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Home My WebLink AboutCO 623• • Image Project Order File Cover F'age 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. o~~ Order File Identifier Organizing ~do„e~ RE CAN Color Items: ^ Greyscale Items: ^ Poor Quality Originals: ^ Other: NOTES: BY: Maria _ Project Proofing BY: Maria _ Scanning Preparation BY: Maria Production Scanning x 30 = + = TOTAL PAGES A~~~ D~ (Count does not include cover sheet) 1 n Date: (~ ~S~ V ~ I Stage 1 Page Count from Scanned File: __r~ (Count does include cover sfieet) Page Count Matches Number in Scanning Preparation: V YES NO BY: Maria Date: q ~'O~ /s/ ~~ / Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY~ Maria Date: ~S~ Scanning is complete at this point unless rescanning is required. ~II I~~III IIIII ~I III ReScanned III,l,I') II,~, IIII~ BY~ Maria Date: Comments about this file: ^ Two-sided IIJ II~IIt !~ II I!I !!I DIGITAL DATA ^ Diskettes, No. ^ Other, No/Type: ^ Rescan Needed tll II ~I li i~ i I III ~) OVERSIZED (Scannable) ^ Maps: ^ Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) ^ Logs of various kinds: Date: Date: ~ Other:: ~ /s/ ~ ~ ~IIIIfIIIIIIII IIII~ /s/ , -- ~ ~ /s/ Quality Checked III II~II) II~ (I'I ~I -'~~~ ,1 10/6/2005 Orders File Cover Page.doc ~ ~ INDEX CONSERVATION ORDER NO. 623 Nicolai Creek #11 1. July 1, 2009 Aurora Gas request for Spacing Exception Nicolai Creek #11 (Structural Maps held confidential) 2. July 3, 2009 Notice of Hearing ADN and Notice of Hearing July 7, 2009 Peninsula Clarion, Affidavit of Publications, e-mail list, bulk mailing list 3. -------------- Miscellaneous Information 4. July 8, 2009 Land Plats Conservation Order No. 623 . ~ STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF Aurora Gas, LLC for an order ) granting an exception to the well spacing requirements ) of 20 AAC 25. O55(a)(4) to allow drilling and ) completion of the proposed Nicolai Creek No. 11 gas ) development well within 3,000 feet of other wells that ) are producing from, or may be capable of producing ) from, the same pools. ) ) Docket Number: CO-09-24 Conservation Order No. 623 Nicolai Creek No. 11 Gas Exploratory Well Kenai Peninsula Borough, Alaska August 19, 2009 NOTICE CLOSING DOCKET BY THE COMMISSION: The Commission has the closed the Docket in the above captioned matter. ENTERED AND EFFECTIVE at Anchorage, Alaska and this 19th day of August, 2009. BY DIRECTION OF THE COMMISSION ial As'!~istant to the Commission ~ ~ STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF Aurora Gas, LLC for an order granting an exception to the well spacing requirements of 20 AAC 25. O55(a)(4) to allow drilling and completion of the proposed Nicolai Creek No. 11 gas development well within 3,000 feet of other wells that are producing from, or may be capable of producing from, the same pools. IT APPEARING THAT: Docket Number: CO-09-24 Conservation Order No. 623 Nicolai Creek No. 11 Gas Exploratory Well Kenai Peninsula Barough, Alaska August 19, 2009 1. By letter dated July l, 2009, Aurora Gas, LLC (Aurora) requests the Alaska Oil and Gas Conservation Commission (Commission) enter an order granting an exception to the spacing requirements of 20 AAC 25.055(a)(4) to allow drilling, perforating, completing, testing and production of the proposed Nicolai Creek No. 11 vertical gas exploratory well within 3,000 feet of other wells that are, or may be, capable of producing from the same pools (i.e., the Nicolai Creek Beluga Undefined Gas Pool and the Nicolai Creek South Undefined Gas Pool), which are in the Kenai Peninsula Borough, Alaska. 2. On July 1, 2009, the Commission requested additional information from Aurora; on July 6, 2009, Aurara submitted the requested information. 3. On July 3, 2009, pursuant to 20 AAC 25.540, the Commission published in the Atvcxo~,GE DA~Lv NEWS notice of the opportunity for a public hearing on August 1 l, 2009. 4. On July 7, 2009, pursuant to 20 AAC 25.540, the Commission published in the PEN~t~1SVLA CLAR~Otv notice of the opportunity for a public hearing on August 11, 2009. 5. The Commission received no protest to the application or request far a hearing. 6. The public hearing was vacated on July 29, 2009. To resolve Aurora's request, the Commission evaluated information submitted by Aurara along with information in the Commission's files. FINDINGS: 1. Aurora is the operator of the Nicolai Creek Unit and will be the operator of the proposed Nicolai Creek No. 11 well that may access the Nicolai Creek Beluga Undefined Gas Pool and/or the Nicolai Creek South Undefined Gas Pool, Kenai Peninsula Barough, Alaska. 2. The proposed Nicolai Creek No. 11 well will be an onshore, vertical gas exploratory well with surface and bottomhole locations 1,894 feet from the south line and 1,534 feet from the east line of Section 30, T11N, R12W, Seward Meridian (S.M.). 3. The Nicolai Creek No. 11 well is proposed to be drilled and completed within 3,000 feet of other wells (i.e., the active Nicolai Creek Unit No. 9 and the inactive Nicolai Creek Unit No. 1B gas production wells) that are producing from, or may be capable of producing from, the same pools (i.e., the Nicolai Creek Beluga Undefined Gas Pool or the Nicolai Creek South Undefined Gas Pool). ~ ~ 4. By certified mail, Aurora sent notice of the application to all owners, landowners, and operators of all properties within 3,000 feet of each anticipated productive pool of the proposed Nicolai Creek No. 11 well. Aurora provided the Commission the notice, date of mailing, and addresses to which the notice was sent. The Nicolai Creek No. 11 well is designed to recover Nicolai Creek Beluga Undefined Gas Pool and Nicolai Creek South Undefined Gas Pool reserves that, based on the information evaluated, appear to be fault-separated from reservoirs accessible by existing wells and trapped at a structurally more favorable location. CONCLUSIONS: 1. An exception to 20 AAC 25.055(a)(4) is necessary to allow drilling and completion of the Nicolai Creek No. 11 gas development well that may recover Nicolai Creek Beluga Undefined Gas Pool and Nicolai Creek South Undefined Gas Pool reserves that are not accessible with existing wells 2. Granting a spacing exception to allow drilling and completion of the Nicolai Creek No. 11 well will not result in waste or jeopardize the correlative rights of adjoining or nearby owners, operators and landowners. NOW, THEREFORE, IT IS ORDERED: Pursuant to the Commission's autharity under AS 31.05.030 and 20 AAC 25.055, the Commission approves Aurora's application far an order granting an exception to the well spacing provisions of 20 AAC 25.055(a)(4) to allow drilling and completion of the Nicolai Creek No. 11 well. Aurora may proceed with regular production as long as it complies with all other legal requirements. ENTERED at Anchorage, Alaska, and dated August 19, 2009. FK „-s~T° .< ~ R ~ ~ r ~ ~ /' ~ _ ~ { ~ ~ Daniel T. Seamount, Jr., Chair Alaska Oil ~, c~'as Conservation Commission .,y - \ ^ .. '~,~r . ~7.~. ~ `?^~ ~:+fr ~f.'r, .:~ ' a ~ 1 ~~`~ ~ 4~~*.'' ohn . or an, Comr~riS~sioner ~;~•,:~,~~y~~• I a Oil and Gas Conservation Commission ~~~ ~ Cathy P. oerster, Commissioner Alaska il and Gas Conservation Commission Conservation Order No. 623 Effective August 19, 2009 Page 2 of 3 ~ ~ RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Conservation Order No. 623 Effective August 19, 2009 Page 3 of 3 ~ ~ Mary Jones David McCaleb Cindi Walker XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography GEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 Mark Wedman Schlumberger Ciri Halliburton Drilling and Measurements land Department 6900 Arctic Bivd. 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99502 Anchorage, AK 99503 Anchorage, AK 99503 Baker Oil Tools Ivan Gillian Jill Schneider 4730 Business Park Blvd., #44 9649 Musket Bell Cr.#5 US Geological Survey Anchorage, AK 99503 Anchorage, AK 99507 4200 University Dr. Anchorage, AK 99508 Gordon Severson Jack Hakkila Darwin Waldsmith 3201 Westmar Cr. PO Box 190083 PO Box 39309 Anchorage, AK 99508-4336 Anchorage, AK 99519 Ninilchick, AK 99639 James Gibbs Kenai National Wildlife Refuge Penny Vadla PO Box 1597 Refuge Manager 399 West Riverview Avenue Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-7714 Soldotna. AK 99669-2139 Richard Wagner Cliff Burglin Bernie Karl PO Box 60868 PO Box 70131 K&K Recycling Inc. Fairbanks, AK 99706 Fairbanks, AK 99707 PO Box 58055 Fairbanks, AK 99711 North Slope Borough PO Box 69 Barrow, AK 99723 V q ( ~ 1 ~ a~ ~~ ~ ~ ~ Page 1 of 1 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Thursday, August 20, 2009 3:24 PM Subject: co623 Attachments: co623.pdf BCC:'Aaron Gluzman'; caunderwood@marathonoil.com; 'Dale Hoffman'; Fridiric Grenier; 'Gary Orr'; Jerome Eggemeyer; 'Joe Longo'; 'Lamont Frazer'; Marc Kuck; 'Mary Aschoff ; Maurizio Grandi; P Bates; Richard Garrard; 'Sandra Lemke'; 'Scott Nash'; 'Steve Virant'; 'Wayne Wooster'; 'Willem Vollenbrock'; 'William Van Dyke'; Woolf, Wendy C(DNR); 'Anna Raff; 'Barbara F Fullmer'; 'bbritch'; 'Bill Walker'; 'Brad McKim'; 'Brandon Gagnon'; 'Brian Gillespie'; 'Brian Havelock'; 'Brit Lively'; 'Bruce Webb'; 'buonoje'; 'Cammy Taylor'; 'Cande.Brandow'; 'carol smyth'; 'Charles O'Donnell'; Chris Gay; 'Cliff Posey'; 'Dan Bross'; 'dapa'; 'Daryl J. Kleppin'; 'David Brown'; 'David Gorney'; David House; 'David L Boelens'; 'David Steingreaber'; 'ddonkel'; Deborah Jones; Decker, Paul L(DNR); 'doug_schultze'; 'Eric Lidji '; 'Evan Harness'; 'eyancy'; 'foms2@mtaonline.net'; 'Francis S. Sommer'; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Rogers'; 'Gary Schultz'; 'ghammons'; 'Gordon Pospisil'; 'Gregg Nady'; 'gspfoff; 'Hank Alford'; 'Harry Engel'; 'jah'; 'Janet D. Platt'; 'jejones'; 'Jerry Brady'; 'Jerry McCutcheon'; 'Jim Arlington'; 'Jim White'; 'Jim Winegarner ;'Joe Nicks'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'John W Katz'; 'Jon Goltz'; Joseph Darrigo; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; knelson@petroleumnews.com; 'Krissell Crandall'; 'Kristin Elowe'; 'Laura Silliphant'; 'mail=akpratts@acsalaska.net'; 'mail=foms@mtaonline.net'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley'; 'Mark Kovac'; 'Mark P. Worcester'; 'Marquerite kremer ; Melanie Brown; 'Michael Nelson'; 'Mike Bill'; 'Mike Jacobs'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkin7200'; 'Nick W. Glover'; NSK Problem Well Supv; NSU, ADW Well Integrity Engineer; 'Patty Alfaro'; 'Paul Winslow'; Rader, Matthew W(DNR); Raj Nanvaan; 'Randall Kanady'; 'Randy L. Skillern'; 'Rob McWhorter '; rob.g.dragnich@exxonmobil.com; 'Robert Campbell'; 'Robert Province'; 'Rudy Brueggeman'; 'Sandra Pierce'; 'Scott Cranswick'; 'Shannon Donnelly'; 'Sharmaine Copeland'; Slemons, Jonne; 'Sondra Stewman'; 'Sonja Frankllin'; 'Stan Porhola'; 'stanekj'; 'Steve Lambert'; 'Steve Moothart'; 'Steven R. Rossberg'; 'tablerk'; 'Tamera Sheffield'; 'Temple Davidson'; Teresa Imm; 'Terrie Hubble'; Thompson, Nan G(DNR); 'Tim Lawlor'; 'Todd Durkee'; Tony Hopfinger; 'trmjrl'; 'Walter Featherly'; Walter Quay; Aubert, Winton G(DOA); Birnbaum, Alan J (LAW); Crisp, John H(DOA); Darlene Ramirez; Davies, Stephen F(DOA); Fleckenstein, Robert J(DOA); Foerster, Catherine P(DOA); Grimaldi, Louis R(DOA); Johnson, Elaine M(DOA); Jones, Jeffery B(DOA); Laasch, Linda K (DOA); Mahnken, Christine R(DOA); Maunder, Thomas E(DOA); McIver, Bren (DOA); McMains, Stephen E (DOA); Noble, Robert C(DOA); Norman, John K(DOA); Okland, Howard D(DOA); Paladijczuk, Tracie L(DOA); Pasqual, Maria (DOA); Regg, James B(DOA); Roby, David S(DOA); Saltmarsh, Arthur C(DOA); Scheve, Charles M(DOA); Schwartz, Guy L(DOA); Seamount, Dan T(DOA) Attachments:co623.pdf; Jody J. Colombie ~Special Assistant A/asku Oil anct Gas Conservution Commission 333 West 7th Avenue, Suite 100 flnchorage, AK 99.501 (907)793-1221 (phone) (907)276-7542 (f~x) 8/20/2009 ~4 Page 1 of 1 ~ Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Wednesday, Juty 48, 200912:02 PM To: 'Bruce D Webb' Subject: FW: Nicalai Creek 11 Spacing Excepfion App{ication Bruce, ~ Could you please provide a land plat for the Nicolai Creek Unit and the section containing the proposed location of Nicolai Creek 11 that depicts current lease boundaries and lease numbers? I didn't find one in the file or with Ed Jones's email dated July 6, 2009. Thanks, Steve Davies AOGCC From: Davies, Stephen F (DOA) Sent: Wednesday, July 01, 2009 4:18 PM To: 'Bruce D Webb' Cc: Saltmarsh, Arthur C(DOA); Colombie, ]ody J(DOA) Subj~ct: Nicoiai Creek 11 Spacing Exception Applicaticwn Bruce: I received the application for spaang exception for Nicolai Creek 11 today. The public mee~ng natice sfiould be published shortly. The application contains the following statement: "The Nicolai Creek #11 will be targeting gas in the Upper Tyonek and Beluga Forma#ions, Carya 2-1 thru 2-5 and Tsuga 2-6 sands. This well is needed to increase production from the Nicolai Creek Unit by aacessing the referenced sands further to the west.° I need a more precise justification for the proposed location of the Nicotai Creek 11 well. In other words, why can't Nicolai Creek 11 be drilled at a location that will conform to the appropriate spacing standarcis (n this case, statewide spacing requirements)? What is gained by accessing these sands further to the west? Is that loeation structurally more favorable? Are the sands discontinuous? Can you say whether or not the sands at this location will be in pressure communicafion with the sands open to other wells within 3,000 feet? Will a well at this loca~on decrease u~imate recovery or cause waste? Could you ptease also provide a land plat for the Nicolai Creek Unit and the s~~tion containing the proposed location of Nicolai Creek 11 that depicts current lease boundaries and lease numbers? Thanks for your help, Steve Davies AOGCC 7/8/Z009 ;-- -- - ~ _ - - -- - - I j __ -- - -- - _ ___ _ SEC 30 TOWNSHIP I1N RANGE 12W OF THE SEWARD 1l~RIDIAN, pLASgp i ~ LEGEND ~ . ~ - - - - - -- _ ~ _ --_ i--' ~ i _ . .