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THE STATE °fALASKA GOVERNOR MIKE DUNLEAVY December 1, 2020 211 2 -o -1q 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 Crystal Smith John L. Hendrix Preparedness & Response Region Manager CEO & President Dept. of Environmental Conservation Furie Operating Alaska, LLC Division of Spill Prevention and Response 188 W Northern Lights Blvd, Suite 620 555 Cordova Street Anchorage, AK 99503 Anchorage, AK 99501 Re: Request for determination that Furie Operating Alaska, LLC's wells are incapable of flowing oil to the ground surface Dear Ms. Smith and Mr. Hendrix: By letter dated November 5, 2020, Furie Operating Alaska, LLC (Furie) requested that the Alaska Oil and Gas Conservation Commission (AOGCC) make a determination that none of their operated wells is capable of flowing liquid hydrocarbons to the ground surface. AS 31.05.030(1) Under AS 31.05.030(2), the Commission is authorized to determine whether an operator of a natural gas exploration facility has demonstrated with reasonable certainty that its well or wells will not penetrate a formation capable of flowing oil to the ground surface. Such a determination results in the exemption of wells at the natural gas exploration facility from the requirements of AS 46.04.030 and AS 46.04.040. Furie has requested such a determination. Furie's current activities in the Kitchen Lights Unit (KLU) fit the definition of a "natural gas production facility" as defined in AS 46.04.050(b) and not the definition of "natural gas exploration facility found in AS 46.04.050(c) because Furie is engaged in regular production of natural gas from the Julius R. Platform in the Cook Inlet. Since Furie's operations do not involve a "natural gas exploration facility" the AOGCC cannot make a determination under AS 31.05.030(n. However, AOGCC provides this review of Furie's drilling and production operations to the Alaska Department of Environmental Conservation for its consideration. Crystal Smith and John L. Hendrix December 1, 2020 Page 2 of 2 KLU Exploration and Development Well Drilline History Furie's' initial exploration activities in the KLU were to search for oil and gas. During the exploration program, a total of six exploratory wells were drilled. The wells and their current status are listed below: Well Status2 KLU 1 Suspended KLU 2 Plugged and abandoned KLU 2A Suspended KLU 3 Converted to a development well and currently producing KLU 4 Suspended KLU 5 Plugged and abandoned In addition to the six exploratory wells listed above, Furie has drilled an additional four development wells. These wells and their current status are listed below: Well Status KLU A-1 Producing KLU A-2 Plugged and abandoned KLU A -2A Producing KLU A-4 Producing Potential for Flowin¢ Liauid Hydrocarbons to the Ground Surface After review of well records and production data, the AOGCC concludes that it is reasonably certain that none of the Furie-operated wells in the KLU are capable of flowing liquid hydrocarbons to the ground surface. Generally speaking, in the Cook Inlet Basin oil production is not possible from the Upper Tyonek and shallower formations. The only KLU well drilled deep enough to encounter the Lower Tyonek and deeper potentially oil-bearing formations was the KLU 1 exploration well, but data from that well do not indicate the presence of producible liquid hydrocarbons. KLU 1 was subsequently plugged with multiple downhole plugs making it incapable of flowing at all even if producible liquid hydrocarbons had been discovered. Likewise, even though they didn't penetrate potential oil-bearing formations, the KLU 2, 2A, 4, 5, and A-2 wells have also been rendered incapable of any production due to the setting of downhole and surface plugs in the wells. None of the four remaining wells, all of which are currently in production, has ever shown any production of liquid hydrocarbon, nor is there any data in the well records for these wells showing that they encountered any producible liquid hydrocarbons. The initial exploration well in the KLU (KLU #1) was drilled by Escopeta Oil Company, LLC, but Furie is now operator of this and all wells in the KLU. I The three wells listed as suspended have all the necessary downhole plugs and surface plugs that would be required to plug and abandon the well, but the casing has not been cut off below the mudline as required by AOGCC regulations so they cannot be classified as plugged and abandoned. Crystal Smith and John L. Hendrix December 1, 2020 Page 2 of 2 Conclusion After careful review of the production and well data for the KLU wells, the AOGCC concludes that it is reasonably certain that none of the wells that Furie operates is capable of flowing liquid hydrocarbons to the ground surface. Please contact Mr. Dave Roby (at dave.robyna,alaska.eov or 793-1232) if you have questions conceming this determination. Dlgaallysigned Jeremy by Jeremy M. Pd. M. Price ° bnM20.12,01 11.430 -09'W Jeremy M. Price Commissioner, Chair cc: Laurie Silfven, DEC ggWy signed by Daniel T. DenlelT..seamuui Jr. Seamount, Jr. Wta 202a12a1 1o:lga o9oo Daniel T. Seamount, Jr. Commissioner Jessie L. Digitally signed by Jessie L Cbmielow ki Chmielowski 111:2020.12.01 11:26412 -0900' Jessie L. Chmielowski Commissioner APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the Commission 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 Commission mails, OR 30 days if the Commission 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 Commission 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 Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days ifthe Commission otherwise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs FPRIS C:� OPERAG ALASKA LLC RECEIVED November 5, 2020 HOV 0 6 2020 Alaska Oil and Gas Conservation Commission AOGCC 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 RE: Determination to Request that all FURIE's KLU wells are compliant with AS 31.05.030(1) Dear Chairman Price, Furie Operating Alaska LLC (FURZE) is requesting AOGCC's determination to eliminate the Alaska Department of Environmental Conservation (ADEC)'s requirement for an oil discharge prevention and contingency plan and corresponding proof of financial responsibility placed on Furie under previous ownership. Furie Operating Alaska, LLC submits this letter requesting a determination from AOGCC that all of the producing wells (Table 1) in FURIE's Cook Inlet Kitchen Lights Unit (KLU) produce only natural gas from the Beluga and Sterling formations, with no co -production of liquid hydrocarbons or oil. FURIE also requests determination that there are no wells currently capable of oil or liquid hydrocarbon production from the Tyonek or deeper formations based on the following: • Oil commodity economics are not favorable for the foreseeable future and FURIE has suspended plans to explore and develop deeper, potentially oil-bearing horizons. There are no oil-bearing strata nor oil shows identified within the Beluga and Sterling formations within the 4 producing wellbores (KLU #A-1, KLU #A -2A, KLU #3, and KLU #A-4). There are no other FURZE wells capable of hydrocarbon production. • All producing wells are plugged back to the base of the gas producing Beluga formation. There are currently no producible penetrations of the potentially oil bearing upper or lower Tyonek, nor the Hemlock -Sunfish formations in any of the above noted producing gas wells. There were no tests of liquid hydrocarbons below the top of the Tyonek in any FURIE wells. Three unsuccessful exploratory wells (KLU #4, KLU #2, KLU #1) were drilled, but not tested on company leases and are cemented back to sea floor (Table 2). Two wells (KLU #4, KLU #2) reached total depth within the base of the Beluga formation and did not penetrate deeper potentially oil bearing Tyonek or Hemlock formations. A third well (KLU #1) was a deep exploratory test that terminated in the Tyonek. KLU #1 did not encounter producible hydrocarbons and has been cemented. The open hole portion of the well was plugged back with cement from 15,298' to 13,108' MD, inside 9-7/8" casing shoe located at 13,383' MD. All perforations and productive intervals were cemented with top of uppermost cement plug at 325' MD, 122' below seafloor with 13-3/8" cap installed. All cement plugs were set in place per AOGCC P&A requirements. FURIE requests the AOGCC determination that we are natural gas producer only and, as such, are compliant with AS 31.05.030 and do not have any wells capable of flowing oil or liquid hydrocarbons to the ground surface. (a) AS 31.05.030 (1) that evidence obtained through evaluation demonstrates with reasonable certainty that all of the wells at a natural gas exploration facility will not penetrate a formation capable of flowina oil to the ground surface. If the drilling of a well at an exploration facility exempted under this subsection does penetrate a formation capable of flowing oil to the surface, the owner or operator shall submit an oil discharge prevention and contingency plan and proof of financial responsibility to the department to meet the requirements of AS 46.04.030 and 46.04.040. Finally, FURIE also requests a determination/confirmation that the FURIE KLU production platform and onshore facility produce and process natural gas only, with no capacity to produce or transport liquid hydrocarbons or oil. AS 46.04.050. Exemptions. (a) The provisions of AS 46.04.030 , 46.04.040, and 46.04.060 do not apply to an oil terminal facility that has an effective storage capacity of less than 5,000 barrels of crude oil or less than 10,000 barrels of non -crude oil. (b) The provisions of AS 46.04.030 and 46.04.040 do not apply to a natural gas production facility and a natural gas terminal facility; for purposes of this subsection, "natural gas production facility' and "natural gas terminal facility" mean a platform, facility, or structure that, except for storage of refined petroleum products in a quantity that does not exceed 10,000 barrels, is used solely for the production, compression, storage, or transport of natural gas. (c) The provisions of AS 46.04.030 and 46.04.040 do not apply to a natural gas exploration facility if the Alaska Oil and Gas Conservation Commission has determined under AS 31.05.030 (1) that evidence obtained through evaluation demonstrates with reasonable certainty that all of the wells at a natural gas exploration facility will not penetrate a formation capable of flowing oil to the ground surface. If the drilling of a well at an exploration facility exempted under this subsection does penetrate a formation capable of flowing oil to the surface, the owner or operator shall submit an oil discharge prevention and contingency plan and proof of financial responsibility to the department to meet the requirements of AS 46.04.030 and 46.04.040. For purposes of this subsection, "natural gas exploration facility" means a platform, facility, or structure that, except for storage of refined petroleum products in a quantity that does not exceed 10,000 barrels, is used solely for the exploration for natural gas. Additionally, we would like to reference the attached letter to Crystal Smith P&R Manager dated August 11,2020, Attachment A: Request for suspension of FURIE Operating Alaska's Oil Discharge Prevention and Contingency Plan, Cook Inlet Exploration Kitchen Lights Unit ADEC C -Plan (C - Plan No. 16 -CP -5184) and Relief from Financial Responsibility Requirements. If you have any questions or require further information, please contact Rick Dusenbery at (907) 331-9282, email at r.dusenberv(cDfuriealaska.com or call me at (907) 365-9945. Regards, John . Hendrix CEO resident Furie O rating Alaska, LLC Cc Jessie Chmielowski, Commissioner Dan Seamount, Commissioner Jody Colombie, AOGCC Special Assistant David Roby, Senior Petroleum Engineer Guy Schwartz, Senior Petroleum Engineer Table 1 FURIE Operating Alaska Well Location List and Status WNIName CYrmn45la4a4 Reit ME Surhlw btaib^[°°rdlnatal1 Lindon SeFUm TshW a 111faordirolel M .N NM 2) K 9 Damm MAA Paduu. 50)3320682-0090 218469 FIT FR. 991' ML 24 IN IIW Seward 294325.85 2536121.20 AK Z. 04 BLU A -M Noduu+ 5073320655-01-00 216086 896'FWL 343 FR 24 20 IIW Seward 294331.49 2536125.62 AKZ.A4 MUA-1 h40uow 50733 2%560090 216-063 8M'FWL 342 FR 24 IN IIW Seward 294319.20 2536123.89 AN Z. 44 KLU3 hoducw 50733206100000 213-015 348'F54909'FWL 24 ION IIW Seward 294345.00 2536130.00 ABZo 24 ME 5073320616-004)0 213-088 122'FE42,422'FW 8 ION IIW Seward 309226.00 254894)-00 AKZ " KLUM 50)3320603-014)0 212-147 1,543'INL 2,470' FEL 35 ION IIW Seward 290642.27 2529019.06 AKZO 94 IOUI 5073320593-0000 211939 241' FN42,095'FWL 25 ION 11W Seward 295390.00 2535400.00 ABZamM MUA3 PEA 50)332%559000 216455 8%' FW 343' FR 24 ION 11W Seward 2M331.49 2536125.62 AK Zine 94 BLUS P&A 5073320632-00-00 214422 957'FEL 2.105'FSL 22 9N 11W Seward 286441.00 250MMOO AllZ.M KLU2 tU. 5073320603-0000 212479 1,521'FNL2,M2'FWL 35 ION 11W Seward 290M0.19 2529041.92 AK Z. N4 Fatle4) I Fmd6wLe4 Qat/1aq.1 J.M. 8 Firth m 60'S6'I2'N/ISI99'231W OnsAon PFodu4tbn 60.44'09'N/151-19-SO'W WINY Table 2 -Summary of Wells Awaiting P&A Status Well Status KLU #4 (PTD: 213-088) jdry hole -no economic hydrocarbons encountered Wellbore cemented, incapable of flow KLU #2A (PTD: 212- Dry hole -no economic hydrocarbons 147) 1 encountered Wellbore cemented, incapable of flow KLU #1 (PTD: 211-039) Dry hole -no economic hydrocarbons encountered Wellbore cemented, incapable of flow Comments Drilled to a total depth of 9,163' MD/ 8,639' TVD. Formation at depth of TD: BELUGA. Wellbore cemented. Top of uppermost cement plug at 196' MD, 4' below seafloor. All cement plugs set in place per AOGCC P&A requirements. W.O. 30" casing cut below mudline. Drilled to a total depth of 10,750' MD/ 7,109' TVD. Formation at depth of TD: BELUGA; Wellbore cemented. Top of uppermost cement plug at 227' MD, 15' below seafloor with 13-3/8" cap installed. All cement plugs set in place per AOGCC P&A requirements. W.O cut of 15' of 30" casing remaining above mudline. Drilled to a total depth of 15,298' MD/ 15,298' TVD. Formation at depth of TD: Lower TYONEK. Open hole plugged back with cement from 15,298' to 13,108' MD, inside 9 7/8" casing shoe located at 13,383' MD. Wellbore cemented. Top of uppermost cement plug at 325' MD, 122' below seafloor with 13-3/8" cap installed. All cement plugs set in place per AOGCC P&A requirements. W.O. 30" casing cut below mudline ATTACHMENT A 6/ EV,Wn it VIA HAND DELIVERY/EMAIL August 11, 2020 Alaska Department of Environmental Conservation Prevention, Preparedness & Response Program Division of Spill Prevention and Response 555 Cordova Street Anchorage, Alaska 99501-2617 Attn: Crystal Smith, P&R Region Manager Re: Request for suspension of FURZE Operating Alaska's Oil Discharge Prevention and Contingency Plan, Cook Inlet Exploration Kitchen Lights Unit ADEC C -Plan (C -Plan No. 16 -CP -5194) and Relief from Financial Responsibility Requirements Dear Ms. Smith Thank you very much for the conference call with you and Graham Wood on August 3, 2020. We were pleased to Introduce some of the new FURIE Operating Alaska LLC management team and provide a brief overview of our company's status, current operations and priorities. FURIE Operating Alaska LLC is exclusively a producer of dry biogenic natural gas with no co -production of any oil or liquid hydrocarbons. The above referenced ADEC C -Plan No. 16 -CP -5184 was developed to address the C -Plan requirements for FURIE's multiyear Cook Inlet Exploration Drilling Program. This C -Pian was originally approved In February 2012, with 5 subsequent revisions, and last updated in July 2018. As a natural gas producer with no current plans to drill or develop oil prospects on our leases, FURIE requests exemption from the requirements of Oil Discharge Prevention and Contingency Plan (ADEC C -Plan No. 16 -CP -5184) as specified under Alaska Statute 46.04.050. Notwithstanding the foregoing, FURIE Operating Alaska will continue to adhere to all C -Plan, HSE and regulatory requirements pertaining to the safe operation of our existing Cook Inlet KLU natural gas production platform, pipelines and on -shore facilities. In support of our request, the company offers herein a brief summary of our corporate re -structuring and operations. Corporate Profile and Status - FURIE Operating Alaska LLC Chapter 11 debtor FURIE Operating Alaska LLC and related debtor companies, Cornucopia Oil & Gas Company LLC and Corsair Oil & Gas LLC, filed an amended plan of reorganization on lune 7, 2020 in the U.S. Bankruptcy Court for the District of Delaware. The plan was accepted by the court on lune 11, 2020 and set forth the proposed acquisition of the assets and existing equity interests of the debtors' assets by Anchorage based HEX Cook Inlet LLC (HEX -CI). The transaction closed on lune 30, 2020 and HEX -CI Page d Furie Operating Alaska, LLC ( 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 C,01) b12nATX,N.Aj0E took control of the assets on July 1, 2020. Post -closing, FURZE Operating Alaska LLC remains as the designated corporate operating entity. FURZE Operating Alaska LLC has engaged a highly experienced team of professionals to manage company operations in a safe, expedient and socially responsible manner. in all circumstances, the company and management are mandated to protea the public's Interest and safety. The new management team is establishing itself as a prudent, diligent and environmentally responsible operator. In all aspects of our business, management is following best practices designed to optimize ultimate hydrocarbon recovery and create in-state employment, economic development and royalty revenue for Alaskans. Oil Discharge Prevention and Contingency Plan -ADEC C -Plan (C -Plan No. 16 -CP -5184) FURIE Operating Alaska LLC produces only non -associated blogenic dry natural gas from our operated Kitchen Lights Unit (KLU) platform. The dry gas is co-produced with varying amounts of relatively fresh formation water from the Beluga and Sterling formations through four existing gas production wells. The produced gas comprises 99.4% methane and is transported from the Cook Inlet offshore gas production platform via pipeline to our onshore gas processing and sales facility. There are no associated oil, condensate, or natural gas liquids produced with the natural gas (Attachment A). Oil commodity economics are not favorable for the foreseeable future and FURIE has suspended plans to explore and develop deeper, potentially oil-bearing horizons. There are no oil-bearing strata nor oil shows Identified within the Beluga and Sterling formations within the 4 producing wellbores (KLU #A-1, KLU #A -2A, KLU #3, and KLU #A-4). All producing wells are plugged back to the base of the gas producing Beluga formation. There are currently no producible penetrations of the potentially oil bearing lower Tyonek or Hemlock formations in any of the above noted producing gas wells. Three unsuccessful exploratory wells (KLU #4, KLU #2, KLU #1) were drilled on company leases and are cemented back to sea floor (Attachment Q. Two wells (KLU #4, KLU #2) reached total depth within the Beluga formation and did not penetrate deeper potentially oil bearing Tyonek or Hemlock formations. A third well (KLU #1) was a deeper test that terminated in the Tyonek. KLU #1 did not encounter producible hydrocarbons and has been cemented. The open hole portion of the well was plugged back with cement from 15,298'to 13,108' MD, inside 9-718' casing shoe located at 13,383' MD. All perforations and productive intervals were cemented with top of uppermost cement plug at 325' M0, 122' below seafloor with 13-3/8" cap installed. All cement plugs were set in place per AOGCC P&A requirements. FURZE Operating Alaska LLC is currently updating the 2020 Plan of Development as well as the 2020 Plan of Operations. In the past month post -closing, the company has identified several critical operational and commercial priorities that will be included in the updated plans: • Restoring gas production from the suspended KLU-A4 wellbore • Increasing gas production from the KLU #3, #A -2A, #A-1 wells • Completing the permitting and installation of produced water handing facilities on the KLU gas production platform Page 12 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 907.277.3726 e�:? F11019 1LLC • Completing thorough technical engineering, geoscience and HSE due diligence on all company owned assets, including pipelines, facilities producing, suspended and P&A wells • Completing several critical commercial and financial tasks relating to insurance, property taxes, gas marketing and operating efficiencies FURIE Operating Alaska LLC is requesting waiver of the existing DEC financial responsibility Insurance requirements as the company is exclusively a producer of dry non -associated natural gas with no co -production of oil or liquid hydrocarbons. FURIE Operating Alaska LLC is not currently exploring for, developing or producing oil or gas liquids, and therefore does not operate any of the following operating structures that require proof of Financial Responsibility. The company requests a suspension of FURIE Operating Alaska's Oil Discharge Prevention and Contingency Plan (ODPCP, C -Plan) and Release from Financial Responsibility Requirements detailed below: • Oil Terminal Facility- facilities with storage capacity more than 5,000 barrels of crude or 10,000 of non -crude. 46.04.901)(15) (ASP). • Pipeline - structures used to transport oil or petroleum products between production facilities or to vessels. 46.04.9DD (19) (ASP). • Exploration Facility - platform, vessel, or other facility used to explore for oil resources. 46.04.900 181 (ASPI. • Offshore or Onshore Production Facility - drilling rig, drill site, flow station, gathering center, pump station, storage tank, well and related appurtenances. 46.04.900 (201 (ASPI The company currently has S1.63M in existing Bond/CD deposits on file with various Alaska State Agencies (Attachment 8). These demonstrate that the company has financial capability and is committed to corporate responsibility as defined by State Law. Should you have any questions or require a technical presentation beyond the information presented here, please do not hesitate to contact the undersigned directly. Thank you for your consideration. Respectfully, i 4 - Rick Dusenbery Chief Operating Officer FURIE Operating Alaska LLC Page 13 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 6j/ ENE Attachment A Kitchen Ughts Unit Total Production by Well & Pool Initial Production to June 30, 2020 Page 14 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 Attachment B - Summary of Bond/CD Amounts FURIE Alaska Operating LLC Type of Bond Agency Bank Bond/CD Reference Amount # AOGCC AOGCC Northrim 3128440746 $650,000 Blanket Well Bond AOGCC Northrim 7101559313 $200,000 Statewide Oil and Gas SOA,DNR Northrim 7101550668 $500,000 Bond Pipeline DR&R SOA, Div of Mining, Land and Northrim 7102128969 $228,375 Water Pipeline Survey SOA, Div of Mining, Land and Northrim 7102128977 $ 50,000 Water TOTAL $1,628,375 Attachment C - Summary of Suspended Wells Awaiting Final P&A Status Well Status KLU #4 (PTD: 213-088) Dry hole -no economic hydrocarbons encountered Wellbore cemented, Incapable of flow KLU #2A (PTD: 212-147) Dry hole -no economic hydrocarbons encountered Wellbore cemented, Incapable of flow KW #1 (PTD: 211-039) Dry hole -no economic hydrocarbons encountered Wellbore cemented, Incapable of flow Comments Drilled to a total depth of 9,163' MO/ 6,639' TVD. Formation at depth of T0: BELUGA. Wellbore cemented. Top of uppermost cement plug at 196' MD, 4' below seafloor. All cement plugs set in place per AOGCC P&A requirements. W.O cut of 15' of 30" casing remaining above mudline. Drilled to a total depth of 10,756' MD/ 7,109' TVD. Formation at depth of TD: BELUGA; Wellbore cemented. Top of uppermost cement plug at 227' MD, 15' below seafloor with 13-3/8" cap Installed. All cement plugs set in place per AOGCC P&A requirements. W.0 M of 15' of 30" casing remaining above mudiine. Drilled to a total depth of 15,298' MD/ 15,298' TVD. Formation at depth of TO: TYONEK. Open hole plugged back with cement from 15,298' to 13,108' MD, Inside 9 7/8" casing shoe located at 13,383' MD. Wellbore cemented. Top of uppermost cement plug at 325' MD, 122' below seafloor with 13-3/8" cap Installed. All cement plugs set in place per AOGCC P&A requirements W.0 cut of 15' of 30" casing remaining above mudline. Page 15 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 15' above seafloor KLU #1 Current Abandonment Schematic (September 2020 - BL) MLLW: 88' 188' - 30" cap, 30" and 20" casing stubs 203' - Seafloor 277' - Butt weld sub 285' - Top cement 295' - Top sand13 3/8" cap tested to 300 psi for 30 min - good test. 9 7/8" cap tested to 1000 psi for 30 min - good test.324' - Mud Line Suspension 20" cemented with full returns. Circulate 20" x 30" annulus through port in 20" MLS. Ports squeeze cement because MLS ports would not close. 20" tested to 1000 psi witnessed by AOGCC 10/4/11. 352' - TOC 13 3/8" x 20" annulus tested to 350 psi for 30 min (10/24/11) - good test. Top cement 9 7/8" at MLS circulated from DV tool at 8809'. 9 7/8" x 13 3/8" annulus tested to 500 psi for 30 min (7/5/12 and 8/24/12) - good test. 8809' - DV tool 13108' - Top cement plug 15298' - TD open hole 30" casing shoe at 358' 20" casing shoe at 1805' 13 3/8" casing shoe at 4907' 9 7/8" casing shoe at 13383' History Recap KLU#1 was drilled under drilling Permit (21-039) and suspended in 2011 Sundry 311-332, Reentered during the 2012 Cook Inlet Exploration season. After deepening and logging the new interval, the well was suspension again with Sundry # (312-291). 2011 Operational issues: Due to ID restriction from the 30” butt welds, the 20” casing was run without the landing ring on the 20” mudline hanger. This resulted in the MSL being set at 136’ below mudline. The 20” casing was cemented and 20 X 30 annulus was circulated clean though the 20” MSL ports. However, we were unable to close the ports on the 20” MSL. After an unsuccessful casing tests. To eliminate the possibility of a wet shoe, a balanced plug was set above the 20” shoe. (Note: during the planning of the squeeze work. AOGCC’s Winton Aubert 9-16-11 indicated that no Bond Log would be required). A second attempt to close the ports on the MSL failed, therefore the MSL was squeezed cemented under a retainer. No returns or pressure on the 20” x 30” annulus during the cement squeeze were seen. Subsequent annulus test of 194 psi bleed to 164 psi in 50 minutes. After drilling out the retainer the annulus and casing failed to test. The 30” diverter system was replaced with 20-1/4” BOP. There by eliminating further 20”X 30” annulus pressure testing. The second retainer was set and the MLS ports resqueezed. The casing was successfully tested to 1000psi and witnessed by AOGCC’s Lou Grimaldi on 10-4-11. The 20” casing shoe was drilled out plus 25’ new hole and a FIT test conducted to 12.5ppg EMW. The well was drilled to and 13-3/8 casing was set and cemented at 4933’. The plug was bumped. The MSL ports were opened and the anulus circulated and ports closed. The 13-3/8” casing was tested to 1800 psi OK. Five bbls were bullheaded down the annulus. The casing was retested to 3500 psi for 30 min. OK. Witnessing test waived by AOGCC. The 20” X 13-3/8” annulus was tested to 350 psi for 30 min. (10-24-11). sThe well was drilled to 9100’ and open hole logs conducted. The well was suspended with the variances granted under Sundry 311-332. The 20” and 30” casing were cut at the same depth 15’ above mudline and the surface cement plug was set from 550’ to 350’ preserving the MLS profile at 326’ RT. 2012 ReEntry. The ReEntry of KLU #1 included Tieing back the 30” and 13-3/8” casing strings. Casing head and BOP were NU and tested. The 13-3/8” casing was tested to 3250psi and witnessed by AOGCC’s Bob Noble. A cement Bond log was conducted on 5/18/12 with top cement in13-3/8 annulus at MSL. The well was drilled and 9-7/8 casing ran to 13,356.’ The casing was cemented plug bumped. The second stage was cement successful thru the DV tool. The casing was tested to 4500psi. The annulus was circulated clear thru the MSL ports and casing tested to 6500 psi. The 13-5/8” BOP was ND the 9-7/8” cut off. The “B” section and 11” BOP installed and tested. After drilling out the casing and shoe +20’, LOT was conducted @ 17.7 EMW. The well was drilled to 15,298’ and logged. Abandonment plugs 1 thru 4 from 15298- 13108’ were set and the casing tested to 1400 psi. for 30 min. A retainer was set at 550’and tested to 1000psi for 30 min. While ND BOP pressure was noted on the 9-7/8 X 13-3/8 annulus. Attempted to PT annulus to 1000psi. No test. The BOP was reinstalled and tested. The cement surface plug and EZSV were drilled out. The mud was conditioned from 16.9 ppg to 12.1 ppg. SLB punched casing at 4607- 4610’. An EZSV set at 4517’ and casing squeezed with 83 bbl cement. The casing tested to 2500 psi for 30 min witnessed by AOGCC’s Jeff Jones 8-13-12. The 13-3/8” X 9-7/8” annulus was tested to 1000psi 30 min. A surface plug set 550’-350’. BOP and Casing head were removed and the 9-7/8” casing pulled from the MSL. The 9-7/8” cap was set and test to 1000psi. The 13-3/8” wellhead spool and 13-3/8” casing from the MSL were pulled. A 13-3/8” cap was installed and test to 500 psi 30 min. on a chart recorder. Sand was spotted on 13-3/8” cap and 7 bbl cement spotted on the sand. The 30” tie back was removed and 30” trash cap set. KLU #2A Current Abandonment Schematic (September 2020 - BL) 15' above seafloor 197' - Top 30" 212' - Seafloor MLLW: 102' 220' - Top 20" 226' - Top cement 246' - Top sand 20" MLS running tool with gauled threads 266' - Mud Line Suspension 30" x 20" cement job had full returns and flushed clear to 280' through a grout string. 8 hours after cementing annulus took 7 bbl to fill, placing top of cement at 302'. 302' - Top of cement Top cement below 426' - circulate 13 3/8" to 20" no cement returned to surface. 20" x 9 7/8" annulus tested to 500 psi for 30 min (11/2/12) - good test. 20" casing tested to 2500 psi prior to drilling out shoe. 13 3/8" cap untested - 13 3/8" shoe open 9 7/8" cap tested to 300 psi 30" casing driven to 366' 13 3/8" casing to 426'(curtain string) 20" casing to 1905' 9 7/8" casing to 10750' KLU #2A Sundry Attachment (312-349) Historical review: KLU#2a was drilled under Drilling Permit 212-147 and Suspended with Sundry 312-413. 2012 operational issues: Before running the 20” casing it was discovered that the 20” running tool could not be removed from the 20” Mud line hanger due to gauled threads. A second attempt to back-off running tool was made without success after the casing was run. This problem required reconfiguring the casing design using a 13-3/8” tieback to the “B” section of the wellhead and running a 9-7/8” X 9-5/8” string to 9000’. This reconfiguration was approved by Sundry 312-349. The 20” was cemented in place with full returns. The plug was bumped. 75 bbl cement was returned to surface. The 20” X 30” annulus was flushed clear with grout strings to 280’. Eight hours after cement was in place the annulus took 7 bbl to fill. This placed the TOC estimated at 302’ which is 64’ above 30” shoe at 366’. The 30” diverter was removed. The 20” starting head welded on, 13-3/8” casing tie back ran from 436’ and the 13-3/8” well head installed and tested. The casing was tested to 2500psi. The shoe + 20’ were drilled and a FIT conducted to 11.5 ppg EMW. The well was drilled to TD 10,750’ MD. The well was logged, (including a bond log 10-24-12) and DST tests conducted. The 9-7/8” X 20” annulus was pressure tested to 500 psi for 30 min. on 11-2-12. A retainer was set at 7407’ and squeezed cemented with 99 bbl cement under retainer and 6bbl spotted on top retainer. The plug was tested to 2100 psi for 15 min and the top cement tagged at 7268’. The testing was witnessed by AOGCC’s Lou Grimaldi. A second EZSV was set at 722’. A 71 bbl balanced was placed on the EZSV and tested to 1500psi. The BOP’s were ND and 9-7/8” casing recovered to the MSL. The 9-7/8” cap was installed and tested to 300 psi. The 13-3/8” was recovered to MLS and 13-3/8” cap set. Twenty feet of sand was placed on the 13-3/8” cap. Deletion of the 30” cap was approved by AOGCC’s Guy Schwartz. KLU #4 Current Abandonment Schematic (September 2020 - BL) 177' - Top 30" 192' - Seafloor 196' - Top Cement 206' - Top Sand +/- 211' - 20" & 13 3/8" caps 13 3/8" cap tested 540 psi 215' - Mud Line Suspension 30" x 20" Cement job full returns. Annulus circulated clear through grout string to 215'. 20" x 13 3/8" annulus downsqueeze tested to 540 psi. Witnessed by AOGCC (Guy Schwartz 9/21/13) 1000' - 20" x 13 3/8" annulus downsqueezed 2000' to 1000' due to DV failure on 2nd stage of primary cement job.30" casing driven to 318' 20" casing tested to 1500 psi (8/3/13) just prior to drilling out shoe 15' above seafloor 13 3/8 " casing 20" casing shoe at 2396' History Recap KLU#4 was drilled under drilling Permit (213-088) and suspended with Sundry 313-495. 2012 Operational issues: Before running the 20” casing it was discovered that the 20” running tool could not be removed from the 20” Mud line hanger due to gauled threads. A second attempt to back-off running tool was made without success after the casing was run. This problem required reconfiguring the casing design using a 13-3/8” tieback to the “B” section of the wellhead and running a 9-7/8” X 9-5/8” string to 9000’. This reconfiguration was approved by Sundry 312-349. The 20” was cemented in place with full returns. The plug was bumped. 75 bbl cement was returned to surface. The 20” X 30” annulus was flushed clear with grout strings to 280’. Eight hours after cement was in place the annulus took 7 bbl to fill. This placed the TOC estimated at 302’ which is 64’ above 30” shoe at 366’. The 30” diverter was removed. The 20” starting head welded on, 13-3/8” casing tie back ran from 436’ and the 13-3/8” well head installed and tested. The casing was tested to 2500psi. The shoe + 20’ were drilled and a FIT conducted to 11.5 ppg EMW. The well was drilled to TD 10,750’ MD. The well was logged, (including a bond log 10-24-12) and DST tests conducted. The 9-7/8” X 20” annulus was pressure tested to 500 psi for 30 min. on 11-2-12. A retainer was set at 7407’ and squeezed cemented with 99 bbl cement under retainer and 6bbl spotted on top retainer. The plug was tested to 2100 psi for 15 min and the top cement tagged at 7268’. The testing was witnessed by AOGCC’s Lou Grimaldi. A second EZSV was set at 722’. A 71 bbl balanced was placed on the EZSV and tested to 1500psi. The BOP’s were ND and 9-7/8” casing recovered to the MSL. The 9-7/8” cap was installed and tested to 300 psi. The 13-3/8” was recovered to MLS and 13-3/8” cap set. Twenty feet of sand was placed on the 13-3/8” cap. 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N V • p E 1.1 N N o) _m c0 V ›- G 6 0 O E 0 c rn > I ° w I � ti I- N N N C f0 O re a N (N 10 Ln N V I— CO N IN N N O. m W t C N I y m ._ a 2 a3 m F. coE E c ,.,,zEL)m I W m 1 re m Q o o Q o 0 c C U °' C..) 0 0 C 2 N .0 m J N N a m to V 0 " a D o a a co U E a O a) O 0 0 0 y LL o 2 aa' 0 E 13 m E E a 2 w w w 3 _ o a 0 0 0 C 0 0 Release of Confidential Data Coversheet Well Name: KLU 2 PTD: 212-079 E-Set: 22405, 22987, 25121 ✓ Physical data labeled with PTD, E-Set# Conf. entry: / / ✓ Import CD data to RBDMS via GeoLogs tab Va-✓i D wJ ✓ Confidential (incomplete)entry in Well Data List notes Import to DigLogs via E-Set tab •J Scan labeled data • Apply OCR text recognition Wr Save to Well Log Header Scans CSI New"complete" entry in Well Data List notes Logged by: Meredith Guhl Fully logged: NI / $ / /� aia a? �Sr21 e.7 F U4k. I c2;g05 Operating Alaska LLC December 4,2014 Ms. Meredith Guhl Alaska Oil and Gas Conservation Commission 333 W.7th Avenue,Suite 100 Anchorage,AK 99501 RE: ADDITIONAL DATA REQUEST-CONFIDENTIAL DATA TRANSMITTAL Kitchen Lights Unit#2—Final Log Report API# KLU#2-50-733-20603-00-00 Ms.Guhl, Herein submitted are the additional log reports by Schlumberger and Baker Hughes for KLU#2,this submittal is pursuant to our obligations under Permit to Drill No.212-079. Please note there was NO rotary side-wall or conventional core samples run for this well. As requested per your email dated 12-1-14,enclosed is data: KLU#2: Digital Data on attached CD Schlumberger: Paper Print Baker Hughes: Furie_KLU2_DTCO_MF_QC_1900 TO 8882 ft • 1:600 MD KLU2_DTSM_XD_QC_1900 TO 8882 ft • 1:240 MD KLU2 R1B FMI FIELD PRINT Z'2 b5 • 1:600 TVD KLU2_R1B_SSCAN_FIELD_PRINT a-511 • 1:240 TVD • Final Well Report/Directional Survey Furie Operating Alaska, LLC requests that this information be held CONFIDENTIAL,as marked on the covers of the binders. If you should have any questions or concerns,please contact me anytime at 907-277-3726. Sincerely, RECEIVED&ACCEPTED ABOVE DATA STAMP HERE: IIidad - RECEIVED Bob Laule DEC 0 4 2014 Drilling Engineer, Furie Operating Alaska, LLC ®^CC A By: !`1 117�111..ii ll!! 1029 W.3RD AVENUE,SUITE 500 I ANCHORAGE,ALASKA 199501 OFFICE:907-277-3726 I FAX:907-277-2796 PAGE 1 Guhl, Meredith D (DOA) From: Decker, Paul L (DNR) Sent: Monday, December 01, 2014 3:54 PM To: Guhl, Meredith D (DOA) Cc: Bettis, Patricia K(DOA); Davies, Stephen F (DOA) Subject: Re: Confidential wells releasing 12/5/2014: KLU 2 and KLU 2A Meredith, No,these wells didn't have requests for extended confidentiality. Thanks, -Paul Sent from my iPhone On Dec 1, 2014, at 8:39 AM, "Guhl, Meredith D (DOA)"<meredith.guhl@alaska.gov>wrote: Hello Paul, KLU 2 (PTD 212-079)and KLU 2A(PTD 212-147) are due for release from confidentiality on this Friday, 12/5/2014. Has confidentiality been extended for either of these wells? Thank you, Meredith Meredith Guhl Petroleum Geology Assistant Alaska Oil and Gas Conservation Commission 333 W.7th Ave,Suite 100,Anchorage, AK 99501 meredith.guhl@alaska.gov Direct: (907)793-1235 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 Meredith Guhl at 907-793-1235 or meredith.guhl@alaska.gov. 1 Guhl, Meredith D (DOA) From: Guhl, Meredith D (DOA) Sent: Monday, December 01, 2014 12:15 PM To: 'Bob Laule' Cc: Bettis, Patricia K(DOA); Davies, Stephen F (DOA) Subject: KLU 2, PTD 212-079, Data Required Hello Bob, I am reviewing the data for KLU 2, PTD 212-079, completed 9/30/2012, in advance of the well being released from confidentiality on 12/5/2014. During my review I have I have come across the following issues that need to be addressed. 1. On the CD submitted 7/3/2012 that includes Baker Hughes, Canrig and Schlumberger data,the following items need to be supplied: a. A paper print of Furie_KLU2_DTCO_MF_QC_1900 TO 8882 ft.pds b. A paper print of Furie_KLU2_DTSM_XD_QC_1900 TO 8882 ft.pds c. A paper print of Furie_KLU2_R1B_FMI_FIELD_PRINT d. A paper print of Furie_KLU2_R1B_SSCAN_FIELD_PRINT 2. Paper logs from BakerHughes- Multiple Propagation Resistivity/Compensated Neutron Porosity/Compensated Bulk Density/Gamma Ray were supplied on 7/3/2013 also, along with a .las file on the CD noted above. In addition to the .las file, please supply either a .pdf or.tif file for each BakerHughes log, per 20 AAC 25.071 (b)(6). a. 1:600 MD b. 1:240 MD c. 1:600 TVD d. 1:240 TVD 3. An inclination survey, in digital format, has not been supplied. Please supply the BakerHughes directional survey in both .pdf format and in an excel or text format. Please supply this data by 12/8/2014. Because the well is confidential until 12/5, please provide any digital data via a CD to the AOGCC office to maintain confidentiality. If you have any questions, please contact me. Regards, Meredith Meredith Guhl Petroleum Geology Assistant Alaska Oil and Gas Conservation Commission 333 W. 7th Ave, Suite 100, Anchorage,AK 99501 meredith.guhl@alaska.gov Direct: (907)793-1235 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, 1 /00:400 FURZE Operating Alaska LLC July 3,2013 Mr. Howard Ojfkland RECE I V E L Alaska Oil and Gas Conservation Commission 333 W.7th Avenue,Suite 100 JUL 0 2013 Anchorage,AK 99501 AOGCC RE: CONFIDENTIAL DATA TRANSMITTAL Kitchen Lights Unit#2 and#2a-Final Log Report API# KLU#2-50-733-20603-00-00 and KLU#2a 50-733-20603-01-00 Mr.Oakland, Herein submitted are the Final Log Reports by Schlumberger and Baker Hughes for both KLU#2 and KLU#2a,this submittal is Pursuant to our obligations under Permit to Drill No. (KLU#2) 212-079 and Permit to Drill No. (KLU#2a)212-147. Please note there was NO rotary side-wall or conventional core samples run for either well. The logs are labeled as follows: KLU#2: KLU#2a: Baker Hughes: Baker Hughes: • LWD-MPR 2MD 366'-9,106'x- LWD-MPR 2MD 366'-10,750' Final - Final • LWD-MPR 2TVD 366'-9,106' LWD-MPR 2TVD 366'-10,750' Final Final • LWD-MPR 5MD 366'-9,106'- LWD-MPR 5MD 366'-10,750' Final- Final • LWD-MPR 5TVD 366'-9,106'' LWD-MPR 5TVD 366'-10,750' Final Final Schlumberger: Schlumberger: • Triple Combo/1,900'-9,106'✓ PPC/GR 6000'-9600' • CMR/1,900'-9,106' ✓ XPT/GR 6000'-9600' • Caliper/1,900'-9,106' `' CMR/GR 6000'-9600' • SP/1,900'-9,106' ✓ USIT/GR/CCL 300'-9100' • Sonic Scanner QC Plot • Sonic Final Custom Processing Furie Operating Alaska, LLC requests that this information be held CONFIDENTIAL,as marked on the covers of the binders. 1029 W.3RD AVENUE,SUITE 500 I ANCHORAGE,ALASKA 199501 OFFICE:907-277-3726 I FAX:907-277-2796 PAGE 1 alb - U?q - Furie Operating Alasl .LC Page 2 of 2 If you should have any questions or concerns, please contact me anytime at 907-277-3726. **Please signify that you have received and accepted this report by signing in the space below. Sincerely, Bob Laule Drilling Engineer, Furie Operating Alaska, LLC CE!VED"ATE TED ABOVE DATA This day u .Z O L 3 By: ` Title: 14_„`«43•.. f�.y_ FURIE RE,E,v ri; ,,, e_ JUL 02033 Operating Alaska LLC AOGCC July 1,2013 Mr. Howard OAkland Alaska Oil and Gas Conservation Commission 333 W.7th Avenue,Suite 100 Anchorage,AK 99501 RE: CONFIDENTIAL DATA TRANSMITTAL Kitchen Lights Unit#2 and#2a—Final Mud Log Report API# KLU#2-50-733-20603-00-00 and KLU#2a 50-733-20603-01-00 Mr.Oakland, Herein submitted are the Final Mud Log Reports for both KLU#2 and KLU#2a,this submittal is Pursuant to our obligations under Permit to Drill No. (KLU#2)212-079 and Permit to Drill No. (KLU#2a)212-147. The binders are labeled as follows: KLU#2 • Final Well Report Mudlogging Data,provided by:CanRig 09-24-12 �-7•- 9 S 7 KLU#2a • Final Well Report Mudlogging Data, provided by:CanRig 10-09-12 Furie Operating Alaska, LLC requests that this information be held CONFIDENTIAL,as marked on the covers of the binders. If you should have any questions or concerns, please contact me anytime at 907-277-3726. **Please signify that you have received and accepted this report by signing in the space below. Sincerely, RECEIVED&ACCE TED ABOVE DATA This ( day of JU lVf -- C3! 3 /14,..fz...4 Title: / ac 4.iNtAt Bob Laule Drilling Engineer, Furie Operating Alaska,LLC 1029 W.3RD AVENUE,SUITE 500 I ANCHORAGE,ALASKA 199501 OFFICE:907-277-3726 I FAX:907-277-2796 PAGE 1 d/, - d ?y Page 1 of 1 Okland, Howard D (DOA) From: Okland, Howard D (DOA) Sent: Friday, June 28, 2013 11:02 AM To: 'b.laule@furiealaska.com' Subject: Follow up to phone call Bob, I looked for log prints for KLU -2 (212-079) and KLU-2A (212-147) and did not find any MWD/LDW, Wireline, or Formation/Engineering or(Mud) logs. Also looked for print copies of the EOW reports for KLU-2and KLU-2A. I did not find any. Please let me know if sidewall core was taken. If any were taken, the Commission needs a copy of the conventional core analysis (P&P). Call or e mail with any questions. TNX Howard Okland 793-1235 howard.okland@alaska.gov 7/1/2013 RECEIVED OCT 2 3 2012 (1111.41111" FURIEAOGCC Operating Alaska LLC P 9 Furie Operating Alaska, LLC 1029 West 3rd Avenue, Suite 500 Anchorage, Alaska 99501 DATA TRANSMITTAL CONFIDENTIAL October 23, 2012 Alaska Oil and Gas Conservation Commission 333 W. 7`h Avenue,Suite 100 Anchorage, AK 99501 RE: 10-407 for KLU#2- Kitchen Lights Unit, Confidential Data Kitchen Lights Unit#2 Well Logs and Reports for Suspension of Well Dear AOGCC: Enclosed is the 10-407 for KLU#2 with attached Well Operations Summary, Directional Surveys, Wellbore Diagram and Summary of the Logs with attached CD of all digitally formatted logs, titled "KLU#2 Well Logs". Furie Operating Alaska, LLC hereby transmits to you the above data and reports pursuant to our obligations to you under Permit to Drill No. 212-079. Furie Operating Alaska, LLC requests that these data and reports be held Confidential, as marked on the attached and listed above, in accordance with AS 31.05.035 and 20 AAC 25.537. Please signify that you have received and accepted this data by signing in the space below and returning this letter to me at the Anchorage address above or by fax to me at 907-277-3796. If you have questions, please feel free to contact me at 907-277-3726. Sincerely, Robert B. Laule Furie Operating Alaska, LLC Drilling Engineer Furie Operating Alaska,LLC 11029 W.3rd Avenue,Suite 500 I Anchorage,AK 199501 I Office 907-277-3726 RECEIVED AND ACCEPTED ABOVE DATA This day of October, 2012. BY: TITLE: CC: Damon Kade, President, Furie Operating Alaska, LLC Jonathan Iversen,Stoel Rives LLP Furie Operating Alaska,LLC 11029 W.3rd Avenue,Suite 500 I Anchorage,AK 199501 I Office 907-277-3726 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG la.Well Status: Oilll Gas u SPLUG 0 Other u Abandoned IA Suspended- _ 1 b.Well Class: 20AAC 25105 2oMc 25 110 Development El Exploratory GINJ n WINJ n WAG n WDSPL E No.of Completions: II'V t1- Service n Stratigraphic Test 2.Operator Name: 5.Date Comp.,Susp.,or 12.Permit to Drill Number: Furie Operating Alaska, LLC Aband.: 9/30/12 • 212-079 - / 312- 373 3.Address: 6.Date Spudded: 13.API Number: 1029 W.3rd Avenue,Suite 500,Anchorage,AK 99501 9/6/12 50-733-20603-00-00 • 4a.Location of Well(Governmental Section): 7.Date TD Reached: 14.Well Name and Number: Surface: 1521.3'FNL,2802.6'FWL,Sec.35,T1ON,R11W,SM • elI;if J/a • KLU#2 - Top of Productive Horizon: 8.KB(Tt abo e MSL): 15.Field/Pool(s): 1521.3'FNL,2802.6'FWL,Sec.35,T1ON,R11W,SM GL(ft above MSL):212 ' Total Depth: 9.Plug Back Depth(MD+TVD): EXPLORATION' 1521.3'FNL,2802.6'FWL,Sec.35,T1ON,R11W,SM 2035 4b.Location of Well(State Base Plane Coordinates,NAD 27): 10.Total Depth(MD+ND): 16.Property Designation: Surface: x- 290 840.19E y- 2529041.92N Zone- 4 & 9106/9106 ADL 389198 • TPI: x- 290 840.19E y- 2529041.92N Zone- 4 11.SSSV Depth(MD+ND): 17.Land Use Permit: Total Depth: x- 290 840.19E y- 2529041.92N Zone- 4 9004/9004 NA 18.Directional Survey: Yes ®o w El 19.Water Depth,if Offshore: 20.Thickness of Permafrost MD/TVD: (Submit electronic and printed information per 20 AAC 25.050) 110 (ft MSL) NA 21.Logs Obtained(List all logs here and submit electronic and printed information per 20AAC25.071): 22.Re-drill/Lateral Top Window MD/TVD: LWD,MWD,Mud Compost Log,Sonic Scanner,SP,Triple Combo,FMI,CMR,&Calipers 2065' 23. CASING,LINER AND CEMENTING RECORD WT.PER SETTING DEPTH MD SETTING DEPTH ND AMOUNT CASING FT. GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED 30" 1.5"Wall X56 0 367 0 367 Driven Driven 20" 106# K55 0 829 0 829 26" 20" 133# K55 829 1390 829 1390 26" 607 bb1(12.5ppg G) 20" 169# K55 1390 1906 1390 1-906 26" +62 bbl(15.8 ppg G) 13 3/8" 72# N80 0 436 0 436 17 1/2" None I 24.Open to production or injection? Yes No 25. TUBING RECORD If Yes,list each interval open(MD+TVD of Top an ottom;Pe oration Size and SIZE DEPTH SET(MD) PACKER SET(MD/ND) Number): NA NA NA 26. ACID,FRACTURE,CEMENT SQUEEZE,ETC. Was hydraulic fracturing used during completion? Yes 1 1 No W ,-i6,,,, DEPTH INTERVAL(MD) AMOUNT AND KIND OF MATERIAL USED . _1141k4 [ :; 4'_UT� 27. PRODUCTION TEST Date First Production: Method of Operation(Flowing,gas lift,etc.): 1'1,. C��C NA Date of Test: Hours Tested: Production for Oil-Bbl: Gas-MCF: Water-Bbl: Choke Size: Gas-Oil Ratio: Test Period Flow Tubing Casing Press: Calculated Oil-Bbl: Gas-MCF: Water-Bbl: Oil Gravity-API(torr): Press. 24-Hour Rate - 28. CORE DATA Conventional Core(s)Acquired? Yes 1 I No IN Sidewall Cores Acquired? Yes I I No If Yes to either question,list formations and intervals cored(MD+ND of top and bottom of each),and summanze lithology and presence of oil,gas or water (submit separate sheets with this form,if needed).Submit detailed descriptions,core chips,photographs and laboratory analytical results per 20 AAC 25.071 RflnMS OCT 2 4 2012de Form 10-407 Revised 10/2012 CONTINUED ON REVERSE //4./z._ Submit original only ORIGINAL ' ' *r,2 .1 29. GEOLOGIC MARKERS (List all formations and markers encountered). 30. FORMATION TESTS NAME MD TVD Well tested? Des If yes,list intervals and formations tested,briefly summarizing test results.Attach separate sheets to this form,if needed,and submit Permafrost-Top NA Na detailed test information per 20 AAC 25.071 Permafrost-Base Sterling Formation 2,908 2,908 Beluga 4,768 4,768 Tyonek 8,727 8,727 Formation at total depth: Tyonek 9,106 9,106 31. List of Attachments: 32 I hereby certify that the foregoing is true and correct to the best of my knowledge Contact: Robert Laule Email. b.laule( furieDetroleum.com Printed Name. Robert Laule Title: Drilling Engineer Signature: r ,� ` "`�— Phone: 907-277-3726 Date: /t2-2 2 Z– INSTRUCTIONS General: This form is designed for submitting a complete and correct well completion report and log on all types of lands and leases in Alaska Submit a well schematic diagram with each 10-407 well completion report and 10-404 well sundry report when the downhole well design is changed. Item 1b: Classification of Service wells: Gas Injection,Water Injection,Water-Alternating-Gas Injection,Salt Water Disposal,Water Supply for Injection, Observation,or Other.Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion Item 4b. TPI(Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13. The API number reported to AOGCC must be 14 digits(ex.50-029-20123-00-00). Item 20. Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28 Item 23: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool Item 24: If this well is completed for separate production from more than one interval(multiple completion),so state in item 1,and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced,showing the data pertinent to such interval). Item 27: Method of Operation. Flowing,Gas Lift,Rod Pump,Hydraulic Pump,Submersible,Water Injection,Gas Injection,Shut-in,or Other(explain). Item 28: Provide a listing of intervals cored and the corresponding formations,and a brief description in this box Submit detailed description and analytical laboratory information required by 20 AAC 25.071 Item 30: Provide a listing of intervals tested and the corresponding formation,and a brief summary in this box. Submit detailed test and analytical laboratory information required by 20 AAC 25.071. Form 10-407 Revised 10/2012 FURIE OPERATING of ALASKA,LLC KITCHEN LIGHTS UNIT NO.2 COOK INLET,ALASKA 9/30/12 PROPOSED SCHEMATIC TUBULARS&SETTING DEPTHS MW FORMATION DEPTH(KB) (PPG) EVALUATION MD DRILL FLOOR 212' RKB TO SEA FLOOR 132' HIGH TIDE 102' MEAN LOW LOW WATER 212' SEA FLOOR 266' MUD LINE SUSPENSION 366' 30"x 1 1/2"WIT DRIVE PIPE +1-426' 13 3/8"72#N-80 BT&C MWD-LWD(RESISTIVITY-GR) 1897' 20"CONDUCTOR CASING 9.3 +/-11.5#FIT 2056 Cement kick off Plug 15.8 ppg t*+*+*+*+*+*+*+*+*+*+* 2356 MWD/LWD: RESISTIVITY-GR- NEUTRON-DENSITY 9.8 Kill Wt Mud ELECTRIC LOGS(OPTIONAL): COMP.MAG.RESONANCE-XPT FMI-SONIC SCANNER(DIPOLE) ROTARY SIDE WALL CORES +F++++++}+++++++++ 5365' Cement Plug 15.8 ppg 5 Sequential 500'Balanced Plugs *+*+*+*+*++++++++++++ 8000' 9.8 Kill Wt Mud 9106' 9.8# KLL1@--DRLG 8 TP&A 092712 Edited copy 2 xis 10/17/12 Report Date Number 24 Hour Operation Summary Finish rig up Frank's hammer equip., p/u and m/u 30"drive pipe secure and start drive procedures, Remove broken drive pipe guide, resume drive procedures,secure drive pipe and wait on tide to calm, resume drive pipe 8/27/12 1 operations drive pipe with 156' penetration, rig down Frank's hammer equipment and load out and offload diverter system. Finish load out and offload equip. from boat, install plus 10 valve,set and secure drive pipe guide, soft break and cut 30"drive pipe, laydown 30" drive pipe, weld on diverter flange. Load out Frank's hammer equip., weld padeyes and attempt to break out top joint no success, rigged up to make 8/28/12 2 rough cut 30", stop working on cutting drive pipe due to current, made cut and layed out, rigged up texas deck for final cut and welding operations, secured drive pipe into guide, made final cut set diverter flange begin welding procedures same.Weld out diverter flange, install diverter sytem. Welding diverter flange, stop welding on diverter flange due to current, continue weld out diverter flange, n/u 8/29/12 3 diverter, stop n/u diverter due to current,continue n/u diverter, tighten all bolts and secure same, p/u and snake Port diverter line under rig and m/u same. Finish install Port diverter line, Finish weld out bell nipple and install, hook up all control lines and function test with AOGCC witness function test, P/u drill pipe and stand in derrick. Finish install port diverter line, fabricate on bell nipple while wait on current,o/I equipment M/V Green Provider, weld on bell nipple and hammer bolts on hydrill, hook up control lines,finish weld bell nipple flange, snake bell 8/30/12 4 nipple under rig, make measurments for flowline bladder, snake out due to current and weld bladder houseing on bell nipple. Install bell nipple and tighten, install starboard diverter line and secure, secure bell nipple, install tires to help with cushion on stack, function test Diverter, pick up pipe and bha. Installed bell nipple, waite on slack tide,installed tires on BB winches, installed starboard diverter line, installed 8/31/12 5 texas deck stairs,finish r/u 30' diverter sytem, performed diverter function test with AOGCC inspector present and AOGCC inspector shut drilling operations down to movement of diverter caused by currents, attempt to stabilize and repair guide.Finish repair diverter guide and stabilize diverter to continue drilling operations. Add 2-tires and cables to top of hydrill, attempt to remove drive pipe guiude unable will have to cut and remove 9/1/12 6 at slack tide, removed guide, install tires at well head,fabricate padeyes for bell nipple and drive pipe, weld padeyes on bell nipple, install truck tires on bell nipple padeyes while fabricate on new drive pipe guide.Finish install truck tires to bell nipple, continue fabricate new drive pipe guide, weld padeyes on drive pipe at slack tide. Finish install truck tires and cable on bell nipple, continue fab new drive pipe guide, start welding padeyes on 9/2/12 7 drive pipe and main skid beams. Finish weld out all padeyes and install air plane tires,complete and install new drive pipe guide,function test diverter sytem with AOGCC witness, pick up drill pipe and bha. Finish weld out drive pipe and sub structure padeyes, continue fab new drive pipe guide, lower texas deck and 9/3/12 8 install stakes on 30"drive pipe, finish weld out drive pipe guide, install drive pipe saddle prepare to lower drive pipe guide. install pipe guide and secure same, hook up diverter control lines, pick up drill pipe stand in derrick and p/u 26" bit tih and wash out 30" drive pipe. Repair and install drive pipe guide. AOGCC inspection. Install service lines. Retorque bolts on hydrill, diverter and 9/4/12 9 bell nipple. Pick up drill pipe. Pick up HWDP. Make up 26" bit.Trip in hole to 212'. Wash out 30" pipe to 366'. Drill to 386'. Pull out of hole. Pick up 12 1/4" bha. _ Pick up HWDP and stand in derrick. Install rotary pollution pan on bell nipple. Clean out 30" pipe to 366' Drill to 9/5/12 10 386. Circ. Pull out of hole. Lay down BHA. Pick up Baker 12 1/4" BHA. Pick up Baker 12 1/4" bha.Trip in hole to 386'. Drill pilot hole to+/- 1900' 9/6/12 ii Pick up 12 1/4" bha.Trip in hole to 386'. Drill from 386 to 1657' Drill to +/- 1900'. Circ. Pull out of hole. Pick up hole opening assembly Drill 12 1/4" pilot hole to 1816'. Down time repair mud pumps. Drill pilot hole to 1906'. Circ. Pull out of hole. 9/7/12 12 Stand back Baker assembly in derrick. Pick up 26" hole opener assembly.Trip in hole to 386' Open hole from 12 1/4 to 26"from 386 to 575. Down time. Repair blower motor on top drive. Open hole to 672'. Down time. Repair blower motor on t/drive.Open hole from 12 1/4 to 26"to 1900' Down time. Repair blower on top drive. Open hole from 12 1/4 to 26"from 672 to 872'. Circ sand out.. Open hole 9/8/12 13 to 976. Circ sand out. Open hole to 1410' Circ sand out. Open hole to 1609'. Open 12 1/4" hole to 26"to 1900'. Pump sweep. Circ hole clean. Short trip. Circ. Pull out of hole. Run 20"casing. Open hole to 26"to 1884. Back ream and ream down for connection.Taking weight at 1881 and not drilling off. 9/9/12 14 Pump sweep. Circ out. Pull out of hole.Break off bull nose and install 12 1/4" bit.Trip in hole to 1876. Tag fill. Open hole to 26"to 1900'. Pump sweep and circ out. Pull out of hole and lay down stabilizers and hole opener. Rig up to run 20"casing Run and cement 20"casing. 9/10/12 15 Rig up to run casing. Attempt to back out hanger joint. Failed. Run 20" casing Run 20" casing to 1900'. Circ. Cement. 9/11/12 16 Run 20" casing to 1905'. Circ. Rig up and cement. Wash out at hanger. Spot B.J. retarder pill at hanger. Lay down grout string. Nipple down diverter. Install 20"wellhead. Run 13 3/8 casing. Lay down grout strings. Remove pollution pans and diverter extension lines. Nipple down cement head. Raise bell 9/12/11 17 nipple and cut 20" pipe. Lay out same. Raise diverter and make rought cut on 20" pipe. Remove diverter and spool from well bay. Cut and remove 30"starter flange. Make final cut on 20" pipe. Set and weld out 20"S.O.W. Test same. Run 13 3/8 casin.. Install 13 3 8 wellhead. Ni..le u. 13 5 8 bo. Make final cut on 20" pipe. Install 20 wellhead. Attempt to test. Repair wellhead and test to 385 psi. Run 13 3/8 9/13/13 18 casing to 436'. Install 13 3/8 wellhead and test to 1750 psi . Install drive pipe guide. Finish installing drive pipe guide. Nipple up bop and test. 9/14/12 19 Install drive pipe guide. Nipple up 13 5/8 bope. Rig up to test bope. Center bope with rotary.Test bope. Center bope with rotary. Pick up BHA. Trip in hole.Taq cement. Circ. Test casing. Drill out. F.I.T. to 11.5 ppq. Test bop. Down time Trouble shoot blind rams.( not closing fully). Install bell nipple and pollution pans. Install 9/15/12 20 blind rams.Test blind rams and upper pipe rams. Pick up BHA. Trip in hole and tag cement. Circ.Test casing to 2500 psi. Drill out. FIT test. Nipple up pollution pan while dressing blind rams. Attempt to install Archer blind rams. Failed. Remove and install Spartan blind rams and attempt to test. Failed. Nipple up flowline. Install B-B winches and tires to hydrill. Install 9/16/12 21 rachet binders on 30" pipe. Pull test plug. R/D test equipment. Change out jar. P/U mud motor and change angle. P/U drill pipe. Pick up drill pipe. Install blind rams.Test blind rams and top pipe rams. Pick up bha.Trip in hole. Tag cement. Test casing. Drill out. F.I.T. test. Down time. Pick up drill pipe and rack in derrick. Set test plug. Remove blind rams. Install new blind rams. Test blind and upper pipe rams to 250/ 5000 psi. Trip in hole with 12 1/4" rock bit to 1837'. Displace mud. Test casing 9/17/12 22 to 2500 psi. Drill cement, float collar, shoe and 20' new formation. Circ. F.I.T. test to 11.5 ppq. Pump slug. Pull out of hole. Lay down drill collars and mud motor. Pick up Baker bha.Trip in hole to bottom of casing. Cut drill line. Drill ahead. POOH I/d drill collars mud motor and bit, Pick up mud motor from derrick make up new bit and bha, pick up hwdp 9/18/12 23 change out cross overs test MWD and Motor,TIH t/1860', slip and cut drig line,TIH t/1926', Drilling ahead f/1926't/3135'. Drill ahead Drill f/3135 t/3179, pump LCM pills, Drill f/3179 t/3433, Slide drill f/3433 t/3458, Drill f/3433 t/3458, circulate 9/19/12 24 sweep clean hole, pump slug and POOH, build volume during trip out, Pick up pipe TIH finish TIH on stands t/3746, wash and ream to 3836, drill ahead f/3836 t/4400. Drill ahead f/4400' 9/20/12 25 Drill f/4400' t/4680', clean ditches due to cuttings, drill f/4680't/4757', clean ditches due to cuttings, drill f/4757' t/6026'. Drill ahead f/6026'. Drill f/6026't/7034', Slide drill f/7034't/7094', Drill f/7094't/7505', pump sweep and circulate hole clean, pump 9/21/12 26 slug and pooh, well swabbing attempt to rotate out well began to swab again, pump out of hole for short trip rotate out well began to swab again, pump out of hole for short trip Pull out of hole pumping and rotating t/2450', pump slug pooh, held safety mtg and remove source,finish pooh lay down bit and BHA, pull wear bushing and rig up and attempt to test BOPE,AOGCC inspector found test chart 9/22/12 27 recorders out of calibration unable to test, pick up and make up new BHA and trip in hole.Finish pick up BHA and 1-stand HWDP, pick up 63-joints 5"dp tih and pooh stand dp back in derrick, trip in hole with 5" HWDP and followed by 5" dp to shoe re-log from shoe t/7505'. Pick up 5"drill pipe tih,JSA mtg on pooh, Pooh stand drill pipe in derrick 21-stands,Tih bha on drill pipe to 1910', 9/23/12 28 log from 1910'to 2050',Tih to 6100' wash from 6100 to 6150', ream and log from 6150'to 7505', drill ahead from 7505'to 7887'. Drill ahead from 7887' Drill f/7887't/9106', Pump sweep circulate bottoms up, Short trip to 7500'on elevators,Trip in hole tagged up at �c`p(+ 9/24/12 29 9005', Wash and ream f/9005't/9106' Circulate out hole clean with high vis sweeps. Pooh,Test BOPE, Rig up and perform electric line logs with Schlumberger Finish circulate out sweep, Pooh to source, held safety mtg on removeing source and removed same finish pooh 9/25/12 30 with BHA, Retreave wear bushing, Rig up test BOPE, Held pre job safety mtg and rig up and run in hole with logging tools t/8990'. Logging operations. Perform logging operations, lay down motor from derrick, pick up and make up 12 1/4" milltooth bit and cross 9/26/12 31 overs Trip in hole for clean out run to shoe slip and cut drilling line, continue stage in hole to 9106', Circulate hole clean and Pull out of hole. Trip in hole with 12 1/4" milltooth bit t/1811', slip and cut drilling line, stage in hole t/8415'tag up same, wash and ream f/8415't/8500', circulate out hole, pump slug and pooh, pick up motor scribe retorque and stand bha 9/27/12 32 back except source,strap 9-joints 5" drill pipe and make up cement mule shoe while off load #5 and # 6 cement hertz tanks.Trip in hole to 8500' pump and spot 9.9ppg high vis pill, pooh to 8000'circulate hole, mix and pump cement plugs up to 5500', pooh and pump cement kick off plug at 1950'. TIH t/8500', circulate hole, spot pill f/8500't/8000', Pooh t/8000', circulate hole, Pooh 6-stands install I-BOPE tih 9/28/12 33 t/8000', Start cement plug back procedures f/8000' up to 6500' 3- plugs set same. Continue plug back procedures f/6500't/5500', Wait on cement for 8-hrs tih and tag top of cement, Pooh set kick off plug f/2250' t/1950', Pooh rig up and test BOPE. Performed cement plug operations, Pooh to 5179'and wait on cement to set,Trip in hole and tag cement with 20k down at 5367', Pooh to 2700'spot high visc pill and pooh to 2356' pump kick off cement plug pooh to 1900' 9/29/12 34 and circulate out, Pooh lay down cement mule shoe, Flush stack prepare to test BOPE. Rig up and test BOPE, Make up bha trip in hole to shoe at 1900', Wait on Drilling permits to be issued by AOGCC,Trip in hole and dress off top cement start side track operations. Rig up and test BOPE, install wear bushing, Make up Baker drilling assembly trip in hole to 2005', Wash down to 9/30/12 35 2035', Dress off top cement to 2066',Circulate and reduce mud weight to 9.5 ppg, Pooh to 1862' inside casing shoe, Wait on AOGCC drilling permits to drill ahead. Wait on drilling permits, Start side track operations and drill ahead. ICLµ cog ',,,„:„/ FURZE ( „,.,..:: :,,, , , ,,,,.,,, , „. ., ,,c CONFIDENTIAL DAILY DRILLING REPORT UAIC FILL/ API NUMBER WV AFt PERMIT NUMBER LOUNIT SIAIt KtYUKI NU. 8/19/12 KLU#2 SOIL BORING 50-733-20603-00-00 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 1 DEPTH-MD/ND PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD ND KEITH FREENY/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 24 HOUR OPERATIONS SUMMARY Move rig t/KLU#2 location work with currents,pinned rig on location,wait on high tide to preload,start preloading,divers checked all legs no obstructions, wait on high tide to complete preloading operations. 'forecast Finish preloading,jack up 30'above high tide,skid out and set texas deck and stairs,lay down 30"overshot and 1-joint,off load and run 30"to bottom.Rig up soil boaring equipment. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:00 2 Attempting to hold rig on KLU#2 location.Rig pulling tugs in current.Wait on tide to pin rig on location. 2:00 4:30 2.5 Tide slack,pull back to location,attempt to soft pin rig.Unable to pin&stop,all tugs @ 100%power 4:30 7:30 3 All tugs trying to hold rig position near location,all tugs @ 100%power.Rig pulling tugs with current.Raise legs to 80 draft, 7:30 8:30 1 Pull rig back onto location while lowering legs. 8:30 10:00 1.5 Rig pinned on location jacking up to 5'airgap.Installing deep well and removing blank caps from preload tanks. 10:00 14:00 4 All tugs released from rig,standing by for divers to inspect legs at 1400hrs. 14:00 15:00 1 Divers arrived at rigjumped diver in water at 1439hrs,diver out of water at 1S07hrs.Completed inspection of bow and port legs.Due to currents,next dive at 2030hrs. 15:00 16:00 1 Waiting on high tide to preload.Released all tugs at 16:00 hours. 16:00 17:00 1 Waiting on high tide to preload.Cut bell off 36"overshot.Welding padeyes on 36"overshot joint. 17:00 23:00 6 Taking on preload,dive boat at rig diver in water at 20:30 and inspected starboard leg out of water 21:00 hrs.,dive supervisor reported no problems noted on legs. continue preloading 23:00 0:00 1 Wait on high tide to finish preloading. Heading=213 RIG LAT=60 55 01.5591 RIG LONG=151 10 31.0446 23 feet southwest of proposed SHL Perserverence 5750 HP Pacific Explorer 4300 HP 1i vigilant 6800 HP M/V Perserverance on charter 0001 hrs.$8,300 per day 11 Crowley Tug on charter O800hrs.82,000 per hour Pacific Explorer on charter 8-4-12 9$12,500 per day Safety meeting topic: 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME , MAKE GD GD EMSCO DEPTH - MODEL PZ10 PZ10 FB1600 WEIGHT STROKE 10" - 10" 12" VISC. _ LINER SIZE 6 6 6 PV SPM 78 YP GPM 272 - GELS SURF.PRESS 140 API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS TORQUE AMPS OIL PICK UP M# CAKE ROATATING WT. , M# M8T SLACK OFF M# ADDITIVES SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynafiber m DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 34 ANNULAR WIND SW-1 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRTLY/CLDY 30,618 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 55 697 SERVICE 5 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 924 542 TOTAL 45 CSG SPOOL KLUa2 000 1 )000111011111:,,i141 Operating Alaska LL C CONFIDENTIAL DAILY DRILLING REPORT URIC NNtLU API NUMIStK RIG Arc YtNMII NUMDEK I.VUNIT SIAlt KtFUKI NU. 8/20/12 KLU#2 SOIL BORING 50-731-20500-00-n0 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 2 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH FREENY/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 24 HOUR OPERATIONS SUMMARY 'Wait on high tide to finish take on preload water,clean on rig,take on preload water,holding final preload,repairing drive pipe guide&change pump liners to 6.B",dump preload water pump out aft tank with pump,jack rig up,skid out 25'to drilling position,lower drive pipe guide,install stairs and handrails,clear pipe deck,o/I drive 5-joints Drill quip and drive shoe Torecast IP/I1 shoe joint,weld hole up in#2 joint,continue p/u 30"install wedge locks and tih tag sea floor,secure and remove 1-joint,r/u soil boring equipment,perform soil boring operations. