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Home My WebLink AboutSIO 007 ASTATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7"' Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF MARATHON OIL COMPANY ("Marathon") for an order to amend Rule 1 of Storage Injection Order No. 7 to allow for additional gas storage injectors, and COMMISSION PROPOSAL to correct typographical errors concerning the approved storage area, and to amend the rules to provide a mechanism for the application for and approval of additional wells for the purpose of gas storage. BY THE COMMISSION: Storage Injection Order No. 7A Kenai Gas Field Sterling Gas Pool 6 May 4, 2007 ORDER CLOSING DOCKET The Commission has the closed the Docket in the above captioned matter. DATED AND EFFECTIVE at Anchorage, Alaska and this 4t` day of May, 2007. BY DIRECTION OF THE COMMISSION Assistant to the Commission STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF MARATHON OIL COMPANY ("Marathon") for an order to amend Rule 1 of Storage Injection Order No. 7 to allow for additional gas storage injectors, and COMMISSION PROPOSAL to correct typographical errors concerning the approved storage area, and to amend the rules to provide a mechanism for the application for and approval of additional wells for the purpose of gas storage. IT APPEARING THAT: Storage Injection Order No. 7A Kenai Gas Field Sterling Gas Pool 6 May 4, 2007 1. By application dated February 19, 2007, Marathon Oil Company ("Marathon") as operator of the Kenai Gas Field, requested the following: (1) that the Alaska Oil and Gas Conservation Commission ("Commission") amend Rule 1 of Storage Injection Order No. 7 ("SIO 7") to allow for additional gas storage injection wells within Sterling Gas Pool 6 of the Kenai Gas Field; and (2) that such additional injection wells be added to SIO 7 by filing a Sundry or Permit to drill. 2. Notice of opportunity for public comment and a hearing was published in the Anchorage Daily News on February 26, 2007 and was re -noticed in the Anchorage Daily News on March 16, 2007 in accordance with 20 AAC 25.540. 3. By letter dated March 9, 2007, Marathon provided an affidavit attesting to its efforts to contact all surface owners with rights overlying the Sterling Gas Pool 6 of the Kenai Gas Field. On March 16, 2007, Marathon provided an affidavit attesting to its additional efforts to contact all such surface owners. 4. Four public comments, one being a written request for a public hearing, were received. 5. A public hearing was held in the Commission's offices at 333 West 7th Avenue, Anchorage, Alaska, at 9:00 AM on April 24, 2007. Storage Injection Order 7A May 4, 2007 FINDINGS: 1. Operator: Marathon is the sole operator of the operators within one -quarter mile of th Kenai Gas Field. Page 2 e Kenai Gas Field, and there are no other boundaries of Sterling Gas Pool 6, of the 2. Injection Strata: Sterling Gas Pool 6 is defined in Conservation Order 510 as the accumulation of gas common to and correlative with the measured depth ("MD") interval of 5,250 feet to 5,520 feet in well Kenai Unit ("KU") 21-6 3. Injection Wells: SIO 7 authorized natural gas storage injection into Sterling Gas Pool 6 at well KU 31-07X. Marathon proposes to convert production well Kenai Unit ("KU") 23X- 06 to allow storage injection and production. Marathon anticipates that additional storage wells may be necessary. 4. Notification of Operators and Surface Owners: Marathon has provided two affidavits showing that it attempted to contact all surface owners within one -quarter mile of the Sterling Gas Pool 6's boundaries, as defined below. The surface owners are the Alaska. Department of Natural Resources, Salamatof Native Association, Inc., and numerous private individuals. 5. Description of Operation: As authorized in SIO 7, Marathon injects natural gas from the Kenai Gas Field and Cannery Loop Unit into Sterling Gas Pool 6 at well KU 31-07X. The operation involves alternating between injection and production, providing gas to meet peak requirements during seasonal high demand periods. SIO 7, Rule 4 provides that the reservoir pressure at Sterling Gas Pool 6 cannot exceed 300 pounds per square inch ("psi"). 6. Pool Information: A description of Sterling Gas Pool 6 is provided in SIO 7, Finding 6. 7. Typographical errors: Because of a typographical error in the SIO 7 description of the affected area, the township range values were not properly differentiated. Storage Injection Order 7A May 4, 2007 Page 3 8. Type of Fluid and Source: Dry natural gas from the Kenai Gas Field and from the Cannery Loop Unit is planned for storage injection. 9. Underground Sources of Drinking Water: Under 40 CFR 147.102(b)(1)(iii), EPA has exempted Kenai Gas Field aquifers below 1,300 feet true vertical depth ("TVD"). 10. Mechanical Condition of Adjacent Wells: Marathon reported on gas storage performance at Sterling Gas Pool 6 by letter dated March 2, 2007, in accordance with SIO 7, Rule 5. The total volume of gas injected into Pool 6 between May 8, 2006 (when injection began) and January 31, 2007 was 1,529.155 million standard cubic feet ("mcf'), and the gas produced (including storage and native gas) during this period was 3,067,680 mcf The approximate reservoir pressure change during the storage and production phases was 23 psi. The maximum reservoir pressure during the injection cycle was 172 psi, which was well below the maximum SIO 7, Rule 4 allowable pressure of 300 psi. 11. Public Comments: A public request was made for a hearing. The requester submitted comments to the Commission by letter dated March 16, 2007. A total of four individuals provided oral comments by telephone. Three of the four commenters were contacted by Marathon and the Commission and their concerns were wholly resolved. One of the commenters who called the Commission opposed Marathon's application to the injection and storage of gas but did not provide written comments or oral testimony. CONCLUSIONS: 1. The gas storage project meets the requirements of 20 AAC 25.252. 2. All aquifers below 1,300 TVD feet have been exempted by the EPA under 40 CFR 147.102(b)(1)(iii). 3. The gas storage project will be conducted in permeable strata and involves injection at pressures well below the parting pressure of Sterling Gas Pool 6. Proposed injection pressures are not reasonably likely to propagate fractures through the confining interval. Injected fluids will be confined within the appropriate receiving interval by impermeable lithology, cement isolation of the wellbore and appropriate operating conditions. 4. Information provided by Marathon, including logs, cement records and ongoing surveillance data, evidences that Sterling Gas Pool 6 is vertically isolated and Storage Injection Order 7A May 4, 2007 Page 4 behaves in a predictable, tank -like manner. The SIO 7 rules are adequate to ensure the mechanical integrity and isolation of Sterling Gas Pool 6. 5. An order permitting the underground injection of fluids on an area basis, rather than for each injection well individually, would provide for the efficient administration and surveillance of underground fluid injection operations. 20 AAC 25.460 authorizes the Commission to issue orders governing underground injection operations on an area basis. The gas storage project meets all the requirements of 20 AAC 25.460, and the Commission has considered the cumulative effects of operating additional injection wells. 6. The addition of gas injection wells cycling gas within Sterling Gas Pool 6 for the purpose of storage and production will not impact confinement and will not cause waste, jeopardize correlative rights, endanger freshwater, or impair the ultimate recovery of the resource. 7. The public comments regarding Marathon's request have been addressed. 8. All storage injectors must be constructed in accordance with the requirements of 20 AAC 25.030. In accordance with 20 AAC 252 and 25.412, Marathon must demonstrate that Sterling Gas Pool 6 is isolated to the approved interval. 9. On March 16, 2006, Marathon provided a report on the mechanical condition of each well that penetrates Sterling Gas Pool 6. Marathon found no evidence of pressure communication between the Sterling Gas Pool 6 strata and other strata, but cement bond logs do not exist for all Sterling Gas Pool 6 penetrations. Marathon has been unable to provide well records such as cement bond logs and cement top verifications for some wells that are used to determine isolation of the injection zone in all wells penetrating the confining layer. Accordingly, SIO 7, Rule 3 requires well monitoring of Sterling Gas Pool 6. Marathon has met all the requirements of SIO 7, Rule 3 mandating a Gas Storage Project Monitoring Program including the installation and operation of an automatic data acquisition system to record the flow rates and pressures of all active wells in the Kenai Gas Field. Data are collected and analyzed continuously at Marathon's Kenai Gas Field office. Operations personnel daily visit all production pads to visually inspect and maintain wells and production equipment. 10. Based on the information Marathon provided, including 46 years of natural gas production history, Sterling Pool 6 appears to be performing as expected, i.e., with tank -like behavior and is vertically isolated from other strata. Storage Injection Order 7A Page 5 May 4, 2007 NOW, THEREFORE, IT IS ORDERED: The underground injection of natural gas for storage is authorized in Sterling Gas Pool 6 in the Kenai Gas Field within the affected area, subject to the following rules. Affected Area: (Seward Meridian) Township, Range Section Portion T4N, R11W 4 W 1/2 SW 1/4, SW 1/4 NW 1/4 5, 6, 7, and All 8 9 W 1/2 NW 1/4, NW 1/4 SW 1/4 17 NE 1/4 NE 1 /4,W 1/2 NE 1/4, NW 1/4, N 1/2 SW 1/4, SW 1/4 SW 1/4 18 All T4N, R12W 1 E 1/2, E 1/2 W 1/2 12 E 1/2, E 1/2 W 1/2 13 NE 1/4, E 1/2 NW 1/4, N 1/2, SE 1/4 T5N, R11W 28 W 1/2 SW 1/4 29 All 30 E 1/2 NE 1/4, SW 1/4 NE 1/4, SE 1/4, SE 1/4 SW 1/4 31 E 1/2, SW 1/4, E 1/2 NW 1/4 32 All 33 W 1/2 NW 1/4, SE 1/4 NW 1/4, and SW 1/4 RULE 1: STORAGE INJECTION The underground injection of natural gas for storage is authorized in Sterling Gas Pool 6 within the affected area and into strata that are common to, and correlate with, the interval between the measured depths of 5,250 feet and 5,520 feet in well KU 21-6. Storage Injection Order 7 Page 6 May 4, 2007 RULE 2: FLUID INJECTION WELLS The underground injection of fluids must be through a well permitted for drilling as a service well for injection in conformance with 20 AAC 25.005 or permitted for conversion to a service well for injection in conformance with 20 AAC 25.280 and 20 AAC 25.412(e). RULE 3: DEMONSTRATION OF MECHANICAL INTEGRITY The mechanical integrity of all gas storage injectors must be demonstrated before injection begins, and before returning a well to service following a workover affecting mechanical integrity. A Commission -witnessed mechanical integrity test must be performed after injection is commenced for the first time in a well. That test must be scheduled when injection conditions e.g., temperature, pressure, flow rate have stabilized. Subsequent tests must be performed at least once every four years. The Commission shall be notified orally and in writing at least 24 hours in advance of any test. Unless another means is approved by the Commission, mechanical integrity must be demonstrated by a tubing/casing annulus pressure test using a surface pressure of 1,500 psi, or by a gradient of 0.25 psi/ft multiplied by the vertical depth of the packer, whichever is greater. Stabilizing pressure that does not change more than 10 percent during a 30-minute period is required for a valid test. Results of all mechanical integrity tests must be provided in writing to the Commission within 30 days after the test is completed. Results must be readily available for Commission inspection. RULE 4: WELL INTEGRITY FAILURE AND CONFINEMENT The operator shall maintain a continuous data acquisition system to record the flow rates and pressures on all active wells in the Kenai Gas Field. Field personnel must perform daily visual inspections and maintenance of all active wells and production equipment. Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by changes in injection rates, operating pressure observations, tests, surveys, logs, or other evidence, the operator shall notify the Commission by the next business day and submit a corrective action plan on a Form 10-403 for Commission approval. The operator shall immediately shut in the well if continued operation would be unsafe cause waste or threaten contamination of freshwater, or if so directed by the Commission. The operator shall submit to the Commission a monthly report on daily tubing and casing annuli pressures and injection rates for all wells within the affected area. RULE 5: Notification of Improper Injection Injection of fluids other than natural gas without proper authorization is considered improper injection. Upon discovery of such an event, the operator must immediately notify the Commission, provide details of the operation, and propose actions to prevent recurrence. Additionally, notification requirements of any other State or Federal agency remain the operator's responsibility. RULE 6: MAXIMUM RESERVOIR PRESSURE The reservoir pressure for the project shall be limited to 300 psi. Storage Injection Order 7A Page 7 May 4, 2007 RULE 7: PERFORMANCE REPORTING An annual report evaluating the performance of the storage injection operation must be provided to the Commission no later than March 15. The report shall include material balance calculations of the gas production and injection volumes and a summary of well performance data to provide assurance of reservoir confinement of the gas storage volumes. Additional data collection and analysis requirements may be imposed by the Commission based on a review of the operating performance. Such data collection requirements could include temperature surveys, pressure surveys, and production logs. RULE 8: OTHER CONDITIONS a. The operator must comply with all applicable provisions of AS 31.05, Commission regulations, and orders, stipulations, and terms of any permits issued by the Commission. b. The Commission may suspend, revoke, or modify this authorization if injected gas is not confined to the designated injection strata RULE 9: ADMINISTRATIVE ACTIONS Unless notice and public hearing are otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in the movement of gas outside of the authorized injection zone The Commission may approve drilling or the conversion of existing wells for the purpose of gas storage by approving permits or sundrys, without notice and public hearing, as long as the requirements of this order are met. DONE at Anch_Qog, Alaska, and dated May 4, 2007. Daniel T. Seamount, Jr., Commissioner Alaska Oil and Gas Conservation Commission Cathy Foe r ter, Commissioner Alaska Oil and Gas Conservation Commission AS 31.05.080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it Month file with the Commission an application for rehearing. A request for rehearing must be received by 4:30 PM on the 23`d day following the date of the order, or next working day if a holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days from the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by non -action of the Commission, the 30-day period for appeal to Superior Court runs from the date on which the request is deemed denied (i.e., 10`h day after the application for rehearing was filed). SI07A Kenai Gas Field Subject: SI07A Kenai Gas Field From: Jody Colombie<jody_colombie@admin.state.ak.us> Date: Fri, 04 May 2007 14:52:12 -0800 To: undisclosed -recipients:; BCC: Christine Hansen <c.hansen@iogcc.state.ok.us>, Terrie Hubble <hubbletl@bp.com>, Sondra Stewman <StewmaSD@BP.com>, stanekj <stanekj@unocal.com>, trmjrl <trmjrl@aol.com>, jdarlington <jdarlington@forestoil.com>, nelson <knelson@petroleumnews.com>, Mark Dalton <mark.dalton@hdrinc.com>, Shannon Donnelly<shannon.donnelly@conocophillips.com>, "Mark P. Worcester" <mark.p.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>, Mikel Schultz <Mikel.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "Janet D. Platt" <P1attJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mckay@gci.net>, Barbara F Fullmer <barbara.f fullmer@conocophillips.com>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesno I @gci.net>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shell.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>, jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud"<james.m.ruud@conocophillips.com>, Brit Lively <bl@mapalaska.com>, jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@alaskadc.org>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobil.com>, many <marty@rkindustrial.com>, ghammons <ghammons@aol.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@aol.com>, Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <todd.durkee@anadarko.com>, Gary Schultz <gary_schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoil.com>, Sharmaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoil.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>, James Scherr <james.scherr@mms.gov>, Tim Lawlor <Tim Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamers Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mlewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff <smetankaj@unocal.com>, Gary Rogers <gary_rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur_Copoulos@dnr.state.ak.us>, Ken <klyons@otsintl.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, Paul Decker <paul_decker@dnr.state.ak.us>, Aleutians East Borough <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>, Mike Mason <mike@kbbi.org>, Garland Robinson <gbrobinson@marathonoil.com>, Cammy Taylor <cammy_taylor@dnr.state.ak.us>, Thomas E Maunder <tom maunder@admin.state.ak.us>, Stephen F Davies <steve davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoil.com>, Deanna Gamble <dgamble@kakivik.com>, James B Regg I of 2 5/4/2007 2:52 PM SI07A Kenai Gas Field <jim_regg@admin.state.ak.us>, Catherine P Foerster<cathy_foerster@admin.state.ak.us>, gregory micallef <micallef@clearwire.net>, Laura Silliphant <laura silliphant@dnr.state.ak.us>, David Steingreaber<david.e.steingreaber@exxonmobil.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve_moothart@dnr.state.ak.us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, Paul Bloom <paul_bloom@ml.com>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple_davidson@dnr.state.ak.us>, Walter Featherly <WFeatherly@PattonBoggs.com>, Tricia Waggoner <taggoner@nrginc.com>, John Spain <jps@stateside.com>, Cody Rice <Cody_Rice@legis.state.ak.us>, John Garing <garingJD@bp.com>, Harry Engel <engelhr@bp.com>, Jim Winegarner<jimwinegarner@brooksrangepetro.com>, Matt Rader <matt_rader@dnr.state.ak.us>, carol smyth <carol.smyth@shell.com>, Arthur C Saltmarsh <art_saltmarsh@admin.state. ak.us>, Chris Gay <cdgay@marathonoil.com>, foms@mtaonline.net, Rudy Brueggeman <rudy.brueggemann@intemational.gc.ca>, Cary Carrigan <cary@kfgd.com>, Sonja Frankllin <sfranklin6@bloomberg.net>, Mike Bill <Michael.Bill@bp.com>, Walter Quay <WQuay@chevron.com>, "Alan Birnbaum <V \"Alan J Birnbaum V5" <alan_birnbaum\"@law.state.ak.us>, Randall Kanady <Randall.B.Kanady@conocophillips.com>, MJ Loveland <N1878@conocophillips.com>, David S Roby <dave_roby@admin.state.ak.us>, Cynthia B Mciver <bren mciver@admin.state.ak.us>, icibele@marathonoil.com Jody Colombie <jodv eolonihica idmin state ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration sio7A.pdf Content -Type: application/pdf Content -Encoding: base64 2 of 2 5/4/2007 2:52 PM Mary Jones David McCaleb Mona Dickens XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography GEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 John Levorsen Michael Parks Mark Wedman 200 North 3rd Street, #1202 Marple's Business Newsletter Halliburton Boise, ID 83702 117 West Mercer St, Ste 200 6900 Arctic Blvd. Seattle, WA 98119-3960 Anchorage, AK 99502 Baker Oil Tools Schlumberger Ciri 4730 Business Park Blvd., #44 Drilling and Measurements Land Department Anchorage, AK 99503 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99503 Anchorage, AK 99503 Ivan Gillian Jill Schneider Gordon Severson 9649 Musket Bell Cr.#5 US Geological Survey 3201 Westmar Cr. Anchorage, AK 99507 4200 University Dr. Anchorage, AK 99508-4336 Anchorage, AK 99508 Jack Hakkila Darwin Waldsmith James Gibbs PO Box 190083 PO Box 39309 PO Box 1597 Anchorage, AK 99519 Ninilchick, AK 99639 Soldotna, AK 99669 Kenai National Wildlife Refuge Penny Vadla Richard Wagner Refuge Manager 399 West Riverview Avenue PO Box 60868 PO Box 2139 Soldotna, AK 99669-7714 Fairbanks, AK 99706 Soldotna, AK 99669-2139 Cliff Burglin Bernie Kari North Slope Borough PO Box 70131 K&K Recycling Inc. PO Box 69 Fairbanks, AK 99707 PO Box 58055 Barrow, AK 99723 Fairbanks, AK 99711 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 I D THE STATE 01ALASKA GOVERNOR BILL WALKER Alaska Oil and Gas Conservation Commission ADMINISTRATIVE APPROVAL STORAGE INJECTION ORDER NO. 7A.001 Mr. Larry Greenstein Hilcorp Alaska LLC 3800 Centerpoint Dr., Suite 1400 Anchorage, AK 99503 Re: Docket Number: SIO -17-001 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1 433 Fax: 907.276.7542 www,aogcc.alaska.gov Administrative Approval to increase the maximum reservoir pressure limit Kenai Gas Field (KGF) Sterling Gas Pool 6 Dear Mr. Greenstein: By email dated September 11, 2017, Hilcorp Alaska LLC (Hilcorp) requested the reservoir pressure limitation contained in Rule 6 of Storage Injection Order 7A be raised from 300 to 400 psi to allow for anticipated larger storage volumes. Hilcorp's request is hereby approved. On August 26, 2005, Marathon Oil Company (Marathon)' submitted an application to the Alaska Oil and Gas Conservation Commission (AOGCC) to establish gas storage operations within the KGF Sterling Gas Pool 6. The application requested a maximum allowable reservoir pressure of 500 psi and presented information demonstrating that 500 psi was over 2,000 psi less than the fracture pressure of the reservoir. During testimony on the application Marathon stated that based on its planned injection and withdrawal cycle volumes the actual reservoir pressure would be much less than the 500 psi requested. Marathon subsequently amended their application and asked for the maximum reservoir pressure limit to be 300 psi because this would be more than enough to cover its proposed activities. Since there was not a need for the reservoir pressure limit to be 500 psi the AOGCC established 300 psi as the maximum allowable reservoir pressure for Sterling Gas Pool 6. Operations at the storage pool have evolved since Hilcorp has become owner/operator. It now routinely injects larger volumes than Marathon did and is approaching the 300 psi pressure limit on a more regular basis than Marathon did. For this reason Hilcorp has requested that the maximum reservoir pressure limit be raised from 300 to 400 psi so that its storage operations can proceed unhindered. Under Rule 9 of SIO 7A the AOGCC may administratively amend the order if notice and hearing are not required, and the proposed change does not promote waste or ' Marathon was the operator of the KGF prior to Hilcorp purchasing Marathon's assets in the Cook Inlet Region and becoming operator of the KGF on February 1, 2013. SIO 7A.001 February 22, 2018 Page 2 of 2 jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in movement of injected fluids outside the authorized injection interval. The proposed change does not change the affected area or injection interval so there is no need for public notice for this application and there will be no effect on correlative rights. The proposed change will not result in waste or risk the movement of injection fluids outside of the authorized interval because the 400 psi limit is more than 2,000 psi below the reservoir's fracture pressure. Amending the order to allow for more flexibility in storage reservoir operations is a sound engineering and geoscience decision. In accordance with Rule 9 of SIO 7A the AOGCC grants Hilcorp's request to raise the maximum allowable reservoir pressure for the KGF Sterling Gas Pool 6 to 400 psi. Now therefore it is ordered, Rule 6 of SIO 7A is hereby modified to read: RULE 6: MAXIMUM RESERVOIR PRESSURE The reservoir pressure for the project shall be limiter DONE at Anchorage, Alaska and dated February 22, 2018. Hollis S. French Chair, Commissioner Daniel T. Seamount, Jr. Commissioner RECONSIDERA Cathy IY Foers Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. THE: STATE `'ALASKA GOVERNOR HILI. WALKER Alaska Oil and Gas Conservation Commission ADMINISTRATIVE APPROVAL STORAGE INJECTION ORDER NO. 7A.001 Mr. Larry Greenstein Hilcorp Alaska LLC 3800 Centerpoint Dr., Suite 1400 Anchorage, AK 99503 Re: Docket Number: SIO -17-001 333 West Seventh Avenue Anchorage, Ataska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 aogcc.olaska.gov Administrative Approval to increase the maximum reservoir pressure limit Kenai Gas Field (KGF) Sterling Gas Pool 6 Dear Mr. Greenstein: By email dated September 11, 2017, Hilcorp Alaska LLC (Hilcorp) requested the reservoir pressure limitation contained in Rule 6 of Storage Injection Order 7A be raised from 300 to 400 psi to allow for anticipated larger storage volumes. Hilcorp's request is hereby approved. On August 26, 2005, Marathon Oil Company (Marathon)` submitted an application to the Alaska Oil and Gas Conservation Commission (AOGCC) to establish gas storage operations within the KGF Sterling Gas Pool 6. The application requested a maximum allowable reservoir pressure of 500 psi and presented information demonstrating that 500 psi was over 2,000 psi less than the fracture pressure of the reservoir. During testimony on the application Marathon stated that based on its planned injection and withdrawal cycle volumes the actual reservoir pressure would be much less than the 500 psi requested. Marathon subsequently amended their application and asked for the maximum reservoir pressure limit to be 300 psi because this would be more than enough to cover its proposed activities. Since there was not a need for the reservoir pressure limit to be 500 psi the AOGCC established 300 psi as the maximum allowable reservoir pressure for Sterling Gas Pool 6. Operations at the storage pool have evolved since Hilcorp has become owner/operator. It now routinely injects larger volumes than Marathon did and is approaching the 300 psi pressure limit on a more regular basis than Marathon did. For this reason Hilcorp has requested that the maximum reservoir pressure limit be raised from 300 to 400 psi so that its storage operations can proceed unhindered. Under Rule 9 of SIO 7A the AOGCC may administratively amend the order if notice and hearing are not required, and the proposed change does not promote waste or ' Marathon was the operator of the KGF prior to Hilcorp purchasing Marathon's assets in the Cook Inlet Region and becoming operator of the KGF on February 1, 2013. SIO 7A.001 February 22, 2018 Page 2 of 2 jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in movement of injected fluids outside the authorized injection interval. The proposed change does not change the affected area or injection interval so there is no need for public notice for this application and there will be no effect on correlative rights. The proposed change will not result in waste or risk the movement of injection fluids outside of the authorized interval because the 400 psi limit is more than 2,000 psi below the reservoir's fracture pressure. Amending the order to allow for more flexibility in storage reservoir operations is a sound engineering and geoscience decision. In accordance with Rule 9 of SIO 7A the AOGCC grants Hilcorp's request to raise the maximum allowable reservoir pressure for the KGF Sterling Gas Pool 6 to 400 psi. Now therefore it is ordered, Rule 6 of SIO 7A is hereby modified to read: RULE 6: MAXIMUM RESERVOIR PRESSURE The reservoir pressure for the project shall be limited to 400 psi. DONE at Anchorage, Alaska and dated February 22, 2018. //signature on file// Hollis S. French Chair, Commissioner //signature on file// Daniel T. Seamount, Jr. Commissioner //signature on file// Cathy P. Foerster Commissioner SFt,otL,t,,y,( C n � drrUN �' As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in par[ within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the dam on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to ran is not included in the period; the last day of the period is included, unless it falls on a weekend or sure holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Thursday, February 22, 2018 2:26 PM To: 'Ballantine, Tab A (LAW) (tab.ballantine@alaska.gov)'; 'Bender, Makana K (DOA) (makana.bender@alaska.gov)'; 'Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov)'; 'Bixby, Brian D (DOA)'; 'Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov)'; Carlisle, Samantha J (DOA); 'Colombie, Jody J (DOA) Oody.colombie@alaska.gov)'; 'Cook, Guy D (DOA)'; 'Davies, Stephen F (DOA) (steve.davies@alaska.gov)'; Earl, Adam G (DOA); Erickson, Tamara K (DOA);'Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov)'; 'French, Hollis (DOA)'; 'Frystacky, Michal (michal.frystacky@alaska.gov)'; 'Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov)'; Herrera, Matthew F (DOA); 'Jones, Jeffery B (DOA) 6effjones@alaska.gov)'; Kair, Michael N (DOA); Laubenstein, Lou (DOA);'Link, Liz M (DOA)'; Loepp, Victoria T (DOA); Mcphee, Megan S (DOA); 'Mumm, Joseph (DOA sponsored) (Joseph.mumm@alaska.gov)';'Noble, Robert C (DOA) (bob.noble@alaska.gov)'; 'Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov)'; 'Pasqual, Maria (DOA) (maria.pasqual@alaska.gov)'; 'Regg, James