------ __ BASE INFOR\1ATION _ ' - --- ~ ~ ~ . »n ~ ::i~ y~.~ ~~ ~. I i - . .- .. . . ~rconauanrirc I I~ simver urva I ' - SVRV :ry L(YI LINI: I ~ ~ I ~ ll)HRr'SIfIG/AFl'IH1N CRi~ I ~ ~ I I - IFI tiLCIIOI~ IJ~I: I . „ . . . ~ . ,e.v . I . I .. '_~ ~IXfHWAY I I ' ~ I ~ . •^°••••....-..° Rf1AD ____'__". _- // 7AAiL "....-r -'- NNUIIJAU •---~-+ -• 1711'IAIGI IVWf7t IJNC I II \ ~ ~I' . I . ~--. - ~ ~1.1 r 1 ~ ~ ~ F~ ~~ ~ ~•• ~. I~~ ~= /, ~l ( ~\. -r ~z c I . ~ ' 7V]lPFIOAP.IL'!P. 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'~~ox ~k ~ ~ ~ -- ~ -- - --- .. . -- ~ -------- ~~~ y rwJS .`~~r q x :~f~a'~S ~ ~ z x x ~~ .'~c x ~ ~,X l ~ ~~ ~~,~~~~,,(~. ' °, ', ~ 32?'" 23 ;~ ~~~!' ' ~~J . ~ ~..' ~ ~ ~; ° ~' J~'~'~ ( ~~ . I / ' ; _ _ __ --- s%x' ~x~r' ~ s~ X E3 047 _ S_-~ K~% x~ x~ R~ k x~X ~:Ri . .. .- I( Jt 7 X k~% X 1t~ "Y~' ~ ~, N ~[ X % X X X %, /Js ~ - ~ % k X X X %. ~ ly ]C ~ . / k~x X.% x z N' ~ x x 27 x x x x x ; 26 X X X x ussX r x" X x x asaax x x' I SFP 1649 9:85 TRACT A-H W x x x r y TRACTB•HW x * ' TRACTC-HW GRANITE x < x TOWER . . Al'S :~ x x_ - ~ . ,x xs79x :x'.7. %,.X"':x~- , r. 'X- x X%~~k!'~ ~-'7!", X X-%'~%~.~,s~; KSA_~3`0+,<.-:x~ z z~.x~~ z x_x~_•~x~:~ x K~:L K~~x x=7c"'::fc ic: ~ Attachment 1 T 11N~ R 1~ • W~ Sewarc~ ,~ . , - `:; ~~..,`,~; ~ ~ ~ ,~l~~~R~,~~ ,'•,~,~\~. ~ ~ ~., . , ~ ,`~. ~ i ,,\~` ,~,~ `~,. ~ ~ \~ ~``~.. - --~J . . ~. \~• . I I' _ _ - ,. ` \\\\\ . I . . \ ~ •, ~ ~ \•~~~~.. `~ ~ I~ ' ~~~~~,~\ ,. , ~ T~~~~ ~ ~ ~ ~ ____- . . ~ ~ . -~----- i ~~ ,,~\`~''~'~\ , I `~ ~ ,. . ~`~,` `~ `~ ~ I -~~~ ----{------ ~ , ` ~'~ ~.•~~`~\ \`~~. . ~ ~ ~ ~ ~ ~~~~~ .. I~~~ ~~.\. - ~ A~~ s.;,~y f :`~ ~`~` `~;`.; _. ~ Ne Unit Bounda l~'1/i-i~4~2~, ~ ~;;,.,~;~~_~ ~., TU SC}~ f~/ /c~c'~ 61 C ~ ~~ C ~~~-8426 _J' Mericlian Cook Inlet Coa~tline ~~, ~~ ~ ~. , I , ~ ~ ~ ~ i ~- Protracted Sections 19, Nicolai Nort~ PA, 20, 29 and 30, T11 N, Nicolai South~ PA & R12W, SM, AK Beluga PA Tracts I•_\Ill!{II ••.~" . i':t~~~ 1 ~~f 3 ~~ -„a ~i ~ ' ` \I C!{EEK IIT 7 ~ AA-EA26 ~ ~ ~ ~ j i~RNt~lSi=t'~'E;~ BFLLrGAPA!TRRCTS n Sr-.:;. ' ..~f S!iEEr: - , (.~ _ '- , - . 1 _ _ S~~ 30- ~,1, -- ~E~ 29 ( ; - _ _ ~ i t.. ;~ M:ET : ~ ~~~} J 1~tiCt~~.AI CKEEK ~' -__.. ___. UNlT 9 ~ L-175pg ~ ~ i ~ ~ _y __ ~ ! I - - . _ , N~c~~n~ sour~ Nn r~~ncrs ~ ' s~"~H~er :~ I ~. ~ _. :_ `+-- -1... J _~ ----- -~ 1 ! A~`'7~ ' ~ ~ ~ SEC 31 , SEC 32 '~T11N . -- -- , -; , _ __._ __ SEC 18 SEC 17 _ - ~ ~j/~',~~~ - -- - - _~ ~ / ,~, :~//, . ~, ..~ ~~ / ~~i. I. ~! `/• !NICOL}1i CKEEK ~ NICOLAI CKEEK ;~ f~ `~ UF+lIT 3 UNIT 5 -~/~/~j~,, //`~ S ~~ /! ~'~~```~' EC 19 ~/ ,i. f, , ~ sE~ Za / .;:' ,~ ;; r;~c,O~ni n[ORTH PA - ~~f~ 1~ ~,~;/ A~)C.-h'.'.Z: 9 `,I/.'~ ~j/f ///: SHEET: 1 of -~: Aurora Gas, LLC . ~ 2 1 2005 IOA~ O~ ~~~ GA~ BELUGA PA TRACTS I~ ~ within Sec 29 and 30 NoRT,.., T 11 N R 12W S M AK EXHIBIT «A~~ Page 3 of 3 , . -; ~, ~a~ . •3:. ' '~~~1~ ~~ 1', ' . ~r ~ ~ ~ f . p ~ I ~~ ~ Y~ j~~r ~; ~: ;> ~~ ,, 2 1 2005 , ~ ._ ~, y, ~' ~ ~L%~ ION OF '' TRACT 2 , o~L , ND GAS ~ ~1AQ4 45.300 AC .~' - i cw ~ne ' ~+o~ p ~ ~. cor~ i'.A 8429 - " ~l.IV1 L~fiSc: F+/~ -._ , ; . --_ 's 'T1zf~-JS ~2.C~ To ` ~ ~ ~ `- ~ ~ I , (~~1d~~~ ~I ~ ~ ~!- wr.a~.p ~ al~ ~ ~ I P4 / i ~ I ~ ' I U U. - -~ ~ ' , N«: P,~ - . 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NE . 8E % LYKi NOItTN OF 1M1W =~~Il6 M 6t7f . i. u, w, .:..~w r.......wr.. >...c.....w......r~-.~;de;,,..s Po BEYNE.9ESilrNCieatfn~osNnv 7J0~ 110Lt7ei! . .av«.,iemnw P9 SIYY.HWY:BWY.LVUIODOIliNOFMIW IAQ A0.T7l16 *.naRinaw~ti`n..ui`e~na vw aeY.~+w):awY.Lrrreso~m~or~r Ooer ~n~a6 y:aX,.,~.:~' -~.. r.<, , Pt Y , y, ~ .~ x.aa x. .ti.... ~..m> GRAPHIC SCALE 30 29 '0° o mo ~oo aao ,wo 31 32 ( ~ P'~' ) i ~n = +oo rc SHEET: 2 of 3 . . ....,,....~ .»» ~_-- t : - ~'"""~'° ~'~° ~- Aur+vra Gas, LLC , . M~ Tastiny - - ', « - ~ • ~ • Davies, Stephen F (DOA) From: Melissa Ainsworth@ak.blm.gov Sent: Wednesday, July 08, 2009 3:10 PM To: Davies, Stephen F (DOA) Cc: Charlie Beecham@blm.gov; Greg_Noble@blm.gov; Carol_Taylor@ak.bim.gov; Havelock, Brian E (DNR); Davidson, Temple (DNR) Subject: Re: Fw: Inquiry Regarding AA-8426 Attachments: AA-008426_AA-085789 Nicolai Creek Unit & Lease Transfer to SOA.pdf ~ AA-008426 AA-085 789 Nicolai Cr,.. Steve: The leases (AA-008426 and AA-085789) and Nicolai Creek Unit have been transferred to the SOA-DNR-DOG. The attached Decision has been signed. However, DNR-DOG and Aurora are still working out issues regarding the replacement bonding. The waiver of administration is effect upon DNR's approval of the replacement bond with assumption of liability rider as outlined in the decision. The DNR-DOG bond covers all outstanding liabilities on the lease. The surface ownership and subsurface ownership all depends on where you are on the lease. The BLM has only determined ownership based on our patents. For the must current ownership you would have to go to the State Recorders Office to see if anything has bee subsequently transferred. However, the State of Alaska now owns all of the oil and gas mineral interest under the lease effective 12/15/08. Aurora will discontinue reporting to the MMS production and royalty effective June 10, 2009. MMS will then do a royalty true-up from 6/10/09 back to 12/15/08. (See attached file: AA-008426 AA-085789 Nicolai Creek Unit & Lease Transfer to SOA.pdf) If you have anymore questions please feel free to contact me at the numbers below. Thank you, /s/ Melissa Ainsworth Mineral Law Specialist Mineral Law and Solid Mineral Section Bureau of Land Management- Alaska 907-271-5718 phone, 907-271-3933 fax melissa_ainsworth@ak.blm.gov Carol Taylor/AKSO/AK/BL M/DOI Melissa 07/08/2009 12:52 Ainsworth/AKSO/AK/BLM/DOI@BLM PM To CC Subject Fw: Inquiry Regarding AA-8426 1 ~ ~ Carol Taylor Chief, Mineral Law and Solid Minerals Section Division of Resources 907 271-4402 Fax 907 271-3933 ----- Forwarded by Carol Taylor/AKSO/AK/BLM/DOI on 07/08/2009 12:52 PM "Davies, Stephen F (DOA) " <steve.daviesCala To ska.gov> Carol_TaylorCak.blm.gov CC 07/08/2009 12:46 Bob MerrillC~ak.blm.gov PM Subject Inquiry Regarding AA-8426 Carol and Bob, I'm trying to find out if Lease AA-8426 has been conveyed to the state or whether it remains with BLM. If it has been conveyed, what is the effective date? If it has not been conveyed: Who is the landowner (I presume it is BLM) and who is the owner of the subsurface mineral rights? (I presume it is Aurora Gas, LLC, but would like confirmation.) Thanks, Steve Davies AOGCC 2 • ~ P " =' . ~'co Q~P~MENTOFT ,ym United States Department of the Interior ,u.' p ~ ~ BUREAU OF LAND MANAGEMENT ~ ,y4q~H =~9,9 ~ Alaska State Office 222 West Seventh Avenue, #13 Anchorage, Alaska 99513-7599 http://www.ak.blm.gov June 10, 2009 3100-1 (AK930) AA-008426, AA-085789, AA-085788 Hand Delivered State of Alaska Department of Natural Resources Division of Oil and Gas William Van Dyke, Acting Director 550 West 7~' Avenue, Suite 800 Anchorage, Alaska 99501-35 Certified Mail Article Number 70072560000029557663 Aurora Gas LLC Manager Land and Regulatory Affairs 1400 West Benson Blvd Suite 410 Anchorage, Alaska 99503 Certified Mail Article Number 70072560000029557670 Swift Energy Alaska, Inc. 16825 Northchase Drive Suite 400 Houston, Texas 77060 DECISION Federal Oil and Gas Lease and Unit Administration Waived and Transferred to the State of Alaska N~~~ ~~ ~ On October 20, 2008, the Bureau of Land Management (BLM) issued a decision for United States Survey 4550 approving the remaining selected oil and gas mineral estate within original federal oil and gas lease A-034161 for conveyance to the State of Alaska (SOA). This decision was then solidified by Patent no. 50-2009-0092 on December 15, 2008. With the SOA receiving entitlement to the last portion of the oil and gas selected underneath lease A-034161, said decision vested the oil and gas within Patent no. 50-67-0253. . ~ Original lease A-034161 was segregated into lease AA-008426 in 1973. Administration of lease A-034161 was subsequently waived to the SOA within the same year. In 2003, lease AA-008426 which remained under federal administration was then segregated upon commitment to the Nicolai Creek Unit into lease AA-085789. Therefore, pursuant to Section 6(h) of the Alaska Statehood Act, as amended, this decision hereby waives administration and transfers the following federal leases to the SOA: • Federal oil and gas lease AA-008426 containing 45.30 acres more or less, • Federal oil and gas lease AA-085789 containing 1,622.88 acres more or less. Upon transfer of the above leases to the SOA, the BLM no longer holds interest within the Nicolai Creek Unit. Therefore, the BLM hereby waives administration and transfers the Nicolai Creek Unit AA-085788 and associated participating areas AA-085788A and AA-085788B to the SOA. The Minerals Management Service (MMS), Minerals Revenue Management will reconcile all rentals/royalties paid by the lessee to the federal government on the above mentioned leases, unit, and participating area beginning December 15, 2008, to the present. The rentals/royalties are disbursed between the SOA/federal government in a 90% SOA, 10% federal split. The federal government will disburse to the SOA the 10% rental/royalty monies owed to the SOA from December 15, 2008 through the date of actual disbursement of monies by MMS. Effective the date of this decision, lessees and/or operators must hereafter pay rentals and royalties to the SOA for the above leases and unit. The SOA may be contacted at Division of Oil and Gas, 550 West Seventh Avenue, Suite 800, Anchorage, Alaska 99501-3560, telephone 907-269-8800. The lessee/operator has 30 days from the date of this decision to obtain, submit, and receive SOA Division of Oil and Gas approval on a replacement bond assuming all liability of the federal statewide bond AKAA-086555 currently held by the BLM in the amount of $25,000. On or before the 30th day, the lessee/operator must provide written request to release federal statewide surety bond AKAA-086555 and proof of approved replacement bond with assumption of liability by the SOA. Failure to provide this will result in delay of federal statewide bond termination by the BLM. This waiver of administration is hereby effective the date in which the SOA approves said replacement bond. If you have any questions regarding this Decision, please contact Melissa Ainsworth at 907-271-5718. /s/ Ted Murphy Ted Murphy Deputy State Director Division of Resources ~ Enclosures: ~ 1- Copy of Federal Lease File AA-008426 (Sent to State of Alaska only) 2- Copy of Federal Lease File AA-085789 (Sent to State of Alaska only) 3- Copy of Federal Nicolai Creek Unit File AA-085788 (Sent to State of Alaska only) 4- Copy of Federal Nicolai Creek Unit Participating Area Files AA-085788A and AA-085788B (Sent to State of Alaska Only) 5- Copy of BLM Decision Dated October 20, 2008 6- Copy of Patent 50-67-0253 and 50-2009-0092 cc: Minerals Management Service, Minerals Revenue Management BLM- State Director AK-910 Deputy State Director, Division of Conveyance Management AK-960 Chief, Section of Energy AK-932 AA-008426 AA-085789 AA-085788 AA-085788 A&B AA-058730 , ~ ~ o~PQ~~gNT oF ry~'ym United States Department of the Interior e A f/J ~~ D BUREAU OF LAND MANAGEMENT • ~qRCH 3 ~~°'9 Alaska State Office 222 West Seventh Avenue, #13 Anchorage, Alaska 99513-7599 http://www.ak.blm.gov In Reply Refer To: A-058730 (2627) (960) ljr/mjm/sla CERTIFIED MAIL RETURN RECEIPT REQUESTED DECISION State of Alaska Department of Natural Resources : A-058730 ;~ ~ TAKE PRII~E' ~N~MERI~,A ~~~ 2 0 2~ Division of Mining, Land and Water . General Purposes Grant Realty Services Section . State Selection 550 West Seventh Avenue, Suite 1O50A . Reserved Mineral Estate Anchorage, Alaska 99501-3579 : I. Decision of Mav 15, 2003, Vacated in Its Entiretv On May 15, 2003, the Bureau of Land Management issued a decision approving the reserved mineral estate within U.S. Survey No. 4550 (hereafter USS 4550), Alaska, located in T. 11 N., R. 12 W., Seward Meridian, Alaska, for conveyance to the State of Alaska (hereafter State). That decision is hereby vacated in its entirety. Ii. Reserved Mineral Estate within USS 4550 Approved for Convevance On August 29, 1960, the State filed General Purposes Grant selection application A-052976 for lands in T. 11 N., R. 12 W., Seward Meridian. On February 18, 1963, the State filed General Purposes Grant selection application A-058730 under the provisions of Sec. 6(b) of the Alaska Statehood Act of July 7, 1958, Pub. L. 85-508, 72 Stat. 339, as axnended1, for the reserved mineral estate within T. 11 N., R. 12 W., Seward Meridian. At the time of their selection by the State, the lands within T. 11 N., R. 12 W., Seward Meridian, were encumbered by federal oil and gas leases issued under the Mineral Leasing Act of February 25, 1920, as amended. Both State applications were filed within 10 years of the date of admission of Alaska into the Union (January 3, 1959), the period in which the State was allowed to select lands within federal oil and gas leases. ~ Acts of September 14, 1960, 74 Stat. 1025, and March 25, 1964, 78 Stat. 168 ~ ~ Tract A of T. 11 N., R. 12 W., Seward Meridian, was conveyed to the State under application A-052976 by patent no. 50-67-0253 on October 31, 1966. Patent no. 50-67-0253 did not convey the oil and gas deposits included in federal oil and gas leases A-035044 and A-034161 but did include a provision stating that "all the rights and interests to the oil and gas deposits in said lands" would automatically vest in the State upon termination or relinquishment of the listed oil and gas leases. The land embraced in USS 4550, which is located within the boundazies of T. 11 N., R. 12 W., Seward Meridian, was conveyed to Gust Peterson under headquarters site application A-054364 by patent no. 50-66-0215, but the coal, oil