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 5:00 5 Waiting on high tide to finish taking on preload water,cleaning pollution pans,cleaning rig floor 5:00 8:30 3.5 Take on preload water stage 3&4 8:30 10:30 2 Holding final preload,repairing drive pipe guide,changing pump liners to 6 1/2" — 10:30 12:00 1.5 Dump preload water. 12:00 15:00 3 Dump preload and pump out tanks due to valves not opening. 15:00 16:30 1.5 Jack rig up with 30'air gap at high tide. — 16:30 19:30 3 Held ISA,Skid drilling package out 25'to drilling position. 19:30 22:00 2.5 Lower drive pipe guide,lower texas deck,install all handrails and stairways on upper pipe rack,clear upper pipe rack to off load drive pipe. 22:00 23:00 1 Off load drive shoe joint and 2 more joints drill quip,1-with hole and 1-with 4'stump. 23:00 0:00 1 Lay down 30"drive pipe from derrick and over shot guide. Safety meeting topic:Picking up drive pipe,proper load handling. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ10 PZ10 FB1600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS • API WL SLOW PUMP DATA • HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH FT. SOLIDS TORQUE AMPS OIL PICK UP Mc CAKE ROATATING WT. M# MBT SLACK OFF M# ADDITIVES SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynaeber in _ DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 34 ANNULAR _ WIND SW-5 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDTRON PRTLY/CLDY 29,568 CAMP CATERING 4 BLSHFAR RAMS TEMPERATURE 52 631 SERVICE 16 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,050 524 TOTAL 56 CSG SPOOL KLOe2 DDR 2 000000:4-1? Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT LIAIt FLELL, API NOMOUK Alla Art PEKMII NUMCtR LVUNIY STAID KCYUKI NU. B/21/12 KLU#2 SOIL BORING 00.733.20603-O-00 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 3 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD • MD TVD KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 24 HOUR OPERATIONS SUMMARY )O/L 30"drive pipe,prepare 30"to be ran in hole,Install drive pipe guide on 30",set stairs to texas deck,p/u 30"drive pipe w/BWS,adjusted drive pipe guide,ran#4,5&6 joint tagged AT 212'from RKB,angle on drive pipe of suitable to perform soil boring,repostioned,drive pipe guide broke wait on slack tide to repair,start repairs on drive pipe guide. 'Forecast (Finish repairs on drive pipe guide,Lay down 30"landing joint and r/u TEM soil boring equipment,start soil boring operations. HOURS DETAILS OF OPERATIONS START END HES(OUR) 0:00 1:00 1 Offload shoe joint&BWS joint 1:00 2:00 1 P/U 30"joint w/4'stump&break out same while welders dress hole in drive pipe,lay down 30"stump&drive pipe,P/U 30"shoe joint&RIH 2:00 3:00 1 Cut patch from 4'stump&weld In joint#2 - 3:00 4:30 1.5 P/U and M/U 30"drive pipe w/7,500 ft.lbs.torque,cut and remove pad eyes 4:30 7:30 3 Insert In drive pipe guide&install stairs to Texas deck 7:30 8:30 1 P/U&make up BWS joint 8:30 11:30 3 Adjusting drive pipe guide,P/U joint number 4,5,and 6,tagged mudllne at 212'from RKB 11:30 12:00 0.5 Peter Testers surveyed drive pipe angle,Informed that bore hole sampling could not be done with current angle 12:00 15:00 3 R/U and soft break jt.#6 at rotary table,offloading from boat and p ading MWD and Logging shacks,hooking up shuntline 15:00 21:00 6 Reposition drive pipe at correct angle for soil boring operations,tide caused drive pipe guide to break loose, wait on slack tide to resecure drive pipe guide. 21:00 0:00 3 At slack tide secured drive pipe guide around drive pipe,rig welder refurbishing pin holes on drive pipe guide extension. Safety meeting topic:P/u and make up 30"drive pipe,discussed incedent with morning tour crew working in rough conditions and R/U soil boring equipment. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ10 PZI0 FB1600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH FT. SOLIDS TORQUE AMPS OIL PICK UP M# CAKE ROATATING WT M# MBT SLACK OFF M# ADDITIVEs SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. • LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynaflber m DEPTH OUT • new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP ! WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 34 ANNULAR WIND 5-4 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS _ CONDITION PRTLY/CLDY 28,812 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 53 562 •• SERVICE 16 MUD CROSS FUEL USED DRILL • OTHER PIPE RAMS 756 524 TOTAL 56 CSG SPOOL KLUr2 DDR 3 - - - FURIE Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT LOU t 1OSLO AP!5511115 KI, AFL FtKMI I NUMBtK L.UUN I Y 5 IA W IttYUKI NU. 8/22/2012 KLU#2 SOIL BORING SO-733-2e603-00-00 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 4 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 24 HOUR OPERATIONS SUMMARY !Finish repairing drive pipe guide,weld padeyes on 30",attempt to stabilize 30''drive pipe,stabilize same,lay down top joint 30,NOV performed top visual inspection,held prejob safety mtg with crews on rigging up TDSI equipment,rigged up equipment and picked up coring bit and tlh tagged at 212. Forecast {Mix coring mud and perform core drilling operations. HOURS DETAILS OF OPERATIONS START END HRS(DUO) 0:00 0:30 0.5 Finish repair ng drive pipe guide 0:30 6:00 5.5 Welding padeyes on 30"with rig welder 6:00 9:00 3 Attempting to stabilize 30"drive pipe with BB winches and air hoists 9:00 12:00 3 Received additional 4'straps and 2 ton chain hoists,installing the same on 30"drive pipe,during current slack tide 12:00 13:30 1.5 Back out top joint of 30"lay down the same,rig down rigup lines,Installed elevators 13:30 15:00 1.5 NOV performing visual inspection of top drive 15:00 21:00 6 Held prejob safety meeting with rig personnel and Testers Drilling personnel re:rigging up and operations of the core Hr lung process 21:00 0:00 3 M/U 4 1/2"Coring bit and BR on 4 1/2'coring pipe,tag at 212'. ' conducted fire and abandonment drill Safety meeting topic:Fall protection over 6'heights,moving loads from upper pipe rack to lower racks,texas safety 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD 011550 DEPTH MODEL PZ10 PZIO 101600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PS SPM VP GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS - _ mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI . AND DRAG . • SAND DEPTH FT. SOLIDS TORQUE AMPS OIL PICK UP M# CAKE ROATATING WT. M# MIST SLACK OFF M# ADDITIVES SACKS BIT RECORD • BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynaflbar m , DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP WOO RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/13/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 34 ANNULAR WIND 'SW-5 ' FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRLY/CLOY 27,888 CAMP CATERING 4 131_SHE.RAMS TEMPERATURE 54 474 SERVICE 16 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 924 429 TOTAL 56 COG SPOOL : I I KUM DOR a ".°11:CI:. FURIE aeratingAlaska LLC CONFIDENTIAL DAILY DRILLING REPORT UAIt rItLU AP1 NUMHtH Mt, Art PtKM11 NUMICH LUUNIIf SIAIt KtPUKI NU. 8/23/12 KLU 02 SOIL BORING 50-733-20603-00-00 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 5 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD ND KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY Mix mud f/Core drlg operations,P/U and till with core csg 1/220',P/U and till w/core bit asst'.t/tag @ 215'core drill 1/223',recovered no sample,core drill 1/242'recovered samlpe,continue core drill F/243't/248',258't/268'and f/268't/273'recovered core sample,POOH f/278'no sample recovered,clean out barrel tih 1/223'tag up,attempt to wash 1/278' 'Forecast (Continue Coreing Operations. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:30 2.5 Mixing mud&displace mix,building more volume 2:30 4:00 1.5 Start core drilling operations to set coring casing @220' 4:00 5:30 1.5 P/U&M/U coring bit,TIM,tag @ 215'core drill to 223' 5:30 6:00 0.5 Attempting to recover cores,unsuccessful 6:00 8:30 2.5 1st core recovered @ 242'-12"In length 8:30 15:00 6.5 2nd core @243'to 248'-54"in length,3rd core @ 258'to 268'-60"In length,4th core @ 268'to 273'-60"in length 15:00 18:00 3 POOH from 278'with no sample caught 18:00 18:30 0.5 Clean out and redress core barrel,core barrel had 6 to 8'of sand in barrel no core sample. 18:30 19:00 0.5 TIH t/223' 19:00 21:30 2.5 Attempt to recover core barrel,no success,lay down 2-joints end of coring bit 225'. 21:30 22:30 1 Washed f/225't/240',retreaved core barrel no sample. 22:30 0:00 1.5 Washed f/240't/263'. Safety meeting topic:Core drilling operations,Cleaning and Maintenance. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ10 P210 F81600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM yp GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT-HP SPM PE _ _ SURF PRESS mF BOTTOM HOLE BPM PM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BINS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH FT. SOLIDS TORQUE AMPS OIL PICK UP Mi CAKE ROATATING WT. MX MU SLACK OFF MS ''i ADDITIVES SACKS BIT RECORD BARITE BIT NO. i GELS SIZE CAUSTIC MFG. LIGNITE TYPE UGNO SERIAL NO. Engineer NOZZLES Dynanber m DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND NW-5 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRTLY CLDY 39,900 CAMP CATERING 4 BL SHEAR RAMSTEMPERATURE 54 914 SERVICE 17 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 924 1,956 TOTAL 53 CSG SPOOL • ,11.1111: F RIE Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT UAIt r1tLO Am NUMISM Kll Art YtOMII NUMHtR LOUNI Y alAIt KtP0111 NU. 8/24/12 KLU#2 SOIL BORING 50-733-20603-00-00 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 6 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY IWash f/263't/278',core operations retreave samples,work stuck pipe and free same,core operations,hole packing off pooh and regain circ.,tih wash to bottom no returns,troublr shoot pump problem and changed out pump continue trouble shoot circulation problem. 'Forecast (Trouble shoot circulation problem,continue coring operations(NOTE Pump sucking air changed out suction connection resume coring operations at 01:30 hrs.) HOURS DETAILS OF OPERATIONS START END HRS(OUR) 0:00 1:30 1.5 Wash from 263'to 278' 1:30 4:30 3 Care from 278'to 283'no sample recovered,core f/283'11288'-4"sample recovered,core f/288'1/293'no sample,core f/293 t/298'recovered 60"sample Core R298'1/303'recovered 27"sample,core f/303'1/308'recovered 54"sample,core f/308'1/313'no sample recovered 4:30 7:00 2.5 Working on stuck pipe at 313',building heavy vis mud 7:00 Pipe free,core f/313'1/318'recovered 30"sample,core 1/318'1/323'recovered 18"sample,core f/323'1/328'no sample,core f/328'1/333'recovered 9"sample Core f/333'4338'recovered 20"sample,core f/338'1/343'no sample recovered,core f/343'1/348'no sample recovered,hole packing off,working out of hole from 348' . 15:30 8.5 to 323',attempting to regain circulation 15:30 18:30 3 Trip in hole washing to bottom,coring f/348'4353'no sample,core f/353'11358'no sample,1358'1/363'recover 36"sample,363'11368'no sample,368'1/373'no sample no returns. 18:30 19:00 0.5 POOH 11323'laying down 5"joints total 10 joints. 19:00 19:30 0.5 TRH w/10'joints 3 total 1/353'. ' 19:30 20:00 0.5 Circulated hole clean no returns. 20:00 21:30 1.5 Trouble shooting coring mud pump changed out same. 21:30 22:00 0.5 Try to reestablish circulation no success. 22:00 23:30 1.5 Try to fill hole with coring mud pump,unable to regain returns. 23:00 0:00 0.5 Thin mud viscosity to try and regain circulation. Safety meeting topic:Core drilling operations,Cleaning and Maintenance. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ1O PZ1O FB1600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT•HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH FE SOLIDS TORQUE AMPS OIL PICK UP M# CAKE ROATATING WT. MA MBT SLACK OFF M# ADDITIVES SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynanber m DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR. 32 ANNULAR WIND SE-10 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRTLY/CLDY 38,892 CAMP CATERING 4 IL SHEAR RAMS TEMPERATURE 49 837 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,008 1,618 TOTAL 53 CSG SPOOL • SLOW 50R 6 I 11111111:00 0 0 olli -4t,,„00,.... (000, FURIE Operating Alaska LI.0 CONFIDENTIAL DAILY DRILLING REPORT UAIt ACLU API NUMbEK KIT, Art PEKMlI NUMB, COUNTY SIAIt KcYUKI IVU. 8/25/12 KLU#2 SOIL BORING 50-733-cocoa-o0-0o SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 7 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY Trouble shoot core pump problem,Coreing operations rorecast IFinlsh coreing operations,rig up hammer and drive pipe HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 1:30 1.5 TIH T/373'&trouble shoot pump problem,tighten up pump suction&change suction hose 1:30 5:30 4 Core f/373'1/378'nosample,core f/378'1/383'recovered 30"sample,core f/383'V 388'recovered 30"sample-last 4"had gravel,core f/388'1/393'no sample recovered 5:30 6:30 1 Core f/393'1/398'60"recovered w/pea gravel, 6:30 8:30 2 Working on mud pumps 8:30 Coring f/398't/403'recovered 42"sample-clay&gravel,core f/403't/408'no sample,core f/408'1/413'recover 6"sample w/silt and trace of gravel,core U413'1/418' 14:00 5.5 no sample recovered,f/418'1/423'no sample,cored f/423'(/428'12"sample-silt,sand&gravel,cored f/428'(/433'no sample,core f/433'(/438'no sample 14:00 16:00 2 POOH from 438',lay down 10-5'joints and replace with 5-10'Joints,tih t/438'resume coring 16:00 19:00 3 Coring f/438'(/443'no sample,core f/443'1/450'no sample,core f/450'1/453'no sample,core f/453'(/458'no sample 19:00 20:00 1 POOH from 458',lay down 4-5'Joints and replace with 2-10'joints,tih 1/458' 20:00 0:00 4 Coring f/458'(/463'no sample,core f/463'(/468'no sample core f/468'1/473'no sample,core f/473'(/478'no sample and no returns,core f/478'(/483'no sample Safety meeting topic:Core operations,Off loading equipment from boat,cleaning and maitanance 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL P210 PZ10 FB1600 WEIGHT STROKE 10" 10" 12" RISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM PM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH FT. SOLIDS TORQUE AMPS OIL PICK UP MO CAKE ROATATING WT. MO MST SLACK OFF MO ADDITIVES SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES DynaRber m DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS • AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/e/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SW-8 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRTLY/CLDY 37,716 CAMP CATERING 5 9L SHEAR RAMS TEMPERATURE 51 774 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,176 1,271 TOTAL 54 CSG SPOOL KLU12 MR 7 ., . .4000000000 • . '*--( URE Operating Alaska LL C CONFIDENTIAL DAILY DRILLING REPORT VAIt rICLU All NUMetK OIL, Art YtKMII NUMtER COUNTT MAIC KtYUKI NU. 8/26/12 KLU#2 SOIL BORING 50-733-20603-00-00 SPARTAN 151 12-005 212079 Kenai Pen.Bro. AK 8 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH 'SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY ICoreing operations,POOH w/coreing casing lay down same,rig down soil boring equipment and loa out to M/V Discovery,Held preJob safety mtg w/Franks and rig crews on rigging up drive pipe hammer,weld padeyes on short drive down adapter 'Forecast Drive drive pipe 1/377'165'penetration,rig down Franks drive pipe hammer and equipment,curt and weld on reverter flange. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 3:30 3.5 Core f/483'11488'No Sample,Core f/488't/493'No sample,Core U493'1/498'No sample,Core f/498'11503'No sample,Core f/503'1/508' 3:30 10:00 6.5 Refueled unit with diesel,POOH w/core barrel,hung up,attempting to wash free,core 1/503'1/508 recover 10"sample w/silt and gravel 10:00 14:00 4 POOH with casing,laying down same 14:00 18:00 4 Rig down soil boring equipment,backloading same to M/V Discovery 18:00 22:00 4 Held prejob safety mtg w/Franks and rig crews on r/u drive pipe hammer,rig up same. 22:00 0:00 2 Weld 35 ton padeyes on Franks short drive down adapter Safety meeting topic: 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ10 PZ10 FB1600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH FT. SOLIDS TORQUE AMPS OIL PICK UP MA CAKE ROATATING WT. MU MBT SLACK OFF MU ADDITIVES SACKS BIT RECORD BARITE SIBTZE NO. GELS CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynanber m DEPTH OUT new badge DEPTH IN TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SSW-34 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION CLDY/RAIN 36,750 CAMP CATERING 5 Si.SHEAR RAMS TEMPERATURE 52 686 SERVICE 14 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 966 1,123 TOTAL 53 CSG SPOOL swag DDR a FURIE . Operating Alaska LLC M 60-733-Z0(003-ou-co CONFIDENTIAL DAILY DRILLING REPORT erb Z1Z2119V URIC rmu) AVI NUNIbtH Nl1a Art VCNMlI NUMCC LUUNIY Milt NtYUHI NV. 8/27/12 KLU#2 su-7aa-oouao 00-ca SPARTAN 151 12-006 21 Kenai Pen.Bro. AK 1 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/FRANK JOHNSON 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY Finish rig up Frank's hammer equip.,p/u and m/u 30"drive pipe secure and start drive procedures,Remove broken drive pipe guide,resume drive procedures,secure drive pipe and wait on tide to cairn,resume drive pipe operations drive pipe with 156'penetration,rig down Frank's hammer equipment and load out and offload diverter system. 'F0recast 'Finish load out and offload equip.from boat,install plus 10 valve,set and secure drive pipe guide,soft break and cut 30"drive pipe,laydown 30"drive pipe,weld on diverter flange. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:00 2 Finish R/U Franks hammer equip.Welded padeyes on short drive down adapter,P/U&cut off padeyes 2:00 3:30 1.5 P/U joint#6 align&M/U same to 7500 tong line pull 3:30 4:30 1 Install wedge locks&remove padeyes @ Texas Deck. 4:30 6:30 2 Driving#7 drive pipe joint,drive pipe guide broke below the Texas deck 6:30 8:30 2 Removing broken drive pipe guide 8:30 11:30 3 Resumed hammer operation on Jt.#7,P/U joint#8&drive down same,water currents haulted driving pipe due to excessive movement of drive pipe&hammer 11:30 15:30 4 Securing drive pipe with slings and hoists,waiting on tide to slow down to resume hammer operations,repairing drive pipe guide 15:30 16:30 1 Resumed driving jt.#7 16.30 19:30 3 P/U Joint#8,drive at 155bpf,156'penetration w/BWS at 64.17'below mudline. 19:30 0:00 4,5 Rig down Frank's equipment back load to M/V Discovery and off load diverter equipment,while position texas deck and prepare to weld plus 10 valve,while welders refurb drive pipe guide, Note:Total drive pipe pickup and drove,370.20'-212.00'=158.20'-3.67'above RKB=154.53'Penetration-90.36'BWS from shoe=64.17'BWS below mud line. Safety meeting topic:Driving 30"drive pipe with Frank's hammer,picking up drive pipe from pipe rack. 24 MUD RECORD CASING RECORD PUMP DATA 1 IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ10 PZ10 F81600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS ' API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS TORQUE AMPS OIL PICK UP M# CAKE ROATATING WT M# MBT SLACK OFF Ms ADDITIVES SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer NOZZLES Dynanber In DEPTH OUT new bridge DEPTH IN TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST TOTAL LENGTH AV DC CUM.MUD COST 0 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND NW-6 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRLY CLDY 35,826 CAMP CATERING 5 eL SHEAR RAMS TEMPERATURE 54 622 SERVICE 6 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 924 1,635 TOTAL 45 CSG SPOOL KLUV2 DDR 1 Ni.„ -4 0 reif,-?.`C;S4v ri. . CONFIDENTIAL DAILY DRILLING REPORT UAIt YItLU API OIL/MLitt( KIG AYE PEKMII NUMHtK t-UUNIY 11510 KtPUKI NU. 8/28/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 2 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY Load out Frank's hammer equip.,weld padeyes and attempt to break out top joint no success,rigged up to make rough cut 30",stop working on cutting dove pipe due to current,made cut and layed out,rigged up texas deck for final cut and welding operations,secured drive pipe into guide,made final cut set diverter flange begin welding procedures same. 'Forecast (Weld out diverter flange,install diverter sytem. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 9:00 9 Continue load out Frank's equipment and offload diverter equipment,position texas deck below drive pipe guide and lower drive pipe guide,secure drive pipe same 9:00 11:00 2 Installing pad eyes on drive pipe. Attempted to break out top joint.Unable to hold backup with air hoist line. - 11:00 13:30 2.5 Rigging up to make rough cut on 30"drive pipe 13:30 16:00 2.5 Stop working on drive pipe due to strong tide current. Started welding onflanges to diverter lines on top pipe rack, 16:00 18:00 2 Resumed rigging up to make rough cut on 30”drive pipe. Cut and lay down same. _ 18:00 20:30 2.5 Rigging texas deck for welders to complete final cit on 30",secured drive pipe guide. 20:30 22:30 2 Made final cut on 30"and dressed off same to set and weld 30"diverter flange. 22:30 0:00 1.5 P/u diverter flange and snake under cantilever beams set on 30"same and start welding out flange. Safety meeting topic:Reviewed 7SA's and Stop Cards.Discussed rigging safely for heavy lifts. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME MAKE GD GD EMSCO DEPTH MODEL PZ10 PZ10 FB1600 WEIGHT STROKE 10" 10" 12" VISC. LINER SIZE 6.5 6.5 6.5 PV SPM YP GPM GELS SURF.PRESS API WL SLOW PUMP DATA HT-HP SPM pF SURF PRESS mF BOTTOM HOLE BPM pM ASSEMBLY CAPACITY pH NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca TOTAL CIRC.(STROKES/MIN) CI TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS TORQUE AMPS OIL PICK UP M# CAKE ROATATING WT. M# MET SLACK OFF M# ADDITIVES SACKS BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIGNO SERIAL NO. Engineer 20400 NOZZLES Dynafiber m DEPTH OUT new bridge DEPTH IN Lab 1800 TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 22,200 TOTAL LENGTH AV DC CUM.MUD COST 22,400 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SW-2 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION PRTLY/CLDY 34,944 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 55 556 SERVICE 8 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 882 15,225 TOTAL 47 CSG SPOOL KLU#2 DDR 2 illi°°°.11.111:00:09 • • Operating Alasika LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 8/29/12 KLU#2 So-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 3 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY Welding diverter flange,stop welding on diverter flange due to current,continue weld out diverter flange,n/u diverter,stop n/u diverter due to current, continue n/u diverter,tighten all bolts and secure same,p/u and snake Port diverter line under rig and m/u same. Forecast Finish install Port diverter line,Finish weld out bell nipple and Install,hook up all control lines and function test with AOGCC witness function test,P/u drill pipe and stand in derrick. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 1:30 1.5 Welding on Diverter Flange, 1:30 4:00 2,5 Stop working on drive pipe due to strong tide current.Changed out swivel packing and cleaned on rig while waiting. 4:00 7:30 3.5 Continue to weld out Diverter Starting Flange. 7:30 14:00 6.5 Nippling up Diverter 14:00 16:30 2.5 Stopped nippling up diverter due to strong tide current.Welding on diverter lines and bell nipple while waiting on tide. (Mud cross and diverter valves in place,annular hanging under rig floor on rig up lines.) 16:30 17:30 1 Install diverter annular on diverter spool. 17:30 22:00 4.5 Tighten bolts on diverter and spool flanges,install secondary support line with comalong,and hook BOP winches to diverter annular. 22:00 0:00 2 P/u and snake Port diverter line under canterleaver beam and start make up to flange.While perform fabrications on bell nipple. At 7:30 hrs AOGCC was contacted to request a witness for the 30"diverter function test for 12:00 hrs,8/30/12. Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed nippling up 30"Diverter. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 16:00 MAKE GD GD EMSCO DEPTH MODEL PZ10 PZ10 FB1600 WEIGHT 8.7 STROKE 10" 10" 12" VISC. 62 LINER SIZE 6.5 6.5 6.5 PV 14 SPM YP 17 GPM GELS SURF.PRESS API WL NC SLOW PUMP DATA HT-HP SPM pF 0.8 SURF PRESS mF 1.1 BOTTOM HOLE BPM pM 1.1 ASSEMBLY CAPACITY pH 11.4 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 40 TOTAL CIRC.(STROKES/MIN) CI 1200 TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS 3 TORQUE AMPS OIL PICK UP M# CAKE 2 ROATATING WT. M# MBT SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. GELS 630 150 SIZE CAUSTIC 5 80 MFG. LIGNITE TYPE LIME 10 25 SERIAL NO. Engineer 1 NOZZLES Dynaflber m DEPTH OUT new bridge DEPTH IN Lab 1 TOTAL FT. HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 11,037 TOTAL LENGTH AV DC CUM.MUD COST 33,437 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SW-7 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 33,726 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 55 493 SERVICE 7 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,218 1,479 TOTAL 46 CSG SPOOL KLLIS2 DDR 3 k 7,. FURIE • Opel t(,f-7g At(15/`<L..I LLC,. CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 8/30/12 KLU#2 SO-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 4 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY Finish install port diverter line,fabricate on bell nipple while wait on current,o/I equipment M/V Green Provider,weld on bell nipple and hammer bolts on hydrin,hook up control fines,finish weld bell nipple flange,snake bell nipple under rig,make measurments for flowline bladder,snake out due to current and weld bladder bouncing on bell nipple. Forecast Install bell nipple and tighten,install starboard diverter line and secure,secure bell nipple,install tires to help with cushion on stack,function test Diverter,pick up pipe and bha. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:00 2 Finish install Port diverter line. 2:00 5:30 3.5 Wait on current to slack tide to continue nipple up Diverter,continue fabricate bell nipple and rig up more lines to secure diverter sytem. 0/L miscellaneous equipment from M/V Green Provider. 5:30 10:30 5 Continue welding on bell nipple and hammer up bolts on hydrill. .,10:30 12:00 1.5 Adding additional support to diverter 12:00 15:003 Hooking up Accumilator control lines to 30"diverter system. 15:00 17:00 2 Continue fabricate on bell nipple and secureing diverter. 17:00 20:00 3 Snake bell nipple under floor and set same. 20:00 21:00 1 Welders made measurments to install flow line bladder on bell nipple,current causeing movement on diverter and bell nipple. 21:00 23:00 2 Snaked bell nipple back out from under floor. 23:00 0:00 1 Weld bladder housing onto bell nipple on pipe rack. Safety meeting topic:Review JSA's and Stop Cards. Discussed the importance of always wearing PPE when outside rig. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 16:00 22:00 MAKE GD GD EMSCO DEPTH0 0 MODEL PZ10 PZ10 FB1600_ WEIGHT 8.7 8.8 STROKE 10" 10" 12" VISC. 160 119 LINER SIZE 6.5 6.5 6.5 PV 28 28 SPM YP 36 36 GPM GELS SURF.PRESS API WL NC NC SLOW PUMP DATA HT-HP SPM pF 0.8 0.8 _ SURF PRESS mF 1.1 1.1 BOTTOM HOLE BPM pM 1.1 1.1 ASSEMBLY CAPACITY pH 11 11 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 40 40 TOTAL CIRC.(STROKES/MIN) CI 1200 1200 TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS 3 3 TORQUE AMPS OIL PICK UP MA CAKE2 2 ROATATING WT MA MBT SLACK OFF MA ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. GELS 120 30 SIZE CAUSTIC 80 MFG. FLOWZAN 3, 94 TYPE LIME 25 SERIAL NO. Engineer NOZZLES Dynafiber m DEPTH OUT I new badge DEPTH IN Lab TOTAL FT. HOURS I AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 7,231 TOTAL LENGTH AV DC CUM.MUD COST 40,668 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SSE-5 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION CLDY 32,634 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 54 433 SERVICE 13 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,092 1,479 TOTAL 52 CSG SPOOL KLUM2 00124ll "6m.) (011 ,,5,5.- FUR, ,,,,,..,,,..14,50, Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 8/31/2012 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 5 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 , LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY Installed bell nipple,Waite on slack tide,installed tires on BB winches,installed starboard diverter line,installed texas deck stairs,finish r/u 30'diver sytem,performed diverter function test with AOGCC inspector present and AOGCC inspector shut drilling operations down to movement of diverter caused by currents,attempt to stabilize and repair guii 'Forecast 'Finish repair diverter guide and stabilize diverter to continue drilling operations. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 0:30 0.5 Crews held JSA mtg.and filled out same on,installing bell nipple. 0:30 3:00 2.5 Installed bell nipple and 4-bolted same. 3:00 5:30 2.5 Waiting on tide to slack.Secure diverter by putting tires between diverter and BB winches,while waiting on tide to slack. 5:30 7:30 2.0 Rig up and stab starboard side diverter line. 7:30 11:00 3.5 Hammer up starboard diverter line,check bolts on stack,test Canrig pit volume alarms,and continue to secure diverter. 11:00 12:00 1.0 Install stairs to texas deck and clean the texas deck. 12:00 13:00 1.0 Finished rigging up 30"diverter system. 13:00 16:00 2.0 Performing AOGCC compliance test for 30"diverter system with AOGCC Inspector. 16:00 0:00 8 Attempt to stabilize diverter,add more line with tires,straps and cables,Diverter stable at slack tide,found diverter drive pipe guide broken,disassemble to raise welders repair.Currents at 10.51 knots at 00:00 hrs. AOGCC Inspector on rig @ 13:00 hrs to witness 30"diverter function test. AT 16:50 hrs the drilling operations were shut down by the State of Alaska due to diverter system movement tide change. 9/4111 AOGCC Inspector on rig©13:00 hrs to witness 30"diverter function test. Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed working in wet conditions,stressed the importance of using fall protection equipment. 23 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 20:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 0 MODEL PZ10 PZ10 FB1600 WEIGHT 9 STROKE 10" 10" 12" VISC, 203 LINER SIZE 6.5 6.5 6.5 PV 28 SPM YP 31 GPM GELS 34/66 SURF.PRESS API WL NC SLOW PUMP DATA HT-HP SPM pF 0.8 SURF PRESS mF 1.1 BOTTOM HOLE BPM pM 1.1 ASSEMBLY CAPACITY pH 10.8 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 40 TOTAL CIRC.(STROKES/MIN) CI 1200 TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS 3 TORQUE AMPS OIL PICK UP M# CAKE 3 ROATATING WT. M# MBT 30 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. GELS 150 SIZE CAUSTIC 80 MFG. LIGNITE _ TYPE LIME 25 SERIAL NO. Engineer NOZZLES Dynafiber m DEPTH OUT new bridge DEPTH IN Lab TOTAL FT. Gelex 5 35 HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 6,658 TOTAL LENGTH AV DC CUM.MUD COST 47,326 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND NNW-5 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION CLOUDY 31,584 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 48 567 SERVICE 13 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,050 1,462 TOTAL 52 CSG SPOOL KLU#2 DDR 5 ,000, ... FURZE Ir." Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/1/2012 KLU#2 so-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 6 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY Add 2-tires and cables to top of hydrill,attempt to remove drive pipe guiude unable will have to cut and remove at slack tide,removed guide,insta at well head,fabricate padeyes for bell nipple and drive pipe,weld padeyes on bell nipple,install truck tires on bell nipple padeyes while fabricate on new drive pipe guide. 'Forecast (Finish install truck tires to bell nipple,continue fabricate new drive pipe guide,weld padeyes on drive pipe at slack tide. HOURS DETAILS OF OPERATIONS SFARF END HRS(DUR) 0:00 3:30 3.5 Add two tires and cables to top of hydril.Attempt to remove drive pipe guide for repairs. Will have to cut and remove for repairs during slack tide.At 0:00 hrs the current was moving at 12.10 mph. 3:30 6:30 3.0 Prepare to install truck tires in the cables holding the diverter system. Shut down due to tide current moving 13.32 mph at 4:00 hrs. 6:30 15:00 5.5 Remove and work on drive pipe guide.Installing tires @ well head. 15:00 19:30 4.5 Fabricate padeyes for bell nipple and drive pipe padeyes,rig up cables on truck tires to change out on"BB"winches. 19:30 23:30 4.0 Weld padeyes on bell nipple,finish prepare drive pipe guide padeyes,fabricate new drive pipe guide. 23:30 0:00 0.5 Start change out tires and straps on bell nipple,continue fabrication on drive pipe guide.Tide at 00:00 hrs 10.88 mph. Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed working in wet conditions and using stop work authority in unsafe conditions. 21 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 18:30 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Cory 366.54' MAKE GD GD EMSCO DEPTH 0 MODEL PZ10 PZ10 FB1600 WEIGHT 9 STROKE 10" 10" 12" VISC. 220 LINER SIZE 6.5 6.5 6.5 PV 35 SPM YP 40 GPM GELS 27/62 SURF.PRESS API WL NC SLOW PUMP DATA HT-HP SPM pF 0.8 SURF PRESS mF 1.1 BOTTOM HOLE BPM pM 1.1 ASSEMBLY CAPACITY pH 10.7 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 40 TOTAL CIRC.(STROKES/MIN) CI 1200 TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS 3 TORQUE AMPS OIL _ .__ PICK UP M# CAKE 3 _ _ ROATATING WT. M# MBT 30 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE 90 3321 BIT NO. GELS 30 700 SIZE CAUSTIC , 80 ,_ .. MFG. LIGNITE TYPE LIME 25 SERIAL NO. • Engineer, _ NOZZLES Dynafiber rn DEPTH OUT new bridge DEPTH IN Lab TOTAL FT. Gelex 7 28 HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 5,327 TOTAL LENGTH AV DC CUM.MUD COST 52,653 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SSE-18 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLOUDY 30,534 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 49 492 SERVICE 11 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,050 1,444 TOTAL 51 CSG SPOOL KLU#2 Doe 6 "1111:000:03 RIE - Operating Alaska LL C CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/2/2012 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 7 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY 'Finish install truck tires and cable on bell nipple,continue fab new drive pipe guide,start welding padeyes on drive pipe and main skid beams. Forecast IFinish weld out all padeyes and install air plane tires,complete and install new drive pipe guide,function test diverter sytem with AOGCC witness,pick up drill pipe and bha. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 3:30 3.5 Finish install truck tires and cables on bell nipple support lines,while continue to fabricate new drive pipe guide 3:30 0:00 20.5 Continue to fabricate on new drive pipe guide. Weld pad eyes on drive pipe, start weld padeyes on upper main skid beams,weld on drive pipe padeyes. Safety meeting topic:Discussed using common sense when working,stay alert. Talked about keeping work are free of debris and unused tools. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 16:30 30" 1.5"WALL/X-56 450 PPF Grill Quip/Ten Corr 366.54' MAKE GD GD EMSCO DEPTH 0 MODEL PZ10 PZ10 FB1600 WEIGHT 9 STROKE 10" 10" 12" VISC. 164 LINER SIZE 6.5 6.5 6.5 PV 31 SPM YP 36 GPM GELS 24/59 SURF.PRESS I API WL NC SLOW PUMP DATA HT-HP SPM pF 0.7 SURF PRESS mF 1.1 BOTTOM HOLE BPM pM 1.1 ASSEMBLY CAPACITY pH 10.6 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) • Ca 40 TOTAL CIRC.(STROKES/MIN) • CI 1200 TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS 3 TORQUE AMPS OIL PICK UP M# CAKE 3 ROATATING WT. M# MBT 17.5 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. GELS 34 666 SIZE CAUSTIC MFG. LIGNITE TYPE LIME SERIAL NO. Engineer NOZZLES Dynafiber a, DEPTH OUT new bridge DEPTH IN Lab _ TOTAL FT. Gelex HOURS AVE.ROP WOB RPM AV DP ' AV DP DAILY MUD COST 3,099 TOTAL LENGTH AV DC CUM.MUD COST 55,751 TOTAL WEIGHT GRADE-T/B/G ! CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND NNE-2 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION RAINY 29,442 CAMP CATERING 5 8L SHEAR RAMS TEMPERATURE 48 415 SERVICE 11 MUD CROSS _ FUEL USED DRILL OTHER PIPE RAMS 1,092 1,427 TOTAL 51 CSG SPOOL ' • KLUW2 DDR 7 40,007.0. ..,(:,"":„.,,,,„000-0 Li E Operating Alaska L CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/3/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 8 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD ND KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY Finish weld out drive pipe and sub structure padeyes,continue fab new drive pipe guide,lower texas deck and Install stakes on 30"drive pipe,finish weld out drive pipe guide,install drive pipe saddle prepare to lower drive pipe guide. Forecast install pipe guide and secure same,hook up diverter control lines,pick up drill pipe stand in derrick and p/u 26"bit tih and wash out 30"drive pipe. HOURS DETAILS OF OPERATIONS START END HRS(OUR) 0:00 13:00 13.0 Finish weld out padeyes on drive pipe at texas deck,continue weld out padeyes on skid beam structure,cut and make 1"slings and install on air plane tires, continue fab drive pipe materials for weldding out pipe guide. 13:00 16:00 3.0 Lower texas deck to install strakes on 30"drive pipe. Prepare strakes and place on drive pipe for divers to install. 16:00 19:00 3.0 Finish weld out drive pipe guide. 19:00 0:00 5.0 Install drive pipe guide saddle on drive pipe guide tighten bolts,remove tire and cables obstructing guide for lowering into place.Pick up texas deck to lower pipe guide. Safety meeting topic:Review JSA's and stop cards. Discussed using the riding belt safely and the importance of good communication. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 16:30 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 0 MODEL PZ10 PZ10 FB1600 WEIGHT 9 STROKE 10" 10" 12" VISC. 164 LINER SIZE 6.5 6.5 6.5 PV 31 SPM VP 36 GPM GELS 24 SURF.PRESS API WL 59 SLOW PUMP DATA HT-HP SPM pF 0.7 SURF PRESS mF 1.1 BOTTOM HOLE BPM _ pM 1.1 ASSEMBLY CAPACITY pH 10.6 NO, DESCRIPTION LENGTH BTMS UP(STROKES/MIN) 1 Ca 40 TOTAL CIRC.(STROKES/MIN) CI 1200 TORQUE AND DRAG SAND DEPTH 8,598' FT. SOLIDS 3 TORQUE AMPS OIL PICK UP MA I CAKE 3 ROATATING WT. MA MBT 27.5 SLACK OFF MA ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIME SERIAL NO. Engineer NOZZLES Dynafiber m DEPTH OUT new bridge DEPTH IN Lab TOTAL FT. Gelex HOURS AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 2,600 TOTAL LENGTH AV DC CUM.MUD COST 58,351 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND SSE-30/35 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLOUDY 28,560 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 48 341 SERVICE 11 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 882 1,383 TOTAL 51 CSG SPOOL KLUx2 DDR 8 illigi°1111 • I Operating t a .L CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/5/12 KLU#2 so-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 10 DEPTH-MD/ND PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 386 174 9,000 MD 9000 ND KEITH MATT/KEITH FREENY 907-375-7500 1 LAST CASING/DEPTH SHOE TEST(PPG)I LAST BOP TEST RKB/MUD LINE 31I 212 24 HOUR OPERATIONS SUMMARY (Pick up HWDP and stand in derrick.Install rotary pollution pan on bell nipple.Clean out 30"pipe to 66'Drill to 386.Circ.Pull out of hole.Lay down BHA. Pick up Baker 12 1/4"BHA. 1-orecast 'Pick up Baker 12 1/4"bha.Trip in hole to 386'.Drill pilot hole to+/-1900' HOURS DETAILS OF OPERATIONS STARE END MRS(DUR) 0:00 4:30 4.5 Pick up 27 joints of Hevi Wate drill pipe and rack in derrick. 4:30 6:30 2.0 Install pollution pan on bell nipple.Remove same and modify to ft. 6:30 7:30 1.0 Pick up bottom hole assembly while modifying pollution pan. 7:30 8:00 , 0.5 Install pollution pan on bell nipple. 8:00 10:00 2.0 Pick up 26"bit and bottom hole assembly. 10:00 14:30 4.5 Spud well and drill to 386'. 14:30 18:00 3.5 Circulate hole clean.Pull out of hole,Lay down clean out bottom hole assembly. 18:00 20:00 2,0 Pick up jars and double hwdp.Stand back in derrick.Stage Baker subs to rig floor. 20:00 23:00 3 Pick up Baker MWD collar.Make up closesure sub and 7 5/8 x 6 5/8 xo(shop torqued)attempt to break out 7 5/8 x 6 5/8 xo.Failed,Lay down closesure and xo. Pick up second closesure sub and xo.Break out 7 5/8 x 6 5/8 xo.Lay down MWD collar with closesure sub to deck, 23:00 0:00 1 Pick up Baker 12 1/4"bottom hole assembly. Spud KLU#2*10:00 hrs 9/5/12. Safety meeting topic:Review]SA's and stop cards. Discussed work in high winds and keeping mind on job during last tour before crew change. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 20:30 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 386 MODEL PZ10 PZ10 FB1600 WEIGHT 9.3 STROKE 10" 10" 12" VISC. 122 LINER SIZE 6.5 6.5 6.5 PV 28 SPM 85 85 YP 32 _ GPM 346 346 GELS 10/25/42 SURF.PRESS 500 500 API WL 8.6 SLOW PUMP DATA HT-HP SPM pF 0.2 SURF PRESS mF 0,45 BOTTOM HOLE BPM pM 1 ASSEMBLY CAPACITY pH 10.2 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 20 1 26"GBR RENTAL BIT 1.90' TOTAL CIRC.(STROKES/MIN) CI 900 2 7-5/8"REG BOX X 6-5/8"REG BOX BIT SUB 2.61' TORQUE AND DRAG SAND 2 3 8"DRILL COLLAR 31.04' DEPTH FT. SOLIDS 6 4 6-5/8"REG.PIN X 4-1/2"REG.BOX CROSS OVER SUB 3.71' TORQUE AMPS OIL 5 12 HWDP 346.74 PICK UP M# CAKE 2 ROATATING WT, M# MBT 27.5 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. 1 ' GELS 140 560 SIZE 26" CAUSTIC MFG. GBR LIGNITE TYPE MILL TOOTH LIME SERIAL NO. 969GR-26 !. Engineer NOZZLES 3-20'S Dynafiber m DEPTH OUT 386 new bridge DEPTH IN 366.53' Lab TOTAL FT. 174 Gelex 1 26 HOURS 4.5 AVE.ROP WOB RPM AV DP AV DP DAILY MUD COST 4,677 TOTAL LENGTH 386 AV DC CUM.MUD COST 65,628 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND South 40 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 25,956 CAMP CATERING 5 SL SHEAR RAMS TEMPERATURE 50 1,075 SERVICE 14 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,680 602 TOTAL 53 CSG SPOOL KLUM2 DDR 10 "I°11.1:....? FURIE Q rat,,,,,Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/6/12 KLU#2 50-733-20603-00-oo SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 11 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1657 1271 9,000 MD 9000 TVD KEITH MATT/KEITH PREEN,/ 907-375-7500 2 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY 'Pick up 12 1/4"bha.Trip in hole to 386'.Drill from 386 to 1657 'Forecast (Drill to+1-1900'.Circ.Pull out of hole.Pick up hole opening assembly HOURS DETAILS OF OPERATIONS 5 TART END HRS(DUR) 0:00 5:00 5.0 Pick up Baker 12-1/4"bottom hole assembly. 5:00 5:30 0.5 Trip in hole to 386' 5:30 0:00 18.5 Drill 12 1/4"pilot hole from 386'to 1657'. Depth Incl 494 1.6 554 1.55 647 1.39 738 1.17 828 .90 928 .61 1020 .75 1110 .71 1206 .72 . 1301 .68 1495 .64 1585 .61 Safety meeting topic:Review JSA's and stop cards. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 2100 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 1566 MODEL PZ1O PZ10 FB1600 WEIGHT 9.2 STROKE 10" 10" 12" VISC. 101 LINER SIZE 6.5 6.5 6.5 PV 13 SPM 90 90 YP 40 GPM 366 374 ' GELS 24/50/65 SURF.PRESS 2150 2150 API WL 7.8 SLOW PUMP DATA HT-HP na SPM pF 0.15 SURF PRESS mF 0.65 BOTTOM HOLE BPM pM 0.6 ASSEMBLY CAPACITY pH 9.4 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 200 1 12-1/4"HCC GT-C1 SR#5187242 1.00 TOTAL CIRC.(STROKES/MIN) CI 3800 2 MUD MOTOR..15 rpg 35.90 TORQUE AND DRAG SAND 3 3 NM PONY COLLAR 10.17 DEPTH 1657 FT. SOLIDS 5 4 NM STRING STABALIZER 5.97 TORQUE 3000 AMPS OIL 0 5 NM BOTTOM STOP SUB 2.58 PICK UP 125 M# CAKE 2/32" 6 ONTRAK-MWD/GAMMA/DIR 22.92 ROATATING WT. 120 M# MBT 20 7 12-1/8"MODULAR STABALIZER 5.94 SLACK OFF 115 M# ADDITIVES USED ON RIG 8 BCPM SUB 11.65 BIT RECORD BARITE 257 3065 9 NM TOP STOP SUB 2.16 BIT NO. 2 1 GELS 630 210 10 NM X-OVER 4.05 SIZE 12-1/4" 26" CAUSTIC 1 68 11 NM FILTER SUB 5.55 MFG. HCC GBR LIGNITE 12 NM X-OVER 2.69 TYPE GT-CI MILL TOOTH LIME 13 8"NM DRILL COLLAR 30.78 SERIAL NO. 5187242 969GR-26 Engineer 2 2 14 8"NM DRILL COLLAR 30.69 NOZZLES 3-18'S;CENTER-14 3-20'S Dynafber m 15 STEEL X-OVER 1.60 DEPTH OUT 386 new bridge 16 24 HWDP 736.96 DEPTH IN 386 366.53' Lab 1 1 17 JAR 31.32 TOTAL FT. 1271 174 Geleo 26 18 80 1,02 HOURS 18.5 4.5 SODA ASH 5 38 19 5 HWDP 152.37 AVE.ROP 69 FLOZAN 4 59 WOB 0/5 POLY PAC 3 15 RPM 50/MM 110 AV OP AV DP DAILY MUD COST 16,017 TOTAL LENGTH 1095.32 AV DC CUM.MUD COST 81,645 TOTAL WEIGHT 50K GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 31 ANNULAR WIND 5.5.E30 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 23,520 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 48935 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,436 1,045 TOTAL 53 CSG SPOOL KLU#2 DDR 11 „fri:000 FuRIE ,... ,,,r,„„,„,40,0„. Ir. t p rwtin Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/7/2012 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 12 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906 249 9,000 MD 9000 TVD KEITH MATT/KEITH FREENY 907-375-7500 3 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY IDrill 12 1/4"pilot hole to 1816'.Down time repair mud pumps.Drill pilot hole to 1906'.Circ.Pull out of hole.Stand back Baker assembly in derrick. Pick up 26"hole opener assembly.Trip in hole to 386'Open hole from 12 1/4 to 26"from 386 to 575.Down time.Repair blower motor on top drive.Open hole to 672'.Down time.Repair blower motor c 'Forecast lOpen hole from 12 1/4 to 26"to 1900' HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:00 2.0 Drill 12-1/4"pilot hole from 1,657'to 1,816'. 2:00 . 3:30 1.5 Downtime.Circulate with#1 pump while trouble shooting#2 pump and making repairs on#3 pump. Circulate with#3 pump while making repairs on#1 p 3:30 5:00 1.5 Drill 12-1/4"pilot hole from 1,816'to 1,906'. 5:00 6:00 1.0 Pump 50 bbl circulate hole clean. 6:00 8:30 2.5 Pump slug and pull out of hole.SLM. 8:30 10:30 2.0 Download MWD,Drain Motor,Lay Down Bit,Stand back NMDC and Motor. 10:30 12:00 1.5 P/U 26"Hole Opener and Bottom Hole Assembly 12:00 14:00 2.0 Trip in hole with 26"hole opener 14:00 17:00 3.0 Open 12-1/4"hole to 26"hole from 386'to 575' 17:00 20:30 3.5 Down time.Circ and clean hole while repairing blower motor on top drive. 20:30 22:00 1.5 Open 12-1/4"hole to 26"hole from 575 to 672' 22:00 0:00 2 Down Time.Circ and clean hole while repairing blower motor on top drive. Safety meeting topic:Review JSA's and stop cards. Discussed picking up BHA,keeping work area tidy and clean. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 15:00 21:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corr 366.54' MAKE GD GD EMSCO DEPTH 1906 1906 MODEL PZ10 PZ10 FB1600 WEIGHT 9.2 9.2 STROKE 10" 10" 12" VISC. 85 82 - LINER SIZE 6.5 6.5 6.5 PV 14 16 SPM 90 90 YP 36 29 GPM 366 374 GELS 20/50/61 12/51/62 SURF.PRESS 750 750 API WL 6.9 6.8 SLOW PUMP DATA HT-HP na na SPM _ pF 0.1 0.15 SURF PRESS mF 0.75 0.8 BOTTOM HOLE BPM pM 0.45 0.55 ASSEMBLY CAPACITY pH 9.2 9.1 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 120 100 1 26"BULL NOSE HOLE OPENER 8.69 TOTAL CIRC.(STROKES/MIN) CI 2600 2400 2 BIT SUB 2.84 TORQUE AND DRAG SAND 1.75 1.75 3 CROSS OVER 2.61 DEPTH FT. SOLIDS 5 5 4 DRILL COLLAR 31.03 TORQUE AMPS OIL 0 0 5 DRILL COLLAR 30.74 PICK UP M# CAKE 2/32" 2/32" 6 STABALIZER 6.02 ROATATING WT. M# MBT 18.5 18.75 7 DRILL COLLAR 30.53 SLACK OFF M# ADDITIVES USED ON RIG 8 DRILL COLLAR 30.58 BIT RECORD BARITE 3065 9 STABALIZER 5.83 BIT NO. 2 1 GELS 142 377 10 DRILL COLLAR 30.77 SIZE 12-1/4" 26" CAUSTIC 2 66 11 DRILL COLLAR 30.76 MFG. HCC GBR Mixllmed 7 50 12 CROSS OVER 2.85 TYPE GT-C1 MILL TOOTH Nut plug reed 27 63 13 24 HWDP 736.96 SERIAL NO. 5187242 969GR-26 Engineer 2 2 14 JAR 31.32 NOZZLES 3-18'S;CENTER-14 3-20'S Dynafiber to 15 XO 1.02 DEPTH OUT 386 new bridge 16 5 HWDP 152.37 DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 18.5 4.5 SODA ASI- 5 37 AVE.ROP 69 FLOZAN 12 44 WOB 0/5 POLY PAC 7 4 RPM 50/MM 110 Safecarb4 9 8 AV DP AV DP DAILY MUD COST 9,271 TOTAL LENGTH 1134.92 AV DC CUM.MUD COST 91,116 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 31 ANNULAR WIND North 5 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 21,042 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 46 853 SERVICE 11 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,604 272 TOTAL 49 CSG SPOOL KLUa2 DDR 12 "00000 000 :,er 1:2:tt"r J r:1(1.I G z__'-C CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/8/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 13 DEPTH-MD/ND PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906 9,000 MD 9000 ND KEITH MATT/KEITH FREENY 907-375-7500 _ 4 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 212 24 HOUR OPERATIONS SUMMARY Down time.Repair blower on top drive.Open hole from 12 1/4 to 26"from 672 to 872'.Circ sand out..Open hole to 976.Circ sand out.Open hole to 1410' Circ sand out.Open hole to 1609'. rorecast (Open 12 1/4"hole to 26"to 1900'.Pump sweep.Circ hole clean.Short trip.Circ.Pull out of hole.Run 20"casing. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 1:00 1.00 Downtime. Repair blower on top drive. 1:00 6:30 4.50 Open 12-1/4"hole to 26"from 672'to 872' 6:30 7:00 1.50 Pump Sweep.Circulate hole clean. 7:00 8:00 1.00 Open 12-1/4"hole to 26"from 872'to 976' 8:00 9:00 1.00 Circulate hole clean 9:00 18:00 9.00 Open 12-1/4"hole to 26"from 976'to 1410' 18:00 18:30 0.50 Circulate hole clean 18:30 0:00 5.50 Open 12-1/4"hole to 26"from 1410'to 1609' 3-Inspectors from the EPA&ADEC inspected the rig today from 8:00 hrs till 14:30 hrs. Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed not taking unnecessary risk and using stop work authority. 24.00 MUD RECORD CASING RECORD PUMP DATA I IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 21:00 15:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 1489 1269 MODEL PZ10 PZ10 FB1600 WEIGHT 9.5 9.5 STROKE 10" 10" 12" VISC. 105 91 LINER SIZE 6.5 6.5 6.5 PV 19 24 SPM 80 80 YP 27 23 GPM 326 326 GELS 18/39/50 11/39/54 SURF.PRESS 950 950 API WL 6,2 6.2 SLOW PUMP DATA HT-HP NA NA SPM pF 0.25 0.15 SURF PRESS mF 0.8 1.05 BOTTOM HOLE BPM pM 0.5 0.6 ASSEMBLY CAPACITY pH 9.5 9.5 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 80 80 1 26"BULL NOSE HOLE OPENER 8.69 TOTAL CIRC.(STROKES/MIN) CI 1550 1600 2 BIT SUB 2.84 TORQUE AND DRAG SAND 3 3 3 CROSS OVER 2.61 DEPTH 1609 FT. SOLIDS 6.5 6.5 4 DRILL COLLAR 31.03 TORQUE 3000 AMPS OIL 0 0 5 DRILL COLLAR 30.74 PICK UP 125 M# I CAKE 2/32" 2/32" 6 STABALIZER 6.02 ROATATING WT. 120 MS I MBT 20 19.25 7 DRILL COLLAR 30.53 SLACK OFF 115 MS ADDITIVES USED ON RIG 8 DRILL COLLAR 30.58 BIT RECORD BARITE 3065 9 STABALIZER 5.83 BIT NO. 2 1 GELS 233 144 10 DRILL COLLAR 30.77 SIZE 12-1/4" 26" CAUSTIC 3 63 11 DRILL COLLAR 30.76 MFG. HCC GBR Mixllmed 8 42 12 CROSS OVER 2.85 TYPE GT-C1 MILL TOOTH Nut ping med 15 88 13 24 HWDP 736.96 SERIAL NO. 5187242 969GR-26 Engineer 2 2 14 JAR 31.32 NOZZLES 3-18'S;CENTER-14 3-20'S Dynafiber m 15 XO 1.02 DEPTH OUT 1906 386 new bridge 16 5 HWDP 152.37 DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 '. SODA ASH 17 20 AVE.ROP 69 I FLOZAN 28 16 WOB 0/5 POLY PAC 28 46 RPM 50/MM 110 Safecarb4C 13 51 AV DP AV DP DAILY MUD COST 16,833 TOTAL LENGTH 1134.92 AV DC CUM.MUD COST 107,750 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 31 ANNULAR WIND N.E.25 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 37,170 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 50 803 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,100 524 TOTAL 53 CSG SPOOL KLUC2 DDR 13 Iry froos-..„,,„, FURZE .,„ Operating ratin Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/9/12 KLU*2 SO-733-70603-00-00 SPARTAN 151 12-006 2120790 Kenal Pen.Bro. AK 14 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 ND KEITH MATT/KEITH FREENY 907-375-7500 5 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY 'Open hole to 26"to 1884.Back ream and ream down for connection.Taking weight at 1881 and not drilling off.Pump sweep.Circ out.Pull out of hole. Break off bull nose and install 12 1/4"bit.Tnp in hole to f 876.Tag fill.Open hole to 26"to 1900'.Pump sweep and circ out.Pull out of hole and lay down stabilizers and hole opener.Rig up to run 20"casing Forecast 1Run and cement 20"casing. HOURS '"w.. DETAILS OF OPERATIONS SIAHT 2NU HRS(L0JI 0:00 5:00 5.00 -Open 12-1/4"hole to 26"from 1609'to 1884' 5:00 7:00 2.00 Back ream and ream down to 1884'. Taking weight-Back ream and ream down to 1881',taking weight. Pump sweep and attempt to work deeper.Circulate out sweep. 7:00 10:00 3.00 Pull out of hole to pick up drill bit on end of hole opener. 10:00 13:00 3.00 Remove bullnose from 26"hole opener and install 12-1/4"drill bit. Trip in hole to 1876'. - - 13:00 15:00 2.00 Open 12-1/4"hole to 26"from 1876'to 1900'. 15:00 16:30 1.50 Pump hi vis sweep,circulate hole clean. 16:30 21:30 5.00 Pump slug,pull out hole.Lay down stabilizers and hole openers. 21:30 0:00 2.50 _Rig up GBR casing equipment. 'Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed cleaning up spills and keeping work areas clean and tidy. - 24.00 _ MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 21:00 14:00 30' 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 1901 1888 MODEL PZIO PZ10 FB1600 WEIGHT 9.5 9.5 STROKE 10" 10" 12" VISC. 107 87 LINER SIZE 6.5 6.5 6.5 PV 25 19 SPM 80 80 YP 30 30 GPM 326 326 GELS 11/37/55 13/27/40 SURF.PRESS _ 950 _ 950 API WL 6 5.9 SLOW PUMP DATA HT-HP na na SPM pF 0.2 0.2 SURF PRESS mF 1.2 0.9 BOTTOM HOLE BPM pM 0.65 0.4 ASSEMBLY CAPACITY pH 9.7 9.4 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 60 80 1 26"BULL NOSE HOLE OPENER 8.69 TOTAL CIRC.(STROKES/MIN) CI 1450 1450 2 BIT SUB 2.84 TORQUE AND DRAG SAND 4 4.25 3 CROSS OVER 2.61 DEPTH 1609 FT. SOLIDS 8 7.5 4 DRILL COLLAR 31.03 TORQUE 3000 AMPS OIL 0 0 5 DRILL COLLAR 30.74 PICK UP 125 M# CAKE 2 2 6 STABALIZER 6.02 ROATATING WT. 120 Mu MBT 22.625 20 7 DRILL COLLAR 30.53 SLACK OFF 115 Ma ADDITIVES USED ON RIG 8 DRILL COLLAR 30.58 BIT RECORD BARITE 256 3065 9 STABALIZER 5.83 BIT NO. 2 1 GELS 75 85 10 DRILL COLLAR 30.77 SIZE 12-1/4" 26' CAUSTIC 2 61 11 DRILL COLLAR 30.76 MFG. HCC GBR Mixllmed 18 14 12 CROSS OVER 2.85 TYPE GT-C1 MILL TOOTH Nut plug mea 5 78 13 24 HWDP 736.96 SERIAL NO. 5187242 969GR-26 Engineer 2 2 14 JAR 31.32 NOZZLES 3-18'S;CENTER-14 3-20'S Dynaflberm 15 50 1.02 DEPTH OUT 1906 386 new bridge 16 5 HWDP 152.37 DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA ASH 1 17 AVE.ROP 69 FLOZAN 5 80 WOB 0/5 POLY PAC 8 35 RPM 50/MM 110 1 Safecarb40 12 34 AV DP AV DP DAILY MUD COST 7,087 TOTAL LENGTH 1134.92 AV DC CUM.MUD COST 114,837 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 31 ANNULAR WIND N.W.10/15 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 34,566 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 49 704 SERVICE 16 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,604 1,748 TOTAL 54 CSG SPOOL KLUM2 DDR 14 "00011:000_003 f(11111111 10 FURIE Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/11/12 KLU*2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 16 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 TVD KEITH MATT/KEITH FREENY 907-375-7500 7 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 212 24 HOUR OPERATIONS SUMMARY Run 20"casing to 1905'.Circ.Rig up and cement.Wash out at hanger.Spot B.J.retarder pill at hanger.Lay down grout string. extension lines. 1-orecast Nipple down diverter.Install 20"wellhead.Run 13 3/8 casing. HOURS DETAILS OF OPERATIONS START END HRS(DM 0:00 0:30 0.50 Pick up and run 20"casing from 1348'to 1384'. 0:30 1:00 0.50 Change out GBR power unit for casing tongs 1:00 4:00 3.00 Run 39 jts of 20",N-80,106/133/169#,BTC,casing. Pick up hanger.Trip in hole with 45 joints total-tag @ 1903'.Wash to 1905'. Hanger @ 266'. 4:00 6:00 2.00 Circulate hole clean. 6:00 11:30 5.50 Rig down fill up tool and rig up 20"cement head. Load head with cement plug.Picked up 2 grout strings.Run same in hole to 277/278', 11:30 12:00 0.50 Held safety meeting with Baker Pressure and rig personnel. 12:00 13:00 1.00 Pump 60 bbl mud clean two spacer W/rig pumps.Test Baker line to 2000 psi.Drop bottom plug. 13:00 16:30 3.50 Mix and pump 1959 sx class g lead cement with 2%ad-2 and.4%cd 32 at 12.5 ppg,730 bbl slurry.Tail cement 500 sx class g with.5%cd32 and.25%a-7 at 15.8 ppg 105 bbl slurry. _ 16:30 18:00 1.50 Pump 100 bbl tail.Drop top plug.Pump 5 bbl cement and 10 bbl water.Displace with 612 bbi mud W/Rig pumps.Bump plug with 500 psi over circ pressure,1000 psi. Checked floats.OK.j Washing thru grout string with BJ unit while displacing cement.Bump plug and switched to rig pump to wash out.ZCement in place at 17:35. 18:00 21:30 3.50 Continue to wash out with seawater thru dual grout string at 280'until water clean.Reposition grout string and wash out again.Repostion grout string for third time and wash out. 21:30 22:00 0.50 Pump 70 bbl retarder and spot at 280' 22:00 0:00 2.00 Lay down grout strings while monitoring 30 x 20 annlus.5 bbl lost Note full returns during cement job.Cement returns to surface.Appr 75 bbl Safety meeting topic:Discussed the necessity of following safety guidelines. Stated that the consequences of non-compliance will be termination. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 0:00 0:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 1901 1901 20" N-80 169/133/106 BT&C 1905' MODEL P210 PZ10 FB1600 WEIGHT 9.5 9.5 STROKE 10" 10" 12" VISC. 65 75 LINER SIZE 6,5 6.5 6.5 PV 16 19 SPM 80 80 YP 25 27 GPM 326 326 GELS 7/14/21 10/22/35 SURF.PRESS 950 950 API WL 6.6 6.4 SLOW PUMP DATA HT-HP SPM pF 0.1 0.15 _ SURF PRESS mF 1.1 1.2 BOTTOM HOLE BPM pM 0.5 0.6 ASSEMBLY CAPACITY pH 9 9.3 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 60 60 TOTAL CIRC.(STROKES/MIN) CI 1400 1400 TORQUE AND DRAG SAND3 3.5 DEPTH FT. SOLIDS 7.5 7.5 TORQUE AMPS OIL PICK UP M# CAKE2 2 ROATATING WT. MO MBT 20 21.25 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD _ BARITE 3065 BIT NO. 2 1 GELS8 85 SIZE 12-1/4" 26" CAUSTIC 3 58 MFG. HCC GBR Mixllmed 14 TYPE GT-C1 MILL TOOTH N.plug reed 78 SERIAL NO. 5187242 969GR-26 Engineer 2 2 NOZZLES 3-18'S;CENTER-14 3-20'S Dynafiber m DEPTH OUT 1906 386 new bridge DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA ASH 17 AVE.ROP 69 FLOZAN 80 WOB 0/5 POLY PAC 35 RPM 50/MM 110 Safecarb4C 4 34 AV DP defoamer 4 41 AV DP DAILY MUD COST 3,534 TOTAL LENGTH 0.00 AV DC CUM.MUD COST 121,090 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 31 ANNULAR WIND North 15 FUEL ONBOARD WATER ONBOARD OPERATOR2 PIPE RAMS - CONDITION Rain 31,500 CAMP CATERING5 BL SHEAR RAMS TEMPERATURE 44 605 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER S PIPE RAMS 1,932 1,002 TOTAL 53 CSG SPOOL KLUd2 DDR 16 / e)00000. l:lifFURIE Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/12/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. _ AK 17 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 ND KEITH MATT/KEITH FREENY 907-375-7500 8 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 212 24 HOUR OPERATIONS SUMMARY ILay down grout strings.Remove pollution pans and diverter extension lines.Nipple down cement head.Raise bell nipple and cut 20"pipe.Lay out same. Raise diverter and make rought cut on 20"pipe.Remove diverter and spool from well bay.Cut and remove 30"starter flange.Make final cut on 20"pipe. 1-orecast jSet and weld out 20"S.O.W.Test same.Run 13 3/8 casing.Install 13 3/8 wellhead.Nipple up 13 5/8 bop HOURS DETAILS OF OPERATIONS SIARt tND HRS(DUR) 0:00 1:00 1.00 Lay down grout string. Clear floor of excess equipment while monitoring 30"x 20"annulus. Lost total of 7 barrels. 1:00 5:00 4.00 Remove pollution pans in rotary. Nipple down diverter extension lines. 5:00 15:00 10.00 Remove cement head,removed bell nipple,lifted same,made rough cut on 20",remove and lay down same. Rigging up to lift diverter. 15:00 20:00 5.00 Raise diverter.Make rought cut on 20".Set diverter.Lay down cut joint of 20"pipe.Remove diverter and spool from well bay and set on cantilever deck. 20:00 21:00 1.00 Remove diverter from diverter spool and set diverter on shipping rack while removing rental bolts and cleaning 30"and 20"pipe for final cut. 21:00 0:00 3.00 Cut and remove starter flange from 30"pipe.Make final cut on 20"pipe. Safety meeting topic:Nipple down diverter and nipple up bop.Heavy lifts with crane. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 0:00 0:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 1905 1905 20" N-80 169/133/106 BT&C 1905' MODEL PZ1O PZ10 FB1600 WEIGHT 9.6 9.5 STROKE 10" 10" 12" VISC. 54 64 LINER SIZE 6.5 6.5 6.5 PV 16 17 SPM 80 80 YP 21 22 GPM 326 326 GELS 7/13/21 7/14/20 SURF.PRESS 950 950 API WL 6.6 6.5 SLOW PUMP DATA HT-HP SPM pF 0.15 0.1 SURF PRESS mF 1 1 BOTTOM HOLE BPM pM 0.35 0.4 ASSEMBLY CAPACITY pH 9 9.1 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 60 60 TOTAL CIRC.(STROKES/MIN) CI 1400 1400 TORQUE AND DRAG SAND 2.5 , 3 DEPTH FT. SOLIDS 7.5 7.5 TORQUE AMPS OIL 0 0 PICK UP M# CAKE 2 2 ROATATING WT. M# MBT 20 20 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE 3065 BIT NO. 2 1 GELS 85 SIZE 12-1/4" 26" CAUSTIC 58 MFG. HCC GBR Mixllmed 14 TYPE GT-C1 MILL TOOTH Nut pws m<" 78 SERIAL NO. 5187242 969GR-26 Engineer 2 2 NOZZLES 3-18'5;CENTER-14 3-20'S Dy"aeoe,m DEPTH OUT 1906 386 new bridge DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA ASH 17 AVE.ROP 69 FLOZAN I 80 WOB 0/5 POLY PAC 35 RPM 50/MM 110 Safecarb40 34 AV DP defoamer 41 AV DP DAILY MUD COST 2,600 TOTAL LENGTH 0.00 AV DC CUM.MUD COST 123,690 TOTAL WEIGHT GRADE-T/B/G 2/2/I , CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND I North 2 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS _ CONDITION Cloudy 30,240 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 47 539 KLU82 DDR 17 000000:00:00 FURZE ,....,., Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/13/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 18 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 ND KEITH MATT/KEITH FREENY 907-375-7500 9 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 212 24 HOURS OPERATION SUMMARY. (Make final cut on 20"pipe.Install 20 wellhead.Attempt to test.Repair wellhead and test to 385 psi.Run 13 3/8 casing to 436'.Install 13 3/8 wellhead and test to 1750 psi.Install drive pipe guide. forecast Finish installing drive pipe guide.Nipple up bop and test. HOURS DETAILS OF OPERATIONS START tND HRS(DUR) 0:00 0:30 0.50 Make final cut on 30"and 20"pipe. 0:30 5:00 4.50 Set 20"Slip on well head and weld out same. 5:00 6:30 1.50 Post heat well head and wrap same. Let cool.Rig up GBR 13-3/8"casing tools. 6:30 7:30 1.00 Pick up and break out hanger joint. Make up hanger joint to 2500 lbs torque. Perform hydraulic test on hanger with Cameron 7:30 9:30 2,00 Attempt to test wellhead with nitrogen. Leaks found on well head.Repair leaks.Retest well head to 385 psi for 30 minutes.Good test. 9:30 13:30 4,00 Run in hole with 13-3/8"casing to 436'.Hanger at 266'. 13:30 15:30 2.00 Make rough cut on 13-3/8"casing.Lay down cut joint of 13-3/8"casing. _ 15:30 16:00 0.50 Make final cut on 13-3/8"casing. _ 16:00 21:00 5.00 Installing well head and test to 1750 psi for 30 minutes. 21:00 0:00 3.00 Remove excess equipment from Texas deck.Remove pollution pan.Open door on Texas deck and install drive pipe guide. 08:25 hrs.E-mailed 31m Regg(AOGCC)with 24hr notification for BOPE Test witness. Safety meeting topic:Nipple up and testing bop.Crane lifts 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 0:00 0:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 1905 1905 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.6 9.6 13 3/8 N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 55 55 LINER SIZE 6.5 6.5 6.5 PV 15 15 SPM YP 21 22 GPM GELS 7/12/18 7/12/19 SURF.PRESS API WL 6.7 6.5 SLOW PUMP DATA HT-HP SPM I pF 0.1 0.1 SURF PRESS mF 1 1 BOTTOM HOLE BPM pM 0.3 0.3 ASSEMBLY CAPACITY pH 8.8 8.9 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 60 60 TOTAL CIRC.(STROKES/MIN) CI 1400 1400 TORQUE AND DRAG SAND 2 2 DEPTH FT. SOLIDS 7.5 7.5 TORQUE AMPS OIL 0 0 PICK UP M# CAKE 2 2 ROATATING WT. M# MBT 20 20 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE 3065 BIT NO. 2 1 I GELS 85 SIZE 12-1/4" 26" CAUSTIC 58 MFG. HCC GBR Mixttmed 14 TYPE GT-C1 MILL TOOTH 78 SERIAL NO. 5187242 969GR-26 Engineer 2 2 NOZZLES 3-18'5;CENTER-14 3-20'S ovne berm DEPTH OUT 1906 386 new bridge DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA ASH 17 AVE.ROP 69 FLOZAN I 80 WOB 0/5 POLY PAC 35 RPM 50/MM 110 Safecarb40 34 AV DP defoamer 41 AV DP DAILY MUD COST 2,600 TOTAL LENGTH 0.00 AV DC CUM.MUD COST 126,290 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND South 10 FUEL ONBOARD (WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 28,560 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 48 468 KLU#2 DDR 18 FURIETellM°111;1),;404„..4),,'i.le Operating Alaska L L C CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/14/2012 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 19 DEPTH-MD/TV PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 TVD KEITH MATT/KEITH FREENY 907-375-7500 10 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 212 24 HOURS OPERATION SUMMARY. Install drive pipe guide.Nipple up 13 5/8 bope.Rig up to test bope.Center bope with rotary. t Nest bope.Center bope with rotary. Pick up BHA.Trip in hole.Tag cement.Circ.Test casing.Drill out. F.I.T.to 11.5 ppg. HOURS DETAILS OF OPERATIONS START END HRS(DUR) _ 0:00 1:30 1.50 Install drive pipe guide and pollution pan. 1:30 20:00 18.50 Nipple up 13-5/8"BOPE.Function test same. 20:00 22:00 2.00 Rig up to test BOPE.Attempt to center bope with rotary.Unpin drive pipe guide and attempt to pull 30"pipe to stern with winches.Note current running fr 22:00 0:00 2.00 Finish rigging up to test while opening door on drive pipe guide and centering bop with rotary. Jim Regg with AOGCC waived witness for the 13-5/8"10M BOPE Test @ 13:30 today. Safety meeting topic: Nipple up and testing bope. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 0:00 0:00 30" 1.5"WALL/X-56 450 PPF )rill Quip/Ten Con 366.54' MAKE GD GD EMSCO DEPTH 1905 1905 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.6 9.6 13 3/8 N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 54 55 LINER SIZE 6.5 6.5 6.5 PV 16 15 SPM YP 19 21 GPM GELS #### ###### SURF. PRESS API WL 6.6 6.6 SLOW PUMP DATA HT-HP SPM pF 0.1 0.1 _ SURF PRESS mF 1 1 BOTTOM HOLE BPM pM 0.3 0.3 ASSEMBLY CAPACITY pH 8.8 8.8 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 60 60 TOTAL CIRC. (STROKES/MIN) CI 1400 1400 TORQUE AND DRAG SAND 2 2 DEPTH FT. SOLIDS 7.5 7.5 TORQUE AMPS OIL 0 0 PICK UP M# CAKE 2 2 ROATATING WT. M# MBT 20 20 SLACK OFF M# ♦D0mvE5 USED ON RIG BIT RECORD BARITE 3065 BIT NO. 2 1 GELS 85 SIZE 12-1/4" 26" CAUSTIC 58 MFG. HCC GBR MixIImed 14 TYPE GT-C1 MILL TOOTH Mut plug rued 78 SERIAL NO. 5187242 969GR-26 Engineer 2 2 NOZZLES 3-18'S;CENTER-14 3-20'S Dynafiberm DEPTH OUT 1906 386 new bridge DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA ASH 17 AVE.ROP 69 FLOZAN 80 WOB 0/5 POLY PAC 35 RPM 50/MM 110 Safecarb40 34 AV DP defoamer 41 AV DP DAILY MUD COS 2,600 TOTAL LENGTH 0.00 AV DC CUM.MUD COS- 128,890 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND North10FUELL076 ARD WATER ONBOARD OPERATOR PIPEA CONDITION dy2 CAMP CATERING G 5 ERRAMS K'U"7-DD1O TEMPERATURE 1,015 00004 -V110111°H F Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/15/2012 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 20 DEPTH-MD/TV PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 TVD KEITH MATT/KEITH FREENY 907-375-7500 11 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 212 24 HOURS OPERATION SUMMARY. 