B (DOA) Oim.regg@alaska.gov)'; Rixse, Melvin G (DOA);'Roby, David S (DOA) (dave.roby@alaska.gov)'; 'Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov)'; 'Seamount, Dan T (DOA)(dan.seamount@alaska.gov)';'Wallace, Chris D (DOA) (chris.wallace@alaska.gov)';'AK, GWO Projects Well Integrity'; 'AKDCWellIntegrityCoordinator'; 'Alan Bailey'; 'Alex Demarban'; 'Alicia Showalter'; 'Allen Huckabay'; 'Andrew Vanderlack'; 'Ann Danielson'; 'Anna Raff'; 'Barbara F Fullmer'; 'bbritch'; 'Becky Bohrer'; 'Ben Boettger'; 'Bill Bredar'; 'Bob'; 'Bonnie Bailey'; 'Brandon Viator'; 'Brian Havelock'; 'Bruce Webb'; 'Caleb Conrad'; 'Candi English'; 'Cody Gauer'; 'Cody Terrell'; 'Colleen Miller'; 'Connie Downing'; 'Crandall, Krissell'; 'D Lawrence'; 'Dale Hoffman'; 'Danielle Mercurio';'Darci Homer'; 'Dave Harbour'; 'David Boelens';'David Duffy';'David House';'David McCaleb';'ddonkel@cfl.rr.com'; Diemer, Kenneth J (DNR); 'DNROG Units';'Donna Ambruz';'Ed Jones'; 'Elizabeth Harball';'Elowe, Kristin'; 'Elwood Brehmer'; 'Evan Osborne'; 'Evans, John R (LDZX)'; 'Garrett Brown'; 'George Pollock'; 'Gordon Pospisil'; Greeley, Destin M (DOR); 'Gretchen Stoddard'; 'gspfoff'; Hurst, Rona D (DNR); Hyun, James 1 (DNR); 'Jacki Rose'; 'Jason Brune'; 'Jdarlington Oarlington@gmail.com)'; 'Jeanne McPherren'; 'Jerry Hodgden'; 'Jill Simek'; 'Jim Shine'; 'Jim Watt';'Jim White';'Jim Young';'Joe Lastufka';'Joe Nicks'; 'John Burdick';'John Easton'; 'John Larsen'; 'Jon Goltz'; 'Josef Chmielowski'; 'Joshua Stephen'; 'Juanita Lovett'; 'Judy Stanek'; 'Kari Moriarty'; 'Kasper Kowalewski'; 'Kazeem Adegbola'; 'Keith Torrance'; 'Keith Wiles'; 'Kelly Sperback'; 'Kevin Frank'; Kruse, Rebecca D (DNR);'Kyla Choquette'; 'Laura Silliphant (laura.gregersen@alaska.gov)'; 'Leslie Smith'; 'Lori Nelson'; 'Luke Keller'; 'Marc Kovak';'Mark Dalton';'Mark Hanley (mark.han ley@ anadarko.com)'; 'Mark Landt'; 'Mark Wedman';'Michael Bill';'Michael Calkins'; 'Michael Moora';'Michael Quick'; 'Michael Schoetz';'Mike Morgan';'MJ Loveland'; 'mkm7200'; 'Motteram, Luke A'; Mueller, Marta R (DNR); 'Nathaniel Herz'; 'nelson'; 'Nichole Saunders';'Nick Ostrovsky'; 'NSK Problem Well Supv';'Patty Alfaro'; 'Paul Craig'; 'Paul Decker (paul.decker@alaska.gov)';'Paul Mazzolini'; Pike, Kevin W (DNR);'Randall Kanady'; 'Renan Yanish';'Richard Cool'; 'Robert Brelsford';'Robert Warthen';'Ryan Gross'; 'Sara Leverette'; 'Scott Griffith'; 'Shahla Farzan'; 'Shannon Donnelly'; 'Sharon Yarawsky'; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); 'Stephanie Klemmer'; 'Stephen Hennigan'; 'Sternicki, Oliver R'; 'Steve Moothart (steve.moothart@alaska.gov)'; 'Steve Quinn'; 'Suzanne Gibson'; 'Tamers Sheffield'; 'Tanisha Gleason'; 'Ted Kramer'; 'Teresa Imm'; 'Tim Jones'; 'Tim Mayers'; 'Todd Durkee'; 'Tom Maloney'; 'trmjrl'; 'Tyler Senden'; Umekwe, Maduabuchi P (DNR); 'Vinnie Catalano'; 'Well Integrity'; 'Well Integrity'; 'Weston Nash'; 'Whitney Pettus'; 'Aaron Gluzman'; 'Aaron Sorrell'; 'Ajibola Adeyeye'; 'Alan Dennis'; 'Andy To: Bond'; 'Bajsarowicz, Caroline J; 'Bruce Williams'; 'Casey Sullivan'; 'Corey Munk'; 'Davis Mccraine';'Don Shaw';'Eppie Hogan';'Eric Lidji';'Garrett Haag'; 'Graham Smith'; Neusser, Heather A (DNR); 'Holly Fair'; 'Jamie M. Long'; 'Jason Bergerson'; 'Jesse Chielowski'; 'Jim Magill'; 'Joe Longo'; 'John Martineck'; 'Josh Kindred'; 'Keith Lopez'; 'Laney Vazquez'; 'Lois Epstein'; Longan, Sara W (DNR); 'Marc Kuck';'Marcia Hobson'; 'Marie Steele'; 'Matt Armstrong'; 'Melonnie Amundson'; 'Mike Franger'; 'Morgan, Kirk A (DNR)'; 'Pascal Umekwe'; 'Pat Galvin'; 'Pete Dickinson'; 'Peter Contreras'; 'Rachel Davis'; 'Richard Garrard'; 'Richmond, Diane M';'Robert Province';'Ryan Daniel';'Sandra Lemke'; 'Susan Pollard';'Talib Syed';'Tina Grovier (tmgrovier@stoel.com)';'William Van Dyke' Subject: SIO 7A.001 (Hilcorp, Kenai Gas Field) Attachments: sio7a.001.pdf Administrative Approval to increase the maximum reservoir pressure limit Kenai Gas Field (KGF) Sterling Gas Pool 6 Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1211 CONFIDENTIALITY NOTICE: This e-mail message, includinganv attachments, contains information from the Alaska Oil and Gas Conservation Conmrission (AOC CC), 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 vou, contact Samantha Carlisle at (907 :93-123 or Samantha.Carlislew;alaska gov. Bennie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 INDEX STORAGE INJECTION ORDER NO. 7A Kenai Gas Field Sterling Gas Pool 6 1. February 19, 2007 Marathon Oil Company (Marathon)'s request for amendment to Rule 1 2. February 26, 2007 Notice of Public Hearing, Affidavit of Publication, email distribution, and mailings 3. March 9, 2007 Marathon's Affidavit of Mailing Notices 4. March 13, 2007 Questions from the public 5. March 13, 2007 Email to Marathon 6. March 16, 2007 Notice of Public Hearing, Affidavit of Publication, and email distribution 7. March 16, 2007 Yragui's request for Hearing 8. March 16, 2007 Marathon's Affidavit of Mailing Notices 9. April 24, 2007 Public Hearing Transcript, sign -in sheet, Marathon's Request for Amendment exhibit, and Keener's comments 10. -------------------- Public Contacts 11. March 1, 2008 Marathon's Third Storage Development Plan 12. February 27, 2009 Marathon's Fourth Storage Development Plan 13. May 1, 2009 Email re: KBU 42-6X intermediate casing cement 14. April 28, 2010 Email re: Gas Storage Jurisdictional Question 15. September 11, 2017 Request to increase the maximum reservoir pressure limits (SIO 7A.001) 16. March 13, 2020 Request to change annual performance report due date. (SIO 7A.002) THE mri; "ALASKA Alaska Oil and Gas Conservation Commission GOVERNOR MICHAEL 1. DUNLEAVY 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 wvr v.aog cc.o la sko.gov ADMINISTRATIVE APPROVAL STORAGE INJECTION ORDER NO. 7A.002 Mr. Anthony McConkey Reservoir Engineer Hilcorp Alaska, LLC. PO Box 244027 Anchorage, AK 99524-4027 Re: Docket Number: SIO -20-001 Request for administrative approval to change annual performance report due date Kenai Gas Field Sterling Gas Pool 6 Dear Mr. McConkey: By letter dated March 13, 2020, Hilcorp Alaska, LLC. (Hilcorp) requested administrative approval to amend Rule 7 of Storage Injection Order No. 7A (SIO 7A) to change the due date of the annual performance report from March 15th to April 11 of each year. Hilcorp's request is hereby GRANTED. Hilcorp, as the operator of a number of fields and pools in Alaska, each with numerous annual reports that must be filed. The vast majority of the reports are due by April 151. Changing the reporting due date for this report from March 151 to April l" will have no detrimental impact on when the information contained in the report would be made available to the Alaska Oil and Gas Conservation Commission (AOGCC) and the public. Report submission for Hilcorp will be more efficient if all of its annual reports have a uniform due date. Rule 9 of SIO 7A allows the AOGCC to administratively amend the order so long as change will not promote waste, jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in the movement of gas outside of the authorized injection zone. Hilcorp's request is purely administrative in nature and thus meets all of the conditions to allow for the order to be administratively amended. Now therefore it is ordered, Rule 7 of SIO 7A is amended to read as follows: RULE 7: PERFORMANCE An annual report evaluating the performance of the storage injection operation must be provided to the Commission no later than April 1. The report shall include material balance SIO 7A.002 June 29, 2020 Page 2 of 2 calculations of the gas production and injection volumes and a summary of well performance data to provide assurance of reservoir confinement of the gas storage volumes. Additional data collection and analysis requirements may be imposed by the Commission based on a review of the operating performance. Such data collection requirements could include temperature surveys, pressure surveys, and production logs. DONE at Anchorage, Alaska and dated June 29, 2020. Jeremy Dl9ttal"19ne6 by xiemym.Poce M. Price Daae: 3020.0639 1630:19-08W Jeremy M. Price Chair, Commissioner Daniel T. Dignallysi9nedby Daniel T.6eamounUr Seamount, Jr. 1:211.1.11 19:4444 neva Daniel T. Seamount, Jr. Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in pan within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period oftime above, the date of the event or default after which the designated period begins to ran is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 16 Hilcorp Alaska, LLC U March 13, 2020 Chris Wallace, Senior Petroleum Engineer Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 Re: Sterling Gas Pool 6 SIO #7A, Rule #7 Amendment Dear Mr. Wallace: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 RECEIVED MAR 17 2020 A®CCC Per Rule #7 of Storage Injection Order #7A, Hilcorp is required to submit an annual performance report consisting of material balance calculations of gas and production volumes to provide assurance of continued reservoir confinement of the gas and storage volumes by March 15`h. The majority of Hilcorp's annual performance reports have a due date of April I ". In order to increase efficiencies in the annual reporting schedule, Hilcorp would like to request to amend Rule #7 of SIO #7A to require annual reporting of material balance calculations of production and injection volumes submissions for the prior calendar year to be filed on or before April 151 Should you have questions, please contact Anthony McConkey at 777-8460 or Holly Tipton at 777-8330. Sincerely, ME Anthony McConkey Reservoir Engineer 15 Colombie, Jody J (DOA) From: Roby, David S (DOA) Sent: Monday, December 18, 2017 10:14 AM To: Colombie, Jody J (DOA) Subject: FW: SIO 7A Rule 6 Hilcorp question on maximum pressure Here's the request from Hilcorp to revise SIO 7A for the Kenai gas field Dave Roby (907) 793-1232 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 Dave Roby at (907(793-1232 or dave.robv@alaska.aov. From: Larry Greenstein [mailto:lgreenstein@hilcorp.com] Sent: Monday, September 11, 2017 2:57 PM To: Roby, David S (DOA) <dave.roby@alaska.gov>; Wallace, Chris D (DOA) <chris.wallace@alaska.gov> Subject: RE: SID 7A Rule 6 Hilcorp question on maximum pressure Thanks for the clarification, Dave (and Chris). I don't think we need to formalize this 'psia vs psi' with an AA. We are good with this e-mail as proof of the definition of 'psi'. We would like to still be considered for an AA regarding an increase in the reservoir limit to 400 psia though. We just ran a SBHP and found the Pool 6 reservoir to be at -272 psia in the KU 34-31 well. Historically this has meant that we'd have at least 4 bcf more gas that could be stored before coming up close to the 300 psia limit (assuming no production from Pool 6 in the meantime). Probably won't get there before the weather gets cold but, as referenced below, the application justified 'no more than 500 psia' be used for the reservoir pressure limit. As the 300 psia seemed rather arbitrary, it should be easy enough to allow an increase to 400 psia with a simple AA. Please consider this a request to do just that, ie Administratively Approve an increase in the reservoir pressure to 400 psia (from 300 psia) as stated in Rule #6 of SIO #7A. Thank you Larry From: Roby, David S (DOA) [mailto:dave.robv@alaska.aov] Sent: Monday, September 11, 2017 2:32 PM To: Wallace, Chris D (DOA) <chris.wallace@alaska.aov>; Larry Greenstein <Iareenstein@hilcoro.com> Subject: RE: SID 7A Rule 6 Hilcorp question on maximum pressure Larry, In the original application discussions around reservoir pressure were in psia (see below), so let's go with the pressure limit in the order is in psia as well. ,?he proposed gas storage operation is expected to increase the current reservoir pressure from 192 psia to no more than 500 psia." - Introduction section to Marathon's SIO application dated August 28, 2005. I suppose we could do an AA if you think one is necessary. Dave Roby (907)793-1232 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). If 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 Dave Roby at (907(793-1232 or dave.robv@alaska aov. From: Wallace, Chris D (DOA) Sent: Monday, September 11, 2017 1:55 PM To: Roby, David S (DOA) <dave.robv@alaska.gov> Subject: SIO 7A Rule 6 Hilcorp question on maximum pressure Dave, Just got a call from Larry. He is requesting clarification on if the max. reservoir pressure of 300 is psig or psia? If you could check and get back to him with your thoughts and if that can be clarified with an AA or not. Thanks and Regards, Chris Wallace, Sr. Petroleum Engineer, Alaska Oil and Gas Conservation Commission, 333 West 7`h Avenue, Anchorage, AK 99501, (907) 793- 1250 (phone), (907) 276-7542 (fax), chris.wallaceftalaska.gov 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 Chris Wallace at 907-793- 1250 or chris.wallace@alaska.aov. 14 Page 1 of 2 Regg, James B (DOA) From: Regg, James B (DOA) ! «'�'�'�'" Sent: Wednesday, April 28, 2010 2:59 PM To: 'dennis.hinnah@dot gov' Cc: Aubert, Winton G (DOA) Subject: RE: Gas Storage Jurisdictional Question I referenced the wrong Swanson River storage injection order; it should have read SIO 6, not SIO 3 Jim Regg AOGCC 333 W 7th Avenue, Suite 100 Anchorage, AK 99501 907-793-1236 From: Regg, James B (DOA) Sent: Wednesday, April 28, 2010 2:42 PM To: 'dennis.hinnah@dot.gov' Cc: Aubert, Winton G (DOA) Subject: RE: Gas Storage Jurisdictional Question Dennis - Winton and I discussed your request; I also checked with our Stat Tech who handles Monthly Facility Gas Disposition reports. AOGCC does not know the exact source of the gas that goes into storage unless the operator chooses to offer the information as part of one of its required reporting obligations. The operator's application for storage injection is required to identify the injected fluids (source) per 20 AAC 25 252(c)(7) which most often includes provisions for accepting gas from other unnamed sources that have gas compatible with the storage zone formation fluids. For the fields you name, the operator lists the following likely gas sources: SIO 3 - Swanson; application says source of gas will be from Swanson River Field initially and from other Cook Inlet fields in the future; SIO 4 - Pretty Creek; application says source of gas will be from excess Union -owned gas likely from Steelhead platform (McArthur River Field; Trading Bay Unit) and could also be sourced from Beluga River field or other west side properties operated by other operators; SIO 7A - Kenai; application says source of gas will be Kenai and Cannery Loop or sources deemed compatible with Sterling Pool 6; SI0.8 - Nicolai Creek; application says source of gas is "not presently determinable"; could come from other Aurora operated fields or purchased from another producer or utility. We checked the annual gas storage performance reports required by injection order rule; these focus on volume injected/produced and ongoing integrity of reservoir/wellbore without identifying the source. Our Storage Injection Order files include copies of the Storage Development Plans field with DNR; those include references to source(s) of gas for the gas storage project. For example, the DNR Storage Development Plan for Kenai Unit indicates gas from only Kenai Unit and Cannery Loop Unit has been injected to date. Because of the Commission's regulatory focus (reservoir and well performance/integrity perspectives) and lack of jurisdication beyond the point of custody transfer, we do not have information on pipeline(s) used to transfer the gas to storage injection well. We also do not have information about any processing facilities between a production well and storage injection well. Regarding inspections, our focus is the wellhead safety valve system, wellbore integrity and custody transfer measurement; we do not perform safety inspections at storage facilities. I think you are going to find there is more likely to be a regulatory gap than there would be regulatory overlap regarding surface facilities servicing gas storage operations. Sounds like your best bet is to obtain information about the source of gas from the operators. 4/28/2010 Page 2 of 2 Is I-ft Jim Regg AOGCC 333 W.7th Avenue, Suite 100 Anchorage, AK 99501 907-793-1236 From: dennis.hinnah@dot.gov [mailto:dennis.hinnah@dot.gov] Sent: Wednesday, April 28, 2010 11:40 AM To: Aubert, Winton G (DOA); Regg, James B (DOA) Subject: Gas Storage Jurisdictional Question Hi Winton/Jlm, I am trying to figure out a jurisdictional question related to the gas storage fields in Alaska and I am hoping you can help me. As I understand it, these are the four gas storage fields: Swanson River Field, operated by operated by Union Oil Company of California (SIO 3) Pretty Creek Gas Storage Facility, operated by Union Oil Company of California (SIO 4) Kenai Gas Field, operated by Marathon Oil Company (SIO 6) Nicolai Creek Field, operated by Aurora Gas, LLC (SIO 8) PHMSA has jurisdiction in gas storage fields for surface piping, compression, etc. where the source of the gas is from a pipeline regulated by PHMSA. It is not clear what our jurisdiction is if the gas is moved between wells in the same field to get it to a well with higher deliverability or different reservoirs in the same field. There are probably other scenarios that I haven't thought of. I reviewed the Storage Injection Orders and wasn't able to find what I need. For each Storage Injection I would like to know the source of the stored gas, the pipeline(s) it travels through, and any processing facilities between the production well(s) and injection well(s). I included Jim on this email, because I would also like to know the extent of the safety inspections that the AOGCC does at the storage facilities. I don't see much jurisdictional overlap but things such as a pressure relief device that protects both the well and the pipeline or a common cathodic protection system would probably be jurisdictional to both agencies. Some of this could involve DNR or BLM jurisdiction, but so far I haven't seen anything leading me in that direction. I would be happy to discuss this further or if you would like to meet please let me know. Thanks, Dennis Dennis Hinnah, P.E. Deputy Director, Western Region U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Phone: 907-271-4937 4/28/2010 13 KBU 42-6x intermediate casing cement Page 1 of 1 Maunder, Thomas E (DOA) From: Regg, James B (DOA) Sent: Friday, May 01, 2009 6:31 PM To: Berga, Pete; Tank, Will; Anderson, Gene Cc: Maunder, Thomas E (DOA); tzelenka@blm.gov Subject: RE: KBU 42-6x intermediate casing cement IariCA-O%,Av '�)kO`"1 A► I appreciate the effort and timely responses by Will Tank regarding my questions. Information provided was very helpful. The bond log clearly defines a cement top that appears coincident to the highly porous, depleted Sterling A8 sand. The bond log also clearly shows approximately 800 feet of good cement between the Sterling Pool 6 gas storage zone and the cement top. I discussed this matter with Commission Chair Dan Seamount; we agree that you can proceed without taking remedial action as required by 20 AAC 25.030(d)(5). You will need to provide the Commission with a 10-403 to address this variance. Jim Regg AOGCC 333 W.7th Avenue, Suite 100 Anchorage, AK 99501 907-793-1236 From: Berga, Pete (mailto:pkberga@marathonoil.com] Sent: Friday, May 01, 2009 10:12 AM To: Maunder, Thomas E (DOA); Regg, James B (DOA); tzelenka@blm.gov Cc: Tank, Will; Anderson, Gene Subject: KBU 42-6x intermediate casing cement Jim Regg and Tom Zelenka Follow up to our phone conversations. The well has been drilled to 7105' and with 9 5/8" casing at 7091' md. Top of hydrocarbon bearing sand(depleted) is 4900' md. Lost returns during cement job. Pump pressures indicate we may have cement around 4900' md. Running bond log now to find top of cement. Hopefully we will have this info around 1 pm today. Myself, Will Tank or Gene Anderson will contact you with the results and remedial plan if we need one. Any verbal approves will be followed up with sundrys on Monday. 11 /27/2009 12 Marathon MARATHON Oil Company u February 27, 2009 Steve Virant Landman — s IT, Alaska Asset Team V/A� North America Production Organization P.O. Box 196168 Anchorae, AK las8 0ir��' jr „§ f6is_ Telephone 907/565-3041168 AnchoraUt Fax 907/565-3076 Jane Williamson Alaska Oil and Gas Conservation Committee 333 W. 7th Avenue Suite 100 Anchorage, AK 99501-3539 Re: ADL 390821 Fourth Storage Development Plan — Kenai Gas Field Pool 6 Gas Storage Lease Dear Mr. Noble: Please find attached the Fourth Storage Development Plan — Kenai Gas Field Pool 6 Gas Storage Lease that was submitted to Department of Natural Resources. If you have any questions, contact Gary Laughlin at (907) 565- 3036 or galaughlinamarathonoil.com. Regards, Steve Virant M Marathon MARATHON Oil Company March 1, 2009 Kevin Banks, Acting Director Division of Oil and Gas Department of Natural Resources 550 W. 7th Ave., Suite 800 Anchorage, AK 99501-3560 Carri Lockhart Asset Manager Alaska Asset Team North America Production Organization P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/565-3040 Fax 907/565-3076 ll VE 1 MAR 9 3 llJfj� Alaska Oil & Gas Cora;. wornmissios Anchorapa Re: ADL 390821 Fourth Storage Development Plan - Kenai Gas Field Pool 6 Gas Storage Lease Dear Mr. Banks: Marathon Oil Company (Marathon) respectfully submits the above referenced document for your approval. If you have any questions, please do not hesitate to contact Gary Laughlin at (907)565-3036 or galaughlin@marathonoil.com. Sincerely, am Lockhart Asset Manager Enclosures Via Certified Mail cc: Greg Noble, BLM Jane Williamson, AOGCC Gary Laughlin, Marathon File M Marathon MARATHON Oil Company March 1, 2009 Kevin Banks, Acting Director Division of Oil and Gas Department of Natural Resources 550 W. 7th Ave., Suite 800 Anchorage, AK 99501-3560 Carri Lockhart Asset Manager Alaska Asset Team North America Production Organization P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/565-3040 Fax 907/565-3076 Re: ADL 390821 Fourth Storage Development Plan - Kenai Gas Field Pool 6 Gas Storage Lease Dear Mr. Banks: I. PERIOD DURATION This Fourth Development Plan shall be in effect from April 1, 2009 through March 31, 2010. II. ACTIVITY DURING THE THIRD STORAGE DEVELOPMENT PLAN & MONTHLY SUMMARY OF INJECTED & WITHDRAWN VOLUMES KU 22-6X was drilled and completed into Sterling Pool 6. KU 21-6RD was worked over and completed as a monobore to improve production performance. A detailed daily injection gas volume by well is included in Exhibit #1. Total injection for the year 2008 was 3,724,624 MCF. A detailed monthly production accounting of gas volumes injected, withdrawn and the resulting balances between native and non-native gas is presented in Exhibit #2. Total withdrawals for the year 2008 were 1,856,224 MCF of native gas and 602,763 MCF of storage gas. The total withdrawn gas for 2008 was 2,458,987 MCF. III. Royalties Table 1 provides an accounting breakdown of monthly royalty payments made by Marathon in 2008 on volumes of gas injected into storage. Sources of gas injected into storage during the third SDP were from the Kenai Gas Field (KGF) and the Cannery Loop Unit (CLU). Table 1 State Royalty payments for Storage Gas Kenai CLU Jan-08 $ - $ - Feb-08 $ 21.62 $ 637.16 Mar-08 $ 146.90 $ 5,251.26 Apr-08 $ 788.35 $ 20,049.70 Ma -08 $ 607.56 $ 27,058.78 Jun-08 $ 576.59 $ 35,316.85 Jul-08 $ 147.14 $ 40,575.90 Au -08 $ 216.77 $ 30,943.08 Se -08 $ 82.90 $ 18,318.72 Oct-08 $ 3.49 $ 5,197.10 Nov-08 $ - $ 882.40 Dec-08 $ - $ 4,775.47 Total $164,702.75 $ 1,634.45 $ 163,068.30 Federal Royalty Payments for Storage Gas Kenai CLU Jan-08 $ - $ - Feb-08 $ 138.47 $ 49.01 Mar-08 $ 994.34 $ 402.71 A r-08 $ 4,094.54 $ 1,609.10 Ma -08 $ 4,376.44 $ 2,212.20 Jun-08 $ 5,827.29 $ 3,017.84 Jul-08 $ 5,803.76 $ 3,503.66 Au -08 $ 4,422.63 $ 2,662.15 Se -08 $ 2,465.65 $ 1,597.22 Oct-08 $ 792.64 $ 448.08 Nov-08 $ 172.80 $ 72.58 Dec-08 $ 977.81 $ 386.15 Total $ 38,738.90 $ 24,839.02 $ 13,899.88 IV. FOURTH PERIOD PLANNED ACTIVITIES Well KU 31-6 is expected to be drilled and completed into Pool 6 KU 21-07X is being evaluated for a possible workover for access to an additional completion in Pool 6. Marathon is studying the conversion of wells KU 21-06RD and KU 22-6X, into dual functioning injector/producer wells. The physical changes may occur during the period covered by the 41h SDP. Marathon will continue optimizing the gas production wells throughout the field. Several wells are under evaluation to reduce water loading issues and improve gas rates. All 2009 projects, including the above, are subject to deferral due to necessity (performance from other wells/fields) or budget constraints. Marathon shall seek approval from ADNR for any activities during the plan period that are not specifically listed in this section. (A). COMPLETION STATUS as of March 1st, 2009 Class Type Count Gas Producers 15 Gas Injectors 2 Shut-in Completions 4 * 2 injectors are also producers and are counted in both categories (B). Facilities The gas compression associated with the Kenai Gas Field Storage Project has not changed materially since the 3rd SDP. Minor piping modifications were made to allow some Pool 6 producers to utilize a lower suction pressure via 2 small compressors. Their use will not add reserves but will help increase deliverability during peak demand periods. Exhibit #4 provides a summary of the compression located in the Kenai Gas Field. (C). MARKET As reported in the Third SDP, gas injection will occur in periods of surplus supply and low market demand, principally in the period between April and September. Withdrawal will occur in periods of high demand. Marathon anticipates injecting between 3 and 6 BCF of gas in the fourth SDP period. Actual volumes injected and stored will be a function of gas supply and market demands. The Kenai Gas Field Pool 6 Storage Facility is intended to provide Marathon Oil Company with a means to mitigate its seasonal variations in its gas contract demands. Marathon supplies gas to all Cook Inlet market segments: utilities, industrials, and private parties. Marathon has no contracts obligating it to develop or provide storage services. (D). Performance Monitoring: Annual Engineering Evaluation and P/Z Performance Analysis Attached as Exhibit #5 is a report prepared to satisfy the requirements of both the ADNR gas storage lease and the AOGCC Storage Injection Order #7. The report details production and injection volumes, material balance calculations and assurance of continued reservoir confinement of the gas storage volumes. VI. Long Term Plans There are no anticipated changes or revisions to the long term storage plan. Request for Approval Marathon Oil Company (Marathon), as Unit Operator, reserves the right to modify the SDP if necessitated; however, such modifications will be subject to approval by the Alaska Department of Natural Resources (ADNR). Your approval of the Fourth Storage Development Plan and the specific activities listed in Section III are respectfully requested. Sincerely, Card Lockhart Alaska Asset Team Manager MARATHON OIL COMPANY Enclosures cc: Greg Noble, BLM Jane Williamson, AOGCC Gary Laughlin, Marathon File Approved: Alaska Department of Natural Resources By: Title: Date: Exhibit ] MCF Well Date 23X-06 GAS INJ KGF 31-07X INJ Grand Total 04/20/06 64/21 /06 04/22/06 _ 04/23/06 04/24/06 04/25/06 04/26/06 04/27/06 04/28/06 04/29/06 04/30/06 05/01 /06 05/02/06 05/03/06 05/04/06 05/05/06 05/06/06 05/07/06 05/08/06 1,566 1,566 05/09/06 2,017 2,017 05/10/06 _ _ 05/11 /06 11,439 11,439 05/12/06 2,008 2,008 05/13/06 4,523 4,523 05/14/06 6,434 6,434 05/15/06 8,983 8,983 05/1 //06 12,004 12,004 05/17/06 32,186 32,186 05/18/06 29,185 29,185 05/19/06 11,438 11,438 05/20/06 9,013 9,013 05/21/06 9,276 9,276 05/22/06 9,052 9,052 05/23/06 8,115 8,115 05/24/06 20,996 20,996 05/25/06 13,685 13,685 05/26/06 11,048 11,048 05/27/06 21,983 21,983 05/28/06 22,181 22,181 05/29/06 13,954 13,954 05/30/06 9,565 9,565 05/31/06 6,764 6,764 06/01 /06 5,121 5,121 06/02/06 16,736 16,736 06/03/06 20,181 20,181 06/04/06 18,920 18,920 06/05/06 13,983 13,983 06/06/06 _ _ 13,751 13,751 06/07/06 18,139 18,139 06/08/06 19,897 19,897 06/0 9//06 12,920 12,920 06/10/06 18,679 18,679 06/11 /06 18,994 18,994 66/12/ 66 6,216 6,216 06/13/06 7,681 7,681 06/14/06 16,166 16,166 06/15/06 13,830 13,830 06/16/06 12,395 12,395 06/17/06 - 17,542 17,542 06/18/06 23,878 23,878 06/19/06 27,455 27,455 06/20/06 22,2 77 22,267 06/21 /06 21,020 21,020 06/22/06 17,696 17,696 06/23/06 11,821 11,821 06/24/06 16,990 16,990 06/25/06 15,740 15,740 06/26/06 14,593 14,593 06/27/06 13,818 13,818 06/28/06 10,491 10,491 06/29/06 20,666 20,666 06/30/06 32,690 32,690 07/01/06 32,024 32,024 07/02/06 30,664 30,664 07/03/06 31,521 31,521 07/04/06 28,837 28,837 07/05/06 20,417 20,417 07/06/06 9,686 9,686 07/07/06 950 950 07/08/06 _ _ 07/09/06 8,271 8,271 07/10/06 _ _ 07/11/06 3,806 3,806 07/12/06 5,912 5,912 07/13/06 9,034 9,034 07/14/06 4,790 4,790 07/15/06 11,858 11,858 07/16/06 7,241 7,241 07/17/06 5,465 5,465 07/1 //06 7,448 7,448 07/19/06 8,970 8,970 07/20/06 11,147 11,147 07/21/06 3,905 3,905 07/22/06 3 3 07/23/06 1,327 1,327 07/24/06 1,172 07/25/06 _1,172 3,209 3,209 07/26/06 2,569 2,569 07/27/06 5,211 5,211 07/28/06 9,342 9,342 07/29/06 10,523 10,523 07/30/06 9,213 9,213 07/31/06 3,552 3,552 08/01/06 2,942 2,942 08/02/06 1,940 1,940 08/03/06 1,055 1,055 08/04/06 _ 133 133 08/05/06 5,567 5,567 08/06/06 8,848 8,848 08/07/06 4,669 4,669 08/08/06 2,344 2,344 08/09/06 2,011 2,011 08/10/06 6,018 6,018 08/11/06 4,347 4,347 08/12/06 3,953 3,953 08/13/06 2,397 2,397 08/14/06 - - 08/15/06 - - 08/16/06 - - 08/17/06 165 165 08/18/06 770 770 08/19/06 231 231 08/20/06 117 117 08/21 /06 - - 08/22/06 98 98 08/23/06 - - 08/24/06 - - 08/25/06 961 961 08/26/06 - - 08/27/06 - - 08/28/06 - - 08/29/06 - - 08/30/06 - - 