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Home My WebLink AboutCO 544 )'.: ImageÞroject Order File Cover paJe XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. 0D l;LfL+ Order File Identifier Organizing (done) D Two-sided III "11111111111111 ~escan Needed III 1111111111111111 RESCAN ~ Color Items: ~reYSCale Items: 0 Poor Quality Originals: DIGITAL DATA OVERSIZED (Scannable) D Maps: D Diskettes, No. D Other, No/Type: D Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) D Other: D Logs of various kinds: NOTES: Scanning Preparation x 30 = + DOther::'1 J ý) Date: I, 1 tJ5' 151 m r' 111111111111111111 11 ~ Date:! . 7 os 151 111 ' = TOT~L PAGES lot, b~~~~J~~7,O'OC~I~~;I;;;¡; n1P BY: Helen ~ Project Proofing BY: Hele~ BY: Helen~ \ Production Scanning Stage 1 Page Count from Scanned File: 101 (Count does include ~er sheet) Page Count Matches Number in Scanning Preparation: V YþS 1 NO Helen G;) Date: J r-' OS Is! VVlf BY: Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Helen Maria Date: /s/ Scanning is complete at this point unless rescanning is required. I111I1I1I1111111111 ReScanned 1111111111111111111 BY: Helen Maria Date: /s/ Comments about this file: Quality Checked 1111111111111111111 12/1/2004 Orders File Cover Page.doc INDEX CONSERVATION ORDER #544 North Beluga #1 1. November 10,2004 Pelician Hill Application for an Spacing Exception North Beluga #1 2. November 17,2004 Notice of Hearing, e-mail mail list, bulk mailing list Affidavit of Publication 3. ---------------- Various e-mails 4. November 17, 2004 Ltr from Bankston re: Spacing Exception 5. November 17,2004 Pelican Hill's Withdraw of Application CONSERVATION ORDER #544 ::Jt: lh Pelican Hill Oil & 60S, Inc. 4141 B Street, Suite 205 Anchorage, AK 99503 ) ~ .r(', 1iV~Aì\YM:~=M O..:c:-:t;'";) &0. f2~~ ~¥iC ~ - .lJ.\i11' - J, ~. \.JtU...'~ Q 907-277-1401, Telephone 907-277-1402, Fax November 17, 2004 Mr. John Norman Chairman Alaska Oil and Gas Commission 333 W. 7th Ave. Suite 100 Anchorage, AK 99501 Re: Spacing Exception N. Beluga No.1 Gas Well Dear Mr. Norman: On November 10,2004 Pelican Hill Oil & Gas, Inc. filed a spacing exemption for its N. Beluga No.1 gas well. That well will be located on a lease that is being earned by a farmout from the present lease holder, Trading Bay Oil and Gas, LLC, for which Paul L. Craig is both a principal and a signatory. At the time of filing of the exception, Paul L. Craig, as an individual, owned the mineral rights to a five-acre federal tract, US 3901, located in Sec. 12-T13N-R10W. This tract is approximately 400 feet from the proposed well site and is entirely surrounded by ADL 389933. As per the letter from William M. Bankston, attorney for Paul L. Craig, dated November 17, 2004 to the AOGCC, ownership in US 3901 has been transferred to Trading Bay Oil and Gas, LLC. The hydrocarbon rights associated with US 3901 have now been farmed out to Pelican Hill Oil and Gas, Inc. According to Alaska Statute 20 AAC 25.055(a)(2), a spacing exception is not necessary. Please withdraw Pelican Hill's application for same. Sincerely, ~.~ Arlen Ehm Vice President/Alaska Pelican Hill Cc: Mr. Al Gross, Pelican Hill Mr. Carl Bauman, Hughes Thorsness Mr. Paul L. Craig NOV 1 7 2004 :t:t: ~ ) BANKSTON, GRONNING, O'HARA, SEDOR, MILLS, GIVENS & HEAPHEY A PROFESSIONAL CORPORATION ATTORNEYS AT LAw 601 W. 5TH AVENUE, SUITE 900 ANCHORAGE, ALASKA 99501 (907) 276-1711 FACSIMILE (907) 279-5358 WWW.BANKSTON.TO WILLIAM M. BANKSTON LEA E. FILIPPI JON T. GIVENS CHRIS D. GRONNING CHRISTOPHER J. HEAPHEY PAMELA J. KEELER MICHAEL R. MILLS BARBRA Z. NAULT STEVEN T. O'HARA JOHN M. SEDOR BRIAN J. STIBITZ THOMAS V. WANG, JR. November 17, 2004 Mr. John Norman, Chairman Alaska Oil and Gas Commission 333 W. 7th Ave. Suite 100 Anchorage, AK 99501 Re: Spacing Exception N. Beluga No.1 Gas Well Dear Mr. Norman: This law firm represents Trading Bay Oil & Gas, LLC and Paul L. Craig. The proposed N. Beluga Gas Well No.1 is to be located on ADL 389933 (owned by Trading Bay Oil & Gas, LLC) about 400 feet from the boundary of US 390 1 (owned by Paul L. Craig, an individual). Pursuant to Alaska Statutes and Regulations, Pelican Hill Oil & Gas, Inc. - the operator of the N. Beluga Gas Well No.1, has applied for a Spacing Exception (see Pelican Hill's letter to you dated September 10, 2004). Please be advised that Pelican Hill Oil & Gas, Inc, Trading Bay Oil and Gas, LLC, and Paul L. Craig - an individual, have reached an agreement resulting in no further need for a spacing exception. Specifically, Paul L. Craig has agreed to immediately transfer the hydrocarbon rights associated with US 3901 to Trading Bay Oil & Gas, LLC which will result in the owners of the hydrocarbon rights on each side of the property line to be the same party. Trading Bay Oil & Gas shall immediately farm-in the hydrocarbon rights associated with US 3901 on similar terms as the farm-in of ADL 389933 to Pelican Hill Oil & Gas, LLC and welcomes Pelican Hill's exploitation of these hydrocarbon rights. ) Mr. John Norman, Chairman Alaska Oil and Gas Commission November 17,2004 Page 2 ) In summary, the spacing exception is no longer necessary with regard to the N. Beluga No.1 Gas Well for the reasons stated above. Very truly yours, BANKSTON, GRONNING, O'HARA, SEDOR, MILLS, GIVENS & HEAPHEY, P.C. ìuz(ii~ -- William M. Bankston WMB:cfv cc: Trading Bay Oil & Gas, LLC Pelican Hill Oil & Gas, Inc. Carl J.D. Bauman, Esq. Paul L. Craig T3303\06\L TRnorman WMBl =+t: w [Fwd: RE: AOGCC Requests Clarification ofYQJlr Intentions Regar... ~ . ) ) Subject: [Fwd: RE: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well] From: John Norman <john - norman@admin.state.ak.us> Date: Tue, 16 Nov 2004 13:18:07 -0900 To: Jody J Colombie <jody - colombie@~admin.state.ak.us> cc: file -------- Original Message -------- Subject:RE: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well Date:Tue, 16 Nov 2004 11:27:07 -0900 From:Arlen Ehm <arlen.ehm@alaska.net> To:'Stephen Davies' <steve davies@admin.state.ak.us>, htlaw@htlaw.com, wbankston@bankston.to, 'Mark D Myers' <mark myers@dnr.state.ak.us> CC:'John Norman' <john norman@admin.state.ak.us>, 'Daniel Seamount' <dan seamount@admin.state.ak.us>, 'Tom Maunder' <tom maunder@admin.state.ak.us>, 'John Hartz' <jack hartz@admin.state.ak.us>, 'William D Vandyke' <bill van dyke@dnr.state.ak.us> Steve: For your information, Trading Bay Oil and Gas LLC and Pelican Hill Oil and Gas, Inc. are presently in discussions that should provide the clarification that you have requested. Hopefully, we will be in touch with you by tomorrow. Thanks. Arlen From: Stephen Davies [mailto:steve davies@admin.state.ak.us] Sent: Tuesday, November 16, 2004 10: 14 AM To: htlaw@htlaw.com; wbankston@bankston.to; Arlen Ehm; Mark D Myers Cc: John Norman; Daniel Seamount; Tom Maunder; John Hartz; William D Vandyke Subject: AOGCC Requests Clarification of Your Intentions Regarding Pelican HiWs Proposed N Beluga 1 Well Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, R10W, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.'s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: 10f2 11/16/2004 1:41 PM [:~d: RE: AOGCC Requests Clarification of Yo)" Intentions Regar... ') 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William,M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated O,s;tober 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 2. Permit to Drill Application 3. Spacing Exception Application The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1, 2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. Paul L. Craig reportedly owns the hydrocarbon rights for US Survey 3901. The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17, 2004. The earliest possible hearing date the Commission could set for this matter is December 21, 2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1, 2004. The Commission can consider approving the permit to drill in advance of the spacing exception hearing, only if: 1. All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Commission Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation John K. Nomlan <John Nonnan(a,'admin.state.us> Commissioner Alaska Oil & Gas Cmservation Commission 20f2 11/16/2004 1:41 PM Re: AOGCC Requests Clarification of Your Intentions Regarding Pe... . <ill ) ') Subject: Re: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well] " " '. " . . . . " From: "Paul L. Craig" <pcraig@gci.net> Date: Tue, 16 Nov 200411:38:16 -0900 ~j;=~];~:r~~_Y.~~f;~i;~~;:¡:::~.~:(:;~~;O!',;:;;:t~¡¡,~~:~~¡,;2"':f~1~:N''.;t~t,::I'''!:':;;;, I confirm that I am in receipt of the following message. I wi II reply to your inquiry as quickly as possible but do not yet have an answer to the questions posed by you (Mr. Davies) and Mr. Maunder. Paul L. Craig ----- Original Message ----- "ffrorri: Stëphen"D"aviéŠ:""~"':,::,'"::" "'". To: pcraíQ@ç¡cì.net Sent: Tuesday, November 16, 2004 11 :21 AM Subject: [Fwd: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well] ~ :.." . Dear Mr. Craig, At the time I sent the message below I did not have your email address. Please accept my apologies for the delay. Please confirm receipt of this email via return email. Thank you for your help, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission -------- Original Message -------- Subject:AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well Date:Tue, 16 Nov 2004 10:13:37 -0900 From:Stephen Davies <steve davìes(~admin.state.akus> Organization:State of Alaska To:htlaw@htlaw.com, wbankston(á}bankston.to, Arlen Ehm <arlen.ehm(ä}alaska.net>, Mark D Myers <mark myers(~dnr.state.akus> CC:John Norman <iohn norman@admìn.state.akus>, Daniel Seamount <clan seamount(Cl}admin.state.ak.us>, Tom Maunder <tom maunder(~admin.state.ak.us>, John Hartz <jack hartz@admin.state.ak.us>, William D Vandyke <bill van dyke@dnr.state.akus> Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, RIOW, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.'s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: lof2 11/16/2004 2:20 PM Re: AOGCC Requests Clarification of Your