1Test bop.Down time Trouble shoot blind rams.(not closing fully).Install bell nipple and pollution pans. t !Install blind rams.Test blind rams and upper pipe rams.Pick up BHA.Trip in hole and tag cement.Circ.Test casing to 2500 psi. Drill out. FIT test. HOURS DETAILS OF OPERATIONS Si AR! END NRS(DUR)' 0:00 6:30 6.50 Testing BOPE 250/3500/5000 psi 6:30 19:30 13.00 Down Time. Trouble shoot 13-5/8"blind rams.Change seals on blind rams and attempt to test.Remove 5"pipe rams from top rams and install in blind ra Test good.Remove 5"pipe rams from blind and install in top ram.Close blind ram bonnet. 19:30 23:00 3.50 Install lower section of bell nipple to hydril.Install tires and b-b winches to port side of hydril.Install upper section of bell nipple. 23:00 0:00 1.00 Offload rams from boat at 23:00.Continue to nipple up bell nipple and pollution pans while dressing blind ram blocks with rubbers Safety meeting topic: Reviewed JSA's and Stop Cards. Discussed the importance of following written procedures for high risk and unusual situations. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 0:00 0:00 30" 1.5"WALL/X-56 450 PPF )rill Quip/Ten Con 366.54' MAKE GD GD EMSCO DEPTH 1905 1905 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.6 9.6 13 3/8 N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 54 55 LINER SIZE 6.5 6.5 6 PV 15 15 SPM YP 21 21 GPM GELS #### ###### SURF.PRESS API WL 6.6 6.6 SLOW PUMP DATA HT-HP na na SPM pF 0.3 0.3 SURF PRESS mF 0.1 0.1 BOTTOM HOLE BPM pM 1 1 ASSEMBLY CAPACITY pH 8.8 8.8 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 50 60 TOTAL CIRC. (STROKES/MIN) CI 1400 1400 TORQUE AND DRAG SAND 2 2 DEPTH FT. SOLIDS 7.5 7.5 TORQUE AMPS OIL 0 0 PICK UP M# CAKE 2 2 ROATATING WT. M# MBT 20 20 SLACK OFF M# E: USED ON RIG BIT RECORD BARITE 3065 BIT NO. 2 1 GELS 85 SIZE 12-1/4" 26" CAUSTIC 58 MFG. HCC GBR MixlImed 14 TYPE GT-C1 MILL TOOTH "t plug tn. 78 SERIAL NO. 5187242 969GR-26 Engineer 2 NOZZLES 3-18'S;CENTER-14 3-20'S KCL 90 DEPTH OUT 1906 386 salt 294 DEPTH IN 386 366.53' Lab 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA ASH 17 AVE.ROP 69 FLOZAN 80 WOB 0/5 POLY PAC 35 RPM 50/MM 110 Safecarb40 34 AV DP defoamer 41 AV DP DAILY MUD COS 12,514 TOTAL LENGTH 0.00 AV DC CUM.MUD COS' 141,404 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND North 20 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 26,922 CAMP CATERING 5 BL SHEAR RAMS Y,,,e2.D S V TEMPERATURE 46 952 (111111111111,„,„,.. Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/16/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 21 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1906' 9,000 MD 9000 TVD _KEITH MATT/KEITH FREENY 907-375-7500 12 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 212 24 HOURS OPERATION SUMMARY. Nipple up pollution pan while dressing blind rams.Attempt to install Archer blind rams.Failed.Remove and install Spartan blind rams and attempt to test. Failed.Nipple up Bowline.Install B-B winches and tires to hydrill.Install rachet binders on 30"pipe.Pull test plug.R/D test equipment.Change out jar.P/U mud motor and change angle.P/U drill pipe. 'Forecast pick up drill pipe.Install blind rams.Test blind rams and top pipe rams.Pick up bha.Trip in hole.Tag cement.Test casing.Drill out.F.I.T.test. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 1:00 1.00 Nipple up pollution pan and flowline while dressing blind ram block. 1:00 4:30 3.50 Down Time. Attempt to install Archer blind shear ram. Ram will go inside ram cavity approximately one inch and stop w/1000 psi closing pressure. Remove Archer rams, install Spartan blind rams and attempt to test. Test failed,pumping through. 4:30 8:30 4.00 Down Time.Finish nipple up flowline. Install tires and BB winches on starboard side of Hydrill.Install heavy duty ratchet binders on 30"drive pipe. 8:30 9:30 1.00 Down time. Rig down chickson and test assembly.Retrieve test plug 9:30 10:30 1.00 Down Time. Lay down 7-3/4"jars and pick up 6-1/2"jars.Stand back in derrick. 10:30 13:30 3.00 Down Time.Pick up mud motor and change angle. 13:30 0:00 10.50 Down Time. Pick up drill pipe and stand in derrick. Safety meeting topic:Reviewed JSA's and Stop Cards. Working in slippery conditions. Picking up drill pipe. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 20:00 9:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 1905 1905 20" N-80 169/133/106 BT&C 1905' MODEL PZ1O PZ10 FB1600 WEIGHT 9.1 9.6 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 60 55 LINER SIZE 6.5 6.5 6 PV 11 15 SPM YP 11 21 GPM GELS 3/4/05 7/13/19 SURF.PRESS API WL 7.4 6.6 SLOW PUMP DATA HT-HP na na SPM pF 3.8 0.1 SURF PRESS mF 7.7 1 BOTTOM HOLE BPM pM 5.3 0.3 ASSEMBLY CAPACITY pH 10 8.8 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 1320 60 TOTAL CIRC.(STROKES/MIN) CI 122000 1400 TORQUE AND DRAG SAND 0 2 DEPTH FT. SOLIDS _ 4 7.5 _ _ TORQUE AMPS OIL 0 0 PICK UP M# CAKE 1 2 ROATATING WT. M# MBT na 20 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE 3065 BIT NO. 2 1 1, GELS 85 SIZE 12-1/4" 26" CAUSTIC 58 MFG. HCC GER Mixllmed 14 TYPE GT-C1 MILL TOOTH Nut plug m 78 SERIAL NO. 5187242 969GR-26 Engineer 2 2 NOZZLES 3-18'S;CENTER-14 3-20'S resinex 38 DEPTH OUT 1906 386 ' salt 196 DEPTH IN 386 366.53' Lab 1 1 TOTAL FT. 1271 174 Gelex 26 HOURS 22 4.5 SODA AS 4 17 AVE.ROP 69 FLOZAN 30 80 WOB 0/5 POLY PA, 30 35 RPM 50/MM 110 Safecarb40 34 AV DP defoamej 4 41 AV DP DAILY MUD COST 54,568 TOTAL LENGTH 0.00 AV DC CUM.MUD COST 195,972 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND South 40/50 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Cloudy 25,746 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 48 855 ! KLUD2 DDR 21 i . ii, „000°. ......e FUR.I E _..„:„,,,,,_, ei!-- Operating Alaska LL C CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/17/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 22 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 1926 20 9,000 MD 9000 ND KEITH MATT/KEITH FREENY 907-375-7500 13 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 24 HOURS OPERATION SUMMARY. IDown time.Pick up drill pipe and rack in derrick.Set test plug.Remove blind rams.Install new blind rams.Test blind and upper pipe rams to 250/5000 psi. 'rip in hole with 12 1/4"rock bit to 1837'.Displace mud,Test casing to 2500 psi.Drill cement,float collar,shoe and 20'new formation.Circ.F.I.T.test to 11.5 ppg.Pump slug.Pull out of hole. 'Forecast ILay down drill collars and mud motor.Pick up Baker bha.Trip in hole to bottom of casing.Cut drill line.Drill ahead. HOURS DETAILS OF OPERATIONS SIARI END HRS(DUR) 0:00 3:00 3.00 Down Time.Pick up drill pipe and rack in derrick. Total of 143 joints. 3:00 7:00 4.00 Down Time.Set test plug. Remove blind rams from BOPE.Offload blind rams from boat @ 4:30. Install new blind rams in BOPE. Test blind and upper pipe rams to ,/ 250/5000 psi. Good test. 7:00 11:00 4.00 Run in hole with bottom hole assembly. 11:00 13:30 2.50 Tagged up 1837'. Preparing to displace mud.Displace with kla-shield mud @ 9.2 ppg. 13:30 15:00 1.50 Rig up to perform casing test.Broke circulation. Test line to 3500 psi.Perform casing test to 2500 psi.,with water,for 30 minutes on chart. 15:00 19:00 4.00 Drill cement and float equipment and 20'new formation.1920'drill pipe measurement, 19:00 20:00 1.00 Circ 20:00 22:00 2.00 Rig up and test lines to 1000 psi.Preform FIT test with 9.2 ppg mud and 232 psi for E.M.W.of 11.5 ppg.Rig down testing assembly. 22:00 0:00 2.00 Slug pipe.Pull out of hole. At 08:00 hrs.sent request to the AOGCC,for a inspector to witness the formation integrity test. Safety meeting topic:Cold weather injuries,trash segregation,and house keeping.Tripping in hole. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 2:00pm 3:00am 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 1905 1905 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.15 9.15 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 61 60 LINER SIZE 6.5 6.5 6 PV 12 11 SPM YP 11 11 GPM GELS 3/4/05 3/4/05 SURF.PRESS API WL 7.2 7.4 SLOW PUMP DATA HT-HP na na SPM pF 2.6 3.8 _ SURF PRESS mF 7.7 7.7 BOTTOM HOLE BPM pM 5.3 5.3 ASSEMBLY CAPACITY pH 10 10 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) Ca 1240 1320 1 12-1/4"HCC Sr#5187242 1.00 TOTAL CIRC.(STROKES/MIN) CI 120000 122000 2 MUD MOTOR 35.91 TORQUE AND DRAG SAND 0 0 3 NM STRING STABALIZER 6.03 DEPTH FT. SOLIDS 6 4 4 CROSS OVER 2.61 TORQUE AMPS OIL 0 0 5 DRILL COLLAR 31.03 PICK UP M# CAKE 1 1 6 DRILL COLLAR 30.74 ROATATING WT. M# MBT na na 7 DRILL COLLAR 30.53 SLACK OFF M# ADDITIVES USED ON RIG 8 DRILL COLLAR 30.58 BIT RECORD BARITE 3065 9 DRILL COLLAR 30.77 BIT NO. 2 RR 2 GELS 85 10 DRILL COLLAR 30.76 SIZE 12-1/4" 12-1/4" CAUSTIC__ 58 11 CROSS OVER 2.85 MFG. HCC HCC Mixllmed 14 12 24 HWDP ___ __ 736.96 TYPE GT-C1 GT-C1 u m.e 78 13 JAR 32.05 SERIAL NO. 5187242 5187242 Engineer 2 2 14 5 HWDP 152,37 NOZZLES 3-18'S;CENTER-14 3-18'S;CTR-14 resinex 23 DEPTH OUT 1920 1906 salt 588 DEPTH IN 1906 386 Lab 1 1 TOTAL FT. 14 1271 Gelex 26 HOURS 22 SODA ASH 4 17 AVE.ROP 69 FLOZAN 41 80 WOB 0/5 POLY PAC 18 35 RPM 50/MM 110 Safecarb40 34 AV DP defoamer 41 AV DP DAILY MUD COST 43,362, TOTAL LENGTH 1154.19 AV DC CUM.MUD COST 239,334 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR R2 East 8/10 FUEL ONBOARD WATEC84POARD OPERATOR PCONDITION Cloudy24 CATERING BL TEMPERATURE KLU#2 DDR 22 eii71:4400.-. FURIE OperatingAlaskaLLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/18/12 KLU*2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 23 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 3135/3135 1209 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 14 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 24 HOURS OPERATION SUMMARY. IPOOH 1/d drill collars mud motor and bit,Pick up mud motor from derrick make up new bit and bha,pick up hwdp change out cross overs test MWD and • Motor,Till t/1860',slip and cut dug line,TIH t/1926',Drilling ahead f/1926't/3135'. 5-orecast IDrill ahead HOURS DETAILS OF OPERATIONS 5 FART END FIRE(1../UH) 0:00 2:30 2.50 Pull out of hole laying down drill collars,stabilzer. Drain mud motor. Lay down mud motor and bit. 2:30 7:30 5.00 Pick up mud motor stand from derrick. Make up bit. Scribe motor. Pick up Lithotrak. Pick up top stop.Plug in program tool. Pick up monel stand. Back off cross over. Make up monel collars. Break off pup Joint. Loaded radioactive source. 7:30 8:30 1.00 Pick up stand of HWDP. Change out cross overs. Test MWD and Motor. 8:30 9:00 0.50 Trip in hole with HWDP 9:00 9:30 0.50 Trip in hole with drill pipe to 1860'. 9:30 11:00 1.50 Cut drill line. 11:00 11:30 0.50 Trip in hole from 1860'to 1926'. 11:30 0:00 12.50 Drill from 1926'to 3135'. MD 1974'INC 0.62 AZIM 23.93 N/S 18.07 E/W 19.83 DLS 0.20 BUILD 0.20 MD 2445 INC 0.62 AZIM 11.98 N/S 22.11 E/W 21.04 DLS 0.09 BUILD-0.09 MD 2914'INC 0.62 AZIM 9.16 N/S 27.84 E/W 21.75 DLS 0.03 BUILD 0.00 MD 3007 INC 0.62 AZIM 4,94 N/S 28.83 E/W 21.87 DLS 0.05 BUILD 0.00 Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed stop work authority and the importance of good communication while working. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 9:00pm 2:00pm 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 2810 2148 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.2 9.2 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 48 50 LINER SIZE 6.5 6.5 6 PV 13 10 SPM 85 85 YP 15 12 GPM 692 692 GELS 5/9/14 4/7/12 SURF.PRESS 1650 1650 API WL 5.8 5.4 SLOW PUMP DATA HT-HP na na SPM 20/30/40 pF 4.3 4.1 1 SURF PRESS 200/250/300 mF 6.8 7.2 BOTTOM HOLE BPM 1.94/2.91/3.88 pM 5 4.9 ASSEMBLY CAPACITY pH 10.2 10.4 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 400 140 1 12-1/4"HCC Sr#5187242 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 78000 76000 2 MUD MOTOR 35.91 TORQUE AND DRAG SAND 1 1 3 NM STRING STABALIZER 6.03 DEPTH 3135 FT. SOLIDS 6 5.2 4 CROSS OVER 2.61 TORQUE 4500 AMPS OIL 0 0 5 DRILL COLLAR 31.03 PICK UP 150 M# ' CAKE 2 2 6 DRILL COLLAR 30.74 ROATATING WT. 155 M# MBT na na 7 DRILL COLLAR 30.53 SLACK OFF 155 MO ...arm USED ON RIG 8 DRILL COLLAR 30.58 BIT RECORD BARITE 3065 9 DRILL COLLAR 30.77 BIT NO. 3 2 RR GELS 85 10 DRILL COLLAR 30.76 SIZE 12-1/4" 12-1/4" CAUSTIC 58 11 CROSS OVER 2.85 MFG. SMITH HCC Mixllmed 14 12 24 HWDP 736.96 TYPE MDSI616LBPX GT-C1 NW quo mea 78 13 JAR 32.05 SERIAL NO. 3G0146 5187242 Engineer 2 2 14 5 HWDP 152.37 NOZZLES 6 X 16 3-18'S;CTR-14 resinex 23 DEPTH OUT 1926 salt 294 DEPTH IN 1926 1906 Lab 1 1 TOTAL FT. 1209 20 Gelex 26 HOURS 12.5 SODA ASH 17 AVE.ROP 97 FLOZAN 27 80 WOB 0/8 POLY PAC 36 35 RPM 55 sarecarb4o 34 AV DP defoamer 41 AV DP DAILY MUD COST 37,551 TOTAL LENGTH 1154.19 AV DC CUM.MUD COST 276,885 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA 12.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND NE-7 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION CLDY/RAIN 42,042 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 46 696 SERVICE 14 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,974 1,965 TOTAL 51 CSG SPOOL _ KLUr2 DDR 23 1110 ., CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/18/12 KLU*2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 24 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 4400/4400 1265 9,000 MD 9000 TVD KEITH FREENY/FRANK JOHNSON 907-375-7500 15 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 24 HOURS OPERATION SUMMARY. IIDrill f/3135 t/3179,pump LCM pills,Drill f/3179 1/3433,Slide drill f/3433 t/3458,Drill f/3433 t/3458,circulate sweep clean hole,pump slug and POOH, build volume during trip out,Pick up pipe TIH finish TIH on stands 1/3746,wash and ream to 3836,drill ahead f/3836 1/4400. rorecast IDrill ahead f/4400' HOURS DETAILS OF OPERATIONS S FART END HRS(DUR) 0:00 0:30 0.50 Drill from 3135'to 3179' 0:30 1:30 1.00 Monitor well losses,losses @ 120 barrels per hour(pph).Build 30 pounds per barrel(ppb)LCM pill 15 ppb safecarb 250 and 15 ppb safe carb 40. Pumped 1st pill loses @ 60 bph. Pumped 2nd pill,well static. No loses. 1:30 3:30 2.00 Resume drilling from 3179'to 3433'. Lowered pump rate from 692 gallons per minute to 611 gallons per minute. 3:30 4:30 1.00 Slide from 3433'to 3458'. 4:30 8:00 3.50 Drilling ahead from 3458'to 3836'. 8:00 9:30 1.50 Pump sweep and circulate out. 9:30 12:00 2.50 Pump 15 bbl slug.Pull out of hole with 29 stands to 1111'while building mud volume. 12:00 12:30 0.50 Held prejob meeting on picking up pipe. 12:30 15:30 3.00 Trip in hole picking up 51 joints of drill pipe while building mud volume. 15:30 17:00 1.50 Trip in hole with drill pipe from derrick to 3746'. 17:00 18:00 1.00 Ream from 3746 to 3836'Note.Hole packing off at 3746'.Taking weight with pump pressure increase.Pump sweep at 3766',Ream to bottom with max weight of 20 k 18:00 0:00 6.00 Drill from 3836'to 4400' MD 3103 INC 0.62 AZIM 4.94 N/S 29.94 E/W 21.92 DLS 0.10 BUILD 0.08 MD 3573 INC 0.18 AZIM 186 N/S 34.41 E/W 21.93 DLS 0.00 BUILD 0.00 MD 4137 INC 0,35 AZIM 128.69 N/S 32.17 E/W 24.04 DLS 0.03 BUILD 0.00 MD 4326 INC 0.26 AZIM 118.85 N/S 31,67 E/W 24,82 DLS 0.01 BUILD 0.00 , Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed stop work authority and the importance of good communication while working. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 8:00pm 9:00am 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 4152 3540 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.3 9.3 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 49 54 LINER SIZE 6.5 6.5 6 PV 13 12 SPM 85 85 YP 15 17 GPM 692 692 GELS 4/6/13 4/6/12 SURF.PRESS 1980 1980 API WL 5.2 5.4 SLOW PUMP DATA HT-HP na na SPM 20/30/40 20/30/40 pF 3.7 4.2 SURF PRESS 300/310/325 250/275/310 mF 6.1 6.5 BOTTOM HOLE BPM 1.94/2.91/3.88 1.9.4/2.91/3.88 pM 4.3 4.7 ASSEMBLY CAPACITY pH 10.1 10 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 240 260 1 12-1/4"SMITH SR 9 JG0146 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 54000 74000 2 MUD MOTOR 35.90 TORQUE AND DRAG SAND 1.5 1.5 3 NM PONY COLLAR 10.17 DEPTH 4400 FT. SOLIDS 6 6 4 NM STRING STABALIZER 5.97 TORQUE 5000 AMPS OIL 0 0 5 NM BOTTOM STOP SUB 2.58 PICK UP 195 M# CAKE 2 2 6 ON TRAK MWD/GAMMA/DIR 22.92 ROATATING WT. 195 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.94 SLACK OFF 185 M# ADDITIVES USED ON RIG 8 BCPM SUB 11.65 BIT RECORD BARITE 3065 9 NM MODULAR CROSS OVER 3.42 BIT NO. 3 2 RR GELS 85 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 58 11 CCN 8.77 MFG. SMITH HCC MistImed 14 12 NM TOP STOP SUB 2,17 TYPE MDSI616LBPX GT-CI Nut plug mea 78 13 NM FILTER SUB 5.55 SERIAL NO. JG0146 5187242 Engineer 2 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 3-18'S;CTR-14 resinex 126 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 1926 salt 86 16 8"NM DRILL COLLAR 30.69 DEPTH IN 1926 1906 Lab 1 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 2474 20 Gelex 26 18 24-HWDP 736.96 HOURS 25.5 SODA ASH 15 17 19 DRILLING JAR(HYD) 32.05 AVE.ROP 97 FLOZAN 127 80 20 5-HWDP 152.37 WOB 0/20 POLO PAC 60 35 RPM 60 sareeam40 67 34 AV DP defoamer 41 AV DP DAILY MUD COST 94,958 TOTAL LENGTH 1111.96 AV DC CUM.MUD COST 371,843 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 30 ANNULAR WIND NW-9 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION CLDY/RAIN 39,438 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 54 622 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,604 715 TOTAL 51 CSG SPOOL KLU#2 DDR 24 . , . , , OperatiRIE ng Alaska tit: CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/20/12 KLU#2 50-233-10603-00-0o SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 25 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 6026/6026 1626 9,000 MD 9000 TVD KEITH FREENY/FRANK JOHNSON 907-375-7500 16 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 24 HOURS OPERATION SUMMARY. 'Drill f/4400't/4680',clean ditches due to cuttings,drill 8/4680't/4757',clean ditches due to cuttings,drill 8/4757't/6026'. Forecast IDrill ahead 8/6026'. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:30 2.50 Drill from 4400to 4680. 2:30 5:00 2.50 Clean out ditch due to cuttings 5:00 5:30 0.50 Drill from 4680'to 4757'. 5:30 6:00 0.50 Clean out ditch due to cuttings 6:00 0:00 18.00 Drill from 475T to 6026' MD 4421 INC 0.26 AZIM 129.75 N/S 31.42 E/W 25.18 DLS 0.05 BUILD 0.00 MD 4983 INC 0.35 AZIM 91.08 N/S 30.86 E/W 28.06 DLS 0.11 BUILD-0.10 MD 5546 INC 0.79 AZIM 100.92 N/S 30.17 E/W 33.25 DLS 0.10 BUILD 0.10 MD 5923 INC 0.79 AZIM 94,94 N/S 29.21 E/W 37.77 DLS 0.13 BUILD 0.10 Safety meeting topic:Reviewed JSA's and Stop Cards. Discussed the importance of insuring safety devices are in place and functioning. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 8:00pm 9:00am 30" 1,5"WALL/X-56 450 PPF Drill Quip/Ten Com, 366.54' MAKE GD GD EMSCO DEPTH 5670 5100 20" N-80 169/133/106 BT&C 1905' MODEL PZIO PZ1O FBI600 WEIGHT 9.5 9.3 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 52 51 LINER SIZE 6.5 6.5 6 PV 14 12 SPM 85 85 YP 17 16 GPM 692 692 GELS 5/8/13 5/8/12 SURF,PRESS 1980 1980 API WL 4.6 4.8 SLOW PUMP DATA • • • HT-HP na na SPM 20/30/40 20/30/40 pF 1.7 2.1 SURF PRESS 300/325/375 275/300/350 1 mF 4.5 4.9 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 2.2 3 ASSEMBLY CAPACITY pH 9.6 9.9 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 11070/65.1 Ca 240 240 1 12-1/4"SMITH SR#300146 1.00 TOTAL CIRC.(STROKES/MIN) 19360/113.9 CI 41000 48000 2 MUD MOTOR 35.90 TORQUE AND DRAG SAND 1 1.75 3 NM PONY COLLAR 10.17 DEPTH 6026 FT. SOLIDS 6 6 4 NM STRING STABALIZER 5.97 TORQUE 6200 AMPS OIL 0 0 S NM BOTTOM STOP SUB 2.58 PICK UP 215 M# • CAKE 2 2 6 ON TRAK MWD/GAMMA/DIR 22.92 ROATATING WT. 215 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.94 SLACK OFF 210 MY xborrnms USED ON RIG 8 BCPM SUB 11.65 BIT RECORD BARITE 18 3065 9 NM MODULAR CROSS OVER 3.42 BIT NO. 3 2 RR GELS 85 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 58 11 CCN 8.77 MFG. SMITH HCC MixlImed 14 12 NM TOP STOP SUB 2.17 TYPE MDSI616LBPX GT-C1 78 13 NM FILTER SUB 5.55 SERIAL NO, JG0146 5187242 Engineer 2 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 3-18'S;CTR-14 resinex 18 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 1926 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 1926 1906 Lab 1 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 4100 20 Gelex 26 18 24-HWDP 736.96 HOURS 46.5 SODA ASH 17 19 DRILLING JAR(HYD) 32.05 AVE.ROP 88 FLOZAN 80 80 20 5-HWDP 152.37 WOB 0/20 POLY PAC 25 35 RPM 60 Safecarb40 34 AV DP defoamer 41AV DP DAILY MUD COST ii'.:::iii9:7001.: TOTAL LENGTH 1111.96 AV DC CUM.MUD COST 409,034 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA 46.5 , PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER • CONTRACTOR 30 ANNULAR WIND SE-11 FUEL ONBOARD WATER ONBOARD , OPERATOR 2 PIPE RAMS CONDITION CLOY/RAIN 36,540 CAMP CATERING 4 FX.SHEAR RAMS TEMPERATURE 50 622 SERVICE 16 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,898 1,427 TOTAL 52 CSG SPOOL KLU#2 01825 "..-.0-100 FURZE Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/21/12 _ KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 26 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 7505/7505 1479 9,000 MD 9000 TVD KEITH FREENY/FRANK JOHNSON 907-375-7500 17 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 24 HOURS OPERATION SUMMARY. Drill(/6026't/7034',Slide drill f/7034'1/7094',Drill f/7094't/7505',pump sweep and circulate hole clean,pump slug and pooh,well swabbing attempt to rotate out well began to swab again,pump out of hole for short trip Forecast Pump out of hole for short trip,tih and resume drilling f/7505'. HOURS DETAILS OF OPERATIONS START END HRS(OUR) 0:00 13:30 13.50 Drill from 6026'to 7034'. 13:30 15:30 2.00 Slide from 7034 to 7094. 15:30 21:00 5.50 Drill from 7094'to 7505'. 21:00 22:30 1.50 Pump sweep and circulate hole clean. 22:30 0:00 1.50 Pump slug attempt to POOH for short trip,well swabbing,attempt to rotate out of hole fluid began to fall correctly for displacement. (Note:at 00:30 hours well began to swab again,started pump out of hole.) MD 6112 INC 0.79 AZIM 107.95 N/S 28.63 E/W 40.45 DLS 0.12 BUILD-0.10 MD 6676 INC 0.97 AZIM 94.59 N/S 26.51 E/W 48.66 DLS 0.10 BUILD 0.00 MD 7239 INC 1.05 AZIM 191.27 N/S 22.80 E/W 55.64 DLS 0.11 BUILD 0.00 Safety meeting topic:Drilling ahead,making connections and house keeping. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 9:00pm 9:00am 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 7505 6730 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.6 9.6 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 54 54 LINER SIZE 6.5 6.5 6 PV 16 16 SPM 85 85 YP 23 22 GPM 692 692 GELS 7/9/14 5/7/13 SURF.PRESS 1980 1980 API WL 3.8 4 SLOW PUMP DATA HT-HP 7.7 na SPM 20/30/40 20/30/40 pF 1.4 1.3 SURF PRESS 300/310/325 250/275/310 mF 3.7 3.4 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 2 2 ASSEMBLY CAPACITY pH 9.3 9.6 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 200 240 1 12-1/4"SMITH SR#JG0146 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 32000 40000 2 MUD MOTOR 35.90 TORQUE AND DRAG SAND 0.75 0.75 3 NM PONY COLLAR 10.17 DEPTH 7505 FT. SOLIDS 7 6 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 2 1 5 NM BOTTOM STOP SUB 2.58 PICK UP 230 M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.92 ROATATING WT. 230 M# MBT n/a na 7 12 1/8"MODULAR STABALIZER 5,94 SLACK OFF 225 M# Aoomvrs USED ON RIG 8 BCPM SUB 11.65 BIT RECORD BARITE 26 3065 9 NM MODULAR CROSS OVER 3.42 BIT NO. 3 2 RR GELS 85 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 2 58 11 CCN 8.77 MFG. SMITH HCC Mixllmed 14 12 NM TOP STOP SUB 2.17 TYPE MDSI616LBPX GT-C1 ".plume 78 13 NM FILTER SUB 5.55 SERIAL NO. J00146 5187242 Engineer 2 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 3-18'S;CTR-14 resinex 45 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 1926 salt 49 16 8"NM DRILL COLLAR 30.69 DEPTH IN 1926 1906 Lab 1 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 3953 20 Gelex 26 18 24-HWDP 736.96 HOURS 46.5 SODA Asn 17 19 DRILLING JAR(HYD) 32.05 AVE.ROP 85 FLOZAN 14 80 20 5-HWDP 152.37 WOB 20/25 POLY PAC 33 35 RPM 80 sarecarww 34 AV DP defoamer 41 AV DP DAILY MUD COST 44,600 TOTAL LENGTH 1111.96 AV DC CUM.MUD COST 453,634 TOTAL WEIGHT GRADE-T/B/G 2/2/I CUM.HRS.BHA 46.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CATERING 9 ANNULAR WIND OPS CONTRACTOR 23 BPS RARMSAMS CEONDITIONRE CLDY FUEL 32,424 2 ONBOARD WATER 4 ONBOARD KLU42 DDR 26 ., . „. . : R . , . .: . cort-74 " .„,,,,,,,- , u IE . , ........:_. . Operating Alaska 1,1,C. CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/22/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 27 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 7505/7505 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 24 HOURS OPERATION SUMMARY. (Pull out of hole pumping and rotating t/2450',pump slug pooh,held safety mtg and remove source,finish pooh lay down bit and BHA,pull wear bushing and rig up and attempt to test BOPE,AOGCC inspector found test chart recorders out of calibration unable to test,pick up and make up new BHA and trip in hole. Forecast IFinish pick up BHA and 1-stand HWDP,pick up 63-joints 5"dp tih and pooh stand dp back in derrick,trip in hole with 5"HWDP and followed by 5"dp to shoe re-log from shoe t/7505'. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 7:00 7.00 POOH well swabing began rotating and pumping out of hole,30 to 60k drag up to 4075',at 4075'over pull up to 70k worked thru setting jars off 1-time,continue POOH Dragging same continue pump and ream out same. 7:00 9:00 2.00 Slug pipe.Pull out of hole from 2450'. 9:00 10:00 1.00 Held safety meeting.Remove source from MWD tool. 10:00 10:30 0.50 Pick up joint of drill pipe and rack back monel collars in derrick. 10:30 11:30 1.00 Down load MWD. 11:30 13:00 1.50 Lay down MWD collar,mudmotor and bit. 13:00 16:30 3.50 Pull wear bushing.Rig up hose and drain bop stack.Flush thru stack.Rig up lines to test blinds. Rig up test joint.Replace rubber on test plug. Set test plug.Rig up 10K chart recorder on rig floor for AOGCC.AOGCC states wrong pins.Rig up 15k chart recorder on rig floor.AOGCC states that recorder is off 500 psi.Can not adjust on rig as per AOGCC,must be sent in to certified repair shop.Rig up 10k recorder back on rig floor.AOGCC states that pin sizes are not correct. 16:30 17:30 1.00 Pull test plug.Rig down test assembly.Set wear bushing. 17:30 19:30 2.00 Pick up mud motor and MWD tools scribe same,make up 12 1/4"bit. 19:30 20:30 1.00 Upload MWD tools. 20:30 21:30 1.00 Pick up non mag drill collars and load source. 21:30 22:00 0.50 Trip in hole with 1-stand HWDP and test same test ok. 22:00 0:00 2.00 Trip in hole picking up 63-joints drill pipe from v-door Safety meeting topic:Pull out of hole,lay down BHA and test BOPE 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 3:00am 2:00pm 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 7505 7505 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.6 9.8 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 55 61 LINER SIZE 6.5 6.5 6 PV 17 16 SPM YP 22 22 GPM GELS 7/9/14 7/9/13 SURF.PRESS API WL 3.7 3.8 SLOW PUMP DATA HT-HP 7.8 7.8 SPM 20/30/40 20/30/40 PF 1.4 1.3 SURF PRESS mF 3.7 3.6 BOTTOM HOLE BPM 1.94/2.91/3.68 1.94/2.91/3.88 pM 2 2 ASSEMBLY CAPACITY pH 9.3 9.3 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 200 200 1 12-1/4"SMITH SR#JF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 33000 33000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.75 0.75 3 NM PONY COLLAR 10.17 DEPTH 7505 FT. SOLIDS 7 7 4 NM STRING STABALIZER 5.97 TORQUE AMPS OIL 2 2 5 NM BOTTOM STOP SUB 2.58 PICK UP M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF M# oornves USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 5 3065 9 NM MODULAR CROSS OVER 3.42 BIT NO. 3 3 GELS 85 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 58 11 CCN 8.77 MFG. SMITH SMITH Mixllmed 14 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX e 78 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 100146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 2474 Gelex 26 18 24-HWDP 736.96 HOURS 25.5 SODA use 17 19 DRILLING JAR(HYD) 32.05 AVE.ROP 97 FLOZAN 80 20 5-HWDP 152.37 WOB 0/25 POLY PAC 35 RPM 60 Safecarb40 34 AV DP , defoamer 41 AV DP DAILY MUD COST 5,486 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 459,120 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER ',. CONTRACTOR 29 ANNULAR WIND NNE-9 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLDY 30,996 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 54 207 SERVICE 16 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,428 1,410 TOTAL 52 CSG SPOOL KLUa2 DDR 27 .,. / . .....„,„;,' FUR! ' ...... Operae ]Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/23/12 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 28 DEPTH-MD/ND PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 788777887' 382 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 IPick up 5"drill pipe tih,JSA mtg on pooh,Pooh stand drill pipe in derrick 21-stands,Tih bha on drill pipe to 1910',log from 1910'to 2050',Tih to 6100' wash from 6100 to 6150',ream and log from 6150'to 7505',drill ahead from 7505'to 7887'. Forecast IDrill ahead from 7887' HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 2:00 2.00 P/U 5"DP from V-door 2:00 2:30 0.50 Held ISA on tripping out of hole 2:30 3:30 1.00 POOH stand back 21 stands of drill pipe 3:30 5:00 1.50 TIH w/BHA on HWDP&8 stands of drill pipe 5:00 6:30 1.50 Fill pipe,ream,and log from 1910'to 2050' 6:30 9:00 2.50 Trip in hole to 6100'.Check pipe measurements.Wash from 6100'to 6150'. 9:00 19:00 10.00 Ream and log from 6150'to 7505' 19:00 0:00 5.00 Drill from 7505'to 7887'. MD 7621 INC 1.02 AZIM 193.05 N/S 18.5 E/W 56.09 DLS 0.10 BUILD 0.10 MD 7810 INC 0.98 AZIM 188.16 N/S 14.83 E/W 55.43 DLS 0.10 BUILD 0.10 REGG,JAMES WITH AOGCC GRANTED EXTENTION ON BOPE TEST TO WEDNESDAY 26 TH OR FIRST TRIP OUT. A GGi 1 f ZA I t 1- ` _ Sent 24 hour notification e-mail to Jim Regg w/AOGCC for BOPE test at 1030 hrs. Safety meeting topic:Tripping,Drilling ahead and mixing chemicals. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 8:30PM 10:00AM 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 7615 7505 20" N-80 169/133/106 BT&C 1905' MODEL PZ1O PZ1O FB1600 WEIGHT 9.8 9.9 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 56 67 LINER SIZE 6.5 6.5 6 PV 18 19 SPM 88 88 YP 24 24 GPM 717 717 GELS 8/11/15 7/9/15 SURF.PRESS 3250 3250 API WL 3.7 4 SLOW PUMP DATA HT-HP 7.9 8 SPM 20/30/40 20/30/40 pF 1.1 1.2 SURF PRESS 375/450/500 375/425/475 mF 3.8 3.6 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 1.5 1.9 ASSEMBLY CAPACITY pH 9.4 9.2 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 80 200 1 12-1/4"SMITH SR#JF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 30000 32000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.5 1.5 3 NM PONY COLLAR 10.17 DEPTH 7887 FT. SOLIDS 8 9 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1 2 5 NM BOTTOM STOP SUB 2.58 PICK UP 255 M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATAT1NG WT. 255 M# MBT NA NA 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 250 M# oomxes USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 1.69 9 NM MODULAR CROSS OVER 3.42 BIT NO. 3 3 GELS 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 2 11 CCN 8,77 MFG. SMITH SMITH Mixllmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX N.OLIO an 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 300146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 10 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 382 2474 Gelex 18 24-HWDP 736.96 HOURS 5 25.5 sooA ASH 10 19 DRILLING JAR(HYD) 32.05 AVE.ROP 76 97 FLOZAN 7 20 5-HWDP 152.37 WOB 20-Oct 0/25 POLY PAC RPM 80 60 5afecarb40 AV DP defoamer AV DP DAILY MUD COST - 11,296 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 470,416 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR WIND SE-10 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLDY 27,930 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 45 906 SERVICE 17 MUD CROSSFUEL USED DRILL OTHER PIPE RAMS 3,066 . 1,927 TOTAL 53 COG SPOOL KLU#2 DDR28 FURIE ., Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/24/12 KLU*2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 29 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 9106/9106 1219' 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 18 _ LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/17/12 212 _ Drill(/7887't/9106',Pump sweep circulate bottoms up,Short trip to 7500'on elevators,Trip in hole tagged up at 9005',Wash and ream f/9005't/9106' Circulate out hole clean with high vis sweeps. Forecast IPooh,Test BOPE,Rig up and perform electric line logs with Schlumberger HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 16:30 16.50 Drill from 7887'to 9106' 16:30 19:00 2.50 Pump sweep circulate bottoms up 19:00 20:30 1.50 Short trip to 7500'on elevators. 20:30 21:30 1.00 Trip in hole tagged at 9005'. 21:30 22:00 0.50 Wash and ream(/9005't/9106'. _ 22:00 0:00 2.00 Circulate hole while build high vis sweep,pump high vis sweep. 9-23-12 REGG,JAMES WITH AOGCC GRANTED EXTENTION ON BOPS TEST TO WEDNESDAY 26 TH OR FIRST TRIP OUT. 9-24-12 1630hrs.Mr.Regg waived witness to BOPE test,slated for 9-25-12 1345 hrs.rig conducted fire and abandonment drill Safety meeting topic:Tripping pipe,body positioning while crane is operation 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 8:30pm 9:00am 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 9106 8500 20" N-80 169/133/106 BT&C 1905' MODEL PZ1O PZ1O FB1600 WEIGHT 9.8 9.9 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 53 51 LINER SIZE 6.5 6.5 6 PV 17 16 SPM 88 88 YP 22 24 GPM 717 717 GELS 7/11/14 7/11/14 SURF.PRESS 3250 3250 API WL 3.7 3.9 SLOW PUMP DATA HT-HP 7.8 7.9 SPM 20/30/40 20/30/40 pF 1.1 1.3 SURF PRESS 325/375/450 325/350/400 mF 3.7 4.5 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 1.7 1.8 ASSEMBLY CAPACITY pH 9.5 9.5 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 60 140 1 12-1/4"SMITH SR#JF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 31000 31000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.25 0.5 3 NM PONY COLLAR 10.17 DEPTH 9106 FT. SOLIDS 8 9 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 2 1 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. 260 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 M# Aoomves USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 20 9 NM MODULAR CROSS OVER 3.42 BIT NO. 3 3 GELS 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. _ SMITH SMITH Mixllmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX nut pug mm 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 JG0146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 29 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex 18 24-HWDP 736.96 HOURS 21.5 25.5 SODA ASH 20 19 DRILLING JAR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 13 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC 5 RPM 80 60 Safecarba0 30 AV DP defoamer AV DP DAILY MUD COST 33,346 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 503,762 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR WIND NNW-8 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLDY 24,318 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 51 1,062 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 3,612 1,037 TOTAL 51 CSG SPOOL KLU/2 DDR 29 0000000:010, 0 FURIE Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/25/12 KLU#2 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 30 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 9106/9106 9,000 MD 9000 TVD KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/25/12 212 Finish circulate out sweep,Pooh to source,held safety mtg on removeing source and removed same finish pooh with BHA,Retreave wear bushing,Rig up test BOPE,Held pre job safety mtg and rig up and run In hole with logging tools t/8990'. Forecast ILogging operations. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 0:30 0.50 Finish circulating out sweep 0:30 1:30 1.00 POOH 10 stands on elevators,monitor fluid displacment,pump slug,POOH on elevators 1:30 6:00 4.50 POOH to BHA 6:00 7:00 1.00 Held safety meeting,remove radioactive source 7:00 10:00 3.00 Rack back monel collars,download MWD and rack back mud motor and bit. 10:00 10:30 0.50 Pull wear bushing. 10:30 12:00 1.50 Rig up test assembly. 12:00 20:00 8.00 Test blind rams.Good test.Rig down 2"chicksan from across cantilever deck and rig up 3"cement line under cantilever to test bop while Schlumberger checks tools on cantilever deck.Testing bop to 250/3500/5000 psi. Rig down BOPE test equipment and lines 20:00 - 0:00 4.00 Held pre job safety mtg with crew on rig up and run in hole with logging tools,Pick and make up CMR and Triple Combo run in hole same 1/8990' tag up same,attempt to work through same. 9-23-12 REGG,JAMES WITH AOGCC GRANTED EXTENTION ON BOPE TEST TO WEDNESDAY 26 TH OR FIRST TRIP OUT. 9-24-12 1630hrs.Mr.Regg waived witness to BOPE test,slated for 9-25-12 Safety meeting topic:Cold weather operations,High pressure testing,Logging safety 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 1:00pm 3:00 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 9106 9106 20" N-80 169/133/106 BT&C 1905' MODEL PZ1O PZ10 FB1600 WEIGHT 9.8 9.8 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 55 54 LINER SIZE 6.5 6.5 6 PV 18 18 SPM 88 88 YP 23 24 GPM 717 717 GELS 9/12/15 9/12/16 SURF.PRESS 3250 3250 API WL 3.8 3.7 SLOW PUMP DATA HT-HP 7.8 7.9 SPM 20/30/40 20/30/40 pF 1.3 1.4 SURF PRESS 325/375/450 325/350/400 mF 4.5 4.7 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 1.6 1.7 ASSEMBLY CAPACITY pH 9.5 9.5 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 60 60 1 12-1/4"SMITH SR 9 JF 6474 1.00 TOTAL CIRC.(STROKES/M1N) 13438/79 CI 32000 33000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.75 0.75 3 NM PONY COLLAR 10.17 DEPTH 9106 FT. SOLIDS 8 8 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1.5 1.5 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 MS CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. 260 MS MIT na. na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 M# Anomvea USED ON RIO 8 BCPM SUB 11.86 BIT RECORD BARITE 10 9 NM MODULAR CROSS OVER 3.42 BIT NO. 4 3 GELS 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. SMITH SMITH Mixllmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX Nut plug m"d 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 JG0146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 8 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex 18 24-HWDP 736.96 HOURS 21.5 25.5 SODA ASH 19 DRILLING JAR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 3 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC 8 RPM 80 60 Saieca,aO AV DP defoamer AV DP DAILY MUD COST 12,790 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 516,552 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR • WIND NE-45 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLDY 22,344 CAMP CATERING 4 Si,SHEAR RAMS TEMPERATURE 47 782 SERVICE 15 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS _ 1,974 906 TOTAL 51 CSG SPOOL _ KLUii2 DDR 30 11.11:000 FURS Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/26/12 KLU#2 SPARTAN 151 12-006 2120790 _ Kenai Pen.Bro. AK 31 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 9106/9106 9,000 MD 9000 TVD _KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/25/12 212 'Perform logging operations,lay down motor from derrick,pick up and make up 12 1/4"milltooth bit and cross overs 'Forecast'Trip in hole for clean out run to shoe slip and cut drilling line,continue stage in hole to 9106',Circulate hole clean and Pull out of hole. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 10:30 10,50 Corrolate&Log F/8990'up to surface 10:30 12:30 2.00 Swapping out logging tools,rigging up FMI tools 12:30 16:00 3.50 TIH with FMI SONIC tools to 8860' 16:00 22:30 6.50 Logging out of hole with FMI SONIC tools,rig down logging equipment. 22:30 23:00 0.50 Lay down motor from derrick 23:00 0:00 1.00 Make up 12 1/4"milltooth bit and x-over. Safety meeting topic:Cold weather and high wind conditions,logging safety and operations 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 9:00am 8:30pm 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 9106 9106 20" N-80 169/133/106 BT&C 1905' MODEL PZIO PZ10 FB1600 WEIGHT 9.8 9.8 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 59 59 LINER SIZE 6.5 6.5 6 PV 18 18 SPM 88 88 YP 24 25 GPM 717 717 GELS 9/12/16 9/12/15 SURF.PRESS 3250 3250 API WL 3.9 3.8 SLOW PUMP DATA HT-HP 8 8 SPM 20/30/40 20/30/40 pF 1.3 1.2 SURF PRESS 325/375/450 325/350/400 mF 4.4 4.4 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 • pM 1.5 1.5 ASSEMBLY CAPACITY pH 9.5 9.5 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 60 60 1 12-1/4"SMITH SR#JF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 32000 31000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.75 0.5 3 NM PONY COLLAR 10.17 DEPTH 9106 FT. SOLIDS 8 8 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1,5 1.5 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. 260 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 M# ADDITIVES USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 9 9 NM MODULAR CROSS OVER 3.42 BIT NO. 4 3 GELS 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. SMITH SMITH Mixllmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX . Nut plklo 111. 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 1G0146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 • salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 • Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex 18 24-HWDP 736.96 HOURS 21.5 25.5 SODA ASO 19 DRILLING JAR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC RPM 80 60 safecarbao AV DP defoamer AV DP DAILY MUD COST 6,848 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 523,400 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR WIND NNW-30 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLDY 21,420 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 48 710 KLUB2 DDR 31 .04#00-- .iiiiii (07 FURZE ...,, . Operating Alaska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/27/12 KLU#2 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 32 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 9106/9106 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/25/12 212 Trip in hole with 12 1/4'milltooth bit t/1811',slip and cut drilling line,stage in hole t/8415'tag up same,wash and ream(/8415't/8500',circulate out hole,pump slug and pooh,pick up motor scribe retorque and stand bha back except source,strap 9-joints 5"drill pipe and make up cement mule shoe while off load#5 and#6 cement hertz tanks. Forecast ITrip in hole to 8500'pump and spot 9.9ppg high vis pill,pooh to 8000'circulate hole,mix and pump cement plugs up to 5500',pooh and pump cement kick off plug at 1950'. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 3:00 3.00 TIH W/12 1/4"Mill Tooth bit to 1811' 3:00 5:00 2.00 Circ while Slip and cut drill line 5:00 6:00 1.00 TIH F/1811'T/3980' 6:00 7:00 1.00 Circulate 7:00 8:30 1.50 TIH F/3980'-T/5971' 8:30 10:00 1.50 Circulate 10:00 11:00 1.00 Trip in hole to 8415'.Taking weight. 11:00 11:30 0.50 Wash and ream from 8415 to 8500'. 11:30 15:30 4.00 Circ at 8500'. 15:30 20:00 4.50 Slug pipe.Pull out of hole. 20:00 23:30 3.50 Pick up motor scibe and retorque,continue pick up and stand back bha except radio active source. 23:30 0:00 0.50 Strap 9-joints 5"drill pipe,make up cement mule shoe while off load#5 and#6 cement hertz. Safety meeting topic:Mixing hazardous chemicals,cold weather operations 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 8:30pm 9:00am 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 9106 9106 20" N-80 169/133/106 BT&C 1905' MODEL PZ1O PZ10 FB1600 WEIGHT 9.8 9.8 13.375" N-80 72 BT&C 436' STROKE 10" _ 10" 12" VISC. 63 60 LINER SIZE 6.5 6.5 6 PV 14 14 SPM 88 88 YP 23 23 GPM 717 717 GELS 6/8/13 6/8/12 SURF.PRESS 3250 3250 API WL 3.9 4 SLOW PUMP DATA HT-HP 8 8 SPM 20/30/40 20/30/40 pF 1.4 1.5 SURF PRESS 325/375/450 325/350/400 I mF 4.5 4.7 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 1.6 1.7 ASSEMBLY CAPACITY pH 9.5 9.5 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 80 80 1 12-1/4"SMITH SR#IF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 29000 29000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.5 0.5 3 NM PONY COLLAR 10.17 DEPTH 9106 FT. SOLIDS 8 8 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1.5 1.5 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 Mit CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WE 260 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 M0 noomvra USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 9 NM MODULAR CROSS OVER 3.42 BIT NO. 4 3 GELS 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. SMITH SMITH • MixIImed 12 NM TOP STOP SUB 2.17 TYPE MOSI1616LBPX MOSI616LBPX Nut plug med 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 300146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 • salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex 18 24-HWDP 736.96 HOURS 21.5 25.5 SODA ASH, 19 DRILLING]AR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC RPM 80 60 saferwrb40 AV DP defoamer AV DP DAILY MUD COST 2,600 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 526,000 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR WIND NNW-10 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION CLOUDY 19,446 CAMP I CATERING 4 BL SHEAR RAMS TEMPERATURE 46 650 SERVICE 17 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 1,974 724 TOTAL 53 CSG SPOOL KLU#2 DDR 32 ' 11011110 (I° FURZE Operating Alas ea LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/28/12 _ KLU*2 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 33 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 9106/9106 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/25/12 212 ITIH t/8500',circulate hole,spot pill 08500'48000',Pooh t/8000',circulate hole,Pooh 6-stands install I-BOPE tih t/8000',Start cement plug back procedures f/8000'up to 6500'3-plugs set same. Forekast(Continue plug back procedures f/6500't/5500',Wait on cement for 8-hrs tih and tag top of cement,Pooh set kick off plug f/2250't/1950',Pooh rig up and test BOPE. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 5:00 5.00 TIH TO 8500' 5:00 7:30 2.50 Circulating @ 8500' 7:30 8:00 0.50 Spot pill from 8500'to 8000' 8:00 8:30 0.50 POOH TO 8000' 8:30 12:30 4.00 Circulating 12:30 13:30 1.00 Trip out of hole 6 stands,P/U I-BOP,TIH to 8000' 13:30 15:00 1.50 Plug Number 1 Mix and pump 451 sx class g cement at 15.8 ppg with 0.6%FL63,0.3%R3,0.2^/s CD-32,0.005PPS Static Free+1 gal per 100 sacks 92.5 bbl slurry,displace with 129 bbl mud for a balance plug from 8000 to 7450 15:00 17:30 2.50 Pull out of hole to 7450'.Circulate trace of cement on bottoms up. _ 17:30 18:30 1.00 Trip out of hole 6 stands,P/U I-BOP,TIH to 7450' 18:30 20:00 1.50 Plug Number 2 Mix and pump 405 sx class g cement at 15.8 ppg with 0.6%FL63,0.3%R3,0.2%CD-32,0.005PPS Static Free+1 gal per 100 sacks 83 bbl slurry,displace with 118 bbl mud for a balanceplug from 7450'to 6950' 20:00 22:30 2.50 Trip out of hole 6 stands,P/U I-BOP,TIH to 6950',Circulate,Trip out of hole 5-stands install I-BOP trip back in hole to 6950'. 22:30 0:00 1.50 Plug Number 3 Mix and pump 410 sx class g cement at 15.8 ppg with 0.6%FL63,0.3%R3,0.2%CD-32,0.005PPS Static Free+1 gal per 100 sacks 84 bbl slurry,displace with 108 bbl mud for a balance plug from 6950'to 6500'. At 0702 hrs.on 9-28-12 we received verbal approval from Guy Schwartz(AOGCC)to proceed with open hole plugging operation Safety meeting topic:Cold weather operations,ice on the deck,cementing processes,pumping cement 24.00 _ MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 3:00AM 1:00PM 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 9106 9106 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ10 FB1600 WEIGHT 9.8 9.8 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 62 56 LINER SIZE 6.5 6.5 6 PV 14 14 SPM 88 88 YP 23 21 GPM 717 717 GELS 6/8/13 6/8/12 SURF.PRESS 3250 3250 API WL 4 4 SLOW PUMP DATA HT-HP 8 8 SPM 20/30/40 20/30/40 pF 1.4 1.4 _ SURF PRESS 325/375/450 325/350/400 mF 4.5 4.4 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 1.7 1.6 ASSEMBLY CAPACITY pH 9.5 9.5 NO. DESCRIPTION LENGTH(ft) ,BTMS UP(STROKES/MIN) 7146/42 Ca 80 80 1 12-1/4"SMITH SR Y lF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 30000 28000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.5 0.5 3 NM PONY COLLAR 10.17 DEPTH 9106 FT. SOLIDS 8 8 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1.5 1.5 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 MY CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. 260 MY MBT NA NA 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 MY A00mora USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 9 NM MODULAR CROSS OVER 3.42 BIT NO. 4 3 GELS 35 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. SMITH SMITH Mixllmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX Hut plugrnes 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 1G0146 , Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex 18 24-HWDP 736.96 HOURS 21.5 25.5 soDA ASH 19 DRILLING JAR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC RPM 80 60 safecaroao AV DP defoamer AV DP DAILY MUD COST 3,315 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 529,315 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR WIND SSE-10 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS CONDITION RAIN/SNOW 17,304 CAMP CATERING 4 BL SHEAR RAMS TEMPERATURE 30 600 SERVICE 12 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 2,142 1,088 TOTAL 48 CSG SPOOL - _ KLUr2 DDR 33 Operating laska LLC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO, 9/29/12 KLU#2 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 34 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD 9106/9106 9,000 MD 9000 TVD KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/25/12 212 (Performed cement plug operations,Pooh to 5179'and wait on cement to set,Trip in hole and tag cement with 20k down at 5367',Pooh to 2700'spot high visc pill and pooh to 2356'pump kick off cement plug pooh to 1900'and circulate out,Pooh lay down cement mule shoe,Flush stack prepare to test BOPE. 'Forecast Rig up and test BOPE,Make up bha trip in hole to shoe at 1900',Wait on Drilling permits to be issued by AOGCC,Trip in hole and dress off top cement start side track operations. HOURS DETAILS OF OPERATIONS START END HRS(DUR) 0:00 1:30 1.50 POOH F/6950'T/6500',circulate out,no cement returns 1:30 2:30 1.00 POOH F/6500'T/6000'install I.-BOP&TIH T/6500' 2:30 4:30 2.00 Plug Number 4 Mix and pump 534 sx class g cement at 15.8 ppg with 0.6%FL63,0.3%R3,0.2%CD-32,0.005PPS Static Free+1 gal per 100 sacks 111 bbl slurry,displace with 98 bbl mud fora balance plug from 6500'to 6000'. 4:30 6:00 1.50 POOH F/6500'T/6000',circulate out 6:00 7:00 1.00 POOH 6 stands,install I-BOP,TIH to 6000' 7:00 9:00 2.00 Plug Number 5 Mix and pump 478 sx class g cement at 15.8 ppg with 0.4%FL63,0.1%R3,0.3%CD-32,0.005PPS Static Free+1 gal per 100 sacks 98 bbl slurry,displace with 89 bbl mud for a balance plug from 6000'to 5500'.Cement in place at 09:00 9:00 11:00 2.00 POOH to 5367'circulate.Cement returns to surface. 11:00 11:30 0.50 Pull out of hole to 5179. 11:30 17:00 5.50 Circulating while waiting on cement. 17:00 17:30 0.50 Trip in hole to 5365'and tag cement with 20,0009. 17:30 19:00 1.50 Pull out of hole to 2700'.Spot 75 bbl high vis pill. 19:00 20:00 1.00 Pull out of hole to 1900'install I-BOP and trip in hole to 2300' 20:00 21:00 1.00 Plug Number 6 Mix and pump 250 sx class g cement at 15.8 ppg with 0.4%FL63,0.1%R3,0.3%CD-32,0.005PPS Static Free+1 gal per 100 sacks 52 bbl slurry,displace with 35bbl mud for a balance plug from 2356'to 2056'.Cement in place at 09:00 21:00 22:30 1.50 Pooh to 1900'circulate out 22:30 23:30 1.00 Pooh l/d cement mule shoe. 23:30 0:00 0.50 Flush stack prepare to test BOPE. At 0702 hrs.on 9-28-12 we received verbal approval from Guy Schwartz(AOGCC)to proceed with open hole plugging operation At 1456hrs.9-29-12 Jim Regg waived witness via e-mail to tagging 5th cement plug @ 5500',no response given to witness of BOPE Testing 9-30 @0600 Safety meeting topic:Cold weather operations,Heavy lifts,Cement operations. 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 3:00am 1:00pm 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Corn 366.54' MAKE GD GD EMSCO DEPTH 9106 5365 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ1O FB1600 WEIGHT 9.8 9.9 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 58 53 LINER SIZE 6.5 6.5 6 PV 18 18 - SPM 88 88 - YP 23 22 GPM 717 717 GELS 7/10/13 7/9/13 SURF.PRESS 3250 3250 API WL 3.9 4 SLOW PUMP DATA HT-HP 8 8 SPM 20/30/40 20/30/40 pF 2.3 2.5 SURF PRESS 325/375/450 325/350/400 mF 5 5.2 BOTTOM HOLE BPM 1.94/2.91/3.88 1.94/2.91/3.88 pM 3 3.1 ASSEMBLY CAPACITY pH 11.1 11.3 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 _ Ca 160 160 1 12-1/4"SMITH SR#JF 6474 1.00 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 25000 25000 2 MUD MOTOR 35.81 TORQUE AND DRAG SAND 0.75 0.75 3 NM PONY COLLAR 10,17 DEPTH 9106 FT. SOLIDS 8 8.5 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1.5 1.5 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. 260 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 M# ADDITIVES USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 11 9 NM MODULAR CROSS OVER 3.42 BIT NO. 4 3 GELS 50 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. SMITH SMITH Mixllmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX Nut o'aa.a 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 JG0146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex 18 24-HWDP 736.96 HOURS 21.5 25.5 SODA ASH 19 DRILLING JAR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC RPM 80 60 safecarbao AV DP defoamer AV DP DAILY MUD COST 8,738 TOTAL LENGTH 1111.91 AV DC CUM.MUD COST 538,053 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER OR 29 ANNULAR WIND NNE-5 TEMPERATURE FUEL ONBOARD IWATERS ONBOARD OPERATOR PACONDITION IPRTLYY/CLDY 1CAMP CATERING 4 BL RAMS Kl 002 DOR 34 • M • . .001e. .... .( FURZE Iii°111- Operating Alaska LLC • CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/30/12 KLU#2 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 35 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD PBTD 2065' 9,000 MD 9000 ND KEITH FREENY/FRANK JOHNSON 907-375-7500 18 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD LINE 1905 11.5 9/30/12 212 Rig up and test BOPE,install wear bushing,Make up Baker drilling assembly trip in hole to 2005',Wash down to 2035',Dress off top cement to 2066', Circulate and reduce mud weight to 9.5 ppg,Pooh to 1862'inside casing shoe,Wait on AOGCC drilling permits to drill ahead. I=orecastWait on drilling permits,Start side track operations and drill ahead. HOURS DETAILS OF OPERATIONS START END HRS(OUR) 0:00 1:30 1.50 Rigging up to test BOPS 1:30 8:30 7.00 Perform testing of BOPE 8:30 9:30 1.00 Installing wear bushing 9:30 14:30 5.00 M/U Baker bottom hole assembly 14:30 15:00 0.50 Trip in hole with hwdp. 15:00 15:30 0.50 Trip in hole with drill pipe to 1950'.Fill pipe.Trip in hole to 2005'without pumping.Taking weight. 15:30 17:30 2.00 Wash down to 2005 with low pump pressure.Taking weight.Wash and ream from 2005'to 2035'with zero weight.Dress top of cement 2035 to 2066'with 1,000 W.O.B. Rop 80 fph at 2035'to 2065'rop 25 fph 17:30 20:30 3.00 Circ and reduce mud weight to 9.5 ppg. 20:30 21:00 0.50 Pooh f/2065'to 1862'inside shoe. 21:00 0:00 3.00 Wait on Permits from AOGCC for drilling ahead,check and clean all flow lines and ditches,shaker manifolds prepare for drilling ahead. "At 1456hrs.9-29-12 Jim Regg waived witness via e-mail to tagging 5th cement plug @ 5500',no response given to witness of ROPE Testing 9-30 @0600 Safety meeting topic:Cold weather operations,high wind operations,winterizing equipment 24.00 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 19:30pm 13:OOpm 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Com 366.54' MAKE GD GD EMSCO DEPTH 2065 2065 20" N-80 169/133/106 BT&C 1905' MODEL PZ10 PZ1O _ FB1600 WEIGHT 9.5 9.9 13.375" N-80 72 BT&C 436' STROKE 10" 10" 12" VISC. 52 86 LINER SIZE 6.5 6.5 6 PV 12 17 SPM 88 88 YP 15 19 GPM 717 717 GELS 6/8/12 8/14/23 SURF.PRESS 3250 3250 API WL 8 5.6 SLOW PUMP DATA HT-HP na na SPM 20/30/40 20/30/40 pF 3.9 4.4 SURF PRESS 325/375/450 325/350/400 mF 5.2 6.6 BOTTOM HOLE BPM 1.94/2,91/3.88 1.94/2.91/3.88 pM 6.1 5.7 ASSEMBLY CAPACITY pH 11.8 11.8 NO. DESCRIPTION LENGTH(ft) BTMS UP(STROKES/MIN) 7146/42 Ca 17000 25000 1 12-1/4"QD506FXX(JET 6x16)S/N#7024719 1.61 TOTAL CIRC.(STROKES/MIN) 13438/79 CI 320 200 2 STEERABLE MUD MOTOR 1.3 DEGREE 35.81 TORQUE AND DRAG SAND 0.5 0.5 3 NM PONY COLLAR 10.17 DEPTH 9106 FT. SOLIDS 7.5 8.5 4 NM STRING STABALIZER 5.97 TORQUE 8000 AMPS OIL 1 1.5 5 NM BOTTOM STOP SUB 2.58 PICK UP 260 M# CAKE 1 1 6 ON TRAK MWD/GAMMA/DIR 22.70 ROATATING WT. 260 M# MBT na na 7 12 1/8"MODULAR STABALIZER 5.99 SLACK OFF 255 MO ADDITIVES USED ON RIG 8 BCPM SUB 11.86 BIT RECORD BARITE 9 NM MODULAR CROSS OVER 3.42 BIT NO. 4 3 GELS 10 ORD 8.78 SIZE 12-1/4" 12-1/4" CAUSTIC 11 CCN 8.77 MFG. SMITH SMITH MixIlmed 12 NM TOP STOP SUB 2.17 TYPE MDSI1616LBPX MDSI616LBPX 13 NM FILTER SUB 5.55 SERIAL NO. JF 6474 300146 Engineer 2 14 NM CROSS OVER 2.69 NOZZLES 6 X 16 6 X 16 resinex 30 15 8"NM DRILL COLLAR 30.78 DEPTH OUT 9106 7505 salt 16 8"NM DRILL COLLAR 30.69 DEPTH IN 7505 1926 Lab 1 17 - STEEL CROSS OVER 1.60 TOTAL FT. 1601 2474 Gelex - 18 24-HWDP 736.96 HOURS 21.5 25.5 SODA ASH 19 DRILLING JAR(HYD) 32.05 AVE.ROP 74 97 FLOZAN 20 5-HWDP 152.37 WOB 20-Jan 0/25 POLY PAC RPM 80 60 Sare,a,50 AV DP defoamer AV DP DAILY MUD COST 10,973 TOTAL LENGTH 1112.52 AV DC CUM.MUD COST 549,026 TOTAL WEIGHT 80,000 GRADE-T/B/G _ CUM.HRS.BHA 21.5 25.5 PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 29 ANNULAR Shaffer 13-5/8 x 5M 5M WIND NNW-5 FUEL ONBOARD WATER ONBOARD OPERATOR 3 PIPE RAMS Cameron Type U 13-5/8 x 10M 10M CONDITION CLEAR 33,558 CAMP CATERING 4 BL SHEAR RAMS Cameron Type U 1OM TEMPERATURE 41 906 SERVICE 13 MUD CROSS - FUEL USED DRILL OTHER PIPE RAMS Cameron Type U 13-5/8 x 10M 10M 1,806 1,146 TOTAL 49 CSG SPOOL Cameron SOW 13-3/8X 13-5/8 10M 10M KLU#2 DDR 35 -- O N O� O ^ O AD v) O ^ 0 CD O v) [� O� 00 N M e 0 N vn 0 ' O M O N M M ^ O 0 ^ 0 0 O N ^ ^ O O O O O O O O e8 O O O O O O O O O O O O O O O O O 6 O 6 O 6 6 O Q 8 All W13333 3333 3333 3333 3333 3333 M N 0 OD V O N O N r.O v1 N vD ^ N cD N O 'Co- N_ 0tvo O N O� 0 M O ^ ON [� AD N ^ D\ n M R M N N O O O ON hi 1 O D\ D1 00 00 l� [, [� l� [� �D AD AD �D �D )D �D �D �D �D �D �D �D v) Z y r 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 C C C O O O O O M M M M M M M M M M M M M M M M M M M M M M M M O O O O O O O O O O O O O O O O O 0 0 O 0 O O O EO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q v) V'1 V'1 vl v) kr) v) kr) v) v) v) v) V7 ut v1 4') V7 V) vl V) V) V) V) v) Z Z Z Z ZZ Z Z-. 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N O T 00 r n 00 v) et et M N N 00 T T DD r '''.4i et -- N M M N 00 O N M v) [� 00 T O -- N et ut r` LW6 7: ed kk a',: G. L 0 W AD AD AD AD MD AD AD AD N N N N N N N N N 00 00 00 00 00 00 00 ii) CC O d v. w 3 o 0 ag o00 ,. Q . L tO iiiI 333 34t 4t _ _ . 64o; o; 0; .p N N N .+ O O O C - ° ° O N rn h h .r) O O O d ,1o 0 0 E O U d E z N n _. o b0 M M D\ c> M a ,__, N 1p w 01 T 001 01 11- 1•••i z� � � n tea, O N N N N O Q 1.. _ CPS CO 01 Q1 01 F V C O 0 0 A �^ 4 ' •12 C N N N .70 0 0 �1) CA If) CI) - CIS o °� pr'+pui Qv `� o a� M a CP 5arip' 3 3 - o en en a — L O O - a�0a. fl �ell O z e I.) O M M O C C Cl)— 1D 10 1D RI SCC Yd T. 3 1 E p4 NV M a o bf) OA Q L V (V N O CI_ 'c 0\ h _� LL V >.. 01 rn 0 - d F" F" F a F-- T 0 0 Z a 4 a Lc7 R 4 N y ,0 O N 1 O O V1 0 4:tC 00 0o Z ri 10 4m/ O ° 16 ri Ni O A O L2 = COQ CI O O R •E° r.r -. 01 CA 64 elifti_1:2 CtO 4 R Q .0 .0�C..D �0 0 0 0 L ++ C 01 01 01 Q n� ra Q O Om c Lr: 0°' a a o F ra c c c b 3 s Q .5. 0 00 LL o _ _ A =`r U o 0 CC 0 oo a w rnoo 'ate (IN�� nCI 10 ; W �— oo rn rn W CC0 < a. u, 0 0 FURIE Operating Alaska LLC Summary of Logs for KLU#2 Schlumberger Wireline: SP 19,00 8,860 Calliper Open-Hole 1,900 8,890 CMR 1,900 8,890 Triple Combo 1,900 8,890 FMI 1,900 8,860 Sonic Scanner 1,900 13,282 Baker Hughes: Directional Drilling End of Well - MWD/ LWD CanRig: Drilling Dynamic Log 214' to 9,106' LWD Combo Log 214' to 9,106' Formation Log 214' to 9,106' **Cutting Samples to be provided once received under separate cover. 1029 W. 3rd Avenue,Suite 500 I Anchorage,AK 199501 I Office:907.277.3726 �w�~\\I%%��s � THE STATE Alaska Oil and Gas — °fALASJ(A Conservation Commission GOVERNOR SEAN PARNELL 333 West Seventh Avenue ALAS� Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 Bob Laule Drilling Engineer Furie Operating Alaska, LLC a 1029 W 3rd Avenue, Suite 500 Anchorage, AK 99501 Re: Exploratory Field, Exploratory Pool, KLU #2 Sundry Number: 312-373 Dear Mr. Laule: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for 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. Sincerely, 6kWit Cathy . Foerster Chair DATED this day of October, 2012. Encl. Furie Operating Alaska,LLC 1029 West 3''d Ave,Suite 500 Anchorage,Alaska 99501 October 1, 2012 RE: Kitchen Lights Unit,Co dentia) Data Kitchen Lights Uni Alaska Oil and Gas Conservation (L- Commission 333 W. 7th Avenue,Suite 100 Anchorage,AK 99501 Gentlemen L� y (( / •7 ,tom -"—_ — Enclosed is the 10-403 Application for Sundry Approval for well KLU#2 for the ab ent of the KLU#2 well bore in preparation of an open hole side track. Verbal approval was granted by Guy Schwartz September 28tH Furie Operating Alaska, LLC requests that these data and reports be held confidential, as marked on the attached and listed above,in accordance with AS 31.05.035 and 20 AAC 25.537. Please signify that you have received and accepted this data by signing in the space below and returning this letter to me at the Anchorage address above or by fax to me at 907-277-3796. If you have questions, please feel free to contact me at 907-277-3726. Sincerely, Bob Laule RECEIVED AND ACCEPTED ABOVE DATA This 1g day of October, 2012 BY: TITLE: STATE OF ALASKA9)'1 "'") ei/ ' ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS Io r?/ 20 AAC 25.280 1 Type of Request Aband• .% ,fir/,U Plug for Redrill® Perforate New Pool LIRepair Wellu Change Approved Program Suspend PlugPerforations Perforate Pull Tubin Extension Operations Shut owns Re-enter Susp.Well Stimulate B Alter Casing EI TiTi IOther 2 Operator Name' 4.Current Well Class. 5 Permit to Drill Number. �;sD Z r 2 Furse Operating Alaska LLC Development Exploratory 9 -217.,E)--/-7 lc5- 3 Address Stratigraphic e Service ® 6.API Number. S—C.; 73: 55 :x:. z 1029 W 3rd Ave,Suite 500 Anch AK 99501 ECCE I V E CIA ��.,� 7.If perforating,closest approach in pool(s)opened by this operation to nearest 8.Well Name and Number property line where ownership or landownership changes. P f 12°0112 O / Spacing Exception Required' Yes No ® KLU#2 O 2012 �2 9.Property Designation(Lease Number). 10.Field/Pool(s): r ADL 389198 • Exploration AOG(CC 11 PRESENT WELL CONDITION SUMMARY Total Depth MD(ft): Total Depth ND(ft): Effective Depth MD(ft): Effective Depth ND(ft). Plugs(measured) Junk(measured): 9000' 9000' 9000' 9000' NONE Casing Length Size MD ND Burst Collapse Structural 367 30" 367' 367' Na Na Conductor 516 20"169*X56 1897 1897 3440 psi 2522 psi Conductor 544 20"133*J-55 1383 1383 3060 psi 1500 psi Conductor 829 20"106*J-55 829 829 2410psi 770 psi Surface 436 13.375"72*N-80HC 436 436 5380 psi 3470 psi Intermediate Tubing Perforation Depth MD(ft): Perforation Depth ND(ft): Tubing Size: Tubing Grade. Tubing MD(ft): TBD TBD NA NA NA Packers and SSSV Type. Packers and SSSV MD(ft)and ND(ft): 12 Attachments' Description Summary of Proposal Id 13 Well Class after proposed work Detailed Operations Program I I BOP Sketch I I Exploratory IXI Development I I Service I I 14.Estimated Date for Sept 28th 2012 15.Well Status after proposed work' Commencing Operations' Oil El Gas 0 WDSPL ❑ Suspended 16 Verbal Approval: Yes Date WINJ El GINJ ❑ WAG Abandoned El Commission Representative: Guy Schwartz 9/28/2012 GSTOR El SPLUG El 17 I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Bob Laule Printed Name Bob Liule Title Drilling Engineer Signature G,y Phone Date lU— (907)277-3726 / --/ 7— COMMISSION USE ONLY C Conditions of approval: Notify Commission so that a representative may witness Sundry Number 7 ,51 Plug Integrity [2( BOP Test El Mechanical Integrity Test [] Location ClearanceEl Other: / 1 / Ak ;fy 1 h.3-0 r c.s l�t.al;C Subsequent Form Required: /Q Yv 7 /`,, APPROVED BY Approved by: (• 74hz Relied .I COMMISSIONER THE COMMISSION Date /t) - S _ �"_ Form///10���--4--Oyyy3lllRewtea 1/2010 RBC MS OCT 0 g 2012 ubmit in Duplicate J O R Furie Operating Alaska Well KLU#2 Plan for the abandonment of well bore in preparation of a sidetrack Summary Scope of Work Spot 40 bbl High vis pill with top at 8000' Mix and spot five 500' balanced cement plugs sequentially. Pull up 5 stands and circulate and Wait on Cement. Tag top of cement with 20K @ 5365 .Witnessing tagging the top of cement plug was waived by Jim Regg 9-29-12. POH and spot 40 bbl High viscosity pill with top at 2356' • Spot 300' balanced cement plug. POH .PU Kick off BHA. Wait on cement. Dress top of cement 2035-2066 with 1K WOB. Drill side track once approved Permit to Drill is approved. t tcLvt_ zA F � z`Z' �� r Attachments: Well Bore Diagram Baker Hughes Cementing Operation Report FURIE OPERATING of ALASKA,LLC KITCHEN LIGHTS UNIT NO.2 COOK INLET,ALASKA 9/30/12 PROPOSED SCHEMATIC TUBULARS&SETTING DEPTHS MW FORMATION DEPTH(KB) (PPG) EVALUATION MD DRILL FLOOR 212' RKB TO SEA FLOOR 132' HIGH TIDE 102' MEAN LOW LOW WATER 212' SEA FLOOR 266' MUD LINE SUSPENSION 366' 30"x 11/2"W/T DRIVE PIPE +/-426' 133/8"72#N-80 BT&C MWD-LWD(RESISTIVITY-GR) 1614. 1897' 20"CONDUCTOR CASING 9.3 +/-11.5#FIT 2056 Cement kick off Plug15.8 +*r*+OQQ4**+*+*+ ppg 4*+O*+*+4*+*+*r0*+ 2356 MWD/LWD: RESISTIVITY-GR- NEUTRON-DENSITY 9.8 Kill Wt Mud ��kIb ELECTRIC LOGS(OPTIONAL): COMP.MAG.RESONANCE-XPT FMI-SONIC SCANNER(DIPOLE) ROTARY SIDE WALL CORES +T+'+•+T+'+*+T+'+'+'+ 5365' Cement Plug 15.8 ppg ++++++++++ ++r44i444i ««:.