08/31 /06 - - 09/01 /06 - - 09/02/06 - - 09/03/06 1,910 1,910 09/04/06 14,431 14,431 09/05/06 26,617 26,617 09/06/06 17,592 17,592 09/07/06 9,176 9,176 09/08/06 22,335 22,335 09/09/06 24,282 24,282 09/10/06 22,166 22,166 09/11 /06 23,701 23,701 09/12/06_ 29,149 29,149 09/13/06 32,060 32,060 09/14/06 22,792 22,792 09/15/06 22,262 22,262 09/16/06 22,020 22,020 09/17/06 26,651 26,651 09/18/06 24,092 24,092 09/19/06 13,303 13,303 09/20/06 15,532 15,532 09/21 /06 14,251 14,251 09/22/06 - - 09/23/06 1,421 1,421 09/24/06 6,546 6,546 09/25/06 3,596 3,596 09/26/06 - - 09/27/06 - - 09/28/06 - - 09/29/06 - - 09/30/06 - - 10/01 /06 - - 10/02/06 - - 10/03/06 - - 10/04/06 - - 10/05/06 - - 10/06/06 - - 10/07/06 - - 10/08/06 1,182 1,182 10/09/06 683 683 10/10/06 3,240 3,240 10/11 /06 68 68 10/12/06 501 501 10/13/06 - - 10/14/06 - - 10/15/06 220 220 10/16/06 - - 10/17/06 - - 10/18/06 1,986 1,986 10/19/06 5,415 5,415 10/20/06 3,298 3,298 10/21/06 2,069 2,069 10/22/06 - - 10/23/06 - - 10/24/06 - - 10/25/06 - - 10/26/06 - - 10/27/06 - - 10/28/06 - - 10/29/06 - - 10/30/06 - - 10/31 /06 - - 11 /02/06 11 /03/06 11 /04/06 11 /05/06 11 /06/06 11 /07/06 11 /08/06 11 /09/06 11 /10/06 11 /11 /06 11 /12/06 11 /13/06 11 /14/06 11 /15/06 11 /16/06 11 /17/06 - - 11 /18/06 11 /19/06 - - 11 /20/06 - - 11 /21 /06 - - 11 /22/06 11 /23/06 11 /24/06 11 /25/06 - - 11 /26/06 - - 11 /27/06 - - 11 /28/06 11 /29/06 - - 11 /30/06 12/01 /06 - - 12/02/06 - - 12/03/06 - - 12/04/06 - - 12/05/06 - - 12/06/06 - - 12/07/06 - - 12/08/06 - - 12/09/06 - - 12/10/06 - - 12/11 /06 - - 12/12/06 - - 12/13/06 - - 12/14/06 - - 12/15/06 - - 12/16/06 - - 12/17/06 - - 12/18/06 - - 12/19/06 - - 12/20/06 - - 12/21 /06 - - - 12/22/06 --- - - 12/23/06 - - 12/24/06 - - 12/25/06 - - 12/26/06 - - 12/27/06 - - 12/28/06 - - 12/29/06 - - 12/30/06 - - 12/31 /06 - - 01 /01 /07 - - 01 /02/07 - - 01 /03/07 - - 01 /04/07 - - 01 /05/07 - - 01 /06/07 - - 01 /07/07 - - 01 /08/07 - - 01 /09/07 - - 01 /10/07 - - 01/11/07 - - 01 /12/07 - - 01 /13/07 - - 01 /14/07 - - 01 /15/07 - - 01 /16/07 - - 01 /17/07 - - 01 /18/07 - - 01 /19/07 - - 01 /20/07 - - 01/21/07 - - 01 /22/07 - - 01 /23/07 - - 01 /24/07 - - 01 /25/07 - - 01 /26/07 - - 01 /27/07 - - 01 /28/07 - - 01 /29/07 - - 01 /30/07 - - 01/31/07 - - 02/01 /07 216 216 02/02/07 5,028 5,028 02/03/07 4,070 4,070 02/04/07 - - 02/05/07 - - 02/06/07 - - 02/07/07 - - 02/08/07 - - 02/09/07 --- - _ 02/11 /07 02/12/07 02/13/07 02/14/07 02/15/07 02/16/07 02/17/07 02/18/07 02/19/07 02/20/07 02/21 /07 02/22/07 02/23/07 02/24/07 02/25/07 02/26/07 02/27/07 02/28/07 03/01 /07 03/02/07 03/03/07 03/04/07 03/05/07 03/06/07 03/07/07 03/08/07 03/09/07 03/10/07 03/11 /07 03/12/07 03/13/07 03/14/07 03/15/07 03/16/07 03/17/07 03/18/07 03/19/07 03/20/07 03/21 /07 03/22/07 03/23/07 03/24/07 03/25/07 - - 03/26/07 - - 03/27/07 03/28/07 - - 03/29/07 - - 03/30/07 - _ 003/31 J- -14 -�- 04/02/07 -- 04/03/07 _ 04/04/07 04/05/07 04/06/07 04/07/07 04/08/07 04/09/07 04/10/07 _ 04/11/07 6,299 6,299 04/12/07 11,847 11,847 04/13/07 13,521 33,521 04/14/07 15,881 15,881 04/15/07 15,041 15,041 04/16/07 8,956 8,956 04/17/07 5,609 5,609 04/18/07 12,674 12,674 04/19/07 7,115 7,115 04/20/07 04/21 /07 29 29 04/22/07 5,294 5,294 04/23/07 16,231 16,231 04/24/07 13,318 13,318 04/25/07 11,074 11,074 04/26/07 9,784 9,784 04/27/07 10,624 10,624 04/28/07 13,652 13,652 04/29/07 22,278 22,278 04/30/07 1,598 1,598 05/01 /07 05/02/07 05/03/07 05/04/07 6,264 6,264 05/05/07 29,048 29,048 05/06/07 39,768 39,768 05/07/07 - 33,435 33,435 05/08/07 - 40,776 40,776 05/09/07 - 27,696 27,696 05/10/07 - 9,920 9,920 05/11/07 - 11,785 11,785 05/12/07 - 31,934 31,934 05/13/07 12,131 32,926 45,057 05/14/07 19,025 21,676 40,701 05/15/07 17,444 20,073 37,517 05/16/07 23,146 17,729 40,874 05/17/07 17,557 19,457 37,014 05/18/07 21,994 24,014 46,008 05/19/07 24,369 26,593 50,962 05/20/07 27,380 29,026 56,406 05/21/07 27,486 29,936 57,422 05/22/07 28,078 _ 30,339 _ 58,417 05/23/07 20,355 21,010 41,365 05/24/07 17,602 18,361 35,963 05/25/07 - - - 05/26/07 - - - 05/27/07 - - 05/28/07 - - - 05/29/07 - - - 05/30/07 - - - 05/31 /07 - - - 06/01 /07 - - - 06/02/07 _ - - - 06/03/07 1,026 1,034 2,060 06/04/07 16 0 16 06/05/07 714 1 715 06/06/07 633 - 633 06/07/07 - - - 06/08/07 - - - 06/09/07 - - - 06/10/07 - - - 06/11 /07 - - - 06/12/07 - - - 06/13/07 - - - 06/14/07 - - - 06/15/07 - - - 06/16/07 - - - 06/17/07 - - - 06/18/07 - - - 06/19/07 - - - 06/20/07 - - - 06/21 /07 - - - 06/22/07 - - - 06/23/07 - - - 06/24/07 - - - 06/25/07 - - - 06/26/07 - - - 06/27/07 - - - 06/28/07 - - - 06/29/07 - - - 06/30/07 - - - 07/01 /07 - - - 07/02/07 - - - 07/03/07 711 - 711 07/04/07 4,415 2,604 7,019 07/05/07 4,495 5,664 10,159 07/06/07 6,947 8,328 15,275 07/07/07 8,726 9,701 18,427 07/08/07 8,234 8,614 16,847 07/09/07 7,936 8,023 15,959 07/10/07 8,639 8,694 17,333 07/11 /07 6,821 6,840 13,661 07/12/07 5,495 5,202 10,697 07/13/07 4,802 4,460 9,261 07/14/07 5,987 5,685 11,672 07/15/07 6,588 6,286 12,874 07/16/07 _ 5,873 5,480 11,353 07/17/07 11,115 11,061 22,176 07/18/07 4,197 3,925 8,122 07/19/07 6,386 6,566 12,952 07/20/07 8,310 8,306 16,616 07/21/07 10,226 10,137 20,363 07/22/07 8,874 8,336 17,210 07/23/07 3,421 2,842 6,263 07/24/07 1,988 1,796 3,784 07/25/07 6,945 6,760 13,705 07/26/07 7,430 6,917 14,347 07/27/07 10,343 7,041 17,385 07/28/07 9,696 10,070 19,766 07/29/07 6,676 6,238 12,913 07/30/07 11,307 11,429 22,736 07/31 /07 7,320 6,575 13,895 08/01/07 4,842 4,083 8,925 08/02/07 3,216 2,538 5,754 08/03/07 4,402 1,163 5,565 08/04/07 5,365 - 5,365 08/05/07 9,469 - 9,469 08/06/07 7,613 - 7,613 08/07/07 6,127 - 6,127 08/08/07 7,344 - 7,344 08/09/07 7,338 - 7,338 08/10/07 9,248 - 9,248 08/11/07 10,821 - 10,821 08/12/07 11,043 - 11,043 08/13/07 8,515 - 8,515 08/14/07 6,966 - 6,966 08/15/07 6,081 5,979 12,061 08/16/07 3,994 3,780 7,774 08/17/07 1,277 1,180 2,457 08/18/07 2,843 2,843 5,686 08/19/07 3,257 2,657 5,915 08/20/07 2,352 - 2,352 08/21/07 2,626 - 2,626 08/22/07 4,979 - 4,979 08/23/07 4,867 - 4,867 08/24/07 6,893 - 6,893 08/25/07 12,979 - 12,979 08/26/07 15,979 - 15,979 08/27/07 4,524 3,228 7,752 08/28/07 4,456 4,581 9,037 08/29/07 7,786 8,010 15,796 08/30/07 6,034 5,637 11,671 08/31 /07 8,670 _ 8,432 17,102 09/01 /07 15,439 15,913 31,352 09/02/07 13,538 13,606 27,144 09/03/07 11,764 11,510 23,274 09/04/07 10,742 10,345 21,087 09/05/07 11,755 11,390 23,145 09/06/07 11,448 10,731 22,178 09/07/07 10,665 9,703 20,368 09/08/07 5,329 4,850 10,178 09/09/07 982 923 1,905 09/10/07 4,443 4,054 8,497 09/11/07 3,502 3,184 6,686 09/12/07 2,114 2,080 4,194 09/13/07 - - - 09/14/07 - 781 781 09/15/07 - - - 09/16/07 - - - 09/17/07 - - - 09/18/07 - - - 09/19/07 - - - 09/20/07 - - - 09/21 /07 - - - 09/22/07 - - - 09/23/07 - - - 09/24/07 - - - 09/25/07 - - - 09/26/07 - - - 09/27/07 - - - 09/28/07 - - - 09/29/07 - 3,100 3,100 09/30/07 - 7,261 7,261 10/01 /07 - 10,467 10,467 10/02/07 - 3,595 3,595 10/03/07 - 2,103 2,103 10/04/07 - - - 10/05/07 - - - 10/06/07 - - - 10/07/07 - - - 10/08/07 - - - 10/09/07 - 9,132 9,132 10/10/07 - 7,226 7,226 10/11 /07 - 7,821 7,821 10/12/07 - 3,949 3,949 10/13/07 - 599 599 10/14/07 - 2,038 2,038 10/15/07 - 1,974 1,974 10/16/07 - 1,411 1,411 10/17/07 - 1,385 10/18/07 _ - _1,385 361 361 10/19/07 - 16 16 10/20/07 - _ - - 10/21 /07 - - - 10/22/07 - - - 10/23/07 - - - 10/24/07- 10/25/07 - - - 10/26/07 - - - 10/27/07 - - - 10/28/07 - - - 10/29/07 - - - 10/30/07 - - - 10/31 /07 - - - 11 /01 /07 - - - 11 /02/07 - - - 11 /03/07 - - - 11 /04/07 - - - 11 /05/07 - 0 0 11 /06/07 - - - 11 /07/07 - - - 11 /08/07 - - - 11 /09/07 - - - 11 /10/07 - - - 11 /11 /07 - - - 11 /12/07 - - - 11 /13/07 - - - 11 /14/07 - - - 11 /15/07 - - - 11 /16/07 - - - 11 /17/07 - - - 11 /18/07 - - - 11 /19/07 - - - 11 /20/07 - - - 11 /21 /07 - - - 11 /22/07 - - - 11 /23/07 - - - 11 /24/07 - - - 11 /25/07 - - - 11 /26/07 - - - 11 /27/07 - - - 11 /28/07 - - - 11 /29/07 - - - 11 /30/07 - - - 12/01 /07 - - - 12/02/07 - - - 12/03/07 - - - 12/04/07 - - - 12/05/07 - - - 12/06/07 --- - - 12/07/07 - 197 197 12/08/07 - 4,205 4,205 12/09/07 - - - 12/10/07 - - - 12/11 /07 - - - 12/12/07 - - - 12/13/07 - - - 12/14/07 - - - 12/15/07 - - - 12/16/07- 12/17/07 - - - 12/18/07 - - - 12/19/07 - - - 12/20/07 - - - 12/21 /07 - - - 12/22/07 - - - 12/23/07 - - - 12/24/07 - - - 12/25/07 - - - 12/26/07 - - - 12/27/07 - - - 12/28/07 - - - 12/29/07 - - - 12/30/07 - - - 12/31 /07 - - - 01/01/08 - - - 01 /02/08 - - - 01 /03/08 - - - 01 /04/08 - - - 01 /05/08 - - - 01 /06/08 - - - 01 /07/08 - - - 01 /08/08 - - - 01 /09/08 - - - 01 /10/08 - - - 01 /11 /08 - - - 01 /12/08 - - - 01 /13/08 - - - 01 /14/08 - - - 01 /15/08 - - - 01 /16/08 - - - 01 /17/08 - - - 01 /18/08 - - - 01 /19/08 - - - 01 /20/08 - - - 01/21/08 - - - 01 /22/08 - - - 01 /23/08 - - - 01 /24/08 - - - 01/25/08 - -�- - - 01 /26/08 - - - - -- - 01 /27/08 - - - 01 /28/08 - - - 01 /29/08 - - - 01 /30/08 - - - 01/31/08 - - - 02/01 /08 - - - 02/02/08 - - - 02/03/08 - - - 02/04/08 - - - 02/05/08 - - - 02/06/08 - - - 02/07/08 - - - 02/08/08 - - - 02/09/08 - - - 02/10/08 - - - 02/11 /08 - - - 02/12/08 - - - 02/13/08 - - - 02/14/08 - - - 02/15/08 - - - 02/16/08 - - - 02/17/08 - - - 02/18/08 - - - 02/19/08 - - - 02/20/08 1,985 - 1,985 02/21 /08 1,844 - 1,844 02/22/08 3,863 - 3,863 02/23/08 2,286 - 2,286 02/24/08 1,396 - 1,396 02/25/08 - - - 02/26/08 - - - 02/27/08 - - - 02/28/08 282 - 282 02/29/08 1,018 - 1,018 03/01 /08 370 - 370 03/02/08 - - - 03/03/08 - - - 03/04/08 - - - 03/05/08 - - - 03/06/08 891 - 891 03/07/08 2,626 - 2,626 03/08/08 14,176 - 14,176 03/09/08 11,730 - 11,730 03/10/08 4,369 - 4,369 03/11/08 2,330 - 2,330 03/12/08 - - - 03/13/08 - - - 03/14/08 - - - 03/15/08 - - - 03/16/08 4,277 - 4,277 03/17/08 2,152 - 2,152 03/18/08 1,387 - 1,387 03/19/08 - - - 03/20/08 - - - 03/21 /08 - - - 03/22/08 3,171 - 3,171 03/23/08 1,521 - 1,521 03/24/08 - - - 03/25/08 3,968 - 3,968 03/26/08 3,948 - 3,948 03/27/08 4,509 - 4,509 03/28/08 7,080 - 7,080 03/29/08 1,973 - 1,973 03/30/08 12,058 - 12,058 03/31 /08 11,358 - 11,358 04/01/08 16,938 - 16,938 04/02/08 16,291 - 16,291 04/03/08 19,230 - 19,230 04/04/08 21,122 - 21,122 04/05/08 21,704 - 21,704 04/06/08 7,076 - 7,076 04/07/08 7,208 - 7,208 04/08/08 3,120 - 3,120 04/09/08 4,925 - 4,925 04/10/08 4,964 - 4,964 04/11/08 12,810 - 12,810 04/12/08 13,496 - 13,496 04/13/08 10,582 - 10,582 04/14/08 13,564 - 13,564 04/15/08 13,023 - 13,023 04/16/08 4,825 - 4,825 04/17/08 3,206 - 3,206 04/18/08 7,685 - 7,685 04/19/08 14,128 - 14,128 04/20/08 18,402 - 18,402 04/21/08 23,018 - 23,018 04/22/08 24,913 - 24,913 04/23/08 29,759 2,282 32,042 04/24/08 8,263 21,555 29,818 04/25/08 8,237 21,659 29,897 04/26/08 4,668 4,495 9,163 04/27/08 504 58 562 04/28/08 4,475 - 4,475 04/29/08 1,335 - 1,335 04/30/08 2,954 - 2,954 05/01 /08 2,997 - 2,997 05/02/08 4,428 - 4,428 05/03/08 3,943 - 3,943 05/04/08 10,706 - 10,706 05/05/08 12,796 - 12,796 05/06/08 3,501 241 3,741 05/07/08 481 - 481 05/08/08 675 - 675 05/09/08 6,706 2,869 9,575 05/10/08 21,960 24,784 46,744 05/11/08 22,270 24,091 46,361 05/12/08 25,483 28,158 53,641 05/13/08 22,222 23,650 45,872 05/14/08 882 851 1,733 05/15/08 - - - 05/16/08 1,336 619 1,955 05/17/08 28,542 3,767 32,309 05/18/08 14,999 14,623 29,622 05/19/08 17,688 17,470 35,158 05/20/08 16,162 16,024 32,185 05/21/08 17,400 17,386 34,786 05/22/08 14,275 13,818 28,093 05/23/08 7,124 7,111 14,235 05/24/08 - 49 49 05/25/08 218 206 424 05/26/08 581 511 1,092 05/27/08 - - - 05/28/08 - - - 05/29/08 2,664 - 2,664 05/30/08 20,180 - 20,180 05/31 /08 21,494 - 21,494 06/01/08 18,299 - 18,299 06/02/08 18,343 - 18,343 06/03/08 14,825 - 14,825 06/04/08 12,896 - 12,896 06/05/08 12,370 - 12,370 06/06/08 14,324 - 14,324 06/07/08 24,015 - 24,015 06/08/08 20,212 - 20,212 06/09/08 14,977 - 14,977 06/10/08 23,858 - 23,858 06/11/08 20,987 - 20,987 06/12/08 20,989 - 20,989 06/13/08 19,600 - 19,600 06/14/08 25,078 - 25,078 06/15/08 20,518 - 20,518 06/16/08 27,539 - 27,539 06/17/08 26,127 - 26,127 06/18/08 30,881 - 30,881 06/19/08 29,773 - 29,773 06/20/08 27,245 - 27,245 06/21 /08 32,447 - 32,447 06/22/08 30,079 - 30,079 06/23/08 _ 30,812 - 30,812 06/24/08 27,465 - 27,465 06/25/08 30,662 - 30,662 06/26/08 32,792 - 32,792 06/27/08 21,370 4,525 25,895 06/28/08 15,484 15,890 31,373 06/29/08 15,245 15,405 30,650 06/30/08 16,091 16,245 32,336 07/01 /08 14,193 14,170 28,364 07/02/08 14,691 14,543 29,234 07/03/08 17,798 17,980 35,778 07/04/08 22,071 23,042 45,114 07/05/08 19,937 20,339 40,276 07/06/08 18,970 18,922 37,892 07/07/08 12,254 11,683 23,937 07/08/08 10,231 9,384 19,615 07/09/08 9,503 8,614 18,117 07/10/08 12,860 11,843 24,703 07/11/08 12,211 11,272 23,483 07/12/08 15,792 14,789 30,581 07/13/08 16,139 15,114 31,252 07/14/08 14,278 13,333 27,611 07/15/08 12,410 11,242 23,651 07/16/08 14,630 9,263 23,893 07/17/08 12,726 11,847 24,573 07/18/08 - 21,314 21,314 07/19/08 - 29,612 29,612 07/20/08 - 35,256 35,256 07/21 /08 - 30,661 30,661 07/22/08 - 19,411 19,411 07/23/08 - 18,669 18,669 07/24/08 8,513 11,808 20,321 07/25/08 25,388 - 25,388 07/26/08 24,079 8,157 32,236 07/27/08 18,210 16,251 34,460 07/28/08 8,845 7,412 16,257 07/29/08 11,664 9,658 21,322 07/30/08 10,981 9,659 20,640 07/31 /08 10,785 8,932 19,717 08/01/08 13,305 11,077 24,382 08/02/08 16,435 14,071 30,506 08/03/08 16,441 14,103 30,544 08/04/08 7,579 6,448 14,027 08/05/08 2,989 2,401 5,390 08/06/08 10,679 8,919 19,598 08/07/08 13,439 11,246 24,684 08/08/08 10,942 8,881 19,823 08/09/08 12,433 9,398 21,831 08/10/08 16,242 13,702 29,944 08/11/08 17,719 15,213 32,932 08/12/08 13,474 9,573 23,047 08/13/08 15,661 11,252 26,913 08/14/08 16,063 12,233 28,296 08/15/08 13,206 9,524 22,730 08/16/08 14,505 10,428 24,933 08/17/08 15,694 11,353 27,048 08/18/08 12,834 9,039 21,873 08/19/08 20,017 15,476 35,492 08/20/08 9,336 7,169 16,505 08/21 /08 7,710 5,447 13,157 08/22/08 7,710 5,306 13,016 08/23/08 10,076 6,801 16,877 08/24/08 9,868 6,693 16,561 08/25/08 5,247 3,478 8,726 08/26/08 1,901 1,384 3,285 08/27/08 1,266 942 2,208 08/28/08 5,239 3,526 8,765 08/29/08 7,135 4,754 11,889 08/30/08 7,817 5,170 12,986 08/31 /08 9,486 6,287 15,773 09/01 /08 9,380 6,276 15,656 09/02/08 6,384 4,231 10,615 09/03/08 8,786 5,781 14,567 09/04/08 6,401 4,159 10,560 09/05/08 5,870 3,900 9,770 09/06/08 7,472 4,863 12,334 09/07/08 7,132 4,591 11,723 09/08/08 1,838 2,429 4,267 09/09/08 - 9,257 9,257 09/10/08 - 5,123 5,123 09/11 /08 - 1,900 1,900 09/12/08 - 4,270 4,270 09/13/08 - 6,665 6,665 09/14/08 - 4,035 4,035 09/15/08 - 930 930 09/16/08 - 1,864 1,864 09/17/08 - 9,834 9,834 09/18/08 - 8,951 8,951 09/19/08 - 10,408 10,408 09/20/08 - 2,729 2,729 09/21 /08 197 11,793 11,990 09/22/08 16,569 11,508 28,077 09/23/08 17,615 12,643 30,258 09/24/08 16,500 11,415 27,915 09/25/08 13,731 9,199 22,930 09/26/08 15,402 10,710 26,112 09/27/08 6,583 4,152 10,735 09/28/08 5,442 3,403 8,845 09/29/08 3,244 2,098 5,342 09/30/08 14,103 9,612 23,715 10/01/08 10/02/08 13,282 3,687 8,933 22,215 2,459 6,146 10/03/08 5,348 3,775 9,123 10/04/08 8,888 4,557 13,445 10/05/08 5,352 3,209 8,561 10/06/08 1,707 1,120 2,827 10/07/08 989 856 1,844 10/08/08 1,446 - 1,446 10/09/08 704 - 704 10/10/08 277 - 277 10/11 /08 8,580 6,815 15,395 10/12/08 - - - 10/13/08 3,357 2,676 6,033 10/14/08 6,862 5,635 12,497 10/15/08 - - - 10/16/08 - - - 10/17/08 - - - 10/18/08 - - - 10/19/08- 10/20/08 - - - 10/21 /08 - - - 10/22/08 - - - 10/23/08 - - - 10/24/08 - - - 10/25/08 - - - 10/26/08 - - - 10/27/08 - - - 10/28/08 - - - 10/29/08 - - - 10/30/08 - - - 10/31 /08 - - - 11/01/08 - - - 11 /02/08 - - - 11 /03/08 - - - 11 /04/08 - - - 11 /05/08 - - - 11 /06/08 - - - 11 /07/08 - - - 11/08/08 7,678 7,958 15,636 11 /09/08 - - - 11 /10/08 118 - 118 11/11/08 2,735 - 2,735 11 /12/08 - - - 11 /13/08 - - - 11 /14/08 - - - 11 /15/08 - - - 11 /16/08 - - - 11 /17/08 - - - 11 /18/08 - - - 11 /19/08 - - - 11 /20/08 11 /21 /08 - - - -- - - - - 11 /22/08 - - - 11 /23/08 - - - 11 /24/08 - - - 11 /25/08 - - - 11 /26/08 - - - 11 /27/08 - - - 11 /28/08 - - - 11 /29/08 - - - 11 /30/08 - - - 12/01 /08 - - - 12/02/08 - - - 12/03/08 1,324 - 1,324 12/04/08 10,785 - 10,785 12/05/08 11,628 - 11,628 12/06/08 12,106 - 12,106 12/07/08 11,547 - 11,547 12/08/08 5,129 - 5,129 12/09/08 2,625 - 2,625 12/10/08 2,437 3,338 5,774 12/11/08 - 7,939 7,939 12/12/08 - 1,607 1,607 12/13/08 - 1,361 1,361 12/14/08 - - - 12/15/08 - - - 12/16/08 4,860 - 4,860 12/17/08 - - - 12/18/08 325 - 325 12/19/08 1,562 - 1,562 12/20/08 - 3,419 3,419 12/21 /08 - 361 361 12/22/08 - - - 12/23/08 - 2,491 2,491 12/24/08 - 1,294 1,294 12/25/08 - 967 967 12/26/08 - 3,688 3,688 12/27/08 - 2,004 2,004 12/28/08 - - - 12/29/08 - - - 12/30/08 - - - 12/31 /08 - - - 01/01/09 - - - 01 /02/09 - - - 01 /03/09 - - - 01 /04/09 - - - 01 /05/09 - - - 01 /06/09 926 - 926 01 /07/09 - - - 01 /08/09 - - - 01 /09/09 88 - 88 01 /10/09 - - - 01/11/09 415 - 415 01/12/09 3,435 9,028 12,463 01 /13/09 703 21,481 22,183 01 /14/09 20,850 19,641 40,491 01/15/09 19,568 18,595 38,163 01/16/09 7,622 21,134 28,756 01/17/09 5,965 22,855 28,820 01/18/09 14,951 13,374 28,325 01/19/09 19,786 5,562 25,348 01 /20/09 24,166 - 24,166 01 /21 /09 15,155 - 15,155 01/22/09 20,002 - 20,002 01 /23/09 26,489 - 26,489 01/24/09 18,776 - 18,776 01/25/09 19,553 7,648 27,200 01/26/09 15,144 13,927 29,071 01/27/09 11,034 9,679 20,713 01 /28/09 20,288 19,211 39,499 01/29/09 15,290 13,724 29,014 01 /30/09 14,120 12,820 26,940 01/31/09 13,783 12,360 26,143 Exhibit #2 TOTAL TOTAL Allocation Ratio *Native *Stored Schedule Native Stored Total GAS GAS Native Stored Gas Gas Native Stored Total Year End date Month Year Beg Balance Beg Balance Beginning INJECTED WITHDRAWN Gas Gas Withdrawn Withdrawn End Balance End Balance End Balance 0 Aug-05 32,510,000 32,510,000 245,376 100% 0% 245,376 32,264,624 32,264,624 0 Sep-05 32,264,624 32,264,624 621,932 100% 0% 621,932 31,642,692 31,642,692 0 Oct-05 31,642,692 31,642,692 778,951 100% 0% 778,951 30,863,741 30,863,741 0 Nov-05 30,863,741 30,863,741 1,257,120 100% 0% 1,257,120 29,606,621 29,606,621 0 Dec-05 29,606,621 29,606,621 977,479 100% 0% 977,479 28,629,142 28,629,142 0 Jan-06 28,629,142 28,629,142 1,012,219 100% 0% 1,012,219 27,616,923 27,616,923 0 Feb-06 27,616,923 27,616,923 736,817 100% 0% 736,817 26,880,106 26,880,106 0 Mar-06 26,880,106 26,880,106 588,212 100% 0% 588,212 26,291,894 26,291,894 0 Apr-06 26,291,894 26,291,894 97,942 100% 0% 97,942 26,193,952 26,193,952 1 May-06 26,193,952 26,193,952 277,415 - 90% 10% - 26,193,952 277,415 26,471,367 1 Jun-06 26,193,952 277,415 26,471,367 500,276 - 90% 10% - 26,193,952 777,691 26,971,643 1 Jul-06 26,193,952 777,691 26,971,643 288,066 779 90% 10% 701 78 26,193,251 1,065,679 27,258,930 1 Aug-06 26,193,251 1,065,679 27,258,930 48,566 243,801 90% 10% 219,421 24,380 25,973,830 1,089,865 27,063,695 1 Sep-06 25,973,830 1,089,865 27,063,695 395,885 204,373 90% 10% 183,936 20,437 25,789,894 1,465,313 27,255,207 1 Oct-06 25,789,894 1,465,313 27,255,207 18,947 259,416 90% 10% 233,474 25,942 25,556,420 1,458,318 27,014,738 1 Nov-06 25,556,420 1,458,318 27,014,738 0 916,743 90% 10% 825,069 91,674 24,731,351 1,366,644 26,097,995 1 Dec-06 24,731,351 1,366,644 26,097,995 0 867,726 90% 10% 780,953 86,773 23,950,398 1,279,871 25,230,269 1 Jan-07 23,950,398 1,279,871 25,230,269 0 783,239 90% 10% 704,915 78,324 23,245,483 1,201,547 24,447,030 1 Feb-07 23,245,483 1,201,547 24,447,030 9,315 593,636 90% 10% 534,272 59,364 22,711,210 1,151,499 23,862,709 1 Mar-07 22,711,210 1,151,499 23,862,709 0 630,218 90% 10% 567,196 63,022 22,144,014 1,088,477 23,232,491 1 Apr-07 22,144,014 1,088,477 23,232,491 200,796 21,689 90% 10% 19,520 2,169 22,124,494 1,287,104 23,411,598 2 May-07 22,124,494 1,287,104 23,411,598 778,368 64,910 80% 20% 51,928 12,982 22,072,566 2,052,490 24,125,056 2 Jun-07 22,072,566 2,052,490 24,125,056 3,424 110,059 80% 20% 88,047 22,012 21,984,519 2,033,902 24,018,421 2 Jul-07 21,984,519 2,033,902 24,018,421 393,483 0 80% 20% 0 0 21,984,519 2,427,385 24,411,904 2 Aug-07 21,984,519 2,427,385 24,411,904 256,019 0 80% 20% 0 0 21,984,519 2,683,404 24,667,923 2 Sep-07 21,984,519 2,683,404 24,667,923 211,153 428,741 80% 20% 342,993 85,748 21,641,526 2,808,809 24,450,335 2 Oct-07 21,641,526 2,808,809 24,450,335 52,077 277,214 80% 20% 221,771 55,443 21,419,755 2,805,443 24,225,198 2 Nov-07 21,419,755 2,805,443 24,225,198 - 558,362 80% 20% 446,690 111,672 20,973,065 2,693,771 23,666,836 2 Dec-07 20,973,065 2,693,771 23,666,836 4,402 805,131 80% 20% 644,105 161,026 20,328,960 2,537,147 22,866,107 2 Jan-08 20,328,960 2,537,147 22,866,107 - 770,824 80% 20% 616,659 154,165 19,712,301 2,382,982 22,095,283 2 Feb-08 19,712,301 2,382,982 22,095,283 12,673 432,695 80% 20% 346,156 86,539 19,366,145 2,309,116 21,675,261 2 Mar-08 19,366,145 2,309,116 21,675,261 93,892 127,650 80% 20% 102,120 25,530 19,264,025 2,377,478 21,641,503 2 Apr-08 19,264,025 2,377,478 21,641,503 392,477 18,161 80% 20% 14,529 3,632 19,249,496 2,766,323 22,015,819 3 May-08 19,249,496 2,766,323 22,015,819 497,940 4,226 70% 30% 2,958 1,268 19,246,538 3,262,995 22,509,533 3 Jun-08 19,246,538 3,262,995 22,509,533 727,366 0 70% 30% 0 0 19,246,538 3,990,361 23,236,899 3 Jul-08 19,246,538 3,990,361 23,236,899 833,337 0 70% 30% 0 0 19,246,538 4,823,698 24,070,236 3 Aug-08 19,246,538 4,823,698 24,070,236 603,744 0 70% 30% 0 0 19,246,538 5,427,442 24,673,980 3 Sep-08 19,246,538 5,427,442 24,673,980 351,401 0 70% 30% 0 0 19,246,538 5,778,843 25,025,381 3 Oct-08 19,246,538 5,778,843 25,025,381 100,513 402,504 70% 30% 281,753 120,751 18,964,785 5,758,605 24,723,390 3 Nov-08 18,964,785 5,758,605 24,723,390 18,488 436,729 70% 30% 305,710 131,019 18,659,075 5,646.074 24,305,149 3 Dec-08 18,659,075 5,646,074 24,305,149 92,793 266,198 70% 30% 186,339 79,859 18,472,737 5,659,008 24,131,744 Exhibit #3 —Active iniectnr.c anri PradnrPrc in Ctnrlina Pan] 6 17ri'ginal Kenai Gas Field Sterling C1 Tap Structure (flap k i . e.- all a-0FBI EAU 4- .P M Q Current Producer C-i = 50 ft 0.5 miles Yellow dots indicate Active Pool 6 Well Exhibit #4 KENAI GAS FIELD GATHERING & PIPELINE COMPRESSION NOMINAL HORSEPOWER RATINGS & OPERATING PARAMETERS AT PEAK DELIVERABILITY Approximate Thruput at Nominal Horsepower Suction Pressure Discharge Pressure Peak Deliverability Unit Site (Pad) Rating PSIG PSIG MMCFPD Saturn 1 14-6 1100 50 to 70 235 to 260 11 to 12 Saturn 2 14-6 1100 50 to 70 235 to 260 11 to 12 Saturn 3 14-6 1100 50 to 70 235 to 260 11 to 12 IRA 34-31 5000 50 to 70 245 to 270 40 to 45 IRB 34-31 5000 50 to 70 245 to 270 40 to 45 Centaur 1 14-6 4500 225 to 250 725 to 750 44 to 50 Centaur 2 14-6 4500 225 to 250 725 to 750 36 to 40 Ariel 1 14-6 600 20 to 40 50 to 70 15 to 20 Ariel 2 41-7 600 20 to 40 50 to 70 15 to 20 Note I: Kenai Gas Field low pressure system peak deliverability thru compression system is - 70 to 75 MMCFD. Note 2: Kenai Gas Field compression operating parameters and peak deliverability estimate as of - November, 2006. Comments All 3 Saturns online at peak deliverability. All 3 Saturns online at peak deliverability. All 3 Saturns online at peak deliverability. Either IRA or IRB online at peak deliverability. Either IRA or IRB online at peak deliverability. Both Centaurs online at peak deliverability Both Centaurs online at peak deliverability. Both Ariels online at peak deliverability. Both Ariels online at peak deliverability. r Alaska Asset Team P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 9071565.3076 March 1, 2009 Commissioners: John Norman, Dan Seamount, Cathy Foerster Alaska Oil and Gas Conservation Commission 333 W. 7t" Avenue Suite 100 Anchorage, AK 99501-3539 Re: Storage Injection Order 7 2009 Annual Gas Storage Performance Evaluation Dear Commissioners: Marathon Oil Company (Marathon) respectfully submits the attached information to fulfill the requirements of Rule 5 of Storage Injection Order#7, dated April 19, 2006. Rule 5 requires, in part: "An annual report evaluating the performance of the storage injection operation must be provided to the Commission no later than March 15. The report shall include material balance calculations of the gas production and injection volumes and a summary of well performance data to provide assurance of continued reservoir confinement of the gas storage volumes." After almost 48 years of continuous production, the Sterling Pool 6 continues to exhibit tank -like behavior. Marathon has not observed, and has no information indicating, any change to this behavior as a result of gas injection and storage operations which began on May 8, 2006. Marathon has conducted gas storage operations in compliance with the rules and conditions of S10 #7. All required data, other than form 10-413 as explained below, have been submitted to the AOGCC. From the time of first injection through the period ending December 31, 2008, the total volume of gas injected into Pool 6 was 7,162,816 mscf. The total volume of stored gas withdrawn was 1,503,809 mscf. The total volume of native gas withdrawn was 7,721,216 mscf. The maximum calculated reservoir bottom -hole pressure during the 2008 injection cycle was 187 psia (KBU 23X-06, June 2008) far below the maximum of 300 PSI permitted under Rule 4 of SIO-7. Attached, please find Exhibit #1, a summary of the results of a recent update to the Sterling Pool 6 reservoir model, which is submitted to satisfy the annual performance evaluation requirements for material balance calculations. The reservoir pressures used in the model were shut-in tubing pressures obtained from our SCADA system which were converted to bottom -hole pressures at mid -perforation. The field was shut in on May 13, 2008 and October 17, 2008 to obtain pressure data (Exhibit 1 M). Modeling work shows a direct response to injection and withdrawals from the reservoir. Each observed shut-in well pressure correlated to the model's prediction. In summary, the model's prediction is consistent with observed pressures and injection/withdrawal volumes. The observed static pressures gathered have slight variations from the P/Z line (Exhibit 4). The reason for the variations can be explained by examining the pressure distributions predicted by the simulation model (Exhibit 1 N). There is an aerial as well as temporal variation of pressure in the reservoir. This implies depending upon the location of the specific wells chosen for pressure measurements and the time of the year when the pressures are measured, the average measured pressure could be slightly higher or lower than P/Z line. This is consistent with the observed departures from the P/Z values in Exhibit 4. Exhibit #2 is a plot showing the performance of the injection wells (KU 31-07X and 23X-06) during 2008. Exhibit #3 is a table showing monthly injection and withdrawal volumes plus allocated balances between Native and Stored gas. Exhibit #4 is the original P/Z plot contained in the application for gas storage Exhibit #5 is a plot showing monthly averaged production rates, injection rates and field average pressure. Although Form 10-413 appears to be required by statute, the form has not been submitted because we interpret it to be applicable only to enhanced recovery projects rather than gas storage projects. Additional guidance is requested regarding the applicability and necessity of Form 10-413 for this gas storage project. If you have any questions, please do not hesitate to contact me at: 713-296-3390 or dszalkowskia-marathonoil.com ;Sinc ely, Scott Szalkowski SUBSURFACE SUPERVISOR MARATHON OIL COMPANY Enclosures Via Certified Mail cc: Greg Noble, BLM Kevin Banks, Alaska DNR, Dept of Oil & Gas Lyndon lbele, Marathon File 2 Exhibit #1 (1A. ® 1 L) Comparisons of Observed Pressures vs. Expected Pressures from Eclipse tm Model • KDU-5 Exhibit 1A • Well 43-06RD Exhibit 1 S • Well 34-32 Exhibit 1 C • Well 34-31 Exhibit 1 D • Well 33-07 Exhibit 1E • Well 33-06 Exhibit 1F • Well 31-07X Exhibit 1G • Well 23X-06 Exhibit 1 H • Well 21-06RD Exhibit 11 • Well 14X-06 Exhibit I • Well 14-32 Exhibit 1 K • Well 13-06 Exhibit 1 L For each well listed above two plots are presented showing historical observed shut-in pressures against those predicted by the Eclipse simulation model. The upper plot encompasses the entire historical life of the Pool 6 reservoir. The lower plot shows the same data beginning in the Year2003. There is agreement between the pressures predicted by the simulation model and those observed at each well. There are some minor differences in pressures taken between 2003 and 2008. The minor variations can be attributed to the following conditions. 1) Simulation uses average monthly production rates rather than daily rates. 2) Some of the observed pressures are obtained from SCADA, which are less accurate as compared to test gauges used for biannual pressure measurements. 3) Some of the data was obtained when the field was not completely shut in as desired, to compare against the simulated shut in pressures. Conclusions 9 • Eclipse Model was updated to include production and injection volumes through December 2008 • The pressures predicted by the Eclipse model were compared to pressures observed in the various wells in 2008 • The pressures observed in the various wells compared very favorably with those predicted by the simulation model • Storage Unit did not exceed maximum allowable pressure of 300 psis • Sterling Pool 6 continues to maintain reservoir confinement. 4 Marathon MARATHON Uil company - mutated .�:6HP - Eclip �e �-rl��arved �6HP for 'd008 -- Observed 3BHP till 2007 �qi 000 n• ri I I I I 1 l l t 9Ci0 1/ 1 970 1/ 1 980 1 /2000 Drjt .cs...ay.0 weFw r�r.. 49- Exhibit 11A `v"vGii 'n'vv-0 -:E;imulate,cl :BHP Eclipse -- C>bc.,ervetd 3BHP till 2007 2000- -.1000O - I r 11FIFO 1 /1 970 1 /,1 PRO 1 990 -1 f2(:)00 I)ntF ss ZkM 15 Exhibit 1 B: Well 43-06RD C3131-11" - Eclipse C3S"P For 2008 -- ObsorvoclSBHP till 2007 2000— �q-1 000 — 0- 0 1/1 960 I it 970 1 1 60 111 990 1/2000 Du Le leNl 30a — Li L-L Exhibit !C:-Well U-IZ-- rY. .