Intentions Regarding Pe... ). ..e>Þ ) 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated October 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 2. Permit to Drill Application 3. Spacing Exception Application The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1,2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. Paul L. Craig reportedly owns the hydrocarbon rights for US Survey 3901. The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17,2004. The earliest possible hearing date the Commission could set for this matter is December 21, 2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1,2004. The Commission can consider approving the permit to drill in advance of the spacing exception hearing, only if: 1 . All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation Commission 20f2 11/16/20042:20 PM RE: AOGCC Requests Clarification of Your Intentions Regarding Pe... ') ) SuliJject: RE: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Wen Frørn: Arlen Ehm <arlen.ehm@alaska.net> . Date: Tue, 16 Nov 200411:27:07-0900 . : . Steve: For your information, Trading Bay Oil and Gas LLC and Pelican Hill Oil and Gas, Inc. are presently in discussions that should provide the clarification that you have requested. Hopefully, we will be in touch with you by tomorrow. Thanks. Arlen From: Stephen Davies [mailto:steve_davies@admin.state.ak.us] Sent: Tuesday, November 16, 2004 10:14 AM To: htlaw@htlaw.com; wbankston@bankston.to; Arlen Ehm; Mark D Myers Cc: John Norman; Daniel Seamount; Tom Maunder; John Hartz; William D Vandyke Subject: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, T13N, RI0W, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.' s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated October 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 2. Permit to Drill Applic~tion 3. Spacing Exception Application The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1, 2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. Paul L. Craig reportedly owns the hydrocarbon rights for US Survey 3901. 10f2 .11/16/20042:20 PM RE: AOGCC Requests Clarification of Your Intentions Regarding Pe... ') ) The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17,2004. The earliest possible hearing date the Commission could set for this matter is December 21,2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1, 2004. The Commission can consider approving the permit to drill in advance of the spacing exception hearing, only if: 1. All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Commission Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation 2of2 11/16/2004 2:20 PM RE: AOGCC Requests Clarification of Your Intentions Regarding Pe... ) ) Subject: RE: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well fro.m: Arlen Ehm <arlen.ehm@alaska.net> . Date: Tue, 16 Noy 200411:27:07 -0900 . . Steve: For your information, Trading Bay Oil and Gas LLC and Pelican Hill Oil and Gas, Inc. are presently in discussions that should provide the clarification that you have requested. Hopefully, we will be in touch with you by tomorrow. Thanks. Arlen From: Stephen Davies (mailto:steve_davies@admin.state.ak.us] Sent: Tuesday, November 16, 2004 10:14 AM To: htlaw@htlaw.com; wbankston@bankston.to; Arlen Ehm; Mark D Myers Cc: John Norman; Daniel Seamount; Tom Maunder; John Hartz; William D Vandyke Subject: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, RI0W, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.' s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated October 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 2. Permit to Drill Application 3. Spacing Exception Application The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1,2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. Paul L. Craig reportedly owns the hydrocarbon rights for US Survey 3901. 10f2 11/16/20043:22 PM RE: AOGCC Requests Clarification of Your Intentions Regarding Pe... ) ) The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17, 2004. The earliest possible hearing date the Commission could set for this matter is December 21, 2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1, 2004. The Commission can consider approving the permit to drill in advance of the spacing exception hearing, only if: 1. All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Commission Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation 20f2 11/16/20043:22 PM Re:~OGCC. Requests Clarification of Your Inte)ions Regarding Pe... Subject: Re: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga I Well From: John Norman <john - norman@admin.state.ak.us> Date: Tue, 16 Nov 2004 11:07:50 -0900 To: Stephen Davies <steve - davies@admin.state.ak.us> Thanks Steve. Be sure to cc file. Stephen Davies wrote: Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, RI0W, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.'s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated October 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 2. Permit to Drill Application 3. Spacing Exception Application The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1, 2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. Paul L. Craig reportedly owns the hydrocarbon rights for US Survey 3901. The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17, 2004. The earliest possible hearing date the Commission could set for this matter is December 21, 2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1, 2004. The Commission can consider approving the permit to drill in advance of the spacing exception lof2 11/16/2004 11:11 AM Re: AOGCC. Requests Clarification of Your Inte,)ions Regarding Pe... ') bearing, only if: 1. All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Commission Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation John K. Norman <John Norman@admin.state.us> Commissioner Alaska Oil & Gas Cmservation Commission 2of2 11/16/2004 11:11 AM RE: [Fwd: AOGCC Requests Clarification of Your Intentions Regar... ~ 0(..; ) ') Subject: RE: [Fwd: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 WeIll' , . From: Carl Bauman <CJB@htlaw.com> »a~e:.!lle, ~6.No~ 200~ 10:59::25 ~~999 '" .. .., . .. .'. '. . . . Tc);"~te,ph~~~QaÝie.~~~ev<ß~Yí~s(w4*1i~~tat~~ak;:.us>:'~ >::>:': j::t:'. Mr. Davies, I received this e-mail. Thank you. Carl Bauman -----Original Message----- From: Stephen Davies [mailto:steve_davies@admin.state.ak.us] Sent: Tuesday, November 16, 2004 10:31 AM To: Carl Bauman Subject: [Fwd: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well] Mr. Bauman, My original attempt to send this email to you via htlaw(âJhtlaw.com failed. Please confirm receipt of this email via return email. Thank. you for your help, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission -------- Original Message -------- Subject:AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well Date:Tue, 16 Nov 2004 10:13:37 -0900 From: Stephen Davies <steve daviesC~admin.state.akus> Organization:State of Alaska To:htlaw(á')htlaw.com, wbankston~¡?bankston.to, Arlen Ehm <arlen.ehm(ä)alaska.net>, Mark D Myers <mark myers@dnr.state.ak.us> CC:John Norman <john norman@admin.state.akus>, Daniel Seamount <dan seamount({yadmin.state.akus>, Tom Maunder <tonl maunder@admin.state.ak.us>, John Hartz <jack hartz@admin.state.akus>, William D Vandyke <bill van dyke(â¿dnr.state.ak.us> Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, RI0W, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.'s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated October 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 10f2 11/16/20042:20 PM RE: [Fwd: AOGCC Requests Clarification of Your Intentions Regar... ) 2. Permit to Drill Applicatión 3. Spacing Exception Application ~) The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1, 2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. Paul L. Craig reportedly owns the hydrocarbon rights for US Survey 3901. The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17, 2004. The earliest possible hearing date the Commission could set for this matter is December 21, 2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1, 2004. The Commission can consider approving the permit to drill in advance of the spacing exception hearing, only if: 1. All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation Commission 20f2 11/16/20042:20 PM AOGCC Requests Clarification of Your Intentions Regarding Pelica... . ' ,\. ') ) Subject: AOGCC Requests Clarification of Your Intentions Regarding Pelican Hill's Proposed N Beluga 1 Well From: Stephen Davies <steve - davíes@admin.state.ak.us> Da~e:Tue, 16Nov 2004 10:13:37~0900, '" ',' " " "',,' ,'" '~C"'" '."" ,..""., ..' Gentlemen: Please forward this email to your clients who are directly or indirectly involved with Pelican Hill's proposed N Beluga 1 well and the lands or leases within 3000 feet of the proposed location of the well, which is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, RIOW, Seward Meridian, Cook Inlet Basin, Alaska. The Alaska Oil and Gas Conservation Commission ("Commission") is in receipt of the following documents concerning Pelican Hill Oil & Gas, Inc.' s ("Pelican Hill") proposed N Beluga 1 well and the lands and leases surrounding it: 1. Letter to Carl J.D. Bauman of Hughes, Thorsness, Powell, Huddleston & Bauman, LLC from William M. Bankston of Bankston, Gronning, O'Hara, Sedor, Mills, Givens & Heaphey, dated October 27,2004, which is entitled "Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933." 