and gas were reserved to the United States. Although State selection application A-058730 became effective as to USS 4550 on November 10, 1965, when issuance of patent no. 50-66-0215 created a reserved mineral estate, the State did not request conveyance of the reserved minerals within USS 4550 unti12003. The reserved mineral estate within USS 4550, more particularly described in the proposed patent which is incorporated herein by reference, is proper for conveyance to the State. The proposed patent also idenrifie~ federal and third-party interests, if any. III. Historv of Federal Oil and Gas Leases within T 11 N, R 12 W. Seward Meridian On September 17, 1973, after issuance of patent no. 50-67-0253, federa,l lease A-035044 was segregated into separate leases-A-035044 and AA-8427. Lease A-035044 expired on August 1, 1975, and lease AA-8427 was terminated on May 1, 1975, with the result that all the oil and gas rights previously reserved to the United States in patent no. 50-67-0253 for federal lease A-035044 vested in the State on or before August 1, 1975. Federal lease A-034161 was segregated into separate leases-- A-034161 and AA-8426-effective May 21, 1973, and announced by decision dated September 17, 1973. Lease A-034161 was closed and transferred to the State effective October l, 1973, with the result that all the oil and gas rights reserved to the United States in patent no. 50-67-0253 in lease A-034161, as it existed following segregation, vested in the State on October 1, 1973, while lease AA-8426 remained under federal administration. Federal lease AA-8426 was segregated into separate leases-AA-8426 and AA-85789-effective November 1, 2003, and announced by decision dated September 22, 2005. Both leases remain under federal administration. Federal lease AA-85789 includes the oil and gas deposits within USS 4550. IV. Previouslv Excluded Oil and Gas Deposits to Vest unon Issuance of Patent Section 6(h) of the Alaska Statehood Act, as amended, allows the State to receive title to lands included in federal mineral leases if the State selection was made by January 3, 1969, and if the State selected all the lands subject to the mineral lease. The Bureau of Land Management has Page 2 of 6 ~ ~ consistently held that the term "lands" also includes the reserved mineral estates. The regulations at 43 CFR § 26273(b)(4)(i) provide that when the State receives title to all federal interests in a lease area, the requirements have been met. The proposed patent incorporated in this decision does not exclude the oil and gas rights in lease AA-85789, because upon issuance of the proposed patent, the 5tate will have selected and received title to all available lands in original federal lease A-034161, and the remaining oil and gas rights owned by the United States within the original lease area will autornatically vest in the State. V. ApnealInformation Any party claiming a property interest in lands affected by this decision may appeal the decision to the Interior Board of Land Appeals, Office of Hearings and Appeals, within 30 days of receipt of this decision. The appellant has the burden of showing that the decision appealed from is in error. Failure to file the notice of appeal with the Bureau within the time allowed will result in dismissal of the appeal. In order to avoid dismissal of the appeal, there must be strict compliance with the regulations contained in 43 CFR, Part 4. /s/ Margaret McDaniel Margaret J. McDaniel Land Law Examiner Land Transfer Adjudication II Enclosures: Decision dated 5/15/03 U.S. Survey No. 4550 MTP Patent Nos. 50-66-0215 and 50-67-0253 Copy furnished to: Aurora Gas LLC (CM-RRR) 10333 Richrnond, Suite 710 Houston, Texas 77042 (w/enclosures) Division of Energy and Solid Minerals (940) Page 3 of 6 ~ ~ AA-8426 (3111) AA-85789 (3111) FM, AK-(O 11) Lori Nelson (961) Page 4 of 6 ~ ~ ~l~~e ~ni~~e~d ~~~tt~,~ n~ .~~t~r~x~ ~roposed ~atent A-058730 This Patent is issued by the UI~IITED STATES, Department of the Interior, Bureau of Land Management, 222 West Seventh Avenue, #13, Anchorage, Alaska 99513-7599, as GRANTOR, to the State of Alaska, Department of Natural Resources, Division of Mining, Land, and Water, 550 West Seventh Avenue, Suite 1O50A, Anchorage, Alaska 99501-35'79, as GRANTEE, for the reserved mineral estate in lands in the Anchorage Recording District. WHEREAS 5tate of Alaska is entitled to a patent pursuant to Section 6(b) of the Alaska Statehood Act of July 7, 1928, Pub. L. 85-508, 72 Stat. 339, as amended by the Acts of September 14, 1960, 74 Stat. 1025, and March 25, 1964, 78 Stat. 168, for the minerals reserved to the LJIVITED STATES in the following-described lands in the hereinbelow identified patent: Patent No. 50-66-0215 U.S. Survey No. 4550, Alaska. Containing 5.00 acres, as shown on the plat of survey accepted August 6, 1963. WHEREAS, the surface rights of and to the above-described lands were patented with the following-described mineral interests and estates reserved to the UNITED STATES: All the coal, oil and gas in the lands so patented, and to it, or persons authorized by it, the right to prospect for, mine and remove such deposits from the same upon compliance with the conditions and subject to the provisions and limitations of the Act of March 8, 1922, 42 Stat. 415, as amended and supplemented. Page 5 of 6 ~ ~ NOW KNOW YE, that there is, therefore, granted by the tTNITED STATES, unto the said State of Alaska, the above-described mineral interests and estates in the above-described lands; TO HAVE AND TO HOLD the same together with all the rights, privileges, immunities, and appurtenances, of whatsoever nature, thereunto belonging unto the said State of Alaska, forever, subject to all the reservations and exceptions, other than the minerals specified above, contained in the aforesaid patent. Locarion Index for Recording Information: Return Recorded Document to: USS 4550, Secs. 28 and 29, T. 11 N., R. 12 W., Si1~I Page 6 of 6 ~ Joint Administration: BLM and State of Alaska Nicolai Creek Unit (NCU) Operator: Aurora Gas, LLC Unit Effective Date: April 2, 1968 I S011N012W Federal Lease A-085789 Legend a~ +.~ I ' Producing Gas • Well Head Location General Well Path PA Boundaries ~ NCU Beluga PA ~ NCU South PA - NCU Boundary Outline ~ 0 0.~ o.z m _______------ Gook In~et o.a o.s N ie BLM holds no responsibiliry to the acwrecy ot the data Cispayed on this map. Last uptlated February 28, 2007. ~ ~ Subpart 3104-Bonds § 3104.1 Bond obligations. (a) Prior to the commencement of surface disturbing activities related to drilling operations, the lessee, operating rights owner (sublessee), or operator shall submit a surety or a personal bond, conditioned upon compliance with all of the terms and conditions of the entire leasehold(s) covered by the bond, as described in this subpart. The bond amounts shall be not less than the minimum amounts described in this subpart in order to ensure compliance with the act, including complete and timely plugging of the well(s), reclamation of the lease area(s), and the restoration of any lands or surface waters adversely affected by lease operations after the abandonment or cessation of oil and gas operations on the lease(s) in accordance with, but not limited to, the standards and requirements set forth in §§ 3162.3 and 3162.5 of this title and orders issued by the authorized officer. (b) Surety bonds shall be issued by qualified surety companies approved by the Department of the Treasury (see Department of the Treasury Circular No. 570). (c) Personal bonds shall be accompanied by: (1) Certificate of deposit issued by a financial institution, the deposits of which are Federally insured, explicitly granting the Secretary full authority to demand immediate payment in case of default in the performance of the terms and conditions of the lease. The certificate shall explicitly indicate on its face that Secretarial approval is required prior to redemption of the certificate of deposit by any party; (2) Cashier's check; (3) Certified check; (4) Negotiable Treasury securities of the United States of a value equal to the amount specified in the bond. Negotiable Treasury securities shall be accompanied by a proper conveyance to the Secretary of full authority to sell such securities in case of default in the performance of the tertns and conditions of a lease; or (5) Irrevocable letter of credit issued by a financial institution, the deposits of which are Federally insured, for a specific term, identifying the Secretary as sole payee with full authority to demand immediate payment in the case of default in the performance of the terms and conditions of a lease. Letters of credit shall be subject to the following conditions: (i) The letter of credit shall be issued only by a financial institution organized or authorized to do business in the United States; (ii) The letter of credit shall be irrevocable during its term. A letter of credit ,~a used as security for any lease upon which drilling has taken place and final r,~'"`~ approval of all abandonment has not been given, or as security for a statewide C~~,..~ ` , or nationwide lease bond, shall be forfeited and shall be collected by the ~ ~ authorized officer if not replaced by other suitable bond or letter of credit at `~~ ,_ ~ least 30 days before its expiration date; ~~~-,,~/`~ (iii) The letter of credit shall be payable to the Bureau of Land Management ~,1` ~,~~ ~ ~,a ~ /~~~7~ ~~5 ~ s~~c~~r ~- ''' E'c~ !~ ~ ~' ~i' cl ~•~' ~ ~ f ~ ~ ~~~LGt ~4 ~ S l~c~ c;,:~c~-~- ~_ ~~r'C L~c~~ ~ f-~i~..! ~t ~e~-~..~.~__._ ~~ S ~ ~ upon demand, in part or in full, upon receipt from the authorized officer of a notice of attachment stating the basis therefor, e.g., default in compliance with the lease terms and conditions or failure to file a replacement in accordance with paragraph (c)(5)(ii) of this section; (iv) The initia~ expiration date of the letter of credit shall be at least 1 year following the date it is filed in the proper BLM office; and (v) The letter of credit shall contain a provision for automatic renewal for periods of not less than 1 year in the absence of notice to the proper BLM office at least 90 days prior to the originally stated or any extended expiration date. § 3104.2 Lease bond. A lease bond may be posted by a lessee, owner of operating rights (sublessee), or operator in an amount of not less than $10,000 for each lease conditioned upon compliance with all of the terms of the lease. Where 2 or more principals have interests in different formations or portions of the lease, separate bonds may be posted. The operator on the ground shall be covered by a bond in his/her own name as principal, or a bond in the name of the lessee or sublessee, provided that a consent of the surety, or the obligor in the case of a personal bond, to include the operator under the coverage of the bond is furnished to the Bureau office maintaining the bond. § 3104.3 Statewide and nationwide bonds. (a) In lieu of lease bonds, lessees, owners of operating rights (sublessees), or operators may furnish a bond in an amount of not less than $25,000 covering all leases and operations in any one State. (b) In lieu of lease bonds or statewide bonds, lessees, owners of operating rights (sublessees), or operators may furnish a bond in an amount of not less than $150,000 covering all leases and operations nationwide. § 3104.4 Unit operator's bond. In lieu of individual lease, statewide, or nationwide bonds for operations conducted on leases committed to an approved unit agreement, the unit operator may furnish a unit operator bond in the manner set forth in § 3104.1 of this title. The amount of such a bond shall be determined by the authorized officer. The format for such a surety bond is set forth in § 3186.2 of this title. Where a unit operator is covered by a nationwide or statewide bond, coverage for such a unit may be provided by a rider to such bond sgecifically covering the unit and increasing the bond in such amount as may be determined appropriate by the authorized officer. § 3104.5 Increased amount of bonds. (a) When an operator desiring approval of an Application for Permit to Drill has caused the Bureau to make a demand for payment under a bond or other financial guarantee within the 5- year period prior to submission of the Application for Permit to Drill, due to failure to plug a well or reclaim lands completely in a timely manner, the authorized officer shall require, prior to approval of the Application for Permit to Drill, a bond in an amount equal to the costs as estimated by the authorized officer of plugging the well and ~ ~ reclaiming the disturbed area involved in the proposed operation, or in the minimum amount as prescribed in this subpart, whichever is greater. (b) The authorized officer may require an increase in the amount of any bond whenever it is determined that the operator poses a risk due to factors, including, but not limited to, a history of previous violations, a notice from the Service that there are uncollected royalties due, or the total cost of plugging existing wells and reclaiming lands exceeds the present bond amount based on the estimates detertnined by the authorized officer. The increase in bond amount may be to any level specified by the authorized officer, but in no circumstances shall it exceed the total of the estimated costs of plugging and reclamation, the amount of uncollected royalties due to the Service, plus the amount of monies owed to the lessor due to previous violations remaining outstanding. § 3104.6 Where filed and number of copies. All bonds shall be filed in the proper BLM office on a current form approved by the Director. A single copy executed by the principal or, in the case of surety bonds, by both the principal and an acceptable surety is sufficient. A bond filed on a form not currently in use shall be acceptable, unless such form has