�.., K nwrt< rm . r.s�, -- Nall a-.af orae ucdon Rai�r f Exhibit 1 D: Well 34-31 Exhibit 1E: Well 33-07 --- .. xJatF.d :+BHP - Eclipaw - - dbserved 36HP till 2007 2000 0 '1 /'1 960 '1 /'1 1 1 /1 0,80 1 /1 60 '1 /2000 I?rii� Exhibit 1 F: Well 33-06 W- Simuka d SBHP - Eclipl-� ++ C3b--rvcd -SBHP till 2007 20001 • C>be+arvo<l --BHP for 2C n vi O 1- 1 /1 960 1 PI 970 1!19S0 '1 /1 990 '112000 Exhibit 1G: Well 31-07X Exhibit 11-1: Well 23X-06 -.+inxdat.ad �dEHP - Eclipses ++ CDboetvscl SBHP till 2007 2000 n u't 000 ri 7l7960 1/1970 1/7980 7/1!_l90 '1/2000 -R�a6+rM Rd1111'�' f^YI*v td .. .na C.vn�Y��nw Ati+. '. Exhibit 11: Well 21-06RD im -- �ulatad 3EHF' - Ecliioae 4b,Erve cl BHP for ^bb8 Vbservocl BBHP till .'Qfw7 2000 �q,i 000 u� 0 11,1 960 1 A'1 V 70 1 /1 990 11,11990 112000 Dote Exhibit U: Well 14X-06 .simulated --BHP - Eclipze SBHP for 2003 ++ SBHP till 2007 2000 rn v O 1 /1 960 I 1 /1 970 I 1 /1 930 I 11,1 990 I 1 /2000 Uo-te —Sim�lwfeci SBHP - Eellpse ,. Ob.—A iSBHP OR 2007 600 300 O .. Obsaiva[I SBHP far 2006 (Fial[I allot in) Dote Exhibit 1 K: Well 14-32 Aut, Exhibit 1L: Well 13-06 May-13- 2008, POOL 6 Shut -In surface pressures with 200 psi test gauge 5/13/2008 Wells had been Ell approx. 48 hrs. Well Test Gauge Psig SITP psi. Mid Perf SSTVD MidPerf TVD Mld Per! MD Zones Perfl Cale'd Mld Perf SHP Pats Datum 4665' SS or-4652 TVD COMMENTS 14-32V 4520 4607 5316 C-1 145.8 145.9 SHPfrom the static PT done on the well 14-32AN 4620 4607 6316 C-1 21-6RDV 4482 4562 5280 C-1 21-SRDAN 4482 4562 5280 C-1 34-31 4653 4741 4743 C-1 34.32L 4485 4580 5239 C-1 146.2 146.3 BHP from the static PT done on the well 34.32LAN 4485 4580 5239 C-1 DU51- 4490 4578 6162 CA DU5LAN 4490 4578 5162 C-1 13.6L 4476 4570 5223 13.61-AN 1 4476 4570 5223 C-1 14-X6V 44M 4498 4498 14-X6AN 4403 449E 4498 01,C-2 23-X6RDV 145.0 159.65 4393 4486 4868 C-1 174.6 1752 BHP calculated based on surface pressures 23-X6RDAN 4393 4486 4868 C-1 31-7X 129.0 143.65 4359 4446 5350 C-1,C-2 156.0 157.E BHP calcuated based on surface pressures 38-6 C-1 33-7S 4442 4532 5050 C-1 43-6RD 4416 4503 5362 C-1 44-30 156.1 Oct-17- 2008, POOL 6 Shutan surface pressures with 200 psi test gauge 10/1712008 Wells had been SII approx. 48 hrs. Well Test Gauge Palo SITP pals MidPerf SSTVD MldPerf TVD MI4Perf MD Zones Psr(d Cale'd Mld Perf SHP pals Datum 4565' SS or-4652 TVD COMMENTS 14-32V 4520 4607 5316 CA 14-32AN 4520 4607 5316 C-1 21-6RDV 4482 4562 5280 C-1 21-SRDAN 4482 4562 5280 C-1 34-31 4653 4741 4743 C-1 34-32L 4485 4580 5239 CA 34-32LAN 4485 4580 5239 CA Du-5L 4490 4578 5162 C-1 DU-SLAN 4490 4578 5162 C4 13-GL 4476 4570 5223 178.3 1785 BHPfromthestatic PTdoneonthewell 13-61LAN 4476 4570 5223 C-1 14-X6V 443 4498 1 4498 14-X&AN 4403 4495 4498 C-1,C-2 23-X6RDV 4393 4485 4868 C-1 23-X6RDAN 4393 4485 4868 C-1 31-7X 4359 4446 5350 C-1,C-2 33-6 CA 33-7S 4442 4532 5050 C-1 43.6RD 4416 4503 5362 1 C-1 44-30 178.E Exhibit 1M: Static Reservoir Pressures gathered in 2008 Pressure distribution as per Eclipse Model on 30-April-2008 Pressure distribution as per Eclipse Model on .30-Sep-2008 Exhibit 1 N: Reservoir pressure distribution predicted by Eclipse simulation model 23x-06 45,000 i 40,000 35,000 30,000 9 25,000 N E m 20,000 K s,000 10.000 5,000 0 0 100 200 300 400 500 600 700 Tubing prig 2 ♦ ♦� ♦ �♦ y = 74.53z - 72 1.3 t • R2 = 0.841 • 31-7x 45,000 40,000 35,000 30,000 u 25,000 1n E 220,000 15,000 10,000 5,000 0 0 100 200 300 400 500 600 700 800 Tubing psig y 74.38x -12565 ♦ R = 0. 068 M Exhibit # 2: Performance of injection wells during 2008 Total Total Native Gas Stored Gas Native i Date INJECTED MCF WITHDRAWN MCF Allocation % Allocation % End Balance MSCF End Ba 01/31/08 - 770,824 80% 20% 19,712,301 02/29/08 12,673 432,695 80% 20% 19,366,145 03131/08 93,892 127,650 80% 20% 19,264,025 04/30/08 392,477 18,161 80% 20% 19,249,496 06/31/08 497,940 4,226 70% 30% 19,246,538 06/30/08 727,366 - 70% 30% 19,246,538 07/31/08 833,337 - 70% 30% 19,246,538 08/31/08 603,744 - 70% 30% 19,246,538 09/30/08 351,401 - 70% 30% 19,246,538 10/31/08 100,513 402,504 70% 30% 18,964,785 11/30/08 18,488 436,729 70% 30% 18,659,075 12/31/08 92,793 266,198 70% 30% 18,472,737 3,724,624 2,458,987 229,921,256 Exhibit 3: Monthly injection and withdrawal volumes P/Z for Pool - 6 300 250 200 d 150 100 50 • May-08 average pressure data Oct-08 averagepressure data • Eclipse P2 Linear (Eclipse P/Z) Official P2 Ecipse Model P2 5.100E+08 5.500E+08 5.600E+08 5.700E+08 5.200E+08 5.300E+08 5.400E+08 Cum withdrawl (MSCF) Exhibit # 4: P/Z Plot -FPR vs. DATE (Last_2new) -FGIR vs. DATE (Last_2new) --FGPR vs. DATE (Last_2new) 200 40000 190 30000 180 L—rF 170 _ 20000,- LL- < CJ Gn 07 d � d 160 LL 10000CJ� C� 150 140 0 1/1/06 1/1/07 1/1/08 1/1/09 DAT E Black — Monthly averaged gas injection rates Red — Monthly averaged gas production rates Blue — Monthly averaged field pressures Exhibit # 5: Monthly averaged rates and pressure 11 Marathon AtARATNON Oil Company March 1, 2008 T. Mitc le Production Manager USPO Alaska Asset Team P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/565-3040 FAX 907/565-3076 Cellular 907/382-0752 E-Mail: tmlittle@marathonoil.com RECEIVE® Kevin Banks, Acting Director FEB 2 9 2008 Division of Oil and Gas Department of Natural Resources Alaska Oil & Gas ems• C MtRS9 M 550 W. 7th Ave., Suite 800 kchora9e Anchorage, AK 99501-3560 Re: ADL 390821 Third Storage Development Plan - Kenai Gas Field Pool 6 Gas Storage Lease Dear Mr. Banks: Marathon Oil Company (Marathon) respectfully submits the above referenced document for your approval. If you have any questions, please do not hesitate to contact Gary Laughlin at (907) 565-3036 or galaughlin@marathonoil.com. Sincerely, T. Mitch Little Enclosures Via Certified Mail cc: Greg Noble, BLM Jane Williamson, AOGCC Gary Laughlin, Marathon File March 1, 2008 Kevin Banks, Acting Director Division of Oil and Gas Department of Natural Resources 550 W. 7th Ave., Suite 800 Anchorage, AK 99501-3560 Re: ADL 390821 Third Storage Development Plan - Kenai Gas Field Pool 6 Gas Storage Lease Dear Mr. Banks: I. PERIOD DURATION This Third Development Plan shall be in effect from April 1, 2008 through March 31, 2009. II. ACTIVITY DURING THE SECOND STORAGE DEVELOPMENT PLAN & MONTHLY SUMMARY OF INJECTED & WITHDRAWN VOLUMES A detailed daily injection gas volume by well is included in Exhibit #1. A detailed monthly production accounting of gas volumes injected, withdrawn and the resulting balances between native and non-native gas is presented in Exhibit #2. Accounting figures are available only for the period thru January 31, 2008. The total volume of gas injected into Pool 6 through this period was 1,967,936 mcf. The total volume of stored gas withdrawn was 605,543 mcf. The total volume of native gas withdrawn was 2,422,174 mcf. Well KDU 4 was completed into the Gas Storage Pool but has not been produced. III. Royalties Table 1 provides an accounting breakdown of monthly royalty payments made by Marathon in 2007 on volumes of gas injected into storage. Sources of gas injected into storage during the second SDP were from the Kenai Gas Field (KGF) and the Cannery Loop Unit (CLU). Table 1 Royalty payments for Jan-07 $ - $ - Feb-07 $ 111.34 $ 383.74 Mar-07 $ - $ - Apr-07 $ 1,339.32 $ 9,516.22 Ma -07 $ 5,754.43 $ 42,329.13 Jun-07 $ 35.56 $ 163.91 Jul-07 $ 2,207.09 $ 18,241.45 Au -07 $ 2,455.11 $ 13,727.67 Se -07 $ 838.63 $ 6,073.45 Oct-07 $ 347.81 $ 2,154.75 Nov-07 $ - $ - Dec-07 $ 21.23 $ 173.39 Tc $11,659.86 $ 82,863.75 $ Ity Payments for Storage Jan-07 $ - $ - Feb-07 $ 312.85 $ 8.30 Mar-07 $ - $ - A r-07 $ 4,448.31 $ 202.42 Ma -07 $18,444.18 $ 964.82 Jun-07 $ 114.17 $ 3.68 Jul-07 $ 8,308.59 $ 395.51 Au -07 $ 7,768.98 $ 297.44 Se -07 $ 3,627.81 $ 221.93 Oct-07 $ 984.73 $ 147.53 Nov-07 $ - $ - Dec-071 $ 76.73 $ 16.25 Total $ 41,372.35 $ 39,325.19 $ 2,047.16 IV. THIRD PERIOD PLANNED ACTIVITIES No additional activities are currently anticipated during the 3rd SDP. Marathon shall seek approval from ADNR for any activities during the plan period that are not specifically listed in this section (A). COMPLETION STATUS as of March 1st, 2008 KDU - 4 was recompleted into the Gas Storage Pool but has not been produced. The beluga completion was isolated with cement and a cast iron bridge plug was set. Class Type Count Gas Producers 15 Gas Injectors 2 Shut-in Completions 5 2 injectors are also producers and are counted in both categories (B). Facilities The gas compression associated with the Kenai Gas Field Storage Project has not changed materially since the 2"d SDP. No new compression facilities have been added. Exhibit #4 provides a summary of the compression located in the Kenai Gas Field. (C). MARKET As reported in the Second SDP, gas injection will occur in periods of surplus supply and low market demand, principally in the period between April and September. Withdrawal will occur in periods of high demand. Marathon anticipates injecting between 3 and 6 BCF of gas in the third SDP period. Actual volumes injected and stored will be a function of gas supply and market demands. The Kenai Gas Field Pool 6 Storage Facility is intended to provide Marathon Oil Company with a means to mitigate its seasonal variations in its gas contract demands. Marathon supplies gas to all Cook Inlet market segments: utilities, industrials, and private parties. Marathon has no contracts obligating it to develop or provide storage services. (D). Performance Monitoring: Annual Engineering Evaluation and P/z Performance Analysis Attached as Exhibit #5 is a report prepared to satisfy the requirements of both the ADNR gas storage lease and the AOGCC Storage Injection Order #7. The report details production and injection volumes, material balance calculations and assurance of continued reservoir confinement of the gas storage volumes. VI. Long Term Plans There are no anticipated changes or revisions to the long term plan for the storage lease. Request for Approval Marathon Oil Company (Marathon), as Unit Operator, reserves the right to modify the SDP if necessitated; however, such modifications will be subject to approval by the Alaska Department of Natural Resources (ADNR). Your approval of the Third Storage Development Plan and the specific activities listed in Section III are respectfully requested. Sincerely, T. Mitch Little Alaska Asset Team Manager Enclosures Via Certified Mail cc: Greg Noble, BLM Jane Williamson, AOGCC Gary Laughlin, Marathon File Approved: Alaska Department of Natural Resources Title: Date: Exhibit 1 KGF 31-07X [NJ MCF) 23X-06 GAS [NJ (MCF) Total (MCF) 4/20/2006 - - 4/21 /2006 - - 4/22/2006 - - 4/23/2006 - - 4/24/2006 - - 4/25/2006 - - 4/26/2006 - - 4/27/2006 - - 4/28/2006 - - 4/29/2006 - - 4/30/2006 - - 5/1 /2006 - - 5/2/2006 - - 5/3/2006 - - 5/4/2006 - - 5/5/2006 - - 5/6/2006 - - 5/7/2006 - - 5/8/2006 1,566 1,566 5/9/2006 2,017 2,017 5/10/2006 - - 5/11 /2006 11,439 11,439 5/12/2006 2,008 2,008 5/13/2006 4,523 4,523 5/14/2006 6,434 6,434 5/15/2006 8,983 8,983 5/16/2006 12,004 12,004 5/17/2006 32,186 32,186 5/18/2006 29,185 29,185 5/19/2006 11,438 11,438 5/20/2006 9,013 9,013 5/21 /2006 9,276 9,276 5/22/2006 9,052 9,052 5/23/2006 8,115 8,115 5/24/2006 20,996 20,996 5/25/2006 13,685 13,685 5/26/2006 11,048 11,048 5/27/2006 21,983 21,983 5/28/2006 22,181 22,181 5/29/2006 13,954 13,954 5/30/2006 9,565 9,565 5/31 /2006 6,764 6,764 6/1 /2006 5,121 5,121 6/2/2006 16,736 16,736 6/3/2006 20,181 20,181 6/4/2006 18,920 18,920 6/5/2006 13,983 13,983 6/6/2006 13,751 13,751 6/7/2006 18,139 18,139 6/8/2006 19,897 19,897 6/9/2006 12,920 12,920 6/10/2006 18,679 18,679 6/11 /2006 18,994 18,994 6/12/2006 6,216 6,216 6/13/2006 7,681 7,681 6/14/2006 16,166 16,166 6/15/2006 13,830 13,830 6/16/2006 12,395 12,395 6/17/2006 17,542 17,542 6/18/2006 23,878 23,878 6/19/2006 27,455 27,455 6/20/2006 22,267 22,267 6/21 /2006 21,020 21,020 6/22/2006 17,696 17,696 6/23/2006 11,821 11,821 6/24/2006 16,990 16,990 6/25/2006 15,740 15,740 6/26/2006 14,593 14,593 6/27/2006 13,818 13,818 6/28/2006 10,491 10,491 6/29/2006 20,666 20,666 6/30/2006 32,690 32,690 7/1 /2006 32,024 32,024 7/2/2006 30,664 30,664 7/3/2006 31,521 31,521 7/4/2006 28,837 28,837 7/5/2006 20,417 20,417 7/6/2006 9,686 9,686 7/7/2006 950 950 7/8/2006 - - 7/9/2006 8,271 8,271 7/10/2006 - - 7/11 /2006 3,806 3,806 7/12/2006 5,912 5,912 7/13/2006 9,034 9,034 7/14/2006 4,790 4,790 7/15/2006 11,858 11,858 7/16/2006 7,241 7,241 7/17/2006 5,465 5,465 7/18/2006 7,448 7,448 7/19/2006 8,970 8,970 7/20/2006 11,147 11,147 7/21 /2006 3,905 3,905 7/22/2006 3 3 7/23/2006 1,327 1,327 7/24/2006 1,172 1,172 7/25/2006 3,209 3,209 7/26/2006 2,569 2,569 7/27/2006 5,211 5,211 7/28/2006 9,342 9,342 7/29/2006 10,523 10,523 7/30/2006 9,213 9,213 7/31/2006 3,552 3,552 8/1 /2006 2,942 2,942 8/2/2006 1,940 1,940 8/3/2006 1,055 1,055 8/4/2006 133 133 8/5/2006 5,567 5,567 8/6/2006 8,848 8,848 8/7/2006 4,669 4,669 8/8/2006 2,344 2,344 8/9/2006 2,011 2,011 8/10/2006 6,018 6,018 8/11 /2006 4,347 4,347 8/12/2006 3,953 3,953 8/13/2006 2,397 2,397 8/14/2006 - - 8/15/2006 - - 8/16/2006 - - 8/17/2006 165 165 8/18/2006 770 770 8/19/2006 231 231 8/20/2006 117 117 8/21 /2006 - - 8/22/2006 98 98 8/23/2006 - - 8/24/2006 - - 8/25/2006 961 961 8/26/2006 - - 8/27/2006 - - 8/28/2006 - - 8/29/2006 - - 8/30/2006 - - 8/31 /2006 - - 9/1 /2006 - - 9/2/2006 - - 9/3/2006 1,910 1,910 9/4/2006 14,431 14,431 9/5/2006 26,617 26,617 9/6/2006 17,592 17,592 9/7/2006 9,176 9,176 9/8/2006 22,335 22,335 9/9/2006 24,282 24,282 9/10/2006 22,166 22,166 9/11 /2006 23,701 23,701 9/12/2006 29,149 29,149 9/13/2006 32,060 32,060 9/14/2006 22,792 22,792 9/15/2006 22,262 22,262 9/16/2006 22,020 22,020 9/17/2006 26,651 26,651 9/18/2006 24,092 24,092 9/19/2006 13,303 13,303 9/20/2006 15,532 15,532 9/21 /2006 14,251 14,251 9/22/2006 - - 9/23/2006 1,421 1,421 9/24/2006 6,546 6,546 9/25/2006 3,596 3,596 9/26/2006 - - 9/27/2006 - - 9/28/2006 - - 9/29/2006 - - 9/30/2006 - - 10/1 /2006 - - 10/2/2006 - - 10/3/2006 - - 10/4/2006 - - 10/5/2006 - - 10/6/2006 - - 10/7/2006 - - 10/8/2006 1,182 1,182 10/9/2006 683 683 10/10/2006 3,240 3,240 10/11 /2006 68 68 10/12/2006 501 501 10/13/2006 - - 10/14/2006 - - 10/15/2006 220 220 10/16/2006 - - 10/17/2006 - - 10/18/2006 1,986 1,986 10/19/2006 5,415 5,415 10/20/2006 3,298 3,298 10/21 /2006 2,069 2,069 10/22/2006 - - 10/23/2006 - - 10/24/2006 - - 10/25/2006 - - 10/26/2006 - - 10/27/2006 - - 10/28/2006 - - 10/29/2006 - - 10/30/2006 - - 10/31 /2006 - - 11 /1 /2006 - - 11 /2/2006 - - 11 /3/2006 - - 11 /4/2006 - - 11 /5/2006 - - 11 /6/2006 - - 11 /7/2006 - - 11 /8/2006 - - 11 /9/2006 - - 11 /10/2006 - - 11 /11 /2006 - - 11 /12/2006 - - 11 /13/2006 - - 11 /14/2006 - - 11 /15/2006 - - 11 /16/2006 - - 11 /17/2006 - - 11 /18/2006 - - 11 /19/2006 - - 11 /20/2006 - - 11 /21 /2006 - - 11 /22/2006 - - 11 /23/2006 - - 11 /24/2006 - - 11 /25/2006 - - 11 /26/2006 - - 11 /27/2006 - - 11 /28/2006 - - 11 /29/2006 - - 11 /30/2006 - - 12/1 /2006 - - 12/2/2006 - - 12/3/2006 - - 12/4/2006 - - 12/5/2006 - - 12/6/2006 - - 12/7/2006 - - 12/8/2006 - - 12/9/2006 - - 12/10/2006 - - 12/11 /2006 - - 12/12/2006 - - 12/13/2006 - - 12/14/2006 - - 12/15/2006 - - 12/16/2006 - - 12/17/2006 - - 12/18/2006 - - 12/19/2006 - - 12/20/2006 - - 12/21 /2006 - - 12/22/2006 - - 12/23/2006 - - 12/24/2006 - - 12/25/2006 - - 12/26/2006 - - 12/27/2006 - - 12/28/2006 - - 12/29/2006 - - 12/30/2006 - - 12/31 /2006 - - 1 /1 /2007 - - 1 /2/2007 - - 1 /3/2007 - - 1 /4/2007 - - 1 /5/2007 - - 1 /6/2007 - - 1 /7/2007 - - 1 /8/2007 - - 1 /9/2007 - - 1 /10/2007 - - 1 /11 /2007 - - 1 /12/2007 - - 1 /13/2007 - - 1 /14/2007 - - 1 /15/2007 - - 1 /16/2007 - - 1 /17/2007 - - 1 /18/2007 - - 1 /19/2007 - - 1 /20/2007 - - 1 /21 /2007 - - 1 /22/2007 - - 1 /23/2007 - - 1 /24/2007 - - 1 /25/2007 - - 1 /26/2007 - - 1 /27/2007 - - 1 /28/2007 - - 1 /29/2007 - - 1 /30/2007 - - 1 /31 /2007 - - 2/1 /2007 216 216 2/2/2007 5,028 5,028 2/3/2007 4,070 4,070 2/4/2007 - - 2/5/2007 - - 2/6/2007 - - 2/7/2007 - - 2/8/2007 - - 2/9/2007 - - 2/10/2007 - - 2/11 /2007 - - 2/12/2007 - - 2/13/2007 - - 2/14/2007 - - 2/15/2007 - - 2/16/2007 - - 2/17/2007 - - 2/18/2007 - - 2/19/2007 - - 2/20/2007 - - 2/21 /2007 - - 2/22/2007 - - 2/23/2007 - - 2/24/2007 - - 2/25/2007 - - 2/26/2007 - - 2/27/2007 - - 2/28/2007 - - 3/1 /2007 - - 3/2/2007 - - 3/3/2007 - - 3/4/2007 - - 3/5/2007 - - 3/6/2007 - - 3/7/2007 - - 3/8/2007 - - 3/9/2007 - - 3/10/2007 - - 3/11 /2007 - - 3/12/2007 - - 3/13/2007 - - 3/14/2007 - - 3/15/2007 - - 3/16/2007 - - 3/17/2007 - - 3/18/2007 - - 3/19/2007 - - 3/20/2007 - - 3/21 /2007 - - 3/22/2007 - - 3/23/2007 - - 3/24/2007 - - 3/25/2007 - - 3/26/2007 - - 3/27/2007 - - 3/28/2007 - - 3/29/2007 - - 3/30/2007 - - 3/31 /2007 - - 4/1 /2007 - - 4/2/2007 - - 4/3/2007 - - 4/4/2007 - - 4/5/2007 - - 4/6/2007 - - 4/7/2007 - - 4/8/2007 - - 4/9/2007 - - 4/10/2007 - - 4/11/2007 6,299 6,299 4/12/2007 11,847 11,847 4/13/2007 13,521 13,521 4/14/2007 15,881 15,881 4/15/2007 15,041 15,041 4/16/2007 8,956 8,956 4/17/2007 5,609 5,609 4/18/2007 12,674 12,674 4/19/2007 7,115 7,115 4/20/2007 - - 4/21 /2007 29 29 4/22/2007 5,294 5,294 4/23/2007 16,231 16,231 4/24/2007 13,318 13,318 4/25/2007 11,074 11,074 4/26/2007 9,784 9,784 4/27/2007 10,624 10,624 4/28/2007 13,652 13,652 4/29/2007 22,278 22,278 4/30/2007 1,598 1,598 5/1 /2007 - - 5/2/2007 - - 5/3/2007 - - 5/4/2007 6,264 6,264 5/5/2007 29,048 29,048 5/6/2007 39,768 39,768 5/7/2007 33,435 - 33,435 5/8/2007 40,776 - 40,776 5/9/2007 27,696 - 27,696 5/10/2007 9,920 - 9,920 5/11 /2007 11,785 - 11,785 5/12/2007 31,934 - 31,934 5/13/2007 32,926 16,391 49,317 5/14/2007 21,676 25,699 47,375 5/15/2007 20,073 23,567 43,640 5/16/2007 17,729 31,243 48,971 5/17/2007 19,457 23,718 43,175 5/18/2007 24,014 29,691 53,705 5/19/2007 26,593 32,886 59,478 5/20/2007 29,026 36,939 65,965 5/21 /2007 29,936 37,079 67,015 5/22/2007 30,339 37,875 68,214 5/23/2007 21,010 27,482 48,492 5/24/2007 18,361 23,767 42,128 5/25/2007 - - - 5/26/2007 - - - 5/27/2007 - - - 5/28/2007 - - - 5/29/2007 - - 5/30/2007 - - - 5/31 /2007 - - - 6/1 /2007 - - - 6/2/2007 - - - 6/3/2007 1,034 1,397 2,431 6/4/2007 0 22 22 6/5/2007 1 979 980 6/6/2007 - 868 868 6/7/2007 - - - 6/8/2007 - - - 6/9/2007 - - - 6/10/2007 - - - 6/11 /2007 - - - 6/12/2007 - - - 6/13/2007 - - - 6/14/2007 - - - 6/15/2007 - - - 6/16/2007 - - - 6/17/2007 - - - 6/18/2007 - - - 6/19/2007 - - - 6/20/2007 - - - 6/21 /2007 - - - 6/22/2007 - - - 6/23/2007 - - - 6/24/2007 - - - 6/25/2007 - - - 6/26/2007 - - - 6/27/2007 - - - 6/28/2007 - - - 6/29/2007 - - - 6/30/2007 - - - 7/1 /2007 - - - 7/2/2007 - - - 7/3/2007 - 972 972 7/4/2007 2,604 5,990 8,594 7/5/2007 5,664 6,104 11,768 7/6/2007 8,328 9,416 17,744 7/7/2007 9,701 11,816 21,517 7/8/2007 8,614 11,152 19,766 7/9/2007 8,023 10,751 18,773 7/10/2007 8,694 11,699 20,393 7/11 /2007 6,840 9,245 16,084 7/12/2007 5,202 7,456 12,657 7/13/2007 4,460 6,518 10,977 7/14/2007 5,685 8,120 13,805 7/15/2007 6,286 8,931 15,217 7/16/2007 5,480 7,966 13,446 7/17/2007 11,061 15,035 26,096 7/18/2007 3,925 5,699 9,624 7/19/2007 6,566 8,655 15,222 7/20/2007 8,306 11,255 19,561 7/21 /2007 10,137 13,838 23,975 7/22/2007 8,336 12,015 20,351 7/23/2007 2,842 4,647 7,489 7/24/2007 1,796 2,708 4,503 7/25/2007 6,760 9,412 16,172 7/26/2007 6,917 10,068 16,984 7/27/2007 7,041 13,994 21,035 7/28/2007 10,070 13,124 23,194 7/29/2007 6,238 9,048 15,286 7/30/2007 11,429 15,294 26,723 7/31 /2007 6,575 9,919 16,493 8/1 /2007 4,083 6,571 10,654 8/2/2007 2,538 4,373 6,911 8/3/2007 1,163 5,975 7,138 8/4/2007 - 7,278 7,278 8/5/2007 - 12,817 12,817 8/6/2007 - 10,305 10,305 8/7/2007 - 8,305 8,305 8/8/2007 - 9,950 9,950 8/9/2007 - 9,931 9,931 8/10/2007 - 12,518 12,518 8/11 /2007 - 14,640 14,640 8/12/2007 - 14,938 14,938 8/13/2007 - 11,516 11,516 8/14/2007 - 9,432 9,432 8/15/2007 5,979 8,249 14,228 8/16/2007 3,780 5,423 9,203 8/17/2007 1,180 1,737 2,917 8/18/2007 2,843 3,855 6,698 8/19/2007 2,657 4,421 7,078 8/20/2007 - 3,188 3,188 8/21 /2007 - 3,557 3,557 8/22/2007 - 6,726 6,726 8/23/2007 - 6,589 6,589 8/24/2007 - 9,314 9,314 8/25/2007 - 17,544 17,544 8/26/2007 - 21,587 21,587 8/27/2007 3,228 6,130 9,358 8/28/2007 4,581 6,040 10,621 8/29/2007 8,010 10,540 18,550 8/30/2007 5,637 8,182 13,819 8/31 /2007 8,432 11,740 20,172 9/1 /2007 15,913 20,859 36,772 9/2/2007 13,606 18,300 31,906 9/3/2007 11,510 15,911 27,421 9/4/2007 10,345 14,533 24,878 9/5/2007 11,390 15,898 27,288 9/6/2007 10,731 15,485 26,215 9/7/2007 9,703 14,430 24,133 9/8/2007 4,850 7,222 12,071 9/9/2007 923 1,338 2,260 9/10/2007 4,054 6,028 10,082 9/11 /2007 3,184 4,752 7,935 9/12/2007 2,080 2,866 4,946 9/13/2007 - - - 9/14/2007 781 - 781 9/15/2007 - - - 9/16/2007 - - - 9/17/2007 - - - 9/18/2007 - - - 9/19/2007 - - - 9/20/2007 - - - 9/21 /2007 - - - 9/22/2007 - - - 9/23/2007 - - - 9/24/2007 - - - 9/25/2007 - - - 9/26/2007 - - - 9/27/2007 - - - 9/28/2007 - - - 9/29/2007 3,100 - 3,100 9/30/2007 7,261 - 7,261 10/1 /2007 10,467 - 10,467 10/2/2007 3,595 - 3,595 10/3/2007 2,103 - 2,103 10/4/2007 - 45 45 10/5/2007 - - - 10/6/2007 - - - 10/7/2007 - - - 10/8/2007 - - - 10/9/2007 9,132 - 9,132 10/10/2007 7,226 - 7,226 10/11 /2007 7,821 - 7,821 10/12/2007 3,949 - 3,949 10/13/2007 599 - 599 10/14/2007 2,038 - 2,038 10/15/2007 1,974 - 1,974 10/16/2007 1,411 - 1,411 10/17/2007 1,385 - 1,385 10/18/2007 361 11 372 10/19/2007 16 - 16 10/20/2007 - - - 10/21 /2007 - - - 10/22/2007 - - - 10/23/2007 - - - 10/24/2007 - - - 10/25/2007 - - - 10/26/2007 - - - 10/27/2007 - - - 10/28/2007 - - - 10/29/2007 - - - 10/30/2007 - - - 10/31 /2007 - - - 11 /1 /2007 - - - 11 /2/2007 - - - 11 /3/2007 - - - 11 /4/2007 - - - 11 /5/2007 0 - 0 11 /6/2007 - - - 11 /7/2007 - - - 11 /8/2007 - - - 11 /9/2007 - - - 11 /10/2007 - - - 11 /11 /2007 - - - 11 /12/2007 - - - 11 /13/2007 - - - 11 /14/2007 - - - 11 /15/2007 - - - 11 /16/2007 - - - 11 /17/2007 - - - 11 /18/2007 - - - 11 /19/2007 - - - 11 /20/2007 - - - 11 /21 /2007 - - - 11 /22/2007 - - - 11 /23/2007 - - - 11 /24/2007 - - - 11 /25/2007 - - - 11 /26/2007 - - - 11 /27/2007 - - - 11 /28/2007 - - - 11 /29/2007 - - - 11 /30/2007 - - - 12/1 /2007 - - - 12/2/2007 - - - 12/3/2007 - - - 12/4/2007 - - - 12/5/2007 - - - 12/6/2007 - - - 12/7/2007 197 - 197 12/8/2007 4,205 - 4,205 12/9/2007 - - - 12/10/2007 - - - 12/11 /2007 - - - 12/12/2007 - - - 12/13/2007 - - - 12/14/2007 - - - 12/15/2007 - - - 12/16/2007 - - - 12/17/2007 - - - 12/18/2007 - - - 12/19/2007 - - - 12/20/2007 - - - 12/21 /2007 - - - 12/22/2007 - - - 12/23/2007 - - - 12/24/2007 - - - 12/25/2007 - - - 12/26/2007 - - - 12/27/2007 - - - 12/28/2007 - - - 12/29/2007 - - - 12/30/2007 - - - 12/31 /2007 - - - Exhibit #2 TOTAL TOTAL Allocation Ratio *Native *Stored Schedule Native Stored Total GAS GAS Native Stored Gas Gas Native Stored Year End date Month Year Beg Balance Beg Balance Beginning INJECTED WITHDRAWN Gas Gas Withdrawn Withdrawn End Balance End Balance 0 Aug-05 32,510,000 32,510,000 245,376 100% 0% 245,376 32,264,624 0 Sep-05 32,264,624 32,264,624 621,932 100% 0% 621,932 31,642,692 0 Oct-05 31,642,692 31,642,692 778,951 100% 0% 778,951 30,863,741 0 Nov-05 30,863,741 30,863,741 1,257,120 100% 0% 1,257,120 29,606,621 0 Dec-05 29,606,621 29,606,621 977,479 100% 0% 977,479 28,629,142 0 Jan-06 28,629,142 28,629,142 1,012,219 100% 0% 1,012,219 27,616,923 0 Feb-06 27,616,923 27,616,923 736,817 100% 0% 736,817 26,880,106 0 Mar-06 26,880,106 26,880,106 588,212 100% 0% 588,212 26,291,894 0 Apr-06 26,291,894 26,291,894 97,942 100% 0% 97,942 26,193,952 - 1 May-06 26,193,952 26,193,952 277,415 - 90% 10% - 26,193,952 277,415 1 Jun-06 26,193,952 277,415 26,471,367 500,276 - 90% 10% - 26,193,952 777,691 1 Jul-06 26,193,952 777,691 26,971,643 288,066 779 90% 10% 701 78 26,193,251 1,065,679 1 Aug-06 26,193,251 1,065,679 27,258,930 48,566 243,801 90% 10% 219,421 24,380 25,973,830 1,089,865 1 Sep-06 25,973,830 1,089,865 27,063,695 395,885 204,373 90% 10% 183,936 20,437 25,789,894 1,465,313 1 Oct-06 25,789,894 1,465,313 27,255,207 18,947 259,416 90% 10% 233,474 25,942 25,556,420 1,458,318 1 Nov-06 25,556,420 1,458,318 27,014,738 0 916,743 90% 10% 825,069 91,674 24,731,351 1,366,644 1 Dec-06 24,731,351 1,366,644 26,097,995 0 867,726 90% 10% 780,953 86,773 23,950,398 1,279,871 1 Jan-07 23,950,398 1,279,871 25,230,269 0 783,239 90% 10% 704,915 78,324 23,245,483 1,201,547 1 Feb-07 23,245,483 1,201,547 24,447,030 9,315 593,636 90% 10% 534,272 59,364 22,711,210 1,151,499 1 Mar-07 22,711,210 1,151,499 23,862,709 0 630,218 90% 10% 567,196 63,022 22,144,014 1,088,477 1 Apr-07 22,144,014 1,088,477 23,232,491 200,796 21,689 90% 10% 19,520 2,169 22,124,494 1,287,104 2 May-07 22,124,494 1,287,104 23,411,598 868,135 69,202 80°% 20% 55,362 13,840 22,069,132 2,141,399 2 Jun-07 22,069,132 2,141,399 24,210,531 4,301 110,124 80% 20% 88,099 22,025 21,981,033 2,123,675 2 Jul-07 21,981,033 2,123,675 24,104,708 464,423 0 80% 20% 0 0 21,981,033 2,588,098 2 Aug-07 21,981,033 2,588,098 24,569,131 327,487 0 80% 20% 0 0 21,981,033 2,915,585 2 Sep-07 21,981,033 2,915,585 24,896,618 247,055 436,853 80% 20% 349,482 87,371 21,631,551 3,075,269 2 Oct-07 21,631,551 3,075,269 24,706,820 52,133 277,221 80% 20% 221,777 55,444 21,409,774 3,071,958 2 Nov-07 21,409,774 3,071,958 24,481,732 - 558,362 80% 20% 446,690 111,672 20,963,084 2,960,286 2 Dec-07 20,963,084 2,960,286 23,923,370 4,402 805,131 80% 20% 644,105 161,026 20,318,980 2,803,661 Exhibit #3 —Active Injectors and Producers in Sterling Pool 6 Yellow dots indicate Active Pool 6 Wells Exhibit #4 KENAI GAS FIELD GATHERING & PIPELINE COMPRESSION NOMINAL HORSEPOWER RATINGS & OPERATING PARAMETERS AT PEAR DELI1/ERABILIT4 Approximate Thruput at Nominal Horsepower Suction Pressure Discharge Pressure Peak Deliverability Unit Site (Pad) Rating PSIG PSIG MMCFPD 5atum 1 14-e- 1100 50 to 70 235 to 2B0 11 to 12 Saturn 2 14-e 1100 50 to 70 235 to 200 M I to 12 Saturn 3 14-e 1100 60 to 70 235 to 260 11 to 12 IRA 34-31 Ea00 50 to 70 245 to 270 40 to 45 Ifs B 34-31 5000 50 to 70 245 to 270 40 to 45 Centaur 1 14-6 4500 225 to 250 725 to 750 44 to 50 Centaua 2 14-e 4500 225 to 250 725 to 750 :36 to 40 Note 1: Kenai Gas Feld low pressure system peak deliverability thru compression system is - 70 to 75 MMCFO. Note 2: Kenai Gas Field compression operating parameters and peak deliverability estimate as of - November, 2006. Comments All 3 Saturn® online at peak deliverability All 3 Saturns online at peak deliverability All 3 Saturns online at peak deliverabiiity. Either IRA or IRS online at peak deliverability. Either IRA or IRS online at peak deliverabilaty. Bath Centaurs aniine at peak deiiverabilily. Bath Centaurs aniine at peak delivembilily. 10 Sterling 6 Gas Pool Hearing Subject: Sterling 6 Gas Pool Hearing From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Wed, 18 Apr 2007 11:08:49 -0800 To: Arthur C Saltmarsh <art saltmarsh@admin.state.ak.us> Art, I received a call today from Marilyn Keener, who owns property near the Sterling 6 Gas Pool. She will be referring to her letter dated 2/12/06 and will submitting written comments by 4/24/07. I told her she could e-mail those to me and I would distribute her comments. I have given her my e-mail address. Jody Jody Colombie <jody colombie(a,admin.state. ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration 1 PHONE "�nC=�:3AGE PHOIV E GALL DATE 1 of 1 4/18/2007 11:09 AM "A 6rpvv 77L" Q� ey� CP'HONE CALL FOR.-- - t1 —TIME• Z �-y- TIRETUR PHo,vEo rAx /J EU® MUei�E o1OUR CALL PHC7NC— — 4REA CODE N UMEfER EXTENSION rA WILL CAL_ SCllss �I �` '7 AGAIN CAME TO SEE YOU -- WANTS O SEE YOU ._ 5. Fop iv2 a Ala3ka. Coil .and Gas Conservation Commission 333 V�'esr 7`n Avenue, Suite 100 Ain lcho;•aae, AK 99501-3539 Phone: (907) 279-1433 Fax: (907) 276-7542 Fax Transmission The information contained in this fax is confidential and/or privileged. This fax is intended to be reviewed initially by only the individual named below. If the reader of this transmittal page is not the intended recipient or a representative of the intended recipient, you are hereby notified that any review, dissemination or copying of this fax or the information contained herein is prohibited. if you have received this fax in error, please immediately notify the sander by telephone and return this fax to the sender at the above address. Thank you. T7 From. max #: S- 3o P-6 Date: ,��o?O-D-;P • Phone #* � �.3—��?�O Pages (including Subject: i`-'r�-over sheet): Message: you do rot receive all t1la papas or `"ays any probiemS ` lt-, .Ills tax. pleasa call for assistance a (SOT) 793-9223. r.)'., i,�1 .,., J�i �.�J�lJ� _',3 93 lfH,4 2, RE, DOUBT INDUSTRIES, ENC. REDOUBT PLUMBING & HEATING PO 13OX 1290 KENAI, AK 99611 (907) 283 - 9661 Fax (907) 283 - 6106 Fax Cover Sheet DATE: March 16, 2007 TO: Alaska Oil & Gas Conservation Commission PHONE: ATTN: FAX: (907) 276-1542 FROM: REDOUBT INDUSTRIES, INC. PHONE: (907) 283 .3285 David N. Yra ui FAX: (907) 283 6106 114 CC: Number of pages including cover sheet: 2 Message: Please see attached. �PWO'NE CALL HUNR - �D � 5 HD HNED H CALL — ��f�L)NE �_ coop Nu oEH x 'rasio ASE CAL: - WILL CALL (,Af✓fETC SEEP WANTS TO SEE 'Jp5. ruH.,� Dave and glary Jean Yragui 8847 Kenai Spur I-fighway Kenai, Alaska 99611 Phone (907) 283-3285 Fax; (907) 283- 6106 Via fax (907) 276-7542 Original Via U-S Mail March 16, 2007 Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Ste, 100 Anchorage, Alaska 99501 RE: Request for Hearin Kenai Gas Field, Sterling Pool 6 Application to amend 51O-7 to allow additional gas storage injectors in the Sterling Pool 6. Dear Sir / Madmn: l am writing to request the Alaska Oil & Gas Commission conv.ne a hearing on the proposal referenced above. 1 am an ownererty in the Marathon onate arca of the, probable impact of this opere Kenai Gas Field ation have been unable to by Y on the quiet enjoyment of my property. More speciFically, I would like a hearing to get information on "he following issues: I. Location of Injection Unit: I have not received any information on the proximity of the injection compressors near my family homestead, I want to know what, if any, meastues are being taken by Marathon to mitigate the noise being; introduced by injection compressors. In particular, I would like to know the decibel level of the compressors and the anticipated frequency or use 2. Adverse Consequences from Injection; I have received no information on potential impacts to our aquifer in the area. I would appreciate getting information on what assurances Marathon has given to protect our aquifer fi-om contamination or damage to confining water zones in the area where gas is to be injected. I have lived to the area for many years. I do not think Marathon should bcallowed ts inject gas with out being re u_ire3�to mitt ate adverse impacts on the surface (noise, aquifers (dr' g and farming water sources} in the area. Thank you in advance far your consider ton of my request. •' fully Submitted;' Dave 5 i� 3. s 't S Pa.nter °60`30'OC 98' N 151'05'38.58* Vv ele 99 it Gaede h t . 