*:+*+++*+* • 5 Sequential 500'Balanced Plugs f+++++++++++++++.4+. +r44+++++4+ +*+*++004+*+*+*+ 8000' 9.8 Kill Wt Mud 9106' 9.88 KLUQ—DRLG 8 TP&A 092712 Edited copy xis 9130112 r ' EI BAKER HUGIES Proposal No: 1001155708A FURIE OPERATING LLC KITCHEN LIGHTS UNIT#2 - WILDCAT Field Kenai Offshore County, Alaska October 1st, 2012 P&A Cement Post Job Proposal Prepared for: Prepared by: Bob Laule Joshua Herald Furie Operating Alaska, LLC Technical Support Engineer Bus Phone: 907-277-3726 Email: marboblaule@gmail.com Service Point: Service Representatives: BJS, KENAI Rod Edwards Bus Phone: 907-7764084 Account Manager (907)659-2329 Bus Phone: 907-267-3487 Fax: 907-776-5606 Mobile: 907-229-6536 Powered by PowerVision Gr4105 s Operator Name: FURIE OPERATING LLC 1r Well Name: KITCHEN LIGHTS UNIT#2 BAKER Job Description: P&A 12.25"washed out to 13.16" HUGHES Date: September 26, 2012 Proposal No: 1001155708A FLUID SPECIFICATIONS PLUG VOLUME VOLUME NO. CU-FT FACTOR AMOUNT AND TYPE OF CEMENT 1 472 I 1.15 = 410 sacks Class G Cement+ 0.6% bwoc FL-63 + 0.3% bwoc R-3 + 0.2% bwoc CD-32 + 0.005 lbs/sack Static Free+ 1 gals/100 sack FP-6L+ 43.7% Fresh Water 2 472 I 1.15 = 410 sacks Class G Cement+ 0.2% bwoc CD-32 + 0.005 lbs/sack Static Free+ 1 gals/100 sack FP-6L+ 0.3% bwoc R-3 + 0.6% bwoc FL-63 + 43.7% Fresh Water 3 472 I 1.15 = 410 sacks Class G Cement+ 0.005 lbs/sack Static Free+ 1 gals/100 sack FP-6L+ 0.6% bwoc FL-63 + 0.2% bwoc CD-32+ 0.3% bwoc R-3+43.7% Fresh Water 4 472 I 1.15 = 410 sacks Class G Cement+ 0.005 lbs/sack Static Free+ 1 gals/100 sack FP-6L+ 0.6% bwoc FL-63 + 0.2% bwoc CD-32 + 0.3% bwoc R-3 +43.7% Fresh Water 5 473 / 1.15 = 411 sacks Class G Cement+ 0.005 lbs/sack Static Free+ 1 gals/100 sack FP-6L+ 0.4% bwoc FL-63+ 0.1% bwoc R-3+ 0.3% bwoc CD- 32+43.8% Fresh Water 6 288 I 1.15 = 250 sacks Class G Cement+ 1 gals/100 sack FP-6L+ 0.05% bwoc Static Free + 0.25% bwoc Calcium Chloride + 0.5% bwoc CD-32 +44% Fresh Water CEMENT PROPERTIES PLUG PLUG PLUG PLUG PLUG NO.1 NO.2 NO.3 NO.4 NO.5 Slurry Weight (ppg) 15.80 15.80 15.80 15.80 15.80 Slurry Yield (cf/sack) 1.15 1.15 1.15 1.15 1.15 Amount of Mix Water (gps) 4.92 4.92 4.92 4.92 4.94 Amount of Mix Fluid (gps) 4.93 4.93 4.93 4.93 4.95 PLUG NO.6 Slurry Weight (ppg) 15.80 Slurry Yield (cf/sack) 1.15 Amount of Mix Water (gps) 4.96 Amount of Mix Fluid (gps) 4.97 Report Printed on September 27,20126'.37 PM Page 1 Have more questions? You can find us at http://wwwbakerhughes.com/products-and-services/pressure-pumping Operator Name: FURIE OPERATING LLC Well Name: KITCHEN LIGHTS UNIT#2 BAKER Job Description: P&A 12.25"washed out to 13.16" HUGHES Date: September 26, 2012 Proposal No: 1001155708A FLUID SPECIFICATIONS (Continued) PLUG GEOMETRY PLUG PLUG TOP BOTTOM 1 7500 ft to 8000 ft with 13.16 inch Open Hole PDSqT= 138° F PDST= ° F 2 7000 ft to 7500 ft with 13.16 inch Open Hole PDSqT= 134° F PDST= ° F 3 6500 ft to 7000 ft with 13.16 inch Open Hole PDSqT= 129° F PDST= ° F 4 6000 ft to 6500 ft with 13.16 inch Open Hole PDSqT= 125° F PDST= ° F 5 5500 ft to 6000 ft with 13.16 inch Open Hole PDSqT= 115° F PDST= ° F 6 1965 ft to 2277 ft with 13.16 inch Open Hole PDSqT=80 ° F PDST= ° F Fill volume is based on 12.25"hole washed out to average 13.16" hole. Report Printed on September 27 2012 6 37 PM Page 2 Gr4131 Have more questions'/ You can find us at http//www bakerhughes corn/products-and-services/pressure-pumping Advancing Reservoir Performance Furie Well: Kitchen Lights #2 Field: Kitchen Lights BAK RilII Job Type: Plug HUGHES Cement Lab Report ✓'_apoVans-. 28-Sep-12 Bob Laule Josh Smith Furie Area Lab Technician Baker Hughes - US Pressure Pumping www.bakerhughes.com 0 2010 Baker Hughes Incorporated.All rights reserved. r a— West Coast Area Laboratory Report • BAKER HUGHES Re sort#: CDB045012A Client/Well Information: ompany: Furie District: Kenai Depth MD: 6000 _Field: Kitchen Lights Job Type: Plug Depth TVD: 6000 - — Well: KL#2 Hole Size: 12.25 BHST: 100 Prepared for: Bob Laule Casing Size: BHCT 100 `; ubmitted by: Ken Nix Cement: Class G Water: Fresh Water Josh LLot#: Alsaka G Date: 9/28/12 Slurry Design: FL-63 0.4 % BWOC Class G 100 % CD-32 0.3 % BWOC Additives R-3 0.1 % BWOC Static Free 0.01 lb/sack FP-6L 1 •al/100sack Slurry Properties: 15.8 ppg . 7t1"11XXIPIP5 1.15 ft3/sack Mix Water: 4.941 gal/sack OM' iY<a .. :1:211MEMEI Bingham PV YP Ambient —_---- Plastic 100 194 114 77 43 20 20 107 8 OO lk:afs•ft 5001b/_' 45 de• 0-TR% IF 4 ,__ ---- 80 cc/30min Consistometer Recording of Bearden Consistency(Time is in hrs:min): Nemo al 3:27 .0- ,e° - 1130 7- E40 O4O- 30000- 00 600- 32000— OOH 130— 20000— 70- PC 3OO t 1�OOD yt 00 C 300 7: 10000 1 •0 i -. 360— il I -� .- Mf100 11000 7 p 30 .• -- 1 1 1113- �1313�= I m - ��J�rty4`A ii 1 O O O f 1r :302 00 23033ROO R30 400 Compressive Strength Data: 5:26 7:41 Ilk AL, il 100 © .00 •si 584 1511 2811 3200 --- 100 A-- 6000 -.... -..-. .. - 360 1•— 1600 i i 310 7. 141— 4000 �e0 1♦— 3600 •0— 113— 1- 1m— =10- - L f •60— •� 1000 • Q 130 Jr •— { 1.00— .._ ,y • b— 3— 600 ___{ __ ; °0 cp 1100 3fA0 36•33 00000 Comments: Notice:This report is presented in good faith based upon present day technology and information provided:but because of variable conditions and other information which must be relied upon,Baker Hughes makes no warranty,express or implied,as to the accuracy of the data or of any calculations or opinons expressed herein. You agree that Baker Hughes shall not be liable for any loss or damage, whether due to negligence or otherwise,arising out of or in connection with such data,calculations,or opinons. • KER• West Coast Area Laboratory Report ' BAKER HUGHES Resort#: CDB044912A Client/Well Information: ompany: Furie District: Kenai Depth MD: 7000 Field: Kitchen Lights Job Type: Plug Depth TVD: 7000 Well: KL#2 Hole Size: 12.25 BHST: 125 Prepared for: Bob Laule Casing Size: BHSqT 125 Submitted by: Ken Nix Cement: Class G Water: Fresh Water-Tap Tested b : Josh L•, Alaska G ri, Date: 9/28/12 Slurry Design: Static Free 0.05 %BWOC Base ( Class G 100 I % FP-6L 1 pal/100sack Additives FL-63 0.6 %BWOC CD-32 0.2 %BWOC R-3 0.3 %BWOC Slurry Properties: 15.8 ppg - ` 1.15 ft3/sack Mix Water: 4.922 gal/sack =heolo. , 300 rem .. r.m 3 rim PV YP Ambient Bingham Plastic 125 166 110 75 40 8 7 105 5 10 sec 'Irr 3 E: 90 dee 0 �. ---- 1 1 30 cc/30min Consistometer Recording of Bearden Consistency(Time is in hrs:min): Nemo '' 3:48 ' . „- 1330 j10000, 1 50 • 000 0 3 ,.w ,ao zw TM., 2 3 3.00 am 4-00 .,. Compressive Strength Data: III 5:30 6:32 8 hr 12 ,iiiiii 125 KM 50 ssi 500 esi 1204 2399 3677 3973 --- 400— 20— 50007 360 18 4500- 3207 167 4000— —gyp 2130- 5r 147. 3500— p240- $12- 13000- v200— �[+10—' 125007: 160- 1 8- 2000— A 12°7 6= 1500 80— ¢ 47 � 1000 •10 ' 2 '., 50CH 000 9'.00 18:00 21:00 36.00 T(rH:M4 Comments: Notice:This report is presented good faith based upon present day technology and information provided:but because of variable conditions and other information which must be relied upon,BJ Services makes no warranty,express or implied,as to the accuracy of the data or of any calculations or opinons expressed herein. You agree that BJ Services shall not be liable for any loss or damage,whether due to negligence or otherwise,arising out of or in connection with such data,calculations,or opinons. Ir i ' BAKEWest Coast Area Laboratory Report R• HUGHES Resort#: CDB044812A Client/Well Information: Company: Furie District: Kenai Depth - ._,. 8000 Field: Kitchen Lights Job Type: Plug Depth TVD: ' 8000 Well: KL#2 Hole Size: 12.25 BHST: •_=" 140 Prepared for: Bob Laule Casing Size: BHSq e 140 Submitted by: Ken Nix Cement: Class G Water Fresh Water-Tap Tested b : Josh Lot#: :, Alaska G ' ' 9/28/12 Slurry Design: Static Free 0.05 %BWOC Base 1 Class G 100 I % FP-6L 1 gal/100sack Additives FL-63 0.6 %BWOC CD-32 0.2 %BWOC R-3 0.3 %BWOC Slurry Properties: ,, ill— "'. ;, 15.8 ppg ,_ 1.15 ft3/sack Mix Water: 4.922 gal/sack Rheolo : 6 r m 3 r m PV YP Ambient .1 Bingham 140 160 105 72 35 6 6 Plastic 105 0 Gel t . . 90 de. 0 St h ---- 28 cc/30min Consistometer Recording of Bearden Consistency(Time is in hrs:min): i Taz i'• 3:41 100 bc: 600— 40000— 100— 540- 36000 OCE: • 460- 32000- 80- 420- 28000- 70 7 E 3601 240001 II 60 I'.Ip 300 i 20000 ll. 50 if Q I 240 7 'woo so t 0 '2000 30 120 6000 7. 20- . e0- 4000= ,o -! , 006 050 1'.00 1:30 2:00 2:30 3:00 3:30 4.00 Time(,616.6 Compressive Strength Data: iliika 411 5:11 6:04m e.,. . :iit'4 wi, WWWYt.• .i ri:.l 1 140 Q 50 •si 500 •si 1281 2379 3216 3484 --- 400— 20— 5000— 360— 16— 4500- 320' 16— 4000 260— 14— /30.0.3500—5240' 12--P 200- E 10- ~160- 1 6- 2000- 0 120= ~ 6- pII 1500 80— ¢ 4- I 1000 40— 2— 500- 0 T I 0'.00 9:00 16-00 2)'.00 =..0 Tore(1-1611A6 Comments: Notice:This report is presented good faith based upon present day technology and information provided:but because of variable conditions and other information which must be relied upon,8J Services makes no warranty,express or implied,as to the accuracy of the data or of any calculations or opinons expressed herein. You agree that 13,1 Services shall not be liable for any loss or damage,whether due to negligence or otherwise,arising out of or in connection with such data,calculations,or opinons. BAKER■ West Coast Area Laboratory Report HUGHES Re•ort#: CDB044712A Client/Well Information: . .,.- Furie - District: Kenai Death MD: 2200 field: Kitchen Li•hts Job T •e: Plus Death TVD: 2200 illil Kitchen Li•hts#2 Hole Size: 12.25 BHST: 84 Pre•ared for: Bob Laule IIIMEISMI BHCT 75 Ken Nix Cement: Class G Water: , .• Josh Smith Lot#: Alaska G Date: 9/28/12 Slurry Design: ,, FP-6L Q.al/100sac Me I Class G 1 100 % Additives Static Free 0.05 %BWOC A-7(CaCl2 0.25 %BWOC CD-32 0.5 %BWOC Slurry Properties: 15.8 Yield: 1.15 ft3/sack Mix Water: 4.948 gal/sack fthiofogiritiX111111111ripm 200 rpm 100 rpm 6 rpm 3 rpm Bingham PV YP Ambient Plastic 75 55 24 17 9 1 1 23 2 Gel 10 sec 10 min 100 Ib/sgft 500 Ib/sgftj. - " IP r r° cc/30min Consistometer Recording of Bearden Consistency(Time is in hrs:min): 4 Taz ,; 3:48 100 bc: 6007 40000— 1007 ,, 540-: 36000— 90— 460 1 32000— 80— 420— 28000. 70— - E 360_ 1240004. 11 607 150t:1J:1 40— 180-- I J,12000- I 30- IQ 120 e000 Iv 20- r 60- -a000 10- I Di 0 0'.00 1:00 290 300 4:00 nee ca-ani, Compressive Strength Data: is 4:07 7:07 8 hr 12 hr 24 hr 48 hr Weal. 11 84 'M Q-- 500 •Si 749 2093 4848 7150 7644 400= 20— 8000- 360H 000-360- 18- 7200- 3207 167 6400= 280- 14- -�r555600— E 240— 12- 1.4800— i 200 m1e0— t 4000— $ t t � e r 1607 p 8- 13200— SIR 120-- I I 6- 2400— —. _..i.: 80 4- i 16007 407 I 27 800- 0 0 0 0 18 36 54 '2 74re„H, Comments: Notice This report is presented in good faith based upon present day technology and information provided but because of variable conditions and other information which must be relied upon,Baker Hughes makes no warranty,express or implied,as to the accuracy of the data or of any calculations or opinons expressed herein.You agree that Baker Hughes shall not be liable for any loss or damage,whether due to negligence or otherwise,arising Out of or in connection with such data,calculations,or opinons. Operator: FURIE OPERATING LLC Well Name: KITCHEN LIGHTS UNIT#2 BAKER Date: September 26, 2012 HUGHES Proposal No: 1001155708A PRODUCT DESCRIPTIONS CD-32 A patented, free-flowing, water soluble polymer that is an efficient and effective dispersant for primary and remedial cementing. Calcium Chloride A powdered, flaked or pelletized material used to decrease thickening time and increase the rate of strength development. Class G Cement Intended for use as a basic cement from surface to 8000 ft as manufactured, or can be used with accelerators and retarders to cover a wide range of well depths and temperatures. FL-63 A non-retarding, non-viscosifying fluid loss additive particularly suited for use with coil tubing and/or close tolerance liner cementing. FL-63 is effective from low to high temperatures. Concentrations of 0.2%to 1.0% BWOC are typical. FP-6L A clear liquid that decreases foaming in slurries during mixing. R-3 A low temperature retarder used in a wide range of slurry formulations to extend the slurry thickening time. Static Free An anti-static additive used to prevent air entrainment due to agglomerated particles. Can be used in Cementing and Fracturing operations to aid in the flow of dry materials. Report Printed on September 27,2012 6 77 PM Page 5 Have more questions?You can find us at: http://www.bakerhughes.com/products-and-services/pressure-pumping , , , , Irm. CEMENT JOB REPORT BAKER HUGHES CUSTOMER FURIE OPERATING LLC DATE 29-SEP-12 I F.R.# 1001938284 SERV.SUPV. HAROLD J HENLEY LEASE&WELL NAME LOCATION COUNTY-PARISH-BLOCK KLU#2-API 5073320603.000.0 Kenai Offshore Alaska DISTRICT DRILLING CONTRACTOR RIG# TYPE OF JOB Kenai Plug&Abandon SIZE&TYPE OF PLUGS LIST-CSG-HARDWARE MECHANICAL BARRIERS MD TVD HANGER TYPES MD TVD INA-P&A PHYSICAL SLURRY PROPERTIES SACKS SLURRY SLURRY WATER PUMP Bbl OF WGT YLD GPS ' TIME BM MIX MATERIALS FURNISHED BY BJ LAB REPORT NO. CEMENT PPG FT HR:MIN SLURRY WATER Class G Cement _ 410 15.8 1.15 4.92 84.12 48.0 Class G Cement 410 15.8 1.15 4.92 84.12 48.03 Class G Cement 410 15.8 1.15 4.92 84.12 48.03, Class G Cement I 410 15.8 1.15 4.92 84.12 48.03 Class G Cement I 411 15.8 1.15 4.94 84.24 48.31 Class G Cement L- 250 15.8 1.15 4.96 51.28 29.513 Available Mix Water SW. Available Diapl.Fluid Bbl. TOTAL I 472.001 269.94 HOLE _ TBG-CSG-D.P. COLLAR DEPTHS SIZE %EXCESS ( DEPTH ID OD WGT. TYPE MD TVD GRADE SHOE 7 FLOAT STAGE 13.16 9000 18.38 20 169 CSG 1905 1905 ------ --- 4.276 5-i 19.5 DP 8500 8500 LAST CASING PKR-CMT RET-BR PL-LINER PERF.DEPTH TOP CONN I WELL FLUID ID OD WGT TYPE MD TVD BRAND&TYPE DEPTH TOP BTM SIZE THREAD I TYFE WGT. 19 20 107 1000 10001 L WATER BASED ML 9.8 19. 20 133 I 1200 12001 �_ 18. 20 169 1918 19185 DISPL.VOLUME DISPL.FLUID CAL.PSI CAL.MAX PSI OP.MAX MAX TBG PSI MAX CSG PSI MIX WATER VOLUME UOM TYPE WGT. BUMP PLUG TO REV. SQ.PSI RATED Operator RATED Operator 128 BBLS 1 2000 rig EXPLANATION:TROUBLE SETTING TOOL,RUNNING CSG,ETC.PRIOR TO CEMENTING: PRESSURE/RATE DETAIL EXPLANATION TIME PRESSURE-PSI RATE Bbl.FLUID FLUID SAFETY MEETING: BJ CREW[Xj CO.REP. LX HR:MIN. BPM PUMPED TYPE PIPE ANNULUS TEST LINES 2000 PSI CIRCULATING WELL - RIG U BJ Li 9/28/12 13:00 Safety Meeting. 13:24 0 3.5 WATER Begin pump water ahead of cement for 1st balanced plug©8000'. 11:30 I I Safety Meeting 13:30 1 90 15 Stop pump,shut in treating lines for pressure test. 13:24 50 4 WATER pump water ahead of cement for balanced plug.DP Q 8000 ft. 13:30 2200 15 End pump water ahead.Close in treating line,pressure test. 13:31 2200 Begin line pressure test. 13:34 2082 Test ok,end test,bleed pressure. 13:35 2082 j Test good,bleed pressure. 13:35 0 Begin batch mix cement to 15.8 ppg. 13:35 0 Begin batch cement to 15.8 ppg. 14:14 399 3 CEMENT Begin pumping cement. 14:15 I 400 3 CEMENT After some trouble getting cement,begin pumping cement into well. 14:35 60 I [ 92.5 I WATER End cement,pump 1.7 bbls water behind cement to balance water Reporl Ponied on'. SEP-30-120011.54 Page 1 Jr5001 (1, CEMENT JOB REPORT BAKER v.. HUGHES PRESSURE/RATE DETAIL EXPLANATION TIME PRESSURE-PSI RATE Bbl.FLUID FLUID SAFETY MEETING: BJ CREW IX I CO.REP. I X HR:MIN. -- BPM PUMPED TYPE - - — PIPE ANNULUS TEST UNES 2000 P31 I _ _CIRCULATING WELL - RIG J BJ Li ahead of cement. _ 14:38 1 31 I I 1 92.5 1 WATER 1End pump cement,begin water 1.7 bbls behind cement to balance water ahead. _ 14:38 1— 128 4 1.7 MUD Begin mud displacement of water of cement. -____ 14:39 _ 140 4.4 1.7 MUD End water,begin pumping mud to displace cement. _ 15:07 3151 I 128 1 End displace cement,shut down,bleed pressure. _ 15:08 I 23 I 129 I 1 End displace.Rig pulls up hole,circulate top of plug,gets ready for plug #2. I I I I 1— End 1st plug,rig pulls up 6 stands,circulates bottoms up,prepares for second plug. 18:24 114 4 WATER Begin pump water ahead of cement for 2nd cement plug.DP 2 7450' 18:24 114 4 _ WATER Begin pump water ahead for plug#2.DP a 7450 R. 1828 0 151 'End pump water,shut in treating lines for pressure test 18:29 1922 15 End water ahead.Close in treating line,pressure test. 1829 I 1922 Begin pressure test. 18:32 I 1859 Test good,bleed pressure. 18:32 1859 Test ok,bleed pressure,begin batch cement to 15.8 ppg. 18:32 01 I Begin batch cement to 15.8 ppg. 18:44 357 3 CEMENT Begin pumping cement. 18:44 357 3 L CEMENT I Begin pump cement. 19:12 461 I 83 I WATER I End pump cement,Begin pump water behind cement to balance water ahead. 19:15 133 4 1.7 MUD I End water,begin pumping mud to displace cernertt _ 19:12 1 461 I 83 I WATER End pump cement,follow with 1.7 bbls water to balance water pumped ahead of cement. 19:43 I 1591 I I 118 I End dipslace,Rig pull up hole,circulates top of plug,gets ready to do plug#3. 19:15 133 4 1.7 MUD End water behind cement,begin displace with mud. 19:43 1 259 118 End displace cement.Turn over to rig. 22:29 4 WATER I Begin pump water ahead of cement for plug#3.DP 6 6950 ft. 22:33 2050 15 I Close in treating line,pressure test. Rig pulls up 5 stands,circulates,gets ready for plug 03. 1 22:37 1948 Test ok,bleed pressure.Begin batch cement to 15.8 ppg. 22:28 100 4 I WATER Begin pump water ahead of cement for plug#3. 22:54 82 2 1 CEMENT Begin pumping cement. 22:31 15 Shut down,close in treating line for pressure test. 23:24 26 84 WATER End cement,begin water behind cement to balance water ahead. 22:33 2050 I 1 Pressure test. 23:26 110 3 1.71 MUD Begin pumping mud to displace cement. j 22:37 1950 Pressure test good,bleed pressure. _ 23:55 I 0 I 1 108 1 I End displace.Rig pull up hole,circulate top of cement,get ready for plug#4. _ 22:37 0 Begin batch cement to 15.8 ppg. _ 22:49 86 2.5 CEMENT Begin pump cement. -- I 19/29/12 _ 23:24 I 761 I 841 WATER I End pump cement,pump 1.7 bbis water behind to balance water ahead I� of cement. Repot PNnaa O . SEP-30-1200:11:64 page 2 iA004 . ( )CEMENT JOB REPORT BAKER MB HUGHES PRESSURE/RATE DETAIL EXPLANATION TIME PRESSURE-PSI Ti RATE BBI.FLUID FLUID SAFETY MEETING: BJ CREW U CO.REP. U HR:MIN. PIPE ANNULUS BPM PUMPED TYPE TEST LINES 2000 PSI CIRCULATING WELL -RIG U BJ U _ 02:45 _ 1 591 3 WATER i Begin pump 15 bbl water r for plug#4.DP©6500 ft. 02:54 I 19851 I 15 I I Pressure test. _ 23:28 142 4 1.7 MUD End water,begin displace with mud. _ 03:01 1810 1 Test ok,bleed pressure,begin batche cement to 15.8 ppg. 23:54 215 1 108 I 'End displacement,turn over to rig to get ready for plug#4. __ 03:13 322 3 I CEMENT 'Begin pumping cement. 19/29/2012 _ 02:45 59 4 WATER I Begin pump water ahead of cement for 4th plug.DP(a 6500'. _02:49 15 End pump water,shut in treating line for pressure test. 02:54 I 20001 Begin line pressure test. 03:48 331 I 111 I WATER 'End pump cement,begin pump water behind cement to balance water ahead. 03:50 195 4. 1.7 MUD End water,begin pumping mud. __ ____ 03:00 1846 Pressure test ok. 04:12 2351 1 98 I End pumping mud.Rig pull up hole,circulate top of cement plug,get ready for plug#5. 03:02 o -- Bleed pressure,begin batch cement to 15.8 ppg. 06:53 59 2.5 WATER Begin pump water ahead. _ 03:13 322 3 CEMENT Begin pump cement. 06:58 _ 15 Stop pump water,close in cementing line for pressure test. 03:47 38 I MI WATER 1 End cement,pump 1.7 bbls water behind to balance water pumped ahead of cement. 06:59 2000 ]Leak somewhere. 07:54 1917 Pressure test.Begin batch cement while testing lines. _ 03:50 195 4 1.7 MUD End water behind,begin displace with mud. ___ 04:13 0 98 End plug#4.Turn over to rig to get ready for plug#5. 08:05 1776_ Test ok,bleed pressure. 08:13 265 I 2.5 CEMENT I Begin pumping cement. 06:53 I 2.5 3.5 WATER Begin pump water ahead of cement for plug#5,dp Q 6000'. 06:59 2000 Begin pressure test,leaks. _ 08:45 76 1 98 WATER End cement,begin pumping water behind to balance water ahead of cement. __ 07:54 1900 Begin pressure_test, _ 08:47 144 4.3 1.7 MUD Begin displace cement with mud. 09:08 71 89 I I End pump mud,Rig pull up hole,circulate top of plug,Walt 8 hours to tag cement top. __ _ Begin batch cement to 15.8 ppg. Cement where it should be, holds 20,000. __ 08:05 1776 I I Pressute test ok.Bleed pressure. E 20:13 100_ 3.8 I I WATER I Begin pumping water ahead of plug#6.DP @ 2356 ft. 08:06 50 20:21 21541 15 Close in cement line,pressure test.Begin batch cement to 15.8 ppg. 08:13 265 2.5 CEMENT 'Begin pump cement. 20:24 2106 Pressure test ok. 08:45 I 29 I 98 I WATER End pump cement,pump 1.7 bbls water behind cement to balance water pumped ahead of cement. 20:40 I 86 2.6 CEMENT Begin pumping cement. 08:47 I 144 4.3 1.7 MUD End pump water,begin displace with mud. ., Ro,t�o,: ,20,,:54 Page 3 . ri.0 CEMENT JOB REPORT BAKER HUGHES PRESSURElRATE DETAIL I EXPLANATION TIME PRESSURE-PSI RATE Bbl.FLUID FLUID SAFETY MEETING: BJ CREW 4 C_' CO.REP. A] HR:MIN. PIPE ANNULUS BPM PUMPED TYPE TEST LINES 2000 PSI _ CIRCULATING WELL - RIG U eJ U _ 20:56 281 1.3 1 53 I WATER I End cement,begin water behind to balance water ahead. — 20:59 152 4.2 1.7 MUD I End water,begin pumping mud. 09:08 7 89 End displace,turn over to rig. I Wait for plug to get hard enough to take 10000 lbs. 17:30 Cement plug holds 200.00,rig gets ready for plug#6(Kids off plug). 21:06 215 35 End mud.Rig pulls up hole to circulate.End plugs. 20:13 1003.8 WATER Begin pumping water ahead of plug#6.DP©2356 ft. 20:21 2154- _ 15 Close in cement line,pressure test.Begin batch cement to 15.8 ppg. 20:24 2106 Pressure test ok. 20:40 86 2.6 CEMENT Begin pumping cement. 20:56 28 53 WATER I End cement,begin water behind to balance water ahead. 20:59 1 152— 4.2 1.71 MUD End water,begin pumping mud. 21:06 215 35' End mud.Rig pulls ub hole to circulate,End plugs. PSI TO 1 TEST BBL.CMT TOTAL 1 PSII SPOT SERVICE SUPERVISOR SIGNATURE: BUMPED BUMP FLOAT RETURNS! BBL. LEFT ON TOP OUT _. PLUG PLUG EQUIP. REVERSED PUMPED CSG CEMENT i Y N, Y N 0 522 0 Y ® I Rogan Footed on. SEP-3002 06.11'54 Page 4 411004 co cn Pressure 1 (psi) E 2 _, N 0 O 0 0 0 *no W F1+F2 Rate (bpm) =y a 2° cm o CTIO asz3Z 0 1 I I r____] , gii 71 CD s odor ` c o0 3 ;o _ r awo 3 — wv IQ CoN0 Nv, c N r * m -c-\ m a CO d EDI 3 ' m - - 2 1g � 0 to o co _3 m -a v CD w O O o 3 O J A -ca- m—I _ W 3 _f 7a Po 1I n 1. n a co ES' -A v m m O m it.' 2 Q r_ • o 0 Q 5 u) a E 4 T m - 1 I 1 I 1 1 I 1 I I 1 1 1 O O 01 O U1 O Aux. Density (ppg) 3 I I i I 1 I I 1 1 I 1 1 1 1 I t 1 1 o o CYI o N) O O O F1+F2 Stage (bbl) N co r. C ; Pressure 1 (psi) E Z _. N ,. 0 O (,,n O O O OO nco— E F1+F2 Rate (bpm) =y Q 00 U1 O 9 • a � 2n c O L C c cr �o 1 _ w3 T 2 aa criIn coc Q y y Hi ii co N i d ao 0 7 (Q m- c 3 co o cD \ W O a v W m -0 C W ta - i .--t _ m.-- 3 co Zin0 m C 20n c . qt a ck co N _ d a 3 soco o co 7 O - cr R. T I I I I I I I I 1 I I I I I I I I I I va 0 00 01 —a —a N) .c 0 (11 0 co Aux. Density (ppg) 3 I I I 1 I I I ! 1 1 I I I I I I ! 1 1 m 0 CP N m w O O O O o F1+F2 Stage (bbl) N • m 5. Pres0sure 1 (psi) E , � N) 4,..., 0 O O O O *C)'Er F1+F2 Rate (bpm) = a CA 0 CJ1 0 a ca 3 C y -0 t_. C1 z. C L __ _ _O .�..__ - , W C) _ y ca r co 41 CD cro ? & � '• o N IPy w N c `ter m iv c Doo m , a o a in al m o Co D 3 c a \ a 3 o. v a a Cp L. 0 - - 0' Cl) 61 4 T 1 I I I 1 I I I I 1 I I I 1 I 1 1 1 1 d O O 01 ._& '' N .< O Cr 0 cn Aux. Density (ppg) g i I 1 I 1 I 1 1 i 1 i I I . I { I I m O CP —u N O O 01 O 3 O O O [ F1+F2 Stage (bbl) , Pressure 1 (psi) Z _, NE 0 0 m O 0 O OO CItCD F1+F2 Rate (bpm) ' = y o. ira3 0 CP O 1 I � m 0 n' A -11 G + N e Z04 17 7 , r N � 0 .a / z• ab. •-e• . C ;� co O sks 3 n SI j 3 mD a g.a a MW v m �' ''www 0 -N _, . -I Oa .j g Qp Q =I a .0 07 n la lD LT T / c N cf II I I 1 n 01 - — N.) .< 0 al O Aux. Density (ppg) 3 I I I 1 I I I I I I I I 1 I N O tD 0 O 0 F1+F2 Stage (bbl) co CnPressure 1 (psi) o 0U O O O ono CO F1+F2 Rate (bpm) e y C. L cn _a Z C CD o c77 O 3CDa O --}- - I 1 I P :1 i 5. I c -., pL - — -- ? coo o 3 m co a ----- V I z ca 1 a) m ii, y �' 0 i g coo m y Q rn N m co m -I U, )_ 71 a 5 CD 0 :, Ip O c N co a 3 3 fie' CDC o 1 - 0 y w 3 Cli -TV______ co v = O DT p _1 O i \ 7n- CD 3 1 3 3 ) ' '0 r l O 3 E - a - 1 0 co I a. N m IQ I 1 I I i I I 1 I , I I I 1 I v O O (n —' — N 0 (r 0 m Aux. Density (ppg) N 1 3 I 1 I I I 1 1 1 1 I 1 1 I 1 I I I I I O O O Ut IVO na m O O O F1+F2 Stage (bbl) N 1 N (Iqq) e6e;S ZJ+LJ o ooc) o O N Lr) 0 N I f i aEi (6dd) iisuea •xny 0. NLo O Lo O co co I 1 1 t 7f I T 1 1 I 1 I- 1 I I 1 I I ti m co t - - co 3 E 1 0co ' ......______. I t1Nc—_mac k cr 44( co ea - _.,,, I \ E ( _ 0 a Oa W co o te�aa LO CI Zin 1 L c 3 M ri C g ` iv) O Q _ a� 12 0 - C1o E � m a) C E N L W O d a CL N 76 co N OI —a — ap ..I _ j_ .a Of w L o ozes i C.) ` m 1 — 1 1 O m E O in O 41 =m (wdq) eedZj+1,A 0 0 0 g r`'► o 0 � ' N (isd) I. & nssaidco Waal BAKER CONDITIONS HUGHES The services and products will be provided under the attached Baker Hughes Incorporated Worldwide Terms and Conditions. By requesting that Baker Hughes provide the services and products described herein, Customer accepts all of the terms and conditions of this proposal, including the attached Baker Hughes Incorporated Worldwide Terms and Conditions. In the event that Customer and Baker Hughes have executed a Master Services Agreement covering the services and products to be provided, such Master Services Agreement shall govern in place of the Baker Hughes Worldwide Terms and Conditions. Report Printed on, SEP-27-12 03:36 Gr4175 v1 TERMS AND CONDITIONS BAKER HUGHES Worldwide Orders for rental equipment("Equipment"),services("Services"),and the supply or sale of products,chemicals,or NOTWITHSTANDING PARAGRAPH B.ABOVE,SHOULD CUSTOMER FAIL TO RECOVER SUCH TOOLS equipment("Products")to be provided by Baker Hughes Incorporated through its direct or indirect subsidiaries(in each LOST IN THE WELL,OR SHOULD SUCH TOOLS BECOME DAMAGED IN THE WELL OR DAMAGED case such subsidiary is referred to herein as"BHI"and shall be severally liable for all obligations of BHI herein arising DURING RECOVERY,CUSTOMER SHALL REIMBURSE BHI FOR THE COST OF REPAIRING ANY TOOLS from or related to the order)to its customers(each a"Customer")are subject to acceptance by BHI,and any orders so SO DAMAGED,OR THE REPLACEMENT VALUE OF ANY SUCH TOOLS THAT ARE LOST OR NOT accepted will be governed by the terms and conditions stated herein and any additional terms proposed or agreed to in REPAIRABLE. writing by an authorized representative of BHI(these terms and conditions and any such additional terms collectively referred to herein as the"Agreement"). FURTHER,NOTWITHSTANDING PARAGRAPH B.ABOVE,ALL RISKS ASSOCIATED WITH LOSS OF OR DAMAGE TO TOOLS WHILE IN THE CUSTODY OR CONTROL OF CUSTOMER OR DURING 1.PAYMENT TERMS TRANSPORTATION ARRANGED BY OR CONTROLLED BY CUSTOMER,SHALL BE BORNE BY Unless alternate payment terms are specified or approved by the BHI Credit Department,all charges billed by BHI must CUSTOMER. be paid within thirty(30)days of the date of invoice.For invoices unpaid after thirty(30)days,at BHI's option,discounts from list price may be revoked and interest may be charged at the rate of ten percent(10%)per annum unless such rate E.NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY,CUSTOMER contravenes local law in which case the interest will accrue at the maximum rate allowed by law.Operating,production SHALL RELEASE,INDEMNIFY,DEFEND AND HOLD BHI INDEMNITEES HARMLESS FROM AND AGAINST or well conditions that prevent satisfactory operation of Equipment,Services or Products do not relieve Customer of its ANY AND ALL CLAIMS ASSERTED BY OR IN FAVOR OF ANY PERSON,PARTY,OR ENTITY(INCLUDING payment responsibility. BHI INDEMNITEES)ARISING OUT OF OR RELATED TO:(I)LOSS OF OR DAMAGE TO ANY WELL OR HOLE(INCLUDING BUT NOT LIMITED TO THE COSTS OF RE-DRILL AND SIDETRACK),(II)BLOWOUT, 2.CANCELLATION AND RETURNS FIRE,EXPLOSION,CRATERING OR ANY UNCONTROLLED WELL CONDITION(INCLUDING BUT NOT Products:Orders for Products that are subject to cancellation after acceptance by BHI,but before delivery,will be LIMITED TO THE COSTS TO CONTROL A WILD WELL AND THE REMOVAL OF DEBRIS),(Ill)DAMAGE TO subject to a restocking charge of at least twenty-five percent(25%),plus any packing and transportation costs incurred ANY RESERVOIR,GEOLOGICAL FORMATION OR UNDERGROUND STRATA OR THE LOSS OF OIL, before delivery.Products specially built or manufactured to Customer specifications,or orders for substantial quantities WATER OR GAS THEREFROM,(IV)THE USE OF BHI INDEMNITEES'RADIOACTIVE TOOLS OR ANY manufactured specially for Customer,may not be cancelled. CONTAMINATION RESULTING THEREFROM(INCLUDING BUT NOT LIMITED TO RETRIEVAL OR CONTAINMENT AND CLEAN-UP),(V)POLLUTION OR CONTAMINATION OF ANY KIND INCLUDING BUT Products may be retumed for credit only with prior written authorization from BHI.Such Products must be unused,in NOT LIMITED TO THE COST OF CONTROL,REMOVAL CLEAN-UP AND REMEDIATION,OR(VI)DAMAGE reusable condition,and with original unopened containers.Credit will be issued for the quantity returned at the original TO,OR ESCAPE OF ANY SUBSTANCE FROM,ANY PIPELINE,VESSEL OR STORAGE OR PRODUCTION purchase price,less a restocking charge of at least twenty-five percent(25%)and any actual packing and transportation FACILITY. costs incurred by BHI.No credo will be given for shipping charges incurred by Customer. F.CUSTOMER ACKNOWLEDGES THAT CUTTINGS AND WASTE REMAIN CUSTOMERS Eauioment/Services:In the event Customer cancels an order for Services,Customer shall be liable for all costs incurred RESPONSIBILITY.CUSTOMER SHALL RELEASE,INDEMNIFY,DEFEND AND HOLD BHI INDEMNITEES by BHI in the mobilization/demobilization related thereto,and any other reasonable costs incurred by BHI incident to such HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,ASSERTED BY OR IN FAVOR OF ANY PERSON cancellation.In the event Customer cancels an order for Equipment,Customer shall be liable for any transportation OR ENTITY ARISING OUT OF OR RELATED TO THE TRANSPORTATION,STORAGE,TREATMENT, costs incurred by BHI in the mobilization/demobilization of the Equipment.In addition,a restocking charge of at least DISPOSAL OR HANDLING OF CUTTINGS AND WASTE,INCLUDING,WITHOUT LIMITATION, twenty-five percent(25%)of the original Equipment order may be applied at BHI's sole discretion. CONTAMINATION OF,OR ADVERSE EFFECTS ON THE ENVIRONMENT OR ANY FORM OF PROPERTY, OR ANY VIOLATION OR ALLEGED VIOLATION OF STATUTES,ORDINANCES,LAWS,ORDERS,RULES 3.THIRD-PARTY CHARGFS TAXF, AND REGULATIONS(INCLUDING,WITHOUT LIMITATION,ALL CLAIMS UNDER THE COMPREHENSIVE Customer shall pay all third-party charges,in compliance with BHI's current price list,and any sales,use,rental or other ENVIRONMENTAL RESPONSE,COMPENSATION,AND LIABILITY ACT("CERCLA"),42 U.S.C.§§9601 ET taxes that may be applicable to transactions hereunder.Customer shall pay all applicable customs,excise,import and SEQ.,OR OTHER APPLICABLE STATUTES OR REGULATIONS). other duties unless otherwise agreed to in writing by an authorized representative of BHI.Customer shall provide necessary import licenses and extensions thereof. G.CUSTOMER SHALL RELEASE,DEFEND,INDEMNIFY AND HOLD BHI INDEMNITEES HARMLESS FROM AND AGAINST ANY CLAIMS FOR CONSEQUENTIAL DAMAGES ASSERTED BY OR IN FAVOR OF ANY 4.RISK OF LOSS AND TITLE CONSIGNMENT STORAGE MEMBER OF CUSTOMER INDEMNITEES.BHI SHALL RELEASE,DEFEND,INDEMNIFY AND HOLD Unless otherwise agreed to in writing between BHI and Customer;(i)for Product sales within the United States of CUSTOMER INDEMNITEES HARMLESS FROM AND AGAINST ANY CLAIMS FOR CONSEQUENTIAL America,title and risk of loss shall pass to Customer as soon as the Products depart BHI's point of origin,and(ii)for DAMAGES ASSERTED BY OR IN FAVOR OF ANY MEMBER OF BHI INDEMNITEES. Product sales outside the United States of America,INCOTERM 2010"CPT"shall apply with the following exception: TITLE AND RISK OF LOSS REMAIN WITH BHI UNTIL THE PRODUCTS REACH THE PORT OF ENTRY.For H.In the event this agreement is subject to the indemnity or release limitations in Chapter 127 of the Texas Civil Products provided on consignment,the risk of loss shall pass to Customer as soon as the Products depart BHI's point of Practices and Remedies Code(or any successor statute),and so long as such limitations are in force,each party origin;however,the tole shall remain with BHI until the Product is used by Customer. covenants and agrees to support the mutual indemnity and release obligations contained in Paragraphs B.and C.above by carrying equal amounts of insurance(or qualified self-insurance)in an amount not less than U.S. In the event BHI agrees to store Products after tole passes to Customer,the risk of loss shall remain with Customer. If 55,000,000.00 for the benefit of the other party as indemnitee. any such Products remain on BHI's premises for more than two(2)years from the date initially placed in storage,tole shall revert back to BHI,and BHI may resell or scrap any such Products with no liability to Customer for any proceeds I.THE EXCLUSIONS OF LIABILITY,RELEASES AND INDEMNITIES SET FORTH IN PARAGRAPHS B. generated therefrom. THROUGH G.OF THIS ARTICLE 5,AND ARTICLES 6 AND 10,SHALL APPLY TO ANY CLAIM(S)WITHOUT REGARD TO THE CAUSE(S)THEREOF INCLUDING BUT NOT LIMITED TO PRE-EXISTING CONDITIONS. 5. LIABILITIES RELEASES AND INDEMNIFICATION WHETHER SUCH CONDITIONS BE PATENT OR LATENT,THE UNSEAWORTHINESS OF ANY VESSEL OR A.In this Agreement(i)"BHI Indemnitees"means BHI,its parent,subsidiary and affiliated or related companies;its VESSELS,IMPERFECTION OF MATERIAL,DEFECT OR FAILURE OF PRODUCTS OR EQUIPMENT, subcontractors at any tar;and the officers,directors,employees,consultants,and agents of all of the foregoing;(ii) BREACH OF REPRESENTATION OR WARRANTY(EXPRESS OR IMPLIED),ULTRAHAZARDOUS "Claims"means all claims,demands,causes of action,liabilities,damages,judgments,fines,penalties,awards,losses, ACTIVITY,STRICT LIABILITY,TORT,BREACH OF CONTRACT,BREACH OF DUTY(STATUTORY OR costs,expenses(including,without limitation,attorneys'fees and costs of litigation)of any kind or character arising out OTHERWISE),BREACH OF ANY SAFETY REQUIREMENT OR REGULATION,OR THE NEGLIGENCE, of,or related to,the performance of or subject matter of this Agreement(iii)"Consequential Damages"means any GROSS NEGLIGENCE,WILLFUL MISCONDUCT,OR OTHER LEGAL FAULT OR RESPONSIBILITY OF ANY indirect,special,punitive,exemplary or consequential damages or losses(whether foreseeable or not at the date of this PERSON,PARTY,OR ENTITY(INCLUDING THE INDEMNIFIED OR RELEASED PARTY),WHETHER SUCH Agreement)under applicable law and damages for lost production,lost revenue,lost product,lost profit,lost business, FORM OF NEGLIGENCE BE SOLE,JOINT OR CONCURRENT,ACTIVE OR PASSIVE. lost business opportunities,or charges for rig time,regardless of whether the same would be considered direct indirect, special,punitive,exemplary or consequential damages or losses under applicable law;(iv)"Customer Indemnitees" J.REDRESS UNDER THE INDEMNITY PROVISIONS SET FORTH IN THIS ARTICLE 5 SHALL BE THE means Customer,its parent,subsidiary and affiliated or related companies;its co-lessees,co-owners,partners,joint EXCLUSIVE REMEDIES AVAILABLE TO THE PARTIES HERETO FOR THE CLAIMS COVERED BY SUCH operators and joint venturers:its client or customer if it is not the end user of the Equipment,Services,or Products;its PROVISIONS. other contractors at any tier;and the officers,directors,employees,consultants,and agents of all of the foregoing;(v) "Cuttings and Waste"means any doll cuttings and associated muds,waste or materials from the well arising from or 6.DIRECTIONAL DRILLING processed pursuant to this Agreement and(vi)"Tools"means Equipment and any of BHI Indemnitees'instruments, Customer shall furnish BHI with a well location plan(certified by Customer as correct)setting out the surface equipment,or tools. location of the well,the lease,license,or property boundary lines,and the bottom hole location of Customer's directionally drilled well.If,in the course of drilling the well,it becomes evident to BHI that the certified plan is in B.BHI SHALL RELEASE,INDEMNIFY,DEFEND AND HOLD CUSTOMER INDEMNITEES HARMLESS FROM AND error,BHI shall notify Customer of the error,and Customer shall be responsible to regulate all directional drilling AGAINST ANY AND ALL CLAIMS ARISING OUT OF OR RELATED TO(I)PERSONAL OR BODILY INJURY,ILLNESS, factors so that Customers well bottom hole location will be situated on Customers property,license,or leasehold SICKNESS,DISEASE OR DEATH OF ANY MEMBER OF BHI INDEMNITEES,AND(II)LOSS,DAMAGE OR at total depth of the well being drilled.CUSTOMER SHALL RELEASE,DEFEND,INDEMNIFY AND HOLD BHI DESTRUCTION OF REAL OR PERSONAL PROPERTY,WHETHER OWNED,LEASED,OR CHARTERED,OF ANY INDEMNITEES HARMLESS FROM AND AGAINST ANY CLAIMS ARISING OUT OF,OR RELATED TO, MEMBER OF BHI INDEMNITEES. SUBSURFACE TRESPASS ARISING OUT OF DIRECTIONAL DRILLING OPERATIONS OR OTHER OPERATIONS PERFORMED BY BHI INDEMNITEES OR CUSTOMER INDEMNITEES. C.CUSTOMER SHALL RELEASE,INDEMNIFY,DEFEND AND HOLD BHI INDEMNITEES HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS ARISING OUT OF OR RELATED TO(I)PERSONAL OR BODILY INJURY,ILLNESS, 7.CUSTOMER WARRANTY/BINDING AUTHORITY SICKNESS,DISEASE OR DEATH OF ANY MEMBER OF CUSTOMER INDEMNITEES,AND(II)LOSS,DAMAGE OR If Customer is not the sole owner of the mineral interests,the well or the field,Customer's request for Services, DESTRUCTION OF REAL OR PERSONAL PROPERTY,WHETHER OWNED,LEASED,OR CHARTERED,OF ANY Equipment or Products shall constitute Customer's warranty that Customer is the duly constituted agent of each MEMBER OF CUSTOMER INDEMNITEES. and every owner and has full authority to represent the interests of the same with respect to all decisions taken throughout the provision of any Services,Equipment or Products hereunder.CUSTOMER SHALL RELEASE, D.SHOULD TOOLS BECOME LOST OR DAMAGED IN THE WELL OR HOLE WHEN PERFORMING OR DEFEND,INDEMNIFY AND HOLD BHI INDEMNITEES HARMLESS FROM AND AGAINST ALL CLAIMS ATTEMPTING TO PERFORM THE SERVICES HEREUNDER,IT IS UNDERSTOOD THAT CUSTOMER SHALL MAKE RESULTING FROM THE ALLEGATION BY ANY PERSON OR ENTITY THAT CUSTOMER HAS EVERY EFFORT TO RECOVER THE LOST OR DAMAGED TOOLS AT ITS SOLE COST.CUSTOMER SHALL MISREPRESENTED OR LACKED SUFFICIENT AUTHORITY TO REPRESENT SUCH PERSON OR ENTITY ASSUME THE ENTIRE RESPONSIBILITY FOR FISHING OPERATIONS IN THE RECOVERY OR ATTEMPTED AS WARRANTED BY CUSTOMER IN THIS ARTICLE. RECOVERY OF ANY SUCH LOST OR DAMAGED TOOLS.NONE OF BHI'S EMPLOYEES ARE AUTHORIZED TO DO ANYTHING WHATSOEVER,NOR SHALL ANY OF BHI'S EMPLOYEES BE REQUIRED BY CUSTOMER TO DO 8.ACCESS TO WELL AND WELL SITE STORAGE ANYTHING,OTHER THAN CONSULT IN AN ADVISORY CAPACITY WITH CUSTOMER IN CONNECTION WITH With respect to onshore and offshore operations,Customer shall provide at its expense adequate means of SUCH FISHING OPERATIONS. transportation required for Tools,Products and BHI personnel to gain access to or return from a well site,and Rev.1 January Report Printed on: SEP-27-12 0336 Gr4175 • e t shall obtain at Customers expense all permits.licenses or other authorization required for BHI to enter upon work PRODUCTION FORECASTS AND RESERVE ESTIMATES,FURNISHED BY BHI TO CUSTOMER areas for the purposes contemplated.When necessary to repair roads or bridges,or to provide transportation to HEREUNDER),AND CUSTOMER HEREBY AGREES TO RELEASE,DEFEND,INDEMNIFY AND HOLD BHI move Tools,Products or BHI personnel,such shall be arranged and paid for by Customer. INDEMNITEES HARMLESS FROM ANY CLAIMS ARISING OUT OF THE USE OF SUCH INTERPRETATIONS AND/OR RECOMMENDATIONS. Customer shall provide proper storage space at the well site,meeting all applicable safety and security requirements and consistent with good industry practices,for the Tools and Products.including.without limitation,all explosive and BHI will endeavor to transmit data to Customer as accurately and securely as practicable in accordance with radioactive materials. current industry practice.Notwithstanding the foregoing,BHI does not warrant the accuracy of data transmitted by electronic processes and will not be responsible to Customer for accidental or intentional interception of such date 9.)jP,DIOACTIVE SOURCES by others. Radioactive sources which may be used in BHI's'Services are potentially dangerous.Customer agrees to comply with all applicable governmental regulations governing the use and handling of radioactive sources.In the event a BHI does not represent or warrant that the Products are or will be compliant with the requirements of REACH(the radioactive source becomes stuck in a well,Customer,at Customer's sole risk and expense will make a reasonable Registration Evaluation Authorisation and Restriction of Chemicals Regulation 1907/2006,as amended)and all attempt to recover such radioactive source in accordance with 10 C.F.R§39.15(a)(1)-(4)or other applicable implied warranties as to compliance with REACH("REACH Compliance")are hereby excluded to the fullest extent regulations end use special precautions to prevent damaging the source during recovery operations. If the source permitted by law.Without prejudice to the foregoing,BHI shall use reasonable endeavors to obtain or maintain cannot be recovered,Customer,at Customer's sole risk and expense,will isolate the redioactive material by REACH Compliance in respect of the Products where required by law,unless it is Customers responsibility to cementing it in place or by other means consistent with 10 C.F.R§39.15 or other applicable statutes or regulations. obtain or maintain REACH Compliance or any non-compliance is caused by any actor omission of Customer.In the event BHI receives written notice from any competent authority,or in its reasonable opinion decides,that any 10.WARRANTY of the Products are not or will not become REACH Compliant,it shall inform Customer in writing within a A.Services: BHI warrants that the Services shall conform to the material aspects of the specifications agreed to in reasonable time and may suspend any further deliveries of the relevant Products and/or terminate the Order. writing by BHI and Customer.In the event that the Services fail to conform to such specifications,BHI shall re- Customer shall promptly provide such information to BHI as may be required in order to obtain and maintain perform that part of the non-conforming Services.provided BHI is notified thereof in writing by Customer prior to REACH Compliance in respect of the Products and shall comply with its obligations under REACH. BHI's departure from the work site. THIS ARTICLE 10 SETS FORTH CUSTOMER'S SOLE REMEDIES AND BHI'S ONLY OBLIGATION WITH B.Fauioment:BHI warrants that the Equipment will be of the types specified by and agreed to in writing by BHI and REGARD TO DEFECTIVE OR NON-CONFORMING SERVICES,EQUIPMENT OR PRODUCTS.EXCEPT AS IS Customer,and will be in good operating condition.Liability for loss or damage to Equipment is set forth in Article 5. OTHERWISE EXPRESSLY PROVIDED PURSUANT TO THE PROVISIONS OF THIS ARTICLE 10,BHI MAKES NO WARRANTY OR GUARANTEE OF ANY KIND,EXPRESS OR IMPLIED,INCLUDING NO IMPLIED C.produgtgj(Excluding drill bits,electric submersible pumps and associated cable and surface equipment,specialty WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,REGARDING ANY chemical Products and specialty Products):BHI warrants that the Products shall conform to BHI's published SERVICES PERFORMED OR EQUIPMENT OR PRODUCTS SUPPLIED BY BHI HEREUNDER. IN NO EVENT specifications or the specifications agreed to in writing by BHI and Customer.If any of the Products fail to conform to SHALL BHI BE LIABLE FOR RIG TIME INCURRED BY CUSTOMER INDEMNITEES AS A RESULT OF such specifications upon inspection by BHI.BHI,at its option,shall repair or replace the non-conforming Products DEFECTIVE OR NON-CONFORMING SERVICES,EQUIPMENT OR PRODUCTS. with the type originally furnished or issue credit to the Customer,provided BHI is notified thereof in writing within thirty(30)days after delivery of the particular Products. 11.LOST EQUIPMENT INDEMNITY BUY-BACK In same locations,lost equipment indemnity buy-beck("LEIB")is available for some Tools.LEIB must be D. rill Bits'.BHI warrants that the drill bits to be provided by BHI pursuant to this Agreement shall conform to BHI's purchased by Customer prior to the Tools leaving BHI's point of origin.Regardless of LEIB,Customer shall make published specifications.If any of the drill bits fail to conform to such specifications upon inspection by BHI,BHI.at every reasonable effort to recover BHI's Tools lost or damaged in a well or hole in accordance with Paragraph 50. its option,shall repair or replace the non-conforming drill bits with the type originally furnished or issue credit to the BHI reserves the right not to offer LEIB at its sole discretion. Customer,provided BHI is notified thereof in writing within ninety(90)days from the date of shipment. 12.INSURANCE E.Electric Submersible Pumps and Associated Cable and Surface Equipment:BHI warrants that the electrical Upon written request,each party shall furnish to the other party certificates of insurance evidencing that adequate submersible pumps and associated cable end surface equipment to be provided by BHI pursuant to this Agreement insurance to support each party's obligations hereunder has been secured.To the extent of each party's release shall conform to BHI's published specifications. If any of the electric submersible pumps or associated cable or and indemnity obligations hereunder,each party agrees that all such insurance policies shall(i)be primary to the surface equipment fail to conform with such specifications upon inspection by BHI,BHI,at its option,shall repair or other party's insurance,(il)include the other party,its parent,subsidiary and affiliated or related companies,its replace the non-conforming electric submersible pumps or associated cable or surface equipment with the type subcontractors and other contractors,and its and their respective officers,directors,employees,consultants end originally furnished,provided BHI is notified thereof in writing within the earlier of twelve(12)months from the date of agents as additional insured,and(iii)be endorsed to waive subrogation against the other party,its parent, installation or eighteen(18)months from the date of shipment Warranty claims by Customer must be submitted to subsidiary and affiliated or related companies.its subcontractors and other contractors,and its and their respective BHI within ably(60)days of the failure date of the electric submersible pumps or associated cable or surface officers,directors,employees,consultants and agents. equipment. 13.CHANGE OF DESIGN F.Specialty Chemical Products:BHI warrants that the specialty chemical Products to be provided by BHI pursuant BHI expressly reserves the right to change or modify the design and construction of any of its Products without to this Agreement shall,upon departure from BHI's point of origin,conform to the published physical and chemical obligation to furnish or install such changes or modifications on Products previously or subsequently sold. specifications established by BHI for each such Product.If any of the specialty chemical Products fail to conform to such specifications,BHI,at its option,shall replace the non-conforming specialty chemical Products with the type 14.PATENTS originally furnished or issue credit to the Customer,provided BHI is notified thereof in writing within thirty(30)days BHI warrants that the use or sale of Equipment or Products hereunder will not infringe valid patents of others by after the specialty chemical Products depart BHI's point of origin. reason of the use or sale of such Equipment or Products per se,and hereby agrees to hold CUSTOMER harmless against judgment for damages for infringement of any such patent,provided that Customer shall promptly notify G.Specialty Products'In the event BHI is to provide Products to Customer based upon Customers specific request BHI in writing upon receipt of any claim for infringement.or upon the filing of any such sad for infringement that BHI develop.manufacture,test or put to use Products that are intended to satisfy a unique need identified by whichever first occurs,and shall afford BHI toll opportunity,at BHI's option and expense.to answer such claim or Customer and are not"standard"Products of BHI,Customer hereby recognizes and agrees that the specialty threat of suit,assume the control of the defense of such suit,and settle or compromise same in any way BHI sees Products being provided do not necessarily have or contain the same or similar characteristics as BHI's"standard" fit.BHI does not warrant that such Equipment or Products:(i)will not infringe any such patent when not of BHI's Products,including,but not limited to,a historical performance against which future performance can be measured manufacture,or specially made.in whole or in part,to the Customers design specifications;or(ii)if used or sold in In developing,manufacturing,testing and putting to use any specialty Products,BHI will be relying upon information combination with other materials or apparatus or used in the practice of processes,will not as a result of such and specifications provided by Customer relating to the unique needs of Customer.As such.BHI shall have no combination or use.infringe any such patent and BHI shall not be liable and does not hold Customer harmless for responsibility for the design,manufacture or engineering of any such specialty Products,even though BHI may have damages or losses of any nature whatsoever resufting from actual or alleged patent infringement arising pursuant participated in the development and manufacture of the specialty Products,or for any Customer-furnished materials, to(i)and(ii)above.THIS PARAGRAPH STATES THE ENTIRE RESPONSIBILITY OF BHI CONCERNING information and specifications.It,upon inspection by BHI,any of the specialty Products fail to meet the PATENT INFRINGEMENT specifications agreed to in writing by Customer and BHI,then SRI shall,at its option,repair or replace the non- conforming specialty Products with(i)the type originally furnished to Customer.or(ii)substituted Products having 15.CONFIDENTIALITY BHI's"standard"specifications and qualifications. Each party shall maintain all data and information obtained from the other party in strict confidence,subject only to disclosure required by law or legal process.In the event that BHI owns copyrights to,patents to,or has filed patent H.Discharge Services:Except to the extent that BHI has agreed to provide its discharge compliance engineering applications on,any technology related to the Services,Products or Equipment furnished by BHI hereunder.and if services("Discharge Services")to Customer pursuant to this Agreement BHI shall have no responsibility for BHI makes any improvements on such technology,then such improvements shall not fall within the confidentiality achievement of and compliance with any specific oil retention or similar requirements mandated by any applicable obligations of BHI included herein,and BHI shall own all such Improvements,including drawings,specifications, local,state or federal law or regulation.If Discharge Services are rendered by BHI and agreed oil retention or similar calculations and other documents. requirements are not met,then BHI shall.at its option,re-perform the Discharge Services,or provide a credit to Customer to cover any documented additional disposal costs incurred by Customer as a result of the nonconforming The design,construction,application and operation of BHI's Services,Equipment and Products embody proprietary Discharge Services,provided that such credit shall be limited to 3%of the amount charged for the nonconforming and confidential information.Customer shall maintain this information in strict confidence and shall not disclose d Discharge Services. to others,subject only to disclosure required by law or legal process.To the extent permissible by law,Customer shall not resell the Products or Equipment(or drawings related thereto)to others or reverse engineer or permit BHI's warranty obligations hereunder are non-transferrable and shell not apply if the non-conformity was caused by others to reverse engineer,for the purpose of manufacturing,similar Products or Equipment. (i)Customers failure to properly store or maintain the Products or Equipment,(ii)abnormal well conditions,abrasive materiels,corrosion due to aggressive fluids or incorrect specifications provided by Customer,(iii)unauthorized 16.LIENS.ATTACHMENTS AND ENCUMBRANCES alteration or repair of the Products or Equipment 9v)the Products or Equipment are lost or damaged while on Customer grants to BHI a lien upon and a security interest in(i)any interest that Customer now owns or hereafter Customers site due to Customers or any third party's negligence,vandalism or force majeure(including,but not acquires in the lands,leasehold interests.pipelines.pipeline right-of-ways,personal property and fixtures arising limited to,lightning),or(v)use or handling of the Products or Equipment by Customer in a manner inconsistent with out of,pertaining to,located on,or used in connection with the development of,the mineral property on which the BHI's recommendations.Further,BHI's warranty obligations shall terminate if Customer fails to perform its Services,Products.or Equipment were performed or installed(the"Mineral Property"),(ii)the oil and gas when obligations under this or any other Agreement between the parties. extracted from the Mineral Property.including the proceeds thereof,(iii)the contract rights,inventory and general intangibles pertaining to the Mineral Property,and(iv)any claim against any working interest owner of the Mineral All non-conforming Products shall be delivered to the service facility designated by BHI.All transportation charges Property arising from nonpayment of joint interest billings or lease operating expenses.This lien and security and removal and reinstallation charges related to the repair or replacement of non-conforming Products shall be interest shall be for the purpose of securing performance of Customers obligations to BHI under this Agreement borne by Customer.Any parts for which BHI provides replacement under this warranty shall become the property of Customer authorizes BHI to have filed a financing statement and any other instruments BHI determines to BHI.With regard to materials or equipment famished by third party vendors and/or suppliers,BHI's liability therefor be necessary or appropriate to perfect the lien and security interest created hereby.Upon request Customer shall shall be limited to the assignment of such third party vendors or suppliers warranty to Customer.to the extent such execute any document determined by BHI to be necessary or appropriate to perfect this lien and security interest warranties are assignable.The warranty period for any repaired or replaced Products shall be only for the remainder under all applicable laws and the real property recording statutes of the state in which the Mineral Property is of the original warranty period. located. If BHI is unable to obtain proper execution of such documentation within a reasonable period of time after the request is made.then Customer hereby appoints SRI as Customers true and lawful agent and attorney-in-fact, Interpretations,research,analysis,recommendations.advice or interpretational data(specifically including,without to execute all documents on its behalf,and to otherwise take such actions on its behalf,as BHI deems necessary limitation,any preliminary cuttings reinjection program and any engineering designs,geological studies or analyses, or appropriate,to perfect the lien and security interest created or contemplated hereby.This appointment is well programs,reservoir models,or drilling production optimization or management programs)("Interpretations coupled with an interest and may not be revoked for as long as any portion of Customer's obligations hereunder and/or Recommendations")furnished by BHI hereunder are opinions based upon Inferences from measurements, remains outstanding. The hen and security interest created hereby are in addition to,and not in lieu of,any other empirical relationships and assumptions,and industry practice.which inferences,assumptions and practices are not liens and security interests now existing or hereafter coming into existence,and securing the performance of infallible,and with respect to which professional geologists,engineers,drilling consultants,and analysts may differ. Customer's obligations hereunder,whether voluntary or involuntary,including any liens arising by statute or Accordingly,BHI does not warrant the accuracy,correctness,or completeness of any such Interpretations and/or common law in favor of mechanics and/or materialmen. Recommendations,or that Customer's reliance or any third party's reliance on such Interpretations and/or Recommendations will accomplish any particular results.CUSTOMER ASSUMES FULL RESPONSIBILITY FOR Should Customer commit a breach of any of the terms and conditions of this Agreement,be named as a debtor in THE USE OF SUCH INTERPRETATIONS AND/OR RECOMMENDATIONS AND FOR ALL DECISIONS BASED a bankruptcy proceeding,or become insolvent;should Customer.or any of its assets,be the subject of a THEREON(INCLUDING,WITHOUT LIMITATION.DECISIONS BASED ON ANY OIL AND GAS EVALUATIONS, receivership proceeding;or should any creditor or other person or entity attach or levy Customers property or Ran.t January 2012 Report Printed on: SEP-27-12 03:36 Gr4175 re equipment,BHI shall immediately have the right,without notice and without liability for trespass or damages,to BY FINAL AND BINDING ARBITRATION CONDUCTED IN ACCORDANCE WITH THE UNCITRAL ARBITRATION retake and remove any of its Products or Equipment wherever it may be found.CUSTOMER SHALL RELEASE, RULES(THE"RULES"). DEFEND,INDEMNIFY AND HOLD BHI INDEMNITEES HARMLESS FROM ANY AND ALL LIENS AND ENCUMBRANCES AGAINST PRODUCTS OR EQUIPMENT FURNISHED HEREUNDER AND SHALL RETURN The Tribunal shall be composed of three arbitrators,with each party appointing one arbitrator,and the two arbitrators SAME PROMPTLY TO BHI FREE OF ANY LIENS OR ENCUMBRANCES. so appointed appointing the third arbitrator who shall act as the presiding arbitrator of the Tribunal(the"Tribunal").The appointing authority under the Rules shall be the London Court of International Arbitration.The language of the 17.FORCE MAJEURF arbitration shall be English.The seat of arbitration shall be London,England,and the proceedings shall be conducted If either party is unable by reason of Force Majeure to carry out any of its obligations under this Agreement,other and concluded as soon as reasonably practicable,based upon the schedule established by the Tribunal.Any monetary than obligations to pay money,than on such party giving notice and particulars in writing to the other party within a award shall be made in U.S.Dollars.free of any tax or other deduction,and shall include interest from the date of any reasonable time after the occurrence of the cause relied upon,such obligations shall be suspended."Force Majeure" breach or other violation of the Agreement to the date paid in full ata floating rate of interest equal to the prime rate of shall include any event that is beyond the reasonable control of the party so affected including,without limitation, interest in effect at Citibank,N.A.,New York,U.S.A.,from time to time. acts of God,laws and regulations,government action,war,civil disturbances,hijack,piracy,criminal action by a third party,threats or acts of terrorism,strikes and labor problems,delays of vendors or coolers,lightening,Bre,flood, B.For Services,Equipment or Products provided,or to be provided,by BHI in the Americas:THIS AGREEMENT washout,storm,breakage or accident to equipment or machinery,and shortage of raw materials.In the event that SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF any suspension due to Force Majeure exceeds ten(10)consecutive days,either party may terminate this Agreement OKLAHOMA,EXCLUDING CONFLICTS OF LAW AND CHOICE OF LAW PRINCIPLES.ANY DISPUTE, by written notice to the other party,and Customer shall be liable for demobilization and any other reasonable costs CONTROVERSY OR CLAIM("DISPUTE')ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR • incurred by BHI incidental to such termination. THE FURNISHING OF EQUIPMENT,SERVICES OR PRODUCTS HEREUNDER SHALL BE RESOLVED BY FINAL AND BINDING ARBITRATION CONDUCTED IN ACCORDANCE WITH THE COMMERCIAL RULES OF 18.INDEPENDENT CONTRACTOR ARBITRATION OF THE AMERICAN ARBITRATION ASSOCIATION(THE"RULES").The tribunal shall be composed It is expressly understood that BHI is an independent contractor,and that neither BHI nor its principals,partners, of one(1)neutral arbitrator if the Dispute involves a maximum exposure of less than$7,000,000.If the parties are employees or subcontractors are servants,agents or employees of Customer. unable to agree on a neutral arbitrator,one will be appointed pursuant to the Rules.If the Dispute involves a maximum exposure equal to or in excess of 01,000,000,then the Tribunal shall consist of three(3)arbitrators,with each party In all cases where BHI's employees(defined to include BHI's and its subcontractors'direct,borrowed,special,or appointing one arbitrator,and the two arbitrators so appointed appointing the third arbitrator who shall act as Chair(the statutory employees)are covered by the Louisiana Workers'Compensation Act,La.R.S.23:102 et seq.,BHI and "Tribunary.The seat of arbitration shall be Houston,Texas,end the proceedings shall be conducted and concluded as Customer agree that all Services,Products and Equipment provided by BHI and BHI's employees pursuant to this soon as reasonably practicable,based upon the schedule established by the Tribunal. Agreement are an integral pad of and are essential to the ability of Customer to generate Customers goods, products,end services for the purpose of La.R.S.23:108(A)(1).Furthermore,BHI and Customer agree that C.For any arbitration conducted in accordance with Paragraph A.or B.above,the following shell apply:No award Customer is the statutory employer of BHI's employees for purposes of La.R.S.23:1081(A)(3). shall be made for Consequential Damages.Judgment upon the award rendered by the Tribunal pursuant hereto may be entered in,and enforced by,any court of competent jurisdiction.All statutes of limitation that would otherwise be 19.LAWS.RULES.REGULATIONS.AND EXPORT CONTROL applicable shall apply to the arbitration proceeding.Any attorney-client privilege and other protection against BHI and Customer agree to be subject to all laws,rules,regulations and decrees of any govemmental or regulatory disclosure of privileged or confidential information,including,without limitation,any protection afforded the work- body having jurisdiction over the Services,Equipment or Products to be provided by BHI or the work site or that may product of any attorney,that could otherwise be claimed by any party shall be available to,and maybe claimed by,any otherwise be applicable to BHI's or Customer's performance under this Agreement such party in any arbitration proceeding.The parties shall treat all matters relating to the arbitration as confidential. Subject to each party's right to cooperate fully with the United States authorities,the parties understand and agree that Customer acknowledges that Equipment,Services,Products and/or related technical data covered by this this confidentiality obligation extends to information concerning the fact of any request for arbitration,any ongoing Agreement maybe subject to U.S.and/or foreign trade controls.Customer agrees that it will not sell,reexport or arbitration,as well as all matters discussed,discovered,or divulged,(whether voluntarily or by compulsion)during the transfer Equipment,Products and/or related technical data except in full compliance with all governmental course of such arbitration proceeding.It is the desire of the parties that any Dispute is resolved efficiently and fairly requirements including but not limited to economic sanctions and export controls administered by the U.S. and the Tribunal shall act in a manner consistent with these intentions Department of Treasury,U.S.Department of Commerce and U.S.Department of State.Customer agrees to comply with all BHI requests for trade compliance information,statements,and other assurances including,without limitation, 21.ASSIGNMENT requests for End-User and Routed Transaction certifications.Any breach of this provision shall be deemed a BHI shall have the right to assign the Agreement to any of its subsidiaries,affiliated or related companies without the material breach of this Agreement and sufficient basis for BHI to reject any or all orders or to terminate the consent of Customer. Agreement 22.GENERAL BHI reserves the right to refuse to fulfill any order or otherwise perform under this Agreement if BHI in its sole Failure of Customer or BHI to enforce any of the terms and conditions of this Agreement shall not prevent a discretion determines that such action may violate any law or regulation.Customer agrees that such refusal, subsequent enforcement of such terms and conditions or be deemed a waiver of any subsequent breach.Should any cancellation,or termination of the Agreement by BHI will not constitute a breach of BHI's obligations under this provision of this Agreement,or a portion thereof,be unenforceable or in conflict with governing country,state, Agreement and Customer hereby waives any and all claims against BHI related to such refusal,cancellation,or province,or local laws,then the validity of the remaining provisions,and portions thereof,shall not be affected by such termination. unenforceability or conflict,and this Agreement shall be construed as if such provisions,or portion thereof,were not contained herein.This Agreement contains all representations of the parties and supersedes all prior oral or written 20.GOVERNING LAW AND ARBITRATION) agreements or representations.Customer acknowledges that it has not relied on any representations other than those A.Except for Services,Equipment or Products provided,or to be provided,by BHI in North or South America(the contained in this Agreement.This Agreement shall not be vaned,supplemented qualified,or interpreted by any prior "Americas"):THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH course of dealing between the parties or by any usage of trade and may only be amended by an agreement executed ENGLISH LAW,EXCLUDING CONFLICTS OF LAW AND CHOICE OF LAW PRINCIPLES.ANY DISPUTE, by both parties. In the event that any conflict exists between the provisions of this Agreement and any other terms and CONTROVERSY OR CLAIM("DISPUTE")ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR conditions set forth in Customers purchase orders,field work orders,work tickets,invoices,statements,or any other THE FURNISHING OF EQUIPMENT,SERVICES OR PRODUCTS HEREUNDER SHALL BE RESOLVED type of memoranda or other documents used by Customer in the normal course of business,whether oral or written, the provisions of this Agreement shall govern. Ray.t Janury 2012 Report Printed on: SEP-27-120336 Gr4175 Operator Name: FURIE OPERATING LLC FA' Well Name: KITCHEN LIGHTS UNIT#2 BAKER Date: September 26,2012 HUGHES Proposal No: 1001155708A End of Report Report Printed on September 27.201 Grlast Schwartz, Guy L (DOA) From: Schwartz, Guy L(DOA) Sent: Friday, September 28, 2012 7:02 AM To: b.laule@furiepetroleum.com Cc: t.cosenza@furiepetroleum.com; Ed Ferguson; Davies, Stephen F(DOA) Subject: Re: Abandonment plugs for KLU#2 Bob, You have verbal approval to proceed as outlined below, An official sundry to follow . . , A new PTD application will be required for the new sidetrack from the surface casing shoe. Guy Sent from my iPhone On Sep 27, 2012, at 3:35 PM, "b.laule@furiepetroleum.com" <b.laule@furiepetroleum.com> wrote: > Furie Operating Alaska LLCi s requesting verbal approval to the > abandonment plan for the KLU#2 bottom hole location in preparation of > a side track from the 20" casing shoe at 1897' .The following plan forward confirms my understanding of the requirements out lined in our conversation of this morning. If your have any questions please call Plan forward Spot 40 bbl High vis pill with top at 8000' > Mix and spot five 500' balanced cement plugs sequentially . > Pull up 5 stands and circulate and Wait on Cement. > Tag top of cement with 10K to be witnessed by the AOGCC inspector PQI3. > and spot 40 bbl High vis pill with top at 2250' > Spot 300' balanced cement plug. POH .PU Kick off BHA. Wait on cement. > Attached is a well bore diagram & Proposed Cement slurries. > Formal Sundry to follow upon finalization of cement program. > Thanks for your consideration > Bob Laule > This email contains confidential and / or privileged information. > If you are not the intended recipient or have received this e-mail in > error, please notify the sender immediately and destroy this e-mail. > Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. > <KLU@--DRLG & TP&A 092712 Edited.xls> > <plug 1 & 2 15 8 ppg BHSgT 140°.pdf> > <plug 3 & 4 15 8 ppg BHSgT 125°.pdf> > <Plug 5 15.8 ppg BHCT 100°.doc> > <Surface (Kickoff Plug) 15 8 ppg BHCT 75°.pdf> 1 • Page 1of1 Subject: FW: INTENT PLUG for RE-DRILL WELLS: Corrected From: Davies, Stephen F (DOA) Sent: Monday, February 08, 2010 10:52 AM To: Foerster, Catherine P (DOA); McMains, Stephen E (DOA); Schwartz, Guy L (DOA); Saltmarsh, Arthur C (DOA); Aubert, Winton G (DOA) Subject: RE: INTENT PLUG for RE-DRILL WELLS: Corrected Revised procedure with an additional step per Cathy's comment: INTENT PLUG for RE-DRILL WELLS (IPBRD)Type Work Code in RBDMS 1. When a Form 10-403 is submitted requesting approval to plug a well for redrill,the initial reviewer(Art or Steve D.)will check to make sure that the "Plug for Redrill" box in the upper left corner of the 403 form is checked. If the "Abandon" box is checked, we will cross that erroneous entry out and initial it on both copies of the Form 10-403 (AOGCC's and operator's copies). 