been declared obsolete by the Director prior to the filing of such bond. For purposes of §§ 3104.2 and 3104.3(a) of this title, bonds or bond riders shall be filed in the Bureau State office having jurisdiction of the lease or operations covered by the bond or rider. Nationwide bonds may be filed in any Bureau State office (See § 1821.2-1). § 3104.7 Default. (a) Where, upon a default, the surety makes a payment to the United States of an obligation incurred under a lease, the face amount of the surety bond or personal bonds and the surety's liability thereunder shall be reduced by the amount of such payment. (b) After default, where the obligation in default equals or is less than the face amount of the bond(s), the principal shall either post a new bond or restore the existing bond(s) to the amount previously held or a larger amount as determined by the authorized officer. In lieu thereof, the principal may file separate or substitute bonds for each lease covered by the deficient bond(s). Where the obligation incurred exceeds the face amount of the bond(s), the principal shall make full payment to the United States for all obligations incurred that are in excess of the face amount of the bond(s) and shall post a new bond in the amount previously held or such larger amount as deterrnined by the authorized officer. The restoration of a bond or posting of a new bond shall be made within 6 months or less after receipt of notice from the authorized officer. Failure to comply with these requirements may subject all leases covered by such bond(s) to cancellation under the provisions of § 3108.3 of this title. § 3104.8 Termination of period of liability. The authorized officer shall not give consent to termination of the period of liability of any bond unless an acceptable replacement bond has been filed or until all the terms and conditions of the lease have been met. i- i FLUID MINERALS BOND PROCESSING USER GUIDE XIV. Replacement of Bond General Principals may request to replace existing bonds because: 1. They desire to move all their insurance business to a new or different company or agency that may underwrite bonds/insurance for several Corporate sureties that often are also large insurance companies; or 2. They no longer wish to pay premiums to the surety Replacement of bonds must be handled carefully because of the danger of unintentionally leaving some lease obligations without any coverage. The most difficult aspect of replacing a statewide or nationwide bond is that a new bond that is not specifically conditioned to completely replace the old bond may not cover all lease obligations that were covered by the old bond. This could include the responsibility to properly plug and abandon all wells on leases which expire or terminate before the new bond is filed. In replacing statewide/nationwide bonds, check to ensure that the new bond is conditioned to assume any outstanding liability on the leasehold(s) covered by the prior bond. If an unplugged well exists on an active lease covered under a bond that is being replaced by a new bond, the period of liability of the previous bond is to not be terminated until a rider has been accepted that assumes past liabilities for the unplugged well. Such a rider is needed since the new bond does not automatically cover prior liabilities incurred on behalf of the principal by the former surety. The existence of an unplugged well on a lease that has terminated or expired indicates that the operator has not complied with the lease terms. Therefore, the bond covering the lease must remain in full force and effect until the proper plugging, abandonment, and surface reclamation have been accomplished either by an arrangement made by the surety or through the BLM contracting for the work. (See Section XVIII, below, that addresses default and collection on bonds.) If the period of liability of the bond has been terminated for a lease with an unplugged well and reclamation work that has yet to be completed, a concerted effort is to be made by the BLM to collect on that bond. since several years may have passed, the surety will be reluctant to pay if the period of liability has been terminated. However, the surety is still deemed liable since the principal is liable for the damages it has caused in failing to comply with the lease terms and obligations. To avoid this situation from occurring, either obtain a replacement bond with an attached rider that assumes all previous liabilities existing under the prior bond, or do not release the prior bond until all the liabilities covered by the bond have been properly and fully corrected. The regulations at 43 CFR 3104.7 provide that where, upon default, the surety makes a payment to the U.S. of an obligation (debt) incurred under a lease, the face amount of the ~ ~ bond is reduced by the amount of the required payment. After a default on a lease, the principal on the bond must either post a new bond or replenish the existing bond to its original amount or to an increased amount determined by the BLM (and the surface management agency (see 43 CFR 3104.5) . The regulations also allow the principal to file separate or substitute bonds in lieu of either posting a new bond or increasing the existing statewide or nationwide bond. If the principal uses this option and files individual lease bonds, the BLM may not use an individual bond from one lease to cover an obligation due under another lease. In cases where the obligation and payment are less than the bond face amount, and a new bond is filed or the existing bond is replenished to the full required amount, adequate bonding is in full force and effect for any future liabilities. In instances where the obligation in default is more than the face amount of the bond and the bond is depleted, collection efforts for the remaining obligation in default must continue (see 43 CFR 3104.7) . If the replacement bond is a personal bond backed by cash OI negotiable Treasury securities, the BLM can quickly possess the funds to satisfy the remaining obligations. not use such funds would be contrary to the interests of the U.S. and could result in premature efforts toward collecting under the Debt Collection Act (DCA) and initiation of lease cancellation proceedings. • ~ Illustration 58 (XIV.B.8) BLM Bond No.: Surety Bond No.: Lease Serial No. (if lease bond) RIDER In consideration for any premium charged for this rider and the acceptance of this rider by the Bureau of Land Management on behalf of the United States of America, the undersigned principal(s) and surety hereby extend the coverage of this bond to the performance of all lease obligations, both~ast_and future, including the responsibility to ~ properly plug and abandon any and all wells drilled on the leasehold, including related ~ r (Y~ surface reclamation, and to pay any outstanding rentals or royalties due. This assumption ,,~~ shall continue whether or not the lease subsequently expires ar terminates or is I'~~~~ {,.~ relmquished or cancelled; provided, however, that this rider shall not act to increase the ,~,1 ~U actual cumulative or potential liability of the Surety above the face amount of the bond, ~ to wit: ~~ ~ Dollars ($_). `1 nti~ V Executed this Witness and Address day of , 19_. Principal Witness and Address Surety • ~ Illustration 59 (XIV.B.9) BLM Bond No.: (Replacement Bond) Surety Bond No.: (Replacement Bond RIDER It is hereby agreed by and between the undersigned principal(s) and surety, in consideration for the additional premium or consideration paid for this rider, if any, and the consent by the Bureau of Land Management on behalf of the United States to terminate the period of liability on Bond No. (Replaced Bond No.) carrying the same principal(s) and (Surety on Renlaced Bond) as surety, the undersigned principal(s) and surety hereby assume any and all liabilities that may be outstanding on Bond No. (Replaced Bond No.) including, but not limited to, the obligation to properly plug and abandon all wells existing on leases to which Bond No. ~Replaced Bond No.) applies and any unpaid rentals or royalties heretofore accruing: provided, however, that this rider shall not act to increase the potential or cumulative liability of the surety above the face amount of the bond to which this rider attaches. Executed this day of , 19_. Witnesses: Principal and Title Address Surety Address ~ ~ Sug~ested Laneuage in State DOG Decision• The State of Alaska Department of Natural Resources has approved effective DATE, the $ amount performance bond No. ( ADL-XXXX). This bond hereby repiaces federal bond no. (AA-xxxxx). An assumption of liability rider has been filed on replacement bond (ADL-XXXX), whereas, enter principal(s) and suretv names assumes any and all outstanding liability of federal bond (AA-xxxxx) and extends the coverage of (ADL-xxxxx) to the performance of all lease and unit obligations, both past and future, including the responsibility to properly plug and abandon any and all wells, including related surface reclamation, and to pay any outstanding rentals or royalties (including interest, penalties, and assessments) due. Suggested Lan~uage in the 5tate AOGCC Decision• The State of Alaska, Alaska Oil and Gas Commission has approved effective DATE, the $ amount bond No. ( ADL-XXXX). This bond hereby replaces federal bond no. (AA-xxxxx). An assumption of liability rider has been filed on replacement bond (ADL-XXXX), whereas, enter principal(s) and suret names assumes any and all outstanding liability of federal bond (AA-xxxxx) and extends the coverage of (ADL-xxxxx) to the performance of all lease and unit obligations, both past and future, including the responsibility to properly plug and abandon any and all wells, including related surface reclamation, and to pay any outstanding rentals or royalties (including interest, penalties, and assessments) due. Sug~est LanQuage in BLM Decision for Administration Waiver: The Lessee/Operator must obtain replacement bonding for federal bond no. (AA-XXX~~) within 30 days of receipt of this Decision through the State of Alaska, Department of Natural Resources and State of Alaska, Alaska Oil and Gas Conservation Commission. Replacement bonding through both agencies must have assumption of liability riders assuming any and all outstanding liability of federal bond (AA-xxxxx) and extending the replacement bond to include the performance of all lease and unit obligations, both past and future, including the responsibility to properly plug and abandon any and all wells, including related surface reclamation, and to pay any outstanding rentals or royalties (including interest, penalties, and assessments) due. The Lessee/Operator must provide proof of approved replacement bonding and assumption of liability rider's to the BLM. This must be provided 60 days from receipt of said Decision. = ~ ~-~~ ~~~~ ~ ~,1~55~- /`1 ~ ~ Upon deternunation by the BLM that the lessee/operator has satisfied the above replacement bonding requirements the BLM will release the federal bond and waive lease and unit administration to the State of Alaska, Department of Natural Resources. ~3 ~ ~ . ~- -~' Davies, Stephen F (DOA) _ ~`~~~-~ `~ '!~ ~~ =~ ` ~~/ . ~ y Subject: Canceled: Public Hearing Nicolai Creek #11 (Aurora Gas) r~,~4~ Location: Hearing Room ~ ~ ~ Start: Tue 8/11/2009 9:00 AM End: Tue 8/11/2009 12:00 PM Show Time As: Free Recurrence: (none) Meeting Status: Not yet responded Required Attendees: Seamount, Dan T(DOA); Foerster, Catherine P(DOA); Norman, John K(DOA); Davies, Stephen F(DOA); Maunder, Thomas E(DOA); Roby, David S(DOA); Birnbaum, Alan J (LAW); Ballantine, Tab A(LAW); Mclver, Bren (DOA); Darlene Ramirez Importance: High ~ ~ Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Wednesday, July 29, 2009 12:16 PM To: Colombie, Jody J (DOA) Cc: Seamount, Dan T(DOA); Norman, John K(DOA); Foerster, Catherine P(DOA) Subject: RE: Nicolai Creek #11 Spacing Exception 1 suggest that the Commission vacate the hearing. There is little that is controversial about the proposed Nicolai Creek 11 well: 1) the setback infringement on a federal-state property line was eliminated on June 10, 2009 when BLM conveyed lease AA-8426 (the lease containing the proposed well) to the State of Alaska (the adjacent lease, ADL 17589, is a state lease), and 2) it will be a gas producer located approximately 1,700 feet from existing gas producer Nicolai Creek Unit 1 B; however, Nicolai Creek 11 is designed to recover reserves that are believed to be: a. fault-separated from reservoirs accessible by existing wells, b. at a structurally more favorable location, and c. trapped in better quality reservoirs. Thanks, Steve D. From: Colombie, Jody J (DOA) Sent: Wednesday, July 29, 2009 11:31 AM To: Davies, Stephen F(DOA); Seamount, Dan T(DOA); Norman, John K(DOA); Foerster, Catherine P(DOA) Subject: Nicolai Creek #11 Spacing Exception Can we vacate the 8/11/09 Spacing Exception hearing? No member of the public have commented or requested a hearing. Jody J. Colombie Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 (907)793-1221 (phone) (907)276-7542 (fax) • ~ Page 1 of 2 Colombie, Jody J (DOA) From: Bruce D Webb [bwebb@aurorapower.com] Sent: Monday, July 06, 2009 2:30 PM To: Davies, Stephen F(DOA); Saltmarsh, Arthur C(DOA); Colombie, Jody J(DOA) Subject: FW: Nicolai Creek 11 Spacing Exception Application Attachments: NCU No11 Prospect Review 2.ppt Steve (Art), As requested... Let me know if you need anything else. Thanks for your help. -Bruce From: Ed Jones [mailto:jejones@aurorapower.com] Sent: Monday, July 06, 2009 1:52 PM To: '8ruce D Webb' Subject: RE: Nicolai Creek 11 Spacing Exception Application Bruce, In response to Steve Davies' questions, here is an excerpt from the justification writeup to our K-F investor/owners: The Nicolai Creek Unit #11 is proposed as a straight hole from the west-most non-wetlands