2CJ' Na..PG ti: t 2007 Europa Techti', ,ies image,!, 2CO7 Teri,Weit cs image 2C0' GiVa;Globe JIt P.�T:In9 4 ii : I eva !0 �,7 r*,i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: John K. Norman, Chairman Daniel T. Seamount Cathy Foerster In the Matter of the Application ) to Amend Rule 1, Storage Injection ) Order No. 7, Kenai Gas Field, ) Sterling Pool 6 by ) MARATHON OIL COMPANY ) ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska April 24, 2007 9:00 o'clock a.m. VOLUME I'. PUBLIC HEARING BEFORE: John K. Norman, Chairman Daniel T. Seamount, Commissioner R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 1 2 3 4 5 6 7 8'' 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 TABLE OF CONTENTS Opening remarks by Chairman Norman Testimony by Lyndon Ibele Testimony by Keith Wiles R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 03 08 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P R O C E E D I N G S Tape 1 0050 (On record - 9:00 a.m.) CHAIRMAN NORMAN: I'm going to call the meeting to order. My name is John Norman. I'm the Chair of the Alaska Oil and Gas Conversation Commission. To my immediate right is Commissioner Dan Seamount. Commissioner Cathy Foerster has had another commitment this morning, but we do have a quorum present and will be proceeding with the meeting. This is a hearing being held on the morning of Tuesday, April 24th, 2007 at the time of 9:00 o'clock a.m. Alaska standard time at the Commission's offices at 333 West Seventh Avenue, Suite 100, Anchorage, Alaska. This hearing will be recorded by R & R Courts Reporters. Persons interested in obtaining a transcript following the hearing may see either the Commission's special assistant Jody Colombie or contact R & R Court Reporting. The Commission complies fully with the provisions of the Americans with Disabilities Act. Accordingly if there are any persons here or on the line that might require a special accommodation in order to participa-:e in the meeting let us know and we'll do our very best to pry to accommodate you. I want to remind everyone, those here who will be testifying to speak into the microphones in front of you. & R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 There are two microphones, one is for the purpose of preparation of the court reporting and the other is for amplification so that others in the room can hear you, so it is necessary to speak into both microphones. The purpose of this hearing is to consider a request by Marathon Oil received by the Commission on February 20th, 2007 seeking an amendment to Storage Injection Order 7 to authorize the use of additional wells for gas storage injection in the Sterling Pool 6 of the Kenai Gas Field. This is all in accordance with Chapter 20 of the Alaska Administrative Code Section 25.252 and 20 AAC 25.460. In addition there are certain corrections to the original order that the Commission proposes to do that will effect the description of the proposed storage area. The effected storage area is comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4, 5, 6, 7, 8, 9, 17 and 18 of Township 4, Range 11 west and Sections 1, 2 and 13 Township 4, Range 12 west in Sections 20, 28, 29, 30, 31, 32 and 33 of Township 5 north, Range 11 west all within the Seward Meridian Alaska. Notice of this hearing was initially published on February 26th, 2007 in the Anchorage Daily News and the Peninsula Clarion on March 1, 2007. Subsequently the hearing was vacated and then renoticed for hearing and republished in both newspapers on March 16th, 2007. Any persons desiring to see a R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 copy of the notice or affidavit of publication may see the Commission special assistant Jody Columbie and we will provide one to you. We will be seeking sworn testimony and also I will ask you -- those of you who are testifying I'll instruct you on identifying yourselves and your qualifications as we proceed. We did receive a request for this hearing to be held and that hearing was filed by Dave and Mary Jeanne Yragui whose address is P. O. Box 1290, Kenai, Alaska and I want to touch on a couple of concerns they have at the outset so that, perhaps, the applicant can address them to the extent you're able to do SO. I think that will expedite matters rather than posing these at the end. The Yragui's have asked specifically that this hearing seek to determine the following information, location of the injection unit. The Yragui's say that they have not received information on the proximity of the injection compressors near their home. They would like to know what, if any, measures are being taken by the applicant to mitigate noise being introduced by injection compressors. In particular they would like to know the decibel level of the compressors and the anticipated frequency of use. A second question they posed relates to any consequences from the injection. They state we have received no information on potential impacts to the aquifer in our area. We would R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 appreciate information on what assurances Marathon has given to protect our aquifer from contamination or damage to confining water zones in the area where the gas is to be injected. Another party which is submitting a protest has done so initially by letter to DNR, by phone calls and subsequent contacts to the Commission. That protester has been identified as Tim and Marilyn Keener, K-e-e-n-e-r. And their message is that they are opposed to this injection issue. They are unable to respond further at this time because of family emergency. The Keener's likewise, they have in the file here previously a letter that appears additionally to be seeking information and assurances of no impact on water supply, noise and other aspects of operation of an injection well. So I mention those both now and to the extent you can do so we would appreciate it if you would have those concerns in mind and we'd like to have some discussion of them on the record. We'll now proceed to take testimony from the applicant and who will be presenting this? Okay. Would you raise your right hand, please? (Oath Administered) MR. IBELE: I do. CHAIRMAN NORMAN: Please state your full name? MR. IBELE: Lyndon Ibele. CHAIRMAN NORMAN: And your position? R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. IBELE: The production coordinator Marathon Oil Company. CHAIRMAN NORMAN: And will you be speaking as an expert witness in this matter? MR. IBELE: Yes, sir. CHAIRMAN NORMAN: Then would you, please, state your background and professional qualifications? MR. IBELE: I've been employed by Marathon Oil Company for just short of 27 years, the last 16 here in Alaska. Have worked in drilling, reservoir engineering, operations all phases of our activities here in Alaska. I'm a registered professional engineer in the State of Alaska. CHAIRMAN NORMAN: Commissioner Seamount, any questions concerning qualifications? COMMISSIONER SEAMOUNT: I would move that we qualify Mr. Ibele as an expert witness, but I would like to make a statement first and I'm not sure if it's true or not, but I'm pretty sure that on some of the issues that the surface owners have brought up the AOGCC does not have authority over. One of them is compressor noise, is that correct? I'm trying to think of a regulation or where in the statute we would have authority on that issue. CHAIRMAN NORMAN: That is correct, we don't have authority to regulate compressor noise. COMMISSIONER SEAMOUNT: But we do have authority over R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 7 1 2 3 4 5 6 7 8' 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1 24 25 groundwater protection. CHAIRMAN NORMAN: We do have authority over groundwater and we do have authority to a certain extent to control the location of injection wells so indirectly, I think, that we do have..... COMMISSIONER SEAMOUNT: Okay. CHAIRMAN NORMAN: .....some influence we can exert over this. And I would add the Commission exists to serve as a body that represents all of the Alaskans so to the extent individual Alaskans have a concern it's the desire of the Commission to see that they're resolved to the maximum extent possible. Mr. Ibele, please proceed now. MR. IBELE: Yes, sir. I just wanted to start off by saying that, you know, Marathon recognizes its responsibility to ensure public safety, protection of the environment and conservation of the resource. We know that that's the main charges that the AOGCC has been delegated to protect for Alaskans, also. You have before you a short handout. It's just eight or 10 power point slides that I put together at the request of Art Saltmarsh to explain a little bit more about what we're doing here, you know. First of all, what is -- specifically are we requesting. Well, we filed a letter on February 19th, 2007 with the Commission asking for the storage injection order to be R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 1 2 3 4 5 6 7' 81 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 modified to allow additional wells to be used for gas injection purposes in the Sterling Pool 6 formation. It was, I guess, our intent or our vision all along that more than one injection well may be needed in this project. we anticipated it from day one and we think it was unfortunate that the storage injection order ended up being written in such a manner that allowed us only to one injection well because we really envisioned that there would be more than one at some point in the future and the time really is now. We did file a sundry request almost contemporaneously with our letter to the Commission asking for KBU well 23-x6 to be permitted for dual purposes, both an injector and producing well. As background the Storage Injection Order 7 is an existing storage injection order. It was subject to a thorough review and public notice. This project also required ACMP review and ADNR best interest finding before it was issued so there was lots of opportunity for the public to be involved in this process. This gas storage operations actually began on May 8th, 2006 under the existing permits. Why is this being requested right now? First of all, as I mentioned, the storage injection order as written only allows for one injection well and at this point in time we feel that we need some increased injection capacity. And because this is such a lengthy process we feel it's prudent and essential that R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we have redundant injection capability and a more streamlined agency approval process in case additional wells are needed in the future. As a matter-of-fact, the situation we're in right now is that we will have an opportunity here in the next few weeks to -- because of the way the market situation is, because of the summertime demands that we'll have opportunity to inject more gas than what we have capacity to inject into the one existing well, 31 7X. And we'd also like to have this second well permitted in case there was ever an event of a mechanical failure of some sort in 31 7X that would leave us without the ability to inject any gas especially if it would take us two to three months to get a permit for a second well, so having a second well now is just a backup, a safety issue as well as something we need for additional injection rate. What are the impacts of the requested amendments to SIO 7? Basically it's none. There are no incremental surface area disturbances. There are no pipelines, gathering lines or compressions that is needed other than what is already in place and in use. Any other additional wells for injection in the future must be reviewed and approved by the AOGCC. And public safety, the environment -- protection of the environment and conservation of the resource are protected by the existing terms in the storage injection order. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 IM 1 2 3 4 5 6 7 8 9 10 11 12 III 13 14 15 16 17 18 19 20 21 22 23 24 25 We've got a small map of the Kenai Gas Field which is also shown in a larger view on the wall here that details. The red outline on the map is the Kenai Gas Field Sterling boundary. The green area in the inner section is the Pool 6 gas storage area that was approved by the AOGCC and ADNR. The ownership of the interval in the Pool 6 in which the storage operations are taking place is approximately 55 percent Marathon's interval, State of Alaska has approximately 35 percent and the remaining 10 percent is private interests. The Sterling Pool 6 is at a depth of approximately 4,500 feet, that's the interval at which we're injecting and withdrawing gas. The original reservoir pressure there was 2,500 psi, this is back when it was discovered in the late 1950s. The reservoir pressure currently is about 140 psi and we're limited to a maximum of 300 psi reservoir pressure under the existing storage injection order, so it's almost -- well, currently it's only about five percent of what the original reservoir pressure is and the maximum pressure we're permitted to have in this permit is only 10 percent of what the original pressure is so confinement is reasonably sure just by the fact that we're operating at such low pressures. The estimated ultimate recovery from the reservoir is about 552 billion cubic feet of gas and that was as per agreement in our lease with the ADNR. The cumulative gas R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 injected for storage over this past year was about 1.6 BCF. The recoverable gas in place in the reservoir right now is about 23.4 BCF of which 22.3 BCF is remaining native gas and about 1.1 BCF is stored gas at this time. There was additionally a 50 BCF limitation on the total gas in the ground at any point in time in our lease with the DNR and that equates roughly with the 300 psi limit that the AOGCC imposed on us also. Currently in the Sterling Pool 6 there are 10 active producing wells as listed on the exhibit. There is one well that is maintained as a pressure monitoring well. There is one permitted injector/producer KU 31 7X. There are three inactive wells and there's one water injection well which is really insignificant in the Pool 6 itself. It's at edge of structure and the water volumes are very low compared to the capacity of the reservoir. It does not effect the storage operations at all. And, again, what we're asking for is indicated there that 23-x6, which is an existing producing well in Pool 6, we are working over to convert it to injection status. It will be a dual purpose injection and producing well. Overview injection operations, injection occurs in period of excess supply and low market demands. Withdrawal occurs in periods of high demand. This project has a 10 year primary lease term with the Alaska Department of Natural Resources. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 12 1 2 3 4 5 6 7' 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The ultimate life of the project and the need for any additional wells and/or facilities will be driven by our economic analysis and contractual requirements in the future, but any changes to the project would require a number of different agency and leaseholder approvals. So any questions on this portion of the testimony at this point? CHAIRMAN NORMAN: If you could help me remember again, I -- we visited this subject a year ago, but on the ownership where -- the lease storage ownership, the 54.4 percent held by Marathon is of the entire fee interest or what..... MR. WILES: I can probably best speak to that. Do you need to swear me in..... CHAIRMAN NORMAN: No, that's fine, if you'll be addressing it that will be just fine. MR. WILES: Okay. CHAIRMAN NORMAN: Commissioner Seamount, any questions? COMMISSIONER SEAMOUNT: Which section is this injector going to -- proposed injector going to be located? MR. IBELE: It is on the map here -- I don't know, wait a second. MR. WILES: Section 7 of 411..... MR. IBELE: Section 7. Yeah, the surface is actually this pad 14-6. This is where all of the facilities involved with our gas storage operation are taking place right now. That's R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 where our compression, dehydration and the other facilities that were listed in the original permits were -- are located. The -- I'm sorry, 23-x6 is northern (ph) location here, it's in Section 6. MR. WILES: Okay. MR. IBELE: Okay. This is the wellbore path of 23-x6. There's a circle drawn here that represents a quarter mile radius of where the penetration occurs through the Sterling in that particular well. This other circle you seen drawn on this map is the 31-7x that's the existing injection well and it's in Section 7 actually, so the..... COMMISSIONER SEAMOUNT: Okay. But -- but..... MR. IBELE: .....proposed injector is in Section 6, the existing is in Section 7, the surface location on both are in Section 6. COMMISSIONER SEAMOUNT: Okay. Now, the compressor to eject, would that be a different compressor -- compressor from the one that puts the gas into the pipeline? MR. IBELE: No, sir. COMMISSIONER SEAMOUNT: It's the same compressor? MR. IBELE: It's the same compressor. COMMISSIONER SEAMOUNT: Okay. And does that compressor run all the time? MR. IBELE: Pretty much, yes, sir. COMMISSIONER SEAMOUNT: Okay. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. IBELE: The pipeline pressures run -- well, Enstar's system runs 500 psi or more. KNPL to -- is the other pipeline that we tie into from Kenai Gas Field and it runs about 700 psi so those compressors run basically all the time. COMMISSIONER SEAMOUNT: Okay, thank you. MR. IBELE: Okay, thank you. COMMISSIONER SEAMOUNT: I have no further questions. MR. IBELE: I'd like to -- I'm sorry, go ahead. CHAIRMAN NORMAN: If I could just ask a follow-up question and this might be addressed later or you may not know the answer, but the landowners that have communicated to the AOGCC apparently are not aware of what is portrayed in slide 4 which is that there will be -- as I'm reading your slide 4...... MR. IBELE: Um -hum. CHAIRMAN NORMAN: .....there's virtually no additional surface impact. Why is it that these landowners don't understand that? Why is Marathon not been able to communicate that to them? MR. IBELE: Well, as a matter-of-fact, I called Mr. Yragui the very day that Art Saltmarsh sent me a copy of the letter that was submitted to the AOGCC. And it was a day or two after that until we actually made contact with each other and spoke directly on the telephone. And I have Mr. Yragui's letter in front of me and I was pretty disturbed when I got it because of the comment he made R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that he's been unable to get any information from Marathon. Well, as it turns out he hadn't talked to anybody from Marathon or -- anyway. So I had a lengthy conversation with Mr. Yragui that day and explained to him what we were doing, the fact that this was an existing project, that there were no additional incremental impacts. Mr. Yragui owns land up in this northern part of the field and he told me that he was out running a bulldozer on his property one day and someone came up and read his the riot act about there's a pipeline here, you can't be doing this and you've got to get permission from us and he thought it was Marathon, but as a matter-of-fact as you see on this map this is the Enstar pipeline and it was an employee of Enstar that he had spoken to, not Marathon. He was concerned about the compressors that were due west of his property which is an Enstar compressor site, not a Marathon compressor site. So I had a long conversation with Mr. Yragui and explained to him that those facilities that he was concerned about weren't even Marathon facilities, had nothing to do with our gas storage project. That where our operations are and where our wells are, are approximately two miles south of where his property is. Explained to him that the depth of this reservoir was 4,500 feet. That it was well below where any of the surface R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 waters are. That the pressures that we're operating this storage project at are less -- are currently less than 10 percent of what the original pressure of the reservoir is. And after explaining these things to him his comment to me was well, I'm completely satisfied. Would you like me to call the AOGCC and tell 'em we don't need a hearing and I said yes, that would be fine if you'd do that. So whether or not he actually followed through and did, I don't know, that's nothing I have control over, but again, my personal conversation with Mr. Yragui he indicated to me that he was fully satisfied with the answers he'd been given and wasn't concerned any more. And I think it's just a matter of that, you know, when we're -- when we're able to contact people and explain what's going on the concerns are mitigated. CHAIRMAN NORMAN: About when did this conversation take place? His letter to us is dated March 16th, 2007, approximately when did you..... MR. IBELE: It would have been approximately the 18th or 20th. As a matter-of-fact I called Art on the day that -- that I had that conversation with Mr. Yragui. Do you recall that -- yeah. CHAIRMAN NORMAN: Art being Mr. -- Art Saltmarsh..... MR. IBELE: Art, Mr. Saltmarsh with the AOGCC..... CHAIRMAN NORMAN: .....of the AOGCC. Very good. Well, thank you for that answer and you may proceed. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. IBELE: Okay. And, I guess, that's actually what I had planned to talk about next is my conversation with Mr. Yragui because you've asked those specific questions as we started this hearing. The other thing that, you know, Mr. Yragui points out in his letter is his concern about the noise and, again, as I explained to him that -- that well, you know, are you hearing anything today and he said no. And I said well, it's been in operation since May of last year, if you're not hearing anything now you're not going to. And he actually did indicate that he had spoken to an individual who is a contract laborer for Marathon Oil Company down in Kenai and had told him the same thing as a matter-of- fact and the individual he spoke to works in and around some of our compressor sites and explained to Mr. Yragui the fact that our buildings all have sound dampening in them to try to minimize the noise and the decibels levels that are heard outside the buildings and that, you know, we do go to great lengths to try to minimize impacts not only to environment downhole surface, but also to the noise that's heard around. And he was, again, completely satisfied with the information that had been provided to him based on his comments to me. So that's all I had. I know that Keith has had some contact with the Keeners in the past and, perhaps, it would be more appropriate for him to address some of the content of R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I their letter. CHAIRMAN NORMAN: Okay. Mr. Wiles, if you would -- you will be testifying now? MR. WILES: Yes, sir. CHAIRMAN NORMAN: Would you raise your hand, please? (Oath Administered) MR. WILES: I do. CHAIRMAN NORMAN: Please state your name? MR. WILES: Keith Wiles. CHAIRMAN NORMAN: And your affiliation and title? MR. WILES: I'm the senior land professional for Marathon Oil Company with the Alaska Asset Team. CHAIRMAN NORMAN: And please state your background or professional qualifications? MR. WILES: I have worked as a land professional for approximately 11 years of which I've worked on and off in Alaska for approximately six of those years and full time in Alaska for about the last year. CHAIRMAN NORMAN: Very well, please proceed. MR. WILES: Okay. CHAIRMAN NORMAN: Or, let me ask Commissioner Seamount if he has any questions on it? COMMISSIONER SEAMOUNT: I have no questions. CHAIRMAN NORMAN: All right. We accept your qualifications. Thank you. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 19 1 2 3 4 5'' 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. WILES: Thank you. Briefly as Mr. Ibele pointed out to start with the Yraguis, the issues that they brought up, when I spoke with Mr. Yragui one of his primary concerns was that he had regarded this as investment property and was worried that by us putting facilities that he considered near by that we would, perhaps, in some way impair his ability to make a return on his investment. And as I pointed out when I spoke to him, and I believe I spoke to him approximately a half day to a day before Lyndon did, you know, there are approximately two miles between our facilities and his property. He also, as Lyndon pointed out or as one of your pointed out, brought up the problem -- or not the problem, but the concern that we might have an impact on his aquifer. And I believe we have a little indirect evidence that this is not the case as we also had a Mr. Kaiser (ph) who lives over in approximately this area who at the same time called us and brought up the issue that he didn't think that gas storage directly was making the impact, but he thought that Marathon was making an impact on his water well. And we hired a third party, environmental -- I guess the word being environmental assessment firm to take samples and sent it to a lab in Anchorage and they found approximately the last week of March that Marathon had no impact on this man's water. His name is Mr. Stewart Kaiser, is the property owner. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/fax 274-8982 ANCHORAGE, ALASKA 99501 20 1 2I' 31 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And his well produces, I believe, it's from approximately a depth of 120 feet which I think is approximately typical of that area. And let's see the other owner that we were discussing was Ms. Keener or Marilyn Keener and I'm not sure exactly what her objection on this particular application is because from what you read she essentially said she objects but that she has a family emergency and can't go into the reasons why, is that more -or -less the objection? CHAIRMAN NORMAN: Yes, I think that's probably a fair characterization and I will -- I'll read specifically, they are opposed to the Kenai injection issue. They are unable to send a fax because of family emergency. So what -- that's the only communication we've had from the Keeners. MR. WILES: Okay. Well, given that there's no specific objection there I find it somewhat difficult to address what she may be objecting to this time around. I know in the past her objections have ranged from fairly specific objections such as her belief that we may be impacting water wells which, as I said, I think we have fairly good evidence that we're not impacting water wells, to fairly non-specific objections such as in our 50 year presence, the presence of wildlife has declined and things of that nature that I -- I think -- for one thing I think they're so non-specific as to be difficult to address, but I'm not even sure that they're really within the R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 venue of the AOGCC. Is there anything else that -- anything specific that you would like me to address on behalf of the Keener's complaint? CHAIRMAN NORMAN: Only if you would, perhaps, indicate again from my benefit specifically where the Keener's property is with reference to the injection wells? MR. WILES: The Keener's property is approximately in that area..... CHAIRMAN NORMAN: Um -hum. MR. WILES: .....and the injection well -- the surface facility is that pad right there. The currently existing injection well injects into the interval located right there. And these circles represent a one -quarter mile radius around the..... CHAIRMAN NORMAN: So that's about almost roughly a mile's distance, is that right, a mile..... MR. WILES: Correct. And if you look at this surface pad right here, this is our -- what we call the office pad, it's 31 -- I'm sorry, the pad number is 34-31. This is another of our pads. And once again I'm speculating, I really don't know what exactly is in Ms. Keener's mind, but I honestly think a lot of her objections are that she just doesn't enjoy living near the pad, but our ownership and occupancy of this land predates her ownership and occupancy of the land so it was there when she moved there is essentially, you know, what I can say to that. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Does that answer your questions? CHAIRMAN NORMAN: Yes. Do you have further testimony? MR. WILES: I think the only further thing that I would add is just regarding what Lyndon said in slide 5 on the ownership. Just to clarify that Marathon does own outright in fee approximately 55 percent. The interest that's shown as owned by the State of Alaska, the 34.7 percent, we also have that under lease so we own or control through lease currently approximately 88 or 89 percent of the interval space. CHAIRMAN NORMAN: This is more a matter of curiosity, but the fee ownership is a little bit unusual to see. Was this part of what was acquired from Cook Inlet Region or how does that..... MR. WILES: Yes, sir. CHAIRMAN NORMAN: Okay. MR. WILES: We did acquire the large fee interest that we have -- we also have a small amount of fee interest and when I say small I'm talking in the five to 10 acre range that we acquired from just homestead fee owners out there for various reasons, but the big chunk of fee acres was acquired from CIRI. CHAIRMAN NORMAN: And the acquisition from CIRI, was that of the complete fee or just down to particular depths? MR. WILES: It was the subsurface. We acquired the oil and gas rights, I believe, down through certain depths, but we also at the time it was known that some day we would have R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 23 1 2 3 4 5 6 7 8 9i 10 11 12 13 14 15 16 subsurface injection and we did acquire specifically the subsurface rights in addition to the fee minerals. I'm trying to think of a way to say this, we acquired the two separately. There's a deed that conveys the minerals and subsurface and then there's a second deed that covers the injection rights. CHAIRMAN NORMAN: Okay. Injection rights as opposed to the full fee of the subsurface? The second deed is a limited deed that conveys to you injection rights down to certain..... MR. WILES: Well, I call it the injection rights. Actually subsurface rights,..... MR. IBELE: Interval rights..... MR. WILES: .....interval rights I should have said, I misspoke. 17 11 year? 18 19 20 21 22 23 24 25 CHAIRMAN NORMAN: Okay, understand. COMMISSIONER SEAMOUNT: How many days did you inject last MR. IBELE: I'd be estimating, but the injection started, like I said, the 8th of May and ran pretty much continuously through August..... COMMISSIONER SEAMOUNT: Okay. MR. IBELE: .....and then there was a few days subsequent to that, you know, just again when -- depending on market demand and gas available that we injected through the wintertime and then we had some volumes again just this past R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 month we started injecting so I -- I don't know what that total up to. May, June, July, August, very -- probably 150 days in this past -- in this first one year. COMMISSIONER SEAMOUNT: Did you encounter any surprises over the last year? MR. IBELE: No, sir. We just finished a round of static bottom hole pressures of our pool 6 wells that will be included in subsequent reports to the AOGCC and ADNR and the injection pressures relative to the volumes that have been injected and withdrawn were right in line with what we expected to see. The only thing that -- I don't want to say a surprise, but the only thing that's not quite lived up to expectation is the injectivity rate in the existing well 31 7X is just a little bit lower than what we were expecting to see and that (indiscernible) is one of the reasons why we want to permit a second well for injection capacity. COMMISSIONER SEAMOUNT: Okay. Thank you, Mr. Ibele. CHAIRMAN NORMAN: Mr. Wiles, I'm -- let's see, I'm looking at your affidavit of notification again to all parties. It references an attached Exhibit A and in our file there's another document -- is a letter from Marathon separating it, but this is a -- looks like about a nine page list of owners. And I wonder if you could confirm for me that that is the Exhibit A, that's the list of parties to which notice was mailed? R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/fax 274-8982 ANCHORAGE, ALASKA 99501 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. WILES: Yes, sir, that's the list of all the surface owners who own surface rights over the pool. There was some confusion -- in the part it's my understanding that the Commission's interpretation has been that you notify everyone within a quarter mile of the injector which -- the injection perforation which would include in this well only -- only Marathon as a mineral owner or leasehold owner and as far as a surface owner would include Salamatof Native Corporation and the ADNR. After some discussions with Mr. Saltmarsh and Ms. Jane Williamson we determined it would be mutual ben- -- mutually beneficial to go ahead, although the regulations aren't precisely clear and to go ahead and notify all of the surface owners who own over the pool 6 boundary and the long list of -- I believe it's approximately 140 names are the owners who own surface over the entire boundary and they were the ones who were notified of today's meeting. CHAIRMAN NORMAN: Okay. MR. IBELE: Was that what you were asking? CHAIRMAN NORMAN: Yes. MR. IBELE: Okay. CHAIRMAN NORMAN: Yes, that was it. Any further questions, Commissioner Seamount? COMMISSIONER SEAMOUNT: No, the only thing I'm thinking is I think the quarter mile rule is -- I mean, that thing's got to R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 W 1 2, 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 be more flexible because when you're talking about injecting a lot of gas could impact people a lot further away than a quarter mile. In fact people down south have been killed from accidents from storage. Now, granted I know this geology is different and the risk is much, much lower here than what happened down south, but I think we have to be a lot more careful than just worrying about a quarter mile and you guys were careful. You notified everybody along the pool boundary, you know, everybody that had anything to do with the area of the pool boundaries. That's all I had to say. CHAIRMAN NORMAN: Did you have anything further? MR. IBELE: I don't. No, sir, I don't. CHAIRMAN NORMAN: Then before we excuse you I'd like to ask, perhaps, either one of you, probably you, Mr. Ibele, to summarize two points for the record. Number one the assurances that the injected gas will remain where injected, that's point one. I'd like you what you're relying upon for that. You touched on it before, pressures and (indiscernible). And the second point is the assurances and steps that are being taken to make sure that fresh water supplies are not impacted, those two concerns. MR. IBELE: Okay. With regard to the first, the injection rates and pressures for 31 7X are essentially continuously monitored through our SCADA system and data capture. Reservoir R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 engineers in Houston review that information almost daily as far as looking at cumulative injection volumes versus the pressures in the reservoir. We have the dedicated monitoring well that we have a continuous surface readout of pressures and so we know within one to two psi pretty much what the pressure is in that reservoir at all times. I want to assure you that the last thing we want to do is put gas into the ground that we can't get back out. That's just like throwing away money so we're very concerned and cautious about making sure that we know that we have adequate confinement in the reservoir. We have a 40 year history of pressure versus -- I should say pressure performance on that reservoir that makes us feel very confident that it is a confined reservoir. The information that we have from this first year of injection withdrawals is performing very closely to what we expected it to so there are no indications at all at this time that we aren't seeing 100 percent confinement. There's a requirement in both the AOGCC storage injection order and in our leases with the DNR to perform an annual report that includes all the pressure information and the conclusions from that, that demonstrate continued confinement and that report was submitted to the AOGCC the very first of -- the early part of March so we do have that. Like I said, not only our own daily observances, but an annual report R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 requirement to the agencies. Additionally there is a monthly spreadsheet of an injection withdrawal volumes that must be submitted to the AOGCC and to the various leaseholders so those folks see what's happening at all times basically. Your second question was about confinement as far as -- I should say, protection of the fresh water. Again, our wells are monitored almost around the clock as far as pressure, producing pressures, injection pressures and on top of that we have annulus -- the casing annulus on all these well that would be the very first evidence of any corrosion or downhole problems by monitoring the pressures on the annulus of the wells and that's done routinely. It's reported routinely. And -- like I say, and the AOGCC permits and annual requirements make us -- or I should say, as part of the annual requirements we perform annual, mechanical integrity tests on all the injection wells and we watch all the offset producers as well. So there is a continuous monitoring program in place to make sure that we have confinement and that we're not seeing any communication of gas that would indicate any escape or any potential, like I say, communication to anybody's fresh water. Again, I just want to point out that the pressure of the project right now is around 140 psi. This is the reservoir pressure in the well. A maximum of 300 is permitted and, again, that's less than 10 percent of what the original R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reservoir was so we're operating at extremely low pressures here which, again, mitigates the potential for any problems occurring. And I did mention corrosion here a minute ago, but there -- there's -- this is sweet gas. It's 98, 99 percent methane. There is almost nothing in the way of contaminants in the gas to even lend itself to corrosion so it's just not a problem we have with our downhole facilities. CHAIRMAN NORMAN: How does the composition of the injected gas compare with the native gas of the reservoir? MR. IBELE: It's almost identical. That was actually a part of the original injection permit. The sources of injected gas right now come from other pools in the Kenai Gas Field. The Sterling pools, 3, 4, 5 and the Beluga and Tyonek pools and also there's a small amount of gas that come from the Cannery Loop Unit just by virtue of the fact that it is commingled through the common compression facilities of the Kenai Gas Field, so all of the injected gas is 98, 99 percent methane just about identical to what the native gas in the reservoir was. CHAIRMAN NORMAN: You mentioned monitoring well, could you indicate on the map -- and for the record there are two maps on the wall. One depicting the surface and the other subsurface of the gas storage area. Was there a specific well, monitoring well? R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. IBELE: The monitoring well is well 34 31 and I don't even know where it's at on the map here. In fact, I might defer that to Houston. Clyde or Dani, can you help me? Which pad is well 34 31....... MR. WILES: It's the pad right here (ph)..... MR. IBELE: .....I'm sorry, it's at the office pad. MR. WILES: I don't know which well. MR. IBELE: Do we still have Houston folks on the phone? They're probably on mute. CHAIRMAN NORMAN: If..... MS. ENOS: If you can wait one minute I can look on a map and I can steer you to it. It's well 34 31, is that what you're looking for? MR. IBELE: Correct. MS. ENOS: That's sitting right on office pad. MR. IBELE: Oh, okay, yes, it would be on this pad. It's a -- it was probably the first well built on that pad and so it's a straight well so you don't see a well pad as shown there. It -- (indiscernible - away from microphone)..... CHAIRMAN NORMAN: Sure. And that's a dedicated monitoring well, dedicated strictly to monitoring? MR. IBELE: Correct. CHAIRMAN NORMAN: And how is that monitoring carried out? How often and what mechanisms are used to conduct monitoring? MR. IBELE: Well, again, there's a pressure sensor on the R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 well head at the surface there so we have pretty much a continuous recording of the pressure at the surface. There is a known fluid level in the well so we're able to back calculate to what that bottom hole pressure is in the reservoir at all times. And then we go in the well once or twice a year with instruments to record the pressure downhole at the location of the perforations, too, so..... CHAIRMAN NORMAN: And just to help my understanding again though, the pressures in the monitoring well are monitored how often? MR. IBELE: At the surface it's continuously. Downhole -- CHAIRMAN NORMAN: And how..... MR. IBELE: .....we -- we use the downhole measurement to calibrate or double check our surface measurement and that's done -- well, I don't know if it's once or twice a year at this point in time. CHAIRMAN NORMAN: And when you say continuously, how is it continuous,..... MR. IBELE: It's through a..... CHAIRMAN NORMAN: .....is it truly continuously or is it..... MR. IBELE: .....data acquisition -- SCADA data acquisition that has a sensor at the wellhead and is capture through a computer system to record it..... R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIRMAN NORMAN: So it's not a..... MR. IBELE: .....real time. CHAIRMAN NORMAN: .....manually read gauge at the well that must..... MR. IBELE: No, sir. CHAIRMAN NORMAN: .....be visited, it's -- it's continually monitored? MR. IBELE: Correct. CHAIRMAN NORMAN: Do you know within this area, the storage injection boundary, have you known of any complaints of contamination of fresh water sources by hydrocarbons? MR. WILES: We have had people bring up their belief that fresh water sources were contaminated, but to my knowledge there has not actually been any demonstrated contamination. And the only -- since I've been involved with it the only one we've tested was Mr. Kaiser's well and this was within the last month, month and a half and his well was up in this area and the results of that actually showed that there was no impact from Marathon so that's the only data I really have to go on. CHAIRMAN NORMAN: If you did receive a question from a property owner with a water supply in that area, are you prepared to respond and test that to determine whether there's any basis for the complaint? MR. WILES: I believe we would be willing within reason. R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 You know -- and not that we necessarily have any of these owners in this situation, but you do have some owners in any development like this who will make broad -- broad complaints continuously and we wouldn't be willing to, you know, test their water wells all the time, but I think if someone was near -- near a facility and had a specific complaint that they thought that a well had been contaminated that we would certainly be willing to at least perform the basic level of testing to -- and I know we've done that in the past on the wells. I just -- I don't -- I wasn't around at the time and I don't know specifically whose wells those were or exactly where they were located. CHAIRMAN NORMAN: So, Mr. Wiles, then is it your testimony though that if there were a complaint -- complaint, perhaps, is the wrong word, if there were concern expressed by a property owner Marathon would initially respond and at least do an initial test to determine whether that -- there was basis to that? MR. WILES: Well, we can't commit to do a test for every water well. What I think I'm trying to say is that if we had a reasonable belief that we were somehow impacting it, the reasonable belief being that it was located nearby something that we were doing that we would be willing to perform, you know, the initial level of testing. The basic level to check that, but we're -- we can't commit to testing every well in the R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 area that someone brings up. CHAIRMAN NORMAN: Well, that -- that wasn't my question though is to test every -- well, every well that someone brings up. I mean,..... MR. IBELE: We do respond to the complaints and we try to work with the land owners and talk to them and try to understand what it is that they're concerned about when there are concerns that come up, so ....... CHAIRMAN NORMAN: I mean,..... MR. IBELE: .....and that's the commitment we do have. CHAIRMAN NORMAN: .....it would seem to me that it's just prudent within that area for safety, if nothing else and for protection of groundwater that if someone were to bring to your attention a concern about their fresh water supply that you would respond and test it. MR. IBELE: Yeah, Mr. Norman, I guess I'd like to point out that there are numerous things that impact surface water including a number of junk yards that have been closed up and down along this highway. There's a number of private facilities that would have much more likelihood of impacting peoples' water wells than our operations that are thousands of feet underground. CHAIRMAN NORMAN: But -- yes, and I appreciate that. I do appreciate that, but if the concern was that there might be hydrocarbon/methane coming into a water supply you would R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 respond and test it? MR. IBELE: Yes, sir. CHAIRMAN NORMAN: Okay. Anything, Commissioner Seamount? COMMISSIONER SEAMOUNT: Mr. Ibele, does Marathon ever anticipate wanting to increase the pressure for additional storage? MR. IBELE: That would be a hard question to answer. Obviously -- you know, in near term meaning in the next (ph) number of years no, I don't see that, but, you know the size and scope of this project could be completely a function of what future needs are, what our -- what the demands and supply in Cook Inlet looks like so if you can answer that question, I can answer yours, but I mean, not -- no, at this time I think it would be years, years, years in the future till we were ever to come forth and ask for anything about increasing the pressure above the 300 psi limit that's currently in the SIO. I don't foresee anything at all at this point. COMMISSIONER SEAMOUNT: Okay. I have no further questions. CHAIRMAN NORMAN: Okay. Well, thank you very much for that testimony. If you could plan to remain and we'll see if any other persons are present that have comments..... MR. IBELE: Okay. CHAIRMAN NORMAN: .....and if we would need to recall you I would remind you that you'll remain under Oath till the R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 hearing is completed. I'll ask now, are there any other persons present here or on the telephone that wish to offer relevant testimony? Okay, for the record the Chair neither sees nor hears anyone asking to be recognized to offer additional testimony. With the concurrence of Commissioner Seamount we will take a five minute recess and we will compare our notes and see if we have any further questions. For those of your that are participating in Houston I think, perhaps, if you could just stay on the line we'll try to keep the recess as short as possible and be back to you and then should be able to conclude this fairly quickly. We'll recess for five minutes. (Off record - 9:58 a.m.) (On record - 10:10 a.m.) CHAIRMAN NORMAN: We're back on the record at the hour of 10:10 a.m. on the morning of Tuesday, April 24th. The Commissioners have taken a brief recess and we have no further questions, so before we conclude I'll ask if there are any final comments that the applicant wishes to offer? Mr. Wiles. MR. WILES: Mr. Chairman, with your permission, after Lyndon and I discussed during the break I realized that I think that in your last question before the break regarding testing of contaminated wells that I think I misunderstood the direction of your question. I thought that you were asking if R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 37 1 2 3 41 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we would test every well that there was a general accusation of any sort of contamination. Whereas I think you were actually specifically asking if we would test a well that someone believed that natural gas was leaking into, is that..... CHAIRMAN NORMAN: That's correct. MR. WILES: Okay. And once I discussed that with Lyndon I realized what the tone of the question was. Yes, if someone -- if someone alleged that natural gas was actively leaking in their well we would get people out there to test it as soon as we could get the people there, so..... CHAIRMAN NORMAN: Okay. Thank you for that clarification. MR. WILES: You're welcome. CHAIRMAN NORMAN: Okay, is there anything further? MR. IBELE: No, sir. CHAIRMAN NORMAN: And are there any other persons that have any final comments to make? Okay. Then the Commission will stand adjourned at the hour of 10:12 a.m. (Recessed - 10:12 a.m.) R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 C E R T I F I C A T E UNITED STATES OF AMERICA ) )ss. STATE OF ALASKA ) I, Suzan Kay Olson, Notary Public in and for the State of Alaska, residing at Anchorage, Alaska, and Reporter for R & R Court Reporters, Inc., do hereby certify: THAT the annexed and foregoing Public Hearing In the Matter of the Application to Amend Rule 1, Storage Injection Order No. 7, Kenai Gas Field, Sterling Pool 6 by MARATHON OIL COMPANY, was taken by Suzan Olson on the 24th day of April, 2007, commencing at the hour of 9:00 a.m., at the Alaska Oil and Gas Conservation Commission, Anchorage, Alaska; THAT this Hearing Transcript, as heretofore annexed, is a true and correct transcription of the proceedings taken and transcribed by Suzan Olson; IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this 27th day of April, 2007. Notary blic i d for Aska My Commission Ex res: 08/01/07 R& R C 0 U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Public Hearing Sterling Gas Pool Six Amend SIO 7 April 24, 2007 at 9:00 am NAME — AFFILIATION ADDRESS/PHONE NUMBER TESTIFY (Yes or No) (PLEASE PRINT) Ao&cc 7c(3y 12 32- NO Kenai Gas Storagei._ Storage Injection Order No.7 Request for Amendment April 24, 2007 Lyndon Ibele, PE Marathon Oil Company Production Coordinator What is being requested? • Marathon Oil Company filed request with the AOGCC on February 19, 2007, to allow additional wells to be used for gas injection purposes in the Sterling Pool 6 formation. • Marathon has filed a sundry request for Pool 6 producing well KBU 23-x6 to be permitted for use as a dual purpose injector/producer. Background: • This is an existing Storage Injection Order (No. 7), issued by the AOGCC on April 19, 2006 after thorough review and public notice. • The project also required ACMP review and ADNR "best interest finding". • Gas storage operations (injection and withdrawal) began May 8, 2006. MARATHON OIL CORPORATION • SEPTEMBER 2002 1 Why is it being requested? An amendment to S107 is being requested because: • The SIO as issued allows only one injection well. • Increased injection capacity is needed. • Lengthy permitting process makes it prudent and essential to have redundant injection capability, and a more streamlined agency approval process if additional injection wells are needed in the future. What are the impacts of the requested SIO' amendment? NONEI • No incremental surface area disturbance • No pipelines, gathering lines, or compression that is , d not already in place and in use. • Use of any other wells for injection must be reviewed and approved by AOGCC. • Public safety, environment, and conservation of resource are protected by existing terms in S107 _._ Kenai Gas M. i Field t`^ T S N. R 11 W Kenai Gas Storage Lease Area: 7589 acres'" ::mz r a :T z (green outline) _ i Storage Lease Ownership: g'—. Marathon: 54.4% State of AK: 34.7% 'G CIRI: 10.3% ! Fee (private) 0.5% .r a7 1e e T4 N, R 11W t6 KENAIOENIA' STATE OF ALALASKA 8 1 j to A ft� O KGF Sterling Pool 6 Properties Reservoir Depth - 4500' Original reservoir pressure - 2500 psi 3/31/07 reservoir pressure - 140 psi* (*300 psi maximum allowable in S107) EUR - 552 BCF** (**per Lease Agreement with ADNR) 3/31/07 Cumulative gas injected - 1.6 BCF 3/31/07 Recoverable gas in place - 23.4 BCF*** Remaining Native Gas Reserves — 22.3 BCF Remaining Stored Gas Volume — 1.1 BCF (***50 BCF limitation per lease agreement with ADNR) MARATHON OIL CORPORATION • SEPTEMBER 2002 3 1 KGF Sterling Pool 6 Current Well Status 10 Active producing wells: KU 13-6, KU 14-32, KU 14x-6rd, KU 21 6rd, KU 34-32, KU 43-6rd, KBU 23x-6, KBU 33-7, KDU 5, KBU 33-6 1 Pressure monitoring well: KU 34-31 1 Permitted dual purpose Injector/producer: KU 31-7x 3 Inactive wells: KU 11-8, KU 33-32, KU 44-30 1 W IW: KU 11-17 (edge of structure location, water injection volumes not of impact to gas storage operations) Kenai Gas Storage Overview • Injection occurs in periods of excess supply and low market demands. • Withdrawal occurs in periods of high demand. • 10-year primary lease term with ADNR. • The ultimate life of project, and the need for additional wells and/or facilities will be driven by Marathon's economic analysis and contractual requirements. • Project changes require a number of different agency , and leaseholder approvals. MARATHON OIL CORPORATION • SEPTEMBER 2002 4 FROM : FAX N0. : -pnu. 13 20M 01.59PM P2 Tim and Marilynn Keener PO Box 2833 Kenai, AK 99611 PH: 907 283-9513. Fax: 907 283-6555 Jo= Slemons, Permitting Manager Alaska Dept. of Natural R esowees Division of Oil and Gas , 550 West 7" Ave., Suite 800 Anchorage, AID 99501 PIS: 907 269-8900, Fax 907 269-3484 February 12, 2006 CC: Senator Thomas Wagoner, Represenrabve Mike ChGnault, Representative Kurt Olson, Lt. Gov. Loran Leman RE: Notice, Kenai Gas Storage Lease Application Received, Call for Comments & Alaska Coastal Mwnement Progrffin Consistency Renew Dear Mr. 6lemons: I am a landowner whose property is within the area Marathon Oil Company wished to store naturel gas in. My farrxily lug been heavily impacted by the presence of Ma rwhan ail in the area they are now proposing to store gas v demeath. As a young boy growing up on a homestead on the property on and near whet we are being asked by your DepaAment to comment on, I have seen many changes. I believe these changes have ooamsed mainly because of the tenants, Unocal and Marathon, who have uVecW a nwnber of chemicals and drilling fluids into the ground. The property I refer to has remained undeveloped other than the pmarawce of Marathon and the constant injections and utiv'ities they perform daily to it. When Marilyn Keener most recently asked Marathon in May of 2005 when they would be ending these continual injections, she was informed that they have no plan of ever ending such practice&. I would not feel cont*wtahle with more activity and more injections going on right behind my home. I do not feel that the state"s best interests are at heart by Mayon nor the Wndowrner'$ beat interests. X realize that Marathon's ftonstts ate to their shareholders and profit margins. but I feel that it is our state's duty to protect the citizen and the resources first. We will likely never know what happened to the hundreds of rabbits, ducks, geese, swans, and spruce hens that nested on Hasse lends that are now taken over, but not owned, by Marathon Each day I see Vick af%r truck driving onto the property which your above -mentioned notice is referring to. Marilyn Keener went behind out home in May Z ��d 8��CQyO;C p�,J Z 90?-GO-��U��i �a?-i FROM : FAX N0. Feb. 13 2006 0159PM P3 2005 where the pump micks were delivering thsir loads and was asked by !Marathon not to take pictures. On February 19, 2003, Marilyn Keener went to the Marathon warehouse behind our home to explain her ooncems about water pollution and other serious problems to Donald Erwin, production supervisor at the Kenai gas field. She asked him to drink some tap water to help sllevime her fears but he would aot. Mr. Erwin stated that he would speak to a superior about a third party water test for our family but this was never done, 1 received a letter dated January 6. 2006. fiom Marathon OiI stating, "We are basically oiTaing $40 per net interval wre, par year, for an initial t = of 10 years and as long thereafter as the interval is being used for gu storage". I rind it eximunely insulting that any company would assume a rate they propose would be aoceptable for an unspecified amount of time and remain the exact sauce rate for dooades to come. I would like to have a few questions addressed by your department: Where is the gas that Marathon, wwAs to store under our properly ooming from? How would it be transported to our property? What is an interval acre? What price would the state charge for le ming its property and would the lease rate decrease at least 3% per year? Would•royaltim be charged when the gas that has been stored is used? If so, would this royalty amowrt be itumsed yearly? Have water tests in this rise been W= by third parties to monitor the aquifers and to make certain that the oil company in question has been a. good steward of the state's resources thus far? Are monitoring records kept by third parties available for me to look over'? May I have copies of the geological findings so I might have these reviewed by third patgr experts? In closes, I protest the request by Marathon Oil Company to lease property from the state and private Iandowners for the storage of natural gas. Sincerely, Tim Keener 1Mafily� er ��1 cJ •t✓ Clint Keener Lindsay Keener - '�'�' , 3�yd ��o97L V JGGy�� i1I0 � 1^i� ?c ',C �i 9��7-�G-u ��i RECEIVED M Marathon MARATHON Oil Company March 16, 2007 Mr. Art Saltmarsh Alaska Oil and Gas Conservation Commission 333 West 7"' Avenue, #100 Anchorage, AK 99501-3539 RE: AOGCC Affidavit of Mailing Notices Application to Amend SIO-7 to allow additional gas storage injectors in Sterling Pool Six Marathon Oil Company Kenai Gas Storage Dear Mr. Saltmarsh: Alaska Asset Team Northern Business Unit MAR 1 9 2007 P.U. Box 196168 Alaska Oil & Gas Cons. C Anchorage, AK 99519-618 Commission Telephone 907-565-3044 anchorage Fa;c 907-565-3076 Please find enclosed an affidavit attesting to Marathon Oil Company's efforts to contact all of the surface owners owning rights overlying Kenai Sterling Pool Six. Once we receive the return receipts from the U.S. Post Office, we would be happy to provide those for inspection by AOGCC employees, upon request. Should you have any questions related to land or ownership issues, please contact Keith Wiles at 907-565-3044, or for questions regarding the technical aspects of this application, please contact Lyndon lbele at 907-565-3042. Sincerely, Keith Wiles Senior Land Professional Enclosures AFFIDAVIT Comes now Keith A. Wiles, and first being duly sworn upon his oath, states and deposes as follows: 1. That I am a legal resident of Anchorage, Alaska over the age of 21 years and mentally competent to make this affidavit. 