2. On the Form 10-403 if"Abandon" is checked in Box 15 (Well Status after proposed work), Art or Steve D. will cross that erroneous entry out and initial it on both copies of the Form 10-403 (AOGCC's and operator's copies). Instead, we will check the "Suspended" box. Guy and Winton will serve as quality L control for steps 1 and 2. 3. When Steve McMains receives the Form 10-403 with a check in the "Plug for Redrill" box, he will enter the existing code "IBPRD" into RBDMS. This code automatically generates a comment under the History tab stating "Intent: Plug for Redrill." 4. When Steve McMains receives any Form 10-407, he will check the History tab in RBDMS for this comment. If he sees the "Intent: Plug for Redrill" code, and cannot find any evidence that a subsequent re-drill has been COMPLETED, he will assign a status of SUSPENDED to the well bore in RBDMS, no matter what status is listed on the 10-407. Steve will also change the status on the 10-407 form to SUSPENDED, and will date and initial his change. If Steve does not see the "Intent: Plug for Redrill" comment or code, he will enter the status listed on the Form 10-407 into RBDMS. 5. When the Form 10-407 for the redrill is received, Steve M. will change the original well's status from suspended to abandoned. 6. The first week of every January and July,Steve M. and Steve D. will check the "Well by Type Work Outstanding" user query in RBDMS to ensure that all of the Plug for Redrill wells have been handled properly. At this same time, Steve M. and Steve D. will also review the list of suspended wells for accuracy. Thanks, Steve D. file://F:\Daily_Document_Record\Procedures_Instructions\FW INTENT PLUG for RE-DRI... 4/6/2012 fkx 44 ucoo ( - I u 3 (7 4. lv /KZ_ cZ_ K L__.t/I C 5``s s`ri ,R &9 ;i/ tt4 f�� 4f5-75 / _ 5 7 m G .___ Y q S---_S — _ ?;---O ,,._ "--7-vt- c IL- (- _,--aL .,( j _t_, c < t 1 ? . toi' , r- (,,k I D'- o6 'c(( Io-7 (907- s'za3 c ( 1,, (-7 ,--7(7 - 5 Vs 3 1 c'y -1- 1 c , 5---(; 56(4eu Z k / 42 i r & , CZ1/471 Gz'V7 4' 6 S )=.77y (1_) -cam y L,, _c.--6.,u (C Z 5( ' ( - . kL oe lG )-c4., Regg, James B (DOA) M. al 7_6790 From: spartan-rig@furiepetroleum.com 4 ( q'(1, Sent: Wednesday, September 19, 2012 2:49 PM To: Regg, James B (DOA) Subject: Re: 20 " Casing Test Chart KLU #2 Attachments: LEAK OFF TEST 20 Sorry, sent you the wrong one. This one is complete. From:Jim Regg<iim.regg@alaska.gov> Date:Wed, 19 Sep 2012 22:27:00+0000 To:James Pritchard <spartan-rig@furiepetroleum.com> Cc: "Schwartz, Guy L(DOA)" <guy.schwartz@alaska.gov> Subject: RE: 20 " Casing Test Chart KLU #2 Thanks for clarification; FIT data is missing; only casing test pressures were included. Jim Regg AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 From: spartan-rig@furiepetroleum.com [mailto:spartan-rig@furiepetroleum.com] Sent: Wednesday, September 19, 2012 11:40 AM To: Regg, James B (DOA) Subject: Re: 20 " Casing Test Chart KLU #2 The chart is a pdf format. Adobe reader should open it. The FIT report is in excel. From:Jim Regg<iim.regg@alaska.gov> Date:Wed, 19 Sep 2012 18:56:02 +0000 To:James Pritchard <spartan-rig@furiepetroleum.com> Subject: RE: 20 " Casing Test Chart KLU#2 Still not recognizing the file type; not sure what program to open it in. Jim Regg AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 From:spartan-rig@furiepetroleum.com [mailto:spartan-rig@furieoetroleum.com] Sent: Wednesday, September 19, 2012 10:41 AM To: Regg, James B (DOA) Subject: Re: 20 " Casing Test Chart KLU #2 Sorry about that Mr.Jim 1 From:Jim Regg<iim.regg@alaska.gov> Date: Wed, 19 Sep 2012 18:33:42 +0000 To:James Pritchard <spartan-rig@furiepetroleum.com> Subject: RE: 20 " Casing Test Chart KLU#2 Don't recognize the file format. Please resend Jim Regg AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 From:spartan-rig@furiepetroleum.com [mailto:spartan-rig@furiepetroleum.com] Sent: Monday, September 17, 2012 3:27 PM To: Brooks, Phoebe L (DOA); DOA AOGCC Prudhoe Bay; Regg, James B (DOA) Cc: Bob Laule; Tony Cosenza; Ed Ferguson; Jerry Cloud-aol; james pritchard; thord1; Damon Kade Subject: 20 " Casing Test Chart KLU #2 Dear Sir: Please find chart for 20"casing test attached. /000:40-0)1 FUR`IE Operating Alaska LLC Brian Vines Rig Clerk Spartain 151 907-375-7501 Office 907-690-3260 Cell This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, 2 disclosure or distribution of the material in this e-mail is strictly forbidden. This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. 3 ;., OPERoOR ,�! 3pM OgTE K+ , Li1igitkZ- \AQ ' 0w ..#1� , ¶—(7-17 a0-1- 0rMCg iimari& = 4 . SSM o (1-°() PIITIMMIAZILW NO. t QI63 NOVIIMMININIMmr. e bc 0 ..........., .....00....w, , e° l'cliN111-. r 43:::° prialnissima, _ ,5‘ 0 0 , 0 0 0, o ° V. 0 01,,gamataV 0 0 ' .00 I �, .11111�-'' 9p ° 0 \NI \cp .,/ A O° ,.r-�0 r., °Op6 i ` tAc 70 0 li Vk . Tilia . o 0 *PAMIRS 7 killifilii‘cb :G.° . 1�rAIIIIIIUMUUTIAlif 111 �■...y� 111118111111111009141114111111a 11111mimui 111111111111m• us L 11411111141r- 4, 41 . phi 11111111111111WW" ti,/z vo5.\S e!44114hAriv(46k i b 41401111101111 • IS fit a,IJ! 1tg ° i *Sina.t. #Q' e,0%/ o °o 0 6, ...---......= 0 0 0 0 00 c- —orisiamirtw ### / 0 0 pp os, ` 'alinallailL_��'�,' OOo 4,04017. W Aftm,wwNWIIIIIIIIIk...allow' ArdrerrallINICmigimw- seooc,'' $1:01 I.;‘ 4ftwarlIrami ApP,IimermstaiiO4 a ♦ -fir 7z.00l\ 1W5,4411r/M.Maittl o? Mr. iiiraviiraiwii _ i 1 /° ' / -' 4IriPi,,WillivimarieWOral/ ,AA � W LEAK OFF RIG: Spartan 151 Field: Cook Inlet Well: KLU#2 Casing Data: Size, in WT., ppf Grade Conn. Set @,TVD 20 106 N-80 Butt 1905 v CASING TEST FIT LOT Test Date: 17-Sep-12 EMW Data 11.5 Volume Pressure, Volume Pressure, M. w. MW Used: 9.2 Pumped, bbl. psi Pumped, bbl. psi EQUIV 0.50 53 0.50 129 10.50 Bleed Off 1.00 210 1.00 232 11.54 Minutes psi 1.50 445 1.50 9.20 1 208 2.00 671 2.00 9.20 2 184 2.50 900 2.50 9.20 3 173 3.00 1140 3.00 9.20 4 162 3.50 1370 3.50 9.20 5 151 4.00 1622 4.00 9.20 4.50 1854 4.50 9,20 5.00 2059 5.00 9.20 5.50 2275 5.50 9.20 LOT Pressure: 227 6.00 2425 6.00 9.20 6.50 2540 6.50 9.20 EMW, ppg= 11.49 7.00 7.00 9.20 7.50 7.50 9.20 8.00 8.00 9.20 Note: 8.50 8.50 9.20 Red= inputs 9.00 9.00 9.20 Blue=calculated 9.50 9.50 9.20 10.00 10.00 9.20 Shoe Test -3500 -3000 r 2500 2000 /r f/ r 1500 4 1000 t/ P 500 r 0 -1.00 1.00 3.00 5.00 7.00 9.00 11.00 13.00 15.00 -♦-Straight Line -a-Shoe Test !, lotpstsgl rttsbl5.xls 1 i4C4;\ Ltictk # z Z- Z r7 o Regg, James B (DOA) From: spartan-rig@furiepetroleum.com g r Sent: Monday, September 17, 2012 12:23 PM 7 ( �INI?/ To: Brooks, Phoebe L (DOA); DOA AOGCC Prudhoe Bay; Regg, James B (DOA) Cc: Bob Laule; Tony Cosenza;james pritchard; Jerry Cloud-aol; Ed Ferguson; T.Hord@furiepetroleum.com; Damon Kade Subject: BOPE Test Report and Charts Attachments: BOPE Test Report 91712.xlsx; BOPE TEST CHARTS 9-17-12.pdf This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. 1 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION BOPE Test Report Submit to: iim.reggCa�alaska.gov doa.aogcc.prud hoe.bavCa.alaska.gov phoebe.brooks(cdalaska.gov Contractor: Spartan Rig No.: 151 DATE: 9/17/2012 Rig Rep.: David Hebert Rig Phone: 504-620-8459 Rig Fax: 504-62.0-8461 Operator: Furie Operating Alaska Op. Phone: 907-375-7500 Op. Fax: Rep.: Keith Matt/Keith Freeny E-Mail Spartan-rig@furiepetroleum.com Well Name: KLU #2 PTD# 2120790 Operation: DrIg: Workover: Explor.: X Test: Initial: X Weekly: Bi-Weekly Test Pressure: Rams: 250/5000 Annular: 250/3500 Valves: 250/5000 MISC. INSPECTIONS: TEST DATA FLOOR SAFETY VALVES: Test Result Test Result Quantity Test Result Location Gen.: P Well Sign P Upper Kelly 1 P Housekeeping: P Drl. Rig P Lower Kelly 1 P PTD On Location P Hazard Sec. P Ball Type 2 P Standing Order Posted P Misc NA Inside BOP 1 P FSV Misc 0 NA BOP STACK: Quantity Size/Type Test Result MUD SYSTEM: Visual Alarm Stripper 0 NA Trip Tank P P Annular Preventer 1 13-5/8"X lON P Pit Level Indicators P P #1 Rams 1 5" X 10M P Flow Indicator P P #2 Rams 1 5"X 10M P Meth Gas Detector P P #3 Rams 1 lind shear 10 FP H2S Gas Detector P P #4 Rams 0 NA MS Misc 0 NA #5 Rams 0 NA #6 Rams 0 NA Quantity Test Result Choke Ln. Valves 1 4-1/16" 10M P Inside Reel valves 0 NA HCR Valves 2 3-1/16 10M P Kill Line Valves 1 4-1/16" 10M P Check Valve 0 NA ACCUMULATOR SYSTEM: BOP Misc 0 NA Time/Pressure Test Result System Pressure 3100 P CHOKE MANIFOLD: Pressure After Closure 1450 P Quantity Test Result 200 psi Attained 21 P No. Valves 14 FP Full Pressure Attained 118 P Manual Chokes 1 P Blind Switch Covers: All stations YES Hydraulic Chokes 2 P Nitgn. Bottles (avg): 16@ 1000 CH Misc 0 NA ACC Misc 0 NA Test Results Number of Failures: 2 Test Time: 55.0 Hours Repair or replacement of equipment will be made within days. Notify the North Slope Inspector 659-3607, follow with written confirmation to Supervisor at: jim.regg@alaska.gov Remarks: Choke manifold valve# 1 failed twice. Flushed and greased, Choke manifold valve passed. Blind shear rams failed. Replaced with new blind shear rams. Test passed. 24 HOUR NOTICE GIVEN YES x NO Waived By Jim Regg Date 9/17/2012 Time 0:00 Witness Test start 9/15/12 Finish 7:00 Form 10-424 (Revised 01/2011) BOPE Test Report 91712 Kc.4I 4+.6-1Z1 h __ Pit 2 I Z_079C? - -0 ,4�� w ii100.100 �000t � � `SM o.03 lam "I 2000 W� ~ Q �/� ' 3000 amme�� olorvoir.7, 000 ��,, > 3 40# 4000 0., 0 0 0 imiiiine414~ Alt* .4 ..4 CI* rio #### -_,*: rg00o remmiraw � / 4 #' °# 'V e.00 =fa.,......... 114:N14 1 i 4014##1/00,04 ::::0gt,ffeavi., 14/4 Ar100 •�� ♦X20 ..A.•maiwit ‘All 43 #4tst t 1 z. it II 11 k , . 1 > N o 0 0 1144 p 1 I o00000 0 -.1111111104411416.11/1".lik I ill �� � �q0 0 001- .. ' 8 f mtiI'(I' W � a � MINN c i O O I � 041001V:0 710 000 o , litlO� � �WspIthtlhhl • • 1do0 0 0 0 0 o co r t fth 'ph 11, ‘,1 , , win 001 Atitita 11 i 11 I °c'v g 4 Alai : ego` ‘. AIA , warm= oz,v -warm 0004 ,, I am 0° 44. 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I - ? § i it 4Aii''°E bvQte VoilMillaillialti kill 1111111111111111111iNIAlyslimlummid o1i40r otar0c-00 , 0‘1, 0.00,, .00-so. 8 4 000e, ..,,,,,,i, A& 0A ,.,L i a I inalto • 0 ,o , 1 Ole% 00001 4.11=511.1.1.1. /000 111811.11011110 0 1116\14** 00 6 ifirmo . & . 1&/* 000 . aMillinal Ma IF - 9'Ls( IMENINN. 0 °co% ArpardiNgt"" di 1 4 N% 000 00000A ,4107,-____41.1whio. td ,„\ . „,„ ... ay co a (s)ifli L� ff [FiLnisEASEAN PARNELL, GOVERNOR .` ALASKA OIL AND GAS 333 W 7th AVENUE,SUITE 100 CONSERVATION COMMISSION ANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 FAX (907)276-7542 Robert Laule a ' - 07 Drilling Engineer Furie Operating Alaska, LLC 1029 West 3rd Ave, Suite 500 Anchorage, AK 99501 Re: Exploration Field, Exploration Pool, KLU #2 Sundry Number: 312-349 Dear Mr. Laule: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for 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. Sincerely, 0 104,64,752g_, athy P Foerster Chair DATED this 12th day of September, 2012. Encl. Page 1 of 2 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Tuesday, September 11, 2012 9:50 AM To: Bob and Marie Laule Subject: RE: KLU#2 Permit to Drill Verbal Casing Deviation Request Bob, I need the new cementing details for the 9 7/8" ... the well schematic you provided is a little confusing as to what is going where. Can you provide a new summary sheet for the 9 7/8" casing.? Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Schwartz, Guy L (DOA) Sent: Friday, September 07, 2012 4:31 PM To: 'b.laule@furiepetroleum.com' Cc: Ed Ferguson; Jerry Cloud; Tony Cosenza; James Pritchard; spartan-rig@furiepetroleum.com; d. kade; thordl; Leslie Smith Subject: RE: KLU#2 Permit to Drill Verbal Casing Deviation Request Bob, You have verbal approval to make the changes to the drilling procedure as outlined in your proposal. The initial BOP test(13 5/8" stack) should be based on the MASP expected for the hole section TD of 9000 ft. Test 13 5/8" BOP to 5000 psi (rams)and 3500 psi for Annular for this hole section (1900 -9000 ft) . Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: b.laule@furiepetroleum.com [mailto:b.laule@furiepetroleum.com] Sent: Friday, September 07, 2012 3:30 PM To: Schwartz, Guy L (DOA) Cc: Ed Ferguson; Jerry Cloud; Tony Cosenza; James Pritchard; spartan-rig@furiepetroleum.com; d. kade; thordl; Leslie Smith Subject: KLU#2 Permit to Drill Verbal Casing Deviation Request Guy, Per our verbal discussion attached is an outline of the "VERBAL REQUEST"to change the KLU#2 Permit to Drill. Your prompt attention is appreciated. Per our discussion we understand that we have a tentative verbal approval, pending your final approval of the attached document. Sincerely, Bob 9/11/2012 . - Page 2 of 2 This email contains confidential and/or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. 9/11/2012 RECEIVED FURZESEP 1 0 20 Operating Alaska LLC AOGCC 09-10-12 Dear Mr. Swartz, Attached is the 10-403 Request for Sundry Approval to the Permit to Drill # 212 0790 on KLU#2. This formalizes the request for verbal approval dated September 7th 2012 to revise the casing program to replace the 13-3/8" 72# N80 HC casing with a setting depth of 9000'to 9-7/8" Q125 62.8#. The burst and collapse rating of the 9-7/8" Q125 far exceed that of the 13-3/8 N80 however,the 9-7/8" is existing inventory.A 13-3/8" 72# N80 tie-back string will be placed from 150' below the mud line hanger to the well head,this will allow utilization of existing mud line and well head equipment. After we NU the (B) Section of the well head a 13-5/8" 10,000# BOP will be installed in lieu of the 21-1/4" BOP. The overall intent of the change is to eliminate the hole opening operation from 12-1/4" to 17-1/2" hole to 9,000' there by allowing additional time after the casing is set for Drill Stem Testing of the Sterling and Beluga Formations. Currently the 12-1/4" hole has been opened to 26" diameter to a depth of 1,900'. We are currently running the 20" casing.After cementing, we will ND the Diverter and NU the 20" casing head. We will then commence running the 13-3/8"s tie back assembly from the mud line hanger to surface prior to NU of the 13-5/8" 10M BOP. Attached is the 10-403, a Summary Scope of Work, Composite Well Head/Mud Line Suspension Diagram, and Well Head Diagram. Thanks Sincerely, Robert Laule Furie Operating Alaska, LLC RECEIVED AND ACCEPTED ABOVE DATA This 10 th day of September,2012 BY: TITLE: 1029 W. 3rd Avenue, Suite#500 I Anchorage,Alaska I 99501 I 907.277-3726 • RECEIVED SEP 10 1012 STATE OF ALASKA D 7-S 7 12 r� ALASKA OIL AND GAS CONSERVATION COMMISSION AO�C�/ APPLICATION FOR SUNDRY APPROVALS 20 MC 25.280 1.Type of Request: Abandonu Plug for Redrill 0 Perforate New Pool 11RepairWelluE Change Approved Program. Suspend PlugPerforations Perforate Pull TubingTime Extension Operations Shutdown Re-enter Susp.Well Stimulate e Alter Casing Other: 2.Operator Name: 4.Current Well Class: 5.Permit to Drill Number: Furle Operating Alaska,LLC Development Exploratory • 212079 - 3.Address: 6.API Number: Stratigraphic Service 1029 W.3rd Avenue,Suite 500,Anchorage,AK 99501 50-733-20603-00 • 7.If perforating,closest approach in pool(s)opened by this operation to nearest 8.Well Name and Number: property line where ownership or landownership changes: Spacing Exception Required? Yes ❑ No ® KLU#2 • 9.Property Designation(Lease Number). 10.Field/Pool(s). . ADL 389198 • Exploration 11. PRESENT WELL CONDITION SUMMARY Total Depth MD(ft): Total Depth ND(ft): Effective Depth MD(ft): Effective Depth ND(ft): Plugs(measured). Junk(measured): 9,000 9,000 9,000 9,000 N/A N/A Casing Length Size MD TVD Burst Collapse Structural 370 30" 1.5 Wall 370 370 Conductor 1000 20" 106* 1000 1000 2410 770 Conductor 200 20" 133* 1200 1200 3060 1500 Conductor 700 20" 169* 1900 1900 3380 2500 Surface 9000 9-7/8" 62.8* 9000 9000 13840 11140 Perforation Depth MD(ft): Perforation Depth ND(ft): Tubing Size: Tubing Grade: Tubing MD(ft): N/A N/A N/A N/A N/A Packers and SSSV Type: N/A Packers and SSSV MD(ft)and ND(ft): N/A 12.Attachments: Description Summary of Proposal ❑ 13.Well Class after proposed work: Detailed Operations Program I I BOP Sketch IX Exploratory DCI • Development I I Service 14.Estimated Date for 7-Sep-12 15.Well Status after proposed work: Commencing Operations: Oil 0 Gas ® • WDSPL El Suspended ❑ 16.Verbal Approval: YES Date: 9/7/12 WINJ ❑ GINJ [J WAG Abandoned ❑ Commission Representative: Guy Schwartz-Senior Petroleum Engineer GSTOR El SPLUG 17 17.I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Robert(Bob)Laule Printed Name Robert Laule Title Drilling Engineer Signature � � Phone 907-277-3726 Date 9/10/12 1 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number. 3 I a. 34 q Plug Integrity El BOP Test e Mechanical Integrity Test El Location Clearance 0 Other. A 5 (,�')`� �O 5:.. //-- ()(° /� /C_5�t 3 S �/ (s c / f�]yr c�J 4A C i— (6:4 ,i) Subsequent Form Required: /0_1-/07 f (/✓J?' /6°' ) APPROVED BY Approved by: "1-6 /2 ,� �F-'._____ COMMISSIONER THE COMMISSION Date: 59_ /2 — re..., / III"/2.--.-- RBQMS SEP 12 2011 e011 Form 10-403 Revised 1/2010 ORIGINAL Submit in Duplicate Summary Scope of Work KLU#2 Run and cement the 20" casing to 1900' RT as per the permit to drill. ND Diverter Install 20" casing head per Permit to drill PU 13-3/8 tieback string from mudline to surface well head. Guide shoe 3 joints 13-3/8 casing 13-3/8 mud line hanger 13-3/8 to surface and set in slips. -L-,,•(Z Install Well head "B"section and test void. NU 13-5/8 10M BOP and test —T S pOL r'✓ Drill 12-1/4"hole to 9000' Run and cement a 9-7/8 X 9-5/8 tappered casing string to 9000. Conduct cased hole DST on sterling and Beluga formation Seperate sun ry to be filed for DST. Furie Operating Alaska, LLC 9/7/12 KLU #2 Casing/Cementing Forecast +411+11 4414+414 4.44.+1 44+1+ .) 4#++414 400'30" Drive pipe 1.5"wall t4,1 4 1 F+,4+ r4r0 ii4 «1« ,,«+« Lead 4481 cu-ft 12.5 ppg F444 .141:4 4 F 1' Tail 611 cu-ft 15.8 ppg tttt +�4«+ 4t4 1500'Top of Cement mw=9.3 ppg = _ __= Shoe 1700'SS 1900' RKB 11.5#FIT 4+++++4.-_-_-_-_ 100020" 106#/ft K-55 BT&C 1''/11'1 �i°f+*4+ 200'20" 133#/ft X-56 BT&C 44/4 4 .:« 700'20" 169#/ft X-56 BT&C 2,743 RKB'Top of Sterling 1„ 41+1+11� f111++41 Lead 7755 cu-ft 12.5ppg _= Tail 1283 cu-ft 15.8 ppg - Lead 2129' cu-ft 12.5ppg -------- Tail 115 cu-ft 15.8 ppg = 4664'RKB Top of Beluga DV @ 5300 -_- - Lead 1354' cu-ft 12.5ppg _== Tail 534' cu-ft 15.8 ppg _ L8999' RKB Top of Tyonek mw=9.8-10.0 ppg ::__-: _ 9000'9-7/8"62.8#/ft Q125 X 9-5/8" 53.5#0125 ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- RE:1 9/7/12 I 11"15M BX-158 Ring Gasket .> LoO 111 1-13/16"15M BX-151 Ring Gasket .� n gri.,,IPICB • _ o1 AS: 00 tri 1 Gn a t •1111 13-5/8"10M Q I _•1111! 8X-159 Ring Gasket - - ' 4) te I LJ 1 P11 LI I 1-13/16"10M 1 ,., BX-151 Ring Gasket 1 cc I 11,• •�r1 1/,(�]1i_�RIII C _,• 71'-- %LOY - i 11 "� --- .-W! (,I �Oi '11111 __ LrI 1 iu -- 21-1/4"5M in ® .•111j BX-165 Ring Gasket - ■ ` TN all1IN 1 " r 2-1/16"5M R-24 Ring Gasket G 0 ,11111kt n3 , ••rd., w. 0 Watio '11 nu 11[4.1.1 owe ®, 4.0:),, IE (4 V) P --o - ,Ir ire,, --T,Li: €, iii.; ,-, '--- 11 11' 20"Casing 20"Hanger RP111299 Mt Running Tool .....i / :111 13-3/8"Casing 9-5/::: 30" I Con iii IRunning Tool i20"Mudline Hanger 11 9-5/8"Hanger , r Running Tool 1 1' ' 9'1 0 30"Mudline • m• Sub I` r c 20"Casing 3 3/ el /iLs 1 il:' 3-3/8"Mudline ,1 Hanger i it •-5/8"Mudline ">£I1 lit Hanger <' 3-3/8"Casing CI ii •-5/8"Casing Gait-Se6i/G- •id, 6. RP111339 rr- BAKER HUGHES Proposal No: 1001151448G FURIE OPERATING LLC KITCHEN LIGHTS UNIT#2 Kitchen Lights Field Kenai Offshore County, Alaska September 7, 2012 Cement Proposal Prepared for: Prepared by: Bob Laule Rod Edwards Furie Operating Alaska, LLC Account Manager Bus Phone: 907-277-3726 Bus Phone: 907-267-3487 Email: marboblaule@gmail.com Mobile: 907-229-6536 Service Point: Service Representatives: BJS, KENAI Rod Edwards Bus Phone: 907-7764084 Account Manager (907)659-2329 Bus Phone: 907-267-3487 Fax: 907-776-5606 Mobile: 907-229-6536 Powered by PowerVision Gr4105 Operator Name: FURIE OrtRATING LLC Well Name: KITCHEN LIGHTS UNIT#2 BAKER Job Description: 9-7/8" in 12-1/4 hole w/ DV @ 5,300' HUGHES Date: September 7, 2012 Proposal No: 1001151448G JOB AT A GLANCE Depth (TVD) 9,000 ft Depth (MD) 9,000 ft Hole Size 12.25 in Casing Size/Weight 9 7/8 in, 62.8 lbs/ft Pump Via 9 7/8" O.D. (8.559" .I.D) 62.8 Total Mix Water Required 22,210 gals Stage No: 1 Float/Landing Collar set @ 8,920 ft Pre-Flush Mud Clean II 40 bbls Density 8.4 ppg Lead Slurry Class G Cement 551 sacks >' Density 12.5 ppg Yield 2.46 cf/sack Tail Slurry Class G Cement 464 sacks / Density 15.8 ppg ,/ Yield 1.15 cf/sack Displacement Drilling Mud 635 bbls Density 9.3 ppg Reoit Printed o,, Setainher 7.7011 4 57 PM Page 1 Have more questions? You can find us at: http://www.bakerhughes.com/products-and-services/pressure-pumping Qperator Name: FURIE Or-rRATING LLC Fir Well Name: KITCHEN LIGHTS UNIT#2 BAKER Job Description: 9-7/8" in 12-1/4 hole w/ DV @ 5,300' HUGHES Date: September 7, 2012 Proposal No: 1001151448G JOB AT A GLANCE (Continued) Stage No: 2 Stage Collar set @ 5,300 ft Pre-Flush Mud Clean II 40 bbls Density 8.4 ppg Lead Slurry Class G Cement 867 sacks Density 12.5 ppg Yield 2.46 cf/sack Tail Slurry Class G Cement 100 sacks Density 15.8 ppg Yield 1.15 cf/sack Displacement Drilling Mud 377 bbls Density 9.3 ppg Repoli Pooled on: September 7,2012 4.51 Pb' Page 2 Have more questions? You can find us at: http://www.bakerh ughes.com/products-and-services/pressure-pumping Operator Name: FURIE ERATING LLC Well Name: KITCHEN LIGHTS UNIT#2 BAKER Job Description: 9-7/8" in 12-1/4 hole w/ DV @ 5,300' HUGHES Date: September 7, 2012 Proposal No:1001151448G WELL DATA ANNULAR GEOMETRY ANNULAR I.D. t) I (in) MEASUREDDEPTH(fTRUE VERTICAL 19.000 CASING I 1,000 I 1,000 18.730 CASING I 1,200 I 1,200 18.376 CASING I 1,918 I 1,918 12.250 HOLE I 9,000 I 9,000 SUSPENDED PIPES DIAMETER (in) WEIGHT DEPTH(ft) O.D. I I.D. (lbs/ft) MEASURED I TRUE VERTICAL 9.875 I 8.559 I 62.8 I 9,000 I 9,000 STAGE: 1 Float/Landing Collar set @ 8,920 ft Mud Density 9.80 ppg Est. Static Temp. 152 ° F Est. Circ. Temp. 120 ° F VOLUME CALCULATIONS 2,700 ft x 0.2866 cf/ft with 75% excess = 1354.2 cf 1,000 ft x 0.2866 cf/ft with 75% excess = 501.7 cf 80 ft x 0.3996 cf/ft with 0% excess = 32.0 cf(inside pipe) TOTAL SLURRY VOLUME = 1887.9 cf 337 bbls v' STAGE: 2 Stage Collar set @ 5,300 ft Mud Density 9.80 ppg Est. Static Temp. 122 ° F Est. Circ. Temp. 100 ° F VOLUME CALCULATIONS 418 ft x 1.3099 cf/ft with 0% excess = 547.5 cf 3,152 ft x 0.2866 cf/ft with 75% excess = 1581.1 cf 230 ft x 0.2866 cf/ft with 75% excess = 115.1 cf TOTAL SLURRY VOLUME = 2243.8 cf = 400 bbls Page 3 Have more questions? You can find us at: http://www.bakerh ughes.com/products-and-services/pressure-pumping Operator Name: FURIE OPERATING LLC Well Name: KITCHEN LIGHTS UNIT #2 BAKER Job Description: 9-7/8" in 12-1/4 hole w/ DV @ 5,300' HUGHES Date: September 7, 2012 Proposal No: 1001151448G FLUID SPECIFICATIONS STAGE NO. 1 Pre-Flush 40.0 bbls Mud Clean II @ 8.4 ppg VOLUME VOLUME FLUID CU-FT FACTOR AMOUNT AND TYPE OF CEMENT Lead Slurry 1354 / 2.46 = 551 sacks Class G Cement+0.05% bwoc Static Free + 0.3% bwoc R-3 + 0.2% bwoc CD-32 + 0.5% bwoc FL-52 + 0.25% bwoc ASA-301 + 1 gals/100 sack FP-6L + 1.5% bwoc Sodium Metasilicate + 0121.6% 20/o bwoc MPA-1 + Fresh Water Tail Slurry 534 / 1.15 = 464 sacks Class G Cement + 0.05% bwoc Static Free + 0.3% bwoc R-3 + 0.6% bwoc FL-63 + 0.2% bwoc CD-32 + 1 gals/100 sack FP-6L +43.6% Fresh Water Displacement 634.8 bbls Drilling Mud @ 9.3 ppg CEMENT PROPERTIES SLURRY SLURRY NO.1 NO.2 Slurry Weight (ppg) 12.50 15.80 Slurry Yield (cf/sack) 2.46 1.15 Amount of Mix Water (gps) 13.70 4.91 Amount of Mix Fluid (gps) 13.71 4.92 Estimated Pumping Time-70 BC (HH:MM) 6:33 Free Water (mis) @ ° F @ 90 ° Angle 0.0 Fluid Loss (cc/30min) at 1000 psi and ° F 36.0 COMPRESSIVE STRENGTH 6.5 hrs @ 109° F (psi) 50 8 hrs @ 109 ° F (psi) 500 12 hrs @ 109 ° F (psi) 1945 24 hrs @ 109 ° F (psi) 3682 Report Pnnled on Se17emLe,7 2n 12 4 51 P11 G14129 Page 4 Have more questions? You can find us at: http://www.bakerhughes.com/products-and-services/pressure-pumping '.Operafbr Name: FURIE OPERATING LLC Well Name: KITCHEN LIGHTS UNIT#2 BAKER Job Description: 9-7/8" in 12-1/4 hole w/ DV @ 5,300' HUGHES Date: September 7, 2012 Proposal No: 1001151448G FLUID SPECIFICATIONS (Continued) STAGE NO. 2 Pre-Flush 40.0 bbls Mud Clean II @ 8.4 ppg VOLUME VOLUME FLUID CU-FT FACTOR AMOUNT AND TYPE OF CEMENT Lead Slurry 2129 / 2.46 = 867 sacks Class G Cement+ 0.1% bwoc R-3 + 0.2% bwoc CD-32 + 0.5% bwoc FL-52 + 0.25% bwoc ASA-301 + 1 gals/100 sack FP-6L + 1.5% bwoc Sodium Metasilicate + 20% bwoc MPA-1 + 0.05% bwoc Static Free + 121.6% Fresh Water Tail Slurry 115 / 1.15 = 100 sacks Class G Cement+ 0.05% bwoc Static Free + 0.1% bwoc R-3 + 0.6% bwoc FL-63 +0.2% bwoc CD-32 +43.8% Fresh Water Displacement 377.2 bbls Drilling Mud @ 9.3 ppg CEMENT PROPERTIES SLURRY SLURRY NO.1 NO.2 Slurry Weight (ppg) 12.50 15.80 Slurry Yield (cf/sack) 2.46 1.15 Amount of Mix Water (gps) 13.71 4.93 Amount of Mix Fluid (gps) 13.72 4.93 Estimated Pumping Time -70 BC (HH:MM) Free Water (mis) @ ° F @ 90 ° Angle Fluid Loss (cc/30min) at 1000 psi and ° F Cement volumes and additiives may change based on actual well conditions. Rt 1oit PiinIF1 r,,, S,pIt,{e,7 201:i 51 PIS G,41' Page 5 Have more questions? You can find us at: htt p://www.ba ke rh u g h e s.c om/prod u cts-and-services/pre ss u re-pu m pi n g ( peratdi: FURIE OPERATING LLC Well Name: KITCHEN LIGHTS UNIT #2 BAKER Date: September 7, 2012 HUGHES Proposal No: 1001151448G PRODUCT DESCRIPTIONS ASA-301 Additive used to reduce or eliminate free water and settling in cement slurries. CD-32 A patented, free-flowing, water soluble polymer that is an efficient and effective dispersant for primary and remedial cementing. Class G Cement Intended for use as a basic cement from surface to 8000 ft as manufactured, or can be used with accelerators and retarders to cover a wide range of well depths and temperatures. FL-52 A water soluble, high molecular weight fluid loss additive used in medium to low density slurries. It is functional from low to high temperature ranges. FL-63 A non-retarding, non-viscosifying fluid loss additive particularly suited for use with coil tubing and/or close tolerance liner cementing. FL-63 is effective from low to high temperatures. Concentrations of 0.2%to 1.0% BWOC are typical. FP-6L A clear liquid that decreases foaming in slurries during mixing. MPA-1 MPA-1 is a fine white pozzolanic type powder used to enhance various cement properties. These properties include: Enhanced Compressive Strength Development, Improved Sulfate Resistance, Increased Tensile and Flexural Strength, and Gas Control. MPA-1 is functional over a broad temperature range, and can be used in foamed lightweight, normal, and heavyweight cement designs. Concentrations range from 1 to 30% BWOC. Mud Clean II A water-base mud wash designed for use ahead of cement slurries to aid in mud and drilling debris removal and to prevent contamination of the cement slurry. It should be used only when water-base mud is used. R-3 A low temperature retarder used in a wide range of slurry formulations to extend the slurry thickening time. Sodium Metasilicate An extender used to produce an economical, low density cement slurry. Static Free An anti-static additive used to prevent air entrainment due to agglomerated particles. Can be used in Cementing and Fracturing operations to aid in the flow of dry materials. Rco Plated on Sep[Poi.,7 2o12 4 51 P11 Page 8 G,41c, Have more questions?You can find us at: http://www.bakerh ughes.com/products-and-services/pressure-pumping Page 1 of 1 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Friday, September 07, 2012 4:31 PM To: 'b.laule@furiepetroleum.com' Cc: Ed Ferguson; Jerry Cloud; Tony Cosenza; James Pritchard; spartan-rig@furiepetroleum.com; d. kade; thordl; Leslie Smith Subject: RE: KLU#2 Permit to Drill Verbal Casing Deviation Request Bob, You have verbal approval to make the changes to the drilling procedure as outlined in your proposal. The initial BOP test(13 5/8" stack) should be based on the MASP expected for the hole section TD of 9000 ft. Test 13 5/8" BOP to 5000 psi (rams) and 3500 psi for Annular for this hole section (1900 -9000 ft) . Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: b.laule@furiepetroleum.com [mailto:b.laule@furiepetroleum.com] Sent: Friday, September 07, 2012 3:30 PM To: Schwartz, Guy L(DOA) Cc: Ed Ferguson; Jerry Cloud; Tony Cosenza; James Pritchard; spartan-rig@furiepetroleum.com; d. kade; thordl; Leslie Smith Subject: KLU#2 Permit to Drill Verbal Casing Deviation Request Guy, Per our verbal discussion attached is an outline of the "VERBAL REQUEST"to change the KLU#2 Permit to Drill. Your prompt attention is appreciated. Per our discussion we understand that we have a tentative verbal approval, pending your final approval of the attached document. Sincerely, Bob This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. 9/7/2012 FURIE Operating Alaska ail 09-07-12 Dear Mr.Swartz, Furie Operating Alaska,LLC is requesting a verbal approval to the Permit to Drill 212 0790 on KLU#2 to revise the casing program to replace the 13-3/8 72#N80 HC casing with a setting depth of 9000'with a tapered string of 9-5/8"53.5# X 9-7/8" Q125 62.8#. A 13-3/8"72#N80 tie-back string will be placed from 150'below the mud line hanger to the well head,this will allow utilization of existing mud line and well head equipment. After we NU the(B)Section of the well head a 13-5/8"10,000#BOP will be installed in lieu of the 21-1/4"BOP. The overall intent of the change is to eliminate the hole opening operation from 12-1/4"to 17-1/2"hole to 9,000'there by allowing additional time after the casing is set for Drill Stem Testing of the Sterling and Beluga Formations. Current well operations are opening the 12-1/4"hole with 26"diameter hole opener to a depth of 1,900'. We anticipate having the 20"casing run and cemented as early as 09-09-12. We will then ND the Diverter and NU the 20"casing head. We will then commence running the 13-3/8"s tie back assembly from the mud line hanger to surface prior to NU of the 13-5/8 10M BOP. Attached is a Summary Scope of Work Composite Well Head/Mud Line Suspension Diagram,and Well Head Diagram. Your prompt attention to this is greatly appreciated. Sincerely,,/ Rort hole Furie Operating Alaska,LLC RECEIVED AND ACCEPTED ABOVE DATA This 07 th day of September 2012 BY: TITLE: 1029 W.3rd Avenue,Suite#500 Anchorage,Alaska 99501 ( 907.277-3726 Summary Scope of Work KLU#2 Run and cement the 20"casing to 1900'RT as per the permit to drill. ND Diverter Install 20"casing head per Permit to drill PU 13-3/8 tieback string from mudline to surface well head. Guide shoe 3 joints 13-3/8 casing 13-3/8 mud line hanger 13-3/8 to surface and set in slips. Install Well head"B"section and test void. NU 13-5/8 10M BOP and test Drill 12-1/4"hole to 9000' Run and cement a 9-7/8 X 9-5/8 tappered casing string to 9000. Conduct cased hole DST on sterling and Beluga formation Seperate sundry to be filed for DST. Furie Operating Alaska,LLC 9/7/12 KLU #2 Casing/Cementing Forecast 400'30"Drive pipe 1.5"wall 141,14, Lead 4481 cu-ft 12.5 ppg Tail 611 cu-ft 15.8 ppg 1500'Top of Cement mw=9.3 ppg =_:Shoe 1700'SS 1900'RKB 11.5#FIT 1000'20"106#/ft K-55 BT&C 200'20"133#/ft X-56 BT&C td ?t 700'20"169#/ft X-56 BT&C 2,743 RKB'Top of Sterling ...A Lead 7755 cu-ft 12.5ppg Tail 1283 cu-ft 15.8 ppg Lead 2129' cu-ft 12.5ppg -. Tail 115 cu-ft 15.8 ppg 4664'RKB Top of Beluga DV @ 5300 Lead 1354' cu-ft 12.5ppg Tail 534' cu-ft 15.8 ppg =- 8999'RKB Top of Tyonek mw=9.8-10.0 ppg -_ _ ___ 9000'9-7/8"62.84k/ft 0.125 X 9-5/8" 53.5#0.125 RE:1 9/7/12 / 11.11 a . BX-166RIng6 / -4iF441111M.111110gMmgmmoilmiiiiit:n- 1l1 III 1-13ne•15M EX-151111m Gasket ii ' 7 Mr 41111.44'': ..--;...:.74,.,.:'$4.: ;11 4.00; '!:i1S,..,(:)T.-TWO. M._,,,gii IIII I!I 13518'101.1 -.�. sX-158 Ring Gasket �' ?a Xi P. ;. 111 y � 11,1 maw 1gM BX-161 Ring Galat :, 6i T F :i! Ii". •Illi 1. iiii) All 11 MIN= illj M1 21-1rr 5M BX-155 Ring GO** r ss� Alai Alid IU1 IUI I 2-1/15'5M ir R-24 RAg Gaket tlii JIJJ471 :+11 "MI I 1 , II. 1O.Ca 0'Hangar RP111288 Om I Running Tool 11, iriii 3-3L8-Casing 1I •-51W Casing .• Conductor ' i '�-• 133!8'Hanger 1Runi*ig Tool ' X/Mut%Ine Hi l • •8'HrI' d Running TadtI 1111 I` N 7 Mudline si,e Cain J 3-318'MudlYne J IL Hanger rJ! ■IiP' •5/8Mudne iI Hanger \\ 1 4� 1!..01 3-3/8'Casing i 41 01 r- ,•Casing ‘/•.` sc- ,. RP111339 io#P111:io). Operating Alaska C..LC CONFIDENTIAL DAILY DRILLING REPORT DATE FIELD API NUMBER RIG AFE PERMIT NUMBER COUNTY STATE REPORT NO. 9/4/2012 KLU#2 50-733-20603-00-00 SPARTAN 151 12-006 2120790 Kenai Pen.Bro. AK 9 DEPTH-MD/TVD PROGRESS PROJECTED DEPTH SUPERVISOR PHONE NUMBER DAYS SINCE SPUD MD TVD KEITH MATT/KEITH FREENY 907-375-7500 LAST CASING/DEPTH SHOE TEST(PPG) LAST BOP TEST RKB/MUD UNE 212 24 HOUR OPERATIONS SUMMARY Repair and install drive pipe guide.AOGCC inspection.Install service lines.Retorque bolts on hydrill,diverter and bell nipple.Pick up drill pipe. 'Forecast IPick up HWDP.Make up 26"bit.Trip in hole to 212'.Wash out 30"pipe to 366'.Drill to 386'.Pull out of hole.Pick up 12 1/4"bha. HOURS DETAILS OF OPERATIONS SIARI `6 HRS(DUR) 0:00 4:00 4.0 Attempt to lower drive pipe guide unable to pass texas deck pick up and cut 2'off same,remove guide slide stops and grind welds off same,reinstall in lower pipe lower and secure to 30"drive pipe. 4:00 8:00 4.0 Lower and aligned drive pipe guide for pin holes. 8:00 13:00 5.0 Slide drive pipe guide and lowered the texas deck. Installed polution pans,hook up Koomey lines,install flow line,clean texas deck and substructure. 13:00 15:00 2.0 AOGCC Inspector,Lou Grimaldi,arrive on rig. Performing function test on 30"diverter and rig compliance test. 15:00 18:00 3.0 Rigging up trip tank lines,fill up line,and install polution pans.Install stairs.Reattach stern line to hydril. 18:00 20:00 2.0 Retorque bolts on hydril,diverter and bell nipple. 20:00 0:00 4.0 Rig up handling tools.Pick up 30 joints drill pipe and rack in derrick. At 15:05 hrs AOGCC Inspector,Lou Grimaldi,gave verbal approval to spud well. Safety meeting topic:Review JSA's and stop cards. Discussed installing texas deck and completing diverter rig up.Discussed working in high wind conditions. 24 MUD RECORD CASING RECORD PUMP DATA IN OUT SIZE GRADE WT CONN SHOE DEPTH PUMP NO. 1 2 3 TIME 20:30 30" 1.5"WALL/X-56 450 PPF Drill Quip/Ten Con' 366.54' MAKE GD GD EMSCO DEPTH 0 MODEL PZ10 PZ10 FB1600 WEIGHT 9 STROKE 10" 10" 12" VISC. 109 LINER SIZE 6.5 6.5 6.5 PV 16 SPM YP 40 GPM GELS 27/62/68 SURF.PRESS API WL NC SLOW PUMP DATA HT-HP SPM pF 0.7 SURF PRESS mF 1.1 BOTTOM HOLE BPM pM 1.1 ASSEMBLY CAPACITY pH 10.6 NO. DESCRIPTION LENGTH BTMS UP(STROKES/MIN) Ca 40 TOTAL CIRC.(STROKES/MIN) CI 1200 TORQUE AND DRAG SAND DEPTH FT. SOLIDS 3 TORQUE AMPS OIL PICK UP M# CAKE 3 ROATATING WT. M# MBT 27.5 SLACK OFF M# ADDITIVES USED ON RIG BIT RECORD BARITE BIT NO. GELS SIZE CAUSTIC MFG. LIGNITE TYPE LIME SERIAL NO. Engineer NOZZLES Dynafiber m DEPTH OUT new bridge DEPTH IN Lab TOTAL FT. Gelex HOURS AVE.ROP WOB • RPM AV DP AV DP l DAILY MUD COST 2,600 TOTAL LENGTH AV DC CUM.MUD COST 60,951 TOTAL WEIGHT GRADE-T/B/G CUM.HRS.BHA PERSONNEL BOP CONFIG MAKE MODEL SIZE TP WEATHER CONTRACTOR 32 ANNULAR WIND S.E.15/25 FUEL ONBOARD WATER ONBOARD OPERATOR 2 PIPE RAMS CONDITION Rain 27,636 CAMP CATERING 5 BL SHEAR RAMS TEMPERATURE 47 1,128 SERVICE 12 MUD CROSS FUEL USED DRILL OTHER PIPE RAMS 924 1,010 • TOTAL 51 CSG SPOOL 1 -... -,-..... KLU#2 DDR 9 Pin ZIL0g5,c. Regg, James B (DOA) From: b.laule@furiepetroleum.com � Sent: Tuesday, September 04, 2012 11:30 AM ' '/ t4(l To: Regg, James B (DOA); Jerry Cloud; Ed Ferguson ( C1 Cc: spartan-rig@furiepetroleum.com;j.pritchard@furiepetroleum.com; Tony Cosenza Subject: Re: Diverter Test Witness for Spartan Attachments: Rigging on Diverter System.docx; DSC00528.JPG; SANY0090.JPG '. Jim sorry for the delay but the rig lost internet connection last night. Attached is a short summary of the work that was conducted to stabilize the drive pipe and diverter system. Note two approaches were taken 1st to add additional support to stabilize and dampen the movement and 2nd the addition of the Strake vanes to reduce/redistribute the load.Also FYI based on observations from the rig on the KLU2 location ,the rig is in direct line with the tide. This effect of the tide is inducing turbulence due to flow around the legs in particular the bow and the starboard legs and this is causing additional turbulent forces on the drive pipe on the incoming tide. On the out going tide the drive pipe is not seeing this effect.Although the rig is set on the same azimuth as KLU1 the current at KLU1 was observed to be approximately 40 degree with respect to the rig azimuth. Lesson learned for future rig orientation. Bob From: "spartan-rig@furiepetroleum.com" <spartan-rig@furiepetroleum.com> Date:Tuesday, September 4, 2012 10:29 AM To:Admin <b.laule@furiepetroleum.com> Subject: FW: Diverter Test Witness for Spartan From: "Crisp,John H (DOA)" <Iohn.crisp@alaska.gov> Date:Tue, 04 Sep 2012 18:22:24+0000 To:Jim Regg<iim.regg@alaska.gov>, RIG Clerk<spartan-rig@furiepetroleum.com>, DOA <doa.aogcc.prudhoe.bay@alaska.gov> Subject: RE: Diverter Test Witness for Spartan Brian or Keith. Could you send this mail to Bob Laulie. I am presently on the Slope &just got off the phone with Bob. He gave me his e mail & I tried to forward this message & postmaster sent me back a note it was undeliverable. He is looking for an Inspector due to weather concerns in the Inlet.The best way& only way is thru Jim & I know he would like summary of work performed to stabilize conductor&diverter for integrity while drilling prior to scheduling an Inspector. From: Regg, James B (DOA) Sent: Monday, September 03, 2012 9:23 PM To: spartan-rig@furiepetroleum.com; DOA AOGCC Prudhoe Bay Subject: Re: Diverter Test Witness for Spartan We are not waiving witness. I will not know who is available and when until I get in office tomorrow morning. I would appreciate summary of work completed to stabilize the 30" and diverter. "spartan-rig@furiepetroleum.com" <spartan-rig@furiepetroleum.com> wrote: Dear Sir, We will be ready for a witness of the Diverter function test tomorrow. At your convince, please contact the rig @907-690- 3260, rig cell phone. The rig phones are not working. 1 (.. /0.0.,..) FURIE ' 4.000/ Operating Alaska LIC Brain Vines Rig Clerk Spartain 151 907-375-7501 Office 907-690-3260 Cell This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. This email contains confidential and /or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. This email contains confidential and/or privileged information. If you are not the intended recipient or have received this e-mail in error, please notify the sender immediately and destroy this e-mail. Any unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden. 2 Rigging on Diverter System c/QZ. 1. Bottom 4 pad eyes on drive pipe consist of. Per Pad eye( 2 slings made w/ 1" cable doubled w/ an airplane tire in between the slings, tighten w/ 2 chain hoist ( 1-3 ton and 1- 2ton) , also has a 5/8 load chain doubled attached w/ a 5400 WLL ratchet binder. ( Note these chain hoist will be replaced w/ 85,000 WLL ratchet binders upon arrival @ rig. 2. On Hydril we have 1-3 ton ratchet hoist w/ a 5/8" sling doubled 3 times with a truck tire in between slings. Also the rig bop trolley winches are connected on hydril. 3 Bell nipple has 4 truck tires w/ %" slings doubled twice that are connected to the rig's BB winches. 4. Also 3 strake Vanes we installed below water line. 5. The rig's drive pipe guide available to clamp onto drive pipe if needed. Y i-Jci ,v L kkilkiz- .. Prb zizolib Photos ‘ • • 0 • . / • • t, , •/ i / '/ , 'I/ , , 4iiiiir' i , 4, ... lf,' ' 4iii,,,,'; .„ IV',,.:::.., / . . - .. 0/ ,..., . . . ,. .,. .1% ,,,,i IIIIIIIIIIIrlb ‘'N'N / . . , • e" - i.,,!.; ,,,• I ', -. _ ... . . . ._ •.. . . c , f.- •' '_. i ' I f • , ''.• - . ..,• , • , • „,„, .,, :,,,, --: • I.--..., ,,,. ..--. ' ..., Aik- IIPIrl""ar INF ---'''- • / „ • . ,.: . ., ..,. a , , ..., . , re- \ ..„. ... . • _ .....,,,. ...... isr..„.. , ... •, ,:.. .._;_.,. ... . ---4. ..„.• „.-- .. : .. .. ...,...,. . I!' ... . . • ' ? . . . ,;,. . ......,. . MEMORANDUM State of Alaska Alaska Oil and Gas Conservation Commission TO: Jim Regg T-41 9 161)v DATE: September 3, 2012 P. I. Supervisor FROM: John Crisp SUBJECT: Diverter Inspection Petroleum Inspector Kitchen Lights Unit#2 Furie Operating Alaska PTD 2120790 August 30-31, 2012: On August 30, 2012, I traveled to Furie Alaska's KLU #2 exploration well on Spartan 151 jackup. The diverter system was not completely rigged up upon my arrival on the Rig. Inspection of the accumulator system found rig crew bleeding the accumulator bottles to allow installation of large 80 gal accumulator bottle that would meet requirements for their 21 1/4" 10K stack that will be nippled up after surface casing is set. While I was on the rig the Cook Inlet tide started running at its most severe. Rig & Diverter system had excessive movement to the extent that an accumulator hose to the diverter valve broke, spilling hydraulic fluid to the water surface. The excessive movement and potential for line failures were constant safety concerns for the rig crew. Efforts underway or considered to remedy the excessive movement within the diverter system included adding supports & absorbing the motion with rubber tires in line with the tie-down lines for shock absorbers. After contact with Inspection Supervisor Jim Regg it was agreed that the diverter system could not be inspected in its present condition. Mr. Regg requested I travel back to the Spartan 151 to finish inspection 08-31-2012. I made it clear to the Rig Supervisors that AOGCC was concerned about the reliability and integrity of the diverter system given the excessive movement being experienced during tide changes. The first & greatest concern was for the Rig Crews in which Spartan & Furie had full responsibility. I returned to Spartan 151 on August 31, 2012 to witness a diverter test. Test time for Diverter system includes Inspector stand-by for travel & travel after the Inspection. Diverter system was rigged up & looked to be secure with bell nipple installed & secured with cable & rubber tires to absorb shock of tide from Cook Inlet. Nine tie-downs were utilized to secure diverter system. The stairs to the Texas Deck were installed & I was able to walk around the bag & diverter line valves for Inspection. One stand of 5" drill pipe was RIH to below diverter bag to function divert valves & diverter. Driller functioned diverter & divert ball valves opened in 3 seconds. The system would not pressure back to normal & the accumulator oil reservoir was found to be empty. During our attempt to close diverter the rig & diverter started moving & the motion was quite severe. Shout from the Texas Deck mezzanine was heard & the driller side divert valve had vibrated to the extent that the hydraulic line was broken & oil was pumping in to the Cook Inlet. One of the Spartan Drill Crew entered the Texas Deck & was nearly decapitated when a cable broke Diverter Inspection Spartan 151 KLU-2 8-31-12 jc Page 1 of 2 & missed his head by about a foot. Near miss accident report was generated by Furie and sent to me (copy attached). Video of the movement of the rig & diverter system was taken by Furie Rep. & photo's of the oil slick in the Inlet were taken. I talked to Inspection Supervisor Jim Regg & he stated I should request video & photos & that if given voluntarily they would be strictly confidential. My opinion after failed attempt to function diverter system was that it would be impossible in the current configuration for the operator to assure the integrity of the diverter system during drilling of the surface hole. Instructions from Inspection Supervisor Jim Regg were to cease the diverter function inspection & to communicate to the operator that diverter testing would not occur until the AOGCC could be assured the diverter system is secured and can maintain that integrity during drilling of the conductor casing section of KLU #2. The operator representative requested I be on speaker phone with Furie Rep. Bob Laule & someone else that was not identified to explain AOGCC's response to diverter system failure & near fatality of a Drill Crew member. Summary: I witnessed an unsuccessful test of the diverter system on Furie's Spartan 151 jackup rig preparing to drill KLU #2. Excessive motions in the 30" drive pipe and diverter system due to the Cook Inlet tide prevented safe testing and — as observed —will not allow for the required integrity and reliability of the diverter equipment while drilling the conductor section of KLU #2. There was one near miss accident (potential for serious injury) while responding to a spill from a failed divert valve hydraulic line. Attachments: Furie Near Miss Accident Report 8/31/12 Diverter Inspection Spartan 151 KLU-2 8-31-12 jc Page 2 of 2 L<u� Z- -1)m 7,12.07,-/c Regg, James B (DOA) From: Crisp, John H (DOA) Sent: Sunday, September 02, 2012 9:45 AM To: Regg, James B (DOA) Subject: FW: Spartan 151 Near Miss Attachments: NEAR MISS REPORT Spartan 151 8-31-12.docx From: medic151rig [medic151rig@totalsafety.com] Sent: Friday, August 31, 2012 5:13 PM To: Crisp, John H (DOA) Subject: Spartan 151 Near Miss Aaron Hart Safety/Medic Spartan 151 Total Safety US 504-620-8463 This email contains protected confidential business information from Total Safety. Recipients should not forward this information except on a need to know basis in order to promote the business concerned and should not file copies of this information with publicly accessible records. If you are not the intended recipient,please be aware that any disclosure,copying,distribution,or use of the information contained in this email is prohibited. 1 KLA # z Si AA-T-AN +}rr NEAR MISS REPORT Date: 8-31-12 Name of Person Completing Report(optional): Brian Bullock Employees Involved in Near Miss: Brian Bullock Being as specific as possible, please describe the near miss occurrence: (Attach additional pages as necessary) Hydraulic hose blew off the stack and oil was filling the pollution pan. I went down on the Texas deck to suck out the oil when a cable that was wrapped around the stack broke right beside me. Please describe what might have occurred if not a "near miss": The cable could have popped me in the face or body causing serious injury or death. In your opinion,what could/should you do to avoid this near miss from occurring or perhaps escalating to an actual incident in the future? When the tide is rough stay clear of the Texas deck and all straps and binders. Review of the completed report shall be discussed during the next day's morning safety meeting. This time can be used to get further input regarding appropriate preventative measures. Further preventative measures indicated during safety meeting: Piz( )j Regg, James B (DOA) From: Regg, James B (DOA) l`eff ti3i/127 Sent: Friday, August 31, 2012 7:19 PM To: Foerster, Catherine P (DOA); Seamount, Dan T (DOA); Norman, John K(DOA); Schwartz, Guy L (DOA) Cc: DOA AOGCC Prudhoe Bay Subject: Spartan 151 Attachments: RE: Spartan Rig 151 Diverter inspection on Spartan 151 jackup (Kitchen Lights Unit#2; Furie)was attempted past 2 days by Inspector John Crisp without success. Rig has been experiencing vibrations due to currents; the vibrations and loads induced by incoming/outgoing currents have been severe enough to break the 30" drive pipe guide and prevent the successful rigging up of diverter system. John relayed his concerns from the rig this afternoon. Guy Schwartz and I contacted Furie's Bob Laule (engineer) and James Pritchard (Drlg Superintendent) to discuss situation. Following summarizes discussions with Mr. Laule and Mr. Pritchard: - Rig crew is experimenting with methods to absorb energy from motion of 30" drive pipe; Furie and Spartan are currently researching tensioning equipment for the drive pipe that VARCO offers for jackups (as described, it would be similar to what is used on floating rigs for tensioning of marine riser to avoid vibrations) - Only known difference between KLU 2 and KLU 1 locations is water depth; approx 30 ft deeper water; all other same (30" penetration into seafloor; foundation—no significant leg penetration; rig heading) - Vibration most pronounced on incoming tide - Furie was told that drilling ops would not be allowed until they can confirm the 30" and diverter system are secured and stable; they were told we were not restricting their efforts to secure the diverter but work must be done safely; also told them AOGCC Inspector would be leaving jackup this afternoon and would not come back until diverter secured and ready for function test. I received a follow-up call from Mr. Donnie Durham (Operations Manager, Spartan Offshore Drilling; 504-432-8588). He said Furie relayed to him the rig was shut down by AOGCC due to vibrations. Told him exactly what was told to Furie— no drilling until diverter was secured/stable and passed function test; ok to continue to work on diverter system SAFELY. Asked his understanding from what was relayed by Spartan personnel on board rig—he said only difference is water depth; reiterated several time that vibration is not a real concern for jackup rig—designed to be compliant; issue is a concern for 30" drive pipe and diverter. I asked about possibility of there being foundation issues—he said diver survey completed when rig was sited at KLU 2 was very similar to previous location (did initial survey and surveys later during well ops at KLU #1 and found no evidence of scour around jackup legs); he said they have another diver survey scheduled at KLU 2 location that could be moved up to this weekend (asked him keep us updated with results). Attached is the email response I sent to Mr. Durham in response to questions about continuing rig activities and AOGCC requirements before commencing drilling. Jim Regg AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 1 Regg, James B (DOA) From: Regg, James B (DOA) ` �/ if, v Sent: Friday, August 31, 2012 7:19 PM �/ To: DDurham@Spartanoffshore.com Cc: Schwartz, Guy L (DOA); DOA AOGCC Prudhoe Bay; Bob Laule Subject: RE: Spartan Rig 151 Mr. Durham— Thank you for your call earlier and discussion of the vibration concerns. It is evident that Spartan and Furie are putting effort into resolving the motion in the 30" drive pipe and diverter system. As I told both Furie representatives Bob Laule/James Pritchard and you during separate phone conversations this afternoon, AOGCC will perform the required diverter system inspection and witness the function test once that equipment is secured and stable. Passing an equipment inspection and system function test is required before drilling operations may commence on Kitchen Lights #2. Contact me when you are ready for an AOGCC Inspector to revisit the rig. Regarding the rig operations, the decision to continue efforts to eliminate the drive pipe and diverter system vibrations, and if necessary, the rig vibrations from the incoming/outgoing current loads is at the discretion of Furie and Spartan. Personnel safety should take priority over all considerations. Jim Regg AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 From: DDurham@Spartanoffshore.com [mailto:DDurham©Spartanoffshore.com] Sent: Friday, August 31, 2012 6:10 PM To: Regg, James B (DOA) Subject: Spartan Rig 151 Mr. Regg, As per our conversation earlier regarding Spartan Rig 151's 30" diverter, if we can stabilize the 30" diverter from any movement and making sure it's safe to operate,would we be granted continuation of well activity? We did have Zentech design some padeyes which would withstand 50kips per padeyes,4 padeyes placed on the cantilever which should take the movement out of the 30". This is something that we're looking at to have done in order to proceed with well activity. Thank you, Donnie Durham Operations Manager Spartan Offshore Drilling, LLC. 1-504-432-8588 ddurham@spartanoffshore.com 1 Page 1 of/2/1 s • Schwartz, Guy L (DOA) From: b.Iaule@furiepetroleum.com Sent: Wednesday, August 22, 2012 11:06 AM pTD Ziz To: Schwartz, Guy L (DOA) Cc: Ed Ferguson; Leslie Smith Subject: Re: Furie Operating Alaska LLC KLU#2 21-1/4" BOP Attachments: 15 BOP scematic.pdf Guy Yes we have located the additional 21-1/4" 10M single gate with pipe rams.Attached is the revised BOP diagram to up date the Drilling Permit.Thanks Bob Laule From:Guy Schwartz<guy.schwartz@alaska.gov> Date:Wednesday,August 22, 2012 9:27 AM To:Admin<b.laule@furiepetroleum.com> Cc: Ed Ferguson<ed.ferguson70@gmail.com>, "d. kade" <d.kade@furiepetroleum.com>,Jerry Cloud <j.cloud@furiepetroleum.com>,Jim Regg<jim.regg@alaska.gov> Subject: RE: Furie Operating Alaska LLC KLU#2 21-1/4" BOP Bob, As per our conversation this morning you are correct, a 4 Ram stack is required for>3000 psi MASP. I missed that in the review. Thanks for bringing that to my attention. It sounds like you have located a ram body already for the 10M 21 124" stack. Please forward me the new 21 124" 10M BOP schematic and I will up date the well file. In regards to a possible DST of KLU #2 later in the drilling program a sundry will be required for approval by the Commission. Regards, Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From:b.laule@furiepetroleum.com [mailto:b.Iaule@furiepetroleum.com] Sent: Tuesday, August 21, 2012 3:32 PM To: Schwartz, Guy L (DOA) Cc: Ed Ferguson; d. kade; Jerry Cloud Subject: Furie Operating Alaska LLC KLU#2 21-1/4" BOP Guy While reviewing all the changes to the KLU#2 plan and permit which were the result of the desire to set the 13-3/8 casing at 9000' and consequently resulting in increasing the 13-3/8 casing MASP to 3780 psi, I noticed that the 21-1/4 10M BOP as approved is a three preventer configuration. Per 20 ACC 25.035 for an operation with a max potential surface pressure greater than 3000 psi the BOP require 4 preventers. I wanted to bring this forward as a discussion point rather than it being a potential show stopper upon field inspection. Please advise if we can proceed as approved or if remedial measures need to be made as time is of the essence. Thanks for your attention to this matter. Bob Laule. 8/22/2012 Furie Operating Alaska LLC KLU #2 16 21 -VI,(-Kim BOP Diagram (7i 21 1/4" 2M Annular 21 1/4" 10M Double Gate Pipe Rams Blind Rams • 3" 10M 3" 10M III 3" 10M 3" 10M HRC Kill Side Choke Side 21 1/4" 10M Pipe Rams 17 STME 11 [FI ALPARNELL,GOVERNOR ALASKA OIL AND GAS333 W.7th AVENUE,SUITE 100 CONSERVATION COMMISSIONANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 Bob Laule FAX (907)276-7542 Drilling Engineer Furie Operating Alaska, LLC 1029 W. 3rd Avenue, Suite 500 Anchorage, AK 99501 Re: Exploratory Field, Exploratory Pool, KLU #2 Furie Operating Alaska, LLC Permit No: 212-079 Surface Location: 1521.3' FNL, 2802.6' FWL, SEC. 35, T1ON, R11W, SM Bottomhole Location: 1521.3' FNL, 2802.6' FWL, SEC. 35, T1ON, R11W, SM Dear Mr. Laule: Enclosed is the approved application for permit to drill the above referenced exploration well. Conditions of Approval: 1. Pursuant to 20 AAC 25.035(h)(2), a 12" diverter vent line is approved. 2. 10,000 psi rated 21-1/4" BOPE must be pressure tested to 4000 psi and 2000 psi rated 21-1/4" annular must be tested to 1500 psi. 3. 10,000 psi rated 13-5/8" BOPE must be pressure tested to 7500 psi and 5000 psi rated 13-5/8" annular must be tested to 3500 psi. 4. All casing and liner pressure tests must be maintained for 30 minutes time duration. 5. Approved form 10-403 required for well completion, suspension or abandonment. All dry ditch sample sets submitted to the Commission must be in no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. This permit to drill does not exempt you from obtaining additional permits or approvals required by law from other governmental agencies, and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. A weekly status report is required from the time the well is spudded until it is suspended or plugged and abandoned. The report should be a generalized synopsis of the week's activities and is exclusively for the Commission's internal use. Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless the Commission specifically authorizes a variance. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative Code, or a Commission order, or the terms and conditions of this permit may result in the revocation or suspension of the permit. Sincerely, Cathy/Foerster y Chair DATED this/tday of August, 2012. cc: Department of Fish & Game, Habitat Section w/o encl. (via e-mail) Department of Environmental Conservation w/o encl. (via e-mail) Page 1 of 3 Schwartz, Guy L (DOA) From: Ed Ferguson [ed.ferguson70@gmail.com] Sent: Saturday, August 11, 2012 4:34 AM To: Schwartz, Guy L (DOA) Cc: 'Jerry Cloud-aol'; J.CLOUD@FURIEPETROLEUM.COM; tncosenza@aol.com; Tony Cosenza; james pritchard; James Pritchard; b.laule@furiepetroleum.com; 'Bob Laule'; spartan- rig@furiepetroleum.com; Keith Freeny; kmattconsulting@aol.com Subject: RE: FOA KITCHEN LIGHTS UNIT#2 PERMIT TO DRILL Attachments: FOA KLU2 DRLG PROCED 072612.doc � q Guy, � Z Z'07 / I think I have corrected all of the items listed below in the drilling procedure. On the standard procedure the rig utilizes when a drilling kick is detected, see the following: 1. If the rig driller detects that the well is flowing by a pit gain or increase in flow show, the driller will pull the string up until the tool joint clears the annular preventer& makes sure that there is not a tool joint across the pipe rams. 2. The driller will check to see if there is flow using the trip tank. 3. The driller will close the annular preventer(preferably the drill string can be slowly reciprocated while the "kick" is being circulated out. If the casing pressure approaches the test pressure (within 500-800 psi) of the annular preventer,then the pipe rams will be closed and secured. The choke& kill lines will be checked for any leaks. 4. The driller will then notify the Rig OIM and Well Site Supervisor. 5. Record the Shut-In Drill Pipe Pressure (SIDPP) and the Shut-In Casing Pressure (SICP). Make sure that there is no trapped pressure on the drill string. 6. Depending on the characteristics of the well, the Wait&Weight procedure (preferable to lessen the stress on the well bore, but there may be extenuating circumstances that may require the Driller's Method)or the Driller's Method procedure will be utilized as directed by the Drilling Superintendent. Thanks for your time and consideration. Please let me know if there are any other topics to discuss. Ed M. Ferguson Drilling Engineer representing Furie Operating of Alaska, LLC 936.394.5009 (0) 713.254.8333 (M) From: Schwartz, Guy L (DOA) [mailto:guy.schwartz@alaska.gov] Sent: Thursday, August 09, 2012 5:51 PM To: Ed Ferguson Cc: Davies, Stephen F (DOA) Subject: RE: FOA KITCHEN LIGHTS UNIT #2 PERMIT TO DRILL Ed, I am reviewing the PTD now ... a couple of comments. BOP testing as follows : 21 1/." BOP=4000 psi Annular= 1500 psi 8/14/2012 Page 2 of 3 13 5/8" BOP= 7500 psi Annular= 3500 psi 1)What is the rationale for testing the 13 3/8"casing to only 1000 psi before drilling out? Is MLS system weak link? 2500 psi is more in line with usual practice 2) In your procedure you had a test pressure for the 13 3/8" casing rams at only 2000 psi. This should be 4000 psi ( BOP required test pressure for the 21 1/4" stack) 3)The 13 5/8" BOP test pressure will be 7500 psi (3500 psi for the Annular) based on your provided MASP calculations. Your procedure states 6500 psi. 4) Can you provide the standard procedure the rig uses when a drilling kick is detected .... Regards, Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Ed Ferguson fmailto:ed.ferguson70@gmail.com1 Sent: Wednesday, August 08, 2012 8:48 AM To: Schwartz, Guy L (DOA) Subject: RE: FOA KITCHEN LIGHTS UNIT #2 PERMIT TO DRILL Am revising currently,will forward to you this afternoon. Ed From: Schwartz, Guy L (DOA)fmailto:quy.schwartz@alaska.govl Sent: Wednesday,August 08, 2012 11:47 AM To: Ed Ferguson Subject: RE: FOA KITCHEN LIGHTS UNIT #2 PERMIT TO DRILL Glad you could find the BOP on short notice.. will look for the revised PTD. Bob gave me the detailed rig procedure for KLU#2 (Draft copy) for my review a while back ... since there were so many changes I would like to see the updated rig procedure too. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Ed Ferguson fmailto:ed.ferguson70Cahgmail.com1 Sent: Wednesday, August 08, 2012 6:54 AM To: Schwartz, Guy L(DOA) Cc: Damon Kade; David Elder; Tom Hord; 'Jerry Cloud-aol'; tncosenza@aol.com;james pritchard; spartan- rig@furiepetroleum.com; Keith Freeny; b.laule@furiepetroleum.com; I.smith@furiepetroleum.com; Bruce Webb; b.webb@furiepetroleum.com Subject: FOA KITCHEN LIGHTS UNIT#2 PERMIT TO DRILL Guy, 8/14/2012 Page 3 of 3 A 21%" 10M#WP double ram BOP has been located. I have revised the Permit to Drill,the office manager in Anchorage is putting this all together and will deliver to you first thing this morning. The MASP at 9000' is 3780 psi -› thus the 21 1A" 10M#WP BOP's (could not locate a 5M#WP BOP). The LOT at the 13 3/8" casing seat is expected to be 13.2 ppg or greater. • ARCO SCI #3 had a 13.2 ppg at 9031' in 1993. • On the KLU 1 in 2011, the LOT at 1805' was 13.8 ppg EMW, but in 2012,the LOT was 12.8 ppg EMW(on the side track,the well bore had been drilled away from the cement plugs into the formation). The maximum anticipated mud weight at 13200' is 11.8-12.2#MW as the ARCO SCI#3 had 11.8 ppg MW at 13000' and 12.2 ppg MW at 13462'. If additional information is necessary, please let me know. Ed M. Ferguson Drilling Engineer representing Furie Operating of Alaska 936.394.5009 (0) 713.254.8333 (M) From: Schwartz, Guy L(DOA) f mailto:quy.schwartz(aalaska.govl Sent: Monday, August 06, 2012 6:28 PM To: Ed Ferguson; Bob and Marie Laule Subject: P &A KLU#1 Here is a scan with my comments. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) 8/14/2012 FURIE Operating Alaska LLC RECEIVED AUG 08 2012 Furie Operating Alaska,LLC 1029 West 3'1 Ave, Suite 500 AOGCC Anchorage,Alaska 99501 August 8, 2012 RE: Kitchen Lights Unit, Confidential Data REVISED (1) PERMIT TO DRILL KLU#2 Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue,Suite 100 Anchorage, AK 99501 Gentlemen, Enclosed is the REVISED(1) 10-401 request for a permit to drill for well KLU#2. Furie Operating Alaska, LLC requests that this data be held confidential, as marked on the attached, in accordance with AS 31.05.035 and 20 AAC 25.537. Please signify that you have received and accepted this data by signing in the space below and returning this letter to me at the Anchorage address above or by fax to me at 907-277-3796. If you have questions, please feel free to contact me at 907-277-3726. Sincerely,ely 2 1/-el Bob Laule Furie Operating Alaska, LLC RECEIVED AND ACCEPTED ABOVE DATA This 8th day of August, 2012. BY: TITLE: 1029 W. 3`d Avenue,Suite 500 I Anchorage,Alaska 199501 I Office 907-277-3726 Furie Operating Alaska, LLC 1029 W 3RD AVENUE, SUITE 500 Anchorage, AK 99501 August 8, 2012 Alaska Oil & Gas Conservation Commission 333 W. 7' Ave. , Ste. 100 Anchorage, Alaska 99501 Re: REVISED(1) : Application for Permit to Drill Well: Kitchen Lights Unit #2 TO WHOM IT MAY CONCERN: Furie Operating Alaska, LLC hereby applies for a Permit to Drill an offshore exploration well within its Kitchen Lights Unit in the Cook Inlet. Furie is also requesting a waiver from 20 AAC 25.061(a) for a seismic evaluation for the KLU#2 well site. The waiver request is based on using ARCO's South Cook Inlet #3 seismic data, for Furie's Kitchen Lights Unit Well #2 and presented in the Shallow Gas Hazard Evaluation submitted under separate cover. Additionally, a waiver to 20 AAC 25.035(c) (1) (A) requiring a 16" diverter line is requested. Furie will drill a surface pilot hole with a 12.25" assembly and open the hole to 26". Furie is requesting permission to use a 12" diverter for drilling the pilot hole. The proposed justifications include: 1) the Shallow Gas Survey submitted 5-24-12 under separate cover, with revised surface location submitted 7-24-12, revealing no significant shallow anomalies. 2) past practices in the Inlet of using a 12" diverter on a 12.25 pilot hole 3) no shallow gas issues associated with either offset wells KLU#1, Shell SRS 1 or 2, and Arco South Cook Inlet #3 4) the facility constraints of the rig layout. The Kitchen Lights Unit Well #2 ("KLU#2") will be drilled from the jack up rig Spartan 151. Well KLU#2 is anticipated to be spud August 11th, 2012. If the well log results are encouraging, the well will be suspended with mud- line suspension equipment pending preparation of a long-term development plan. Attached please find the following information required by 20 AAC 25.005 for your review. 1) Form 10-401 Application for Permit to Drill 2) Well Prognosis a. Anticipated Formation Tops b. MASP while drilling 9000' with 21-1/4" 1OM BOP & to 13, 200' with 13-5/8" 10M BOP c. Drilling Hazards e. Drilling Fluid Summary f. Survey Summary g. Logging h. Mud Logging i. Casing summary j . Cementing Summary 3) Plat showing the surface location 4) Well bore Diagram 5) Drilling Program Summary 6) Depth Days Plot 7) Geo Mechanical Plot 8) Projected Disposal Volumes 9) Casing Design Information 10) FIT Procedure 11) Diagrams a. 29-1/2" 500 psi diverter with 12" diverter line. b. 21-1/4" 10M BOP diagram c. 13-5/8" 10M BOP diagram d. 15M Choke manifold diagram e. Pit diagram f. Shaker tank diagram g. Well head system diagram h. Mud Line System diagram 12) Shallow Gas Hazard Evaluation by Watson May 2012 with revised surface location submitted 07-24-2012 under separate cover. If you have any questions or require further information please contact Furie Drilling Engineer, Bob Laule, at (907) 277-3726 (Furie Operating Alaska, Anchorage office) . Sincerely, Bob Laule Drilling Engineer Furie Operating Alaska, LLC Permit to Drill Kitchen Lights Unit Well #2 Table of Contents Description Page Permit To Drill 1 Well Prognosis 2 Surface Plat 6 Well Bore Diagram 7 Drilling Program Summary 8 Depth/Days Plot 10 Geo-Mechanical Plot 11 Mud and Cuttings Discharge Table 12 Casing Design Factors 13 Formation Integrity Test Procedure 15 29.5 " Diverter Diagram 16 21-1/4" 10M BOP Diagram 17 13-5/8" 10M BOP Diagram 18 15M Choke Manifold 19 Mud Pit Capacity Chart 20 Shaker Tank Volume 21 Well Head Diagram 22 Mud Line System Diagram 23 RE1: 8/8/12 , STATE OF ALASKA ASKA OIL AND GAS CONSERVATION COMMISSION PERMIT TO DRILL 20 AAC 25.005 Ila Type of Work: lb Proposed Well Class: Development-Oil Service-WnJ Single Zone lc Specify H well is proposed for. X Redrill Stratigraphlc Test Development-Gas Service-Supply Multiple Zone Coalbed Gas Gas Hydrates reentry _ Exploratory X Service-WAG Service-Disp Shale Gas 2 Operator Name' 5. Bond: Blanket Single Well 11 Well Name and Number: Furie Operating Alaska LLC Bond No 402-081 KLU02 3.Address: 1029 W 3rd Ave Suite 500 6.Proposed Dere+ 12.Field/Pool(s): Anchorage,Ak 99501 MD: ,3wrTVD.Thaab1 Exploration 4a Location of Well(Governmental Sectiony 7 Property Designation(Lease Number)* Surface: 1521 3'FNL,2802.8'FW.,SEC 35,T10N,R11 W,SM ADL 369196 Top of Productive Horizon: 8.Land Use Permit' 13 Approximate Spud Date: 1521 3'FNL,2802.8'PM.,SEC 35,T10N,R11 W,,SM NA qt(f 12 Total Depth. 