2. Permit to Drill Application 3. Spacing Exception Application The Commission requests clarification of the positions of the parties concerning this proposed well. In the letter listed in Item 1 above, Mr. Bankston stated that it is Trading Bay Oil & Gas, LLC's expectation that Pelican Hill will first secure a permit to drill for the N Beluga 1 well, and then start the actual, continual drilling operations on or before December 1,2004. Mr. Bankston correctly identifies the need for a spacing exception for this well based on its close proximity to US Survey 3901. Mr. PaulL. Craig reportedly owns the hydrocarbon rights for US Survey 3901. The Commission received a spacing exception application for N Beluga 1 from Pelican Hill, and will publish a Notice of Public Hearing in the Anchorage Daily News on November 17, 2004. The earliest possible hearing date the Commission could set for this matter is December 21,2004. The permit to drill application received from Pelican Hill indicates intent to start drilling operations on or before December 1,2004. The Commission can consider approving the permit to drill in advance of the spacing exception hearing, only if: 1. All parties are in agreement with the drilling of this well at the proposed location, and 2. Pelican Hill agrees to assume all liability for any protest to the spacing exception. Please advise the Commission as to your intentions in this matter. It is important that we have your response immediately in order to be able to process the permit to drill application in a timely manner. The Commission would like to take this opportunity to wish all of you an excellent Holiday Season. Sincerely, 10f2 11/16/2004 2:24 PM AOGCC Requests Clarification of Your Intentions Regarding Pelica... 20f2 Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission ') Tom Maunder, P.E. Senior Petroleum Engineer Alaska Oil and Gas Conservation Commission 11/16/20042:24 PM Re: 20 AAC 25.055 ') ) Subject: Re: 20 AAC 25.055 Fro~: Stephen Davies <steve - davies@admin.state.ak.us> Da.te: Mon, 15 Nov 200411:11:35 -0900 ... To;Wlên)~hÌ11; ~~lèn.~lìin@álasIgt~net> .. Arlen, The requirement for notification of a spacing exception via certified mail to all owners, landowners and operators within 3000 feet of a proposed gas well (1000 feet from an oil well) is intended to ensure that direct notice has been served to those parties whose correlative rights may be affected by testing or regular production from the well. It provides them with the essential details of the requested exception, and allows them to opportunity to comment or protest. It also removes any claim of "unawareness" that may arise. The Notice of Opportunity for Public Hearing that the Commission publishes in the Anchorage Daily News has the same purpose. It is designed to make the public aware of proposed spacing exceptions, and provide them the opportunity to comment. Any member of the public can protest, provide comment, or request that the Commission hold a hearing. This gives everyone a opportunity to be heard by the Commission, and the Commission takes these protests or comments into account during our decision-making process. If you have any questions, please call me at 793-1224. Thanks, Steve Davies AOGCC Arlen Ehm wrote: Steve: I have been cogitating some more about the spacing exception requirements for the N. Beluga No.1 well. While I now understand the pertinent statute a bit more than before, understanding the reasoning behind other aspects of the statute is still very difficult. I am confused about the intent of 20 MC 25.055 versus the language of the statute as evidenced by subsection (a)(2) versus subsection (d)(1). It would seem that the purpose of this statute is to protect the correlative rights of a landowner ("owner of a mineral or subsurface estate") or lessee ("owner who has the right to drill into and produce from a pooL..") who is located less than 1 ,500 feet from the well bore. However, if that is the case, what standing do the landowners, lessees or operators have who are located more than 1,500 feet but less than 3,000 feet from the well bore? Can the distant parties (DNR and ConocoPhillips) protest or is this just a courtesy notification? What is the reasoning behind the notification to the distant parties? As 20 MC 25.055(d) is written, ConocoPhillips and the DNR get noticed only because of the necessity to request a spacing exception from a party within the 1,500 feet provision, not either of them. What difference could this request for an exception possibly have to these two parties when they are not close enough to trigger a spacing exception on their own? In my response to you on Friday I admitted that I had missed ConocoPhillips but failed to see why the DNR was involved. I still question why either one is involved or should be involved other than the statute calls for it. Arlen 1 of 1 11/16/20043:23 PM Re: ) ) Subject: Re: . From: Stephen Davies. <steve - davies@admin.state.ak.us.> Date: Mon, 15 Nov 2004 10:21 :52 -0900 ~~.~.ÁI'I~n ~hm ~arleii~:éh#l@al~k~~nçt~~ ::: .' ".. Arlen, Commission regulations regarding spacing exceptions and their applications are in place to ensure that the rights of owners, landowners and operators within 3000 feet of a gas well are protected. In order to do so, they must be provided notice via certified mail and the opportunity to be heard. The Commission requires proof of notification. These are required by Commission regulation 20 AAC 25.055. To ensure compliance, the Commission follows the same procedures, every time, with every operator. This ensures rights are protected and provides a complete record. If we weren't consistent, the Commission could be accused of applying regulatory standards in a capricious manner, and could be open to process-related litigation. Regulation 20 AAC 25.055(d) says, in part, "The applicant for an exception shall send notice of the application by certified mail to the owners, landowners and operators [within 3000 feet of a well drilling for gas for which the exception is sought] and shall furnish the commission with a copy of the notice, the date of mailing, and the addresses to which the notice was sent. The application must include (1) the names of all owners, landowners and operators of all properties within...3,OOO feet of a well drilling for gas for which an exception is sought..." 1. Pelican Hill's application did not include a listing of the names of all owners, landowners, and operators within 3000 feet of the proposed N Beluga 1 well. 2. ConocoPhillips, as an operator within 3000 feet, must be noticed. The application Pelican Hill submitted doesn't demonstrate that ConocoPhillips received notice. 3. AK DNR, as landowner, must also be provided notice via certified mail. Expectation of awareness on DNR's part does not meet the requirements of the regulation. The application Pelican Hill submitted does not demonstrate that AK DNR received notice. 4. Mr. Craig, as offset owner and landowner, was rightfully provided notice via certified mail -- Pelican Hill's application indicates this has been done. 5. Because Mr. Craig is the principal and signatory for Trading Bay Oil and Gas, the direct notice to Mr. Craig satisfies the requirement to notice Trading Bay Oil and Gas. Because of Pelican Hill's desired time-frame, the Notice of Public Hearing has been prepared and submitted for publication in the Anchorage Daily News. However, until Pelican Hill submits information demonstrating that ConocoPhillips and AK DNR have been provided notice, the application for spacing exception must be considered deficient. If you have any questions, please call me at 907-793-1224. Sincerely, Steve Davies AOGCC Arlen Ehm wrote: Arlen, Questions regarding the spacing exception application for N. Beluga 1: Owners and Operators: 1. Are there any other owners or operators, other than Pelican Hill and Paul Craig, within 3000 feet of the proposed N Beluga 1 well? Yes, ConocoPhillips is such an operator located approximately 1700 feet to the south of the proposed well lof2 11/16/20043:23 PM Re: " :JIll ') ') and I failed to list them. 3. Does the notice to Paul Craig also serve as the notice to Trading Bay Oil and Gas? Why would we notice Trading Bay Oil and Gas? It still owns the lease where we are drilling, ADL 389933, is farming that lease out to Pelican Hill and has executed both a Designation of Operator form and an Authorization to Operate form in favor of Pelican Hill? In my way of thinking, he should be well aware of this spacing exception application. In fact, you have correspondence in your files from his attorney that discuss this matter. I don't understand that one. Should we notice Pelican Hill also? Mr. Craig's relationship to Trading Bay Oil and Gas is given in Pelican Hill's notice letter to Mr. Craig. 4. Are there any other partners in Trading Bay Oil and Gas other than Mr. Craig? If so, Mr. Craig has not revealed them. Landowners: The landowners within 3000 feet are the state of Alaska and Paul Craig. 1. Did you notify the Alaska Department of Natural Resources? They own the mineral rights on the property that we are on, ADL 389933. Why would we notice them? They should be very well aware that we are drilling the well on their mineral rights and have approved of Pelican Hill's Plan of Operations. They should be aware that they do not own US 3901. 2. Are there any other landowners within 3000 feet of the proposed well? None other than the ADNR the owner of the mineral rights where we are drilling and the mineral rights on the offsetting property to the south Thanks, Steve Davies AOGCC 793-1224 20f2 11/16/2004 3 :23 PM 20 MC 25.055 ') ') Subject: 20 AAC 25.055 From: Arlen Ehm <arlen.ehm@alaska.net> ~ijfar~¡;~~d~~~;t~4œt~;;~~~¥k~~~¡t~I.