2. That I am knowledgeable and fully informed concerning the facts contained in this affidavit. 3. That for approximately the past five years I have worked for Marathon Oil Company (MOC) as a landman, first as a contractor and more recently as an employee. Specifically, I have been responsible for Marathon's land and title work in the Kenai, Alaska area. 4. That as part of my duties in the Kenai area, I am familiar with land ownership and titles related to the surface estate overlying the Kenai Pool Six Gas Storage area. 5. On or about March 6, 2007 I reviewed and updated surface title that 1 had previously examined during late 2005 and early 2006 to ensure that ownership was current as reflected in the Kenai Recorder's Office records and Kenai Peninsula Borough Tax Assessor's Office records. 6. That on or about March 15, 2007 MOC employees mailed a copy of the attached Notice of Public Hearing to all parties owning a surface estate overlying the Kenai Sterling Pool Six. Marathon also included a copy of the Application letter dated February 19, 2007, a copy of which is attached hereto. MOC employees mailed notice to all of the parties listed on the attached Exhibit "A" by certified mail, return receipt requested. The return receipts will be made available for inspection by AOGCC personnel, upon request. In view of the foregoing facts, affiant herein states and deposes that Marathon Oil Company as operator of the Kenai Pool Six Gas Storage has made a reasonable and diligent effort to identify, locate and contact all parties legally due notice of the said Application to Amend SIO-7 to allow additional gas storage injectors in Sterling Pool Six. Further affiant sayeth not. v v- c) Keith A. Wiles (affiant) Date Page 1 of 2 STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) This certifies that on March Jr 2007, before me, a notary ublic in and for the State of Alaska, duly commissioned and sworn, personally appeared known to me to be the person described in, and who executed the foregoing agreement, who then after being duly sworn according to law, acknowledged to me under oath that he executed same freely and voluntarily for the uses and purposes therein mentioned. WITNESS my hand and official seal the day and year in this certificate first above written. r NOTARY PUBLIC in and for Alaska My Commission Expires: j p Page 2 of 2 Amended Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Kenai Gas Field, Sterling Pool 6 Application to amend SIO-7 to allow additional gas storage injectors in Sterling Pool 6. Marathon Oil Company by letter dated February 19, 2007 has requested an amendment to Storage Injection Order 7 to authorize the use of additional wells for gas storage injection on an area basis in the Sterling Pool 6 of the Kenai Gas Field, in accordance with 20 AAC 25.252 and 20 AAC 25.460. In addition, the Commission proposes to correct typographical errors concerning the approved storage area, and to amend the rules to provide a methodology for application and approval of additional wells for the purpose of gas storage. The affected storage area is comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4, 5, 6, 7, 8, 9, 17, 18 of T4, RI 1 W, Sections 1, 12, 13 of T4N, R12 W, and Sections 20, 28, 29, 30, 31, 32, 33 of T5N, RI I W, Seward Meridian. The Commission is vacating the April 3, 2007 hearing and has tentatively rescheduled public hearing on this application for April 24, 2007 at 9:00 am at the Alaska. Oil and Gas Conservation Commission at 333 West 7" Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on April 2, 2007. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after April 3, 2007. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7* Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on April 18, 2007 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the April 24, 2007 hearing. If you are a person with a disability who may need special accommodations in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 793-1221 before April 16, 2007. Cathy P Foerster Commi sioner Published Date: Anchorage Daily News, March 16, 2007 Published Date: Peninsula Clarion, March 16, 2007 M Marathon ..moo. Oil Cotnpanl/ February 19, 2007 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7t' Ave, Suite 100 Anchorage, AK 99501 Attn: Mr. John Norman — Chair of Commission Alaska Asset Team Domestic Production P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 907/565-3076 RE: Request for amendment to Rule 1, Storage Injection Order No. 7 Dear Chairman Norman: Marathon Oil Company respectfully requests amendment to Rule 1 of Storage Injection Order No. 7 (SIO 007.000) to allow additional wells to be used for gas injection purposes in the Sterling Pool 6 formation. Amendment is permissible under Rule 7 of the storage injection order. Any future applications to add injection wells to SIO-7 will be by separate submittal on an as -needed basis, with a full description of well design and demonstration of mechanical integrity. At the present time, only one well, KU 31-07X, is permitted as a Pool 6 gas injection well under SIO-7. Marathon anticipates submitting an application within the next two weeks to permit a second well for gas injection service into the same Pool 6. The candidate well for that service is KBU 23X-06, which is currently completed as a Pool 6 producer. Marathon has an immediate need for additional injection capacity and has scheduled an April, 2007 workover of Well 23X-06 to equip the well for dual injection and production service. Because of the ongoing need to manage our production operations against seasonal swings in our market demand, an additional injection well for the Kenai Gas Storage project is critically required to provide increased injection capacity, as well as to provide redundancy to KU 31-07X. It is possible that additional gas injection wells may be required in the future, depending upon future utilization of the storage project. We have been advised by AOGCC staff that the requested amendment to Rule 1 will require public notice, however once this amendment is approved, additional injection wells may be added to the SIO by administrative action without hearing provided no new land- owner issues are expected to result from such application. Marathon's recognizes its responsibility to ensure the public safety, protection of the environment, and conservation of the resource. It is anticipated that any application for future gas injection wells, including Well KBU 23X-06, will be closely scrutinized and all gas injection wells will be subject to existing Rules 2 through 6 of Storage Injection Order 7. Any questions may be directed to Lyndon Ibele at 907-565-3042. Sincerely, Lndon Ibele Production Coordinator EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 At Schmid 1936 SE BLAIR ROAD WASHOUGAL WA 98671 Alaska Pipeline Company BOX 6288 ANCHORAGE AK 99506-6288 Arthur & Cheryl Dittbrender 35 AVONDALE HEIGHTS ROAD ASHEVILLE NC 28803-9593 Arvo Tomrdle PO BOX 2296 KENAI AK 99611 Au Chilton 3620 A PAHOE AVENUE HOLOLULU HI 96816-2329 Bradley Jordan PO BOC 455 HOWIE IN THE HILLS FL 34737 Brenda Killian 808 MAGIC AVENUE, APT. C3 KENAI AK 99611 Brett & Kimmi Alexander PO BOX 2536 KENAI AK 99611 Brian & Lisa Gabriel 2305 WATERGATE WAY KENAI AK 99611 Bryan & Nona Leigh PO BOX 1695 KENAI AK 99611 Carl High 36385 KALIFONSKY BEACH ROAD KENAI AK 99611 Christina Matson & Michael Randall 1450 PIPESTONE DRIVE WASILLA AK 99654 Claudia Adams PO BOX 2601 KENAI AK 99611 Cook Inlet Region, Inc. PO BOX 93330 ANCHORAGE AK 99509-3330 Curtis C. & Debra L. Shuey 35077 KALIFONSKY BEACH ROAD KENAI AK 99611 Daniel M. Sanchez PO BOX 2705 SOLDOTNA AK 99669 Danny & Kathleen Thompson PO BOX 1067 KENAI AK 99611 David A. & Joanne Wichers 3347 N. WILSON ROAD OAK HARBOR WA 98277 Page 1 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 David M. Schmidt PO BOX 358 KENAI AK 99611 David N. Yragui & Mary Jeanne Yra ui PO BOX 1290 KENAI AK 99611 Dawne E. Schmidt 36371 KALIFONSKY BEACH ROAD KENAI AK 99611 Della Kizer 28 PAPAGO ROAD ALAMAGORDO NM 88310 Dennis & Susan Lacey PO BOX 1005 KENAI AK 99611 Don & Shirl Sabin 9845 JOHNSON POINT LOOP NE OLYMPIA WA 98516 Donald D. & Helena Anfinson 98-843 LEIHULU AIEA HI 96701 Edward Gilkey & Tonia Lawrence 6531 DOWNEY FINCH DRIVE ANCHORAGE AK 99516 Eldon G. Harvey PO BOX 3245 SOLDOTNA AK 99669 Evelyn D. Keener Revocable Trust PO BOX 2521 KENAI AK 99611 Flerron L. Justis 34605 KALIFONSKY BEACH ROAD KENAI AK 99611 G.G. & Bonnie Sue Hardin 4717 SOUTHERN AVENUE SE ALBUQUERQUE NM 87108 Gary & Alice Ambruz 7150 E. CHESTER HEIGHTS ROAD ANCHORAGE AK 99504-3560 Page 2 of 9 KGS Full Pool Address List Surface and Interval.xis EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Gary & Georgia Alexander PO BOX 1549 SOLDOTNA AK 99669 Gary & Kelly Stroh PO BOX 2527 KENAI AK 99611 George A. & Roberta K. Nyce PO BOX 401 KENAI AK 99611 George W. Crabb PO BOX 805 KASILOF AK 99610 Glenn E. & Karen Richardson 5 TURNER HOMESTEAD ROAD OROVILLE WA 98844 Greg Lindhartsen & Gloria Adkins- Lindhartsen 359 PORCUPINE COURT, #2 SOLDOTNA AK 99669 Gregory E. & Patricia C. Johnson 1815 NE 149TH CIRCLE VANCOUVER WA 98686 Harold W. & Ida H. Cockroft PO BOX 167 SOLDOTNA AK 99669 Harvey & Vernita Vestal PO BOX 112515 ANCHORAGE AK 99515-2515 Herman Sigfrid Lindgren PO BOX 504 SOLDOTNA AK 99669 Horace & Lorena Blanchard PO BOX 904 SOLDOTNA AK 99669 Howard Frederick Detweiler, Jr. & Lisa Kay Detweiler 92-1330 KIKAHA STREET KAPOLEI HI 96707 James & Carlene Sanders PO BOX 877492 WASILLA AK 99697 Page 3 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 James A. Arness & Dorothy V. Gray PO BOX 1061 KENAI AK 99611 James H. & Trina Doyle PO BOX 582 KENAI AK 99611 Janet Kodysz & Robert L. Schmidt 6308 SPRING RIDGE DRIVE BAKERSFIELD CA 93313 Jeffrey & Nancy Locke PO BOX 1238 KENAI AK 99611 Jeffrey John McDonald & Dana Lynn Ferrell 247 N. FIREWEED, SUITE A SOLDOTNA AK 99669 Jerome Arthur Pape & Lorraine Janet Pape, trustees of the Pape Family Revocable Trust 206 STEWART STREET, #2 ANCHORAGE AK 99508 John & Beverly Machardy 13796 SE 87TH AVENUE SUMMERFIELD FL 34491 John & Norma Coon 1501 PINE AVENUE KENAI AK 99611 John W. & Barbara J. Kistler 32605 KALIFONSKY BEACH ROAD KASILOF AK 99610 Jon & Sheryl McMichael PO BOX 3715 SOLDOTNA AK 99669 Joseph & Mildred Koski PO BOX 342 SOLDOTNA AK 99669 Jossee & Ricky Hallett PO BOX 3620 KENAI AK 99611 Judith Marie Gormley, Zava Venese Hanson & Katrina Kaye Zupan 253 FLOYD GOLDEN CIRCLE PORTALES NM 88130 Julie Wendt 10672 KENAI SPUR ROAD, #112 KENAI AK 99611 Kam Lau Lum & Mi Oi 1443 MALUAWUI STREET PEARL CITY HI 96782 Karen N.H.L. Hong 750 KAHEKA STREET, APT. 1406 HONOLULU HI 96814 Page 4 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Keith Stasek 108 WOODED GLEN COURT KENAI AK 99611 Kenai Kachemak Pipeline, LLC 3201 "C" STREET, SUITE 800 ANCHORAGE AK 99503 Kenai Peninsula Borough 144 N. BINKLEY SOLDOTNA AK 99669 Kenneth & Victoria Coleman 35565 BARANOF STREET KENAI AK 99611 Kenneth F. & Bonnie R. Nelson 4791 CAMBRIDGE WAY ANCHORAGE AK 99503-7011 Kenneth Lou Lentz PO BOX 190068 ANCHORAGE AK 99519 Larry & Pamela Witte PO BOX 587 KASILOF AK 99660 Larry Daly & Nancy Morris PO BOX 3905 SOLDOTNA AK 99669 Larry R. & Satorene Jackson PO BOX 2715 KENAI AK 99611 Laura Lee Slaymaker PO BOX 110787 ANCHORAGE AK 99511 Lawence Chun 1469 ALA LELEU STREET HONOLULU HI 96818-1516 Leda Taradonova PO BOX 3084 KENAI AK 99611 Lee Lup Ching & Sze Hing 2011 PUAALA LANE HONOLULU HI 96819 Lethie Collins & Larry Ryburn PO BOX 557 SOLDOTNA AK 99669 Lin Chi Chan 98-1062 E KOMO-MAI DRIVE AIEA HI 96701 Lisa Meinhardt 204 STERLING COURT KENAI AK 99611 Page 5 of 9 KGS Full Pool Address List Surface and Interval.xis EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Littel Woman, LLC 645 "G" STREET, SUITE 100, PMB 598 ANCHORAGE AK 99501 Marathon Oil Company 3201 "C STREET, SUITE 800 ANCHORAGE AK 99503 Mark Cranston 504 N. JACKSON GOLDEN CO 80403-1326 Martin B. & Amy L. Hanson 44332 STERLING HIGHWAY, SUITE 18 SOLDOTNA AK 99669 Michael & Gala Bilby 21255 E. RENEE ROAD CLAREMORE OK 74019 Michael & Rebecca Bolstridge 51500 SPUR COURT KENAI AK 99611 Michael J. & Desiree Mazany 2654 HAVITUR COURT ANCHORAGE AK 99504 Michael T. Nelson & Kelly Reilly Nelson 1217 LAWTON DRIVE KENAI AK 99611 Myrtle E. & Dale S. Somers PO BOX 363 SOLDOTNA AK 99669 Neil & Christine Sutton PO BOX 3894 SOLDOTNA AK 99669 Orin & Evelyn Piatt PO BOX 1258 KENAI AK 99611 Pamela K. Terzich 1507 E. 41ST COURT ANCHORAGE AK 99508 Page 6 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Paul R. Long PO BOX 1599 DEWEY AZ 86327 Paula Keohane 35555 KENAI SPUR HIGHWAY KENAI AK 99611 Ravin Seaman PO BOX 143 KENAI AK 99611 Ray Frank Murphy, trustee of the Ray Frank Murphy Living Trust PO BOX 785 KASILOF AK 99610 Richard & Miriam Woodin PO BOX 1877 KENAI AK 99611 Richard W.C. Lum & Chew Young Lum 1635 ALA MAHAMOE STREET HOLNOLULU HI 96819 Robert Jolly 36873 KALIFONSKY BEACH ROAD KENAI AK 99611 Rodger E. & Barbara Schmidt PO BOX 358 KENAI AK 99611 Rodney R. & LuAnn Reynolds 37240 CANNERY ROAD KENAI AK 99611 Ronald & Sharon Rice 33914 ROW RIVER ROAD COTTAGE GROVE OR 97424 Ronda Blou h PO BOX 555 HOONAH AK 99829 Sam Weimer 235 BANNER LANE SOLDOTNA AK 99669 Sara N. Watsjold PO BOX 510 SEWARD AK 99664 Scott Anderson Living Trust 545 "N" STREET ANCHORAGE AK 99501-1915 State of Alaska Department of Natural Resources 550 W. 7TH AVENUE, SUITE 650 ANCHORAGE AK 99501-3576 Steve & Edi Macik 34410 KALIFONSKY BEACH ROAD KENAI AK 99611 Steve Langston 3531 32ND WAY NW OLYMPIA WA 98502 Steven & Merrie Washburn PO BOX 2309 1 KENAI JAK 199611 Page 7 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Stewart Kizer PO BOX 2697 KENAI AK 99611 Suk Leong Lee & Sin Wan 2260 WILSON STREET HONOLULU HI 96819 Sylvia Chun 1469 ALA LELEU STREET HONOLULU HI 96818 Thomas & Nancy Sorenson 287 HANS COURT NW BEMIDJI MN 56601 Thomas & Sherri Johnson PO BOX 2772 KENAI AK 99611 Timothy & Lorraine Heikkila PO BOX 844 KENAI AK 99611 Timothy & Marilyn Keener PO BOX 2833 KENAI AK 99611 Timothy Jackinsky, Sara Jackinsky Mae & Anthony Leaf PO BOX 1044 HOMER AK 99603 Tung Tai Lee 1425 LILIHA, APT. 20 D HONOLULU HI 96817 Vern & Tina Piatt PO BOX 2896 KENAI AK 99611 Vito L. Manno, Jr. & Joyce D. Manno 4507 REGALO BELLO STREET LAS VEGAS NV 89135-2532 W.B. Sullivan PO BOX 943 KENAI AK 99611 Wayne & Jane Schultz 35605 KALIFONSKY BEACH ROAD KENAI AK 99611 William & Jane Mattson PO BOX 1514 KENAI AK 99611 Page 8 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 William & Melinda Nelson 37215 KALIFONSKY BEACH ROAD KENAI AK 99611 William A. Ross & Tina L. Voelker- Ross 2220 SHORE DRIVE ANCHORAGE AK 99515-3138 Salamatof Native Association, Inc. PO BOX 2682 KENAI AK 99611 Page 9 of 9 KGS Full Pool Address List Surface and Interval.xls Dave and Mary Jeanne Yr PO Box 1290 Kenai, Alaska 99611 Phone: (907) 283-3285 Fax: (907) 283- 6106 March 16, 2007 Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Ste. 100 Anchorage, Alaska 99501 MAR 2 1 2007 Alaska Gil & Gas Cons. Commission Anchorage Via Fax (907) 276-7542 Original Via U.S. Mail RE: Request for Hearing Kenai Gas Field, Sterling Pool 6 Application to amend SIO-7 to allow additional gas storage injectors in the Sterling Pool 6. Dear Sir / Madam: I am writing to request the Alaska Oil & Gas Commission convene a hearing on the proposal referenced above. I am the owner of property in the immediate area of the Kenai Gas Field and have been unable to get any information from Marathon on the probable impact of this operation on the quiet enjoyment of my property. More specifically, I would like a hearing to get information on the following issues: 1. Location of Injection Unit: I have not received any information on the proximity of the injection compressors near my family homestead. I want to know what, if any, measures are being taken by Marathon to mitigate the noise being introduced by injection compressors. In particular, I would like to know the decibel level of the compressors and the anticipated frequency of use. 2. Adverse Consequences from Injection: I have received no information on potential impacts to our aquifer in the area. I would appreciate getting information on what assurances Marathon has given to protect our aquifer from contamination or damage to confining water zones in the area where gas is to be injected. I have lived in the area for many years. I do not think Marathon should be allowed to inject gas with out being required to mitigate adverse impacts on the surface (noise, etc.) and subsurface aquifers (drinking and farming water sources) in the area. Thank you in advance for your consideration of my re6i est.� Respectfully Dave Yragui Amended Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Kenai Gas Field, Sterling Pool 6 Application to amend SIO-7 to allow additional gas storage injectors in Sterling Pool 6. Marathon Oil Company by letter dated February 19, 2007 has requested an amendment to Storage Injection Order 7 to authorize the use of additional wells for gas storage injection on an area basis in the Sterling Pool 6 of the Kenai Gas Field, in accordance with 20 AAC 25.252 and 20 AAC 25.460. In addition, the Commission proposes to correct typographical errors concerning the approved storage area, and to amend the rules to provide a methodology for application and approval of additional wells for the purpose of gas storage. The affected storage area is comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4, 5, 6, 7, 8, 9, 17, 18 of T4, RI 1 W, Sections 1, 12, 13 of T4N, R12 W, and Sections 20, 28, 29, 30, 31, 32, 33 of T5N, RI 1 W, Seward Meridian. The Commission is vacating the April 3, 2007 hearing and has tentatively rescheduled public hearing on this application for April 24, 2007 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7tb Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on April 2, 2007. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after April 3, 2007. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on April 18, 2007 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the April 24, 2007 hearing. If you are a person with a disability who may need special accommodations in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 793-1221 before April 16, 2007. D Cathy P Foerster Commi sioner Published Date: Anchorage Daily News, March 16, 2007 Published Date: Peninsula Clarion, March 16, 2007 STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE ADVERTISING ORDER NO. A O_02714023 A SEE BOTTOM FOR INVOICE ADDRESS F R ° M AOGCC 333 W 7th Ave, Ste 100 Anchorage, AK 99501 907-793-1238 AGENCY CONTACT Ceresa Tolley DATE OF A.O. March 14 2007 PHONE PCN DATES ADVERTISEMENT REQUIRED: March 16, 2007 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. T Anchorage Daily News PO Box 149001 Anchorage, AK 99514 SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement Legal® ❑ Display Classified ❑Other (Specify) SEE ATTACHED SEND INVOICE IN TRIPLICATE TO AOGCC, 333 W. 7th Ave., Suite 100 Anchorage, AK 99501 PAGE 1 OF 2 PAGES TOTAL OF ALL PAGES$ REF ITYPE I NUMBER AMOUNT I DATE COMMENTS 1 VEN 2 1 Axe 02910 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LID 1 05 02140100 73451 2 REQUISITIONED BY• U �y DIVISION APPROVAL: - 02-902 (Rev. 3/94) Publisher/Original Copies: Department Fiscal, Department, Receiving Anchorage Daily News 3/16/2007 Affidavit of Publication 1001 Northway Drive, Anchorage, AK 99508 PRICE OTHER OTHER OTHER OTHER OTHER GRAND AD # DATE PO ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES #3 CHARGES #4 CHARGES #5 TOTAL 159643 03/16/2007 02714023 STOF0330 $212.48 $212.48 $0.00 $0.00 $0.00 $0.00 $0.00 $212.48 STATE OF ALASKA THIRD JUDICIAL DISTRICT Christine Clark, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Subscribed and sworn to me before this date: Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska r Amended Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re; Kenai Gas Field, Sterling Pool 6 Application gas torage injectors nIO-7 to Sterling llow additional Pool 6 Marathon Oil Company by letter dated February 19, 2007 has requested an amendment to Storage Iniec- tion Order 7 to authorize the use of additional wells for gas storage injection on an area basis in the Sterling Pool 6 of the Kenai Gas Field, in accor- dance with 20 AAC 25.252 and 20 AA4 25.460. In addi- tion, the Commission proposes to correct typo- graphical errors concerning the approved storage amend the rules to provide o methodol ogy fornapps cation and approval of additional wells for the purpose of gas storage. The affected storage area a comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4,5,6, 7,8,9,-17, 18 ofT4, RII W, Sections 1; 12, 13 ofT4N, R12 W, and Sections 20, 28, 29, 30, 31, 32, 33 ofT5N, RI IW, Se- ward Meridian. The Commission is vacating the April 3, 2007 hear- ing and has tentatively rescheduled public hearing on this application for April 24, 2007 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, SuitelQO, Anchorage, Alaska 99501. k plederson may request that the tentatively quest with he Comm ssionhearing bedno later than 4r30 pm on April2,2007. ,. if a request for a hearing is not tlmeiy filed, the III Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after April 3, 2007. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation mission at 333 West 7th Avenue, Suite 100, Anchorrage .Alaska 99501 •Written com- ments must be received no later than 4:30 pm on April 18, 2007 except that if the Commission decides to est or com mentsdmust becrece rheareceived no later hang, written s the conclu- sion of the April 24, 2007 hearing.. If you are a person with a disability who may need special accommodations in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie-at 793-1221 before April.16, 2007. /s/: Cathy P. Foerster; Commissioner AO# 02714023 Publish: March 1616=2007 — ADVERTISING ORDER INVOI UST BE IN TRIPLICATE SHOWING ADVERTISING ORDER-ERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE /� 0-02714023 ! 1 SEE BOTTOM FOR INVOICE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7th Avenue. Suite 100 Ceresa Tolley March 14- 2007 PHONE PCN ° Anchnra¢e_ AK 99501 M 907-793-1238 -1239 ADVERTISEMENT REQUIRED: March 16, 2007 o Anchorage Daily News PO Box 149001 Anchorage, AK 99514 g THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account # STOF0330 AFFIDAVIT OF PUBLICATION United states of America REMINDER State Of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly swom, according to law, says that he/she is the Of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2007, and thereafter for consecutive days, the last publication appearing on the day of , 2007, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2007, Notary public for state of My commission expires 02-901 (Rev. 3/94) Page 2 Amended Public Notice Sterling Gas Pool 6 Subject: Amended Public Notice Sterling Gas Pool 6 From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Wed, 14 Mar 2007 10:39:11 -0800 To: undisclosed -recipients:; BCC: Christine Hansen <c.hansen@iogcc.state.ok.us>, Terrie Hubble <hubbletl@bp.com>, Sondra Stewman <StewmaSD@BP.com>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, trmjrl <trmjrl@aol.com>, jdarlington <jdarlington@forestoil.com>, nelson <knelson@petroleumnews.com>, cboddy <cboddy@usibelli.com>, Mark Dalton <mark.dalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocophillips.com>, "Mark P. Worcester" <mark.p.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, wdv <wdv@dnr.state.ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <TonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>, Mikel Schultz <Mikel.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "Janet D. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mckay@gci.net>, Barbara F Fullmer <barbara.f.fullmer@conocophillips.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesno1 @gci.net>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shell.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>, jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <mapalaska@ak.net>, jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@alaskadc.org>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp@borough.kenai.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobil.com>, marty <marty@rkindustrial.com>, ghammons <ghammons@aol.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@aol.com>, Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary_schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoil.com>, Sharmaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoil.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>, jack newell <jack.newell@acsalaska.net>, James Scherr <james.scherr@mms.gov>, n1617@conocophillips.com, Tim Lawlor <Tim_Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mlewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff <smetankaj@unocal.com>, Gary Rogers <gary_rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur Copoulos@dnr.state.ak.us>, Ken <klyons@otsintl.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, his Matthews <Iris_Matthews@legis.state.ak.us>, Paul Decker <paul_decker@dnr.state.ak.us>, Aleutians East Borough <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>, Mike Mason 1 of 2 3/14/2007 10:40 AM Amended Public Notice Sterling Gas Pool 6 <mike@kbbi.org>, Garland Roumson <gbrobinson@marathonoil.com>, Cammy Taylor <Camille_Taylor@law.state.ak.us>, Thomas E Maunder <torn maunder@admin.state.ak.us>, Stephen F Davies<steve_davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoil.com>, Deanna Gamble <dgamble@kakivik.com>, James B Regg <jim_regg@admin.state.ak.us>, Catherine P Foerster <cathy_foerster@admin.state.ak.us>, Bob <Bob@fairweather.com>, gregory micallef <micallef@clearwire.net>, Laura Silliphant <Laura_silliphant@dnr.state.ak.us>, David Steingreaber <david.e.steingreaber@exxonmobil.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve_moothart@dnr.state.ak.us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, Paul Bloom <paul_bloom@ml.com>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple_davidson@dnr.state.ak.us>, Walter Featherly <WFeatherly@PattonBoggs.com>, Tricia Waggoner <taggoner@nrginc.com>, Mike Stockinger <Mike.Stockinger@anadarko.com>, John Spain <jps@stateside.com>, Cody Rice <Cody_Rice@legis.state.ak.us>, John Garing <garingJD@bp.com>, Harry Engel <engelhr@bp.com>, Jim Winegarner<jimwinegarner@brooksrangepetro.com>, Matt Rader <matt_rader@dnr.state.ak.us>, carol smyth <carol.smyth@shell.com>, Arthur C Saltmarsh <artsaltmarsh@admin.state.ak.us>, Chris Gay <cdgay@marathonoil.com>, foms@mtaonline.net, Rudy Brueggeman<rudy.brueggemann@international.gc.ca>, Cary Carrigan <cary@kfgd.com>, Sonja Frankllin <sfranklin6@bloomberg.net>, Cynthia B Mciver <bren mciver@admin.state.ak.us> Jody Colombie <jody colombie(aadmin.statc.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Sterling Pool 6 Storage Injection Amended Notice.pdf Content -Type: application/pdf Content -Encoding: base64 2 of 2 3/14/2007 10:40 AM Amended Public Notice Subject: Amended Public Notice From: Jody Colombie <Jody_colombie@admin.state. ak.us> Date: Wed, 14 Mar 2007 10:37:07 -0800 To: Legal Ads Anchorage Daily News <legalads@adn.com> Jody Colombie <jody colombie a,admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Ad Order ADN form.doc Content -Type: application/msword Content -Encoding: base64 Sterling Pool 6 Storage Injection Amended Notice.pdf Content -Type: application/pdf Content -Encoding: base64 1 of 1 3/14/2007 10:40 AM [Fwd: Re: Kenai Notice - questions from Public' Subject: [Fwd: Re: Kenai Notice - questions from Public] From: Jane Williamson <jane _williamson@admin.state. ak.us> Date: Tue, 13 Mar 2007 19:53:57 -0800 To: Jody J Colombie <Jody_colombie@admin.state. ak.us>, Ceresa L Tolley <ceresa tolley@admin.state.ak.us> Please place is S107A application. Original Message-------- Subjeet:Re: Kenai Notice - questions from Public Date:Tue, 13 Mar 2007 19:34:35 -0800 From:Jane Williamson <jane wil I iam son(a�admin. state. ak. us> Organization: State of Alaska To: Wiles, Keith A. <kwiles(a),marathonoil.com> CC:Gay, Chris <cdgay(i�marathonoil.com>, art sal tmarsh@admin. state. ak. us, Camille O Taylor <cammy taylor(u�law. state. ak.us> References: <4D683A6055DEC24DBF97B58000E7C070DB6AO7(d-pnors221 mgroupnet com> Keith, I was just reviewing the affidavit you sent and I need to double check on something. Did you send a copy of your application or just the notice. The Regulations (20AAC25.252(c)(3) require "an affidavit showing that the operators and surface owners within one -quarter mile radieus have been provided a copy of the application for disposal or storage; I'll be out of the office on vacation and won't be back until April 2, so please call Art at 793-1230 with further communications. Jane Jane Williamson, PE <jane wilIiamson(t�admin.state. ak.us> Senior Reservoir Engineer (907) 793-1226 Alaska Oil and Gas Conservation Commission 1 of 1 3/14/2007 8:28 AM Kenai Notice - questions from Public Subject: Kenai Notice - questions from Public From: Jane Williamson <jane_williamson@admin.state.ak.us> Date: Tue, 13 Mar 2007 15:49:26 -0800 To: "Ibele, Lyndon" <lcibele@marathonoil.com>, kwiles@marathonoil.com CC: Camille O Taylor <cammy_taylor@law.state.ak.us>, Dave Roby <dave roby@admin.state.ak.us>, Thomas E Maunder<tom_maunder@admin.state.ak.us>, ART SALTMARSH <art_saltmarsh@admin.state.ak.us>, Jody J Colombie<jody_colombie@admin.state.ak.us>, Cathy P Foerster <cathy_foerster@admin.state.ak.us> Lyndon, Keith, Cammy and I discussed last week discussed that your application needed to be sent to surface owners of the Kenai Gas Pool 6 prior to amendment of Rule 1 of SI07 to allow administrative amendment to allow further wells to be added as injectors. Keith did this and we're now getting quite a few calls from land -owners. We need to get a contact at Marathon that we can refer these calls to. So far we've been contacted by Lori Pape at 333-5635 and Dave Urebi (sp) at (907) 283-3285. I gave them both Keith's number. I haven't been able to get ahold of him however. A third lady called and unfortunately I did not get her name. All three seem quite concerned and I anticipate that there will be comments filed on this application. Could you please let Jody know who at Marathon these folks can speak with for further information and discussion on impact? I will be out tomorrow through the remainder of March. Art Saltmarsh will be leading this project and you can contact him at 793-1230. Could you send an updated map that shows surface ownership in the area Pool areal boundaries and/or a listing of all the owners with the legal description? It would be helpful if the Pool outline and pads are shown on the map. Jane Jane Williamson, PE <jane williamson(a,admin.state.ak.us> Senior Reservoir Engineer (907) 793-1226 Alaska Oil and Gas Conservation Commission 1 of 1 3/13/2007 4:09 PM Alaska -t Team M Marathon MARATHON Oil Company March 9, 2007 Ms. Jane Williamson Alaska Oil and Gas Conservation Commission 333 West 7ch Avenue, #100 Anchorage, AK 99501-3539 RE: AOGCC Affidavit of Mailing Notices Application to Amend SIO-7 to allow Additional gas storage injectors in Sterling Pool Six Marathon Oil Company Kenai Gas Storage Dear Ms. Williamson: P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 907/565-3076 �EI'VED MAR 1 Z 2007 Ainke ai4 641 Cans, COffv*SIOR utww Please find enclosed an affidavit attesting to Marathon Oil Company's efforts to contact all of the surface owners owning rights overlying Kenai Sterling Pool Six. Once we receive the return receipts from the U.S. Post Office, we would be happy to provide those for inspection by AOGCC employees, upon request. Should you have any questions related to land or ownership issues, please contact Keith Wiles at 907-565-3044, or for questions regarding the technical aspects of this application, please contact Lyndon Ibele at 907-565-3042. Sincerely, Keith Wile Senior Land Professional Enclosures AFFIDAVIT Comes now Keith A. Wiles, and first being duly sworn upon his oath, states and deposes as follows: That I am a legal resident of Anchorage, Alaska over the age of 21 years and mentally competent to make this affidavit. 