9.Acres In Property' 14 Distance to Nearest Property 1521.3'FNL,2802.6'FWL,SEC 35,T10N,R 11 W,SM Lease=2560 Acres,unit=83,394 Acres one mile+ 4b.Location of Well(State Base Plane Coordinates-NAD V): 10.KB Elevation above MSL' 219' feet 15.Distance to Nearest Well Open Surface. x- 290840.19E y- 2529041.92N Zone 4 GL Elevation above MSL. feet 3,001 1' 18.Deviated wells: na Ksdca8 depth.no feet 17.Maximum Anticipated Pressures in pig(see .g11i}. "79Q z,C....rs4eteN0i h Maximum Hole Angle. Vertical degrees Downhole: 8,374 psi Surface' 7,054 psi 18 Casing Program: Spealtcations Top-Setting Depth-Bottom `i Cement QueMmy,c f.or sacks "OCL Hole Casing Weight Grade Coupling Length MD TVD MD TVD (including stage data) 30" 1.5"wail X52 Dull Chip H9OD 400 0' 0' 400' 400' Driven 26" 20" 1088 J55 BT&C 1000 0' a 1000 1000 28" 20" 1330 J55 BT&C 200 1000 1000 1200 1200 28" 20" 1880 X56 BT&C 700 1200 1200 1900 1900 4,481 cult 12 5 ppg lead,611 cult sks 15.6 ppg tail 17 5" 13.375" 720 N-80 HC BT&C 9,000 0 0 9,000' 9,000' 7,755 cult 12 5 ppg lead 3,1,283 cult 15.8 tall 12 25" 9 875" 62 80 0-125 Hydril 523 9,360' 0 0 9,360' 9,360' 12 25" 9 875" 82.60 0-125 ANJO 4,000 9,360' 9,380 13,360' 13,360' 1,725 cult 13.5 ppg lead 8 232 curt 15.8ppg tail 19, PRESENT WELL CONDITION SUMMARY(To be completed for Redriil and Re-Entry Operations) Total Depth MD(It): Total Depth TVD(ft): Plugs(measured): Effect.Depth MD(It): Effect Depth TVD(ft): Junk(measured)" Cuing Length Size Cement Volume MD TVD Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD(6): Perforation Depth TVD(IV 20.Attazhnents: Property Plat X BOP Sketch 1(Dining Program v.. Time v Depth Plot X Shallow Hazard Analysis )(Diverter Sketch Seabed Report '(Drilling Fluid Program 20 AAC 25.050 requirements 21 Verbal Approval' Commission Representative' Date 22 I hereby certify that the foregoing Is true and correct. �7 /� Contact Printed Name O , Tide ,f).lJ/( ( C�h Signature f Phone ?t97 277 37 2 C Date 7-7o 'l 2 Commission Use Only Permit to Drill API Number: �7 Permit Approval See cover letter for other PP Number 2 1 Z(0 7 1 50- /33-2 0(O O3-CO Date' -g ((1l requirements. - Conditions of approval: If box is checked,well may not be used toe..ore for,test,or produce coalbed methane,gas hydrates,or gas contained I shales: Other. pe, C It_•� ) A f�C Samples .' No Mud log need No� /'C T'T� ,'i ` 4 N 5 Am. ; r H,S measures Yes No Directional ivy req'd:Yes �O+Z rr Q+`r --pr.-4,,,x—!/� -/ — a'CL /G e. ' 9-44,......,/-1--___ APPROVED BY THE COMMISSION DATE: l / ,COMMISSIONER a/)/ * _Lot c trot 4,. SKr✓•7 R� 0 ORIGINAL RECEIVED AUG 082012 n AOGCC Well Prognosis: Kitchen Lights Unit Well #2 (KLU#2) is an exploration well proposed by Furie Operating Alaska LLC. The planned objective is to drill a well to explore for oil and gas in its Kitchen Lights Unit Prospect located in the Cook Inlet, Alaska. Using the offshore jack-up vessel, Spartan 151, the proposed well KLU#2 will be a vertical well drilled to approximately 13,200 ft. penetrating the Sterling, Beluga,& Tyonek for gas and the Sunfish. This well is an offset to the KLU#1 and Shell SRS State#1 . South Cook Inlet#3. Surface Location: 1521.6 FNL& 2807.6 FWL Sec 35, T10N,R11W, SW Bottom Location: Same (vertical hole) Planned TD 13,200'. a.) Formation Depths: Geological Data: From Shell SRS State #1& KLU#1 Formation Formation Tops (TVD RT) Potential Sterling 2,743 Gas Beluga 4,664 Gas Tyonek 8,999 Gas Sunfish 13,272 Oil �t 7*v Property Lease: ADL 389198 Furie has 100% ownership n Iasi) 3 /Si V b.) Maximum anticipated surface pressure: 94-57> g.,as' - Max BH Pressure is based on offset data from Arco South Cook Inlet#3: AAAs-f) MASP using the Energy Conservation Board Alternative Design Method. (10 ppg)(9000)(0.052)-(0.1)(9000) = 3780 psi (12.2 ppg * .052 * 13200)-.1*13200= 7,054 psi c.) Potential Drilling Hazards: Review of the most recent experience drilling the 12-1/4" hole for the KLU#1 thru the depth of 12,800' ( current as of 6-8-12) is coal sloughing has been experienced causing stuck pipe incident at 10,248', 10,570' & 10,625'. Back reaming,washing and reaming have successfully cleaned hole. A mud weight increase of.2 ppg was added but with no obvious benefit. "A review of the drilling records for the nearest offset wells:" Shell SRS State #1 identified a fluid loss of 580 bbl fluid at 625' no remedial action was taken, a gas influx at 6,260' requiring a bump in MW from 10.5 ppg— 10.7 ppg. Fluid losses were seen in the interval from 7,243' to 8,941'. The 2 loss volumes varied from 75 bbl to 200 bbl and assumed to be self healing as there were no reports of use of LCM. Additional gas cut mud was encountered at 13,370' which required a bump in mud wt from 11.0 ppg to 11.4 ppg. At 13,814' again had gas cut mud and bumped wt to 12.2 ppg. After setting 7" casing at 13341', the well was drilled and cored to 13,859' with a final mud weight of 16.0 ppg. During the subsequent reentry the well was drilled to 16,375' with16.7 ppg without incident. Although no mud density was noted in the summary well records, the Schlumberger DIL log dated 5-28-65 reports a mud weight of 16.7 ppg. Shell SRS State #2 was drilled to 15,403'. Gas cut mud was encountered at 14,386' requiring increasing the mud weight from 11.4 ppg to 12.0 ppg and again at 14,988' where the mud weight was raised from 14.9 ppg to 15.9 ppg. One stuck pipe incident occurred at 15,094'. The pipe was successfully worked free. Arco South Cook Inlet #2 was drilled to 15,059' without incident. While drilling to TD at 15,189' gas cut mud required weighting up mud in stages to 15.4 ppg. While attempting to log the well from TD, it began flowing which required the well to be kill with15.8 ppg. The 15.8 ppg was maintained during the successful running and cementing of the 7" casing. Arco South Cook Inlet #3 was drilled to 13,000' without incident. Sloughing coal at 13,000' required a bump in mud weight from 11.6 ppg to 12.0 ppg. A planned wt increase to 14.8 ppg was made at 13,875' in preparation for drilling the West Forelands formation. A 7" liner was successfully ran and cemented in 14.9 ppg mud to 14,320'. The well was drilled to 15,643' with 16.7 ppg. At 15,643' the mud weight was reduced to 16.5 ppg due to mud loss to the formation for a total of 241 bbls. A 45 bbl LCM pill was spotted. Post BOP testing the well was drilled ahead to TD at 16,000' without problems. The 16.5 ppg was maintained during the running and cementing of the 5" casing. There are no indications that any of the offsetting wells encountered any detectable levels of hydrogen sulfide. KLU#1's geological strata are the same as those of Shell SRS#1 and its reentry. H2S is not expected to be encountered in this well. However, the rig and mud logging unit will have functioning H2S detectors. In conclusion, a review of the drilling operations on the offset wells didn't identify any abnormal hazards that any prudent operator couldn't manage with accepted standard drilling practices. e.) Drilling Fluid Summary: Conductor Hole 26"to 1,900' Gel Spud Mud 9.3 ppg. 17.5" surface hole to 9,000' (KCL water base polymer) 10.0 ppg 12.25"intermediate/production hole to 13,200' (KCL water base polymer) building 11.8 ppg to 12.2 ppg 3 f.) Survey Program: This is a vertical hole. Surveys of inclination will be made every 500' in compliance with regulation 20 ACC25.050. g.) Logging Program: 26" Surface Hole LWD GR/Resistivity 12.25" pilot hole. 17.5" Conductor Hole LWD GR/Resistivity/Neutron Density Sonic in 12.25" pilot hole 12.25" Intermediate/Production LWD GR/Resistivity/Neutron Density/Sonic; E Line based on LWD results. h.) Mud Logging: Two surface loggers alternately on duty A complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; i) Planned Casing Program for KLU#2 30" 20" 20" 20" 13-3/8" 9-7/8" 9-7/8" 1000'- 1200'- Depth 400' 1000' 1200' 1900' 9,000' 9,360 9,360-13,360' Hole Size Driven 26" 26" 26" 17-1/2" 12-1/4" 12-1/4" Weight ppf 1.5" wall 106.5# 133# 169# 72# 62.8# 62.8# Grade X52 K-55 K-55 X-56 HC N-80 Q-125 Q-125 HYD Connection Dril Quip BT&C S BT&C BT&C BT&C 523 ANJO j.) Cementing Summary: 30" 1.5" wall (27" ID) Drive pipe Driven to 400' no cement 20" 106.5#/ft, 20" 133#/ft by 20" 169#from ML suspension rig to set - depth at 1,900' cement to ML(26"OH) ML- 218' 12.0 ppg Yield 2.3 cf/sk Volume calculation 400' X 1.7944 cf/ft with 0% excess = 717.8 cf 4 600'X 1.5053 cf/ft with 100%excess = 1,806 .2 cf 200'X 1.5053 cf/ft with 100%excess = 602.1 cf 450'X 1.5053 cf/ft with 100%excess = 1,354.8 cf 268'X 1.5053 cf/ft with 33% excess = 537.5 cf 40' X 1.84 cf/ft with 0% excess = 73.6 cf shoe joint Total = 5,092.3cf=908 bbl Lead Slurry 4,481 cu-ft 12.5 ppg, yield 2.11 cf/sk 212.1 sks Tail Slurry 611 cu-ft 15.8 ppg,yield 1.15 cf/sk c3( sks 13-3/8" 72#/ft (12.347") set at 9000' cement to 1500' (17.5"OH) Volume calculation 418'X .8660 cb/ft with 0%excess = 362.0 cf 6082'X .6946 cf/ft with 75%excess =2,7393.4 cf 1000'X .6946 cf/ft with 75%excess = 1216.0 cf 80' X .815 cf/ft with 0% excess = 66.5 cf shoe joint Total = 9037.9 cf= 1611 bbl Lead Slurry 7755 cu-ft 12.5 ppg,yield 2.46 cf/sk !C-2" sks Tail Slurry 1283 cu-ft 15.8 ppg,yield 1.15 cf/sk (I!S YLs 9-7/8"62.8#/ft set at 13,200'top of cement @ 8,200' Volume calculation 800 X .2996 cf/ft with 0% excess=239.7 cf 3702'X .2866 cf/ft with 40% excess= 1485.6 cf 498' X .2866 cf/ft with 40% excess = 199.8 cf 80' X .3996 cf/ft with 0% excess = 32.0 cf shoe joint Total = 1,957.0 cf=349 bbl Lead Slurry 1,725cu-ft 13.5 ppg,yield 1.85 cf/sk 411 L Tail Slurry 232 cu-ft 15.8 ppg, yield 1.16 cf/s 2,00 k.) Well Control Equipment: 29-1/2" 500 psi Diverter 21-1/4" 24annular&21-1/4" 10M BOP 13-5/8"5M annular& 10 M BOP 15" M Choke manifold 5 Kitchen Lights Unit #2 Offshore, Cook Inlet Alaska 17 16 15 14 13 18 17 ADL 389197 ADL 389196 Furie Operatirg Alaska, LLC Furie Operating Alaska, LLC 20 21 22 23 24 19 20 ''''" Shell SRS State#1 '�'� 1 ..........7...........T..................... Fuire KLU #1 29 28 27 26 25 30 29 Kitchen Lights Unit #2 /** ADL 389198 ADL 389515 32 33 34 35 36 31 32 Furie Operating Alaska, LLC Furie Operating Alaska, LLC T. 10 N., R. 11 )111., S.M. O Arco SCI #3 T. 10 N., R. 10 W. T. 19 N., R. 11 N., S.M. T. 09 N., Fi. 10 W. 5 4 3 2 1 6 5 Stell SRS State#2® 8 9 10 1112 7 8 ADL 389924 ADL 3895 ADL 389923 Furie Operating Alaska Furie Operating Alas a, LLC Furie Operating Alaska, LLC 17 16 15 14 13 18 17 Kitchen Lights Unit #2 TVD = 15,992 /MD = 15,992 Township 10 N., Range 11 W., Seward Meridian Section 35: 1521.6' FNL and 2807.6' FWL 60° 55' 1.785" N, 151° 10' 31.094" W NAD 27 State Base Plane Coordinates, Zone 4 X: 290840.19 / Y:2529041.92 0 0.5 1 2 (19, . .T� Miles KLU #2 Casing/Cementing Forecast 4*+*++«* +*+*** ♦*4*4v +*f*+*4� ♦*+++*+* +*+*+*+* ♦«4«+«4� +++«+«+• «,«;., *t«:« 400'30" Drive pipe 1.5"wall «,«;«, ::::* Lead 4481 cu-ft 12.5 ppg «;«;«;•, • •••+•* Tail 611 cu-ft 15.8 ppg - :: 1500'Top of Cement mw=9.3 ppg -: : -::-: Shoe 1700'SS 1900'RKB 11.5#FIT ::=:'�«*«*«*: >X4 `_- 1000'20" 106#/ft K-55 BT&C i*i+. ••**4*+*4 ««««««; ;444«« 200'20" 133#/ft X-56 BT&C ....,•+•++.,: ««M+ 700'20" 169#/ft X-56 BT&C +,++ •.444 *4+*+*4 4+,4+ 2,743 RKB'Top of Sterling 44+4f}+ 4}±y++} ++i+ t$.::;« *•+ Lead 7755 cu-ft 12.Sppg -_:-_: =- Tail 1283 cu-ft 15.8 ppg **'+ •+4+* ----- Top Cement 8200' _- ;T.*++ l***+.): _=- 4664'RKB Top of Beluga _ - ** + Y+****+t•-_===- 8999'RKB Top of Tyonek :-:-:-:-.1:4:4** Y*f*4*4t __ 4 Y*f .: _ _ - 1:++0+* Y4Q4+r_ _ __ _ +++* ++++ Y++f. __ mw=9.8-10.0 ppg _- _:::;:««««« « :-:::- 9000'13-3/8"72#/ft N-80HC BT&C +++* Yf r+ 9000'Shoe depth 13.2#LOT ++f*+*4 I"4“..;:..* *+ i*+*+*4 +*+«++ Y«+«+«+« *+*4 4* Y+*+*f i *i i*+* K.,.:44. ::::::« e.:+:,:•'+' «*«++ K.4.4.*4«4«+«} ..t......:,.: *++ *+ 0140 =: Lead 1,725 cu-ft 13.Sppg _:- Tail 232 cu-ft 15.8 ppg - -= 9,360'9-7/8"62.8#/ft 0125 Hydril 523 mw=12.2 12.3 ppg -_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-....- 13,200' = :: _ :___-.:- 13,200'9-7/8"62.8#/ft 0125 ANJ0 13,200' shoe depth 7/24/12 Page 7 Drilling Program Summary for Kitchen Light Unit Well#2 MIRU Move Spartan 151 from KLU#1 to location. Jump divers inspect cans. Take on preload and inspect cans. Cantilever out rig. Install 30" Conductor RU to drive 30"conductor. Drive 30" drive pipe to locate mud line hanger at 50' below mud line. Report final blows at 100 blows/ft. RD hammer. Install 29.5" 500 psi Diverter RU and install 29.5" diverter with two 12" divert lines. Notify AOGCC 24 hour in advance of the diverter function test. Function test diverter. Drill 26" Hole Drill & survey 12-1/4" pilot hole to 1,900'RKB. Circulate and condition hole. Flow check well. POH. Pump and spot pill. Flow check well. POH. Open 12 'A" hole to 26" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. Run 20"Conductor RU and run per casing per program. RIH with 20" casing, landing ring and running tool and land 20" casing on the mudline hanger. Condition Mud. Cement 20" Casing Run in annulus with two grout string. RU to simultaneously circulate annulus while displacing cement. Mix and pump cement per program . Displace with mud. Bump plug . Check floats. Open wash ports in the MLH and flush 30" X 20" annulus and spot cement contaminate pill. Close wash ports and squeeze pill. ND 29.5" Diverter ND 29.5" diverter. Monitor 30" X 20" annulus. Prep and cut 30" drive pipe and lay down same. Cut off 20" casing. Install 20" weld-on starting head. Pre- and post-heat treat and test weld with N2 per manufactures recommendation. 3c)f • NU 21-1/4" Annular with 21-1/4" 10M BOP fd`" r Notify AOGCC 24 hour in advance of the BOP test. RU and install 21-1/4" BOP and test to the required working pressure outlined in Permit to Drill. MU Drilling BHA. MU 17-34" bit and drilling BHA RIH and drill out cement to FC.Test casing t 000 ps. RIH drill out shoe and 20' (not to exceed 50')of formation. Perform FIT to 11.5 ppg POH. RIH drill, LWD log, & survey 12-1/4" pilot hole to 9,000'. Circulate and condition hole. Flow check well. POH. Open 12-1/4" hole to 17-1/2" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. 8 Run 13-3/8"Casing Install and test 13-3/8" pipe rams. RU and run 13-3/8" casing, casing hanger, running tool and landing joints . Run and land 13-3/8" casing on the mudline hanger. Break circulation and condition mud. Cement 13-3/8"Casing Conduct PJSM for cement job. Mix and pump cement per cementing program. Displace with mud. Bump plug. Check floats. Open wash ports in the MLH and flush 20"X 13-3/8" annulus. Close wash ports and test 13-3/8"casing topsi. PT annulus to 290 psi. ND 20.75" BOP PU 20.75" BOP. Monitor annuli. Pull 13-3/8" in tension and set slips. Cut and dress 13-3/8" casing stub. ND BOP. NU intermediate head,21 %" 5M#WP X 13 5/8"10M#WP. Test packoff. NU BOP Notify AOGCC 24 hour in advance of BOP Testing NU 10,000 psi BOP.Test BOP in accordance with pressure requirements identified on the Permit to Drill. -14#4. an e. 7Soo e 3s01) y s '„' Drill Intermediate Hole MU 12.25”drilling BHA . RIH and drill out cement to FC. Test casing to 3,500 psi. Drill out shoe and 20' (not to exceed 50') of formation. Perform LOT. Drill LWD log and survey to TD @ approx 13,200'. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Drop Totco check shot survey. Flow check well. POH. RUN 9-7/8"Casing (-. /9°1°5: Install and test 9-7/8" rams. RU and run 9-7/8" casing, casing hanger, running tool and landing joints. Run and land 9-7/8" casing on the mudline hanger. Condition Mud. Cement 9-7/8"Casing Conduct PJSM for cement job. Mix and pump lead cement followed with tail cement per cementing program. Displace with mud. Bump plug. Open wash ports in the MLH and flush 13-3/8" X 9-5/8" annulus. Close wash ports and test 9 7/8" casing to 6,250 psi. PT annulus to 1500 psi. Suspend Well Notify AOGCC 24 hours in advance of abandonment's to allow for witnessing. .' v �wPc, Abandonment's of the surface casing will be completed with kill weight fluid in the abandoned 6,1, casing, annuli cemented and a combination of cement and mechanical plug in the casing in accordance with the state regulation. Release rig and tow to winter warm stack location. •`l'lv 9 FURIE OPERATING ALASKA, LLC KITCHEN LIGHTS UNIT#2 2012 0DEPTH VS DAYS DAYS 11 '''''''11811111111"I �1 1111111191 1110111111 --11 n Ir' •"1:41,-. 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III 1111 , 111 I_ 1 111 II 1 1 1 1 11 _ 1 1 11 ..i--,r . 1 I1I 1 Inaltight.,:.411.N.-1 1!!11C '11 1!. ' I I ■ I 11!. . 1 0 it 1IIi�i1 1 ::. J.- r 1 1 /! .. 111//1::1 IIht17000 rrnn nrrrru irrror 1 ono rrrn 1 rri nr ■ i . 11•111111,1M.0 I II urr 11 ■ 1 DAYS 7FOA 2012 KLU 2 DVD CURVES 072912RBL.xls 7/29/2012 ID Geo Mechanical Plot KLU#2 0 1 4 2000 4000 6000 LOT Depth in ft "*"MW 8000 Pore Pressure 10000 12000 ---- EMW in ppg 14000 8 10 12 14 16 18 20 11 Furie Operations Alaska, LLC Kitchen Lights Unit #2 Interval: 'Surface(Spud Mud) From To 1,900 Hole Size> 26 inches Footage> 1,900 feet Washout> 0.15 (i.e. 0.10 for 10%) Solids Control Efficiency> 0.75 (i.e. 0.75 for 75%) Cuttings Adhesion> 1.5 (i.e.1.0 for 1 to 1) Barrels of solids to dispose of: 2,702 Barrels Fluids Factor I4 I 10,809 Barrels Total fluids&solids to Inject: 13,511 Barrels Interval: 'Intermediate(KlaShleid mud system) From 1,900 To 7,100 Hole Size> 17.5 inches Footage> 5,200 feet Washout> 0.10 (i.e. 0.10 for 10%) Solids Control Efficiency> 0.80 (i.e. 0.75 for 75%) Cuttings Adhesion> 1.0 (i.e.1.0 for 1 to 1) Barrels of solids to dispose of: 2,735 Barrels Fluids Factor12 5,469 Barrels Total fluids&solids to Inject: 8,204 Barrels Interval: 'Production(KiaShield mud system) From 7,100 To 13,200 Hole Size> 12.25 inches Footage> 6,100 feet %Washout> 0.10 (i.e. .10 for 10%) Solids Control Efficiency> 0.80 (i.e. .75 for 75%) Cuttings Adhesion> 1.0 (i.e.1.0 for 1 to 1) Barrels of solids to dispose of: 1,572 Barrels Fluids Factor 2 I 3,144 Barrels Total fluids&solids to inject: 4,716 Barrels Furie KLU#2 Casing Design Calculation based on the Energy Resource Conservation Board Alternative Design Method Collapse Burst Burst Conn. Tension SF Collapse SF Burst SF Tension 20" 106#J-55 BT&C 770 2410 2410 1683 1.59 2.12 7.72 20" 133#J-55 BT&C 1500 3060 3060 2123 2.58 2.69 19.8 20" 169#X-56 BT&C 2500 3380 3440 2689 2.72 2.98 36.8 13-3/8 72#N80HC BT& 3470 5380 5380 1850 1.01 1.42 2.82 9-7/8"62.8#Q125 523/ 11140 13850 13850 1817 1.33 1.9 3.28 "c"designation on Burst rating indicates connection limited. 20"Casing Collapse pressure based on Max mud wt at casing seat 20"106#1-55 BT&C Collapse Rating psi SF Collapse Pressure(9.3*1000* .052)= 483 psi 770 psi 1.59 20"133#J-55 BT&C Collapse Pressure(9.3*1200* .052)= 580 psi 1500 psi 2.58 20"169#X-56 BT&C Collapse Pressure(9.3*1900* .052)=918psi 2500 psi 2.72 Burst= Frac gradient at shoe 11.5FIT 11.5* 1900*.052= 1136 psi Burst Rating psi SF 20"106#J-55 BT&C 2410 2.12 20" 133#J-55 BT&C 3060 2.69 20"169#X-56 BT&C 3380c 2.98 Tensile Strength String String Full String From 1000' From 1200' Pipe area20"OD x 18.375"ID 48.97 sq in Bouyed 48.97 sq in*9.3*1900*.052= 44,995 (+) 44,995 (+) 44,995 (+) Pipe area18.73" ID x 18.375"ID 13.17 sq in 13.17*.052*1200*9.3 7,644 (-) 7,644 (-) Pipe areal9"OD x 18.73"ID 10.18 sq in 10.18*.052*1000*9.3 4,926 (-) Air Wt(169*700)+(200*133)+(106.5*1000)= 251,400 (-) Air Wt(169*700)+(200*133) 144,900 (-) Air Wt(169*700) 118,300 (-) Net Hanging Wt. -218,975 -107,549 -73,305 Tensile SF 20"106#1-55 BT&C 1683K 7.72 20"133#J-55 BT&C 2123K 19.8 20"169#X-56 BT&C 2689K 36.8 page 13 7/27/12 13 13--3/8 Casing Collapse calculation External pressure applied=mud density hydrostatic at setting depth 10.0 ppg*9,000ft* .052= 4680 psi Internal pressure applied=fluid evacuated to 1/2 the depth of the next casing setting depth with the lightest mud weight at drill out. 9-7/8 shoe is planned to be set @ 13,200,therefore top of mud is at 6,600'or 2,400'above 13-3/8 shoe. Internal Pressure=10.2 ppg*2,400ft*.052=1,273 psi Collaspe pressure=External hydrostatic pressure-Internal hydrostatic pressure= 4680 psi-1,273psi=3407 psi 13-3/8"Casing Collapse Rating psi SF 13-3/8 72#N80HC 3470 1.01 Burst=Formation pressure at shoe-gas gradient (10.0*9,000'*.052)-(.1 psi/ft*9,000')=4,860-900=3,780 psi Burst Rating psi SF 13-3/8 72#N80HC 5,380 1.42 Tensile Strength 1850k Pipe areal3-3/8" 72# 13.375"OD x 12.34"ID= 20.76 sq in Bouyed 20.76 sq in*10.0*9,000*.052= 97,156 (+) Air Wt(72*9,000')= 648,000 (-) Net Hanging Wt. -550,844 Tensile SF 13-3/8 72#N8OHC 1,556 2.82 9-7/8 Casing Collapse pressure based on mud density at casing point Collapse Pressure 9-7/8 12.2.*13200* .052=8,374 psi external Collapse Rating psi SF 9-7/8"62.8#Q125 LT&C 11140 1.33 Formation pressure at shoe minus gas gradient (12.2 ppg*.052*13,200)-(.1)*13,200= 8,374-1,320=7,054 psi Burst Rating psi SF 9-7/8"62.8#Q125 LT&C 13850 1.9 Tensile Strength Pipe area 9-7/8" 62.8# 9.875"OD x 8.625"ID= 18.16 sq in Bouyed 18.16 sq in* 11.0*13,200*.052= 137,115 (+) Air Wt(62.8*13,200)= 828,960 (-) Net Hanging Wt. -691,845 Tensile rating SF 9-7/8"62.8#0125 2270K 3.28 ►4 Formation integrity Test Procedure: Drill out the casing shoe plus 20' minimum and 50'maximum of new hole. Circulate and condition to establish a uniform mud density throughout the system. Pull bit above casing shoe. Close the blowout preventer. Using cement pump, pump down the drill pipe at a rate of// bpm. On a graph plot the fluid pumped in ''/. bbl increments versus drill pipe pressure until the formation at the shoe starts to take fluid; at this point,the pressure will continue to rise, but at a slower rate. Plot and record bleed back pressure in one minute increments for 10 minutes. 15 1 1 29.1./2" 500 psi Diverter Diagram i 1J f f N hi i Iii *.. 11rt"` o _ � § r: =1=-4 ,[_. r'. i b ! ,7,/... .._ ...„.„.„..,j ,;\ 1 ; 1 _ _ ,. ..,, . . .. 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I'' Replaceable I -1i! t r !! .i I 30"Conductor 30"Conductor 20"Casing I 20"Casing 13.3/8°Casing 13-3/8"Casing 9-5/8"Casing 9-50 Casing STATE OF ALASKA SKAOILAND GAS CONSERVATION COMMISSION PERMIT TO DRILL 20 AAC 25 005 tee WS.C.! 1a Type of Work lb Proposed Well Class Development-Oil Service-Winl Single Zone / lc Specify if well is proposed for V Dnll X • Rednll Stratigraphic Test Development-Gas Service-Supply Multiple Zone ,( Coalbed Gas Gas Hydrates Re-entry Exploratory X - Service-WAG Service-Disp /' j"2- Shale Gas 2 Operator Name 5 Bond Blanket Single Well 11 Well Name and Number Furse Operating Alaska LLC Bond No 402-081 ' KLU#2 3 Address 1029 W 3rd Ave Suite 500 6 Proposed Deoth 12 Field/Pool(s) Anchorage,Ak 99501 MD 13,4004TVD 1 i•D' Exploration • 4a Location of Well(Governmental Section) 7 Property Designation(Lease Number) Surface 1521 3'FNL,2802 6 FWL,SEC 35,T1ON,R11 W,SM ADL 389198 • Top of Productive Honzon 8 Land Use Permit 13 Approximate Spud Date ., 1521 3'FNL,2802 6 FWL,SEC 35,TION,R11W,SM NA '1012 • Total Depth 9 Acres in Property 14 Distance to Nearest Property 1521 3'FNL,2802 6'FWL,SEC 35,T1ON,R11W,SM Lease=2580 Acres,unit=83,394 Acres / "b 9-7,,7ne mile-• 4 4b Location of Well(State Base Plane Coordinates-NAD 27) 10 KB Elevation above MSL 2-11-;is / feet 15 Distance to Neares 114,in Surface x- 290840 19E - y- 2529041 92N' Zone- 4 ,c4,Elevation above MSL feet 3,001 1' 16 Deviated wells na Kickoff depth na feet 17 Meximufh hapated Pressures in psig(see 20 AAC 25 035) f_S• Maximum Hole Angle Vertical d Downhole 8,3h par., Surface 7,054 psi %'t,Ry1, 18 Casing Program Specifications ````����yyyy Top- Settin' Bottom Cement Quan5cMor sacks Hole Casing Weight Grade Coupling Length ✓S ND ""' �- ND (including stess,d l•) 30" 1 5"wall X52 Dnl Quip H9OD 400' t< 400' 400' Dnven r- ' 26" 20" 1061! J55 'BT&C 1000 0' �/'i 1000 411 26" 20" 1335 J55 BT&C 200 1000 1 / 1200 �' II 9 26" 20" 1685 X56 •BT&C 700 1200 1200 tt- 1900 • 4,481 cult 12 5 ppg lead,611 cuff sks 15 8 ppg .0 17 5" 13 375" 725 N-80 HC BT&C 9,006 0 0 '„ 9,••.' 9,000'• 7,755 cuff 12 5 ppg lead&,1,283 cuft 15.8 tail .-,, 12 25" 9 875" 62 85 0-125 Hydnl 523 9,360' 0 1 12 25" 9 875" 62 85 Q-125 ANJO 4,006 9,360' 9, 1 1 13,360' 13,360' 1,725 cuff 13 5 ppg lead&232 curt 15 8ppg tail • 19 PRESENT WELL CONDITION SUMMARY(To be completed for Redd!!and R E., ••-rations) Total Depth MD(ft) Total Depth ND(ft) Plugs(measured) ffect .epth MD(ft) Effect Depth ND(ft) Junk(measured) Casing Length Size r-ment Volume MD ND Conductor/Structural • ....,.7 Surface 'ix, Intermediate !" ProductionNe Liner ,�� Perforation Depth MD(ft) 'erforation Depth ND(ft) , ' 20 Attachments Property Plat BOP Sketch Dnlling Program Time v Depth Plot �� - Shallow Hazard Analysis Diverter Sketch Seabed Report Dnlling Fluid Program %'• OAAC 25 050 requirements 1 21 Verbal Approval Commission Representative Date +y�„��,y, 22 I hereby certify that the foregoing is true and correct Contact :.)) Pnnted Name6 CO A � 4— Title 17-r//,,.5 Cinfi-- \ C �� Signature Phone 90!y 2 7 7 3 7 2 Date 7.-/o Commission Use Only 1 Permit to Dnll � API Number ,� Z � (/ Permit Approval See cover letter for other Number � C/ 50- ,)• ).-, J6D3't�.1'4]Date requirements l �' Conditions of approval If box is checked,well may not be used to lore for,test,or produce coalbed methane,gas hydrates,or gas contain shales Other r L/` Samples req'd Yes\ No Mud log req' Ye No > �Z r<r C� r f4 H2S measures No Directional svy req'd Yes No �1 �oy�G i'---(7 APPROVED BY THE COMMISSION Cb.Lsiji.Ot$ G 1� Art DATE _--_ ,COMMISSIONER *:.11/ li;14 Zvi 0-4,vtq r-701ird.. Oz11.1...i,,5mtvRA L REcEIVE-- gk-3'/7-- AUG 01 2012 AOGCC > /,r,,V e,._-.9FURIE ...,„„--/ Operating Alaska LLC Furie Operating Alaska,LLC 1029 West 3"'Ave,Suite 500 Anchorage,Alaska 99501 August 1, 2012 RE: Kitchen Lights Unit, Confidential Data Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue,Suite 100 Anchorage,AK 99501 Gentlemen Enclosed is the 10-401 request for a permit to drill for well KLU#2. Furie Operating Alaska, LLC requests that this data be held confidential, as marked on the attached, in accordance with AS 31.05.035 and 20 AAC 25.537. Please signify that you have received and accepted this data by signing in the space below and returning this letter to me at the Anchorage address above or by fax to me at 907-277-3796. If you have questions, please feel free to contact me at 907-277-3726. Sincerely, .e„..b e.2.6 Bob La e Furie Operating Alaska, LLC RECEIVED AND ACCEPTED ABOVE DATA This 1st day of August, 2012. BY: TITLE: 1029 W. 3'd Avenue, Suite 500 I Anchorage,Alaska I 99501 I Office 907-277-3726 Furie Operating Alaska, LLC 1029 W 3RD AVENUE, SUITE 500 Anchorage, AK 99501 July 26, 2012 Alaska Oil & Gas Conservation Commission 333 W. 7th Ave. , Ste. 100 Anchorage, Alaska 99501 Re: Application for Permit to Drill Well: Kitchen Lights Unit #2 TO WHOM IT MAY CONCERN: Furie Operating Alaska, LLC hereby applies for a Permit to Drill an offshore exploration well within its Kitchen Lights Unit in the Cook Inlet. Furie is also requesting a waiver from 20 AAC 25.061(a) for a seismic evaluation for the KLU#2 well site. The waiver request is based on using ARCO's South Cook Inlet #3 seismic data, for Furie's Kitchen Lights Unit Well #2 and presented in the Shallow Gas Hazard Evaluation submitted under separate cover. Additionally, a waiver to 20 AAC 25.035(c) (1) (A) requiring a 16" diverter line is requested. Furie will drill a surface pilot hole with a 12 .25" assembly and open the hole to 26". Furie is requesting permission to use a 12" diverter for drilling the pilot hole. The proposed justifications include: 1) the Shallow Gas Survey submitted 5-24-12 under separate cover, with revised surface location submitted 7-24-12, revealing no significant shallow anomalies. 2) past practices in the Inlet of using a 12" diverter on a 12.25 pilot hole 3) no shallow gas issues associated with either offset wells KLU#1, Shell SRS 1 or 2, and Arco South Cook Inlet #3 4) the facility constraints of the rig layout. The Kitchen Lights Unit Well #2 ("KLU#2") will be drilled from the jack up rig Spartan 151. Well KLU#2 is anticipated to be spud August 11th, 2012. If the well log results are encouraging, the well will be suspended with mud- line suspension equipment pending preparation of a long-term development plan. Attached please find the following information required by 20 AAC 25.005 for your review. 1) Form 10-401 Application for Permit to Drill 2) Well Prognosis a. Anticipated Formation Tops b. MASP while drilling to TD with 11" 15M BOP. c. MASP while drilling to 9-7/8" casing point with 13-5/8" 10M BOP d. Drilling Hazards e. Drilling Fluid Summary f. Survey Summary g. Logging h. Mud Logging i. Casing summary j . Cementing Summary 3) Plat showing the surface location 4) Well bore Diagram 5) Drilling Program Summary 6) Depth Days Plot 7) Geo Mechanical Plot 8) Projected Disposal Volumes 9) Casing Design Information 10) FIT Procedure 11) Diagrams a. 29-1/2" 500 psi diverter with 12" diverter line. b. 20-3/4" 3M BOP diagram c. 13-5/8" 10M BOP diagram d. 15M Choke manifold diagram e. Pit diagram f. Shaker tank diagram g. Well head system diagram h. Mud Line System diagram 12) Shallow Gas Hazard Evaluation by Watson May 2012 with revised surface location submitted 07-24-2012 under separate cover. If you have any questions or require further information please contact Furie Drilling Engineer, Bob Laule, at (907) 277-3726 (Furie Anchorage office) . Sincerely, Bob Laule Drilling Engineer Furie Operating Alaska, LLC Permit to Drill Kitchen Lights Unit Well #2 Table of Contents Description Page Permit To Drill 1 Well Prognosis 2 Surface Plat 6 Well Bore Diagram 7 Drilling Program Summary 8 Depth/Days Plot 10 Geo-Mechanical Plot 11 Mud and Cuttings Discharge Table 12 Casing Design Factors 13 Formation Integrity Test Procedure 15 29.5 " Diverter Diagram 16 20-3/4" 3M BOP Diagram 17 13-5/8" 10M BOP Diagram 18 15M Choke Manifold 19 Mud Pit Capacity Chart 20 Shaker Tank Volume 21 Well Head Diagram 22 Mud Line System Diagram 23 7/30/12 Well Prognosis: Kitchen Lights Unit Well #2 (KLU#2) is an exploration well proposed by Furie Operating Alaska LLC. The planned objective is to drill a well to explore for oil and gas in its Kitchen Lights Unit Prospect located in the Cook Inlet,Alaska. Using the offshore jack-up vessel, Spartan 151, the proposed well KLU#2 will be a vertical well drilled to approximately 13,200 ft. penetrating the Sterling, Beluga,& Tyonek for gas and the Sunfish. This well is an offset to the KLU#1 and Shell SRS State#1 . South Cook Inlet#3. Surface Location: 1521.6 FNL& 2807.6 FWL Sec 35, T10N,R11W, SW Bottom Location: Same (vertical hole) Planned TD 13,200'. a.) Formation Depths: Geological Data: From Shell SRS State#1& KLU#1 Formation Formation Tops (TVD RT) Potential Sterling 2,743 Gas Beluga 4,664 Gas Tyonek 8,999 Gas Sunfish 13,272 Oil Property Lease: ADL 389198 Furie has 100% ownership b.) Maximum anticipated surface pressure: Max BH Pressure is based on offset data from Arco South Cook Inlet#3: MASP using the Energy Conservation Board Alternative Design Method. (12.2 ppg * .052 * 13200)-.1*13200'7,054 psi c.) Potential Drilling Hazards: Review of the most recent experience drilling the 12-1/4" hole for the KLU#1 thru the depth of 12,800' ( current as of 6-8-12) is coal sloughing has been experienced causing stuck pipe incident at 10,248', 10,570' & 10,625'. Back reaming,washing and reaming have successfully cleaned hole. A mud weight increase of.2 ppg was added but with no obvious benefit. "A review of the drilling records for the nearest offset wells:" Shell SRS State #1 identified a fluid loss of 580 bbl fluid at 625' no remedial action was taken, a gas influx at 6,260' requiring a bump in MW from 10.5 ppg— 10.7 ppg. Fluid losses were seen in the interval from 7,243' to 8,941'. The loss volumes varied from 75 bbl to 200 bbl and assumed to be self healing as there were no 2 reports of use of LCM. Additional gas cut mud was encountered at 13,370'which required a bump in mud wt from 11.0 ppg to 11.4 ppg. At 13,814' again had gas cut mud and bumped wt to 12.2 ppg. After setting 7" casing at 13341', the well was drilled and cored to 13,859' with a final mud weight of 16.0 ppg. During the subsequent reentry the well was drilled to 16,375' with16.7 ppg without incident. Although no mud density was noted in the summary well records, the Schlumberger DIL log dated 5-28-65 reports a mud weight of 16.7 ppg. Shell SRS State #2 was drilled to 15,403'. Gas cut mud was encountered at 14,386' requiring increasing the mud weight from 11.4 ppg to 12.0 ppg and again at 14,988' where the mud weight was raised from 14.9 ppg to 15.9 ppg. One stuck pipe incident occurred at 15,094'. The pipe was successfully worked free. Arco South Cook Inlet #2 was drilled to 15,059' without incident. While drilling to TD at 15,189' gas cut mud required weighting up mud in stages to 15.4 ppg. While attempting to log the well from TD, it began flowing which required the well to be kill with15.8 ppg. The 15.8 ppg was maintained during the successful running and cementing of the 7" casing. Arco South Cook Inlet #3 was drilled to 13,000' without incident. Sloughing coal at 13,000' required a bump in mud weight from 11.6 ppg to 12.0 ppg. A planned wt increase to 14.8 ppg was made at 13,875' in preparation for drilling the West Forelands formation. A 7" liner was successfully ran and cemented in 14.9 ppg mud to 14,320'. The well was drilled to 15,643' with 16.7 ppg. At 15,643' the mud weight was reduced to 16.5 ppg due to mud loss to the formation for a total of 241 bbls. A 45 bbl LCM pill was spotted. Post BOP testing the well was drilled ahead to TD at 16,000' without problems. The 16.5 ppg was maintained during the running and cementing of the 5" casing. There are no indications that any of the offsetting wells encountered any detectable levels of hydrogen sulfide. KLU#1's geological strata are the same as those of Shell SRS#1 and its reentry. H2S is not expected to be encountered in this well. However, the rig and mud logging unit will have functioning H2S detectors. In conclusion, a review of the drilling operations on the offset wells didn't identify any abnormal hazards that any prudent operator couldn't manage with accepted standard drilling practices. e.) Drilling Fluid Summary: Conductor Hole 26"to 1,900' Gel Spud Mud 9.3 ppg. 17.5" surface hole to 9,000' (KCL water base polymer) 10.0 ppg 12.25"intermediate/production hole to 13,200' (KCL water base polymer) building 11.8 ppg to 12.2 ppg 3 f.) Survey Program: This is a vertical hole. Surveys of inclination will be made every 500' in compliance with regulation 20 ACC25.050. g.) Logging Program: 26" Surface Hole LWD GR/Resistivity 12.25" pilot hole. 17.5" Conductor Hole LWD GR/Resistivity/Neutron Density Sonic in 12.25" pilot hole 12.25" Intermediate/Production LWD GR/Resistivity/Neutron Density/Sonic; E Line based on LWD results. h.) Mud Logging: Two surface loggers alternately on duty A complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; i) Planned Casing Program for KLU#2 30" 20" 20" 20" 13-3/8" 9-7/8" 9-7/8" 1000'- 1200'- Depth 400' 1000' 1200' 1900' 9,000' 9,360 9,360-13,360' Hole Size Driven 26" 26" 26" 17-1/2" 12-1/4" 12-1/4" Weight ppf 1.5" wall 106.5# 133# 169# 72# 62.8# 62.8# Grade X52 K-55 K-55 X-56 HC N-80 Q-125 Q-125 HYD Connection Dril Quip BT&C S BT&C BT&C BT&C 523 ANJO j.) Cementing Summary: 30" 1.5" wall (27" ID) Drive pipe Driven to 400' no cement 20" 106.5#/ft, 20" 133#/ft by 20" 169#from ML suspension rig to set depth at 1,900' cement to ML (26"OH) ML- 218' 12.0 ppg Yield 2.3 cf/sk Volume calculation 400' X 1.7944 cf/ft with 0%excess = 717.8 cf 4 600' X 1.5053 cf/ft with 100% excess = 1,806 .2 cf 200'X 1.5053 cf/ft with 100% excess = 602.1 cf 450' X 1.5053 cf/ft with 100% excess = 1,354.8 cf 268'X 1.5053 cf/ft with 33% excess = 537.5 cf 40' X 1.84 cf/ft with 0%excess = 73.6 cf shoe joint Total = 5,092.3cf=908 bbl Lead Slurry 4,481 cu-ft 12.5 ppg, yield 2.11 cf/sk Tail Slurry 611 cu-ft 15.8 ppg, yield 1.15 cf/sk 13-3/8" 72#/ft (12.347") set at 9000' cement to 1500' (17.5"OH) Volume calculation 418' X .8660 cb/ft with 0%excess = 362.0 cf 6082' X .6946 cf/ft with 75% excess = 2,7393.4 cf 1000'X .6946 cf/ft with 75% excess = 1216.0 cf 80' X .815 cf/ft with 0% excess = 66.5 cf shoe joint Total = 9037.9 cf= 1611 bbl Lead Slurry 7755 cu-ft 12.5 ppg,yield 2.46 cf/sk Tail Slurry 1283 cu-ft 15.8 ppg, yield 1.15 cf/sk 9-7/8"62.8#/ft set at 13,200'top of cement @ 8,200' Volume calculation 800 X .2996 cf/ft with 0% excess = 239.7 cf 3702' X .2866 cf/ft with 40%excess= 1485.6 cf 498' X.2866 cf/ft with 40% excess = 199.8 cf 80' X .3996 cf/ft with 0% excess = 32.0 cf shoe joint Total = 1,957.0 cf= 349 bbl Lead Slurry 1,725cu-ft 13.5 ppg,yield 1.85 cf/sk Tail Slurry 232 cu-ft 15.8 ppg, yield 1.16 cf/s k.) Well Control Equipment: 29-1/2" 500 psi Diverter 21-1/4"2M annular& 20-3/4" 3M BOP 13-5/8" 5M annular& 10 M BOP 15" M Choke manifold 5 Kitchen Lights Unit #2 Offshore, Cook Inlet Alaska 17 16 15 14 13 18 17 ADL 389197 ADL 389196 Furie Operatirg Alaska, LLC Furie Operating Alaska, LLC 20 21 22 23 24 19 20 Shell SRS State#1 0 NNOMINNIMPOINIP Fuire KLU #1 29 28 27 26 25 30 29 Kitchen Lights Unit #2 ADL 389198 * D ADL 389515 32 33 34 I 35 36 31 32 Furie Operating Alaska, LLC Furie Operating Alaska, LLC T. 0 N., R. 11 W., S.M. ® Arco SCI #3 T. 10 N., R). 10 W. T. 9 N., R. 11 N., S.M. T. 09 N., R. 10 W. 5 4 3 2 1 6 5 Mel! SRS State#2® 8 9 10 11 12 7 8 ADL 389924 ADL 3895 ADL 389923 Furie Operating Alaska Furie Operating Alas a, LLC Furie Operating Alaska, LLC 17 16 15 14 13 18 17 Kitchen Lights Unit #2 TVD = 15,992 /MD = 15,992 Township 10 N., Range 11 W., Seward Meridian Section 35: 1521.6' FNL and 2807.6' FWL 60° 55' 1.785" N, 151° 10' 31.094" W NAD 27 State Base Plane Coordinates, Zone 4 X: 290840.19 / Y:2529041.92 ' 0 0.5 1 2 . . Miles KLU #2 Casing/Cementing Forecast :..1..44 ::::::::: 1*i«*«-• ::::::$ +;;««« ...". 400'30" Drive pipe 1.5"wall ++444+4 h*r*+* +*OOO 4::444 44+*+*+* 4444+*4* +++ «;«;«; Lead 4481 cu-ft 12.5 ppg ««..44 44 ftI e Tail 611 cu-ft 15.8 ppg ---_---.--_--. 1500'Top of Cement mw=9.3 ppg _ fs -------- :----.----- Shoe 1700'SS 1900'RKB 11.5#FIT :__2,444+« «««««=_ := 1000'20" 106#/ft K-55 BT&C ;x4444 i+:++---- «'+'«'« :444., 200'20" 133#/ft X-56 BT&C ::,«+::. •+.1.:4*: 4«+«+«+« *+:4 700'20" 169#/ft X-56 BT&C 1'4.:** :4* 4«'«+;: +++'* 2,743 RKB'Top of Sterling 11 +:+:+:+ :*'*;* Lead 7755 cu-ft 12.5ppg __-= Tail 1283 cu-ft 15.8 ppg '''`" K.:',41,:"««-'=_=-- = Top Cement 8200' - «+++ .4.444,4,-_-:-:-:- 4664' RKB Top of Beluga 44,44,++ •4'+' ""'. _- 8999' RKB Top of Tyonek j«4«+«+ r«+�+«+:- __ +44 .++4- ___ 4444*+ r++++++:_ _ ♦44444+4,-' _ 4«+«4«+ l4.*4._ _-+++** 4+++*++.____ ____-+4++++ ++++4++ P++4++*+ - *++4 ,++4• -- -- -.+«+4444 •44+..44•- __ 4+44 h+++- __ .-4.++*4 44+# - 1 mw=9.8-10.0 ppg _-:.:=:;++++++ 4+*+*-_=_=_= 9000' 13-3/8"72#/ft N-80HC BT&C +*4.*+ t*4+ *'...14.14 �'°*4' 9000'Shoe depth 13.2#LOT «.,.... r«+«4:« 4*r 4* K* 4444+* + +++++t «+4++* 4+4+, F+4+4+4+ 444+ 04+++4 +4++ r4+4 4*+*4*4 0.f*4*... 44.++ X44*4* 4*4*+*4 e. �.*+*i 44,44«+ •4,44,4«+« 4,4,44,+«4 I«+«+«+« 4+f 04 44 :I..1.+4 f,++«+« r+4+ P444 4444,+«+ «+«+«*« *4*+4.. •+X+:* ++4+4++ •4*+444 -_ Lead 1,725 cu-ft 13.5ppg = Tail 232 cu-ft 15.8 ppg - _ -- -- 9,360'_- 9,360'9-7/8"62.8#/ft Q125 Hydril 523 mw=12.2-12.3 ppg __ ___________ _ ___ _ _;_ 13,200'9-7/8"62.8#/ft Q125 ANJO 13,200' shoe depth 7/24/12 Page 7 Drilling Program Summary for Kitchen Light Unit Well#2 MIRU Move Spartan 151 from KLU#1 to location. Jump divers inspect cans. Take on preload and inspect cans. Cantilever out rig. Install 30"Conductor RU to drive 30"conductor. Drive 30" drive pipe to locate mud line hanger at 50' below mud line. Report final blows at 100 blows/ft. RD hammer. Install 29.5" 500 psi Diverter RU and install 29.5" diverter with two 12" divert lines. Notify AOGCC 24 hour in advance of the diverter function test. Function test diverter. Drill 26" Hole Drill &survey 12-1/4" pilot hole to 1,900'RKB. Circulate and condition hole. Flow check well. POH. Pump and spot pill. Flow check well. POH. Open 121/4" hole to 26" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. Run 20"Conductor RU and run per casing per program. RIH with 20" casing, landing ring and running tool and land 20" casing on the mudline hanger. Condition Mud. Cement 20"Casing Run in annulus with two grout string. RU to simultaneously circulate annulus while displacing cement. Mix and pump cement per program . Displace with mud. Bump plug . Check floats. Open wash ports in the MLH and flush 30" X 20"annulus and spot cement contaminate pill. Close wash ports and squeeze pill. ND 29.5" Diverter ND 29.5" diverter. Monitor 30"X 20"annulus. Prep and cut 30" drive pipe and lay down same. Cut off 20" casing. Install 20"weld-on starting head. Pre-and post-heat treat and test weld with N2 per manufactures recommendation. NU 20-3/4"3 M`BOP with 21-1/4"2M Annular Notify AOGCC 24 hour in advance of the BOP test. RU and install 21-1/4" BOP and test to the required working pressure outlined in Permit to Drill. MU Drilling BHA. MU 17-%z" bit and drilling BHA RIH and drill out cement to FC. Test casing to 1,000 psi. RIH drill out shoe and 20' (not to exceed 50')of formation. Perform FIT to 11.5 ppg. POH. RIH drill, LWD log, & survey 12-1/4" pilot hole to 9,000'. Circulate and condition hole. Flow check well. POH. Open 12-1/4" hole to 17-%s" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. 8 Run 13-3/8"Casing Install and test 13-3/8" pipe rams. RU and run 13-3/8" casing, casing hanger, running tool and landing joints . Run and land 13-3/8" casing on the mudline hanger. Break circulation and condition mud. Cement 13-3/8"Casing Conduct PJSM for cement job. Mix and pump cement per cementing program. Displace with mud. Bump plug. Check floats. Open wash ports in the MLH and flush 20" X 13-3/8" annulus. Close wash ports and test 13-3/8"casing to 1,000 psi. PT annulus to 290 psi. ND 20.75"BOP PU 20.75" BOP. Monitor annuli. Pull 13-3/8" in tension and set slips. Cut and dress 13-3/8" casing stub. ND BOP. NU intermediate head,21 X" 5M#WP X 13 5/8"10M#WP. Test packoff. NU BOP Notify AOGCC 24 hour in advance of BOP Testing NU 10,000 psi BOP.Test BOP in accordance with pressure requirements identified on the Permit to Drill. 770c7 Drill Intermediate Hole `"`—> ( C c MU 12.25"drilling BHA . RIH and drill out cement to FC. Test casing to 3,500 psi. Drill out shoe and 20' (not to exceed 50') of formation. Perform LOT. Drill LWD log and survey to TD @ approx 13,200'. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Drop Totco check shot survey. Flow check well. POH. RUN 9-7/8" Casing Install and test 9-7/8" rams. RU and run 9-7/8" casing, casing hanger, running tool and landing joints. Run and land 9-7/8" casing on the mudline hanger. Condition Mud. Cement 9-7/8"Casing Conduct PJSM for cement job. Mix and pump lead cement followed with tail cement per cementing program. Displace with mud. Bump plug. Open wash ports in the MLH and flush 13-3/8" X 9-5/8" annulus. Close wash ports and test 9 7/8" casing to 6,250 psi. PT annulus to 1500 psi. Suspend Well Notify AOGCC 24 hours in advance of abandonment's to allow for witnessing. Abandonment's of the surface casing will be completed with kill weight fluid in the abandoned casing, annuli cemented and a combination of cement and mechanical plug in the casing in accordance with the state regulation. 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I ' II l' , I'I' ��I� r DAYS 7FOA 2012 KLU 2 DVD CURVES 072912RBL.xls 7/29/2012 Geo Mechanical Plot KLU#2 2000 4000 --- E 6000 LOT Depth in ft MW 8000 —!--Pore Pressure ti 10000 12000 -- _ EMW in ppg 14000 8 10 12 14 16 18 20 11 Furie Operations Alaska, LLC Kitchen Lights Unit #2 Interval: ['Surface(Spud Mud) From To 1,900 Hole Size> 26 inches Footage> 1,900 feet %Washout> 0.15 (i.e. 0.10 for 10%) Solids Control Efficiency> 0.75 (i.e. 0.75 for 75%) Cuttings Adhesion> 1.5 (i.e.1.0 for 1 to 1) Barrels of solids to dispose of: 2,702 Barrels Fluids Factor i4 10,809 Barrels Total fluids&solids to inject: 13,511 Barrels Interval: QIntermedfate(KiaShleld mud system) From 1,900 To 7,100 Hole Size> 17.5 inches Footage> 5,200 feet %Washout> 0.10 (i.e. 0.10 for 10%) Solids Control Efficiency> 0.80 (i.e. 0.75 for 75%) Cuttings Adhesion> 1.0 (i.e.1.0 for 1 to 1) Barrels of solids to dispose of: 2,735 Barrels Fluids Factor 12 5,469 Barrels Total fluids&solids to inject: 8,204 Barrels Interval: [Production(KiaShield mud system) From 7,100 To 13,200 Hole Size> 12.25 inches Footage> 6,100 feet %Washout> 0.10 (i.e. .10 for 10%) Solids Control Efficiency> 0.80 (i.e. .75 for 75%) Cuttings Adhesion> 1.0 (i.e.1.0 for 1 to 1) Barrels of solids to dispose of: 1,572 Barrels Fluids Factor12 J 3,144 Barrels Total fluids&solids to inject: 4,716 Barrels I3 Furie KLU#2 Casing Design Calculation based on the Energy Resource Conservation Board Alternative Design Method Collapse Burst Burst Conn. Tension SF Collapse SF Burst SF Tension 20" 106#J-55 BT&C 770 2410 2410 1683 1.59 2.12 7.72 20" 133#J-55 BT&C 1500 3060 3060 2123 2.58 2.69 19.8 20"169#X-56 BT&C 2500 3380 3440 2689 2.72 2.98 36.8 13-3/8 72#N80HC BT& 3470 5380 5380 1850 1.01 1.42 2.82 9-7/8"62.8#Q125 523/ 11140 13850 13850 1817 1.33 1.9 3.28 "c"designation on Burst rating indicates connection limited. 20"Casing Collapse pressure based on Max mud wt at casing seat 20"106#1-55 BT&C Collapse Rating psi SF Collapse Pressure(9.3*1000* .052)= 483 psi 770 psi 1.59 20" 133#J-55 BT&C Collapse Pressure(9.3*1200* .052)= 580 psi 1500 psi 2.58 20" 169#X-56 BT&C Collapse Pressure(9.3*1900* .052)=918psi 2500 psi 2.72 Burst= Frac gradient at shoe 11.5FIT 11.5* 1900*.052= 1136 psi Burst Rating psi SF 20"106#1-55 BT&C 2410 2.12 20" 133#J-55 BT&C 3060 2.69 20"169#X-56 BT&C 3380c 2.98 Tensile Strength String String Full String From 1000' From 1200' Pipe area20"OD x 18.375"ID 48.97 sq in Bouyed 48.97 sq in*9.3*1900*.052= 44,995 (+) 44,995 (+) 44,995 (+) Pipe area18.73" ID x 18.375" ID 13.17 sq in 13.17*.052*1200*9.3 7,644 (-) 7,644 (-) Pipe areal9"OD x 18.73"ID 10.18 sq in 10.18*.052*1000*9.3 4,926 (-) Air Wt(169*700)+(200*133)+(106.5*1000)= 251,400 (-) Air Wt(169*700)+(200*133) 144,900 (-) Air Wt(169*700) 118,300 (-) Net Hanging Wt. -218,975 -107,549 -73,305 Tensile SF 20" 106#J-55 BT&C 1683K 7.72 20" 133#J-55 BT&C 2123K 19.8 20"169#X-56 BT&C 2689K 36.8 page 13 7/27/12 13--3/8 Casing Collapse calculation External pressure applied=mud density hydrostatic at setting depth 10.0 ppg*9,000ft* .052= 4680 psi Internal pressure applied=fluid evacuated to 1/2 the depth of the next casing setting depth with the lightest mud weight at drill out. 9-7/8 shoe is planned to be set @ 13,200,therefore top of mud is at 6,600'or 2,400'above 13-3/8 shoe. Internal Pressure=10.2 ppg*2,400ft* .052=1,273 psi Collaspe pressure=External hydrostatic pressure-Internal hydrostatic pressure= 4680 psi-1,273psi=3407 psi 13-3/8"Casing Collapse Rating psi SF 13-3/8 72#N8OHC 3470 1.01 Burst=Formation pressure at shoe-gas gradient (10.0*9,000'*.052)-(.1 psi/ft*9,000')=4,860-900=3,780 psi Burst Rating psi SF 13-3/8 72#N80HC 5,380 1.42 Tensile Strength 1850k Pipe areal3-3/8" 72# 13.375"OD x 12.34"ID= 20.76 sq in Bouyed 20.76 sq in*10.0*9,000*.052= 97,156 (+) Air Wt(72*9,000')= 648,000 (-) Net Hanging Wt. -550,844 Tensile SF 13-3/8 72#N80HC 1,556 2.82 9-7/8 Casing Collapse pressure based on mud density at casing point Collapse Pressure 9-7/8 12.2.*13200* .052=8,374 psi external Collapse Rating psi SF 9-7/8"62.8#Q125 LT&C 11140 1.33 Formation pressure at shoe minus gas gradient (12.2 ppg*.052*13,200)-(.1)*13,200= 8,374-1,320=7,054 psi Burst Rating psi SF 9-7/8"62.8#0125 LT&C 13850 1.9 Tensile Strength Pipe area 9-7/8" 62.8# 9.875"OD x 8.625"ID= 18.16 sq in Bouyed 18.16 sq in*11.0*13,200*.052= 137,115 (+) Air Wt(62.8*13,200)= 828,960 (-) Net Hanging Wt. -691,845 Tensile rating SF 9-7/8"62.8#Q125 2270K 3.28 14 Formation integrity Test Procedure: Drill out the casing shoe plus 20' minimum and 50'maximum of new hole. 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II III ( ,� , ■1�IIIO 32,492. . - i 20"CASING �. / 13-3/8"CASING RP111299 I 9-5/8"CASING Suthc Systems 'Pu ►tic Io 1 • i C-15 EX Mudline System & Surface Wellhead J CAMERON 30"x 20" x 13-3/8"X 9-5/8"Casing Program 22 fell44 4 CAMERON Ce ntric 15 Centric 15 EX Running Tie-Back Low Torque Ii Torque and Litt Wastnut ,.,i.�• Profiles with Running Tie-Back 1 Tie-back Tools 10 Itki Prealigrment i rE u �, � 666 Tapered Thread TtrcqueandUtt ' Tle-Backopbon r Torque Profiles with N. 1. 11 Profiles Punning Tools t� tvte[alRunning S ( E �`.;fTest',, anced1I Rbm . , -Th '�.Testingfrlml AbU/e ti °�; n Tback/ ' s, Dual Meal _1 i Thread or I Tle-Back Seals Metal Seal Back Up r i� i Seal Seals r 1� � Annular Seal Resilientil•,il� rCa bilii 1 , II h/ BaekUPp �' �jHargerLdckdown DualInterface Test r ; , �� : Capability Centralization 1� I i i o i Facility t Single TfA Cap t bbb r���� I� � for Bore and Cage. 6S Annulus Retainers ''�( Profile `Stab Type 114 1 —j Maximized ! ,1 Accommodates Engagement FlowSy 1l ir Debris en Dual Concentricity I Self Setting I w V `�;1 I i ,Ir for Parallel Position Split Cage { M �� I Ilii: II INV?! V?1I�� I `ii. SpldRing 11 �`i�,„�.`11� r� il�' Replaceable I � -,,I, Y 30"Conductor 30"Conductor —� 120"Casing 20"Casing 13.3/8"Casing 13-3I13"Casing9-5/8"Casing i 9-5/8"Casing I RECEIVED y STATE OF ALASKA A. A OIL AND GAS CONSERVATION COMMISSION JUN 1 1 2012 PERMIT TO DRILL 20 AAC 25.005GCC 1a.Type of Work. lb.Proposed Well Class. Development-Oil Service- Winj Single Zone 1c Specify if well is pr s�Cior. Drill X . Redrill Stratigraphic Test Development-Gas Service-Supply Multiple Zone Coalbed Gas Gas Hydrates Re-entry Exploratory X - Service-WAG Service-Disp Shale Gas 2.Operator Name: 5. Bond. Blanket Single Well 11 Well Name and Number: Furls Operating Alaska LLC Bond No. 402-081 KLU*2 ' 3.Address: 1029 W 3rd Ave Suite 500 6 Proposed Depth: 12 Field/Pool(s): Anchorage,Ak 99501 MD' 15992' ND. 15992' Exploration 4a. Location of Well(Governmental Section): 7.Property Designation(Lease Number). Surface: 947.4'FNL,3293 8'FWL,SEC 35,T1 ON,R11W,SM . ADL 389198 • Top of Productive Horizon: 8 Land Use Permit. 13.Approximate Spu. ".te: 9474'FNL,3293.8'FWL,SEC 35,T1ON,R11W,SM NA r�l•IZ 8/1/2012 Total Depth. 9 Acres in Property: (7' 14.Dist.• -to Nearest Property. 947.4'FNL,3293.8'FWL,SEC 35,T10N,R11W,SM Lease=2560 Acres,unit=83,394 Acres / on' Ile+ 4b.Location of Well(State Base Plane Coordinates-NAD 27): 10.KB Elevation above MSL: ?i8, ,g, feet 15.Distance to Nearest Well Open Surface: x- 291336.17E y- 2529607.12N Zone- 4 GL Elevation above MSL: „S9-- -t 7,243'from KLU*1 - 16.Deviated wells: na Kickoff depth:na feet 17.Maximum Anticipated Pressures in psig(s--20 AAC 25 035) Maximum Hole Angle: Vertical degrees Downhole: 13,494 psi Surface: 11,030psi ' ' 18.Casing Program. Specifications Top -Setting Depth - -.ttom Cement Quantity,c.f or sacks Hole Casing Weight Grade Coupling Length MD TVD MD TVD (Including stage data) ii 30" 1.5"wall X52 Dnl Quip H9OD 400' 0' 0' 400' 400' Dnven f 26" 20" 106* J55 BT&C 1000 0' 0' 1000 1000 4,481 cuff 12.5 ppg lead,611 cult sks 15.8 ppg tail 26" 20" 133* J55 BT&C 200 1000 .00 1200 1200 26' 20" 168* X56 BT&C 700 1200 1200 1900 1900 17.5" 13.375" 72* N-80 HC BT&C 4,600 0 0 4600 4600 2,650 cuff 12 5 ppg lead&,1,039 cuff 15 8 tail 12 25" 9.875" 62.8* Q-125 Hydril 523 9,360' 0 0 9,360' 9,360' 1,570 cuff 13.0 ppg lead&232 cult 15.8ppg tail 12.25" 9.875' 62.8* 0-125 ANJO 4,000' 9,36, 9,360' 13,360' 13,360' Stage 2 1,985 cuff 13.5 ppg 8.5" 7" 35* Q125HC SLIJ II 2,842 13 50' 13,150' 15,992' 15,992' 513 cult 17 5 ppg 19. PRESENT WELL CONDITION SUMMARY(To be comple-d for Redrill and Re-Entry Operations) Total Depth MD(ft): Total Depth TVD(ft). Plugs(measured). Effect.Depth MD(ft). Effect Depth ND(ft): Junk(measured): Casing Length Size Cement Volume MD TVD Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD(ft): Perforation Depth ND(ft) 20. Attachments- Property Plat BOP.ketch Drilling Program Time v.Depth Plot Shallow Hazard Analysis Divert: Sketch Seabed Report Dnlling Fluid Program 20 AAC 25.050 requirements 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing is true and correct. Contact Printed Name A�c�� L 9 41!G Title 5e' //�',As+.5 EA,)k^" Signature 0,- Phone/ 7 2! 7 3 726 Date 6 //"'"/a AVVVV Commission Use Only Permit to Drill API Nu .er: Permit Approval See cover letter for other Number- „2-/(-- I / 50-7 )- 6t�L,�Q�.(,Q-Date. requirements. Conditions of approval• If box is checked,well may not be used to explore for,test,or produce coalbed methane,gas hydrates,or gas contained' shales: Other. Samples req'd• e No Mud log req' . Yes No H2S measures es No - // Directional svy req'd. Yes {/-I('- - _f(l'''' .7c�1 �'L PPROVID131-7 E COMMISSION DATE- ,COMMISSIONER ORIGINAL x‘43(4z RECEIVED JUN 1 1 2012 Furie Operating Alaska, LLC AOGCC 310 K Street, Ste. 200 SUPERCEDED Anchorage, AK 99501 c `/4--/1- June 10, 2 012 _ Alaska Oil & Gas Conservation Commission 333 W. 7th Ave. , Ste. 100 Anchorage, Alaska 99501 Re: Application for Permit to Drill Well: Kitchen Lights Unit #2 TO WHOM IT MAY CONCERN: Furie Operating Alaska. , LLC hereby applies for a Permit to Drill an offshore exploration well within its Kitchen Lights Unit in the Cook Inlet. Furie is also requesting a waiver from 20 AAC 25.061(a) for a seismic evaluation for the KLU#2 well site. The waiver request is based on using Acro's South Cook Inlet #3 seismic data, for Furie' s Kitchen Lights Unit Well #2 and presented in the Shallow Gas Hazard Evaluation submitted under separate cove May 24,2012' . Additionally, a waiver to 20 AAC 25.035 (c) (1) (A) requiring a 16" diverter line is requested. Furie will drill a surface pilot hole with a 12.25" assembly and open the hole to 26". Furie is requesting permission to use a 12" diverter for drilling the pilot hole. The proposed justifications — include: 1) the -}Shallow Gas Survey submitted 5-24-12 under separate cover , revealin,_no stignificant shallow anomalies. 2) past practices in the Inlet of using a 12" diverter on a 12.25 pilot hole 3) no shallow gas issues associated with either offset wells KLU#1, Shell SRS 1 or 2, and Arco South Cook Inlet #3 4) the facility constraints of the rig layout. The Kitchen Lights Unit Well #2 ("KLU#2") will be drilled from the jackup rig Spartan 151. Well KLU#2 is anticipated to be spud August 1st, 2012. If the well log results are encouraging, the well will be suspended with mudline suspension equipment pending preparation of a long-term development plan. Attached please find the following information required by 20 AAC 25.005 for your review. 1) Form 10-401 Application for Permit to Drill 2) Well Prognosis a. Anticipated Formation Tops b. MASP while drilling to TD with 11" 15M BOP. c. MASP while drilling to 9-5/8" casing point with 13-5/8" 10M BOP d. Drilling Hazards e. Drilling Fluid Summary f. Survey Summary 8 ��jR(7y .�, g. Logging �„J "_ h. Mud Logging i. Casing summary j . Cementing Summary 3) Plat showing the surface location 4) Well bore Diagram 5) Drilling Program Summary 6) Depth Days Plot 7) Geo Mechanical Plot 8) Projected Disposal Volumes 9) Casing Design Information 10) FIT Procedure 11) Diagrams 500 psi 29-1/2" diverter with 12.. diverter line. b. 20-3/4" 3M BOP diagram c. 13-5/8" 10M BOP diagram d. 11" 15M BOP diagram e. 15M Choke manifold diagram f. Pit diagram g. Shaker tank diagram h. Well head system diagram i. Mud Line System diagram 12) Shallow Gas Hazard Evaluation by Watson May 2012 submitted under separate cover. If you have any questions or require further information please contact Furie. Drilling Engineer Bob Laule at (907) 277-3726 (Furie Anchorage office) . Sincerely, :Jc,'G Bob Laule t Permit to Drill Kitchen Lights Unit Well #2 Table of Contents Description Page Permit To Drill 1 Well Prognosis 2 Surface Plat 7 Well Bore Diagram 8 Drilling Program Summary 9 Depth/Days Plot 12 Geo-Mechanical Plot 13 Mud and Cuttings Discharge Table 14 Casing Design Factors 15 Formation Integrity Test Procedure 20 29.5 " Diverter Diagram 21 20-3/4" 3M BOP Diagram 22 13-5/8" 10M BOP Diagram 23 11" 15M BOP Diagram 24 15M Choke Manifold 25 Mud Pit Capacity Chart 26 Shaker Tank Volume 27 Well Head Diagram 28 Mud Line System Diagram 29 Well Prognosis: Kitchen Lights Unit Well #2 (KLU#2) is an exploration well proposed by Furie Operating Alaska LLC. The planned objective is to drill a well to explore for oil and gas in its Kitchen Lights Unit Prospect located in the Cook Inlet, Alaska. Using the offshore jack-up vessel, Spartan 151, the proposed well KLU#2 will be a vertical well drilled to approximately 15 992 ft penetrating the Sterling, Beluga.Tyonek. fQr eas ansithe Sunfish, Sunfish Channel, Hemlok, and W. Foreland for potential oil. This well is an offset from KLU#1 ' and Shell SRS State#1 . Location: 947.4 FNL& 3293.8 FWL Sec 35,T10N,R11W, SW Surface Location: Bottom Location: Same (vertical hole) Planned TD 15,992'. a.) Formation Depths: Geological Data: From Shell SRS State#1& KLU#1 Formation Formation Tops(TVD) Potential Sterling 3,396 Gas Beluga 4,570 Gas Tyonek 8,818 Gas Sunfish 13,052 Oil Sunfish Channel 13,472 Oil Hemlock 14,930 Oil W. Foreland 15,608 Oil Property Lease: ADL 389198 Furie has 100%ownership b.) Maximum anticipated surface pressure: Max BH Pressure is based on offset data from Shell's SRS State#1 DST: Formation Pressure test data from Shell SRS State#1. 7-11-1965 Perforation depths 16,006'-16,021' and 16052' -16082'. Final Flowing Pressure 13,238 psi Final Shut in Pressure 13,494 psi MASP using the Energy Conservation Board Alternative Design Method is the lesser of 13,494 psi X.85=11,461psi OR The fracture gradient at the shoe less the gas gradient. (17.8 ppg LOT* .052 * 13360)-.1*13360= 11,030 psi c.) For approval of using a 10,000 psi BOP for the 12-1/4" hole section to TD at 13,360'. Shell SRS State#1 was drilled to 13,450' with 11.0 ppg mud. Using the expected LOT for the 13-3/8 shoe 2 of 12.8 ppg based on offset well KLU#1. The max surface pressure anticipated in 12.25" hole is: 12.8 ppg*.052*4600= 3061 psi based on Energy Conservation Board Alternative Design Method. d.) Potential Drilling Hazards: Review of the most recent experience drilling the 12-1/4" hole for the KLU#1 thru the depth of 12,800' ( current as of 6-8-12) Coal sloughing has been experienced causing stuck pipe incident at 10,248', 10,570' & 10,625'. Back reaming,washing and reaming have successfully cleaned hole. A mud weight increase of.2 ppg was added but with no obvious benefit. A review of the drilling records for the nearest offset well SRS State#1 identified a fluid loss of 580 bbl fluid at 625' no remedial action was taken, a gas influx at 6,260' requiring a bump in MW from 10.5 ppg— 10.7 ppg. Fluid losses were seen in the interval from 7,243' to 8,941'. The loss volumes varied from 75 bbl to 200 bbl and assumed to be self healing as there were no reports of use of LCM. Additional gas cut mud was encountered at 13,370' which required a bump in mud wt from 11.0 ppg to 11.4 ppg. At 13,814' again had gas cut mud and bumped wt to 12.2 ppg. After setting a drilling liner the well was drilled and cored to 13,859' with a final mud weight of 16.0 ppg. During the subsequent reentry the well was drilled to 16,375' with16.7 ppg without incident. Although no mud density was noted in the summary well records, the Schlumberger DIL log dated 5-28-65 reports a mud weight of 16.7 ppg. Shell SRS State #2 was drilled to 15,403'. Gas cut mud was encountered at 14,386' requiring increasing the mud weight from 11.4 ppg to 12.0 ppg and again at 14,988' where the mud weight was raised from 14.9 ppg to 15.9 ppg. One stuck pipe incident occurred at 15,094'. The pipe was successfully worked free. Arco South Cook Inlet #2 was drilled to 15,059' without incident. While drilling to TD at 15,189' gas cut mud required weighting up mud in stages to 15.4 ppg. While attempting to log the well from TD, it began flowing which required the well to be kill with15.8 ppg. The 15.8 ppg was maintained during the successful running and cementing of the 7" casing. Arco South Cook Inlet #3 was drilled to 13,000' without incident. Sloughing coal at 13,000' required a bump in mud weight from 11.6 ppg to 12.0 ppg. A planned wt increase to 14.8 ppg was made at 13,875' in preparation for drilling the West Forelands formation. A 7" liner was successfully ran and cemented in 14.9 ppg mud to 14,320'. The well was drilled to 15,643' with 16.7 ppg. At 15,643' the mud weight was reduced to 16.5 ppg due to mud loss to the formation for a total of 241 bbls. A 45 bbl LCM pill was spotted. Post BOP testing the well was drilled ahead to TD at 16,000' without problems. The 16.5 ppg was maintained during the running and cementing of the 5" casing. There are no_indications that any of the offsetting wells encountered any detectable levels of hydrogen sulfide. KLU#1's geological strata are the same as those of Shell SRS#1 and its reentry. 3 H2S is not expected to be encountered in this well. However, the rig and mud logging unit will have functioning H2S detectors. In conclusion, a review of the drilling operations on the offset wells didn't identify any abnormal hazards that any prudent operator couldn't manage with accepted standard drilling practices. - e.) Drilling Fluid Summary: Surface Hole 26" to 1,900' Gel Spud Mud 9.3 ppg. 17.5" hole to 4,600' (KCL water base polymer) 9.3 ppg 12.25" hole to 13,360' (KCL water base polymer) building 10.8 ppg to 11.0 ppg 8.5" hole to 15,992' (KCL water base polymer) building 14.0 ppg to 16.4 ppg. f.) Survey Program: This is a vertical hole. Surveys of inclination will be made every 500' in compliance with regulation 20 ACC25.050. g.) Logging Program: 26" Surface Hole LWD GR/Resistivity/neutron density in 12.25" pilot hole. 17.5" LWD GR/Resistivity/Neutron Density in 12.25" pilot hole 12.25" LWD GR/Resistivity; E Line-Triple Combo (GR/Res/ Neutron Density), Optional Sonic, CMR 9-5/8" Casing; GR/CCL, Bond log &Caliper as needed 8.5" LWD GR/Res/ Neutron Density, Optional Sonic, CMR 7"Casing GR/CCL, Bond log h.) Mud Logging: Two surface loggers alternately on duty A complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; 4 i.) Planned Casing Program for KLU#2 30" 20" 20" 20" 13-3/8" 9-7/8" 9-7/8" 7" 900'- 1100'- 13,060'- Depth 400' 900' 1,100' 1900' 4,600' 9,360 9,360-13,360' 15,992' Hole Size Driven 26" 26" 26" 17-1/2" 12-1/4" 12-1/4" 8-1/2" Weight ppf 1.5" wall 106.5# 133.# 169# 68# 62.8# 62.8# 35.0# Grade X52 K-55 K-55 K55 N-80HC Q-125 Q-125 Q-125 Connection Dril Quip BT&C S BT&C BT&C BT&C 523 ANJO STL j.) Cementing Summary: 1) 30" 1.5" wall (27" ID) Drive pipe Driven to 400' no cement Z) 20" 106.5#/ft, 20" 133#/ft by 20" 169#from ML suspension rig to set depth at 1,900'cement to ML(26"OH) ML-218' 12.0 ppg Yield 2.3 cf/sk Volume calculation 400' X 1.7944 cf/ft with 0%excess = 717.8 cf 600'X 1.5053 cf/ft with 100%excess = 1,806 .2 cf 200'X 1.5053 cf/ft with 100%excess = 602.1 cf 450'X 1.5053 cf/ft with 100%excess = 1,354.8 cf 268'X 1.5053 cf/ft with 33%excess = 537.5 cf 40' X 1.84 cf/ft with 0%excess = 73.6 cf shoe joint Total = 5,092.3cf=908 bbl Lead Slurry 4,481 cu-ft 12.5 ppg,yield 2.11 cf/sk`"/ ' iZ Tail Slurry 611 cu-ft 15.8 ppg,yield 1.15 cf/sk J S Si sky 3� 13- 2#/ft(12.347") set at 4600' cement to 1500' (17.5"OH) �3/8�" 7Volume calculation 418'X .8660 cb/ft with 0%excess = 362.0 cf 1,882'X .6946 cf/ft with 75%excess =2,287.8 cf 800'X .6946 cf/ft with 75%excess =972.8 cf 80' X .815 cf/ft with 0%excess = 66.5 cf shoe joint Total = 3,689.1 cf=658 bbl 5 Lead Slurry 2,650 cu-ft 12.5 ppg,yield 2.46 cf/sk fol 7 5k Tail Slurry 1,039 cu-ft 15.8 ppg,yield 1.15 cf/sk ' o 3 sks q.) 9-5/8" 53.5#/ft(8.626") by 9-7/8"62.8#/ft set at 13,360' cement t DV 8,950'_( 9Pi)tol J of cement @ 3,800' VolLS c ume calculation for Stage#1 I ?l? 3,912'X .2866 cf/ft with 40%excess= 1,569.8 cf 498'X .2866 cf/ft with 40%excess = 199.8 cf 80' X .3996 cf/ft with 0%excess = 32.0 cf shoe 'oint Total = 1,801.6 cf= 21 bill �� Lead Slurry Stage#1 1,570 cu-ft 13.0 ppg,yield 2.06 cf/sk �—� 5kL ' Tail Slurry Stage #1 232 cu-ft 15.8 ppg,yield 1.16 cf/sk ---� v Volume calculation for Stage#2 800'X .2996cf/ft with 0%excess = 239.7 cf 4,350'X .2866 cf/ft with 40%excess= 1,745.4cf Tota I = 1,985.1 ct=354 bbl Slurry Stage#2 1,985 cu-ft 13.5 ppg,yield 1.85 cf/sk I d 7Z 545 ,5) 2.'. 5#_Set @ 15,992'with liner top at 13.060' Volume Calculation 200'X .269 cf/ft with 0%excess = 54 cf 200' above liner top. 210'X .1323 cf/ft with 0%excess = 29 cf 2,632'X .1268 cf/ft with 40%excess= 468 cf 80'X .1966 cf/ft with 0%excess = 16.0.cf shoe joint Total= 513 cf=91 bbl cu-ft 7.5 ppg,yield 1.52 cf/sk if SO 5k5 vI k.) Well Control Equipment: 29-1/2" 500 psi Diverter 21-1/4"2M annular&20-3/4" 3M BOP 13-5/8" 5M annular& 10 M BOP 11" 10M annular& 15 M BOP 15" M Choke manifold 6 Kitchen Lights Unit #2 Offshore, Cook Inlet Alaska 17 16 15 14 13 18 17 ADL 389197 ADL 389196 Furie Operating Alaska, LLC Furie OperatingAlaska, LLC 20 21 22 23 24 19 20 Shell SRS State #1 ® Fuire KLI #1 29 28 27 26 I 25 30 29 Kitchen Lights Unit #2 ~*✓ADL 389198 ADL 389515 Furie Operating Alaska LLC Furie Operating Alaska LLC 32 33 ; 34 35 I 36 31 32 T. 0 N., R. 11 iIV., S.M. ® 4rco SCI #3 . T. 10 N., . 10 W. T. 9 N., R. 11 UV., S.M. T. 09 N., . 10 W. 5 4 3 2 1 6 5 9ieII SRS State #2® 8 9 10 11 12 7 8 ADL 389924 ADL 389507 ADL 389923 Furie Operating Alaska Furie Operating Alaska, LLC Furie Operating Alaska, LLC 17 16 15 � 14 13 18 17 I Kitchen Lights Unit #2 Formation Tops (Potential) TVD = 15,992 / MD = 15,992 Sterling Gas 3,304' Township 10 N., Range 11 W., Seward Meridian Beluga Gas 4,478' Section 35: 947.4' FNL and 3293.8' FWL Tyonek Gas 8,726' 60° 55' 7.43" N, 151° 10' 21.267" W NAD 27 Sunfish Oil 12,960' Sunfish Channel 13,380' State Base Plane Coordinates, Zone 4 X: 291336.17 / Y: 2529607.12 Hemlock Oil 14,838' W. Foreland Oil 15,516' 0 0.5 1 2 Mid. Jurassic Oil 15,800' imi Miles KLU #2 Casing/Cementing Forcast • o.;.•:. 400' 30" Drive pipe 1.5" wall .; i:: . 6.4::40 •4040.. •1`,; 1. 6..6..6..6.•: ,.:,.,.,. ./ 6.6.6.6..' 4040 6..40•.V. ... • • Lead 4481 cu-ft 12.5 ppg 40•:•:•:: Tail 611 cu-ft 15.8 ppg ::::1500'Top of Cement mw= 9.3 ppg .:.:.Shoe 1700' SS 1900' RKB 11.5FIT .::1000' 20" 106#/ft K-55 BT&C :• 200' 20" 133 #/ft X-56 BT&C 19t-r 700' 20" 169#/ft X-56 BT&C 6.