~~~'\';¡.:id;::t";:~;:. Steve: I have been cogitating some more about the spacing exception requirements for the N. Beluga No.1 well. While I now understand the pertinent statute a bit more than before, understanding the reasoning behind other aspects of the statute is still very difficult. I am confused about the intent of 20 AAC 25.055 versus the language of the statute as evidenced by subsection (a)(2) versus subsection (d)(1). It would seem that the purpose of this statute is to protect the correlative rights of a landowner ("owner of a mineral or subsurface estate") or lessee ("owner who has the right to drill into and produce from a pooL..") who is located less than 1,500 feet from the well bore. However, if that is the case, what standing do the landowners, lessees or operators have who are located more than 1 ,500 feet but less than 3,000 feet from the well bore? Can the distant parties (DNR and ConocoPhillips) protest or is this just a courtesy notification? What is the reasoning behind the notification to the distant parties? As 20 AAC 25.055(d) is written, ConocoPhillips and the DNR get noticed only because of the necessity to request a spacing exception from a party within the 1,500 feet provision, not either of them. What difference could this request for an exception possibly have to these two parties when they are not close enough to trigger a spacing exception on their own? In my response to you on Friday I admitted that I had missed ConocoPhillips but failed to see why the DNR was involved. I still question why either one is involved or should be involved other than the statute calls for it. Arlen 1 of 1 11/16/20043:22 PM ') ) From: Arlen Ehm <arlen.ehm@alaska.net> Date:" Fri~ 12 Nov 2004 16:22:28 -0900 " ~~¡;=~~~~~~tþ.=~(~~~~~~¡~~l~d~,t~1:~:;;ft;....., Arlen, Questions regarding the spacing exception application for N. Beluga 1: Owners and Operators: 1. Are there any other owners or operators, other than Pelican Hill and Paul Craig, within 3000 feet of the pro posed N Beluga 1 well? Yes, ConocoPhillips is such an operator located approximately 1700 feet to the south of the proposed well and I failed to list them. 3. Does the notice to Paul Craig also serve as the notice to Trading Bay Oil and Gas? Why would we notice Trading Bay Oil and Gas? It still owns the lease where we are drilling, ADL 389933, is farming that lease out to Pelican Hill and has executed both a Designation of Operator form and an Authorization to Operate form in favor of Pelican Hill? In my way of thinking, he should be well aware of this spacing exception application. In fact, you have correspondence in your files from his attorney that discuss this matter. I don't understand that one. Should we notice Pelican Hill also? Mr. Craig's relationship to Trading Bay Oil and Gas is given in Pelican Hill's notice letter to Mr. Craig. 4. Are there any other partners in Trading Bay Oil and Gas other than Mr. Craig? If so, Mr. Craig has not revealed them. Landowners: The landowners within 3000 feet are the state of Alaska and Paul Craig. 1. Did you notify the Alaska Department of Natural Resources? They own the mineral rights on the property that we are on, ADL 389933. Why would we notice them? They should be very well aware that we are drilling the well on their mineral rights and have approved of Pelican Hill's Plan of Operations. They should be aware that they do not own US 3901. 2. Are there any other landowners within 3000 feet of the proposed well? None other than the ADNR the owner of the mineral rights where we are drilling and the mineral rights on the offsetting property to the south Thanks, Steve Davies AOGCC 793-1224 Change of Content-Type: application/rnsword Content-Encoding: base64 1 of 1 11/16/2004 3 :22 PM Owners, Landowners, Operators Notification for N Beluga 1 spacing... ') ) Subject: Owners,.Landowners, Operators Notification for N Beluga 1 spacing exceþtion Fròm: Stephen Davies <steve - davies@admin.state.ak.us> ~~~~~!$æ~.~~¡;;,.;?::'X:'.+[t:[;i);\;;:,;:;i;"_,;,-:;I.¡;j;;:;!':;~,~.:,.' ::i{,:,'.. Arlen, Questions regarding the spacing exception application for N. Beluga 1: Owners and Operators: ~. Are there any other owners or operators, other than Pelican Hill and Paul Craig, within 3000 feet of the proposed N Beluga 1 well? 2. What relationship does Trading Bay Oil and Gas have to Paul Craig? 3. Does the notice to Paul Craig also serve as the notice to Trading Bay Oil and Gas? 4. Are there any other partners in Trading Bay Oil and Gas other than Mr. Craig? Landowners: The landowners within 3000 feet are the state of Alaska and Paul Craig. ~. Did you notify the Alaska Department of Natural Resources? 2. Are there any other landowners within 3000 feet of the proposed well? Thanks, Steve Davies AOGCC 793-1224 1 of 1 11/16/20043:23 PM N Beluga 1: Land Status Question Subject: N Beluga] : Land Status Question From: Stephen Davies <steve_davies@admin.state.ak.us> Date: Mon, 08 Nov 2004 14:03: 17 -0900 To: Arlen Ehm <arlen.ehm@alaska.net> Arlen, While processing Pelican Hill's permit to drill applicaiton for the N Beluga 1 well, I noticed a small "blank" spot on DNR's map of the lease ADL 389933 (see attached). It is important to know what the status of that blank spot is as N Beluga 1 will lie nearby. I'll work on it from my end, but can you or your land person tell me who the owners and landowners of that spot are? Thanks, Steve Davies ---, -'I.oØ'--"'~:;" ,~,,,,"-- .'" -" ---,,~.. T.- ~ ..FP~ nd Gas Map .~ .-/ 10f2 11/8/20045:34 PM BLM-Alaska ALIS Online page 1 01 L US Department of the Interior Bureau of Land Management Alaska Land Information System - ALIS Online Case Retrieval by Survey Type/Number US SURVEY 3901 -;u,:";" :,..~*IU~~.,_.~;'._.MW.~~.,-.--';)'/'~,{»"~~ll~~l>WWill~»*M¡.l~nU~~Jo~M$~'J«IfflW~_!/~U~_(l,xou~tm,'W.~~;z~«'*~-WØt~~Jfflm~;«~'óÆnWMø,..O:f«"',«~):I~~»>«~(~~>1ffl",~~w..>=-'M0~ Click on the Abstract button next to the case serial number to view abstract for that case. ~j J)""il.. 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Data displayed by the ALIS-Online is refreshed Monday-Friday on an hourly basis from 7:00am to 9:00pm with data retrieved from the BLM-Alaska ALIS Production database. No warranty is made by the Bureau of Land Management as to the accuracy, reliability, or completeness of these data. Refer to specific BLM case files for official land status information. ~ For case data related information/help, contact the BLM Alaska Public Information Center at (907) 271-5960. ---..----- --- '-....-",...---.. -----.- ,-=-",-"...-._.__.-.....~--......---_......__.o-..~.......... -~_._.- --~""""""_L-_,""~---"~",,,-,, - - '''''..'''-0-"" .-. . ..- .... "'.°- .......-"--...- -.....- -_..._......_n_.- http://www.ak.blm.gov/perl-bin/alis/srvtype/do_srv_retrieval.pl 11/8/2004 NOV-08-2004 MON 03:22 PM BLM Div Energy/SolidMins FAX NO, 907 2713933 .' ) ) p, 01 3ureau Q~ ~an¿' M..~anagement f":'as.,a State O-"lce vu 222 w: 7th, #13 Anchorage. Ala~;,ka 99513~7599 (907) 27 J -4426 Fax: (907) 271-5479 FAX TRANSMISSION COVER SHEET Date .. November 8. 2004 To: STEVE DA VIES 276-7542 Fax: Re: uss 3901 PATENT &MTP FOR J3N lOW, S.M. Sender: Bob Merrill YOU SHOULD RECEIVE 3 PAGE(S). INCLUDING TIllS COVER SflEET. IF YOU DO NOT RECEIVE AU THE PAGES. PLEASE CALL (907) 271-4426. Hi, Steve. Here's a copy of the patent [50-66-0037] for D.S.Survey 3901 and a COPY' of the Master Title Plat [MTP]for T13N, RIOW, Seward Meridian. You may want to enlarge them to read them to read thelTI more easily. Good lucl( with whatever you're do.ing, and let m,e know ìf you need anything further. Bob " NOY-OB-2004 tiON 03:22 Pti BL~DiV Energy/Solidtiins FAX NO, 907271 3933 ') SURVEYED TOWNsHrp 13 NORTH,RANGE 10 WEST OF T);I; P, 03 SEWARD MERIDIAN, AI-.ASKA ST^TUS ÓF PUBLIC DOMAIN LAND AND MINE HAl. rlTl-Ës ( ~ " ... , {II ur Dlt'4I'.IA,U"A LIu 1II11Irit.~II' /, ~".. .", ~ ~ '".''-'1''' "- ) ~lJ j' ".'~----",r~ ~~;._.(...,. 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J.M4). ~d thf ~ms ~~ple~m'¡'tAi i;h6~'~t.:\, n11.'1 \Jùtbu of ,jf'c;scf,h Schl~lcr hns beeh ost4blished n'nd tl",t th~ i'Cquirornet~t8 'Of Jnw pi::rtlLinhig to tho clajm hay!;! ~en ~ot, for the '~nd \1¡;(.b~a.QC'li 1n;;.1, 6. S-.1~VëY No. :UHi:¡.. a1tlll.1.tad on. tl:1~ \+"'$/iI~ l:Iàl¡k :>f th~ .2alui:ìû Rivccr aj)t~r~j,)~.t¡::ÙJl' ~¡'r3/:\ 1¡¡Heli .tr')It) its ~nôu,t:il. All1.¡¡¡I~. T.I1t'1 Al'ß4 dcser!bcd cOl1taitul 5.0t} llCN/!, ~ccot'dln8' to the ",(ficin{ þlnt of ~he aUl'vcy of t1t{) 88i1! 1nn4, on fJ~ in th~ ßU1"e;il1 of Lund Mmsgt:ment: NOW IOfOW' ¥E. Thl~t the UNXmD S't'A'l'.6JS 01,' AMtRICA, in eòr:lI~i(retntiol1 ut" *ho pL'emisea, DOES IJER1::BY GRANT Ul'I.t:o the IUtià c!i\.il11A!:\.t n:nd to tho he~l'8 ot the add cla.bwnt ~M tr,!,(:t above dezr-riOOd; TO HAVE ANti 'I'D :t¡OLD the ~~:m6, t.ðgothel. with Q.1l1;h~ 1'I¡r}lilf, P'rilllh".gCB. Ù)¡InU- ßi~iCtl, IInd ,.ppu~nlD.Ce~, u! what8OdVel" tmture, thel'(JUnto beloll2"lntr. ~n.t:o th~ said cl<\¡maÞ~ and to ~h~ heJJ'/! nnd tWipl.$ (If tho saJd claUnunt f{l'ÐV(!r: f~bj!!ot to (1) Dony 'V~s1:t'!4 nnd ~1,tCJ'U$d. wat.el' I'Ï$i'1ti for mlnJnsr. I\W4¡::ûltural, ~lutfat!~\.U'i.u". or oth~r glll'pOlttm, 2l\d ri,ht8 to cUt¡;:hea artd t'/:Je1'- VtJ/l'S Un(!d in con11(t(:ttCII~ with ft\icb wntcr rjih~ø, A.ß m¡~y b(! recognized and £tcknowl~~B'ßd by the IMßI ~1JIroms. I~wa ~nd deci:¡iom.l of ~Qt.lrt~; and (£) thc.1'e¡t!J"'VatJr,1fi at a rl¡Itt'ot-W8.Y for ditches or e.n.na.J~ cOWltrRcted by thl! Authority oj thl UnHed ata~ElS, it:¡ Mco:rdD1\Cë wLth ~he Àl!.t ot Au~st SG, ';1890 (26 Sm~. ß.al J 4$ U.s.C. Set. Mri). Thl;¡'( is 0\.1110 r.e~.t'Ve~ to tha Untieå StAtes ~ ri~IIt""fwwlly for tho con/6truo~l(ln ot :mih'QQtø, t"ie~'.o.ph .onl\ telc:phone lines, in aècordi\.nce wH.h SCII;!UOI~ J. of tb~ Act "' Ma~Qh '12; ~9'14 (~S~~t. $05¡ 48 U.5.C. Sec. S05). . [mw:.] IN TEs~ndONr WHEB1!IOF, ìJ~e IIDdel'lIl¡nad uuthQl'izeti "fflcer (If the Bure1\u of l¡md M~l1a$~111i!nt. in 4ecordance wIth the p'oviliÍi!TUI (f th$ Ad of ,rune 17,1948 (62 stat. 416). has, in th~ 11nme øf the 'Uni~ert St/.\t.os, ~~lJd theme lett.ers to bo m4~C PAt-ont, ..nd tÌ14 80811')£ thr. HU1'~\.¡¡ to be hel'el.Jnto amx:od. tJI~ undlJI' IUy l1ft.lf.d, jn Anah-or'~, Al:UilJ..'1'I tbe TB11tTE~.NTIi ~y of SEPTEøëm In. tlm :fear ot UIU' !"ora Que tno1l911.nd n.lhll htlIidrod .f:I11d sr;rrY-lI'!VE ¡md 0' the JndtlpGnd~l1.ce of the United St&t.t!1J the ()n13 hll~ñl'ec:f ,t~ l\TIN1ì:TI1::Ta. B~ ...__~.._dM.l.~...~d~r_~..._- A~ StQ.te4:líreotot" P~tcnt Numb<:r§Q~J¿~L.