2. That I am knowledgeable and fully informed concerning the facts contained in this affidavit. 3. That for approximately the past five years I have worked for Marathon Oil Company (MOC) as a landman, first as a contractor and more recently as an employee. Specifically, I have been responsible for Marathon's land and title work in the Kenai, Alaska area. 4. That as part of my duties in the Kenai area, I am familiar with land ownership and titles related to the surface estate overlying the Kenai Pool Six Gas Storage area. 5. On or about March 6, 2007 I reviewed and updated surface title that I had previously examined during late 2005 and early 2006 to ensure that ownership was current as reflected in the Kenai Recorder's Office records and Kenai Peninsula Borough Tax Assessor's Office records. 6. That on or about March 9, 2007 MOC employees mailed a copy of the attached Notice of Public Hearing to all parties owning a surface estate overlying the Kenai Sterling Pool Six. MOC employees mailed notice to all of the parties listed on the attached Exhibit "A" by certified mail, return receipt requested. The return receipts will be made available for inspection by AOGCC personnel, upon request. In view of the foregoing facts, affiant herein states and deposes that Marathon Oil Company as operator of the Kenai Pool Six Gas Storage has made a reasonable and diligent effort to identify, locate and contact all parties legally due notice of the said Application to Amend SIO-7 to allow additional gas storage injectors in Sterling Pool Six. Further affiant sayeth not. -/V -v �J Keith A. Wiles (affiant) Date Page 1 of 2 STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) This certifies that on March 2007, before me, a notary public in and for the State of Alaska, duly commissioned and sworn, personally appeared &,�� J. L�/i lei known to me to be the person described in, and who executed the foregoing agreement, who then after being duly sworn according to law, acknowledged to me under oath that he executed same freely and voluntarily for the uses and purposes therein mentioned. WITNESS my hand and official seal the day and year in this certificate first above written. NOTARY PUBLIC in and My Commission Expires:_ Page 2 of 2 Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Kenai Gas Field, Sterling Pool 6 Application to amend SIO-7 to allow additional gas storage injectors in Sterling Pool 6. Marathon Oil Company by letter dated February 19, 2007 has requested an amendment to Storage Injection Order 7 to authorize the use of additional wells for gas storage injection in the Sterling Pool 6 of the Kenai Gas Field, in accordance with 20 AAC 25.252 and 20 AAC 25.460. In addition, the Commission proposes to correct typographical errors concerning the approved storage area, and to amend the rules to provide a methodology for application and approval of additional wells for the purpose of gas storage. The affected storage area is comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4, 5, 6, 7, 8, 9, 17, 18 of T4, RI I W, Sections 1, 12, 13 of T4N, RI W, and Sections 20, 28, 29, 30, 31, 32, 33 of T5N, RI I W, Seward Meridian. The Commission has tentatively scheduled a public hearing on this application for April 3, 2007 at 9:00 am at the offices of the Alaska Oil and Gas Conservation Commission at 333 West 7' Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on March 16, 2007, If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221=after April 1, 2007. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7`h Avenue, Suite 100, Anchorage, Alaska 99501, Written comments must be received no later than 4:30 pm on April 2, 2007 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the April 3, 2007 hearing. If you are a person with a disability w ma need special accommodations in order to comment or to attend the public hearing, please the mmission's Special Assistant Jody Colombie at 793-1221 before March 29, 2007. / Y Published Date. Anchorage Daily News, February 26, 2007 Published Date: Peninsula Clarion, March 1, 2007 EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Al Schmid 1936 SE BLAIR ROAD WASHOUGAL WA 98671 Alaska Pipeline Company BOX 6288 ANCHORAGE AK 99506-6288 Arthur & Cheryl Dittbrender 35 AVONDALE HEIGHTS ROAD ASHEVILLE NC 28803-9593 Arvo Tomrdle PO BOX 2296 KENAI AK 99611 Au Chilton 3620 A PAHOE AVENUE HOLOLULU HI 96816-2329 Bradley Jordan PO BOC 455 HOWIE IN THE HILLS FL 34737 Brenda Killian 808 MAGIC AVENUE, APT. C3 KENAI AK 99611 Brett & Kimmi Alexander PO BOX 2536 KENAI AK 99611 Brian & Lisa Gabriel 2305 WATERGATE WAY KENAI AK 99611 Bryan & Nona Leigh PO BOX 1695 KENAI AK 99611 Carl High 36385 KALIFONSKY BEACH ROAD KENAI AK 99611 Christina Matson & Michael Randall 1450 PIPESTONE DRIVE WASILLA AK 99654 Claudia Adams PO BOX 2601 KENAI AK 99611 Cook Inlet Region, Inc. PO BOX 93330 ANCHORAGE AK 99509-3330 Curtis C. & Debra L. Shuey 35077 KALIFONSKY BEACH ROAD KENAI AK 99611 Daniel M. Sanchez PO BOX 2705 SOLDOTNA AK 99669 Danny & Kathleen Thompson PO BOX 1067 KENAI AK 99611 David A. & Joanne Wichers 3347 N. WILSON ROAD OAK HARBOR WA 98277 Page 1 of 9 KGS Full Pool Address List Surface and Interval As EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 David M. Schmidt PO BOX 358 KENAI AK 99611 David N. Yragui & Mary Jeanne Yra ui PO BOX 1290 KENAI AK 99611 Dawne E. Schmidt 36371 KALIFONSKY BEACH ROAD KENAI AK 99611 Della Kizer 28 PAPAGO ROAD ALAMAGORDO NM 88310 Dennis & Susan Lacey PO BOX 1005 KENAI AK 99611 Don & Shirl Sabin 9845 JOHNSON POINT LOOP NE OLYMPIA WA 98516 Donald D. & Helena Anfinson 98-843 LEIHULU AIEA HI 96701 Edward Gilkey & Tonia Lawrence 6531 DOWNEY FINCH DRIVE ANCHORAGE AK 99516 Eldon G. Harvey PO BOX 3245 SOLDOTNA AK 99669 Evelyn D. Keener Revocable Trust PO BOX 2521 KENAI AK 99611 Flerron L. Justis 34605 KALIFONSKY BEACH ROAD KENAI AK 99611 G.G. & Bonnie Sue Hardin 4717 SOUTHERN AVENUE SE ALBUQUERQUE NM 87108 Gary & Alice Ambruz 7150 E. CHESTER HEIGHTS ROAD ANCHORAGE AK 99504-3560 Page 2 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Gary & Georgia Alexander PO BOX 1549 SOLDOTNA AK 99669 Gary & Kelly Stroh PO BOX 2527 KENAI AK 99611 George A. & Roberta K. Nyce PO BOX 401 KENAI AK 99611 George W. Crabb PO BOX 805 KASILOF AK 99610 Glenn E. & Karen Richardson 5 TURNER HOMESTEAD ROAD OROVILLE WA 98844 Greg Lindhartsen & Gloria Adkins- Lindhartsen 359 PORCUPINE COURT, #2 SOLDOTNA AK 99669 Gregory E. & Patricia C. Johnson 1815 NE 149TH CIRCLE VANCOUVER WA 98686 Harold W. & Ida H. Cockroft PO BOX 167 SOLDOTNA AK 99669 Harvey & Vernita Vestal PO BOX 112515 ANCHORAGE AK 99515-2515 Herman Sigfrid Lindgren PO BOX 504 SOLDOTNA AK 99669 Horace & Lorena Blanchard PO BOX 904 SOLDOTNA AK 99669 Howard Frederick Detweiler, Jr. & Lisa Kay Detweiler 92-1330 KIKAHA STREET KAPOLEI HI 96707 James & Carlene Sanders PO BOX 877492 WASILLA AK 99697 Page 3 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 James A. Arness & Dorothy V. Gray PO BOX 1061 KENAI AK 99611 James H. & Trina Doyle PO BOX 582 KENAI AK 99611 Janet Kodysz & Robert L. Schmidt 6308 SPRING RIDGE DRIVE BAKERSFIELD CA 93313 Jeffrey & Nancy Locke PO BOX 1238 KENAI AK 99611 Jeffrey John McDonald & Dana Lynn Ferrell 247 N. FIREWEED, SUITE A SOLDOTNA AK 99669 Jerome Arthur Pape & Lorraine Janet Pape, trustees of the Pape Family Revocable Trust 206 STEWART STREET, #2 ANCHORAGE AK 99508 John & Beverly Machardy 13796 SE 87TH AVENUE SUMMERFIELD FL 34491 John & Norma Coon 1501 PINE AVENUE KENAI AK 99611 John W. & Barbara J. Kistler 32605 KALIFONSKY BEACH ROAD KASILOF AK 99610 Jon & Sheryl McMichael PO BOX 3715 SOLDOTNA AK 99669 Joseph & Mildred Koski PO BOX 342 SOLDOTNA AK 99669 Jossee & Ricky Hallett PO BOX 3620 KENAI AK 99611 Judith Marie Gormley, Zava Venese Hanson & Katrina Kaye Zupan 253 FLOYD GOLDEN CIRCLE PORTALES NM 88130 Julie Wendt 10672 KENAI SPUR ROAD, #112 KENAI AK 99611 Kam Lau Lum & Mi Oi 1443 MALUAWUI STREET PEARL CITY HI 96782 Karen N.H.L. Hong 750 KAHEKA STREET, APT. 1406 HONOLULU HI 96814 Page 4 of 9 KGS Full Pool Address List Surface and Interval As EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Keith Stasek 108 WOODED GLEN COURT KENAI AK 99611 Kenai Kachemak Pipeline, LLC 3201 "C" STREET, SUITE 800 ANCHORAGE AK 99503 Kenai Peninsula Borough 144 N. BINKLEY SOLDOTNA AK 99669 Kenneth & Victoria Coleman 35565 BARANOF STREET KENAI AK 99611 Kenneth F. & Bonnie R. Nelson 4791 CAMBRIDGE WAY ANCHORAGE AK 99503-7011 Kenneth Lou Lentz PO BOX 190068 ANCHORAGE AK 99519 Larry & Pamela Witte PO BOX 587 KASILOF AK 99660 Larry Daly & Nancy Morris PO BOX 3905 SOLDOTNA AK 99669 Larry R. & Satorene Jackson PO BOX 2715 KENAI AK 99611 Laura Lee Slaymaker PO BOX 110787 ANCHORAGE AK 99511 Lawence Chun 1469 ALA LELEU STREET HONOLULU HI 96818-1516 Leda Taradonova PO BOX 3084 KENAI AK 99611 Lee Lup Ching & Sze Hing 2011 PUAALA LANE HONOLULU HI 96819 Lethie Collins & Larry Ryburn PO BOX 557 SOLDOTNA AK 99669 Lin Chi Chan 98-1062 E KOMO-MAI DRIVE AIEA HI 96701 Lisa Meinhardt 204 STERLING COURT KENAI AK 99611 Page 5 of 9 KGS Full Pool Address List Surface and Interval As EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Littel Woman, LLC 645 "G" STREET, SUITE 100, PMB 598 ANCHORAGE AK 99501 Marathon Oil Company 3201 "C" STREET, SUITE 800 ANCHORAGE AK 99503 Mark Cranston 504 N. JACKSON GOLDEN CO 80403-1326 Martin B. & Amy L. Hanson 44332 STERLING HIGHWAY, SUITE 18 SOLDOTNA AK 99669 Michael & Gala Bilby 21255 E. RENEE ROAD CLAREMORE OK 74019 Michael & Rebecca Bolstridge 51500 SPUR COURT KENAI AK 99611 Michael J. & Desiree Mazany 2654 HAVITUR COURT ANCHORAGE AK 99504 Michael T. Nelson & Kelly Reilly Nelson 1217 LAWTON DRIVE KENAI AK 99611 Myrtle E. & Dale S. Somers PO BOX 363 SOLDOTNA AK 99669 Neil & Christine Sutton PO BOX 3894 SOLDOTNA AK 99669 Orin & Evelyn Piatt PO BOX 1258 KENAI AK 99611 Pamela K. Terzich 1507 E. 41ST COURT ANCHORAGE AK 99508 Page 6 of 9 KGS Full Pool Address List Surface and Interval As EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Paul R. Long PO BOX 1599 DEWEY AZ 86327 Paula Keohane 35555 KENAI SPUR HIGHWAY KENAI AK 99611 Ravin Seaman PO BOX 143 KENAI AK 99611 Ray Frank Murphy, trustee of the Ray Frank Murphy Living Trust PO BOX 785 KASILOF AK 99610 Richard & Miriam Woodin PO BOX 1877 KENAI AK 99611 Richard W.C. Lum & Chew Young Lum 1635 ALA MAHAMOE STREET HOLNOLULU HI 96819 Robert Jolly 36873 KALIFONSKY BEACH ROAD KENAI AK 99611 Rodger E. & Barbara Schmidt PO BOX 358 KENAI AK 99611 Rodney R. & LuAnn Reynolds 37240 CANNERY ROAD KENAI AK 99611 Ronald & Sharon Rice 33914 ROW RIVER ROAD COTTAGE GROVE OR 97424 Ronda Blou h PO BOX 555 HOONAH AK 99829 Sam Weimer 235 BANNER LANE SOLDOTNA AK 99669 Sara N. Watsjold PO BOX 510 SEWARD AK 99664 Scott Anderson Living Trust 545 "N" STREET ANCHORAGE AK 99501-1915 State of Alaska Department of Natural Resources 550 W. 7TH AVENUE, SUITE 650 ANCHORAGE AK 99501-3576 Steve & Edi Macik 34410 KALIFONSKY BEACH ROAD KENAI AK 99611 Steve Langston 3531 32ND WAY NW OLYMPIA WA 98502 Steven & Merrie Washburn I PO BOX 2309 KENAI IAK 199611 Page 7 of 9 KGS Full Pool Address List Surface and Interval.xls EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 Stewart Kizer PO BOX 2697 KENAI AK 99611 Suk Leong Lee & Sin Wan 2260 WILSON STREET HONOLULU HI 96819 Sylvia Chun 1469 ALA LELEU STREET HONOLULU HI 96818 Thomas & Nancy Sorenson 287 HANS COURT NW BEMIDJI MN 56601 Thomas & Sherri Johnson PO BOX 2772 KENAI AK 99611 Timothy & Lorraine Heikkila PO BOX 844 KENAI AK 99611 Timothy & Marilyn Keener PO BOX 2833 KENAI AK 99611 Timothy Jackinsky, Sara Jackinsky Mae & Anthony Leaf PO BOX 1044 HOMER AK 99603 Tung Tai Lee 1425 LILIHA, APT. 20D HONOLULU HI 96817 Vern & Tina Piatt PO BOX 2896 KENAI AK 99611 Vito L. Manno, Jr. & Joyce D. Manno 4507 REGALO BELLO STREET LAS VEGAS NV 89135-2532 W.B. Sullivan PO BOX 943 KENAI AK 99611 Wayne & Jane Schultz 35605 KALIFONSKY BEACH ROAD KENAI AK 99611 William & Jane Mattson PO BOX 1514 KENAI AK 99611 Page 8 of 9 KGS Full Pool Address List Surface and Interval As EXHIBIT "A" POOL SIX SURFACE OWNERS MARCH 7, 2007 SURFACE OWNER ADDRESS CITY STATE ZIP 35675 Kbeach, LLC 4019 SPICEWOOD SPRINGS ROAD AUSTIN TX 78759 William & Melinda Nelson 37215 KALIFONSKY BEACH ROAD KENAI AK 99611 William A. Ross & Tina L. Voelker- Ross 2220 SHORE DRIVE ANCHORAGE AK 99515-3138 Salamatof Native Association, Inc. PO BOX 2682 JKENAI JAK 99611 Page 9 of 9 KGS Full Pool Address List Surface and Interval As Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Kenai Gas Field, Sterling Pool 6 Application to amend SIO-7 to allow additional gas storage injectors in Sterling Pool 6. Marathon Oil Company by letter dated February 19, 2007 has requested an amendment to Storage Injection Order 7 to authorize the use of additional wells for gas storage injection in the Sterling Pool 6 of the Kenai Gas Field, in accordance with 20 AAC 25.252 and 20 AAC 25.460. In addition, the Commission proposes to correct typographical errors concerning the approved storage area, and to amend the rules to provide a methodology for application and approval of additional wells for the purpose of gas storage. The affected storage area is comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4, 5, 6, 7, 8, 9, 17, 18 of T4, R1 I W, Sections 1, 12, 13 of T4N, R12 W, and Sections 20, 28, 29, 30, 31, 32, 33 of T5N, RI I W, Seward Meridian. The Commission has tentatively scheduled a public hearing on this application for April 3, 2007 at 9:00 am at the offices of the Alaska Oil and Gas Conservation Commission at 333 West 7t' Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on March 16, 2007. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after April 1, 2007. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7 h Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on April 2, 2007 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the April 3, 2007 hearing. If you are a person with a 5;vqf need special accommodations in order to comment or to attend the public hearing, pleasemmission's Special Assistant Jody Colombie at 793-1221 before March 29, 2007. W Published Date: Anchorage Daily News, February 26, 2007 Published Date: Peninsula Clarion, March 1, 2007 STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER IP INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE ADVERTISING ORDER NO. /► O_OZ714O19 M SEE BOTTOM FOR INVOICE ADDRESS F R ° M AOGCC 333 W 7th Ave, Ste 100 Anchorage, AK 99501 907-793-1238 AGENCY CONTACT Ceresa Tolley_February DATE OF A.O. 23 2007 PHONE PCN DATES ADVERTISEMENT REQUIRED: February 26, 2007 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. o Anchorage Daily News PO Box 149001 Anchorage, AK 99514 g SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement Legal® ❑ Display Classified ❑Other (Specify) SEE ATTACHED SEND INVOICE IN TRIPLICATE TO AOGCC, 333 W. 7th Ave., Suite 100 Anchora e AK 99501 PAGE 1 OF 12PAGES TOTAL OF ALL PAGES$ REF ITYPE I NUMBER AMOUNT DATE COMMENTS 1 VEN 2 Axe 02910 3 4 FIN AMOUNT SY CC PGM LC ACCT FY NMR oISr I ua 05 02140100 73451 2 3 4 REQUISITION BY: DIVISION APPROVAL: rM Anchorage Daily News 2/27/2007 Affidavit of Publication 1001 Northway Drive, Anchorage, AK 99508 PRICE OTHER OTHER OTHER OTHER OTHER GRAND AD # DATE PO ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES #3 CHARGES #4 CHARGES #5 TOTAL 144072 02/26/2007 02714019 STOF0330 $192.56 $192.56 $0.00 $0.00 $0.00 $0.00 $0.00 $192.56 STATE OF ALASKA THIRD JUDICIAL DISTRICT Christine Clark, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. 5ubscr>bed and sworn to me betore this date: 9 Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska MY Notice of Public Bearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Kenai Gas Field, Sterling Pool 6 Application to amend SIO-7 to allow additional gas storage injectors in Sterling Pool 6. Marathon Oil Company by letter dated February 79, 2007 has requested an amendment to Storage Iniec- Lion Order 7 to authorize the use of additional wells for gas storage infection in the Sterling P0016 of the Kenai Gas Field, in accordance with 20 AAC 25.252 and 20 AAC 25.460. In addition, the Commission pro- poses to correct typographical errors concerning the approved storage area, and to amend the rules to Provide a methodology for application and approval Of additional wells for the purpose of gas storage. The affected storage area is comprised of the entire area of Sterling Pool 6 and is located in portions of Sections 4,54 7, 8, 9, 17, 18 of T4, RII W, Sections I, 12, 13 Of T4N, R12 W, and Sections' 20, 28, 29, 30, 31, 32, 33 of T5N, RI W, Seward Meridian. The Commission has tentatively scheduled a public hearing on this application for Apri13, 2007 at 9.00 am at the offices of the Alaska Oil and Gas ConsW vation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may re- quest that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 PM on March 16,2007. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after April 1, 2007. In addition, person regarding thi may submit written comments s application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 995o1. Written com- ments must be received no later than 4:30 pm on April 2, 2007 except that if the Commission decides to hold a public hearing, written protest or com- ments must be received no later than the conclu- sion of the April 3, 2007 hearing. If you are a person with a disability who may need special accommodations to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 793-1221 before March 29, 2007. AO# 02714019 Publish: February 26, 02-902 (Rev. 3/94) Publisher/ Ial Copies: Department Fiscal, Departme eiving AO.FRM STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED A O_02714019 ORDER AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF M ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE BOTTOM FOR INVOICE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7`b Avenue. Suite 100 ° Anchorage. AK 99501 PHONE PCN M 907-793-1238 DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News February 26, 2007 PO Box 149001 Anchorage, AK 99S 14 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS g ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account # STOF0330 AFFIDAVIT OF PUBLICATION United states of America REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly swom, according to law, says that he/she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2005, and thereafter for consecutive days, the last publication appearing on the day of . 2005, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2005, Notary public for state of My commission expires 02-901(Rev. 3/94) AO.FRM Public Notice Subject: Public Notice From: Jody Colombie<jody_colombie@admin.state. ak.us> Date: Fri, 23 Feb 2007 12:08:15 -0900 To: Legal Ads Anchorage Daily News <legalads@adn.com> Jody Colombie <jody colombie(a,admin.state .ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Ad Order ADN form.doc Content -Type: application/msword Content -Encoding: base64 Content -Type: application/pdf SterlingGasField6.pdf Content -Encoding: base64 1 of 1 2/23/2007 12:22 PM Kenai Gas Field, Sterling Pool 6 Subject: Kenai Gas Field, Sterling Pool 6 From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Fri, 23 Feb 2007 12:10:49 -0900 To: undisclosed -recipients:; BCC: Cynthia B Mciver <bren_mciver@admin.state.ak.us>, Christine Hansen <c.hansen@iogcc.state.ok.us>, Terrie Hubble <hubbletl@bp.com>, Sondra Stewman <StewmaSD@BP.com>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, trmjrl <trmjrl@aol.com>, jdarlington <jdarlington@forestoil.com>, nelson <knelson@petroleumnews.com>, cboddy <cboddy@usibelli.com>, Mark Dalton <mark.dalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocophillips.com>, "Mark P. Worcester" <mark.p.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, wdv <wdv@dnr.state.ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>, Mikel Schultz <Mikel.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "Janet D. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mckay@gci.net>, Barbara F Fullmer<barbara.f.fullmer@conocophillips.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesno 1 @gci.net>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shell.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>, jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <mapalaska@ak.net>, jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@alaskadc.org>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp@borough.kenai.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobil.com>, marty <marty@rkindustrial.com>, ghammons <ghammons@aol.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@aol.com>, Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary_schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoil.com>, Sharmaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoil.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>, jack newell <jack.newell@acsalaska.net>, James Scherr <james.scherr@mms.gov>, n1617@conocophillips.com, Tim Lawlor <Tim_Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mlewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff<smetankaj@unocal.com>, Gary Rogers <gary_rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur Copoulos@dnr.state.ak.us>, Ken <klyons@otsintl.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, his Matthews <Iris Matthews@legis.state.ak.us>, Paul Decker <paul_decker@dnr.state.ak.us>, Aleutians East Borough 1 of 2 2/23/2007 12:22 PM Kenai Gas Field, Sterling Pool 6 <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>, Mike Mason <mike@kbbi.org>, Garland Robinson <gbrobinson@marathonoil.com>, Cammy Taylor <Camille_Taylor@law.state.ak.us>, Thomas E Maunder<tom_maunder@admin.state. ak.us>, Stephen F Davies<steve_davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoil.com>, Deanna Gamble <dgamble@kakivik.com>, James B Regg <jim_regg@admin.state.ak.us>, Catherine P Foerster <cathy_foerster@admin.state.ak.us>, Bob <Bob@fairweather.com>, gregory micallef <micallef@clearwire.net>, Laura Silliphant <Laura_silliphant@dnr.state.ak.us>, David Steingreaber <david.e.steingreaber@exxonmobil.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve_moothart@dnr.state.ak.us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, Paul Bloom <paul_bloom@ml.com>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple_davidson@dnr.state.ak.us>, Walter Featherly <WFeatherly@PattonBoggs.com>, Tricia Waggoner <taggoner@nrginc.com>, Mike Stockinger <Mike.Stockinger@anadarko.com>, John Spain <jps@stateside.com>, Cody Rice <Cody_Rice@legis.state.ak.us>, John Garing <garingJD@bp.com>, Harry Engel <engelhr@bp.com>, Jim Winegarner<jimwinegarner@brooksrangepetro.com>, Matt Rader <matt_rader@dnr.state. ak.us>, carol smyth <carol.smyth@shell.com>, Arthur C Saltmarsh <art_saltmarsh@admin.state.ak.us>, Chris Gay <cdgay@marathonoil.com>, foms@mtaonline.net, Rudy Brueggeman <rudy.brueggemann@international.gc.ca>, Cary Carrigan <cary@kfgd.com>, Sonja Frankllin <sfranklin6@bloomberg.net> Jody Colombie <jody colombie @ admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration SterlingGasField6.pdf Content -Type: application/pdf Content -Encoding: base64 2 of 2 2/23/2007 12:22 PM Mary Jones David McCaleb Mona Dickens XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography GEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 John Levorsen Kay Munger Michael Parks 200 North 3rd Street, #1202 Munger Oil Information Service, Inc Marple's Business Newsletter Boise, ID 83702 PO Box 45738 117 West Mercer St, Ste 200 Los Angeles, CA 90045-0738 Seattle, WA 98119-3960 Mark Wedman Schlumberger Baker Oil Tools Halliburton Drilling and Measurements 4730 Business Park Blvd., #44 6900 Arctic Blvd. 2525 Gambell Street #400 Anchorage, AK 99503 Anchorage, AK 99502 Anchorage, AK 99503 Ciri Ivan Gillian Jill Schneider Land Department 9649 Musket Bell Cr.#5 US Geological Survey PO Box 93330 Anchorage, AK 99507 4200 University Dr. Anchorage, AK 99503 Anchorage, AK 99508 Gordon Severson Jack Hakkila Darwin Waldsmith 3201 Westmar Cr. PO Box 190083 PO Box 39309 Anchorage, AK 99508-4336 Anchorage, AK 99519 Ninilchick, AK 99639 James Gibbs Kenai National Wildlife Refuge Penny Vadla PO Box 1597 Refuge Manager 399 West Riverview Avenue Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-7714 Soldotna, AK 99669-2139 Richard Wagner Cliff Burglin Bernie Karl PO Box 60868 PO Box 70131 K&K Recycling Inc. Fairbanks, AK 99706 Fairbanks, AK 99707 PO Box 58055 Fairbanks, AK 99711 North Slope Borough Williams Thomas PO Box 69 Arctic Slope Regional Corporation Barrow, AK 99723 Land Department PO Box 129 Barrow, AK 99723 \� �J RECEIVED Alaska Asset Team FEB 2 0 2-007 MMarathon Domestic Production Alaska Oil & Gas Cons, Commission MARATHON Oil Company P.O. Box 196168 Anchorage Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 907/565-3076 February 19, 2007 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 71h Ave, Suite 100 Anchorage, AK 99501 Attn: Mr. John Norman — Chair of Commission RE: Request for amendment to Rule 1, Storage Injection Order No. 7 Dear Chairman Norman: Marathon Oil Company respectfully requests amendment to Rule 1 of Storage Injection Order No. 7 (SIO 007.000) to allow additional wells to be used for gas injection purposes in the Sterling Pool 6 formation. Amendment is permissible under Rule 7 of the storage injection order. Any future applications to add injection wells to SIO-7 will be by separate submittal on an as -needed basis, with a full description of well design and demonstration of mechanical integrity. At the present time, only one well, KU 31-07X, is permitted as a Pool 6 gas injection well under SIO-7. Marathon anticipates submitting an application within the next two weeks to permit a second well for gas injection service into the same Pool 6. The candidate well for that service is KBU 23X-06, which is currently completed as a Pool 6 producer. Marathon has an immediate need for additional injection capacity and has scheduled an April, 2007 workover of Well 23X-06 to equip the well for dual injection and production service. Because of the ongoing need to manage our production operations against seasonal swings in our market demand, an additional injection well for the Kenai Gas Storage project is critically required to provide increased injection capacity, as well as to provide redundancy to KU 31-07X. It is possible that additional gas injection wells may be required in the future, depending upon future utilization of the storage project. We have been advised by AOGCC staff that the requested amendment to Rule 1 will require public notice, however once this amendment is approved, additional injection wells may be added to the SIO by administrative action without hearing provided no new land- owner issues are expected to result from such application. Marathon's recognizes its responsibility to ensure the public safety, protection of the environment, and conservation of the resource. It is anticipated that any application for future gas injection wells, including Well KBU 23X-06, will be closely scrutinized and all gas injection wells will be subject to existing Rules 2 through 6 of Storage Injection Order 7. Any questions may be directed to Lyndon Ibele at 907-565-3042. Sincerely, Lyndon Ibele Production Coordinator