•, :; :. :•:•::• 3,396 RKB'Top of Sterling Lead 2,650 cu-ft 12.5ppg Tail 1039 cu-ft 15.8 ppg ::Top Cement 3800' mw=9.3 ppg • 4600' 13-3/8" 72#/ft N-80HC BT&C I;'c : �.I4 4600' Shoe depth 12.8#LOT `I`0` 4570' Top of Beluga 8818'Top of Tyonek Lead 1,985cu-ft 13.5ppg :8950' DV Collar 6..40;4; Lead 1,570 Cu ft 13.Oppg Tail 232 cu ft 15.8 ppg :::::13,150'top 7" liner 17.8#LOT 9 360' 9-7/8" 62.8#/ft Q125 Hydril 523 mw=10.8- 11 ppg :.:::::.: 13 360' 9-7/8" 62.8#/ft Q125 ANJO `V, ., '1 13,360' shoe depth i 3 342° 13,052'Top of Sunfish 13,472' Top of Sunfish channel 14,930'Top of Hemlock 15,608'Top of W. Foreland Tail 513 cu-ft 17.5 ppg mw=16.4 ppg j ON. 15,992' 7 35#/ft HC Q125 STL Page 8 6/5/2012 Drilling Program Summary for Kitchen Light Unit Well#2 MIRU Move Spartan 151 from KLU#1 to location. Jump divers inspect cans.Take on preload and inspect cans. Cantilever out rig. Install 30" Conductor RU to drive 30"conductor. Drive 30" drive pipe to locate mudline profile at 50' below mudline. Report final blows 100/ft. RD pile driver. Install 29.5" 500 psi Diverter RU and install 29.5" diverter with two 12" divert lines. Notify AOGCC 24 hour in advance of the diverter function test. Function test diverter. Drill 26" Hole Drill, LWD log, & survey 12-1/4" pilot hole to 1,900'RKB. Circulate and condition hole. Flow check well. Drop check shot survey. POH. Open 12-1/4" hole to 17-Y2" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. Open 17-1/4" hole to 26" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. Run 20"Conductor RU and run per casing per program. RIH with 20" casing, landing ring and running tool and land 20" casing on the mudline hanger. Condition Mud. Cement 20"Casing Run in annulus with two grout string. RU to simultaneously circulate annulus while displacing cement. Mix and pump cement per program . Displace with mud. Bump plug . Check floats. Circulate 20"X DP annulus. Open wash ports in the MLH and flush 30"X 20" annulus and spot cement contaminate pill. Close wash ports and down squeeze pill. ND 29.5" Diverter ND 29.5" diverter. Monitor 30" X 20" annulus. Prep and cut 30" drive pipe and lay down same. Cut off 20" casing. Install 20" weld on starting head. Pre and post heat treat and test weld with N2 per manufactures recommendation. NU 20-3/4"3M BOP with 21-1/4" 2M Annular Notify AOGCC 24 hour in advance of the BOP test. RU and install 21-1/4" BOP and test to the required working pressure outlined in Permit to Drill. MU Drilling BHA. MU 17-1/4" bit and drilling BHA RIH and drill out cement to FC. Test casing to 1,000 psi. RIH drill out shoe and 20' (not to exceed 50')of formation. Perform FIT to 11.5 ppg. POH. RIH drill, LWD log, &survey 12-1/4" pilot hole to 4,800'. Circulate and condition hole. Flow check well. Drop check shot survey. POH. 9 Open 12-1/4" hole to 17-%2" hole. Pump sweep. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Flow check well. POH. Run 13-3/8"Casing Install and test 13-3/8" pipe rams. RU and run 13-3/8" casing, casing hanger, running tool and landing joints . Run and land 13-3/8" casing on the mudline hanger. Break circulation and condition mud. Cement 13-3/8"Casing Conduct PJSM for cement job. Mix and pump cement per cementing program. Displace with mud. Bump plug. Check floats. Circulate 13-3/8" X DP annulus. Open wash ports in the MLH and flush 20" X 13-3/8" annulus. Close wash ports and test 13-3/8"casing to 1,000 psi. PT annulus to 290 psi. ND 20.75" BOP PU 20.75" BOP. Monitor 30" X 20" annulus. Pull 13-3/8" in tension and set slips. Cut and dress 13-3/8" casing stub. ND BOP. NU intermediate head, 13-5/8" 10,000 X 5,000 psi.Test packoff. NU BOP Notify AOGCC 24 hour in advance of BOP Testing NU 10,000 psi BOP.Test BOP in accordance with pressure requirements identified on the Permit to Drill. Drill Intermediate Hole MU 12.25" drilling BHA . RIH and drill out cement to FC. Test casing to 3,500 psi. Drill out shoe and 20' (not to exceed 50') of formation. Perform LOT. Drill LWD log and survey to TD @ approx 13,000'. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Drop Totco check shot survey. Flow check well. POH. RUN 9-7/8"Casing Install and test 9-7/8" rams. RU and run 9-7/8" casing, casing hanger, running tool and landing joints. Run and land 9-7/8" casing on the mudline hanger. Condition Mud. Cement 9-7/8" Casing Conduct PJSM for cement job. Mix and pump lead cement followed with tail cement per cementing program. Displace with mud. Bump plug . Check floats. Pressure up and open Hydraulic DV collar with 2,500 psi. Mix and pump cement. Displace with mud. Bump plug. Open wash ports in the MLH and flush 13-3/8" X 9-5/8" annulus. Close wash ports and test 9-5/8" casing to 6,250 psi. PT annulus to 1500 psi. Land 9-7/8"Casing and Install Packoff. ND 10,000 psi BOP. Pull 9-7/8" casing into tension and set in slips. Cut and dress casing stub. Install packoff. NU wellhead spool 13-5/8" 10,000 psi X 11" 15,000 psi.Test packoff. NU BOP Notify AOGCC 24 hour in advance of BOP testing NU 15,000 psi 11" BOP.Test BOP in accordance with pressure requirements identified on the Permit to Drill. 10 Drill Production Interval. MU 8-1/2" bit and drilling assy. RIH and cleanout cement to FC. Test casing to 6,250 psi. Drill out shoe and 20' (not to exceed 50')of formation. Perform LOT. Drill, LWD log and survey to TD @ approximately 15,992'. Circulate and condition hole. Make wiper trips as required. Pump and spot pill. Drop check shot survey. Flow check well. POH. Run open hole logs as required. RUN 7" Liner RU and 7" 35#casing per liner program with liner top approximately 300' above 9-7/8" casing shoe. Cement Liner Conduct PJSM for cement job. Mix and pump cement per cementing program. Displace with mud. Bump plug. Check floats. Set and release from liner hanger. CBU & POH. Cleanout Liner MU cleanout assembly and RIH. Prior to cleanout confirm cement has reached a compressive strength of 2,000 psi. Cleanout to liner top and test liner lap to LOT+ .5 EMW. POH. RIH cleanout liner to PBTD. POH. LOGGING RU E line and run cased hole logs as required. Suspend Well Notify AOGCC 24 hours in advance of abandonment's to allow for witnessing. Abandonment's of the surface casing will be completed with kill weight fluid in the abandoned casing, annuli cemented and a combination of cement and mechanical plug in the casing in accordance with the state regulation. Release rig and tow to winter warm stack location. 11 FURIE OPERATING ALASKA, LLC KITCHEN LIGHTS UNIT #2 2012 DEPTH VS DAYS 1lII 11111 1 1111111111111 11 111111111x1 1�i . 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Geo Mechanical Plot KLU#2 0 1 1 1 1 1 I 2000 4000 6000 8000 —II—LOT Depth in ft - MW 10000 — —*—Pore Pressure 12000 14000 16000 EMW in ppg 18000 8 10 12 14 16 18 20 22 13 N � c m `� O V }, N U a Vl _ -0 -0 O -0 -0 .0 N Ln N O1 ri 00 CO d' 00 O O E C LID • O 00 QjA 21.) = L V 0 -0 - - N IJl N N N N Ll N ri N l0 O J C O O Ol }+ N N C (f) 4-1 - - -0 O - X Ln Ln N On N c O X11 r1 ri m d' O z O O 4- 4J O U 0) W N C E O 00 r+ 00 ri N O '�f %.i.) d' lD N W N N al r� 13 4) t]A - Q) U c C N (B +-+ a) a- t + U U C C CI + U cn v 2 Furie KLU#2 Casing Design Calculation based on the Energy Resource Conservation Board Alternative Design Method Collapse Burst Burst Conn. Tension SF Collapse SF Burst SF Tension 20"106#J-55 BT&C 770 2410 2410 1683 1.59 2.12 7.72 20" 133#J-55 BT&C 1500 3060 3060 2123 2.58 2.69 47.2 20" 169#X-56 BT&C 2500 3380 3440 2689 2.72 2.98 36.8 13-3/8 72#N8OHC BTE 3470 5380 5380 1850 1.46 1.76 11.9 9-7/8"62.8#Q125 523 11140 13850 13850 1817 2.52 1.25 3.24 7"35#Q125 STL 14310 15570 15570 864 1.05 1.18 5.02 "c"designation on Burst rating indicates connection limited. 20"Casing Collapse pressure based on Max mud wt at casing seat 20" 106#J-55 BT&C Collapse Rating psi SF Collapse Pressure(9.3*1000* .052)= 483 psi 770 psi 1.59 20" 133#J-55 BT&C Collapse Pressure(9.3*1200*.052)= 580 psi 1500 psi 2.58 20" 169#X-56 BT&C Collapse Pressure(9.3*1900* .052)=918psi 2500 psi 2.72 Burst= Frac gradient at shoe 11.SFIT(Offset KLU#1 Well) 11.5* 1900*.052= 1136 psi Burst Rating psi SF 20" 106#J-55 BT&C 2410 2.12 20" 133#J-55 BT&C 3060 2.69 20" 169#X-56 BT&C 3380c 2.98 Tensile Strength String String Full String From 1000' From 1200' Pipe area20"OD x 18.375"ID 48.97 sq in Bouyed 48.97 sq in*9.3*1900*.052= 44,995 (+) 44,995 (+) 44,995 (+) Pipe area18.73" ID x 18.375" ID 13.17 sq in 13.17*.052*1200*9.3 7,644 (-) 7,644 (-) Pipe areal9"OD x 18.73" ID 10.18 sq in 10.18*.052*1000*9.3 4,926 (-) Air Wt(169*700)+(200*133)+(106.5*1000)= 251,400 (-) Air Wt(169*700)+(200*133) 144,900 (-) Air Wt(169*700) 118,300 (-) Net Hanging Wt. -218,975 -44,995 -73,305 Tensile SF 20"106#1-55 BT&C 1683K 7.72 20" 133#J-55 BT&C 2123K 47.2 20" 169#X-56 BT&C 2689K 36.8 15 6/10/2012 13--3/8 Casing Collapse pressure based on mud density at casing point Collapse Pressure 72# 9.9*4600* .052=2368 psi 13-3/8"Casing Collapse Rating psi SF 13-3/8 72#N80HC 3470 1.46 Burst=Frac Gradient at shoe LOT from offset well 12.8*4600'*.052= 3061psi Burst Rating psi SF 13-3/8 72#N80HC 5380 1.76 Tensile Strength 1850k Pipe areal3-3/8" 72# 13.375"OD x 12.34" ID= 20.76 sq in Bouyed 20.76 sq in*9.3*4600*.052= 46,181 (+) Air Wt(72*4600)= 321,200 (-) Net Hanging Wt. -275,019 Tensile SF 13-3/8 72#N80HC 1,556 11.9 16 6/10/2012 9-7/8 Casing Collapse pressure based on mud density at casing point Collapse Pressure 9-7/8 11.*13660* .052=7641 psi external 1/2 column height from next casing TD with 9.3ppg = 6680*.052*9.3 ppg=3230 psi internal mud weight during out shoe 4410 psi Collapse Rating psi SF 9-7/8"62.8#Q125 LT&C 11140 2.52 Fracture gradient at shoe minus gas gradient (17.8 ppg*.052*13360)-(.1)* 13360=11,030 psi Burst Rating psi SF 9-7/8"62.8#0125 LT&C 13850 1.25 Tensile Strength Pipe area 9-7/8" 62.8# 9.875"OD x 8.625" ID= 18.16 sq in Bouyed 18.16 sq in * 11.0*13,360*.052= 138,777 (+) Air Wt(62.8*13360)= 839,008 (-) Net Hanging Wt. -700,231 Tensile rating SF 9-7/8"62.8#Q125 2270K 3.24 17 6/10/2012 7"35#Q125 LT&C Collapse pressure based on mud density at casing point Collapse Pressure 16.4*15992* .052=13638 psi Collapse Rating psi SF 14310 1.05 Burst=DST reservoir Pressure from Offset well 13484-.1*(15992-13150) =13,200 Burst Rating psi SF 7"35#Q125 STL 15570 1.18 Tensile Strength Pipe area 7"35# 7.0"OD x 6.004"ID=10.17 sq in Bouyed Force 10.17sq in*16.4 ppg 15992'*.052= 138,698 (+) Hydrostatic acting on liner immediately below running tool Area OD 7"liner X 5"DP area=18.85 sq in 18.85 sq in*052*13150*16.4= 211,389 (-) Air weight 2842*35#/ft 99,470 (-) Net Hanging Wt. 172,161 7"35#Q125 STL Tensile rating SF connection 864K 5.02 18 6/10/2012 Formation integrity Test Procedure: Drill out the casing shoe plus 20' minimum and 50'maximum of new hole. Circulate and condition to establish a uniform mud density throughout the system. Pull bit above casing shoe. Close the blowout preventer. Using cement pump, pump down the drill pipe at a rate of 1/4 bpm. On a graph plot the fluid pumped in% bbl increments versus drill pipe pressure until the formation at the shoe starts to take fluid; at this point,the pressure will continue to rise, but at a slower rate. 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ZF ' r 40" 0.D. • 30" ' , 1 , -_____.---- --- 20" ----13-3/8" , .. 9-5/8 , , 1 Escopeta Kitchen Light#1 —,CAMERON [ Jeanette 1 2-24-11 1 #1 20778155 '7 g 1 ' e ntnc 15 Ce ntric 15 EX Running Tie-Back if I, Ln:''Torque' I ai Torque and Lift / Washout i,,!j Profiles with Running Tie-Back ® Tie-Back Tools Prea6gnment 1 k II i Torque and Lift \ !Vi: Tapered Thread Tot nue \ Tie-Back Option Pro„ileswith '4 -If Pie/Iles Running Tools �• t !Jill tvtetal Rtmntng r estenratRobust T.yrei eclTest Port TiebackRobust ape!d Toot Seals II 1-11,4 Pressure Balanced , , p N1.2.,,,,; Running Valve Allows I RdiTbrearl ,,,,11' ' - Thread i // Testing from Above I Alignment r'�, Full Thread Tieback +. ^i - Dual Metal Alignment I Thread 1.:;, Tie-Back Seals ttetaiSeN BackUr t Annular Seal with r_ seals l Dual Concentricity 1,„ I t Resilient �. far Parallel Position K d, { � Capability Bach Up ii ' oust Petal { --Hanger Lockdown Una!4' ToMetal Interface Test V j I tI Capability Gems izalion Facility _ x .1 j t i 1 a i a Single T/A Cap i I. for Bore and Cage- tt Retained (� IIt Annulus _ ; i Profile Stab Type iii �{I `� Accommodates = Engagement tvTaeimized t `'. a Flow Sy Deb;i5 i" T "iltrl Dual Concentricity I ,e,, 1 Self Setting ---� ,"for Parallel Position q Split Cageit 1 r+�1 , Split Ping r '1 = I Replaceable {� 1 • I 30"Conductor .r 30"Conductor 20"Casing ,....r 20"Casing 13-3/8"Casing = 13-3r8"Casing 9-5/8"Casing 9-5/8'Casing ., a Page 1 of,i( Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Thursday,August 09, 2012 2:50 PM To: 'Ed Ferguson' Cc: Davies, Stephen F (DOA) Subject: RE: FOA KITCHEN LIGHTS UNIT#2 PERMIT TO DRILL Ed, I am reviewing the PTD now ... a couple of comments. BOP testing as follows : 21 1/." BOP =4000 psi Annular= 1500 psi 13 5/8" BOP= 7500 psi Annular— 3500 psi 1)What is the rationale for testing the 13 3/8"casing to only 1000 psi before drilling out? Is MLS system weak link? 2500 psi is more in line with usual practice 2) In your procedure you had a test pressure for the 13 3/8"casing rams at only 2000 psi. This should be 4000 psi ( BOP required test pressure for the 21 1/4 stack) 3) The 13 5/8" BOP test pressure will be 7500 psi (3500 psi for the Annular) based on your provided MASP calculations. Your procedure states 6500 psi. 4) Can you provide the standard procedure the rig uses when a drilling kick is detected .... Regards, Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Ed Ferguson [mailto:ed.ferguson70@gmail.com] Sent: Wednesday,August 08, 2012 8:48 AM To: Schwartz, Guy L(DOA) Subject: RE: FOA KITCHEN LIGHTS UNIT #2 PERMIT TO DRILL Am revising currently,will forward to you this afternoon. Ed From: Schwartz, Guy L(DOA) [mailto:guy.schwartz@alaska.gov] Sent: Wednesday, August 08, 2012 11:47 AM To: Ed Ferguson Subject RE: FOA KITCHEN LIGHTS UNIT#2 PERMIT TO DRILL. Glad you could find the BOP on short notice.. will look for the revised PTD. Bob gave me the detailed rig procedure for KLU#2 (Draft copy) for my review a while back ... since there were so many changes I would like to see the updated rig procedure too. Guy Schwartz g/9/7(117 Page 1 of 2 Schwartz, Guy L (DOA) From: Ed Ferguson [ed.ferguson70@gmail.com] Sent: Wednesday, August 08, 2012 8:48 AM To: Schwartz, Guy L (DOA) Subject: RE: FOA KITCHEN LIGHTS UNIT#2 PERMIT TO DRILL Am revising currently, will forward to you this afternoon. Ed From: Schwartz, Guy L(DOA) [mailto:guy.schwartz@alaska.gov] Sent: Wednesday, August 08, 2012 11:47 AM To: Ed Ferguson Subject: RE FOA KITCHEN LIGHTS UNIT #2 PERMIT TO DRILL Glad you could find the BOP on short notice.. will look for the revised PTD. Bob gave me the detailed rig procedure for KLU#2 (Draft copy) for my review a while back ... since there were so many changes I would like to see the updated rig procedure too. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Ed Ferguson f mailto:ed.ferquson70@gmail.comI Sent: Wednesday,August 08, 2012 6:54 AM To: Schwartz, Guy L (DOA) Cc: Damon Kade; David Elder;Tom Hord; 'Jerry Cloud aol'; tncosenza@aol.com; lames Pritchard; spartan-rig@furiepetroleum.com; Keith Freeny; b.laule@furiepetroleum.com; I.smith@furiepetroleum.com; Bruce Webb; b.webb@furiepetroleum.com Subject:. FOA KITCHEN LIGHTS UNIT#2 PERMIT TO DRILL Guy, A 21%" 10M#WP double ram BOP has been located. I have revised the Permit to Drill,the office manager in Anchorage is putting this all together and will deliver to you first thing this morning. The MASP at 9000' is 3780 psi 4 thus the 21 /2" 10M#WP BOP's(could not locate a 5M#WP BOP). The LOT at the 13 3/8" casing seat is expected to be 13.2 ppg or greater. • ARCO SCI#3 had a 13.2 ppg at 9031' in 1993. • On the KLU 1 in 2011,the LOT at 1805' was 13.8 ppg EMW, but in 2012, the LOT was 12.8 ppg EMW(on the side track,the well bore had been drilled away from the cement plugs into the formation). The maximum anticipated mud weight at 13200' is 11.8-12.2#MW as the ARCO SCI #3 had 11.8 ppg MW at 13000' and 12.2 ppg MW at 13462'. If additional information is necessary, please let me know. R/9/7017 Page 2 of 2 \ Ed M. Ferguson Drilling Engineer representing Furie Operating of Alaska 936.394.5009 (0) 713.254.8333 (M) From: Schwartz, Guy L (DOA)fmailto:guy.schwartz©alaska.govl Sent: Monday, August 06, 2012 6:28 PM To: Ed Ferguson; Bob and Marie Laule Subject: P&A KLU#1 Here is a scan with my comments. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) R/9/7O1 Page 1 of 1 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Monday, August 06, 2012 12:11 PM To7 Bob and Marie Laule Cc: 'Ed Ferguson' Subject: RE: KLU#2 (PTD 212-079) Another question... What is your min LOT for drilling out of the 13 3/8" shoe? Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Schwartz, Guy L (DOA) Sent: Monday, August 06, 2012 12:04 PM To: Bob and Marie Laule Cc: 'Ed Ferguson' Subject: KLU #2 (PTD 212-079) Bob/Ed: I am reviewing the PTD for KLU#2. Can you provide the MASP for the 13 3/8" setting point....You are proposing using the 3M BOP stack so need to have the MASP calculations for this interval separately. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) R/b/2012 FURIE OPERATING ALASKA, LLC KITCHEN LIGHTS UNIT #2 Exploration Well Cook Inlet, Alaska ADL#389198 7/26/2012 // Revised 8/8/12 FURIE OPERATING ALASKA AFE NO. 2012-005: KLU 2 SOIL BORING 0 FURIE OPERATING ALASKA AFE NO. 2012-006: KLU 2 DRILLING ?j FURIE OPERATING ALASKA AFE NO. 2012-007: WINTER LAY-UP DRILLING SUPERINTENDENT: JERRY CLOUD 318-727-8818 (0) 318-628-0053 (M) jlcdrilling&aol.com or j.cloud@furiepetroleum.com ALASKA DRILLING SUPERINTENDENTS: TONY COSENZA JAMES PRITCHARD 318-623-3790 (M) 318-332-4357 (M) tncosenza@aol.com j.pritchard@furiepetroleum.com or foajamesmpritchard@gmail.com WELL SITE SUPERVISORS:907-375-7500 & 907-375-7501 spartan-rig@furiepetroleum.com KEITH MATT KEITH FREENY FRANK JOHNSON RIG CLERK: MIKE KISTNER/BRIAN VINES NIKISKI EXPEDITER: RICKY BELL & SKIP BOYCE 907-690-3114 r.bell@furiepetroleum.com DRILLING RIG: SPARTAN OFFSHORE RIG 151 504-620-8459 Notify AOGCC Inspector during normal office hrs. @ 907-793-1236 (Jim Regg) or after hrs. pager @ 907-659-3607 at least 24 hours in advance of all BOP testing, casing seat tests, well head tests. A complete copy of the AOGCC drilling permit must be on location. FOA KLU 2 PROCEDURE Page 1 TABLE OF CONTENTS 1. Well Bore Schematic & Procedure 2. Vendor recommendations • M-I Swaco - Mud Program • Mudlogging • Directional/BHA & MWD/LWD • BJ - Cement Program • Baker - Liner Running/Packer Setting Program • E-line Program • Cameron -Surface Wellhead & MLS • Drill Bit Recommendations 3. Data •Torque & Drag Calculations • Drill Pipe Specs. • Borehole/Bit Hydraulic Calculations • Max/Min Make Up Torque for all tubulars •Company & Contractor Contact Numbers •Spartan 151 & Rental BOPE Diagrams with certifications •TFA/Bit Nozzle Size Chart 4. Forms • AOGCC Forms 10-403 & 10-407 • LOT/FIT Forms • Well Control Forms & Calc. Formulas • Morning Report Form 5. Offset Well Records ■ Shell SRS State #1 ■ Shell SRS State #2 ■ Arco South Cook Inlet#2 ■ Arco South Cook Inlet#3 FOA KLU 2 PROCEDURE Page 2 FURIE OPERATING ALASKA, LLC KITCHEN LIGHTS UNIT#2 COOK INLET, ALASKA 5/30/2012 GENERAL INFORMATION: Permit to Drill #: XXXXXXXXXXXXXXXXXXX API #: XXXXXXXXXXXXXXXXXXX AFE's: 2012-005 KLU 2 SOIL BORING 2012-006 KLU 2 DRILLING THROUGH SUSPEND (TP&A) 2012-007 2012-2013 WINTER LAY-UP KLU tSurface Hole Location: 1521.6' FNL& 2807.6' FWL of Section 10,T1ON/R11W, Seward Meridian X= 290,840.19'Y= 2,529,041.92' LAT: 60* 55' 1.785" N & LONG: 151* 10' 31.094" W PROPOSED TOTAL DEPTH: TO THE LOWER TYONEK AT+/-13,260'. • OBJECTIVE: The primary objective of this well is to confirm the presence & evaluation of all oil & gas formations encountered from the Sterling(gas), Beluga (gas),Tyonek (gas), & Tyonek Sunfish (oil) with safe & prudent operations complying with all environmental & regulatory concerns as cost effectively as possible. CHALLENGE:The challenge will be to accomplish these operations (minimize rig down time and maximum efficiencies for each and every operation) & mobilize the drilling rig off location prior to the end of the drilling season, or 10/31. ANTICIPATED RIG &WATER MEASUREMENTS: / RKB 218' HIGH TIDE 135' MLLW 105' SEA FLOOR 0' FORMATIONS ANTICIPATED: FORMATION SSTVD* RKB BELOW MSL STERLING 2546' 2765' 2838' BELUGA 4507' 4726' 4559' TYONEK GAS 8802' 9021' 8894' TYONEK SUNFISH (oil) 13075' 13294' 13167' TOTAL DEPTH 13260' 13479' 13352' '* Above depths are calculated by taking the depths supplied by the geologist for "below MSL" where the MSL is defined at 92'. The RKB to sea floor is estimated at 219', or the SHL is in +/-106' MLLW (mean low low water) plus 30' for high tide + 30' air gap + 53' from bottom of drilling barge to the RKB. The height difference in 219' RKB to 92' MSL is 127'. Taking the "below MSL" depths plus the 127' yields the RKB depths and the SSTVD is the depth below the sea floor, or the RKB depth minus 219'. FOA KLU 2 PROCEDURE Page 3 After the drilling operations commence, these various formation depths will be defined for this well &the casing seat depths will be adjusted. TUBULAR SETTING DEPTHS, DIMENSIONS& MINIMUM PERFORMANCE PROPERTIES: OD, WT, GRADE, CONNECTION/CPLG OD/ ID/DD, COLLAPSE BURST TENSILE YIELD CONDUCTOR: 1000'-20"106.5# K-55 BT&C / 21.000"/19.000"/18.812" 770 2410 1685K 200'-20"133.0# K-55 BT&C / 21.000"/18.730"/18.542" 1500 3060 2123K 700'-20"169.0# K-55 BT&C / 21.000"/18.376"/18.188" 2500 3380 2692K 1900' SURFACE: +/-9000'-13 3/8"72# H/C N-80 BT&C 14.375"/12.347"/12.25 SD 3470 5380 1661K INTERMEDIATE: 9260'- 9 7/8"62.8# H/C 0-125 HYDRIL 523 10.087"/8.625"/8.500" 11140 13840 1817K +/-4000'- 9 7/8"62.8# H/C Q-125 A/B ANJO 13260' 10.162"/8.625"/8.500" SD 11140 13840 1693K LOGGING PROGRAM: RKB MD INTERVAL: MWD/LWD 380'- 1900' RESISTIVITY-GR 1,900'- 9000' RESISTIVITY-NEUTRON-DENSITY-SONIC-PWD-GR 9000 '-13,260' RESISTIVITY-NEUTRON-DENSITY-SONIC-PWD-GR Open-hole logs (OPTIONAL DEPENDING ON RECOMMENDATION OF GEOLOGIST AND MANAGEMENT—WILL INFORM): 1,830'- 9,000' XPT/MDT's, NMR, FMI-SONIC SCANNER, ROTARY SIDE WALL CORES (30) 9,000'-13,260' XPT/MDT's, NMR, FMI-SONIC SCANNER, ROTARY SIDE WALL CORES (30) FOA KLU 2 PROCEDURE Page 4 MUD WEIGHT SCHEDULE w/ RHEOLOGY: RKB MD MUD WT YIELD PT API WL HTHPWL 0'-1900' 9.1- 9.3 45-60 NC-8 J - 5000' 9.2- 9.3 20-28 <6 - 6000' 9.3- 9.5 20-28 <5 10 - 7000' 9.4- 9.5 20-28 <4 9 - 7500' 9.4- 9.5 20-28 <4 <9 - 7700' 9.5- 9.6 20-28 - 8000' 9.8- 9.9 20-28 - 9000' 9.8- 9.9 20-28 - 9100' 10.0- 10.1 20-28 - 9500' 10.1- 10.3 20-28 - 9900' 10.8- 10.9 20-28 - 10000' 10.8- 10.9 20-28 - 11000' 10.9- 11.0 20-28 - 11900' 11.1- 11.3 20-28 - 12600' 11.4- 11.5 20-28 - 13000' 11.8- 11.9 20-28 - 13260' 11.8- 12.2 18-24 <4 <9 The above mud weight schedule is an estimate taken from the offset well, Arco SCI #3, & the key mud rheology is taken from the proposed mud program seen in the DRILLING FLUIDS section. ACTUAL WELL BORE CONDITIONS WILL DICTATE THE MUD WEIGHTS AND RHEOLOGY. GENERAL PLAN OF OPERATIONS & POINTS OF INTEREST: Be sure that there is enough stuck pipe spotting fluid, as recommended by the mud company, such as Pipe Lax or Rapid Spot (that can be mixed on the rig) for 100 barrels volume that is environmentally correct. Additionally make sure that there is enough of this stuck pipe spotting fluid at the dock or in the immediate area, that would be available to replenish any of this product that may be used. Be sure that there is a good supply of lost circulation materials stored on the rig if the well bore experiences "seepage" or the whole loss of mud. The coal seams are fragile and can break down to cause the loss of mud volume. In researching the offset wells, this mud loss appears to be "cured" with lost circulation material pills. MI-Swaco will prepare a lost circulation recommendation. Place flow line magnets in strategic locations (at the top of the possum belly and in the ditch) to catch any steel filings from the casing during drilling operations. Once drilling, check the magnets each day and report the amount each day providing the amount for the day and the cumulative amount. This is such a seemingly minor task, but one the open-hole logging tools is a Nuclear Magnetic Resonance with permanent magnet. If this magnet becomes covered with steel filings, it does not work-) this caused the NMR to be run three (3) times in the original KLU 1 in 2011. At +/-$12,500 per hour rig spread rate, FOA KLU 2 PROCEDURE Page 5 .. ..........._........... . those additional 12 hours, cost an additional $150,000 with the added risk of running the tool several times. There is a bit hydraulics recommendation, to be used as a guide at the end of the BIT section of the prognosis notebook. ######################################################################### With any drilling operation, the number of drill pipe joints, drill collars, hevi-wate drill pipe, &the various subs on the drilling rig need to be accounted. With the limited room on the rig, this may be an ever-changing situation. Be sure to keep a continual tally of the number of joints in the hole, number in the derrick, number on the pipe rack, and the joints remaining at the shore base. Check this against the drillier's tally continuously. This is one of the utmost important aspects of the Well Site Supervisor and the Drilling Superintendents should keep up with this in communications with the rig operations. With this information and the average of the drill pipe joints, the depth of the well bore can be estimated within a few feet. ######################################################################### Once in a coal seam, maintain the hydraulics pump pressure and GPM's until the bit has been reamed back up and is out of the coal seam. Then read the well and the hydraulics "may" need to be reduced to keep from losing circulation and causing the coals to water wet, which may create a "sloughing" problem in the coals, utilizing the water loss additives and asphaltenes to combat the water wetting aspects. GEOLOGICAL DISCUSSION: The Sterling formation should be encountered at +/-3304' and extend to 4400' and the Beluga formation should be 4473'-8700'. These are two important formations for the gas production in the field. The Tyonek gas formations extend from +/-8,730' to +/-12,960' & the Tyonek Sunfish from 12,960' to 13,260'. The well bore to this depth, where the 9 7/8" intermediate casing at +/-13,260' is anticipated to be set, can probably be drilled with +/-11.9-12.2 ppg mud weight, if similar to the ARCO SCI #3, which is approximately 3170' to the southeast of this well (the KLU 1 is+/-8440' to the NNE). The current plan is to drill below the Tyonek Sunfish formation & set the 9 7/8" intermediate casing at +/-13,260' as directed. The Shell SRS State No. 1, Furie KLU 1, and the Arco SCI No. 3 are the offset logs that should be used to correlate with the KLU 2, while drilling, unless the well bore correlations indicate otherwise. The geology of these formations are "channel" in nature & the seismic data will be worked to determine these characteristics. Of course, the correlation and well bore conditions will dictate well bore operations. This information should be shared with the Spartan OIM and drillers in the pre-tour safety meetings. FOA KLU 2 PROCEDURE Page 6 Drill these coal seams very carefully by drilling 2'-3' of these coal seams (note: the rig driller, who needs to be educated about these coal seams, should be instructed by the well site supervisors to pick up &/or back ream up the drill string as soon at the ROP increases, pick up and ream back through enough to stabilize the well bore, then drill additional footage, as deemed appropriate, in the coal seam following the same back reaming procedure, ream back down, continue this routine until the coal seam is drilled up. In researching the offset wells, there seems to be more and thicker coal seams the deeper the well is drilled. Therefore the Furie Well Site Supervisors need to be constantly "walking the rig" to make sure that the drillers are continuously cognizant & vigilant in "reading the well" for these coal seams. These coals seams can cause loss circulation, exhibit "sloughing," which can cause well bore "pack off" problems & stick drill string. These coal seams can also exhibit "breathing" or "ballooning" characteristics. where the well bore takes some fluid and then gives the volume back to the well bore & mud system. The drilling fluids need to have the water loss very low (3-5 API water loss, +/-10 HTHP water loss with 4-6 pounds per barrel (or more depending on the well bore conditions) of asphaltenes (asphermol, Soltex, or coupled gilsonite). FOA KLU 2 PROCEDURE Page 7 OFFSET WELL HISTORIES: Note that the following wells are in the sequence of NE to SW as they are seen on the ARCO SOUTH COOK INLET#2: 1. Drilled in 1993 with Adriactic VIII jack-up rig to 15,189' with 15.8#MW 2. Casing program & mud weight • 309'-30" x1/2" W/T drive pipe (tagged sea floor at 194'RKB& 115' of penetration) • 2486'- 13 3/8" conductor • 9913'- 9 5/8" intermediate with 10.1#MW • 15162'- 7" full string with 15.8#MW 3. Notable incidents: none SHELL SRS STATE#1: 1. Drilled in 1962 with a floater, TP&A & re-entered in 1965. 2. Casing program & mud weight • 237'-16" 65# • 2718'-10 3/" 40.5#with 10.6# MW • 13341'-7" with 11.3+#MW • 16366'- 5" liner with 16.5+#MW 3. Suspended well at 14,041'; re-entered the well in 1965. 4. TD at 16,375' with 16.5+#MW 5. Notable events: • 625'-lost 580 barrels of mud (probably in a coal seam & with 10.6# MW as Shell in 1962 was probably concerned with shallow gas and had heavier mud weight to hold back any shallow gas to be encountered. Shell did not report any excessive gas.) • 3393'- lost 200 barrels with 10#MW • 3887'- lost 200 barrels with 10#MW • 4566'- lost 30 barrels with 10#MW • 7243'- lost 100 barrels with 10.7#MW • 7550'- lost 80 barrels with 10.7#MW • 7836'- lost 200 barrels with 10.7#MW • 8467'- lost 150 barrels with 10.7#MW • 8941'- lost 75 barrels with 10.7#MW • 13570'-took a kick(no details), in the Sunfish Channel), weight up from 11.3+to 15.3+#MW • 13814'-took an oil influx with 15.9#MW, weight up to 16# MW • No details are available while well drilled to 16,375'. Final mud weight at 16.5+ ppg MW. FOA KLU 2 PROCEDURE Page 8 ARCO SOUTH COOK INLET#3: 1. Drilled in 1993 with Gilbert Rowe 38 jack-up rig to 16000'with 16.6#MW 2. Casing program & mud weight • 383'-30" drive pipe (tag sea floor at 238', 2' of free fall, 15 BPF initially, 46 BPF at 103' of penetration, drove to 145' of penetration with 100 BPF) • 2494'-20" surface with 9.3#MW (LOT @ 11.6#EMW) • 9031'-13 3/8" with 9.8#MW (LOT @ 13.2#EMW) • 13462'-9 5/8" with 12.2#MW (LOT @ 19.2#EMW—this is questionable??) • 14320'-7" liner with 15.0#MW (LOT @ 18.0#EMW) • 16000'-5" liner with 16.6#MW 3. Notable incidents: • 9843'—lost 2 cones • 13122'—casing wear • 13575'—lost 2 cones • +/-14,000'—took a kick, Sunfish Channel, weight up 11.3# to 14.1#MW, then raised mud weight to 15#MW & set 7" liner at 14,320'. • 15633'—mud losses at 15 BPH, 241 barrels total, well healed • 16,000'—total depth with 16.6#MW. SHELL SRS STATE #2: 1. Drilled in 1993 with floater to 15403' with 16#MW 2. Casing program & mud weight • 41'-30" pile joint • 211'-20" • 1503'-13 3/8" • 5491'-9 5/8" with 10.7#MW • 14630'-7" full string with 12.3#MW • 15403'—Total Depth with 16#MW 3. Notable incidents: • 13231'—well deviation at 10.61 degrees of angle (overall gradual but steady) • 14242'—stuck drill string • 14937'—gas cut mud, 13.3+#MW cut to 12.3#MW, raised mud weight to 14.9# & then to 15.9# MW • 15094'—stuck drill string with 16#MW, spot pipe lax & worked free • 15,403'—total depth, 16.0#MW FOA KLU 2 PROCEDURE Page 9 DRILLING PROCEDURE: During the KLU1 "suspending" operations (TP&A) in 2012, the tugs, as directed by Spartan Offshore in conjunction with the Furie Management, with +/-13,500 HP total (a 4th tug can be utilized from the Anchorage area as necessary, as ordered by the Drilling Superintendent) will be dispatched for the rig move from Seattle, Washington, with an anticipated 7-10 days to run time to the KLU1 well location. After the KLU1 has been �' suspended with a 360* side scan sonar run to check for debris at the KLU 1 SHL, the '1''° drilling rig will be rigged down & secured,jacked down, tugs attached, and the legs pulled 66s from the sea floor. Note Watson ran the shallow gas hazard survey over the KLU 2 location for the AOGCC; no debris were noted, but one boulder was noted at +/-356'. This will be attached to the Permit to Drill for the AOGCC. Prior to moving on location: A meeting of the FOA Drilling Superintendent & well site supervisors, the Spartan Marine Superintendent, all tug captains, and the Fugro Chance personnel will discuss • the rig move onto the KLU #2 SHL. • pin (lightly) the jack-up rig leg cans on bottom with the bow heading at 220*-225* for weather, satellite communications, & practical operations of the rig cranes & cargo boats. • divers will need to substantiate that the leg cans are not setting on any type of obstacle as per the Spartan Offshore insurers. • pre-load the rig on KLU 2 as per the direction of Spartan Offshore. After the rig is pre-loaded to the satisfaction of the Spartan underwriters, the leg penetration will be monitored for +/-2 hours without additional settling & the rig is deemed stable and secure, dump the pre-load water (be sure to report this pre-load volume to the proper regulatory agencies (US Coast Guard (pre-load water requirements) & US Environmental Protection Agency (EPA) as per the NPDES permit). Be sure to report that this water is "pre-load water". it was taken from the Cook Inlet and was returned to the Cook Inlet. Do not describe this water by any other terms. • Jack up to 30' air gap above high tide (this would be +/-60' air gap at the Mean Low Low Level. The rig will be mobilized within 200' of the KLU2 SHL as per the location detailed on the General Information at the beginning of this procedure. Lightly pin the drilling rig legs, run a 360* side scan sonar with as much weight that can be attached at slack tide ("slack tide" infers that the tidal movements have stopped, but by observations by the well site supervisors & drilling superintendents indicate that the tides do not quit moving). If the noted boulder is located & the rest of the side scan sonar is clear, then move on location using the Fugro Chance Starfix GPS positioning equipment. Attempt to get within 30' of the called location—report the SHL to the Drilling Superintendent, who will convey to the Furie management. Lightly pin the rig legs on bottom, deploy divers to check to make sure that the leg cans are not setting on any type of obstacle that would damage the leg can. On the Daily Drilling Report, provide the exact position attained, which will be conveyed to the AOGCC & DNR as well as other regulatory agencies as required. Once the rig is jacked up and stable with agreement with the Spartan Offshore OIM, then the rig tugs can be released. FOA KLU 2 PROCEDURE Page 10 As this well will be the second well of the 2012 drilling season, the AOGCC may not inspect the rig again (notify the AOGCC when the rig is ready for inspection, the AOGCC will decide whether the rig needs another inspection), after the rig is on location & the KLU 2 soil boring operations are completed. Notify the AOGCC after the rig is pre-loaded, jacked up to drilling height, and rigged up for drilling operations. Document on the daily drilling report and on the IADC report the following: • Date and time of arrival of the drilling on location, • Rig move distance, approximate cost of the rig & tugs for the rig move, • Name of the towing tugs, horse power of each, fuel on board the tow tugs, • Date and time the tugs departed the rig, • Fuel on the drilling rig, and • RKB distances to the sea floor. Post AOGCC drilling permit and SPCC plan in the Doghouse & in the Furie Operating of Alaska (FOA) well site supervisor office (ensure that this is accomplished by the medic/clerk with HSE responsibilities). Call the AOGCC to inform them of the rig on location. Notify AOGCC Inspector during normal office hrs. @ 907-793-1236 (Jim Regg) or after hrs. pager @ 907-659-3607 at least 24 hours in advance of all BOP testing, casing seat tests, well head tests. A ✓ complete copy of the AOGCC drilling permit must be on location. ######################################################################### IMPORTANT: On the sediment sampling of the sea floor, the KLU1 mid-well sampling and the KLU2 pre-well sampling will be taken as scheduled by Bruce Webb on the same trip with the cargo boat in mid-June. Then the KLU1 post-well sediment sampling and the KLU2 mid-well sampling is tentatively scheduled for mid-September. ######################################################################### Rig up rig & skid out cantilever substructure for operations, off load & perform installation of numerous materials & service company equipment. Install & test the PVT equipment and gas & hydrogen sulfide sensors prior to spudding the well &for inspection by the AOGCC when the 30" annular & diverter system is being inspected. Contact the US Coast Guard and alert them of your progress onto the location and arrange for them to come to the rig for their inspection, if an inspection is necessary. Contact the AOGCC & alert them of your progress and arrange for them to come out to inspect the rig. • Be sure you have the test pressure records for the 15,000 psi choke manifold (that is probably their first area of concern). • The test certifications of the various BOPE & especially the test pressure of the blind/shear rams for cutting the drill pipe & the pressure requirements of the blind/shear booster pump. FOA KLU 2 PROCEDURE Page 11 • Additional items to be inspected can be supplied by FOA Drilling Superintendents. Jack up to +/-3'-5' air gap at high tide and pre-load the lack-up as per the direction of the Spartan OIM &/or underwriters in two stages (+/-1/2 of the pre-load on the first stage and the full load on the second stage to +/-17,000 kips). The KLU 1 did not have any leg penetration in 2011 nor in 2012, but this location is approximately 1 %2 miles to the southwest and there could be some penetration and the penetration could be 5'-7' as per offset wells, if ARCO was accurate in their measurements as it is difficult to determine with the fluctuating tides. After the pre-load is completed, jack up to 30' air gap at high tide at +/-135' from the sea floor &the RKB at+/-218'. Jim Regg, AOGCC supervisor, & his inspectors will want to inspect the rig thoroughly before drilling operations can commence (the AOGCC is evidently not concerned with the soil boring operations). Every aspect of the rig will need to be ready, such as the accumulator pressure & booster pressure (clean with no particles in the volume bottles) for the blind/shear rams, the mud loggers with different alarms for the gas and for any possible hydrogen sulfide (H2S), the driller's flow show, the pit volume totalizer with controls at the driller's console that the driller can monitor and adjust, all of the permit notebooks & notices (be sure the Permit to Drill and the kill sheet is posted in the well site supervisor's office, OIM's office, & at the driller's console). RU the 30" drive pipe handling tools with tongs to make up the Dril Quip "quik connectors" (6 joints) with the drive shoe welded. Wait on the slack tide to "stab" the 30" into the sea floor so that the drive pipe is as vertical as possible. Tag the sea floor & allow any 30" to free fall (on the KLU 1 in 2011, this drive pipe had 4'-5' of free fall & 5'-8' with zero blows), BUT DO NOT DRIVE THE 30" DRIVE PIPE AT THIS POINT DUE TO THE SUBSEQUENT SOIL BORING OPERATIONS. Pete Tester will rig-up his soil boring equipment and run the 5 'A" casing inside the 30" drive pipe. The Drilling Superintendent should communicate with Tester to make sure of the procedure and that all equipment necessary is supplied, either by Tester or Furie. >6" The , S The coring samples will be taken to 120'-150' of penetration from the sea floor, or to a Q„t✓- minimum of 100' of penetration with 50' of firm, dense strata recovered. Tester's Keith Mosley, geotek, will be monitoring the soil boring operations and will "make the call" when these operations should terminate. The Alaskan state regulatory agencies allow 300' of penetration below the sea floor without additional permits. If the RKB is 218', this 1y20'-150' of penetration will be 338'- 368' RKB. Send the core samples to Keith Mosley for the samples to be analyzed & these results will be sent to Greg Ruhl, M&H Engineering in Houston. Once the soil boring operations are completed, the 5 'A" casing will be retrieved and the 30" drive pipe will be driven to refusal with a Franks D-62 hammer. DRIVING THE 30" DRIVE PIPE: RU the Franks D-62 hydraulic hammer and equipment. Utilize all of the 30" with the DrilQuip "quik" connectors, then make up the cross over joint (DrilQuip pin by Franks Tencom "quik" connector box—should have a back-up joint) (utilize the joints & drive ,. / FOA KLU 2 PROCEDURE Page 12 subs available—attempt to use all of the DrilQuip drive pipe for inventory purposes) drive subs & the eventual Franks "Tencom"joints, which will be utilized on this well and future exploratory wells. Drive to refusal at 100-110 blows per foot (the KLU1 had 110 BPF with 165' of penetration with 4' of free fall and another 3' of penetration with "0" blows). ARCO used a jack-up drilling rig and drove 30" drive pipe as follows: • SCI #2 to 309' (194' RKB to sea floor with 115' of penetration) & • SCI #3 to 383' (238' RKB to sea floor with 2' of free fall, 103' of penetration with 46 BPF, & 145' of penetration with 100 BPF) Send the driving record with the penetration & associated BPF to the drilling staff for their perusal. Assuming 165' of penetration, as seen on the KLU1, install the Drake vanes (spaced out every 20' in the water column from 20' above the sea floor (to be above the top of the 30" stub when the well is TP&A'ed at +/-15'above the sea floor) to top of the +1-105' MLLW tide, as directed by the drilling superintendent. The Butt Weld Sub ("BWS") mud line suspension hanger (26 'A" ID) is installed 10' from the pin end of the third (3rd) joint from the bottom of the drive shoe; this is ' m +/ ' 0' below 14\,1"), ; the sea approximately floor, depending95from the on thebottoactualof penetrationthedriveshoe of thetoplace 30" driveBWS pipeat at-47 142-7' to 165' • 14 below the sea floor. The 30" drive pipe will be run (BUT NOT DRIVEN AS NOT TO DISTURB THE SOIL BORING DATA TO BE COLLECTED) to the sea floor for the soil boring operations. Perform the KLU2 soil boring operations as per the KLU1 procedures with Testers Soil Boring operations. During the soil boring operations, Can Rig can finish whatever is necessary for the possible rig inspection, which should be already rigged up and ready with the PVT system, mud loggers with all of the alarms, and the check list from the previous rig inspections in 2011 & 2012 on the KLU1. Be sure that there is back-up equipment for the various BOPE stacks (30" annular with diverter lines, 20" annular and rams, & 13 5/8" 10M#WP for the annular preventer, the rams, valves for the HRC and hoses from the kill manifold to the kill spool) as well as the Varco TDS 3 top drive & other pertinent rig equipment. DRILL CONDUCTOR HOLE: 1214" Pilot Hole w/Open to 26" Well Bore/ Run 20" Casing: 0'–+/-1900' RKB Interval Hazards & Risks: • Heavy, water-wet clay section (called "gumbo" in other areas) and bit balling– elevated mud viscosity from spud. • Pea gravel & rocks—flow line plugging, especially cleaning out the 30" drive pipe and the top portion of the conductor hole. • Shaker/Trough Overflow–additions of drilling lubricant & controlled ROP. FOA KLU 2 PROCEDURE Page 13 • Lost Circulation, probably in having too high of mud weights and losing mud in the coal seams–Add LCM (attempt to stay with the calcium carbonate blends); reduced pump rates & mud rheology; controlled running speeds. • Washouts & Hole Sloughing–controlled rheology of water loss & use of asphaltenes. NU 291/2" 500#WP annular preventer and 12" diverter system: With 218' RKB to sea floor plus 165' penetration equals 383' with BWS at +/-288' RKB. Preferably the BWS needs to be 25'-50' or more below the sea floor—the hammer blows per foot is the key requirement. After driving the 30" to refusal, cut 30" conductor as needed (allow room for the bellying of the drive pipe (none has been observed on the KLU1 with the 30" X 11/2" WIT X-52/X- 56 drive pipe), but the KLU2 is in +/-17' deeper water, as per bathymetry mapping. The well site supervisors have reported that the tidal and wave action, coupled with high winds, has really "rocked and jerked" the 11"15M#WP BOPE on the KLU 1 while drilling below the 9 7/8" casing seat. With this increased water depth, the drive pipe may not be affected, but plan to have the top of the 30" drive pipe 3'-5' above the bottom of the drilling rig barge, secured with the BB winches. After finished driving the 30" drive pipe, secure it to rig with the drive pipe "stiff arm" that is equipped to be able to securely stabilize in the stiff arm PLUS 4 cables & BB winches as near bottom of rig hull as possible. Weld on the 29 32" 1M#WP diverter flange to top of drive pipe. NU the 29 32" 500# WP annular preventer and the 12" diverter system. The diverter lines need to be secured, but not to where they cannot slide back & forth, with some play for the "sway &/or up & down" movement of the drive pipe, with the current fluctuations. These 12" diverter lines will be hung with cables. Be sure 30" 1M#WP flange is welded on perfectly level, if possible, in order to minimize DP wear on subsequently installed wellhead spools. NU 29 1/2" 500# WP diverter & spool with two (2)--12" flanged diverter lines & hydraulically operated knife valves. The 12" ball valves must be set up to actuate fully open BEFORE the 29 3z" annular fully closes. NU & function test the 30" annular preventer with the 12" dual diverter system. Be sure that the PVT/flow show system is working properly, as well as the mud logging with the hydrogen sulfide & methane gas detectors and alarms. Contact the AOGCC inspector to witnesses these tests. Install the "+10'-- 6" 1000 psi WP" remote controlled actuated valve assembly with the remote controls on the driller's console and at the escape capsule. This "plus 10' valve" is used to be able to drain the diverter stack and drive pipe of fluids to aid in pumping a good cement job around the 20" conductor (lessen the hydrostatic column if a low pressure zone is taking drilling fluids & to dump excess cement returns from the annulus of the 20" conductor cement job into Cook Inlet). When the "+10' valve" is open, a responsible person, equipped with a radio to the driller must observe any flow. Record these operations on the IADC & daily drilling reports. FOA KLU 2 PROCEDURE Page 14 Note: Notify AOGCC inspector @ 907-279-2714 (Jim Regg) or the 24 hours after hours numbers @ 907-659-3607 prior to being ready to function test diverter such that inspector is there to witness function test. Prepare spud mud per attached mud program with high viscosity mud for the anticipated pea gravel zone. Prepare a reserve pit of 10 ppg drilling fluids in case a pocket of shallow gas is encountered. In preparation to SPUD well, PU & stand back +/-2000' of 5" DP, HWDP & jars in derrick (or enough to drill to 1830' RKB plus +/-35' for the reaming and setting the MLS hanger). Be prepared to detect any shallow gas. Wash out 30" drive pipe: PU 26" rental bit, RIH & tag mud line. Displace seawater with high-viscosity spud mud. Clean out 30" conductor to bottom + 20' new hole in order to check integrity of 30" seat ,/ for any fluid loss. POH. On the KLU1, there were problems in washing out the pea gravel & rocks (plugged up flow line & flooded shakers), be sure that the drilling fluids has sufficient viscosity & pump volume to carry these cuttings out of the well bore. The drilling operations were halted to clean out. NOTE: All PVT monitoring equipment will be functioning properly, as inspected and approved by the AOGCC, before drilling below 30" drive pipe. Have a pit of 10 PPG mud ready in case shallow gas is encountered, which is not anticipated. If a SHALLOW GAS or SALT WATER FLOW is encountered continue to pump mud, including the pit of 10 PPG (then seawater, if needed) & divert the flow through the "down wind" diverter line to attempt to stabilize well. DO NOT SHUT IN THE WELL. DRILL CONDUCTOR WELL BORE TO +/-1900' RKB + +1-35' (note that the ✓ AOGCC stipulated that the maximum depth is 1700' SS TVD (below the sea floor, or a maximum of 1918' RKB MD). PU BHA w/ MWD/LWD: EQUIPMENT DESCRIPTION OD X ID CONNECTIONS PIN X BOX 12 %" MILL TOOTH BIT 6 5/8" REG 9 1/2" ULTRA XLMOTOR w/ 1* AKO w/ FLOAT 12 1/8" 6-5/8" REG Box X 6-5/8" H90 Box TAPERED SUB (9 %"PIN X 8" BOX) 9 1/2" & 8"OD 6-5/8" H90 X 6-5/8" H90 Box 8" NM DRILL COLAR 8" X 2.75" 6-5/8" H90 X 6-5/8" H90 8" NM 12 1/8" OD STABILIZER 8.25" X 2.82" 6-5/8" H90 X 6-5/8" H90 NM-XO 8.00" X 2.88" 6-5/8" H90 X 6-5/8" REG STOP SUB 8.25" X 2.81" 6-5/8" REG X 8-1/4" T2 On Trak LWD/MWD 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 12 1/8" MOD. STABILIZER 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 BCPM (turbine/pulser) 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 NM STOP SUB 8.25" X 2.81" 8-1/4" T2 X 6-5/8" REG NM FILTER SUB 8.25" X 3.00" 6 5/8" REG X 6-5/8" REG NM X/O SUB 8.00" X 2.88" 6 5/8" REG X 6 5/8" H90 2- 8 " NM DC 8.25" X 2.81" 6 5/8" H90 X 6 5/8" H90 FOA KU) 2 PROCEDURE Page 15 X/O SUB (STEEL) 8.00" X 2.88" 6 5/8" H90 X 4 /2" IF 21- 5" HWDP 5" X3" 4 %2" IF X4 /2" IF 8" HYDRAULIC JARS 8" 4 %2" IF X 4 %2" IF 9- 5" HWDP 5" X3" 41/2" IF X4 /2" IF ACCUMULATIVE LENGTH==1122.55' TO TOP OF DRILL PIPE Note: plan to drill this section of hole with Resistivity-GR only. SENSOR DISTANCE FROM BIT: Gamma Ray 72.9" ECD 73.7' Resistivity 78.3' Directional 85.1' Drill 12 %" pilot hole, with a high viscosity mud for the anticipated pea gravel, to the proposed 20" conductor casing setting depth at +/-1900' RKB + 35' rat hole. Top of the / / pgssible shallow gas could possibly start below 20" casing seat at +/-2300' as per the , AOGCC on the KLU1., The Sterling formation is anticipated at 3304' RKB. Drill hole to depth sufficient to land casing BML on 30" BWS & the 20" casing seat as near to 1900' RKB as possible. See recommended BHA, mud program & hydraulics attached. SLMOH. Note that the Shell SRS State 1, the Arco SCI 2, nor the Arco SCI 3 had any shallow gas detected as per the reports on file in the AOGCC data base, but that does not mean that the KLU 2 well will not encounter shallow gas. The well site supervisors and rig crews need to be very cautious in the drilling operations should the shallow gas be encountered. Control drill vertically at +/- 500 GPM pump rate until +/- 200'-300' below 30" conductor seat, or to 560'-660', increasing pump volume and pressure. Control drill hole to maximum ROP of +/-150 feet per hour (or as directed by the Drilling Superintendent) making sure that the mud weight "out" does not exceed 10 ppg4 it is better to drill at a "steady" penetration rate (there is less stress to the wellbore) than to drill as fast as possible and then having to stop drilling to circulate & condition the mud-- bringing down the mud weight. This could lead to undue risks in the well bore, such as increased seepage, mud "breathing" or "ballooning," lost circulation, & stuck drill string. IMPORTANT NOTE: If the well bore experiences "seepage" of the drilling mud, then there are cases reportedly in the Cook Inlet that exhibit a phenomena called "BREATHING" or "BALLOONING" where on connections, the well may appear to be flowing on the annulus, which it is, but not necessarily from a formation of higher formation pressure. The weaker formations, such as a coal seam, would have been "drinking" fluid (seepage) and then when the equivalent circulating density (ECD) is removed by shutting down the pumps, like on a connection, the fluids in the weaker zones may flow back into the well bore. Included in this prognosis notebook is a procedure for determining whether the well is "breathing" or having a well control problems. Be sure to full length drift the 20" to a minimum of 17.75" on the rig, as the casing could have been damaged while loading to the boats and then offloading to the rig. Submit FOA KLU 2 PROCEDURE Page 16 this information on a tally sheet to the Drilling Superintendent and Drilling Engineer via email. OPEN HOLE FROM 12 ''A"TO 26" WELL BORE: !/ PU 12 %" x 26" roller-cone hole opener BHA (WEATHERFORD IN RED). tiv EQUIPMENT DESCRIPTION OD X ID CONNECTIONS 6'- 12 'A" BULL NOSE 12.25" 6 5/8" REG PIN Bit Sub w/ FLOAT 8" X 2.5" 6 5/8" REG BOX X BOX WEATHERFORD 26" HOLE 8.25" X 3" 6 5/8" REG PIN X BOX OPENER 2- 8" DC 8.0" X 3.0" 6 5/8" REG PIN X BOX 25.75" STABILIZER 8.0" X 3" 6 5/8" REG PIN X BOX 2- 8" DC 8.0" X 3" 6 5/8" REG PIN X BOX 25.75" STABILIZER 8.0" X 3" 6 5/8" REG PIN X BOX 2- 8" DC 8.0" X 3" 6 5/8" REG PIN X BOX X/O SUB 6.75" X 2.25" 6 5/8" REG PIN X 4 Y2" IF BOX 21- 5" HWDP 5" X3" 4 %2" IFPIN XBOX 8" HYDRAULIC JARS 7.75" X 3" 4 Y" IF PIN X BOX 9- 5" HWDP 5" X3" 4 'A" IF PIN X BOX Using control drilling, open 12 'A" hole to 26" to the 20" surface casing setting depth + rat hole. Be sure to have a stand-by hole opener on the rig at all times during this operation should the initial hole opener wear out. Pump mud sweeps as necessary to clean hole. Circulate the hole clean. Short trip as needed to assure that the hole is clean & no fill is on bottom. Spot a high-viscosity mud in open hole. POH for casing run. Be sure to jet off the BWS when pulling out of the hole. If there is any question as to the "exact" depth of the BWS, make up the "dummy" hanger to determine this depth. NOTE: Be sure 20" circulating swage is on rig prior to running casing. Have low torque valve open on rig floor. 20" CONDUCTOR CASING to +/-1900' RKB: OD, WT, GRADE, CONNECTION/CPLG OD/ ID/DD, COLLAPSE BURST TENSILE YIELD 1000'-20"106.5# K-55 BT&C / 21.000719.000"/18.812" 770 2410 1685K 200'-20"133.0# K-55 BT&C / 21.000718.730"/18.542" 1500 3060 2123K 700'-20"169.0# K-55 BT&C / 21.000"/18.376"/18.188" 2500 3380 2692K 1900' FOA KLU 2 PROCEDURE Page 17 SUMMARY OF 20" CASING STRING: Run/cement 20" surface casing to +/-1900' RKB, making up the "diamonds," with Mud Line Suspension ("MLS") hanger at +/-265'. In running the 20" casing from the MLS hanger to the surface, be sure that the casing is thorou "strap" welded, for the MLS operations, as directed by the drilling superintendent. After cementing, open the 20" hanger ports with rotation to the right, circulate out the annulus, report the amount of cement in the returns, spot the "sugar/lignite" pill around the MLS hanger, close the hanger ports with left hand rotation to the proper torque as per Cameron, & test the hanger internally to 250 psi. ND 30" annular preventer and diverter system. NU & test the 20" SOW X 21 %" 5M#WP well head to 385 psi on chart. NU the 20" annular and two- ram preventers with AOGCC inspector witnessing the BOP tests as well as the formation integrity test (FIT) to 11.5# EMW. 10 Ak C % y " RUN 20" CONDUCTOR CASING: RU the 20" casing running equipment. Note that the float equipment (float shoe & float collar) will be thread lock to the casing "on the beach" to save rig time. Run the casing as follows: 1. On the Cameron 20" C-15-EX mud line suspension hanger, break out and torque to the recommended torque of 2000-2500 foot pounds of torque. 2. Thread lock (should have been thread locked prior to being sent to the drilling rig) the float shoe to the first joint of 20"169# X-56 BT&C casing. Be sure to buck off the casing collar and thread lock the casing collar on the first joint of casing. 3. Thread lock the float collar to the top of the first joint of casing. Be sure to buck off the casing collar on the second joint &thread lock the casing collar. DO NOT THREAD LOCK MORE THAN CAN BE RACKED BACK IN THE DERRICK. 4. Run the following casing: • +/-17 joints of 20" 169# X-56 BT&C (use as much of this 169# as is in Furie stock in Alaska), plus • +/-5 joints of 20" 133# K-55 BT&C, + • +1-18 joints of 20" 106.5# K-55 BT&C to the 20" MLS hanger (Install Cameron 20" C-15-EX mudline hanger with running tool), + • +/-7 joints of 20" 106.5# K-55 BT&C. 5. Be sure to tack weld (3-2" welds on top and bottom of each casing collar) the connection from the running tool to the casing and every joint to surface. 6. Install one 20" bow spring centralizer with stop collar 10' above the float shoe and one over every collar of the first 19 joints. Install one full body centralizer on the joint above the 30" shoe. 7. Run two strings of 1-1/2"wash string to the MLS. RU to circulate with rig pump. 8. RU 20" BHI cementing head and establish circulation. Circulate the well until the shakers are clean and the mud rheology is good for cementing. 1\ - -I, I,./ / I FOA KLU 2 PROCEDURE Page 18 Be sure that the well site supervisors independently calculate the cement job and compare with the cementer's calculations. Utilize the "+10' valve," if there are problems in achieving cement returns or if the cement returns are to the surface. Be sure to have a responsible person with radio contact with the driller observing the returns through the +10' valve. Cement 20" casing per attached BJ cementing procedure—pump the spacer, launch the diaphragm plug, load the solid plug, mix & pump the lead and tail cement, launch the solid plug, and displace with four (4) barrels cement & drilling fluids. When the solid plug lands up, check to make sure the floats are holding. Check to make sure that the 30" X 20" annulus is stable & the well bore on the annulus may be seeping some fluid to the formation–) account for the amount of fluid lost on this annulus, as this will be an indication of whether there is any cement in the 30" x 20" annulus. Open ports on 20" hanger by rotating the casing to the right with +/-3 rounds. Run 2 strings of 1 1/2" tubing to the MLS hanger or as deep as possible, assist in circulating the 30" X 20" annulus clean, as directed by the drilling superintendent. Note: Make sure that there is additional cement with 1%-2% calcium chloride in the cement or can be added to the mixing water in case the annulus needs to be cemented (squeezed below the MLS hanger plus additional lignite/sugar pill around the MLS hanger). Thoroughly circulate out the excess cement above the MLS hanger. Spot a 30 barrel (equivalent to 94' in the 30" x 20" annulus) lignite or sugar pill (as per the Drilling Superintendent direction) around 20" hanger. Close ports on the 20" hanger by rotating to the left with +/-3 rounds & test to 250 psi. At this point, monitor the fluid level on the 30" x 20" annulus: if the fluid level is dropping. Keep the annulus full and note how many barrels it takes to fill the annulus. If the well bore takes 3-4 barrels, this is about 10'-13' of displacement of the retarded pill around the mud line hanger. But if the annulus level is not taking fluid, then close the annular preventer and pressure up on the annular, slowly & gently, & pump 5-10 barrels (15'-30' equivalent), monitor the annulus to make sure the fluid level does not drop too far. Contact the Drilling Superintendent to discuss. After the MLS is closed and tested, ND 29 1/2" diverter & 12" diverter lines. NU 20" SOW well head: Cut off 30" drive pipe & 20" at required height. Install the 20" SOW x 21 %" 5M#WP casing head with the 34" base plate on the 30" drive pipe, utilizing the pre-heat and post-heat for welding. Test the casing head to 50% of the collapse at 770 psi, or 385 psi on chart for the record. NU 21 %"A/P BOPE: '/(1 SI NU 21 %"5M#WP x 21 %" 10M#WP DSA. Check for full drift of 21-1/4" DSA & any spacer spools needed. FOA KLU 2 PROCEDURE Page 19 l4;A NU & test 21 'A" P BOPE (annular + upper pipe rams + lower blind rams) along with 15M choke manifold to 250 psi low & 1000 psi high on annular & 250 psi low/ 5000 psi high on rams (limited by the well head rating). with AOGCC representative to witness. All pressure tests must be held static for 5 minutes (5 minutes for the low pressure and 5 minutes for the high pressure tests) as per the AOGCC regulations. Although this equipment is supposedly equipped with new elastomers, be sure to have new, replacement elastomers located & in the Cook Inlet area. DRILL SURFACE WELL BORE TO +/-8800' RKB, or to the base of the Beluga formaion: 12 'A" Pilot Hole/ Open to 171/2" Well Bore / Run 13 3/8" Casing: 0' to +/- 8800' RKB, or as directed: Interval Hazards & Risks: • Heavy, water-wet clay section (called "gumbo" in other areas) and bit balling– elevated mud viscosity from spud. • Lost Circulation, probably in having too high of mud weights and losing mud in the coal seams–Add LCM; reduced pump rates & mud rheology; controlled running speeds. • Washouts & Hole Sloughing–controlled rheology of water loss & use of asphaltenes. • Gradual deviation development—watch surveys and correct as needed. Summary of section: Drill the surface section with a 12 1/4" pilot well bore with MWD/LWD (NEUTRON- DENSITY-SONIC-RESISTIVITY-GR) with PWD to +1-8800', to the base of the Beluga formation as directed by well geology correlation, with enough rat hole (+/-25'-30') for the reamer and MLS operations. The Tyonek formation is anticipated to be encountered at 8726' RKB. Open pilot hole to 17 'A" with a roller-cone hole opener (there is concern of using a 17 Y2" mill tooth bit to open the well bore with side tracking the well bore). Drill 12 'A" pilot hole: Install wear bushing (wellhead bowl protector). GIH with 17 %2" bit, bit sub, 6- 8" drill collars, 20- 5" HWDP, drilling jars, 10- 5" HWDP to the float collar, as per the direction of the drilling superintendent. Break circulation & circulate bottoms up. Test 20" casing to 1000 psi on chart for the record. Drill out 20" shoe & clean out rat hole to the bottom of the 26" well bore. Drill 20' of new formation. Circulate the_well bore clean. Pull into the 20" casing. Run Formation Integrity Test (FI to 11.5 ppg EMW i ave 9.2 ppg MW at 1918' RKB . (1700' SSTVD) is 203 psi). Contact t - e _ • witness this casing seat test. Depending on the FIT results, be prepared (have excess cement on board) to braden head squeeze the casing seat, if needed. Displace spud mud with MI-SWACO "KLA-SHIELD" per attached mud program. POH. FOA KLU 2 PROCEDURE Page 20 RIH with the following BHA: EQUIPMENT DESCRIPTION OD X ID CONNECTIONS (PIN X BOX) 12 %" PDC BIT 6 5/8" REG 9 1/2" MOTOR w/ 1* AKO w/ 9.5" 6-5/8" REG Box X 6-5/8" H90 FLOAT 9Y2" x 8" TAPERED SUB 8" 6 5/8" H90 X 6 5/8" H90 8" NM DRILL COLAR 8" X 2.75" 6-5/8" H90 X 6-5/8" H90 12 1/8" NM STABILIZER-STRAIGHT BLADE 8.25" X 2.82" 6-5/8" H90 X 6-5/8" H90 NM-XO 8.00" X 2.88" 6-5/8" H90 X 6-5/8" REG STOP SUB 8.25" X 2.81" 6-5/8" REG X 8-1/4" T2 On Trak LWD/MWD 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 12 1/8" MOD. STABILIZER 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 BCPM (turbine/pulser) 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 12 1/8" Litho Trak 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 Sound Trak 8.40" X 3.19" 8-1/4" T2 X 8-1/4" T2 STOP SUB 8.25" X 2.81" 8-1/4" T2 X 6-5/8" REG NM FILTER SUB 8.25" X 3.00" 6 5/8" REG X 6-5/8" REG NM X/O SUB 8.00" X 2.88" 6 5/8" REG X 6 5/8" H90 2- 8 " NM DC 8.25" X 2.81" 6 5/8" H90 X 6 5/8" H90 X/0 SUB (STEEL) 8.00" X 2.88" 6 5/8" H90 X 4 1/2" IF 21- 5" HWDP 5" X3" 4 %" IF PIN X BOX 8" HYDRAULIC JARS 8" 4 %" IF PIN X BOX 9- 5" HWDP 5" X3" 4 Y2" IF PIN X BOX SENSOR DISTANCE FROM BIT: Gamma Ray 72.9' ECD 73.7' Resistivity 78.3' Directional 85.1' Density 112.3' Caliper 113.2' Porosity 118.5' Neutron 120.3' PU the above BHA & RIH. Drill 12 %" pilot hole to +/-8800' + 35' TVD-RKB (for the hole opening operations); these depths will be determined by the geological correlation of the depths the formation tops are encountered & could be shallower. Top of the Tyonek formation is anticipated at +/-8726' RKB. Survey every stand drilled, unless the deviation starts to be a problem. Control drill to maximum ROP of 200 feet per hour as the well bore will allow & as directed by the drilling superintendent. FOA KLU 2 PROCEDURE Page 21 Use all available solids control equipment to control solids buildup and maintain mud weight. Refer to the mud weight schedule (at the front of this procedure, which was tailored after the ARCO SCI #3 well +/-3200' south of this KLU2 SHL) & the detailed Mud Program (attached)for mud rheology schedule for the 17 Y2" hole interval, On short trips, minimize unless there are well bore problems, such as torque, pick up/slack off increases. Well bore conditions will dictate. Normally short trips are recommended, but due to the coal seams, research and experiences on the KLU 1 substantiate this practice. On the bit hydraulics, there is a hydraulics recommendation at the end of the BIT section of the prognosis notebook. The hydraulic horsepower per square inch for the well bores below of the 20" conductor should be in excess of 1.5 HSI or better (in this section of the well bore, the HSI, in the well bore below the 13 3/8" casing, is recommended to be greater than 2.5 at the top and 1.5 toward 13200' RKB), if attainable. This HSI is needed to maximize the ROP of penetration. DO NOT RUN JET NOZZLES SMALLER THAN 11's. IMPORTANT NOTE: Once in a coal seam, maintain the hydraulics pump pressure and GPM's until the bit has been reamed back up and is out of the coal seam, EVEN IF MUD LOSSES ARE EXPERIENCED. Then read the well and the hydraulics "may" need to be reduced to keep from losing circulation and causing the coals to water wet, which may create a "sloughing" problem in the coals, utilizing the water loss additives and asphaltenes to combat the water wetting aspects. Poor borehole cleaning may result in marginal wellbore conditions. Recommend maintaining flow rate between 550 & 650 GPM in the 12 1/4" pilot hole. The well bore will be cleaned with a low vis (water), high vis weighted sweeps. Monitor returns closely for signs of gas and circulate out all gas-cut mud before continuing to drill. The mud loggers will be mud logging & taking formation samples starting below the 20" shoe. Cutting samples should be taken every 30' as directed by the geologist requirements. SLMOH. Stand back MWD/LWD BHA. OPEN-HOLE ELECTRIC LINE EVALUATION OF STERLING/BELUGA FORMATIONS: As directed by the geologist, the 12 X" well bore may or may not be evaluated with electric line logs. If the LWD (NEUTRON-DENSITY-SONIC-RESISTIVITY-GR) provides the data required, then electric line evaluation may not be necessary. If additional evaluation is needed, then the geologists will provide the logging program. Depending on the amount of metal filings on the ditch magnets, a decision will be made as to whether a 17 Y2" casing scraper, magnet sub, & 17 Y2" casing scraper run will be made to the bottom of the 20" casing; one of the electric line tools is a Compensated Magnetic Resonance that has a permanent magnet, which can get covered with the steel filings and disrupt the operation and accuracy of the tool, as seen on the KLU1 well. FOA KLU 2 PROCEDURE Page 22 The logging suite will be determined with the optional logs are as the following as needed & not necessarily in the order below: • FMI-SONIC SCANNER-PRESSURE EXPRESS-CALIPER-GR • NUCLEAR MAGNETIC RESONANCE • ROTARY SIDE WALL CORES The Presure Express will take the interval pressures, but will not take formation samples like the MDT. The Sterling formation is known to be methane and formation samples are not deemed to be needed. OPEN 12''A" WELL BORE TO 171/2" WELL BORE: RIH with 17 %" roller-cone hole opener BHA: WEAT FORD EQUIPMENT IN RED EQUIPMENT DESCRIPTION OD X ID CONNECTIONS 6'- 12 %" BULL NOSE 12.25" 6 5/8" REG PIN Bit Sub w/ FLOAT 8" X 2.5" 6 5/8" REG BOX X BOX WEATHERFORD 17 1/2" HOLE OPENER 8.25" X 3" 6 5/8" REG PIN X BOX 2- 8" DC 8.0" X 3.0" 6 5/8" REG PIN X BOX 17.375" STABILIZER 8.0" X 3" 6 5/8" REG PIN X BOX 2- 8" DC 8.0" X 3" 6 5/8" REG PIN X BOX 17.375" STABILIZER 8.0" X 3" 6 5/8" REG PIN X BOX 2- 8" DC 8.0" X 3" 6 5/8" REG PIN X BOX X/0 SUB 6.75" X 2.25" 6 5/8" REG PIN X 4 %2" IF BOX 21- 5" HWDP 5" X3" 4 %" IF PIN X BOX 8" HYDRAULIC JARS 7.75" X 3" 4 %" IF PIN X BOX 9- 5" HWDP 5" X3" 4 %" IFPIN XBOX CUMULATIVE LENGTH==450.02' TO THE TOP OF THE DRILL PIPE Strap weld securely the 6'- 12 %" bullnose to the BHA (be sure to have a back-up hole openers on the rig to open the hole to 8800'). Open 12 X" pilot hole to 17 %" usine maximum ROP of 200'/hr, as directed by the drilling superintendent. Short trip to 20" casing shoe as needed. C&C mud for casing run. POH. ✓✓ The following drilling practices (well bore conditions will dictate) could maintain good borehole conditions for the casing and cementing operations to follow: • Use high-viscosity sweeps, or, if needed, low density (water) with high density sweeps (>2 ppg above existing mud weight), high viscosity sweeps throughout the interval to monitor hole cleaning with drill pipe rotation. The use of the Sun "Sweep" pills are discourgaged due the fibrous content of the materials, that may plug a MDT tool. • If sloughing (water wet shale falling into the hole) is a problem, then reduce the water loss and use an asphaltene additive to the mud at 4-6 or 6-8 ppb concentrations. FOA KLU 2 PROCEDURE Page 23 • Proper hole cleaning should be emphasized while drilling 17 'A" hole interval. Wiper trips should be optimized to clean up tight spots only if necessary. • Control drilling may be necessary through this hole section in order to keep from overloading the hole/shakers with cuttings and/or clay balling. The SO-1000 is utilized, much of this should not be apparent while drilling. • The mud should be kept as clean as possible. Use barite to keep the weight at an appropriate level rather than drill solids. • Remember that hole stability may degrade rapidly with time. • Reciprocate & rotate the drill pipe slowly while circulating to avoid excessive surge and swab • Prior to POH at 17 1/2" hole TD, use the BHI LWD caliper, or pump a carbide pill and circulate bottoms up in order to calculate an average hole size using pump strokes. Use this average hole size determination to adjust amount of cement to have on location for 13 3/8" casing cement job. Utilize the caliper logs from the ._ open-hole logs to better estimate. POH and lay down BHA. Pull bowl protector (wear bushing) from wellhead. Make certain that hole is in good shape prior to POH to run casing. Short trip as warranted. Run 13 3/8" SU CASING to +/-8800' RKB: OD, WT, GRADE, CONNECTION/ CPLG OD/ ID/DD, COLLAPSE BURST TENSILE YIELD 9000'-13 3/8"72# H/C N-80 BT&C 14.375"/12.347"/12.25 SD 3470 5380 1661K Inspect, tally and full-length drift 13 3/8" casing to 12.250". Submit this information on a tally sheet to the Drilling Superintendent and Drilling Engineer via email. 