~157 . Q,.o 11"":117"11 f ' ') ) ~ BANKSTON, GRONNING, O'HARA, SEDOR, MILLS, GIVENS & HEAPHEY A PROFESSIONAL CORPORATION ATTORNEYS AT LAw 601 W. 5TH AVENUE, SUITE 900 ANCHORAGE,~KA99501 (907) 276-1711 FACSIMILE (907) 279-5358 WWW.BANKSTON.TO WILLIAM M. BANKSTON LEA E. FIUPPI JON T. GIVENS CHRIS D. GRONNING CHRISTOPHER J. HEAPHEY PAMELA J. KEELER 2004 ~~~~~ 6' ,/MICHAEL R. MILLS BARBRA Z. NAULT STEVEN T. O'HARA JOHN M. SEDOR "~~ J. STIBITZ THoMASV'. WANG, JR. October 27, 2004 via FAX Carl J.D. Bauman, Esq. Hughes Thorsness Powell Huddleston & Bauman, LLC 550 W. 7th Avenue, Suite 1100 Anchorage, Alaska 99501 Re: Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property - ADL 389933 Our File No.: T-3303-06 Dear Carl: Trading Bay Oil & Gas, LLC (TBOG) is in receipt of the Pelican Hill Oil & Gas, Inc. (PHOG) letter dated October 17, 2004 to Mark Fink, Habitat Biologist, Alaska Department of Fish and Game. In this letter and its attached map, PHOG refers to several wells including the NE Beluga No.1, the N. Beluga No.1, the N. Pretty Creek No.1, and the N. Pretty Creek No.2. The purpose of the letter to Mr. Fink apparently was to request authorization to engage in pre-drilling surface preparation activities such as the construction of a short road and the placement of conductor pipe in preparation for drilling of the three wells located within the Susitna Flats Game Refuge. On the attached map, PHOG incorrectly labeled several leases owned by TBOG as "Pelican Hill Farm-In" (e.g., ADL 390102, ADL 390103, and ADL 38934 (sic)). At present, the only FARM-IN AGREE:MENT between TBOG and PHOG is for the North Beluga Property - ADL 389933. Paragraph 18 of this FARM-IN AGREEMENT describes the actions that must be taken by PROG prior to exercising the option to a fann-in agreement on the Pretty Creek Leases. None of these actions have occurred to 0/ date. Pelican Hill Oil & Gas, Inc. is hereby requested to correct this misrepresentation to Mr. Fink and any other public misrepresentations regarding the status of the Pretty Creek Leases. Please copy TBOG with said corrections for its file. ) ':) Carl J.D. Bauman, Esq. October 27,2004 Page 2 Paragraph 5 of the FARM-IN AGREEMENT North Beluga Property - ADL 389933, states, "PHOG commits to drilling and logging a well bottomed in ADL 389933 to a depth of 6,800' or to a lesser depth if the mud log shows no more indications of gas. This well shall be spudded no later than December 1, 2004." In the Petroleum Reference Dictionary, Third Edition, Pennwell Publishing Company, "spud" is defined as "to start the actual drilling of a well." According to the AOGCC, placement of conductor pipe in the ground is one of several surface preparation activities that must occur before the actual drilling of a well. The AOGCC does not require operators to obtain a permit to drill before the operator places conductor pipe. in the ground on a drill pad given that this is a surface preparation activity, not the actual drilling of a well. Before the actual drilling of a well can start, the AOGCC requires that a permit to drill the well must be approved by the Commission (20 AAC 25.005(a)). TBOG has received no indicatioir that PHOG has applied for a Permit to Drill on AOGCC's Form 10-401. This is of significant concern to TBOG insofar as 20 AAC 25.055 specifies that a spacing exception must be requested whenever a gas well is drilled within 1,500 feet of a property line if the landowner is not the same on both sides of the property line. ADL 389933 is owned by Trading Bay Oil and Gas, LLC. The hydrocarbon fights associated with US Survey 3901 are owned by Paul L. Craig, an / individual. Pursuant to 20 AAC 25.055, this circumstance requires PHOG to apply for and be granted a spacing exception as a precursor to the approval of a permit to drill a well on ADL 389933 within 1,500 feet of the boundary of US Survey 3901. The ownership of these properties is a matter of public record and has been orally discussed with PHOG on several occasions prior to execution of the FARM-IN AGREEMENT North Beluga Property - ADL 389933. Likewise, the requirements of 20 AAC 25.055 governing when a spacing exception must be obtained has been extant for many years. TBOG brings this matter to PHOG's attention insofar as TBOG is concerned that PHOG has overlooked this very important matter. Obviously, time is of the essence if PHOG intends to spud (i.e., "start the actual drilling of a well" following the AOGCC's approval of a permit to drill) on or before December 1, 2004. PHOG has had more than three months since the FARM-IN AGREEMENT was signed to acquire all of the necessary permits to drill the well. Perhaps PHOG has already applied for the Permit to Drill on Form 10-401 as would be prudent given the circumstances described above. If so, please provide a copy of this Permit to Drill for Trading Bay's review. If not, immediate action is obviously imperative. ) ') Carl J.D. Bauman, Esq. October 27,2004 Page 3 In closing, in a letter dated September 24, 2004, PHOG reassured TBOG that it had no intention of ceasing operations without completing the drilling of the well to total depth. Consistent with the wording and intent of the contract between TBOG and PHOG, it is Trading Bay's expectation that PHOG will first secure the appropriate permit to drill, and then start the actual drilling of the well on or before December 1, 2004, and continue ~ with drilling until total depth is reached. ' Very truly yours, BANKSTON,GRONNING,O'HARA, SEDOR, MILLS, GIVENS & HEAPHEY, P.C. M$:~ William M. Bankston WMB:cfv cc: Trading Bay Oil & Gas Daniel Seamount, Jr., AOGCC Bruce Webb, Ak Division of Oil & Gas Mark Fink, Habitat Biologist, ADFG T3303\06\L TRbauman WMB 12 Pelican Hill Oil 4 60s, IrÞ..~ J 4141 B Street, Suite 205 Anchorage, Ale 99503 907 - 277 -1401, Telephone 907 -277 -1402, Fax ~ r¡2HcJ? -<::J (. , .fT', TrVfif\Y"'''-''''' a.~ ~. G~~ ~~C Ii' - ..l.JV. .. ~ -- C, -J 01 :\J - ~~ Q October 17,2004 Mr. Mark Fink, Habitat Biologist Alaska Department of Fish and Game ADF Habitat and Restoration Division 333 Raspberry Road Anchorage, AK 99518-1599 Re: Special Area Permit - Susitna Flats State Game Refuge Dear Mr. Fink: On October 10 I sent you a letter asking whether a special pennit can be issued for drilling of the NE Beluga No.1 after the April 30 date. We now have a timing problem at the other end of the winter drilling season that could be alleviated by exceptions to the regulations. On Wednesday October 20 we are mobilizing a water well rig to driB a water wen and drive the conductor pipe on our N. Beluga No.1 well which is located outside the SFSGR. It is in Sec. 12-T13N- RIOW Adjacent to the Alaska Energy Development Burglin X33-12 well that was plugged and abandoned in 1977. . While that equipment is on the west side of the inlet and before the inlet waters ffeeze, we would consider driving the conductor pipes on the three wells that are inside of the SFSGR. However, that would occur before the November 1 date for such activities and we have not yet filed applications for any of the necessary pennits. I need two questions answered: . Can approval be given by ADF & G to drive conductor pipe in advance of issuance of the Plan of Operations and the Special Use Pennit? Can this approval inc1ude activities that would occur prior to the November 1 date? . The three wells under consideration are: NE. Beluga No.1 Sec.7-T13N-Ft9W 2,200' FNL & 2,200' FEL N. Pretty Creek No.1 22-14N-9W 1,705' FWL & 1790' FSL N. Pretty Creek No.2 22-14N-9W 350' FNL & 2,530' FWL . ) ") Mr. Mark Fink October 17, 2004 Page Two Pretty Creek No.1 and No.2 are located adjacent to roads and the NE Beluga No.1 would require a short additional access road connecting to an existing road. I am providing you with an aerial photo for the Pretty Creek wells. A map and a photo were included previously for the NE. Beluga No.1 well. I win call you on Monday to discuss this possibility. Sincerely, Arlen Ehm Vice President/Alaska Cc: Jim Rose, Operations Superintendent Ene. Pelican Hill Oil & Gas, Inc. Proposed Locations for N. Pretty Creek Nos. 1&2 S22T14N R9W March 19, 2004 Vegetation Codes CONFIDENTIAL /~ 24 . Deciduous Mixed Forest, 40-80 yrs 34. Deciduous Mixed Forest, >80 yrs 41 . Coniferous Forest, <30ft 68 . Spagnum Bog 69 . Spagnum-8hrub Bog 92 . Lakes, 10-40 acres taken from: Susitna River Basin Land Cover Type Map Atlas, USDA, 1986 .. ,-- ., , ) cý~ ) BANKSTON, GRONNING, O'HARA, SEDOR, MILLS, GIVENS & HEAPHEY A PROFESSIONAL CORPORATION ATTORNEYS AT LAw 601 W. 5TH AVENUE, SUITE 900 ANCHORAGE,A1ÄSKA99501 (907) 276-1711 FACSIMILE (907) 279-5358 WWW.BANKSTON.TO WILLIAM M. BANKSTON LEA E. FIUPPI JON T. GIVENS CHRIS D. GRONNING CHRISTOPHER J. HEAPHEY PAMELA J. KEELER ~";::';:'?~~ " ~ ,§'MICHAEL R. MILLS BARBRA Z. NAULT STEVEN T. O'HARA JOHN M. SEDOR ^~~ J. STlBITZ THOMA:sV. WANG, JR. October 27, 2004 via FAX Carl J.D. Bauman, Esq. Hughes Thorsness Powell Huddleston & Bauman, LLC 550 W. 7th Avenue, Suite 1100 Anchorage, Alaska 99501 Re: Trading Bay Oil & Gas / Pelican Hill Oil & Gas FARM-IN AGREEMENT North Beluga Property-ADL 389933 Our File No.: T-3303-06 Dear Carl: Trading Bay Oil & Gas, LLC (TBOG) is in receipt of the Pelican Hill Oil & Gas, Inc. (PHOG) letter dated October 17, 2004 to Mark Fink, Habitat Biologist, Alaska Department ofFish and Game. In this letter and its attached map, PHOG refers to several wells including the NE Beluga No.1, the N. Beluga No.1, the N. Pretty Creek No.1, and the N. Pretty Creek No.2. The purpose of the letter to Mr. Fink apparently was to request authorization to engage in pre-drilling surface preparation activities such as the construction of a short road and the placement of conductor pipe in preparation for drilling of the three wells. located within the Susitna Flats Game Refuge. On the attached map, PHOG incorrectly labeled several leases owned by TBOG as "Pelican Hill Farm-In" (e.g., ADL 390102, ADL 390103, and ADL 38934 (sic». At present, the only FARM-IN AGREEMENT between TBOG and PHOG is for the North Beluga Property - ADL 389933. Paragraph 18 of this FARM-IN AGREEMENT describes the actions that must be taken by PROG prior to exercising the option to a fann-in agreement on the Pretty Creek Leases. None of these actions have occurred to date. Pelican Hill Oil & Gas, Inc. is hereby requested to correct this misrepresentation to Mr. Fink and any other public misrepresentations regarding the status of the Pretty Creek Leases. Please copy TBOG with said corrections