surface location available, which is 1800' west of the NCU 9 well. The location appears to be fault separated from the #9, by a down-to-the east splinter fault w/o much throw. The #9 well, drilled in 2003, has been a good Beluga producer--it is a triple-selective completion, completed in 14 sand lenses of the Tsuga 2-6 thru 2-8 sands. To date, the well has produced 1613 MMcf, mostly from the Upper 2-7 sands, but is now comingled with both the middle and lower completions open (Upper 2-7 thru 2-8 sands}. The well produced 39,597 mcf in March 2009 (1277 mcfpd average). The Upper completion has been tested but not produced, and there are 9 uncompleted sands remaining in the wellbore above 1148'. The EUR of the 3 completions is expected to be 2.7 BCF, with another 0.9 BCF Probable behind pipe. The #9 well was not drilled into the Carya sands, as they are available in the NCU #1 B and #2 well bores, which are directionally drilled from the same surface location. The #11 was originally planned as a directional Carya 2-1 thru 2-5 test, but additional review of the seismic looking to duplicate the success of the Beluga in the #9 indicated that a straight hole from this location (an old staging area in an otherwise wetland area) would provide a good test of the Tsuga sands and yet catch the upper Carya sands, the most prolific, in good positions. Thus, this well is proposed as a Beluga thru Carya 2-4 test to 3100'. The #1 B is completed in the Carya 2-1.2 thru 2-5 sands and is expected to be fault separated from the #11 at least to the Carya 2-2 level. The NCU #2 will is believed to be fault separated from the #16 (and, thus, the #11) at all levels--it produces or has produced from the Carya 2-1.1, 2-1.2, 2-2.1, and 2-2.3 sands. The plan is to drill the well to 3100' or less if: a) trouble of any sort is encountered, which slows the drilling (the goal is to keep the Beluga in open hole as short a time as possible to prevent formation damage), or b) if mud log shows diminish significantly below the Carya 2-2 sands. In summary, the #11 is being drilled from a surface location as far west (and north) as we can without significant wetlands issues or without crossing the major east-west fault. Geologically, we believe that #11 will be fault separated from the all the Beluga sands in the #9 and from the shallower Upper Tyonek Carya 2 sands in the #1 B. Because the #1 B is directionally drilled to the southwest, the #11 will be closest to it, but up dip from the producing Carya 2-1 thru 2-4 sands (see attached Power Point maps based on seismic). We may be pressure connected to the Carya 2-3 and 2-4 sands open in the #1 B, depending upon the depth of the fault and whether or not it is sealing those reservoirs, but those sands are know to produce water and sand in the #1 B and are not high quality reservoirs. We are expecting to get up dip from these sands and, possibly in higher quality reservoirs, so ultimate recoveries from these reservoirs are expected to be higher. The volumetrically drainage area of the reservoirs calculated for the EUR's indicated by material balance methods (P/Z vs. Cumulative production plots) range from 120 acres in the best Beluga sands to 40 acres in the Upper Tyonek sands. This new well is beyond those drainage areas, so we expect the well to increase the EUR from the field. Regarding the continuity of the sands, they are expected to be continuous, but the sand quality appears to be somewhat 7/6/2009 ~ ~ Page 2 of 2 channelized (i.e., clay content, porosity, and permeability vary. Please let me know if there are more questions or if more info is needed. Ed 7/6/2009 ~ ~ DONE C~-IECKLIST - SPACING EXCEPTION FOLDER Area / W ell: ~' ~-~/L..~ ~~ Operator: ~ c ,,-~.-Y--~ ~ ~ ~«.- Hearing Date: . ,~/ / /~L~ ~ / ~- Application Complete o~~ ~: ~ _ ~ dditional Information: Requested ~ via ~/~t~ r~; Received on ~ via ~~~ `/ V Additional Information: Requested ~~ via C~~Z t~ r; Received on via Additional Information Complete oli _ t~ Public Notice Complete 7 ~- ~y,~,~ ~~ ,,~~ ~:~ '7 ~ ~ Te~ Drafted on ~~ ~ by a$~ ; Reviewed by Attorney General's Office on -~~ / Te~ct Sent to Jody for Formatting / Publishing on _~ by ~.F~~ ''~ Published in ~.~~ on 7 ~ `~~ Published in ~~-+ ~` ~ `~` ~~ ~4~'f ~` on ~ ~ ~ Questions for Operator Complete Questians Drafted on by Questions Reviewed by Team on ; Reviewed by Attomey General's Off'ice on Questions Sent to Operator on via Response Received on via Response Complete on Public Hearing Complete ~~ Hearing ~ ,: ~--:.^--~-~, ,~=~a~ ~%4`: ~ ''``.~ Additional Information: Requested on via ; Received on via Additional Information: Requested on via ; Received on via Additional Information Complete on Order omplete e~ Drafted on ~ ' ~ by ~' ~ ~~ . ~ 4 ~-c~.,_ ~~~~ r/ TeXt Reviewed by Team on ~ J~z.. ~ ~ ~ Te~ Sent to Attorney General's Office on f L~-- `~Tea~t Reviewed by Attorney General's Office on I" Text Reviewed by Other Agency on ~ ~ Te~t Sent to Jody for Formatting / Publishing on ~~ ~ Te~ Sent to Comxnissioners on Approved by Commissioners on fi~ Published on ~ ~J ~ by ~ CHECKLI5T - SPACING EXCEPTIO APPLICATION OPERATOR ~ t~ ~~'~ t~ S/~ '~ PROPERTY ID/ LEASE S: , FIELD/POOL WELL NAME ~, ~t'v~~ ~~ G'-~ / l PUBH: VERTICAL ~ EXPLORATORY GAS :~ DEVIATED DELINEATION OIL DEVELOPMENT SURFACE LOCATION ~~~~7 ' F S L and %5~~ ' F~L, S.~ , T//~/~, R jZt~i, ~ M PRODUCTIVE INTERVALS ' F L and ' F L, S. , T , R , M (Top and Bottom) ~%' ~ ~ BOTTOM HOLE ' F L and ' F L, S. , T , R , M Check applicable reason(s) for spacin~ egception per 20 AAC 25.055(a): (1) to drill a well for oil within SW feet of a ro line where ownership or landownershi chan es, (2) to drill a well for within 1500 feet of a ro e line where ownershi or landownership changes, (3) to drill and com lete more than one oil well in a overnmental uarter section; or to drill and complete an oil well closer than 1000' to any well drilling to or capable of producing from the same l, (4) to drill and complete more than one as well in a ovemmental section; or ~` or to drill and complete a gas well closer than 3000' to any well drilling to or capable of producing from the same paol. Does the application contain? .-,~ , „ _ A brief explanation for why the operator has chosen to drill the s~cified k'~u-~° ~ ~'~ ° location. A plat drawn to a scale of one inch equaling 2,640 feet or larger, showing ~~,° ~€~ ~'-~ r~~- the location of the well or portion of the well for which the exception is , d ~.~ ~ sought, all other completed and drilling wells on the property, and all U adjoining properties and wells within 1,000 feet of a well ar ~rtion of the well requirnig the spacing exception that is drilling for oil or within 3,000 feet of a well or portion of the well requiruig the spacing exception that is drilling for gas. The names of all owners, landowners, and operators of all properkies 'thin 1,000 feet of a well or portion of the well requiring the spacing exception that is drilling for oil or within 3,000 feet of a well or portion i of the well requirnig the spacing exception that is drilling for gas. A copy of the notice sent by certified mail to the owners, landowners and operators described above, the date of mailing, and the addresses to wluch the notice was sent. An affidavit by a person acquainted with the facts verifying that all facts are riue and that the lat correctl rtrays rtinent and r uired data. If the operator requesls a variance from the notice requireinents of 20AAC25.OSS(d), sufficient information to demonstrate that it is not feasible to comply with the notice requirements because of the comple~ of ownershi ~ ~ ~ CHECKLIST - SPACING EXCEPTION APPLICATION API NUMBER 50283201350000 PROPERTY ID/LEASE FEDAA08426 OPERATOR AURORA GAS LLC FIELD/POOL WELL NAME NICOLAI CREEK 11 VERTICAL DEVIATED EXPLORATORY Yes ____. _ GAS DEVELOPMENT OIL SURFACE LOCATION 1894 FSL and 1534 FEL in T11N R12W M S PRODUCTION INTERVALS NO LOCATION (Top and Bottom) NO LOCATION BOTTOM HOLE NO LOCATION Check applicable reason(s) for spacing exception per 20 AAC 25.055(a): NA Spacing Exception requested to (1) to drill a well for oil within 500 feet of a property line where ownership or landownership changes NA Spacing Exception requested to (2) to drill a well for gas within 1500 feet of a property line where ownership or landownership changes NA Spacing Exception requested to (3) to drill and complete more than one oil well in a governmental quarter section; NA Spacing Exception requested to (3) to drill and complete an oil well closer than 1000' to any well drilling to or capab of producing from the same pool NA Spacing Exception requested to (4) to drill and complete more than one gas well in a governmental section; or Yes Spacing Exception requested to (4) or to drill and complete a gas well closer than 3000' to any well drilling to or capable of producing from the same pool. Yes Does the application contain a brief explanation for why the operator has chosen to drill the specified location. Yes Does the application contain a plat drawn to a scale of one inch equaling 2,640 feet or larger, showing the location the well or portion of the well for which the exception is sought, all other completed and drilling wells on the prope and all adjoining properties and wells within 1,000 feet of a well or portion of the well requiring the spacing exceptio that is drilling for oil or within 3,000 feet of a well or portion of the well requiring the spacing exception that is drilling gas. Yes Does the application contain the names of all owners, landowners, and operators of all properties within 1,000 feet well or portion of the well requiring the spacing exception that is drilling for oil or within 3,000 feet of a well or portio the well requiring the spacing exception that is drilling for gas. ( Yes Does the application contain acopy of the notice sent by certified mail to the owners, landowners and operators described above, the date of mailing, and the addresses to which the notice was sent. Yes Does the application contain an affidavit by a person acquainted with the facts verifying that all facts are true and th the plat correctly portrays pertinent and required data. NA If the operator requests a variance from the notice requirements of 20AAC25.055(d), does the application contain sufficient information to demonstrate that it is not feasible to comply with the notice requirements because of the complexity of ownership within the notice area. ~ STATE OF ALASKA ~ NOTICE TO PUBLISHER ~ ADVERTISING ORDER NO. ADVERTISING ORDER INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE AO~O3O 1 YOOZ S EE BOTTOM`P.QI'~ I~IVO,(GE ADDRES§' ~u i~ r_ ~,~ . ~ s tn ,{ ~ ia d ~ ~ ~~, ~~~i~ (t ~~ ~ ~ . ., ~v ,, ' F R AOGCC 333 W 7th Ave, Ste 100 AGENCY CONTACT Jod Colombie DATE OF A.O. Jul 2 2009 ° "" Anchorage, AK 99501 907-793-1238 PHONE - PCN DATES ADVERTISEMENT REQUIRED: ASAP o Peninsula Clarion P.O. Box 3009 Kenai AK 99611 ~ July 7, 2009 THE MATERIAL BETWEEN THE DOUBIE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement Legal~ ^ Display Classif ied ^Other (Specify) SEE ATTACHED SEN D INVOIGE'.~I~~TRfPLICA'~EG: ~ I ;;ii r ~~ ~9 ~~ I '`~ ~~~. AOGCC, 333 W. 7th Ave., Suite 100 Anchora e AK 99501 PAGE 1 OF 2 PAGES TOTAL OF ALL PAGES$ REF TYPE NUMBER AMOUNT DATE COMMENTS 1 VEN Z A~ 02910 3 4 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LI~ ~ 08 02140100 73451 2 3 4 REQUISITION BY: DIVISION APPROVAL: i i Notice of Public Hearing and Comment Opportunity STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Aurora Gas, LLC for a spacing ex`ception under 20 AAC 25.055 to drill the Nicolai Creek No. 11 well. Aurora Gas, LLC (Aurora), by letter received July 1, 2009 by the Alaska Oil and Gas Conservation Commission (Commission), requests an order for an exception to the spacing requirements of 20 AAC 25.055(a)(4) to drill, perforate, complete, test and produce the Nicolai Creek No. 11 vertical gas development well within 3,000 feet of wells capable of producing from the same pool. The proposed surface and bottomhole locations of the Nicolai Creek No. 11 well are the same: 1,894 feet from the south line and 1,534 feet from the east line of Section 30, T11N, R12W, Seward Meridian (S.M.). A public hearing on the application is tentatively scheduled for August 1 l, 2009, at 9:00 a.m., at the Commission's office: 333 West 7th Ave., Suite 100, Anchorage, AK 99501. To request that the hearing be held, a written request must be received at the Commission's office by 4:30 p.m. on July 23, 2009. If a request is not timely received, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold a hearing, ca11907-793-1221 after July 28, 2009. Written comments regarding the application may be submitted to the Commission. Comments must be received at the Commission's office by 4:30 p.m. on August 10, 2009, except that, if a hearing is held, comments must be received by the conclusion of the hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, ca11907-793-1221 by August 3, 2009. Daniel T. Seamount, Jr. Chair . ~ : PUBLISHER'S AFFIDAVIT UNITED STATES OF AMERICA, ~ STATE OF ALASKA ss: Denise Reece being first duly ~ ~ ~ ~ .~ ~. .~. ,...~:~r ~. ~. ~. ' Nbtice at PubMa ~ ~ ~omment ~ I s~~~o ~ 1 ( Alaska Oil and Gas Conservation Commission ' Re: ~ The application of Aurora Gas, L!C for a spacing ~ exception ynder 20 AAC 25.055 to drill the Nicol~ ~ 'P,urora Gas;NLLC~(Aurora), by letter'received Ju,ly 1,) '2009 by the Alaska Oil and Gas Conservation~ Commission (Commission), requests an prder fpr ~n ' 'exception to the spacing requtrements of 2p qp,C~ '25.055(aK4) to drill, ~perforate, com~ete, test and~ produce , the Nic~lai Creek Na. 17 uertir.