3/8" rams & test with 13 3 8" testjoint to2O& nt / psi withh crds Install 13 . s over to the test plug. All pressure tests must be held static for 5 minutes (5 minutes for the low pressure and 5 minutes for the high pressure tests) as per the AOGCC regulations. NOTE: A CRT fill-up tool, if available, will be used to run 13 3/8" casing. Be sure 13 3/8" circulating swage with a low torque valve (in the open position) is on rig prior to running casing. Run as follows: • Thread lock the float shoe to the first joint of 13 3/8" 72# HCN-80 BTC casing. Run two (2) joints between the float shoe and the float collar. Be sure to buck off the casing collars and thread lock the casing collars (the thread locking process should have been accomplished "on the beach"). FOA KLU 2 PROCEDURE Page 24 • Thread lock the float collar to the top of the second joint of casing. Be sure to buck off the casing collar on the second joint & thread lock the casing collar. DO NOT THREAD LOCK MORE THAN CAN BE RACKED BACK IN THE DERRICK. • 13 3/8" 72# HCN-80 BTC to surface with Cameron C-15 13 3/8" MLS hanger spaced appropriately. Make-up torque is to the "diamonds." • Be sure to break out and then make up the running tool to the hanger (record the make-up torque) to make sure of the make-up torque that will be needed in the TP&A procedure at the end of the well. • Be sure to STRAP weld (3-2" welds on top and bottom of each casing collar) the connection from the running tool to the casing and every joint to surface for the mud line suspension operations to keep from backing out a joint when making up the MLS running tool (torqueing the left) to the hanger. CENTRALIZERS: • Run 2 Solid Body Centralizers (SBC) over Stop Collars (SC) 5'-10' from the pin end and +/-10' from the box end of the bottom 3 joints. • Run one 13 3/8" SBC's with SC's per joint within 10' of the box on EVERY OTHER JOINT TO THE 20" SHOE. • Control casing running speed to minimize surge pressures. Rig up the cementing head on the landing joint prior to entering open hole. When running the casing, be sure to have an equivalent in casing displacement of a "barrel in" equal to a "barrel out" of mud. Establish circulation by reciprocating the casing, if possible, and then staging the mud pumps up until circulation is achieved, circulate & condition the drilling fluids reducing the mud viscosity prior to pumping cement. This will increase the chances for a successful cement job. While circulating, keep the shut down time periods as short as possible. Carefully review the cement plan with the BJ supervisor & mud engineer (have the BJ cementer check your calculations and the Well Site Supervisors should check the cementer's calculatietts) prior to start of cement job. Plan sufficient lead cement volume to bring TOC to 1-G9Q' RKB inside 13 3/8" x 20" annulus. Do not deviate from this plan without prior approval from the Drilling Superintendent. Land casing on 13 3/8" MLS hanger. Pressure test cement lines to 2000 psi. Circulate & condition mud until the shakers are clean of cuttings & any gas has been circulated out & gas has dropped to back ground levels. Cement as per the BJ cementing details for the 13 3/8" adjusting volume for the well bore conditions. NOTc,:c,CQement volumes are based on 75% excess to place TOC in 20" x 13 3/8" annulus @,,,I3KKR.KB. From the open-hole logging, a caliper log should be used to calculate the cement volumes. Pump the spacer, launch the diaphragm plug, load the solid plug, mix & pump the lead and tail slurries, launch the solid plug, displace the cement with drilling fluids until the solid plug bumps up. Do not pump more than the calculated displacement plus one half of the shoe track as a maximum—do not want to over displace the shoe track as having FOA KLU 2 PROCEDURE Page 25 to drill excess cement above the float collar is better than having a wet casing seat. Check to make sure that the floats are holding. If the floats are NOT holding after checking, pump back up, hold for 2-3 minutes, & check again. Opening up the MLS hanger is more important than attempting to get the float equipment to hold. Open ports on 13 3/8" MLS hanger with +/-3 rounds of right hand rotation. Circulate out 20" x 13 3/8" annulus thoroughly keeping track of the hole stability. Spot 20 barrels (113' equivalent) of a sugar or lignite pill around MLS hanger. Close ports by rotating to the left +/-3 rounds & pressure test MLS to 1000 psi. Close the annular preventer, pump down the 20" X 13 3/8" annulus for 10 barrels (56.5'). 6,1 The anticipated pressure is+/-200 psi or less with the cement in the annulus (with a 11.5# FIT of the 20" seat at 1700' SSTVD & 9.2#MW). Hold this pressure for +/-6 hours for the cement to set up as per the direction of the Drilling Superintendent. Release the pressure, make sure the annulus is stable. PU BOP, set the manual-set slips with +1-50,000 pounds of overpull & cut 13 3/8" casing. LD casing stub. Install Cameron 21 'A" 5M#WP X 13 5/8" 10M#WP head, test to 1700 psi on chart for the record. NU/TEST 13 5/8" 10M#WP BOPE: Notify AOGCC 24 hours prior to performing BOP test. (4.41/4. The AOGCC requires a BOPE test every 7 days. The AOGCC Inspector must be contacted r and consulted regarding the seven day test 48 hours before testing. Pr► ND 21 %" 2M BOPE assembly & DSA. NU & test 13 5/8'7110M#WP BOPE to 250 psi low/ 3500 psi high on annular preventer & 250 psi low/.6598 psi high on rams, 15M#WP choke manifold, & associated equipment. All pressure tests must be held static for 5 minutes (5 minutes for the low pressure and 5 minutes for the high pressure tests) as per the AOGCC regulations. Insure a 2" ID (minimum) check valve is installed in the kill line & is purged & clear at all times. Have AOGCC rep. witness BOPE testing. NOTE: In preparation for the eventual TP&A operations, where each annulus will need to be pressure tested to ensure that there is no fluid migration from the open hole into the casing annuluses as per AOGCC AAC 25.110 (1)(B) & 25.112 (d)(2)(A) Well Plugging Requirements for Suspended Wells regulations (page 783) for Pressure test 13 3/8" x 20" annulus to 1 ppg EMW over the casing seat test of the 20" casing seat [(11.5 + 1)- 9.2)](1700' SSTVD)(0.052)=292 psi] on chart for 30 minutes with less than 10% bleed off to assure that the 13 3/8" X 20" annulus is sealed. If the test is negative, the annulus may need to be "bull head" squeezed. Be sure that there is 1.5-2% Calcium Chloride (or as per the BJ recommendation) in the cement mix, or mixing water, for acceleration. This is an extremely difficult test to perfect and could be very time consuming and is the reason that this operation needs to be conducted while drilling the 8 %2" section of the well bore. FOA KLU 2 PROCEDURE Page 26 DRILL 12 %" INTERMEDIATE WELL BORE TO +/-13,260' RKB, or to the base of the TYONEK SUNFISH formaion: 12 %" Well Bore/ Optional Electric Line Logging/ Run 9 7/8" Casing: 0' to +/-13,260' RKB Section Summary: Drill shoe track + 20' of new formation, test casing to Leak Off (expect 13.2 ppg EMW). Drill 12 1/4" hole to +/-13,260' RKB, or to the base of the Tyonek Sunfish formation as directed, with directional BHA with MWD/LWD (NEUTRON-DENSITY-SONIC-RESISTIVITY- GR). Run/cement 9-7/8" intermediate casing, open 9 7/8" MLS hanger, circulate out, spot the lignite pill, close/test the MLS hanger. ND 13 5/8" 10M#WP BOPE. NU/test 13 5/8" 10M#WP X 11" 15M#WP well head. Interval Hazards & Risks: • Lost Circulation, probably in having too high of mud weights and losing mud in the coal seams–Add LCM; reduced pump rates & mud rheology (thin, tough filter cake, low water loss (API & HTHP), adding asphaltene additives); controlled running speeds. • Washouts & Hole Sloughing– controlled rheology of water loss & use of asphaltenes. • Gradual deviation development—watch surveys and correct as needed. The KLU 1 original well bore walked to the northwest and the re-entry KLU 1 was directionally drilled back to the proximity of the SHL and then drifted to the southwest and then below the intermediate casing to the northwest—stayed within +/-30' of the SHL. DRILL 121/4" INTERMEDIATE WELL BORE: Install wear bushing (wellhead bowl protector). Do not run jet nozzles smaller than 11's for consideration of the possibility of needing lost circulation materials to be pumped to cure seepage or lost circulation of whole drilling fluids. PU the following BHA: EQUIPMENT DESCRIPTION OD X ID CONNECTIONS (PIN X BOX) 12 'A" PDC BIT 6 5/8" REG 9 1/2" MOTOR w/ 1* AKO w/ 9.5" 6-5/8" REG Box X 6-5/8" H90 FLOAT 9 %2" x 8" TAPERED SUB 8" 6 5/8" H90 X 6 5/8" H90 8" NM DRILL COLAR 8" X 2.75" 6-5/8" H90 X 6-5/8" H90 12 1/8" NM STABILIZER-STRAIGHT BLADE 8.25" X 2.82" 6-5/8" H90 X 6-5/8" H90 NM-XO 8.00" X 2.88" 6-5/8" H90 X 6-5/8" REG STOP SUB 8.25" X 2.81" 6-5/8" REG X 8-1/4" T2 On Trak LWD/MWD 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 12 1/8" MOD. STABILIZER 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 BCPM (turbine/pulser) 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 12 1/8" Litho Trak 8.25" X 2.81" 8-1/4" T2 X 8-1/4" T2 FOA KLU 2 PROCEDURE Page 27 Sound Trak 8.40" X 3.19" 8-1/4" T2 X 8-1/4" T2 STOP SUB 8.25" X 2.81" 8-1/4" T2 X 6-5/8" REG NM FILTER SUB 8.25" X 3.00" 6 5/8" REG X 6-5/8" REG NM X/0 SUB 8.00" X 2.88" 6 5/8" REG X 6 5/8" H90 2- 8 " NM DC 8.25" X 2.81" 6 5/8" H90 X 6 5/8" H90 X/0 SUB (STEEL) 8.00" X 2.88" 6 5/8" H90 X 4 Y2" IF 21- 5" HWDP 5" X3" 4 %" IFPIN XBOX 8" HYDRAULIC JARS 8" 4 1/2" IF PIN X BOX 9- 5" HWDP 5" X3" 4 %" IF PIN X BOX CUMULATIVE LENGTH==1179.55' SENSOR DISTANCE FROM BIT: Gamma Ray 61.1' ECD 61.9' Resistivity 66.5' Directional 73.3' Density 100.1' Caliper 101.0' Neutron 108.1' Porosity 110.5' Flowrate: 450 - 600 gpm Optimized nozzles and flow rate improve hole cleaning and reduce washout. ➢ For proper wellbore cleaning, it is recommended to rely upon PWD and torque and drag data to determine required circulating duration for cleaning the hole prior to drilling ahead. The BHI LWD personnel, monitoring this PWD data as the well is being drilled, should be instructed to communicate this PWD information to the well site supervisors on a continuous basis and especially if there is a problem. • A "Stripping" drill should be discussed with rig crews prior to drill out. Document drill and record on IADC report. • A "Well Kill" drill should be held with rig crews prior to drill out. Document drill and record on morning & IADC report. • A well kill sheet (re-figured with each mud weight change) shall be posted in the doghouse and updated each tour. Take SPR each drilling tour. Record on IADC & Kill Sheet. • All drills shall be performed and documented. Be sure to have back-up PDC bits on the rig as one PDC bit may not drill the whole interval from +/-8800' to +/-13260'. Be sure to tally, visually inspect, and drift the 9 7/8" casing to 8.500" ID. Submit this information on a tally sheet to the Drilling Superintendent and Drilling Engineer via email. FOA KLU 2 PROCEDURE Page 28 Mud logging and mud-gas sampling required every 30' except through hydrocarbon hole TD plus samples across all shows. Mud weight should be maintained as per the mud weight schedule, unless higher mud weights are necessary in order to minimize the possibility of seepage and loss circulation & to maximize ROP. Please reference the mud weight schedule at the front of this procedure, but well bore conditions will dictate. Maintain all solids control equipment in optimum condition. Continue to respect the coal seams and to take care while drilling the coal and then taking short trips as necessary. Sweeps must be accompanied by maximum rotation until sweep is seen at surface. NOTE: See discussion in mud section regarding surge & swab pressures while drilling this interval. Drill 12 1/4" hole to +/-13,260', as directed by geological correlation. For future drilling operations, the optimum depth to set the 9 7/8" intermediate between the base of the Sunfish formation and the top of the Sunfish Channel, as seen on the Shell SRS State #1 from +/-13,000' to 13,410'. The geological staff and the Furie drilling staff will be monitoring the well &, depending on the well bore conditions & correlation utilizing the MWD/LWD (resistivity-neutron-density-sonic-gamma ray), the actual drilling depth of this 12 'A" well bore will be determined. Circulate and condition the well bore for open- hole electric logging, if deemed necessary. SLMOH. LOG EVALUATION: If the geological staff requires open-hole electric logs, RU the electric line logging company, no lubricator will be utilized. Run the following logs, which is not in any particular order and will be directed by the geologist: MDT's Nuclear Magnetic Resonance (NMR) Formation Micro-Imager(FMI)-Sonic Scanner Rotary Side Wall Cores (+/-30), as directed. Make up a conditioning BHA, as directed by the Superintendent. GIH, circulate and condition the drilling fluids. If there is seepage in the well bore, this aspect should be treated with loss circulation materials (calcium carbonate, NO fibrous materials) prior to the casing being run. POH. FOA KLU 2 PROCEDURE Page 29 RUN 9 7/8" INTERMEDIATE CASING to +/-13,260': OD WT, GRADE, CONNECTION/CPLG OD/ ID/DD, COLLAPSE BURST TENSILE YIELD RUN ALL OF THE ANJO CASING TO MINIMIZE STOCKING PURPOSES. 9260'-9 7/8"62.8# H/C Q-125 HYDRIL 523 * 10.087"/8.625"/8.500" 11140 13840 1817K * Make-Up Torque (foot pounds): 25,000 minimum, 30,000 target +/-4000'-9 7/8"62.8# H/C Q-125 ATLAS BRADFORD "ANJO" ** 10.162"/8.625"/8.500" SD 11140 13840 1693K ** MUT(ft lbs): 20,900 minimum, 24,100 target ************************************************************************* Note: Make sure that the casing tongs have the proper load cells loaded to be able to make up the casing to the proper torque (have back-up tongs with the proper load cells). ************************************************************************* Run the 9 7/8" casing as follows: When all of the casing is on-board the drilling rig, inspect, tally and full-length drift 9 7/8" casing to 8.500". Submit this information on a tally sheet to the Drilling Superintendent and Drilling Engineer via email. 1g41 Install the 9 7/8" rams & test with 9 7/8" test joint toy500-psi with cross over to the test plug. All pressure tests must be held static for 5 minutes (5 minutes for the low pressure and 5 minutes for the high pressure tests) as per the AOGCC regulations. NOTE: A CRT fill-up tool, if available, will be used to run 9 7/8" casing. Be sure to have a 9 7/8" circulating swage (for the ANJO connection and one for the Hvdril 523 connection) with a low torque valve (in the open position) on the rig floor prior to running casing. Run as follows: • Thread lock the float shoe to the first joint of 9 7/8" 62.8# HCQ-125 ANJO casing. Run two (2) joints between the float shoe and the float collar. Be sure to thread lock the casing connections (the thread locking process should have been accomplished "on the beach", but will still need to thread lock the first joint to the second joint on the rig). • Thread lock the float collar to the top of the second joint of casing. DO NOT THREAD LOCK MORE THAN CAN BE RACKED BACK IN THE DERRICK. • Run approximately 2760' (+1-67 joints) of the ANJO connection casing, the cross over joint from ANJO pin to the 9 7/8" 62.8# HCQ-125 Hydril 523 box (there is a back-up cross over joint) plus +/-1660' (+/-41 joints) of the Hydril 523 connection casing. FOA KLU 2 PROCEDURE Page 30 • Continue to run +/-8635' (216 joints) of the Hydril 523 to the Cameron C-15-EX MLS hanger spaced appropriately at +/-265'. Be sure to break out and then make up the Cameron running tool to the hanger (record the make-up torque) to make sure of the make-up torque that will be needed in the TP&A procedure at the end of the well. • Run +/-265' (+/-7 joints) of the Hydril 523 connection to surface. Be sure to STRAP weld 3-2" welds on each casing connection from the running tool to the casing and every joint to surface for the mud line suspension operations to keep from backing out a joint when making up the MLS running tool (torqueing the left) to the hanger. CENTRALIZERS: • Run two- 9 7/8" x 12" OD of the solid body centralizers ("SBC") between stop rings with the bottom SBC+/-5'-10' from the float collar and the top SBC+/-10' from the first joint casing connection. Same for the next 2 joints of casing for a total of 3 joints and 6 SBC & 12 stop rings. • Run SBC on every other joint (+1-10' from the pin end with stop collars) throughout the casing string to 500' above the 13 3/8" casing seat. • Run SBC's on every joint from 100' above & 100' below any prospective pay zone interval, as directed. • Run SBC's on every joint from 100' below & 100' above the DV tool at +/-8900' SSTVD. • On every other joint from the DV Tool to the 13 3/8" shoe plus 500' into the 13 3/8" surface casing. Be sure to communicate the "space out" of the casing at casing seat as well as the MLS hanger with the drilling superintendent and the drilling staff prior to running the casing. Control casing running speed to minimize surge pressures. Rig up the cementing head on the landing joint prior to entering open hole. When running the casing, be sure to have an equivalent in casing displacement of a "barrel in" equal to a "barrel out" of mud. This casing with these connections can be rotated and reciprocated within limits. After running the casing to bottom, or as close as possible with the space out for the MLS hanger, establish circulation by reciprocating &/or rotating the casing, if possible, and then staging the mud pumps up until circulation is achieved, circulate & condition the drilling fluids reducing the mud viscosity prior to pumping cement. This will increase the chances for a successful cement job. While circulating, keep the shut down time periods as short as possible. Carefully review the cement plan with the BJ supervisor & mud engineer (check to make sure the two sets (yours and his) of calculations and pump schedule match) prior to start of cement job. Do not deviate from this plan without prior approval from the Drilling Superintendent. FOA KLU 2 PROCEDURE Page 31 Land casing on 9 7/8" MLS hanger. Pressure test cement lines to 3000 psi. Circulate & condition mud until the shakers are clean of cuttings & any gas has been circulated out & gas has dropped to back ground levels. Cement as per the BJ cementing details for the 9 7/8" adjusting volume for the well bore conditions; a caliper log should be included in the electric line evaluation, if run, use to calculate the necessary volume. NOTE: Cement volumes are based on 40% excess to place TOC in 13 3/8" X 9 7/8" annulus. NOTE: Pump the spacer, mix & pump the lead and tail slurries, & displace the cement with drilling fluids utilizing the mud pumps (if the efficiency of the mud pumps has been established; if not, then the cementing unit will need to be used, as discussed with the drilling superintendent) until the dart plug bumps up. Do not pump more than the calculated displacement plus one half of the shoe track volume as a maximum—do not want to over displace the shoe track as having to drill excess cement above the float collar is better than having a wet casing seat. Open ports on 9 7/8" MLS hanger with +/-3 rounds of right hand rotation. Circulate out x 13 3/8" X 9 7/8" annulus thoroughly keeping track of the hole stability. Spot 20 barrels (113' equivalent) of a sugar or lignite pill around MLS hanger. Close ports by rotating to the left +/-3 rounds & pressure test MLS to 6250 psi on chart. Close the annular preventer, pump down the 13 3/8" X 9 7/8" annulus for 20 barrels (344"). The anticipated pressure is +/-702 psi or less with the cement in the annulus (with a 13.2# LOT of the 13 3/8" seat at 9000' & 12.2#MW). Hold this pressure for +/-6 hours, if possible, for the cement to set up as per the direction of the Drilling Superintendent. Release the pressure, make sure the annulus is stable. NOTE: At this point, depending on the amount of time left in the drilling season & if the drilling operations were not terminated after setting and cementing the 13 3/8" casing, the Suspend (or TP&A) operations would commence. Temporarily plug & abandon well per Supplemental Plan to be prepared in detail, if the formations have not been tested. Generally the major operations are as follows: • Dispatch the tugs from Seattle to the Cook Inlet for demobilizing the rig to the winter lay-up location, probably Seward. • pressure testing the 9 7/8" x 13 3/8" casing annulus with 1 ppg over the 13 3/8" casing seat test, if not previously tested on chart. • pulling the 9 7/8" casing from the MLS to surface, installing the 9 7/8" pressure sealing cap, • pressure testing the 13 3/8" x 20" casing annulus with 1 ppg over the 20" casing seat test, if not previously tested on chart • pulling the 13 3/8" casing & installing the 13 3/8" pressure sealing cap, • pulling the 20" casing & installing the 20" non-pressure cap, spot a thick pill on top of the 20" cap, • cut the 30" x 1 %" drive pipe at 15' above the sea floor, circulate out on top of the 20" cap and spot another gel pill, & FOA KLU 2 PROCEDURE Page 32 • Install, with diver assist, the 36" trash cap over the 30" stub. • Run a 360* side scan sonar, retrieve any lost materials on the sea floor. • RD rig & prepare to jack down. Jack down, tie on the tugs, pull legs & demobilize to winter lay up, probably to Seward. • Be sure to submit AOGCC forms. Secure the drilling rig at the dock, hook up electrical power. Shut down for the winter. ####################################################################### INVOICING — Instruct all service companies to send the invoices to: FURIE OPERATING of ALASKA, LLC 1029 W 3RD AVENUE, SUITE 500 ANCHORAGE, AK 99501 ATTENTION: ROBERT L. LAULE, SR. DRILLING ENGINEER The Well Site Supervisors, when signing the delivery tickets, make sure of the following: • The information on the delivery ticket is accurate. If there is a problem with the delivery ticket, make note of the services that are correct and then make note of the problem, or the disputed amount. The correct amount will be paid in due process. The disputed amount will need to be negotiated. • The company name and address are correct. The well name and date is correct. • Your signature is distinct and Iedgible. If your signature is hard to read, print your name, and then date your signature. Once the delivery tickets are sent to the Anchorage Office, the invoices will be matched to the delivery tickets. The Drilling Superintendent or the Drilling Engineer will check the invoices for accuracy for the charges. They will sign and send to FURIE OPERATING LLC 100 ENTERPRISE AVENUE LEAGUE CITY,TX 77573 ATTENTION: DAVID ELDER, CFO ######################################################################### Drilling Fluids Disposal The drilling cuttings &fluids developed from drilling operations will be either: • Discharged over board under the General NPDES Permit for Cook Inlet for exploratory wells as long as certain toxicity requirements & static sheen criteria are met (this will be elaborated in detail prior to spud as per the DEC & EPA guide lines & stipulations), or • hauled to the nearest permitted Class II disposal well, depending on the toxicity parameters. Where isolation over significant hydrocarbons formations is required per regulations. FOA KLU 2 PROCEDURE Page 33 • Any possible fresh water formations will be covered with the 20" conductor casing cemented to the surface. • The Sterling gas formations will be covered by the 13 3/8" surface casing. • The Beluga & Tyonek "gas" formations will be covered by the 9 5/8"/9 7/8" casing and cemented with a primary job on bottom and then a second stage will be pumped with a DV tool at +/-8950'. • The Sunfish, Sunfish Channel, Hemlock, West Foreland, & Jurassic formations will be isolated by the 7" liner which will be cemented into the 7" X 9 7/8" overlap. H2S Contingency Measure This location is NOT classified as a Hydrogen Sulfide well, however, the Hydrogen Sulfide contingency measures remain in effect during the drilling of this exploratory well. The key points of these requirements are as follows: • The AOGCC will be notified within 24 hours if H2S is encountered in excess of 20 ppm during drilling operations. • The rig will have fully functioning automatic H2S detection equipment meeting all regulatory H2S monitoring requirements. Manual H2S detectors will also be maintained on rig with differing alarms as specified. • Self Contained Breathing Apparatus for all rig personnel will be maintained on rig from prior to spud throughout the well drilling to the proposed total depth. • All personnel engaged in the drilling operation will be trained in H2S emergency procedures and the use of personal protective equipment. (Make sure that this training has been performed for all personnel). • A standard H2S contingency plan will be posted at the rig. Spartan Offshore Inc. has developed an H2S contingency plan for drilling operations. All rig personnel shall read and familiarize themselves with this document and copies should be posted in the rig floor doghouse and in the rig camp. • H2S treating material for the drilling mud system will be available on location in the event that any H2S is encountered. • It is expected that for exploration drilling operations, the rig and personnel will have the equipment and training to identify and contain a H2S emergency situation. If it becomes necessary to notify the regulatory agencies of an H2S encounter, drilling will be suspended and will resume only after the development of detailed remedial and contingency procedures, full regulatory and applicable referenced sections of API RP49 compliance, and approval of the regulatory agencies. ADDITIONAL WELL CONTROL DRILLS & DRILLING PROCEDURES: • Prior to spud, a safety meeting should be held with the rig crews to discuss open hole drilling procedures. Suggested topics include: I.1 JI_ FOA KLU 2 PROCEDURE Page 34 - Hole fill calculations with various sizes of pipe - Well control procedures - Proper tripping practices- include complete & accurate trip sheets for all trips! - Flow rates and hole cleaning - Correct and accurate documentation of all BOP tests, LOT's, and safety drills - Conductor Broach contingency • A "Diverting Shallow Gas" drill should be discussed with rig crews prior to spud. Document drill and record on morning report. • An "Accumulator" drill should be held with rig crews prior to spud. Document drill and record on morning report. • Diverter function drills should be held on a regularly scheduled basis. A suggested minimum is once per day on alternating tours. Document and record on morning report. • Trip sheets must be competed and submitted to the Escopeta Drilling Supervisor after each trip. • The trip tank system should be checked for leaks prior to spud. Confirm that all trip tank gauges are calibrated and working properly. Make sure that all crews understand how to utilize and interpret the trip tank system on Spartan 151. All drills shall be performed and documented as per the written procedures listed in the current 'Drill Expectations and Procedures'. Type of Drill Minimum Frequency* Additional Guidelines Kick While Drilling Once per week per crew Kick While Tripping Once per week per crew Well Kill Twice per year per crew Prior to drilling out casing and/or immediately after Stripping Drill. Stripping Twice per year per crew Prior to drilling out casing, particularly just before drilling production hole. Diverting Shallow Gas Twice per year per crew Prior to spud in conjunction with diverter function test Accumulator Drill Prior to spud on each well In conjunction with AOGCC BOP test (see details in written procedures) Fire Once per two week tour per crew Spill Once per two week tour per crew H2S (Hydrogen Sulfide) Once per quarter per crew Confined Space Entry Once per quarter per crew Drill String Dimensions and Strengths: Pipe Wt Grade Conn TJ OD TJ ID Tube Max TJ Rec'ed (ppf) Type (in) (in) ID MU Torsional Max (in) Torque Yield Pull (ft-lb) (ft-lb) (kips) 5" DP 19.5 S-135 4-1/2 6 1/2" 3 1/4" 3.0" 26800 46500 560 IF FOA KLU 2 PROCEDURE Page 35 5" 49.3 HVYWATE 4-1/2 6 1/2" 3 1/8" 3.0" 29200 56300 691 HWDP IF CONDUCTOR BROACH—CONTINGENCY CEMENTING PLAN In the event of a broach to surface of drilling fluids during the drilling of the 26" surface interval, the following contingency plan is recommended to remediate the situation. Surface Hole Diameter: 26" Conductor Casing Size: 30" x 1 %2" wall Conductor Setting Depth 350' Conductor Annular Volume: Driven Conductor Pipe Volume: 350' 3.9761 ft3/ft = 1393ft3 (247 Bbls) 26" Open Hole Capacity: 3.687 ft3/ft (.6567 bbls/ft) 1. Upon establishing that a broach of the conductor casing has occurred, POH and stand back BHA. 2. RIH with open-ended drill pipe to 20' below the base of the conductor pipe. 3. Establish circulation with mud at normal drilling rate. Begin circulating and establish rate of flow through broach with drilling fluid. 4. Circulate up to 120 bbls of water or until water returns are confirmed from the broach. 5. RIH to 200' below the base of the conductor. Spot a 150' pill of 150K cp polymer (Xanvis) to 50' below the conductor. POH to 20' inside the conductor. 6. Mix and displace 25 bbls of cement at 15.8 ppg. Displace cement to within 5 bbls of the end of drill pipe. Cement may U-tube with no ability to obtain squeeze. Do not over displace. Monitor and gauge all returns. 7. POH and WOC for 8 hours. 8. PU 26" bit and BHA and RIH to clean out cement to 40' below conductor. Establish normal circulating rate and evaluate broaching. If circulation is achieved, continue with plan operations. If additional broaching occurs, repeat steps 6, 7 and 8. PWD Baseline Testing In order to ascertain the wellbore cleaning efficiency of the circulating system, it is necessary to establish baseline ECD parameters with a "clean" fluid prior to drilling ahead and contaminating the system with drilled solids. The following steps are the basis for obtaining usable baseline ECD parameters. FOA KLU 2 PROCEDURE Page 36 1. Prior to drilling out of both the surface and intermediate casings, or in the case of a sidetrack, after the sidetrack has been initiated, condition or displace the drilling fluid per the well plan. 2. Once the "drill-ahead" fluid has been conditioned, drill enough rat-hole to prevent casing wear from rotating BHA. Circulate clean and establish ECD values at the following rates and rotary rpm's. Complete the chart for each value. Well Name: KLU #1 DP OD: 5" Normal Flowrate = gpm DC OD: 8 1/4" Normal RPM = BHA Length: Depth=4800'TVD Casing ID: 12.347" Mud Weight= 9.4ppg PV/YP: RPM @ 95% Normal Normal RPM RPM @ 105% Normal Flowrate @ 95% ECD= ECD= ECD= Normal Torque= Torque= Torque= Normal Flowrate ECD= ECD= ECD= Torque= Torque= Torque= Flowrate @ 105% ECD= ECD= ECD= Norman Torque= Torque= Torque= 3. ECD and torque values for each setting should be recorded only when values have reached stabilized condition. 4. Upon completion of the baseline testing, email or fax the results to the Operations Drilling Engineer. 5. Using Excel, graph "ECD vs. Flow-rate" for each rotary speed (Baker Engineer) for use in correlating actual ECD's to baseline generated values when drilling operations proceed. Graphs should be available for reference in the doghouse and in the Company Man's office. NOTE: In a 8 1/2" wellbore, with no solids removal, drilled solids alone will add 1.03 ppg/1000' drilled to a 750 bbl active system. In a 12 1/4" wellbore, with no solids removal, drilled solids alone will add nearly 2 ppg/1000' drilled to a 750 bbl active system. KLU #1 Drilling Hazards Summary (Post in Rig Floor Doghouse Prior to Spud) 26" Hole/20" Casing Interval FOA KLU 2 PROCEDURE Page 37 Event Risk Level Mitigation Strategy Gas Hydrates Very Low Monitor well while drilling, increased mud weight, managed fluid rheology, decreased circulating times, controlled drilling rates, low mud temperatures Clay Balling Medium Maintain planned mud parameters & specialty additives, Increase mud weight, use well bore sweeps, reduce fluid viscosity, control ROP. Abnormal Pressure in Very Low Diverter drills, increased mud weight Surface Formations Lost Circulation Low Reduced pump rates, mud rheology, lost circulation material, use of low density cement slurries, controlled running speeds. Washouts, Medium Minimize circulating time when possible. Hole Sloughing 17 1/2" Hole/13 3/8" & 12 'A" Hole/9 5/8" &8 %" Hole/7" Casing Intervals Event Risk Level Mitigation Strategy Lost circulation Medium Reduced pump rates, reduced trip speeds, real time equivalent circulating density (ECD) monitoring (PWD), mud rheology, Pre-planned LCM pills, lost circulation material. Hole swabbing on trips Low Reduced trip speeds, mud properties, proper hole filling, real time equivalent circulating density (ECD) monitoring, weighted sweeps. Sloughing Shale/coal, High Increased mud density and fluid composition Tight Hole according to plan, controlled trip speeds, sweeps, ECD monitoring. Abnormal Reservoir Low Well control drills, increased mud weight, Pressure contingencies for top set casing string. Hydrogen Sulfide gas Very Low H2S drills, detection systems, alarms, standard FOA KLU 2 PROCEDURE Page 38 Individual Title Name Office Home Cell Engineer Consultant Ed Ferguson 936-394-5009 936-394-5008 713-254-8333 Drilling Jerry Cloud 318-727-8818 318-727-8818 318-628-0053 Superintendent Sr Drilling Engineer Bob Laule 907-264-6723 907-522-3673 907-602-8203 Project Geologist Doug Waters 907-350-8289 AOGCC Inspector Jim Regg 907-793-1236 907-279-2714 After Hours 907-659- 3607 FOA KLU 2 PROCEDURE Page 39 Page 1 of 1 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Wednesday, July 25, 2012 12:59 PM i(Lt/t To: 'Bob Laule' Il_ y Dr Subject: RE: Energy Resource Conservation Board method for collaspe calculations Bob, Your calculations seem to follow the ERCB guidelines. What time are you coming in tomorrow? Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Bob Laule [mailto:marboblaule@gmail.com] Sent: Wednesday, July 25, 2012 10:46 AM To: Schwartz, Guy L (DOA) Subject: Energy Resource Conservation Board method for collaspe calculations Guy The following calculation are based on the Energy Resource Conservation Board, method Attached is a copy of the referenced page. Look forward to meeting tomorrow to discuss External 8800' * .052*10.7 ppg=4896 psi external Internal with9-7/8 shoe at 13,400 half filled height at 6700'therefore fluid height 2100 above 13-3/8 shoe.Assume drill out with 11..ppg then Internal pressure 4896 psi-(2100* 0.052*11.0ppg)or 4896- 1202=3694psi Collase of casing 3700 SF3700/3694= 1.00 Thanks, Bob Laule 6'__ g g n P S- yam, �` Furie Operating Alaska, LLC FKA: Escopeta 1029 W. 3rd Ave. Suite 500 Anchorage, Alaska 99501 907-277-3726 7/25/2012 v/ 3.2.2 • i hntennediate Casing I Protective Liner Minimum External design factor Load condition Internal pressures/fluid pressureelfluld 1.0 Collapse Surface:0 kPa Surface:0 kPa Fluids:evacuated to at least'. Fluids:mud density at ND of next full length casing casing/liner setting setting depth,with the lightest depth mud density after drill-out' 1.1 Burst if pp H2S Lesser of Surface:0 kPa <0.3 kPa a)maximum formation pressure Fluids: 10 kPa/m less gas gradient to any, gradient 1.203 Burst if depth,5 or ` DAs pp HfiS 10 b}fracture gradient pressure at fir*Ad alp 032< the casing/liner shoe:. 2000 kPa assume minimum 22 kPa/m less gas gradient to surface, 1.253 Burst if or pp H2S > 10 kPa c) maximum formation pressure x 0.85 for wells with total depth >1800 in_ ND,or 1.254 Burst if d) maximum formation (IRP Vol. 1, Sec. 4 pp 1-f25 3 3500 pressure x 0.90 for welts material) -kPa with total depth<1800 m ND Fluids:Assumed gas gradient 1.75—API Buoyed load Surface:0 kPa Surface:0 kPa connections tension using the Fluids:Mud density at Fluids:mud density at pressure x pipe casing/liner setting depth casing/liner setting 1.80—Premium body area method depth connections with (see Appendix F) internal metal to metal seals 1.60—Pipe body yield strength ' Potential consequences of fully evacuated intermediate casing must be considered. 2 High-pressure low-permeability zones,if known,must be considered when assessing external pressures. 3 Materials with specifications meeting or exceeding the requirements outlined in Appendix B. 4 Materials with specifications meeting or exceeding the requirements outlined in IRP Volume 1,Section 4. 5 The Crdlender and Smith method is offered as the standard for the calculation of static bottomhole pressure for this directive.It is applicable to shallow and deep wells,it can be used for sour gases,and with slight modifications it is easily adapted to computer programming.Applicants may ase an independent method for the calculation of bottomhole pressures,provided that the method used follows sound engineering principles.(See Directive 034:Gas Wad Testing:Theory and Practice(3rd edition,1975),Appendix B.) As in IRP Volume 1,Section 4(Fig 1.4.4:1Neahead vs.bottomhole pressure),shut-in tubing pressure is estimated at 85%of bottomhole pressure.Gas gradient is normally calculated by taking 15%(100%-85%)of formation pressure and dividing by ND.However,if an actual gas gradient is known(e.g.,gas composition,PVT data),that value may be used to determine surface pressure and internal pressure at any depth in the casing string. 12 • ERCB Directive 010 Mnimurn Casing Design Requirements(December 2009) Page 1 of 1 Schwartz, Guy L (DOA) From: Davies, Stephen F (DOA) Sent: Wednesday, July 25, 2012 11:48 AM To: William Watson; d.kade@furiepetroleum.com; Bob Laule Cc: Foerster, Catherine P (DOA); Seamount, Dan T(DOA); Norman, John K(DOA); Schwartz, Guy L (DOA) Subject: KLU 2: Revised Location Mr. Kade, Mr.Watson,and Mr. Laule: The revised KLU 2 surface hole location described in Watson Company, Inc.'s letter to the AOGCC dated July 24, 2012 at shot point 116 on Line P21W3 of ARCO's 1993 SCI#3 Geohazards Survey(290840.2 E, 2529041.9 N,ASP Zone 4, NAD 27 Feet) is acceptable to the AOGCC. Please call me if you have any questions. Regards, Steve Davies Sr. Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 333 West 7th Avenue,Suite 100 Anchorage,Alaska 99501 Steve's phone: 907-793-1224 AOGCC's receptionist: 907-793-1223 AOGCC's fax: 907-276-7542 7/25/2012 Davies, Stephen F (DOA) From: William Watson [watson@alaska.net] Sent: Tuesday, July 24, 2012 3:08 PM To: Davies, Stephen F (DOA) Cc: Damon Kade; Ed Ferguson; Bob Laule Escopeta; Doug Waters Subject: KLU#2 Attachments: AOGCC letter KLU 2C 07 24 12 FF.pdf; Fig 1 - KLU#2 Map of Seismic Lines-with Bathy_REV 07-24-2012.pdf Steve, Good afternoon. Please find attached a letter on behalf of Furie to move forward with the location we discussed. I will follow up with a phone call. Thanks much, Will William Watson Watson Company,Inc. 3705 Arctic Blvd.#125 Anchorage,Alaska 99503 907-278-5352 Fax:907-278-5353 ai,on ri,ila,l..i net .00.it'UncOmPrim lid 1 3 Q (:, 0 114k ++AGE." Alaska Oil and Gas Conservation Commission 333 W. 7`''Ave., Suite 100 Anchorage,AK 99501 July 24,2012 Attn: Mr. Steve Davies, Senior Petroleum Geologist RE: Revised KLU 2 Location KLU#2—Location: 290840.2 E 2529041.9 N, ASP Zone 4, NAD 27 Feet 60° 55' 1.785"N, 151° 10' 31.09" W,NAD 27 Dear Mr. Davies: On behalf of Furie Operating Alaska,LLC (Furie)the above location is the revised KLU 2 surface hole location. The accompanying map,Figure 1, exhibits the revised location. The location is within the 1993 ARCO SCI#3 survey area. The specific location within the data set is on Line P21 W3 at shotP oint 116. This location is in 106-feet of water at MLLW. It is 356-feet from a boulder, so a reasonable safety factor has been considered. We request an approval decision within 24-hours so Furie can move forward with other regulatory filings for the location and operational planning. We very much appreciate your attention to this matter. Sincerely, kii-q LaL William Watson President Cc: Mr. Damon Kade,President,Furie Alaska Mr. Ed Furguson,Operations Manager,Furie Alaska Mr. Bob Laule, Petroleum Engineer,Furie Alaska Mr. Doug Waters, Senior Geologist Watson Company,Inc.•3705 Arctic Blvd.,#125•Anchorage,AK 99503•Phone(907)278-5352• www.watsoncompany.net Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Tuesday, July 17, 2012 2:56 PM To: 'William Watson' Subject: RE: Feature of Interest Attachments: 120717_SEISMIC_P18N3B_RAP_KLU-2_Loc.jpg; 120717_SEISMIC_P21W3_RAP_KLU-2 _Loc.jpg Will, See the attached lines P18N3B and P21W3. The blue-colored vertical line is the current KLU 2 location and the dotted, horizontal line marks 0.5 sec on these RAP sections. The red-colored line marks the feature of interest that I'm focusing on: a trough that has strong amplitude and is flat on both the cross-structure line (P18N3B) and the dip line (P21W3). I'm concerned because this flat-spot lies above the proposed surface casing point. Thanks, Steve Davies AOGCC From: William Watson [mailto:watson©alaska.net] Sent: Monday, July 16, 2012 8:32 PM To: Davies, Stephen F (DOA) Subject: Re: Feature of Interest Steve, Find below the image demonstrating a 7 ms vertical displacement on Line P21 W3. As you know, one qualification for a flat-spot is that it is flat on both intersecting lines. I will try to reach you around 8AM. Thank you, Will 1 ;- .6"ik.emk 0"..4.• ( fti"..°4"4 .11.6.NIL :Ike.ii14‘›lik ammNpa 7 elladdlik `* A lk. •"ift,....lo... - - -^ }-y. r , „fro' '�SL�f,�, 4 1,--*,, ..- a.Ii*"' ,,,.,/i � ' ..°411\,.-w..1."4... rte.. __ .__, 1N^0.4 , ---,t, . it—t.......-adis....„---. .... .�. ....41%.."..4 .,......4.0.0s,.. •....,..4..,insia. ......„ .. .tel ..,........,..4 .........070,„......e .. •A`c. . ,,..-40\ e---4.,_,.. Allk011ogodh. ". .N.4pp.,,, 4.44 1,0+. ....-..,ydiliti ,.9.../.A^..06....0010kr — "Oft.! 41M" • iMr .. 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", ON...i •a., 4 ,..-. �..-. .. .li y4 . s' Aillik . `!r►,�/ .. ....„„,,..,..,.. .. e.,..iN.A • 4,..deraim. . .•814, r...♦'`.0'`r.."! . 400.,-_.,,.+.104 .."'L...# �•�'... ..�1•0'ks...,.y'- ..•01.6 f• ./ �'.,, ,../1.40%."."1",.. + w r ,�.}• ,�....`frN w. r ,,11.k 4044444.+ -041.0%.lbw/. 4111, w/. 4111, ' .moi. 0111114 " A .�... ..... Aki .. `- .4..... 01111444‘0116. 410'6►0#41006. �,: AIM /1144 . '. /�.`� 1` ./ .-, ' "‘"10%.• f"4 - -Alb"' ti.1•4. . ••••""*4.4%" --!"N.,"Nrroft "k.„,+ .,.,qtr.•... r►t -40►,.,.-41.. 114•44.6"''‘.0.‘ .,v... --r.+r-\.. ./.'.-.*r* 'SIA'+,, '' •, "' OS -w✓. 1/ )IP I 76 6 4" 411 6 Iti AO r .: s AP iiiiii.dia1 P 10IF 10. '... 1 2 III ( 44 I - -1 4%. Ar i 1 \ \ ‘ , „ ) .r 0 1/10 r ip b ) ' iii hi . 1iti) k 6 i 1 On Jul 16, 2012, at 9:25 AM, Davies, Stephen F (DOA) wrote: Will, 1 I'm working on a different project at the moment, and I'll will phone you when I finish. It should be in about 2 hours. Thanks, Steve Davies AOGCC From: William Watson [mailto:watson@alaska.net] Sent: Monday, July 16, 2012 9:20 AM To: Davies, Stephen F (DOA) Subject: Re: Feature of Interest Steve, Good morning. Looking at the feature on RAP P21 W3. The feature starts lower on the left and moves up approx 7 ms or likely a bit more (toward the surface). As a point of reference, on TVF Line P 18N3 the feature appears to be the continuation of the geologic trend. 2 I On the RAP section for Line P 18N3 the geologic trend is muted and parts of it not visible due to the necessary amplitude preservation. My assessment on both lines is that the amplitude is what is to be anticipated from a geologic reflector. I will try to reach you by phone. Thank you, Will On Jul 13, 2012, at 5:27 PM, Davies, Stephen F (DOA) wrote: Will, I looked through the seismic for quite a while today, but I don't see the dip of 7 ms. This feature looks flat to me on both 18N and 21W. Call me on Monday and we'll set up a time so that we can discuss this. Thanks, Steve Davies AOGCC 907-793-1224 From: William Watson [mailto:watsonOalaska.net] Sent: Wednesday, July 11, 2012 9:52 AM To: Davies, Stephen F (DOA) Subject: Feature of Interest Steve, The feature we have been discussing appears somewhat but not exactly flat on Line P 18N, but on the intersecting Line P21W it dips 7 milliseconds. The feature aligns with the geologic trend and that is an important reason why we believe its a geologic feature. The RAP data was processed using minimum phase. In the RAP sections the geologic features are considerably muted demonstrating minimal dynamic range compression. The feature amplitude is on par with geologic trends in the section. Thank you, Will William Watson Watson Company, Inc. 3705 Arctic Blvd.#125 Anchorage,Alaska 99503 907-278-5352 Fax:907-278-5353 watson©alaska.net www.watsoncompany net 3 Davies, Stephen F (DOA) From: Bob Laule [marboblaule@gmail.com] Sent: Thursday, June 14, 2012 4:58 AM To: Davies, Stephen F (DOA) Subject: RE: Permit Application Question Steve you are right its a typo. I intended to input 218' which is a sea bed measurement. With a MLLW of 105' and a high tide of 135' (before Watson survey estimate) + 30air gap+ 53' from the bottom of the barge to the RT. 135' high tide 30' air gap 53' bottom barge to RT 218 total from sea bed or 113' RT to MLLW. Thanks, Bob Laule Furie Operating Alaska, LLC FKA: Escopeta 1029 W. 3rd Ave. Suite 500 Anchorage, Alaska 99501 907-277-3726 From: Davies, Stephen F (DOA) [mailto:steve.davies@alaska.gov] Sent: Wednesday, June 13, 2012 3:14 PM To: marboblaulegmail.com Cc: Schwartz, Guy L (DOA) Subject: Permit Application Question Bob, What is the planned Kelly Bushing elevation for KLU 2? The Permit to Drill Application says 268" (yes, inches). Now that could just be a typo and maybe it should have read 268', but that seems much too high. I know high tide ranges to about 20' at the site (from page 8 of Watson's shallow hazards report),the rig plans to jack up to an air gap of 30' above high tide, and the drill floor is 53' above the base of the rig hull, so my estimate for the Kelly Bushing elevation is about 103'. Am I wrong? Thanks, Steve Davies AOGCC 907-793-1224 1 Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Wednesday, June 13, 2012 2:38 PM To: 'marboblaule@gmail.com' Cc: Schwartz, Guy L (DOA) Subject: KLU 2 Shallow Hazards Questions Attachments: KLU Site Flatspot line P18N3B.jpg Bob, I have a couple of shallow hazards questions for Furie's geophysical staff. At shot point 121 on shallow hazards seismic line P18N3B acquired by ARCO in 1993, there is a roughly 700-foot wide flat spot visible at 0.45 ms(see attached). This flat spot lies underneath the revised KLU 2 location. 1. How deep is the flat spot (feet below sea level)? How is this depth calculated, and how accurate are the calculations? 2. Where does the flat spot lie with respect to Furie's planned casing program? 3. Is this flat spot visible on conventional seismic data used to map the prospect? Please describe it in detail. Does • it extend to cross-lines or adjacent lines? If so, how large is it? 4. Does Furie's geophysical staff interpret this flat spot to represent a shallow gas hazard? Why or why not? Please explain in detail. 5. What precautions and/or mitigation measures will Furie take with respect to this flat spot? 6. Did Furie's geophysical staff observe any other potential shallow gas hazard indicators in conventional seismic data or in ARCO's shallow hazards seismic data? Thanks, Steve Davies AOGCC 907-793-1224 1 Kitchen Lights Unit Mud Weight vs. Measured Depth Mud Weight (ppg) 8 9 10 11 12 13 14 15 16 17 18 0 Shallowest Occurrence of 1000 Mud Log Ditch Gas -- S.Cook Inlet State No. 2 2000 NomaSRS State No. 1 —__ KLU No. 1 1.... SI S.Cook Inlet State No. 3 3000 -- Shallowest Occurrence of 4000 More than 50 Units* of Mud Log Ditch Gas _ _, WIT O S.Cook Inlet State No. 2 1 5000 1 O SRS State No. 1 ilkO KLU No. 1 6000 —_. — ` S.Cook Inlet State No. 3 r I �' 7000 — i— Q _ __. ._ S.Cook Inlet State No.2 a) 11 • 0 8000 ' a) = 1 SRS Sta a No.1 a 9000 _ ® i KLU No.1 10000 I KLU No. 2 (Proposed) 11000 , • I 1 S.Cook Inlet State No.3 12000 r 13000 1 INDEX MAP '-- walla 14000 1 11---_ L. 15000 1, 16000 Wells *2%methane= 100 Units KLU No. 1 S.Cook Inlet State No. 2 NM= KLU 2 prop. S.Cook Inlet State No. 3 ■■■■••— SRS State No. 1 AOGCC v�� Revised: June 12,2012 • Davies, Stephen F (DOA) From: William Watson [watson@alaska.net] Sent: Monday, April 16, 2012 10:13 AM To: Davies, Stephen F (DOA) Cc: Bob Laule Escopeta Subject: Verify coordinates Steve: The coordinates of KLU #2 are as listed on the shallow gas survey wavier request letter of March 1, 2012. The coordinates are as follows: KLU #2 — Location: 293139.5 Easting, 2530492.7 North, NAD 27, State Plane Zone 4 Thank you, Will William Watson Watson Company, Inc. 3705 Arctic Blvd.#125 Anchorage,Alaska 99503 907-278-5352 Fax: 907-278-5353 watson ucalaska.net www.watsoncompany.net 1 • Davies, Stephen F (DOA) From: Foerster, Catherine P (DOA) Sent: Monday, April 16, 2012 8:06 AM To: Davies, Stephen F (DOA) Subject: RE: Furie KLU #2 Shallow Hazard Survey Requirement Thank you. From: Davies, Stephen F (DOA) Sent: Monday, April 16, 2012 8:05 AM To: Foerster, Catherine P (DOA); Regg, James B (DOA); Schwartz, Guy L (DOA); Roby, David S (DOA) Subject: RE: Furie KLU #2 Shallow Hazard Survey Requirement Cathy, I will check the new location against the shallow hazards data previously submitted to AOGCC and will let you all know what I find. Thanks, Steve D. From: Foerster, Catherine P (DOA) Sent: Monday, April 16, 2012 8:01 AM To: Davies, Stephen F (DOA); Regg, James B (DOA); Schwartz, Guy L (DOA); Roby, David S (DOA) Subject: FW: Furie KLU #2 Shallow Hazard Survey Requirement Thoughts? From: Hobbs, Greg S (DNR) Sent: Friday, April 13, 2012 3:55 PM To: Foerster, Catherine P (DOA) Subject: Furie KLU #2 Shallow Hazard Survey Requirement Cathy- Question- According to the new Furie Plan of Operations, they are moving the KLU#2 Location by about 3500'. I talked about the Shallow Hazards seismic survey with Don Krouskop and he is fairly sure that they have data for the location even if it did move 3500'. We have the understanding that they will complete a sidescan survey on arrival to the location, but are not certain if they need to do another shallow hazard seismic survey. If a new survey were needed,this would set them back until August because of Beluga constraints. Patricia Bettis asked me if I could check with the Commission to see if current shallow hazard data covers Furie for their new KLU#2 location prior to our meeting with them next week on Tuesday. Thank-you! Greg Greg Hobbs, P.E. Petroleum Reservoir Engineer State of Alaska Department of Natural Resources Division of Oil and Gas, Resource Evaluation (907) 375-8239 greg.hobbs@alaska.gov CONFIDENTIALITY NOTICE:This e-mail message,including any attachments,contains information from the Department of Natural Resources(DNR), 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 DNR is aware of the mistake in sending it to you,contact Greg Hobbs at(907)375-8239 or via email at greg.hobbs@alaska.gov. 2 L ` (01":00 URIE Operating Alaska LLC Furie Operating Alaska,LLC 1029 West 3rd Ave,Suite 500 Anchorage,Alaska 99501 Patricia Bettis April 9,2012 Petroleum Land manager Division of Oil and Gas 550 W.7`h Avenue,Suite 1100 Anchorage,AK 99501-3560 RE: Kitchen Lights Unit Unit Plan of Operations Amendment(LOCI 06-004) Notice of Well Location change KLU#2 Addition of Geotechnical Bore-holes Dear Ms. Bettis, After further interpretation of our geophysical information,Furie Operating Alaska,LLC("Furie")has decided to move the location of the KLU#2 well approximately 3,580 feet to the Northeast. Furie hereby provides notice to the Division of Oil and Gas of the revised location of the 2nd well,as follows: Kitchen Lights Unit#2 (See Preliminary Plat,attached) ADL 389198,KLU Tract 12 T. 10 N.,R. 11 W.,S.M.,Section 35 [approx. 30 feet from North line/5,082 feet from West line] 60*55'16.474"N/151*09'45.113"W(ASP Zone 4,NAD 27) Additionally,Furie is planning on drilling two geotechnical bore-holes,one each at the KLU#1 and KLU#2 locations. The bore-holes will be drilled to a depth of less than 300'below the seabed. The geotechnical data obtained from the bore-holes will be used for engineering permanent production facilities,as anticipated in the recently approved Unit Plan of Exploration. Each of the bore-holes will be drilled at the well locations after the jack-up rig legs are pinned to the seabed, prior to the drilling of the oil/gas well. The duration of the bore-hole activity is projected to last up to one week at each location. The rig will not need to be relocated between the bore-hole procedure and the oil/gas well procedure,since the rig floor is capable of cantilevering out 40 feet and adjusting side-to-side from center up to 10 feet in either direction. Attached is the geotechnical bore-hole procedure. Furie is planning on mobilization of the Spartan 151 rig from Port Graham on April 23`d and being at the KLU#1 location on April 25th of this drilling season. These dates are subject to Cook Inlet ice conditions, tug boat delivery from Seattle to the Cook Inlet,and weather conditions. Furie will keep your office appraised of the mobilization schedule,as required in the POO. Thank you for your time and attention to this Unit POO amendment. Please let me know if you have any concerns or need additional information. Sincerely, c�,.'�t✓+e�b ' Bruce D. Webb Vice President,Governmental and External Affairs APR R - 9 2012 attachment DIVISION OIL AND GAS 04-09-2012 Preliminary Kitchen Lights Unit #2 Offshore, Cook Inlet Alaska 17 16 15 14 13 18 17 ADL 389197 ADL 389196 Furie Operating Alaska, LLC Furie Operating Alaska, LLC 20 21 22 23 24 19 20 Shell SRS State#1 0 Furie KLU #1 29 28 27 26 25 30 29 Kitchen Light Unit #2 ADL 38919836 ADL 389515 Furie Operating Alaska, LLC Furie Operating Alaska, LLC 32 33 31 32 T. 0 N., R. 11 W., S.M. 34 35 0 Arco SCI #3 T. 10 N., R. 10 W. T. 9 N., R. 11 ., S.M. T. 09 N., R. 10 W. 5 4 3 2 1 6 5 ell SRS State 0 8 9 10 11 12 7 8 ADL 389924 ADL 389507 ADL 389923 Furie Operating Alaska Furie Operating Alaska, LLC Furie Operating Alaska, LLC 17 16 15 14 1 13 18 17 t Kitchen Lights Unit #2 Formation Tops (Potential) TVD = / MD = Sterling Gas Township 10 N., Range 11 W., Seward Merdian Beluga Gas Section 35: 29.6' FNL and 5,082' FWL Tyonek Gas 60° 55' 16.474" N, 151° 09' 45.113"W NAD 27 Sunfish Oil Hemlock Oil State Base Plane Coordinates, Zone 4 W. Foreland Oil X: 293139.46 / Y: 2530492.74 Mid. Jurassic Oil 0 0.5 1 2 momm. ' Miles KLU#2/KLU#1Geortechnical Coring Itemized Procedures In Support of Geotechnical Operations Plan—February 2012 Attention: Mr. Ed Ferguson Mr.Jerry Cloud Mr.Tony Cosenza Mr. Bob Laule Offshore Operations Lead—Pete Tester of Tester Drilling Services, Inc. This document to provide an itemized list of procedures to collect cores at KLU#2 & KLU #1. The tools, drilling equipment and personnel will be consolidated in Tester Drilling Services Inc.'s(TDSI's)yard, in Anchorage,Alaska.There,everything will be fitted and checked before shipping to the OSK Dock in Nikiski. Trucking will be done by Carlile Transportation or Lynden Trucking of Anchorage. If the crew is not transported via helicopter from Anchorage,they will travel via truck to the OSK Dock where personnel will be transported to the Spartan 151 rig via surface vessel. TDSI will drill two(2) soil borings from the drill deck of the Spartan 151 Jack-up Rig,the first from KLU#2 the second from KLU#1.The borings will be drilled and sampled utilizing the Boart Longyear PQ triple barrel wireline system.The drill will be a Canadian Foremost MPD 1000, utilizing a 1000 rpm core head with automatic chucks and hydraulic foot clamp.The drill mast and rotary will be powered by a Cummins 6CT engine, powering a Sunstrand 46 hydrostatic pump. A 3-segment auxiliary pump will be utilized for the mud pump, crowd, pullback, hydraulic foot clamp and other remote functions.The drilling medium will be a light polymer mixed and furnished by Spartan personnel using the Spartan 151 mud system.TDSI has furnished a list of tools ordered and being manufactured or en route to Anchorage. Upon arrival at the Spartan 151 the crew will go through any orientation required by Furie. During this period TDSI equipment will be offloaded and set on the deck of the Rig. NOTE: Each shift will begin with a tool box safety meeting. After equipment and personnel are on the Spartan 151: 1) Review the work area and safety requirements of working on the Rig drill deck. 2) Hold a tool box meeting and go over responsibilities of all people involved in the drilling process. Discuss any integration of responsibilities where there is interaction between TDSI and Spartan personnel. 3) Receive and set coring equipment as Spartan personnel deliver it to the drill deck via crane. 4) Position and secure the drill rail and power pack,wireline, pumps, pit and pipe racks. Furie 2012 Geotechnical Coring Operation Procedures for KLU tl2 and KLU#1 5) Lay and connect hydraulic lines from power pack to all remote features. 6) Establish a core inspection and quality control area to be utilized by Northern Geotechnical Engineering personnel while logging the cores. 7) Unpack and lay out all tools necessary to the coring procedure. 8) Recheck all lines and tie-downs before starting power pack and checking all component functions. 9) Pick up and set 5"casing to mud line using either sandline or rotary crowd system. 10)Assemble and pickup 5' PQ core barrel, attach to PQ drill pipe and lower PQ pipe to mudline. Clamp PQ pipe 1'off sea floor, inside 5"casing. 11)Transfer 700 gallons of pre-mixed polymer mud from Spartan mud system to TDSI's holding tank. Circulate mud with TDSI's twin FMC pumps to make sure mud flow is smooth and consistent. Check that mud weight is 9-10 lbs. and viscosity is 55-65. 12)Test to make sure all relief valves are working at the correct pressures. 13)Measure stick up and mark pipe for optimum length run. 14)Make up Kelly pipe. Begin pumping mud downhole,establish mud flow,and lower pipe to sea floor or mudline. 15)Establish mud flow at approximately 12 to 15 GPM. 16)Begin coring. 17) Drill until 5' of penetration or pump indicates core blocking. 18)If necessary, break core from bottom, retract pipe to first joint,clamp,shut off mud flow, relieve pressure, break pipe. 19)Lower retrieval tool on wireline and grab the latch head of inner tube. 20) Pull inner tube, remove from overshot, and place inner-tube in tripod pipe vice and secure. Make sure new empty tube is secure and tight.Check for fluid in drill pipe and drop replacement tube into hole or attach to overshot and lower the tube into the latch head of the core barrel. Remove overshot, if utilized, make up Kelly connection, begin pumping mud,and wash bit to bottom of hole. 21)While replacement inner-tube is being lowered or pumped into core barrel the geologist/logging personnel and one drill hand will be breaking down the first tube and checking the core for wash and degradation.This information will be used to adjust mud flow to insure core recovery is maximized. 22)Steps 14 thru 21 will be repeated as necessary until TD is reached, with the exception that every 5'or 10' a new section of PQ pipe will be added to the drill string. 23)To secure as good a core recovery and quality as possible TDSI will be utilizing face discharge diamond bits to advance each boring.The relationship of the bit and inner- tube is adjustable,to control the "face discharge"of the drilling mud.The more washing that takes place the closer the tube will be to the bit. More washing will dictate less GPM from the mud pumps, hence the pumps are variable down to just a few GPM at 450 PSI. 24) During the drilling process the 5"casing can be advanced as necessary to: Free The PQ pipe,cut off gravel and cave or recover circulation.This is done by breaking the PQ connection at the surface,capping the PQ pipe,connecting a crossover sub between the PQ and 5"casing, pumping mud and reaming the 5"casing over the PQ pipe while adding 5"casing as necessary. Furie 2012 Geotechnical Coring Operation Procedures for KLU#2 and KLU#1 25)When TD is reached the PQ can be extracted with a sandline or the pullback system of the mast. Each connection is secured in the hydraulic foot clamp and each tool joint is broken mechanically with the breakout tools or the rotary head. 26)Once the PQ is extracted the 5" casing is extracted in the same manner. 27)When all pipe and casing is stacked on the deck it will be washed down with fresh water bundled, secured and moved to the lower deck in preparation for the rig move. 28) Hydraulic lines will be disconnected and all drilling equipment will be moved back to the lower deck and secured. 29) Demobilize the drill crew for the rig move. 30) Furie to provide direction as to location of TDSI personnel during Rig move from KLU #2 to KLU #1. Either, TDSI will be loaded onto Furie chartered vessel or remain on Spartan 151 during transit. Details will be worked out during planning meeting to take place in Anchorage with Furie and Watson/Tester personnel. 31)At the completion or coring at KLU #1 TDSI personnel will be demobilized to OSK dock. All equipment loaded on truck and moved back to Anchorage. 32)All cores will be moved to Northern Geotechnical Engineering laboratory for testing and analysis. 'curie 2012 Geotechnical Coring Operation Procedures for KLU 112 and KLU 111 OVERSIZED DOCUMENT INSERT This file contains one or more oversized documents. These materials may be found in the original hard file or check the parent folder to view it in digital format. TRANSMITTAL LETTER CHECKLIST WELL NAME La 2_ PTD# -7(7 Development Service 1/Exploratory Stratigraphic Test Non-Conventional Well FIELD: X /�'7 , POOL: W Check Box for Appropriate Letter/Paragraphs to be Included in Transmittal Letter CHECK ADD-ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in Permit No. ,API No. 50- - - API number are between 60-69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - _ - ) from records, data and logs acquired for well SPACING The permit is approved subject to full compliance with 20 AAC EXCEPTION 25.055. Approval to produce/inject is contingent upon issuance of a conservation order approving a spacing exception. assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. Non-Conventional Please note the following special condition of this permit: Well production or production testing of coal bed methane is not allowed for (name of well) until after (Company Name) has designed and implemented a water well testing program to provide baseline data on water quality and quantity. (Company Name)must contact the Commission to obtain advance approval of such water well testing program. Rev:9/09/2011 TRANSMITTAL LETTER CHECKLIST WELL NAME KL,C'C _ PTD# 2 12 2s/I1 Development ✓ Service Exploratory Strati ra hic Test Non-Conventional Well FIELD: �` � � POOL: Check Box for Appropriate Letter/Paragraphs to be Included in Transmittal Letter CHECK ADD-ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in Permit No. ,API No. 50- - - API number are between 60-69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - - ) from records, data and logs acquired for well SPACING The permit is approved subject to full compliance with 20 AAC EXCEPTION 25.055. Approval to produce/inject is contingent upon issuance of a conservation order approving a spacing exception. assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. Non-Conventional Please note the following special condition of this permit: Well production or production testing of coal bed methane is not allowed for (name of well) until after (Company Name) has designed and implemented a water well testing program to provide baseline data on water quality and quantity. (Company Name) must contact the Commission to obtain advance approval of such water well testing program. Rev:9/09/2011 U Y N a o o I0 0 LI , . --160. ca 0 co a ' =' 4 ' M' y' 0 Y, 0 X a co' •y' • C' a' co' 0) m •o LU p y' . I 0E w, = a E' c a) ai E C y, y' a) o ocv. c j o ZmO � 2', N' Up' 0. CO 'O .�O)' . . ` �� O . a. y' ' c c a - co a, 0' c 0 c' O' `° a' n c �i' o' d' N' L' y N o ^ 1n O Q izi -. C NCo , J . `. U) — 0 0 Oo ) p U , _> s Yc E ' c' EOa . a, Y, � . a Oa'L 3 a) a) _ co N . co,E' 0' 0 y � cmN yo, oo• o w Mv ' ja ' . .4-, y, a p: Ttco. . LO. U. N @ p . a) . 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U, 5i' Q, a, U, U) U U U. U, Q w Q. = a CO, CO, U, �' 2 a 0, 0), co. U ,' OCi' h O ..- N c") 10 CO co co O — N CO 10 CO N- CO O) 0 .— N CO V 10 CO IN- CO 0) .- N M 10 m r CO O) — — N N N N N N N N N N c+) CO CO CO CO CO CO CO CO My_ I N N N N c ) O .61., O +67 O C w2� O C Cl) (N as N Ia N _U p ` y. m Y 0 M 0 0 co 0 M O co N am IL LU o C a) E A >` 0 E - N E a) CA0 C o 0. I a I 0 W ,9_I Q C co oa aQ CL *2 W 0 Well History File APPENDIX Information of detailed nature that is not particularly germane to the Well Permitting Process but is part of the history file. To improve the readability of the Well History file and to simplify finding information, information of this nature is accumulated at the end of the file under APPENDIX. No special effort has been made to chronologically organize this category of information.