for its file. ) ) Carl J.D. Bauman, Esq. October 27,2004 Page 2 Paragraph 5 of the FARM-IN AGREEMENT North Beluga Property - ADL 389933, states, "PROG commits to drilling and logging a well bottomed in ADL 389933 to a depth of 6,800' or to a lesser depth if the mud log shows no more indications of gas. This well shall be spudded no later than December 1, 2004." In the Petroleum Reference Dictionary, Third Edition, Pennwell Publishing Company, "spud" is defined as "to start the actual drilling of a well." According to the AOGCC, placement of conductor pipe in the ground is one of several surface preparation activities that must occur before the actual drilling of a well. The AOGCC does not require operators to obtain a permit to drill before the operator places conductor pipe in the ground on a drill pad given that this is a surface preparation activity, not the actual drilling of a well. Before the actual drilling of a well can start, the AOGCC requires that a permit to drill the well must be approved by the Commission (20 AAC 25.005(a)). TBOG has received no indication that PROG has applied for a Permit to Drill on AOGCC's Form 10-401. This is of significant concern to TBOG insofar as 20 AAC 25.055 specifies that a spacing exception must be requested whenever a gas well is drilled within 1,500 feet of a property line if the landowner is not the same on both sides of the property line. ADL 389933 is owned by Trading Bay Oil and Gas, LLC. The hydrocarbon fights associated with US Survey 3901 are owned by Paul L. Craig, an individual. Pursuant to 20 AAC 25.055, this circumstance requires PROG to apply for and be granted a spacing exception as a precursor to the approval of a permit to drill a well on ADL 389933 within 1,500 feet of the boundary of US Survey 3901. The ownership of these properties is a matter of public record and has been orally discussed with PROG on several occasions prior to execution of the FARM-IN AGREEMENT North Beluga Property ~ ADL 389933. Likewise, the requirements of 20 AAC 25.055 governing when a spacing exception must be obtained has been extant for many years. TBOG brings this matter to PROG's attention insofar as TBOG is concerned that PHOG has overlooked this very important matter. Obviously, time is of the essence if PHOG intends to spud (i.e., "start the actual drilling of a well" following the AOGCC's approval of a permit to drill) on or before December 1, 2004. PROG has had more than three months since the FARM-IN AGREEMENT was signed to acquire all of the necessary permits to drill the well. Perhaps PROG has already applied for the Permit to Drill on Form 10-401 as would be prudent given the circumstances described above. If so, please provide a copy of this Permit to Drill for Trading Bay's review. If not, immediate action is obviously imperative. ) ') Carl J.D. Bauman, Esq. October 27,2004 Page 3 In closing, in a letter dated September 24, 2004, PHOG reassured TBOG that it had no intention of ceasing operations without completing the drilling of the well to total depth. Consistent with the wording and intent of the contract between TBOG and PHOG, it is Trading Bay's expectation that PHOG will first secure the appropriate permit to drill, and then start the actual drilling of the well on or before December 1, 2004, and continue with drilling until total depth is reached. Very truly yours, BANKSTON,.GRONNING,O'HARA, SEDOR, MILLS, GIVENS & HEAPHEY, P.C. MCj(~ William M. Bankston WMB:cfv cc: Trading Bay Oil & Gas Daniel Seamount, Jr., AOGCC Bruce Webb, Ak Division of Oil & Gas Mark Fink, Habitat Biologist, ADFG T3303\06\L TRbauman WMB 12 907-277-1401, .Telephone 907 - 277 -1402, Fox ~'rJ-H cJ? - C;) f- 'fT' :TIa.~:-~~,O:&G.4B]G ,~ Pelican Hill Oil " Gas, Irk.- 4141 B Street, Suite 205 Anchorage, AI' 99503 October 17, 2004 Mr. Mark Fink, Habitat Biologist Alaska Department ofFish and Game ADF Habitat and Restoration Division 333 Raspberry Road Anchorage, AI< 99518-1599 Re: Special Area Penn it - Susitna Flats State Game Refuge Dear Mr. Fink: On October 10 I sent you a letter asking whether a special permit can be issued for drilling of the NE Beluga No.1 after the April 30 date. We now have a timing problem at the other end of the winter drilling season that could be alleviated by exceptions to the regulations. On Wednesday October 20 we are mobilizing a water wen rig to drill a water well and drive the conductor pipe on our N. Beluga No.1 well which is located outside thé SFSGR. It is in Sec. 12-T13N- RIOW Adjacent to the Alaska Energy Development Burglin X33-12 wen that was plugged and abandoned in 1977. While that equipment is on the west side of the inlet and before the inlet waters freeze, we would consider driving the conductor pipes on the three wells that are inside of the SFSGR. However, that would occur before the November 1 date for such activities and we have not yet filed applications for any of the necessary pennits. I need two questions answered: . Can approval be given by ADF & G to drive conductor pipe in advance of issuance of the Plan of Operations and the Special Use Permit? Can this approval include activities that would occur prior to the November 1 date? . The three wells under consideration are: NE. Beluga No.1 Sec. 7-T13N-Ft9W 2,200' FNL & 2,200' FEL N. Pretty Creek No.1 22-14N-9W 1,705' FWL & 1790' FSL N. Pretty Creek No. 2 22-14N-9W 350' FNL & 2,530' FWL ) ) Mr. Mark Fink October 17, 2004 Page Two Pretty Creek No.1. and No.2 are located adjacent to roads and the NE Beluga No.1 would require a short additional access road connecting to an existing road. I am providing you with an aerial photo for the Pretty Creek wells. A map and a photo were included previously for the NE. Beluga No.1 well. I will call you on Monday to discuss this possibility. Sincerely, Arlen Ehm Vice President/Alaska Cc: Jim Rose, Operations Superintendent Ene. ,~ Pelican Hill Oil & Gas,lnc. Proposed Locations for N. Pretty Creek Nos. 1&2 822 T14N R9W March 19, 2004 Vegetation Codes CONFIDENTIAL 24 - Deciduous Mixed Forest, 40-80 yrs 34 - Deciduous Mixed Forest, >80 yrs 41 - Coniferous Forest. <30ft 68 - Spagnum Bog 69 - Spagnum-8hrub Bog 92 - Lakes, 10-40 acres taken from: Susitna River Basin Land Cover Type Map Atlas, USDA, 1986 ." ::Jt: N STATE OF ALASKA ) NOTICE TO PUBLISHER ) ADVERTiSING ORDER NO. ADVERTISING ORDER SEE BOTTOM FOR INVOICE ADDRESS 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 AO-02514022 F AOGCC R 333 W 7th Ave, Ste 100 0 Anchorage, AK 99501 AGENCY CONTACT DATE OF A.O. Jody Colombie PHONE November 15, 2004 PCN M (907) 793 -1 ??1 DATES ADVERTISEMENT REQUIRED: ¿ Anchorage Daily News PO Box 149001 Anchorage, AK 99514 November 17, 2004 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Type of Advertisement X Legal D Display Advertisement to be published was e-mailed D Classified DOther (Specify) SEE ATTACHED SEND INVOICE IN TRIPLICATE AOGCC. 333 W. 7th Ave., Suite 100 . TO Anchorage, AI<. 99501 NUMBER AMOUNT DATE TOTAL OF PAGE 1 OF ALL PAGES$ 2 PAGES COMMENTS REF TYPE 1 VEN 2 ARD 3 02910 4 FIN AMOUNT Sy CC PGM LC ACCT FY NMR DIST UQ 05 02140100 73451 2 3 R;QUISITIONED B~ ~Q&1ð1J () DIVISION APPROVAL: ) ') Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Pelican Hill Oil & Gas, Inc. ("PHOG") for a spacing exception to allow the drilling, testing and production of the N Beluga 1 gas exploration well in accordance with 20 AAC 25.055. PHOG by letter dated November 10, 2004 and received by the Alaska Oil and Gas Conservation Commission ("Commission") on November 11, 2004, has requested the Commission to issue an order in conformance with 20 AAC 25.055 (a) (2) allowing deepening, testing and regular production of the N Beluga 1 gas exploration well, which if productive may be open to regular production within 1,500 feet of a property line. The surface location of this proposed vertical well is 1,750 feet from the south line and 2,000 feet from the east line of Section 12, TI3N, RI0W, Seward Meridian ("SM"). The Commission has tentatively set a public hearing on this application for December 21, 2004 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West ih 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 November 30, 2004. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West ih Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on December 20, 2004 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 December 21, 2004 hearing. If you are a person with a disability who m::¡y ~ spe ial ccommodations in order to comment or to attend the public hearinteas c ac, 0 ;"mbie 73-1221. . orman Chairman Published Date: November 17, 2004 ADN AO# 02514022 RE: Public Notice ') ,) Subject: RE: Public Notice From: legalads <legalads@adn.com> Date: Mon, 15 Nov 2004 15:43:31 -0900 To: Jody Colombie <jody - colombie@admin.state.ak.us> Hello Jody: Following is the confirmation information on your legal notice. Please let me know if you have any questions or need additional information. Account Number: STOF 0330 Legal Ad Number: 346032 Publication Date(s): November 17,2004 Your Reference or PO#: 02514022 Cost of Legal Notice: $178.12 Additional Charges Web Link: E-Mail Link: Bolding: Total Cost to Place Legal Notice: $178.12 Your Legal Notice Win Appear On The Web: www.adn.com: XXXX Your Legal Notice Win Not Appear On The Web: www.adn.com: Thank You, Kim Kirby Anchorage Daily News Legal Classified Representative E-Mail: legalads@adn.com Phone: (907) 257-4296 Fax: (907) 279-8170 ---------- From: Jody Colombie Sent: Monday, November 15, 2004 3:29 PM To: legalads Subject: Public Notice «File: Ad Order form.doc»«File: N SeluQa 1 SpacinQ Exception Notice.doc» Please publish on wednesday. 1 of 1 11/15/20043:48 PM ) Anchorage Daily News 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 346032 11/17/2004 02514022 STOF0330 $178.12 $178.12 $0.00 $0.00 $0.00 $0.00 $0.00 $178.12 STATE OF ALASKA THIRD JUDICIAL DISTRICT Notice! of Public Hearing . , """,' '>sTiTê'hFALASkA' ", ". ' AlaSkaO.iland~as ConserY(Jti~n CClmn'liS$io". Re:The application of Þelicon Hill Oil& Go!';,!nc. ("PHOG") for 0 spacing exceptior'ftqallowth~ drilling, testing and production of the ~ Beluga 1 gas exploration well in occordoncewlt,h 20 AAC 25.055. '. PHOGby letter doted November 10. 