~! gas ~produc~ '~~fn p a0 feet t~f weils capabie of~ 'The proposed surFace and bo~pmhole locafrons o# th@' ~ fVicolai Creek No. 11 well are the same; 1,884 feet from~ the south line and 1,634 feet f~nm the east line of ~Seciion 30, T11N, R12W, Seward Meridfan (S.M.). i A public hearing on `the application is tentativel~ ~scheduled fot August 11, 20D9, at 9:00 a.m., at tht IGomrhission's office: 333 VVest 7th Ave., Suite 100,~ ~Anchorage, AK 99501. To request that the hearing b0 ~heid, a wHtten request must be received at th4~ Corrtmissidn's office by 4:30 p.m. on July 23, 2009.' If a~ 'request is not timely received, the Commission may ~conslder the issuanc~ of ah order wiihoUt a hearing. To~ learn if the Commission wilt ho~ a hearing, call 907- ~793-1221 after July 28, 2009. ~ 'Written commertts reyarding the epplication may be~ submitted to the "Commission. Comments _ musi be 'received at the Commission's office by 4:3U p.m. on~ August 10, Q009~, except that, ff a heari~g is held, 'commerrts must be received by the conc)usiorr of the~ hearing. ` ~ ~ If, because of a disability, s~ial accommodatione rsl~ay (be needed to commeM or attend the he~ring, t~ 9fr%~ 793-1221 by August 3, 2009. ~ Daniel T. Seamount, Jr. ~ ~ cn~r ~ PUBUSH: 7/7, 2009 7368/2074 ~~~~....~.~.......rw.r..~~~ sworn, on oath deposes and says: That I am and was at all times here in this affidavit mentions, Supervisor of Legals of the Peninsula Clarion, a news- paper of general circulation and published at Kenai, Alaska, that the Public Hearing AO-03014002 a printed copy of which is hereto annexed was published in said paper one each and every dav for one successive and consecutive da~ in the issues on the following dates: Julv 7. 2009 X ~~i~~~ ~ r%n. SUBSCRIBED AND SWORN to me before t' 9th day of July , 2009 NOTARY PUBLIC in favor for the State of Alaska. My Commission expires 26-Aug-12 ~O7ARY ~ ~~.~ ~a~•.... ~•~ 02-902 (Rev. 3/94) Publishe~inal Copies: Department Fiscal, Departm~eceiving AO.FRM STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED DAVIT O TION P S FOR ATfACNE OF F C CO AO~O3O~ `'FOOZ ORDER ( AF I F PUBLI A ART 2 OF 7Hl AA) WITH D PY ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE BOTTOM FOR INVOICE~ADORESS i ~ o . ~i„ F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7th Avenue. Suite 100 ° Anchnra~e_ AK 995~1 PHONE PCN "" 907-793-1238 DATES ADVERTISEMENT REQUIRED: ASAP o Peninsula Clarion July 7 2009 , PO Box 3009 Kenai AK 99611 THE MATERIAI BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ~ ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUB LICATION United states of America REM I N DER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly 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 2009, and thereafter for consecutive days, the last publication appearing on the day of , 2009, 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 2009, Notary public for state of My commission expires 02-901 (Rev. 3/94) AO.FRM Page 2 PUBLTSHER STATE OF ALASKA ~ ~ ADVERTISING ORDER NO. NOTICE TO PUBLISHER ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AO-03014001 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC AGENCY CONTACT DATE OF A.O. July 2, 2009 R 333 W 7th Ave, Ste 100 Jod Colombie ° Anchorage, AK 99501 PHONE Pcrv "" 907-793-1238 - o Anchorage Daily News July 3, 2009 PO Box 149001 Anchora e AK 99514 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN g~ ITS ENTIRETY ON THE DATES SHOWN. SPECIAI INSTRUCTiONS: Advertisement to be published was e-mailed Type of Advertisement Legal~ ^ Display Classified ^Other (Specify) SEE ATTACHED INVOI~E,;IN,TRIPLICATE,: AOGCC, 333 W. 7th Ave., Suite 100 ~~.T~ ~ ~F,~TM^~~" Anchora e AK 99501 REF TYPE NUMBER AMOUNT 1 VEN 2 A~ 02910 FIN AMOUNT SY CC PGM ~ 10 02140100 2 _ n PAGE 1 OF TOTAL OF 2 PAGES ALL PAGE COMMENTS LC ACCT FY NMR DIS7 73451 DIVISION APPROVAL: 02-902 (Rev. 3/94) " Publisher/Original Copies: Department Fiscal, Department, Receiving AO.FRM ~ • Notice of Public Hearing and Comment Opportunity STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Aurora Gas, LLC for a spacing exception under 20 AAC 25.055 to drill the Nicolai Creek No. 11 well. Aurora Gas, LLC (Aurora), by letter received July l, 2009 by the Alaska Oil and Gas Conservation Commission (Commission), requests an order for an exception to the spacing requirements of 20 AAC 25.055(a)(4) to drill, perforate, complete, test and produce the Nicolai Creek No. 11 vertical gas development well within 3,000 feet of wells capable of producing from the same pool. The proposed surface and bottomhole locations of the Nicolai Creek No. 11 well are the same: 1,894 feet from the south line and 1,534 feet from the east line of Section 30, T11N, R12W, Seward Meridian (S.M.). A public hearing on the application is tentatively scheduled for August 1 l, 2009, at 9:00 a.m., at the Commission's office: 333 West 7th Ave., Suite 100, Anchorage, AK 99501. To request that the hearing be held, a written request must be received at the Commission's office by 4:30 p.m. on July 23, 2009. If a request is not timely received, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold a hearing, ca11907-793-1221 after July 28, 2009. Written comments regarding the application may be submitted to the Commission. Comments must be received at the Commission's office by 4:30 p.m. on August 10, 2009, except that, if a hearing is held, comments must be received by the conclusion of the hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, call 907-793-1221 by August 3, 2009. Daniel T. Seamount, Jr. Chair ~l • ~ ~~~~ I Y ~~ .JUL 1 3 2009 n~~~~~ ~'~i~ ~ (;as Ci~ns. Commissien 1Gvfh~4,~~~ Anchorage Daily News Affidavit' of Publication 1001 Northway Driue, Anchorage, AK 99508 PRICE OTHER OTHER OTHER GRAND AD # D TE 'O ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES #3 TOTAL 655252 07/03/2009 03014001 STOF0330 $175.96 $175.96 $0.00 $0.00 $0.00 $175.96 STATE OF ALASKA THIRD JUDICIAL DISTRICT Shane Drew, being first duly sworn on oath deposes and says that he is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said tnne was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuaLs. Signed Subscribed and sworn to m.e before this date: ~~~ ~>~I~,_ 0 9~ 20U9. Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska MY COMMISSION EXPIRES: ~ c'~'~/ 7~~1 ~~~~t((f~l~~~~~ `~~ ,~~\A A, ~, ~~~ \`~.t~'~ "'~';~'O'~ `~ o.•~pT'qR J.:~ ^. ~ ~ '~E3LlG ~ ~ y ' N • 1 •• ~ ~O4 .Q~ ~ .i 71 ~i~~ ,1~ ./ D 7 ' J~ ~OFA1~;• 11 1 'JfJ~~~~1*11)11>>~,~ ;?ti17I2~9' .~.r.r. - ~ ~ I Comroenc ~~~~h~~~ I STATE OF ALA3KA nt~a ou ana caa conaerrvaeion co~on Re: The application~of Aurora ~as, LL fot a ipg exceptlon under 20 AAG 25,059 ~II t?~ ~~i Cree~c'PW. 14 wefl. ~ Aurora Gas, LLe (AUrora) by letter recpived 1u~ 1. ' 2U09 by the Alaska Oit and Gas Con~ervation I Gatrtml~n (GNi~mission), requests afl arder for an ` except{on to the spacin$ repwiremerits ot 20 AAG ~il 25.055(ax4) to drill, perforate,'complete. t8s# and produce the Nicolai Creek No. 11 vertical gas c#.nrel ent well within 3.000 feet of wQtis capabi~ ' ~ ~#p~citrgfranihes8rr~i,aoo~:~ ' , ~ The proposed suffaye and bo ~t 9oce~YicmS o# ~ the Nicolai Creek No. 1 t weil ar~t e m~Same. 1,894 r~ feet frorn it~e ~Nr line arrcl 1,534 feet.fra~ tt1~ ~est M Iin~ of SeCt~on 30, T11N, R12W, Sewafd Mbridferi 1 (S :M:). ~, public'~esrtng orrthe application is tencativeiy scheduletl Ru Au st 17, 2009, 6t 9:00 a.m. at the Corrrmission's ~• 33s west ~th nve, suite ~oa, Ancharage. AK 94501: To requkst that i~ h6~th~B t~ treld, a written request must be ceceived at ~ae commission's by a:3o p.m. a~ ~ury'28. ~: ff a requesY is no timely received, ttte ComrnissitNf a m8y consider the issuance of an ordeY uviHkwra ` hearing. Tp leam if the Commisslan will hold a YresTing, call 907-793•1227 after Juy 2& 2009. Wrltten canmems tegardin~ the applicatitA~ may be rtts A~ submittetl to the Commiss~on. Comments must be o e re~eiverl ~t the commission's offiicce bY a:~o ,m. on August 70, 2009, exeept that, if a hea~fn~ held, comments must be rece'rved byth~ eo~c usion of ' the Fieatin8. F . . -~ If, b~ause of a t}isebililjr, speciai accommodations J m~y be ~ed Ua.comrr~nt U~ attend the h~aring, I C8N 907- 93-1229 by Augp1SC 3,;2009. ~ t?aniel T. Seamount, k. ! Chair, ~~ ~,~-o~;~, ~ Pubtfshed: luly 3. ~109 I ~ , STATE OF ALASKA ( NOTICE TO PUBLISHER I ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AO-03014001 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ORDER ADVERTISEMENT MUST BE SUBMfTTED WITH INVOICE F AOGCC R 333 West 7th Avenue. Suite 100 ° Anch~rage_ AK 995(11 "" 907-793-1238 o Anchorage Daily News PO Box 149001 Anchorage, AK 99514 AGENCY CONTACT ~ DATE OF A.O. PHONE IPCN ( 7 1/ 1 / 7J - I GG 1 DATES ADVERTISEMENT REQUIREO: July 3, 2009 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account # STOF0330 AFFIDAVIT OF PUBLICATION United states ofAmerica REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division, A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLtCATION HERE. who, being first duly sworn, according to ~aw, 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 2009, and thereafter for consecutive days, the last pubiication appearing on the day of , 2009, 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 2009, Notary public for state of My commission expires _ ~ ~ Mary Jones David McCaleb Cindi Walker XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography GEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 Mark Wedman Schlumberger Ciri Halliburton Drilling and Measurements Land Department 6900 Arctic Blvd. 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99502 Anchorage, AK 99503 Anchorage, AK 99503 Baker Oil Tools Ivan Gillian Jill Schneider 4730 Business Park Blvd., #44 9649 Musket Bell Cr.#5 US Geological Survey Anchorage, AK 99503 Anchorage, AK 99507 4200 University Dr. Anchorage, AK 99508 Gordon Severson Jack Hakkila Darwin Waldsmith 3201 Westmar Cr. PO Box 190083 PO Box 39309 Anchorage, AK 99508-4336 Anchorage, AK 99519 Ninilchick, AK 99639 James Gibbs Kenai National Wildlife Refuge Penny Vadla PO Box 1597 Refuge Manager 399 West Riverview Avenue Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-7714 Soldotna, AK 99669-2139 Richard Wagner Cliff Burglin Bernie Karl PO Box 60868 PO Box 70131 K&K Recycling Inc. Fairbanks, AK 99706 Fairbanks, AK 99707 PO Box 58055 Fairbanks, AK 99711 North Siope Borough PO Box 69 Barrow, AK 99723 ~/ / ~ ~2 ~ ~ ~ ~ Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Thursday, July 02, 2009 10:43 AM Subject: Public Notice Nicolai Creek #11 Attachments: Nicolai Creek #11 Notice.pdf ~~: 1. Nicolai Creek #11 Notice.pdf (... cc: 'Aaron Gluzman'; caunderwood@marathonoil.com; 'Dale Hoffman'; Fred~ric Grenier; 'Gary Orr'; Jerome Eggemeyer; 'Joe Longo'; 'Lamont Frazer'; Marc Kuck; 'Mary AschofF; Maurizio Grandi; P Bates; Richard Garrard; 'Sandra Lemke'; 'Scott Nash'; 'Steve ViranY; Tom Gennings; 'Willem Vollenbrock'; 'William Van Dyke'; Woolf, Wendy C (DNR); 'Anna Raff ; 'Barbara F Fullmer'; 'bbritch'; 'Bill Walker'; 'Brad McKim'; 'Brandon Gagnon'; 'Brian Gillespie'; 'Brian Havelock'; 'Brit Lively'; 'Bruce Webb'; 'buonoje'; 'Cammy Taylor'; 'Cande.Brandow'; 'carol smyth'; 'Cary Carrigan'; 'Charles O'Donnell'; Chris Gay; 'Cliff Posey'; 'Dan Bross'; 'dapa'; 'Daryl J. Kleppin'; 'David Brown'; 'David Gorney'; David House; 'David L Boelens'; 'David Steingreaber'; 'ddonkel'; Deborah Jones; Decker, Paul L(DNR); 'doug_schultze'; 'Eric Lidji '; 'Evan Harness'; 'eyancy'; 'foms2@mtaonline.neY; 'Francis S. Sommer'; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Rogers'; 'Gary Schultz'; 'ghammons'; 'Gordon Pospisil'; 'Gregg Nady'; 'gspfoff; 'Hank Alford'; 'Harry Engel'; 'jah ; 'Janet D. Platt'; 'jejones'; 'Jerry Brady'; 'Jerry McCutcheon'; 'Jim Arlington'; 'Jim White'; 'Jim Winegarner'; 'Joe Nicks'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'John W Katz'; 'Jon Goltz'; Joseph Darrigo; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; knelson@petroleumnews.com; 'Krissell Crandall'; 'Kristin Dirks'; 'Kristin Elowe'; 'Laura SilliphanY; 'mail=akpratts@acsalaska.net'; 'mail=foms@mtaonline.net'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley'; 'Mark Kovac'; 'Mark P. Worcester'; 'Marquerite kremer'; Melanie Brown; 'Michael Nelson'; 'Mike Bill'; 'Mike Jacobs'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson ;'mkm7200'; 'Nick W. Glover'; NSK Probiem Well Supv; NSU, ADW Well Integrity Engineer; 'Patty Alfaro'; 'Paul Winslow'; Pierce, Sandra M(JPO); Rader, Matthew W (DNR); Raj Nanvaan; 'Randall Kanady'; 'Randy L. Skillern'; 'rmclean'; 'Rob McWhorter'; rob.g.dragnich@exxonmobil.com; 'Robert Campbell'; 'Robert Province'; 'Rudy Brueggeman'; 'Scott Cranswick'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sondra Stewman'; 'Sonja Frankllin'; 'Stan Porhola'; 'stanekj'; 'Steve Lambert'; 'Steve Moothart'; 'Steven R. Rossberg'; 'tablerk'; 'Tamera Sheffield'; 'Temple Davidson'; Teresa Imm; 'Terrie Hubble'; Thompson, Nan G(DNR); 'Tim Lawlor'; 'Todd Durkee'; Tony Hopfinger; 'trmjr1'; Von Gemmingen, Scott E(DOR}; 'Walter Featherly ; Walter Quay; Aubert, Winton G(DOA); Birnbaum, Alan J(LAW); Crisp, John H(DOA); Darlene Ramirez; Davies, Stephen F(DOA); Fleckenstein, Robert J(DOA); Foerster, Catherine P(DOA); Grimaldi, Louis R(DOA); Johnson, Elaine M(DOA); Jones, Jeffery B (DOA); Laasch, Linda K(DOA); Mahnken, Christine R(DOA); Maunder, Thomas E(DOA); Mclver, Bren (DOA); McMains, Stephen E(DOA); Noble, Robert C(DOA); Norman, John K(DOA); Okland, Howard D(DOA); Paladijczuk, Tracie L. (DOA); Pasqual, Maria (DOA); Regg, James B(DOA); Roby, David S(DOA); Saltmarsh, Arthur C(DOA); Scheve, Charles M(DOA); Schwartz, Guy L(DOA); Seamount, Dan T(DOA) Jody J. Colombie Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99509 (907)793-1221 (phone) (907)276-7542 (fax) Page 1 of 1 ~ ~ Colombie, Jody J (DOA) From: Davies, Stephen F (DOA) Sent: Wednesday, July 01, 2009 4:18 PM To: Bruce D Webb Cc: Saltmarsh, Arthur C(DOA); Colombie, Jody J(DOA) Subject: Nicolai Creek 11 Spacing Exception Application Bruce: I received the application for spacing exception for Nicolai Creek 11 today. The public meeting notice shouid be published shortly. The application contains the following statement: "The Nicolai Creek #11 will be targeting gas in the Upper Tyonek and Beluga Formations, Carya 2-1 thru 2-5 and Tsuga 2-6 sands. This well is needed to increase production from the Nicolai Creek Unit by accessing the referenced sands further to the west." I need a more precise justification for the proposed location of the Nicolai Creek 11 weli. In other words, why can't Nicolai Creek 11 be drilled at a location that will conform to the appropriate spacing standards (in this case, statewide spacing requirements)? What is gained by accessing these sands further to the west? Is that location structurally more favorable? Are the sands discontinuous? Can you say whether or not the sands at this location will be in pressure communication with the sands open to other wells within 3,000 feet? Will a well at this location decrease ultimate recovery or cause waste? Could you please also provide a land plat for the Nicolai Creek Unit and the section containing the proposed location of Nicolai Creek 11 that depicts current lease boundaries and lease numbers? Thanks for your help, Steve Davies AOGCC 7/2/2009 ~~ C~ ~ .