200,", òndfe~ ceived by the Alaska Oil and Gas ConservatIOn Commission ("Commission") on November II, 20001. has requested the Commission to issue on or. der in conformance with 20 AAC 25.055 (a) (2) .01- lowing deepening, testing and regular produ.ctIO,n 01 the N Beluga 1 gas exploration well. whlC~ If productive may be open to regular production within 1,500 feet ot 0 propert-.: line. Th~ surfoce 10' cation of this proposed vertical well IS 1,750 f~et trom the south line and 2.000 teet from the ea~t I.Ine of Section 12. TI3N. R10W. Seward Merrdlan , ("SM"). Teresita Peralta, 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. Signed 57~//9/Þ I The c~m~issionho" tentatively set Ó pubjlchëor- ing on this application for December 21. 200'"'. at!' 9:00 om at the Alaska Oil and Gas Co~servatlo~, Commission at 333 West 7th Avenue. SUite 100. An- chorage, Aloska 99501. A person may request .t~at the tentativelY scheduled hearing be held by filing 0 written request with the Commission no later, than 01'30 pm on November 30.200,",. If ~"r'équest for a hearing. isnottimelvfHed,the Commission may consider thei:;suanceQf~nor- der without a hearing. To le,arr'1lfttleCQrt:!i'rus$lon will hold the public heoring,pl,ease call}93-1221. "",', I n 'cidd¡ti()ri,'tp~rson may sùbn'1if written co~': ments regarding this application to the Alaska 011 and Gas Conservation Commission ot 333 West 7!h Avenue, Suite 100, Anchorage. Alaska 99501. Wrrt- ten comments must be received no later than 4: 30 pm on December 20. 2004 exce.pt that. if th.e ~om- mission decides to hola 0 publ" t,ear,ng wr,tten protest Or' comments mLlsl be recelv.E'~ no 1~Ie-r than the conclusion of 111" D..ceITIO"r 21 ¡OOJ hE-ar. ing'. ' . .' If y{)u are a person with a disabiHtywho. may need ;,p",cibl occommodations in order: to comment or to o,"nd Ih", OLlOIIC hE'lJr,ng please contact JodY Co- lomb''',ol 793. I n I Subscribed and sworn to me before this date: rhJu2~ 2 V I ~ooy Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska ¡¿,OMMISSI,ON EXPIRES: (Jq J,' 'j;' ),~p, t?r?'r", {( f, 1, a ~~!/ ~\:\ ERlY 1'1'...-".. , I ,\ ~~~. . ' . . :4. &....;.. ~~-., ""......' .¥f~ ~ ~'ln~ I)-I I~' t~(~~~~:i}1 -", a - '"' . "'h . , ~ "" :;.':;:~, ,~~ ,"''''' :>c~.'~,~ -~';:I¡". ,v r~ I\.'S" tí'? ~ -' .,:~., . ""t', .ì.\lr-. . of'! ..:'\ "'~A'>~. ' ,J. . . '.. "'''\'\' ~I'.' ,,»J(Þh?';- '3.~;t~\\, "' .f J¡ i ) J i j ) '} .) I john K. NOrman Chairman , ADN AO# 02514022 , Publish: Nov~mber 17,2004 02-902 (Rev. 3/94) STATE OF ALASKA ADVERTISING ORDER SEE BOTTOM FOR INVOICE ADDRESS Publisher ~inal Copies: Department Fiscal, Departme'.. 'yeceiVing NOTICE TO PUBLISHER AO.FRM ADVERTISING ORDER NO. INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AO-02514022 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 West ih Avenue, Suite 100 0 Anchorage,AJ( 99501 M 907-793-1221 AGENCY CONTACT Jody Colombie PHONE DATE OF A.O. November 15, ?004 PCN (907) 793 -1 ?71 DATES ADVERTISEMENT REQUIRED: T 0 Anchorage Daily News PO Box 149001 Anchorage, AJ( 99514 November 17,2004 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: United states of America AFFIDAVIT OF PUBLICATION REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COpy OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, 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 2004, and thereafter for - consecutive days, the last publication appearing on the - day of , 2004, 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 2004, Notary public for state of My commission expires 02-901 (Rev. 3/94) AO.FRM Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 ') ') Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 John Levorsen 200 North 3rd Street, #1202 Boise,lD 83702 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 David Cusato 200 West 34th PMB 411 Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 North Slope Borough PO Box 69 Barrow, AK 99723 /fá~1L( Public Notice ) ) Subject: Public Notice From: Jody Colombie <jody - colombie@admin.state.ak.us> Date: Mon, 15 Nov 2004 15:29:05 -0900 To: undisclosed-recipients:; BCC: Cynthia B Mciver <bren_mciver@admin.state.ak.us>, Angela Webb <angie - webb@admin.state.ak.us> . Content- Tvpe: application/msword . ,:N Beluga 1 Spacing Exception Notice.doc:1 . d. b 64 : ;: - - - - - :1 Content-Enco lng: ase ".n' ....... 1 of 1 11/15/20043:33 PM Public Notice ') ) Subject: Public Notice From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Mon, 15 Nov 2004 15:29:51 -0900 To: Legal Ads Anchorage Daily News <legalads@adn.com> Please publish '?!.l.~~~~~4.~¥~ Content- T~'pe: application/ms\\'ord ,Ad Order form.doc: . . ¡ Content-Encoding: base64 .' . L........ ..........................................................................................,.[" " ...........,... ..................... .. ................................................................................................................................................¡ ¡ --"~",~,,,'-'..~_w_w_.',,-,-,,_w_-,-',-,,--_w_._w.__.'-"______n__~__'"~~-"'--_Y,-_y~,~,_----~~--~~--_,_--.----.--..---.'-----.--.---...-..--.--..--...--.--.-..----...--.--- -_._-~-~ ,. .. Content-Tvpe: application/ms\Vord . iN Beluga 1 Spacing Exception Notice.doc:! . b ¡ : - - - - -,l~~~tent-Encoding: ase64 ................................................................................... ...................................................................... 1 of 1 11/15/20043:33 PM Public Notice ) ) Subject: Public Notice From: Jody Colombie <jody - colombie@admin.state.ak.us> Date: Mon, 15 Nov 2004 15:30:22 -0900 To: undisclosed-recipients:; BCC: Robert E Mintz <robert- mintz@law.state.ak.us>, Christine Hansen <c.hansen@iogcc.state.ok.us>, Terrie Hubble <hubbletl@bp.com>, Sondra Stewman <StewmaSD@BP.com>, Scott & Cammy Taylor <staylor@.alaska.net>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, roseragsdale <roseragsdale@gci.net>, trmjrl <tnnjr1@ao1.com>, jbriddle <jbriddle@marathonoil.com>, rockhill <rockhill@aoga.org>, shaneg <shaneg@evergreengas.com>, jdarIington <jdarlington@forestoi1.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>, "Jerry C. Dethlefs" <jerry.c.dethlefs@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 OtDonnell <charles.otdonnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Paul G. Hyatt" <hyattpg@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 <Mike1.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <K1eppiDE@BP.com>, "Janet D. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@.BP.com>, ddonkel <ddonkel@cfl.rr.com>, Collins Mount <collins_mount@revenue.state.ak.us>, mckay <mckay@gci.net>, Barbara F Fullmer <barbara.f.fullmer@conocophillips.com>, bocastwf <bocasnvf@bp.com>, Charles Barker <barker@usgs.gov> , doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesnol@gcinet>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shel1.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>, Kurt E Olson <kurt_olson@legis.state~ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, loren_lernan <loren_leman@gov.state.ak.us>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@sso.org>, Suzan J Hill <suzan_hill@dec.state.alcus>, tablerk <tablerk@unoca1.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@ao1.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm 7200@ao1.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 <RAN CIER@petro-canada.ca>, Bill Miller <Bill- Miller@xtoalaska.com>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoi1.com>, Garry Catron <catrongr@bp.com>, Shannaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoiI.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Vaughn Swartz <vaughn.swartz@rbccm.com>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>, Steve Lambe <lambes@unoca1.com> lof2 11/15/20043:33 PM Public Notice 20f2 ) , i .. .. .~..M'---' .....' ..., ¡..... ..... ....~ .... ... ~. ....:~:".. "..::...:':.:::.:""" ::':...:::.:':.:': .::.:::. ...':::::::.::..:::.:'::.:':.::':::.:::.::'.::'.::':.:::... ~~................~.. ........:::..:':::::::::.. iN ßeluga _1- SpacinIL Exception - N otice.docll Content-Type: applicationlmsword I : :.::.:.:.::::::.:::::::::::.::::::::.::::.:::.:::::::::::.::::.::::::.:::.:::::::.:':::.::.:'::.:':.:'::.::.:::::::.::::::.::.:::::::::::~':::::::.:::::~:':;::::.:::::.::::::.::'::;':::::::'.:'.:':::.:'::;';:::::.:::;':::;.:.:::.::.:::........:.~...........:J...~:~.~~~~~;::~:~~.~.~.~~~.~.....?~~.~?4 . .- "-",~",,,"''''_m_--_.'...-........._.... ..-.. -""~' . ....-.-....... .......................m.m............ '''''''''', 11/15/20043:33 PM ::Jt: Þ---I. t -'!" ../ Pelican Hill Oil & Gas, Inc. 4141 B Street, Suite 205 Anchorage, AK 99503 ) ~ .ff, 1TV~A~...... ..N.. ~..'=>~ O. o""&..Q... f!M~...~... ~'7C ~ - ..lJ.\n1 - L C' .., Ul1LJ - Q ') 907 - 277 -1401, Telephone 907-277-1402, Fax November 10, 2004 Mr. John Norman Chairman Alaska Oil and Gas Commission 333 W. 7tÌ1 Ave. Suite 100 Anchorage, AK 99501 rVED NOV 1 2004 Re: Spacing Exception N. Beluga No.1 Gas Well Commission Dear Mr. Norman: Pelican Hill Oil & Gas, Inc. is preparing to drill a gas well on a State of Alaska lease in the Beluga area. The particulars of that well are: OPERATOR: WELL NAME: SURFACE LOCATION: BOTTOM HOLE LOC.: GPS LOCATION: LEASE NO: ELEV A TION: PERMIT NO: FM.ATTD: STATUS: PELICAN HILL N. BELUGA NO.1 12-13N-10W 2,000' FEL & 1,750' FSL SAME aspx = 326,725 aspy = 2,642,670 ADL389933 KB 53 (est.) TD: 6,730 (proposed) API NO: TVD: SAME YEAR: 2004 BELUGA Pennitting in progress. The well will be located on a lease that is being earned by a farmout trom the present lease holder, Trading Bay Oil and Gas, LLC, for which Paul L. Craig is both a principal and a signatory. Paul L. Craig, as an individual, owns the mineral rights to a five-acre federal tract, US 3901, located in Sec. 12- T13N-R10W. This tract is approximately 400 feet trom the proposed well site and is entirely surrounded by ADL 389933. Alaska Statute 20 AAC 25.055 relates to Drilling Units and Well Spacing where subsection (a)(2) states: (2) for a well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the same and the landowner is the same on both sides of the line; Since US 3901 is less distance trom the proposed well than the required setback of 1,500 feet, a spacing exception is being requested. Details concerning the application for an exception are covered by Alaska Statute 20 AAC 25.055 (d). Accordingly, the following information or attachments are being included with this application: ~.<: ) ) (1) The name of the nearby landowner within 3,000 feet Mr. Paul L. Craig 5432 E. Northern Lights Blvd, Suite 610 Anchorage, AK 99508 (2) A plat drawn to the scale of 1 inch to 2,112 feet (Figure 2) showing US 3901 (tract no. 4) (Attached) (3) An affidavit by a person acquainted with the facts (Attached) Additionally, the following information is being included: . A copy of the certified mail notification to the landowner (Attached) The nearby landowner, Mr. Paul L. Craig, through his attorney Mr. William M Bankston, advised Pelican Hill by letter on November 2,2004 that, "It is highly improbable that TBOG and/or Mr. Craig would have reason to protest the requested spacing exception." Considering that Mr. Paul L. Craig made his position known to Pelican Hill in writing, Pelican Hill asked that Paul L. Craig inform the Alaska Oil and Gas Conservation Commission at once of his desire not to protest. That will expedite matters considerably with respect to the drilling of the N. Beluga No.1 well. Sincerely, ~~ Arlen Ehm Vice President! Alaska Pelican Hill Cc: Mr. Al Gross, Pelican Hill Mr. Carl Bauman, Hughes Thorsness Mr. Paul L. Craig Pelican Hill Oil & Gas, Inc. Proposed Location for N. Beluga No.1 S12 T13N R10W March 31, 2004 Beluga River Tracts 1 - ADL 227979 Unit 178B 2 - ASLS 74018 Tract IIBII 3 - ASLS 74018 Tract "A" Lots1,2,3 4 - U.S. Survey 3901 5 - ADL 40382 Lot13 8 - ADL 40381 Lot12 Vegetation Codes U - Uplands P - Palustrine mixture of broad-leaved deciduous scub-shrub & emergent narrow-leaved persistent (P-SS1/EM5-B) Vegetation patterns taken from National Wetlands Inventory, Tyonek A-3, Alaska Quadrangle, U.S. Fish & Wildlife Service, 1978. ~Fig~re 2 ~,;",?}.t -->1 ; 11 -;.". r' ~~J.~l;> -. ~.L,-\~~~f~!~r~ \ , c~ ~ ".7">-.".r ;;,:¡, IUGHES THORSNESS POWELL UDDLESTON & BAUMAN LLC ATIORNEYS AT LAW 550 WEST SEVENTH AVENUE SU1TE 11 00 "NCHORAGE, ALASKA 99501 (907) 274-7522 (907) 263-8320 FAX ) BEFORE THE ALASKA OIL AND GAS CONSERVATION COMMISSION In re Pelican Hill Oil and Gas Well Spacing Exception Application AFFIDAVIT OF ARLEN EHM ) ) ss. THIRD JUDICIAL DISTRICT) STATE OF ALASKA Arlen Ehm, being first duly sworn upon oath, deposes and state: 1. I am the Vice President/Alaska for Pelican Hill Oil & Gas, Inc. ("Pelican Hill"). 2. I was personally involved in the negotiations leading to the original and the current Farm In Agreement (North Beluga Property - ADL 389933) with Trading Bay Oil & Gas, LLC and PLC, LLC. My understanding is that Paul Craig is the sole owner of Trading Bay Oil & Gas, LLC and the sole owner of PLC, LLC. 3. Pelican Hill has applied to the AOGCC for a permit to drill a well on ADL 389933. The proposed well location is within 1500 feet of the property line with US 3901. The proposed well location is approximately 400 feet from the property line with US 3901. My understanding is that Paul Craig is the sole owner of the oil and gas rights underlying US 3901. Affidavit of Arlen Ehm In re Pelican Hill & Gas Page 1 of 2 [UGHES THORSNESS POWELL JDDLESTON & BAUMAN LLC AITORNEYS AT LAW 550 WEST SEVENTH AVENUE SUITE 11 00 \NCHORAGE, ALASKA 99501 (907) 274-7522 (907) 263-8320 FAX ') ) 4. I have personal knowledge that the facts in the Pelican Hill application for a well spacing exception are true, and that the Plat referenced therein as Figure 2 is accurate to the best of our ability. The Plat is an aerial photograph upon which the pertinent location information has been placed by a computer workstation at my direction using governmental data and digitized information from Aeromap. 5. If the proposed Pelican Hill well encounters hydrocarbons sufficient to justify testing, Pelican Hill intends to apply for state certification of the well as capable of production in paying quantities. To do so, Pelican Hill will need to open the well for testing purposes. 6. The well spacing exception is requested to enable Pelican Hill to drill the proposed well at the location requested, which location is the best location in our opinion geologically given the required 1500 foot set back from the lease line. FURTHER YOUR AFFIANT SAYETH NAUGHT. ~ -../L.4/ 7- ~ Arlen Ehm SUBSCRIBED and SWORN TO bef (£ ovember jQ, 2004. , ,\\\\\l~~k~¡/(:'r;~ ~ ,-'/~~ J \.' ,...,( ',"" ~, ~ ,,~~> , ^ . . . N 0 j;~~'.~1?:. a ~Ii~ In d . 0 tate of Alaska :-::: :"Gt)..<) .., ~y~, ^.."~~:?: My ommlsslon Expires: I~-IK' () ( - ::-1 V"^.. {'" ,-", . :Þ\ v::¡ .,.....,. . ,b ...... :. .. ~ '... Z/C :::.~ -' .~... '.':: ~ '. ..q(A~~Þ.." ,,' ~:"¥-....:-:,, \" /././1 . . "\ \ \ ~ .I // }] ")1 'ì, Affidavit of Arlen Ehm In re Pelican Hill & Gas Page 2 of 2 Pelican Hill Oil & Gas, Inc. 4141 B Street, Suite 205 Anchorage, Ale 99503 ') ) ~ .. -ff- !I1CA.~ :-=:,0: &: ~ ~C 907 - 277 -1401, Telephone 907-277-1402, Fax November 10, 2004 Mr. Paul L. Craig 5432 E. Northern Lights Blvd, Suite 610 Anchorage, AK 99508 VIA: u.s. CERTIFIED MAIL Re: Spacing Exception Application Dear Mr. Craig: . Pelican Hill Oil and Gas, Inc. has entered into a farmout agreement involving ADL 389933 with Trading Bay Oil and Gas, LLC, a company in which you are a principal and a signatory. Pelican Hill is preparing to drill a well on this lease at the following location: Sec. 12-TI3N-R10W SM 1725' FSL & 2,000' FEL . A nearby five-acre tract, US 3901, is owned by Paul L. Craig as an individual. . Alaska Statute 20 AAC 25.055 relates to Drilling Units and Well Spacing. Subsection (a)(2) states: (2) for a well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the same and the landowner is the same on both sides of the line; . Subsection (d) of Alaska Statute defmes the procedures for making this application: (d) The commission will review an application for an exception to the provisions of this section in accordance with 20 AAC 25.540. The applicant for an exception shall send notice of the application by certified mail to the owners, landowners, and operators described in (1) of this subsection and shall furnish the commission with a copy of the notice, the date of mailing, and the addresses to which the notice was sent. The application must include ( 1) the names of all owners, landowners, and operators of all properties within 1,000 feet of a well drilling for oil or within 3,000 feet of a well drilling for gas for which an exception is sought; (2) a plat drawn to a scale of one inch equaling 2,640 feet or larger, showing the location of the well for which the exception is sought, all other completed and drilling wells on the property, and all adjoining properties and wells; and ) ) (3) an affidavit by a person acquainted with the facts, verifying that all facts are true and that the plat correctly portrays pertinent and required data. (e) Upon application by the operator, the commission will establish notice requirements different from those of (d) of this section if the operator demonstrates to the commission's satisfaction that compliance with the notice requirements in (d) of this section is not feasible because of the complexity of ownership within the notice area. . Pelican Hill is providing you with a complete copy of that application and this notification of its request for a spacing exception. You advised Pelican Hill in writing on November 2, 2004 through your attorney, Mr. William M. Bankston, that "It is highly improbable that TBOG and/or Mr. Craig would have reason to protest the requested spacing exception". Inasmuch as you have made your position known in writing to Pelican Hill, Pelican Hill is asking that you advise the Alaska Oil and Gas Conservation Commission at once of your desire not to protest. That will expedite matters considerably with respect to the drilling of the N. Beluga No.1 well. Sincerely, ~~ Arlen Ehm Vice President! Alaska Attachment: Copy of AOGCC Application ') ') ru ru J:] ~. '/'11[. , Ii; e I I,. I . LJ1 ., ~ ø.. r::1 t,'(::j I." I'" (.) I Qf'ì ì ¡'1I"1.'Jt'1i «'lllli'.;j::¡'};ìí ("':~"','i'I'1'I.1 ¡oj .):j{oi') Vi" ~ p~~$I- O.~ ~~I~:~ J:] Certified Fee ? 30 (ñ ~ ~1! J:] 1- ,'., ~ ~-:'~a J:] Return Reciept, Fee, . ' "Y r (Endorsement ReqUired) " 1. 75 ~~ ...... ~.~ J:] Restricted Delivery, Fee ,~ .~"'v.; ~ ~ (Endorsement ReqUIred) ~ N' ru Total Postage & Fees $ 4.65 1.1/11/04 ru ~ - ~~~: -~ ~ _:- - -- - -... --~-- -.--- -- -- -- - -- - --- - ------ ------ ----. - --- - - --- -- -- - -- - ----- - ---.-1 ~::~:,::::~-_---____m_m__m__m--::,~~~~:==:~::j ') SENDER: COMPLETE THIS SECTION. ¡ . Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. . Print your name and address on the reverse so that we can return the card to you. . Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: M.~. "PA\J~ t..~Albt 5l.{:,2. E:.NDI:I1{6~ wwns Blvd SUtTt: lJ 10 AN~oRA(,6j~ orOC5Dß' 2. ArtIcle Number (Transfer from service label) ¡ PS Form 3811, February 2004 i COMPLETE THIS SECTION ON DELIVERY A. Signature x 0 Agent 0 Addressee C. Date of Delivery B. Received by ( Printed Name) D. Is delivery address different from item 1? 0 Yes If YES, enter delivery address below: 0 No 3. Service Type [:J Certified Mail [:J Express Mail 0 Registered 0 Return Receipt for Merchandise [J Insured Mail [J C.O.D. 4. Restricted Delivery? (Extra Fee) [J Yes Domestic Return Receipt 102595-02-M-1540 ¡ , ~ :\, "1;1 ') UNITED STATES POSTAL SERVICE First-Class Mail Postage & Fees Paid USPS Permit No. G-10 . Sender: Please print your name, address, and ZIP+4 in this box. A~LEN E\4M 17a..\tArJ ktlL-1- DlL-- ~ ~A?I ¡:.~. LiILll 13> Str~~ 5uff¿ ?-D~ v4-n~hð(aJ€-1 A\4 "to[ 5D3-5"1li 0