-~Au~ora Gas LL~` ~ a www.aurorapower.com Dan Seamount, Chairman Sta.te of Alaska t3il and Gas Conservation Commission 333 W. 7~' Avenue, Suite 100 Anchorage, AK 99501 Re: Application for We~l Spacing Exception Nicolai Creek Unit #~ 1 Development Gas Well Dear Mr. Norman: July l, 2009 ~~~~~~~~ , `l.~ 1r A ~ ? (l Cl ~l 'aEa~x~~ ~;l ~C ~as €~~ri~. Comm~~sior~ .~ rra,t°~~,i'~y.~ Pursuant to 11 AAC 25.055 (d}, Aurora Gas, LLC (Aurora) hereby requests approval to allow the drilling, perforating, completing, testing and proauction of the Nicolai Creek # 11 development gas well within 3,000 feet of other existing gas wells in the Nieolai Creek Unit on the west side of the Coak Inlet. A plat depicting the location of this proposed well has been previously submitted with the Permit to Drill (farm i 0-401). The Nicolai Creek #11 will be targeting gas in the Upper Tyonek and Beluga Formations, Carya 2-1 thru 2-5 and Tsuga 2-6 sands. Tlus well is needed ta increase production from the Nicolai Creek Unit by accessing the referenced sands further to the west. The closes# well to the proposed Nicolai Creek #11 is the Nicolai Creek Unit #1B well appraximately 1,722 feet to the west. Aurara is the Zessee and Unit Operator of the Nicolaa Creek Unit and all surraunding oil and gas leases and adjoining governmental sections. The only affected landowner of this application is the State of Alaska, Mental Health Trust Land Office (TLO). The Notice required by AOGCC regulation has been sent to the TLO and the Affidavit attesting to this and the other facts cantained herein is attached. Should questians arise in connection with this request, please contact me. Respectfully Submitted By, ---~' ~. ~ ~'t-'~~~.~ Bruce D. Webb Manager, Land and Regulatory Affairs attachments 1400 West Benson Blvd., Suite 4i0 •Anchorage, AK 99503 •(907) 277-1003 • Fax: (907) 277-1006 605I North Course Drive, Suite 2Q0 • Houston, TX 77072 .(713) 977-5799 • Fax: (7I3) 977-1347 ~ ~ NOTICE OF APPLICATION FOR WELL SPACING ~XCEPTION Nicolai Creek #11 Develo~ment Gas Well Auror~ Gas, LLC has applied for an ez~ception ta the well spacing requirements, pursuant to the Alaska Oil and Gas Conservation Cammission regulations [11 AAC 25,055(d)]. The proposed well is located in Section 30, Township 11 North, Range 1~ West, of the Seward Men 'an. It is planned to be drilled approximately 1,894 feet from the south section 9 line and 1~s4'~feet from the east section line, within the Moqua.wkie Unit located on the west ~~ side of the Cook Inlet. The nearest well capabie of production from the same reservoir is the ~~ Nicolai Creek Unit #1B, approximately l,'~22 feet to the west. 1 ~j Aurora Gas, LLC is the lessee and Unit operatar of the Nicolai Creek Unit, owned and ,.d(~ managed by the Alaska Division f Oil and Gas, the nearest landowner of interest is the Alaska Mental Health Trust Land Office. Their addresses of record are: U~ ~ ~~ State of Alaska, DNR Division of Oil and Gas 550 W. 7~' Avenue, Suite 1100 Anchorage, AK 99501-3560 Attn: Mr. Kevin Banks, Acting Director State of Alaska, MHT Trust Land Office 718 L Street Suite 202 Anchorage, Alaska 999501 Attn: Mr. Mike Franger, Sr. Resource Manager There are no other affected owners, landowners, lessees or operators within 1500 feet of the proposed Nicolai Creek #11 development gas well. The Application for Exception is attached to this Notice. Dated this 1 st day of July 2009, in Anchorage, Alaska. ~ ~ 1 AFFIDAVIT IN SUPPORT OF THE NO~TICE AND APPLICATION FOR WELL SPACING EXCEPTION Nicolai Creek #11 Development Gas Well I, Bruce D. Webb, Manager af Land and Regulatory Affairs for Aurora Gas, LLC hereby certifies that the required information, data. and geographic portrayals contained in the Notice and Application for exception to the well spacing requirements, pursuant to the Alaska Oil and Gas Conservation Commission regulations [11 AAC 25.055(d)], for the above referenced well, dated July 1, 2009, are true and carrect, to the best of my knowledge. Further your affiant sayeth not, AURORA GAS, LLC BY: ~--~~~ ~~--; ~,~ ^~7 l t ~ ~' ~z Bruce D. Webb Dated Manager, Land and Regulatory Affairs 1N THE TJNITED STATES OF AMERICA STATE OF ALASKA ss. This c~rtifies that on the 1 SE day af July, 20Q9, before n3e a notary public in and for the State of Alaska, duly commissioned and sworn, personally appeared Bruce D. Webb, to me known and known to me to b~ the person described in, and who executed the foregoing assignment, who then after bsing duly sworn according to law, acknowledged to me under oath that h~ executed the same freely and voluntariiy for the uses and purposes therein mentioned. Witness my hand and official seal the day and year first above written. \ `~~~~\\\i\1~11iiK1~/////~j~~ ~ ', ~ ~~l F~t,i/G~ ~- ~ i " \~~~; ,. ~i`i~°" ~,~ .C~i ~~ !~ y. , , . , {`; ~ .. ,~ -.~ 1 ~ ~.g ' 9 ' _ ..~~ ° ' ~~ TARY ` = Notzfry Public.<<' _ . . _ . . ~ . . _ ~ ~ ~LIC : ~ ~ My Commission Expires: ~' ~ r~ " ~ ~ ; C°~ ~r ~ .~'~. ~ ~;:~~-~ ~i~,~~~~~~r~ ~F~ P~~~~``` /////illli1111\\\\ ~ ~ 0 ACCESS ROAD ~INE TABLE LINE LENGTH BEARING L1 150.99 S85°24'32"E L2 127.62 N85°19'02"E L3 125.48 S87°47'45"E L4 134.71 N87°04'44"E L5 247.07 N85°56'45"E L6 201.93 N87°43'21 "E L7 254.67 N89°26'06"E CREEK WETLANDS DRILLING PAD ~ 60' x 265 15' WIDE ACCESS ROAD ~ 265' A 'o ~ 3 L6 L5 L4 L3 ~ L1 `~` --_~_-=--_-=-_=_'._----__-:--- -y---=• L7 APPROX. MHTW NICOLAI CREEK N0. 11 N: 2564934.415 E:1379809.804 LAT: 61 °00'45.341 "N LONG:151 °28'07.952"W E~EV. 20' NAVD88 ADL I36736 0 Q 0 ~ ~ z ~ ~ X w 0 z w ~ EXISTING PAD BEGIN PROJECT N: 2564901.510 E:1381226.621 LAT: 61 °00'45.329"N LONG:151 °27'39.200"W SEC. 30 M N T11N, R12W S.M. AK • - VU WW ~~ PRQIECT NICOLAI CREEK NO. 11 LOCATION SECTION 30, T11 N, R12, S.M., AK MCLANE CONSULTING WC. ENGINEERING - TESTING - SURVEYING - MAPPING ~~ P.O.BOX468SOLDOTNA,AK.99669 VOICE: (907) 283<Z18 FAX: (90T} 28&32G5 WVVW.MCLANECG.COM ..~ Awt~~orra Gas, LL.C PURPOSE ROAD AND PAD CONSTRUCTION A~"`~ AURORA GAS, LLC 1400 WEST BENSON BLVD. SUITE 410 ANCHORAGE, AK 99503 ATTN. CHAO HE~GESON REVISION: _ DATE: 4/28/09 DRANM BY: MSM SCpLE: P'=300' PROJECT NO. 093020 BOOK NO. 04-211 SHEET 2~ 4 SCALE 300 600 F-E`ET ~ NORTH ~ ~ ~ c v NICOLAI t~ CREEK UNIT 19 20 21 30 NCU WELL 11 SURFACE LOCATION 29 N=2564934.415 28 E=1379809.804 1 TRACT2 aa aa2s i 1966 MEAN HIGH WATER LiNE ~ PER ADL 36736 ~ ~~ \~ . _,~;~~ TRACT 2 : T~~T 3~ ADL 17598 ~ A,D~L ?I758~^~ .. ~ ~ , ~ ~ SOUTHERN PA BOUNQARY NICOLAI CREEK UNIT TRADING BAY 33 3~ 32 N OR TH . COUK INLET SCALE a 2000 ~ FEET T11 N ~ PROJECT NICOLAI CREEK NO 1'I ~ `°~"T'°" R~"5'°": _ . SECTION 30, T11N, R12, S.M., AK DATE: 4/28l09 MCLANE CONSULTING INC °'~""'"B" ""S"' . ENGMEERING - TES7WG - SURVEYING - MAPPING PURPOSE SCALE: t"~2W0' P.o.BOx«Sa~,~+,,~.~ VOICE:(907j283-4278 FAX:(9D~2633265 UNIT BOUNDARIES PROJECTNO. 0930?A V~NJW.MCLANECG.COM BOOK NO. 04-20 .~ Aurpr~ Gas L L C "~"~''"'TS AURORA GAS, LLC 1400 WEST BENSON BLVO SUITE 410 ANCHORAGE, AK 99503 w 5~~ ~ pF 4 , ATTN.CHAD HELGESON ~ ~ ~ ~'~ ` _~~"..~:~~~~~ ~' Notice of Public Hearing ~ ~ ~ ~ ~ f ~~~ ~ ~ Zoo7 ~ ~ ~~~ P ~ `~ e~,,~,~' State of Alaska ~~,-Y Alaska Oil and Gas Conservation Commissio~ ~ Re: The application of Aurora Gas, LLC for a spacing exception to allow the drilling, completion, testing and regular production of the Nicolai Creek Unit No. 11 gas development well within 1,500 feet of a property line and within 3,000 feet of another well capable af producing from the same pool. Aurora Gas, LLC ("Aurora"), by a letter dated September 17, 2007 and received by the Alaska Oil and Gas Conservation Commission ("Commission") on September 19, 2007, has requested an order allowing an exception te the spacing requirements of 20 AAC 25.055 (a)(4) to allow drilling, perforating, completing, testing and production of the Nicolai Creek Unit No. 11 gas development well within 3,000 feet of another well capable of producing from the same pool. This proposed well also requires a spacing exception because it will lie within 1,500 feet of a property line. The surface location of the proposed well is 1,894 feet from the south line and 1,543 feet from the east line of Section 30, T11N, R12W, Seward Meridian. The bottom hole location is 1,623 feet from the south line and 1,090 feet from the west Iine of Section 30, T11N, R12W, Seward Meridian. The Commission has tentatively scheduled a public hearing on this application for November 8, 2007 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 VVest 7th 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 October 19, 2007. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after November l, 2007. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on November 5, 2007 except that if the Commission decides to hold a hearing, written protest or comments must be received no later than the conclusion of the November 8, 2007 hearing. If you are a person with a disabilit o may need special modifications in order to comment or attend the lic e ing, lease contact the Commission's Special Assistant Jody Colombie t 7~3-122 ^ or ovember 2, 2007. ENT OF ~ ~ ~ . ~ ~ . a~ P`~ ~-~--~~ ~"~Zm United States Department of the Interior ~' QP ~ ,y ' r ~ ~° BUREAU OF LAND MANAGEMENT ~° ~ ,, ~,,; =~ A9 ~ Alaska State Office '~"~~~ ~'~~~!~ ~R~" 3,g 222 West Seventh Avenue, #13 ~~~^~~~~~° Anchorage, Alaska 99513-7599 http : //www . ak. blm. gov JuN ~ o Zoas ~~~~~' 3100-1 (AK930) , ~~~~ AA-008426, AA-085789, AA-085788 ~ U~V ~ 1 ZOO~ DECISION :.: ___ Hand Delivered . BY: State of Alaska Department of Natural Resources Division of Oil and Gas William Van Dyke, Acting Director 550 West 7~' Avenue, Suite 800 Anchorage, Alaska 99501-35 Certified Mail Article Number 70072560000029557663 Aurora Gas LLC . Manager Land and Regulatory Affairs . 1400 West Benson Blvd . Suite 410 . Anchorage, Alaska 99503 . Certified Mail . Article Number 70072560000029557670 : Swift Energy Alaska, Inc. . 16825 Northchase Drive . Suite 400 . Houston, Texas 77060 . Federal Oil and Gas Lease and Unit Administration Waived and Transferred to the State of Alaska On October 20, 2008, the Bureau of Land Management (BLM) issued a decision for United States Survey 4550 approving the remaining selected oil and gas mineral estate within original federal oil and gas lease A-034161 for conveyance to the State of Alaska (SOA). This decision was then solidified by Patent no. 50-2009-0092 on December 15, 2008. With the SOA receiving entitlement to the last portion of the oil and gas selected underneath lease A-034161, said decision vested the oil and gas within Patent no. 50-67-0253. • ~ 2 Original lease A-034161 was segregated into lease AA-008426 in 1973. Administration of lease A-034161 was subsequently waived to the SOA within the same year. In 2003; lease AA-008426 which remained under federal administration was then segregated upon commitment to the Nicolai Creek Unit into lease AA-085789. Therefore, pursuant to Section 6(h) of the Alaska Statehood Act, as amended, this decision hereby waives administration and transfers the following federal leases to the SOA: Federal oil and gas lease AA-008426 containing 45.30 acres more or less, Federal oil and gas lease AA~085789 containing 1,622.88 acres more or less. Upon transfer of the above leases to the SOA, the BLM po longer holds interest within the Nicolai Creek Unit. Therefore, the BLM hereby waives administration and transfers the Nicolai Creek Unit AA-085788 and associated participating areas AA-085788A and AA-085788B to the SOA. The Minerals Management Service (MMS), Minerals Revenue Management will reconcile all rentals/royalties paid by the lessee to the federal government on the above nnentioned leases, unit, and participating area beginning December 15, 2008, to the present. The rentals/royalties are disbursed between the SOA/federal government in a 90% 50A, 10°Io federal split. The federal government will disburse to the SOA the 10°Io rental/royalty monies owed to the SOA from December 15, 2008 through the date of actual disbursement of monies by MMS. Effective the date of this decision, lessees and/or operators must hereafter pay rentals and royalties to the SOA for the above leases and unit. The SOA may be contacted at Division of Oil and Gas, 550 West Seventh Avenue, Suite 800, Anchorage, Alaska 99501-3560, telephone 907-269-8800. The lessee/operator has 30 days from the date of this decision to obtain, submit, and receive SOA Division of Oil and Gas approval on a replacement bond assuming all liability of the federal statewide bond AKAA-086555 currently held by the BLM in the amount of $25,000. On or before the 30`~ day, the lessee/operator must provide written request to release federal statewide surety bond AKAA-086555 and proof of approved replacement bond with assumption of liability by the SOA. Failure to provide this will result in delay of federal statewide bond ternunation by the BLM. This waiver of administration is hereby effective the date in which the SOA approves said replacement bond. If you have any questions regarding this Decision, please contact Melissa Ainsworth at 907-271-5718. Ted u`r~r Deputy State Direc Division of Resources ~ ~ 3 Enclosures: 1- Copy of Federal I,ease File AA-008426 (Sent to State of Alaska only) 2- Copy of Federal Lease File AA-085789 (Sent to State of Alaska only) 3- Copy of Federal Nicolai Creek Unit File AA-085788 (Sent to State of Alaska only) 4- Copy of Federal Nicolai Creek Unit Participating Area Files AA-085788A and AA-085788B (Sent to State of Alaska Only) 5- Copy of BLM Decision Dated October 20, 2008 6- Copy of Patent 50-67-0253 and 50-2009-0092 cc: Minerals Management Service, Minerals Revenue Management BLM- State Director AK-910 Deputy State Director, Division of Conveyance Management AK-960 Chief, Section of Energy AK-932 AA-008426 AA-085789 AA-085788 AA-085788 A&B ~ ~ AA-058730 . ' ~~ENT Op Ty ~ ~ . a~aP~' ~~~ ~% United States Department of the Interlor '~ ~, ~• p , ~ a ~~ BUREAU OF LAND MANAGEMENT ,y -~ ,o Alaska State Office T~KE PRtDE' AR~ ~$ 222WestSeventhAvenue,#13 ~N MERICyA Anchorage, Alaska 99513-7599 http;//www,ak.blmgov In Reply Refer To: A-058730 (2627) (960) ljr/mjm/sla CERTIFIED MAIL RETURN RECEIPT REQUESTED DECISION State of Alaska Departrnent of Natural Resources Division of Mining, Land and Water Realty Services Section 550 West Seventh Avenue, Suite 1O50A Anchorage, Alaska 99501-3579 . A-058730 oc~2a~ . General Purposes Grant . State Selection . Reserved Mineral Estate I. Decision of Mav 15, 2003. Vacated in Its Entiretv On May 15, 2003, the Bureau of Land Management issued a decision approving the reserved mineral estate within U.S. Survey No. 4550 (hereafter USS 4550), Alaska, located in T. 11 N., R. 12 W., Seward Meridian, Alaska, for conveyance to the State of Alaska (hereafter State). That decision is hereby vacated in its entirety. II. Reserved Mineral Estate within USS 4550 Aqproved for Convevance On August 29, 1960, the State filed General Purposes Grant selection application A-052976 for lands in T. 11 N., R. 12 W., Seward 1~leridian. On February 18, 1963, the State filed General Purposes Grant selection application A-OS8730 under the provisions of Sec. 6(b) of the Alaska Statehood Act of July 7, 1958, Pub. L. 85-508, 72 Stat. 339, as amendedt, for the reserved mineral estate ~vithin T. 11 N., R. 12 W., Seward Meridian. At the time of their selection by the State, the lands within T. 11 N., R. 12 ~'V., Seward Meridian, were encumbered by federal oil and gas leases issued under the i~[ineral Leasing Act of Febnzary 25, 1920, as amended. Both State applications were filed within 10 years of the date of admission of Alaska into the Union (January 3, 1959), the peri~d in ~vhich the State was allowed to select lands within federal oil and gas leases. ~ Acts of September 14, 1960, ?4 Stat. 1025, and l~larch 25, 1964, 78 Stat. 168 ~ ~ Tract A of T. 11 N., R. 12 W., Seward Meridian, was conveyed to the State under application A-052976 by patent no. SO-67-0253 on October 31, 1966. Patent no. 50-67-0253 did not convey the oil and gas deposits included in federal oil and gas leases A-035044 and A-034161 but did include a provision stating that "all the rights and interests to the oil and gas deposits in said lands" would automatically vest in the State upon termination or relinquishment of the listed oil and gas leases. The land embraced in USS 4550, which is located within the boundaries of T. 11 N., R. 12 W., Seward Meridian, was conveyed to Gust Peterson under headquarters site application A-054364 by patent no. 50-66-0215, but the coal, oil and gas were reserved to the United States. Although State selection application A-058730 became effective as to USS 4550 on November 10, 1965, when issuance of patent no. 50-66-0215 created a reserved mineral estate, the State did not request conveyance of the reserved minerals within USS 4550 unti12003. The reserved mineral estate within USS 4550, more particularly described in the proposed patent which is incorporated herein by reference, is proper for conveyance to the State. The proposed patent also identifies federal and third-party interests, if any. III. Historv of Federal Oil and Gas Leases within T 11 N, R 12 W. Seward Meridian On September 17, 1973, after issuance of patent no. 50-67-0253, federal lease A-035044 was segregated into separate leases-A-035044 and AA-8427. Lease A-035044 expired on August 1, 1975, and lease AA-8427 was ternunated on May 1, 1975, with the result that all the oil and gas rights previously reserved to the United States in patent no. 50-67-0253 for federal lease A-035044 vested in the State on or before August l, 1975. Federal lease A-034161 was segregated into separate leases-- A-034161 and AA-842C~effective May 21, 1973, and announced by decision dated September 17, 1973. Lease A-034161 was closed and transferred to the State effective October 1, 1973, with the result that all the oil and gas rights reserved to the United States in patent no. 50-67-0253 in lease A-034161, as it existed following segregation, vested in the State on October 1, 1973, while lease AA-8426 remained under federal administration. Federal lease AA-8426 was segregated into separate leases-AA-8426 and AA-85789-effective November 1, 2003, and announced by decision dated September 22, 2005. Both leases remain under federal administration. Federal lease AA-85789 includes the oil and gas deposits within LTSS 4550. IV. Previouslv Escluded Oil and Gas Deposits to Vest unon [ssuance of Patent Section 6(h) of the Alaska Statehood Act, as amended, allows the State to receive title to lands included in federal mineral leases if the State selection was made by January 3, 1969, and if the State selected all the lands subject to the mineral lease. The Bureau of Land Management has Page 2 ~ ~ consistently held that the term "lands" also includes the reserved mineral estates. The regulations at 43 CFR § 2627.3(b)(4)(i) provide that when the State receives title to all federal interests in a lease area, the requirements have been met. The proposed patent incorporated in this decision does not exclude the oil and gas rights in lease A.A-85789, because upon issuance of the proposed patent, the State will have selected and received title to all available lands in original federal lease A-034161, and the remaining oil and gas rights owned by the United States within the original lease area will autornatically vest in the State. V. At-nealInformation Any party claiming a property interest in lands affected by this decision may appeal the decision to the Interior Boazd of Land Appeals, Office of Hearings and Appeals, within 30 days of receipt of this decision. The appellant has the burden of showing that the decision appealed from is in error. Failure to file the notice of appeal with the Bureau within the time allowed will result in dismissal of the appeal. In order to avoid dismissal of the appeal, there must be strict compliance with the regulations contained in 43 CFR, Part 4. /s/ Margaret McDaniel Margaret J. McDaniel Land Law Examiner Land Transfer Adjudication II Enclosures: Decision dated 5/15/03 U.S. SurveyNo. ~550 MTP Patent Nos. 50-66-0215 and 50-67-0253 Copy furnished to: Aurora Gas LLC (Cl~f-RRR) 10333 Richmond, Suite 710 Houston, Tesas 77042 (~v/enclosures) Division of Energy and Solid ~iinerals (940) Page 3 ~ ~ AA-8426 (3111) AA-85789 (3111) FM, AK-(O 11) Lori Nelson (961) Page ~4 ~ ~ c~~~e ~ni~.e~ ~fi~t~~,~ nf .~m.er~r~ (~D ttII tII Iil~llril tJ~YBp ~jilP.6Prif8 ,6J~NU C11!ltY, (~rrrfing: Patent A-058730 This Patent is issued by the UNITED STATES, Depaztment of the Interior, Bureau of Land Management, 222 West Seventh Avenue, #13, Anchorage, Alaska 99513-7599, as GRANfOR, to the State of Alaska, Department of Natural Resources, Division of Mining, Land and Water; 550 West Seventh Avenue, 3uite lOSOA, Anchorage, Alaska 99501-3579, as GRANfEE, for the reserved mineral estate in lands in the Anchorage Recording District. WHEREAS State of Alaska is entitled to a patent pursuant to Sec. 6(b) of the Alaska Statehood Act of July 7, 1958, Pub. L. 85-50$, 72 Stat. 339, as amended by the Acts of September 14, 1960, 74 Stat. 1025, and March 25, 1964, 78 Stat. 168, for the minerals reserved to the UNITED STATES in the following-described lands in the hereinbelow identified patent: Patent No. 50-66-0215 U.S. Survey No. 4550, Alaska Containing 5.00 acres, as shown on the plat of survey accepted August 6, 1963. WHEREAS, the surface rights of and to the above-described lands were patented with the following-described mineral interests and estates reserved to the iJNITED STATES: All the coal, oil and gas in the lands so patented, and to it, or persons authorized by it, the right to prospect for, mine and remove such deposits from the same upon compliance with the conditions and subject to the provisions and limitations of the Act of March 8, 1922, 42 Stat. 415, as amended and supplemented. Patent No. `~ `~ ~~ o V~ s U O a3' ~G Page 1 of 2 ~ , ~ ~ NOW KNOW YE, that there is, therefore, granted by the UNITED STATES, unto the said State of Alaska, the above-described mineral interests and estates in the above-described lands; TO HAVE AND TO HOLD the same, together with all the rights, privileges, immunities, and appurtenances, of whatsoever nature, thereunto belonging unto the said State of Alaska, forever, subject to all the reservations and exceptions, other than the minerals specified above, contained in the aforesaid patent. In TESTIMONY WHEREOF, the undersigned authorized officer of the Buresu of Land Management, in accordance with the provisions of the Act of Jurie 17, 1948 (62 Stat. 476), has, io the name of the United States> caused these letters to made Patent, and the Seal of the Bureau to be hereunto a~xed. GIVEN under my hand, in Anchorage, Alaska the FIFTEENTH day of DECEMBER in the year of our Lord two thousand and EIGHT and of the Independence of the United States the two hundred and THIItTY-THIItD. By /s/ Rlchard Thwaites Richazd Thwaites Chief, Land Transfer Adjudication II Paten[ No. ~ ~ ~ ~ ~ o ~ ~ V ~ ~ ~ Page 2 of 2 ~^ ~ ~ eo~, ~_~a: tx.s ioea) Ai~c;~eorage 052976 ~C~je ~~.iteb ~t~~e~ ,o~ ~~eru~, ~Gn aYC to iai~om t~e~t preBenfs ~a~lt wt~te, ireeting: ~I:E~A~, a eertiftcat~ of the I.s~nd GFfice at Anonoratte, A.?a~~C4, ia uow de~osit~ in 4:ia~ Aurerxu c;f I,2nd ~~g~r~nt, wserc~b,y it apgeara tY~at ~urs~!»uE ~o ~e granl• o~ iands zu_~r 3eckiori 8(b} of Ylts A.et az Congrase of J"uly 7, 195~ {72 EfaC. ~38)~ 38 R7212i7(tBCT, the~ B~te oT Alaska }cas sa'lec;ted tke ~ollowin~ described la.nd: ~swaxd ~Seridian, Ataeka. T. ZI lV., R. 12 W., Tract A, 'I'fw araa degcribed canta[ng 11,371.CSS ucres, accsard;n~r ;,p the 4ffioial 'pIat of k}Fe C+~ary~~ af tue saic! Land, ott file iu tMa Bureax~ of Laxu1 b~Cat-agesua,it: :'SGW I~AtQD6' YE, Tli~.t the UATIT.ED BTATES ~F AA'lERICA, in ConBldoration of the ~retiu,ses, 11![t fil COUIUY'1»i#p wl$h t"t76 eSid Afi.~ Of CC~P@98~ liAS (x'IVE1_~i A~D G:~"iANTEii~ 3nd '•ug ~i~f~8 ;~rc=senta DC}~3 CIVE AN]J G~APIT, anta tbe said State of Aiae(ca, and to its a.seigos, ttie trac~t cf 3.:and asx~vo dor~cri~cl; Td Hr1V.E AND T6 HCL~ t~ sac:e, together wizFc all Che rig',~ts, ,.rivi- leg-es, immuniiiea s.nd appuzteoances, af whats~cc~r nmtura, Lieereimto beio~tn~.,-, u.i¢n the e~id t~Yat; af Alt~eka, and to ite assigne forever; eubjeat :o azty ~ested acd accr.ted water rig~ts For r~irtft~g, a.gzicultuxal, mxuufaci ~'~8. ~' ott~er pur~uaea, axid rfghts to ~litches and res2rvc~irs ii~ed in conneotton witb such wat•er z•ights as may be recagnize@ rtiad ~cl~~~~~ by ti;~e ia~] ci;sto;~ss. L~vs and decisions of oourts: and t~era ia resa:ved frossi tha lands 5erehy ~at~d, a rf;;rr~-oP-;~vay therean for ditahas or canais ~QUBtraeted by the a;;th~rity af tsa U:uted 9cat~~. 'i'here is aleu r~s::rved to iiie Unliex3 b`tates a ri~t~t-of-~ay f~r ~ie cb:i~tn;cuon af r:a,tlroads, tel.e~ra~F. and telepIlant~ ]i~~ea ia aacordance witt~ tize Avt ~f b7arci~ i2, 35i4 (39 Stat. 9U5• 4ii i7.b', "', ~3ei, 30&). ~ y Lxce;~t tnat tius taatent shalt nnc ~onvay tiia cil a~cl g~.s ri~i~ts ;a tP~ follotving- la~:ds myttl ti:e ail ~ri~i ;;ns leasee Ii~eA shall terruinata or be relinquiat~c:d, ~nt ;~~oa such ter,~unatfc:i ~r rr;- li.nqctis~ment oF Fsie saici leasee. ~ll tLa riglits 1nd intereats Co tY~ oil an_d ga,s de~~esits izi t~~~ aaic; 1a:=as arall autorr~atieally vest .L-, tho ~a~t;tez. PatenE Number _~O~.V7r~'~`~~ ~U.a, E0~'[RNMltli l~iw[Ixe vrice 18-p]9~9-y i ~ ~~~_~w. ~~~~~ A2rFtoz~age 0529?6 r1p to the fo2lo~ving Ittnda, t,`us e.itr•,~ is macie tmd~;r S,:etian 29 af the Act of ~`.~bniary 25, I~20 (41 Stat. ~~7j aad the A:~ of fvEareh 4, .Lg33 (47 Stat. Iu70) and the ~$t~nt ia iseued suUjeci; to iLc~ righ#s of ~riar aerrciteees or IeBeeos to uso pa izntoh of tha s~triace of the sa3d 1andA A& is reqolred for r~rle~g ~eratians for t6e d~eration of the leaees aud any assthorized extens3oJ~s ttAaroaf, withrxrt eoraaenrxetioa to iTze ~stentee for damagea rasalting frora proper niining cEzeratlona, Ancharage S:;rial 1~Fo. i.aud Deecri^+~,••• ' 03~i044 Had t8e re~,~tangular net been extended tho taade wouid t~e destsr.ibed ae: T. Il Pi. , R. 12 V.'. , Saw~ard iuericlian Bac. 15~ Portion of S~ lyi'~ out~side U. 8. Scrrvey I~o. 186fi; s~:. z~, s;s~; St:c. 21, Ail; Sea 22. All IyL~ osrtatde U. 8_ Survep Nv. 1s65; 9oc. 27, Frac~tonai AIY lYing outaide af i;. 8. g~r_ vey AIo. f885 and exciuding TJ. 3. 9urvejr l~Fo. 1605, Lots 1 zuu] 2 of U. 8. Sur~~y iti~. 4643, RIl oY ZT. 6. Barvey No. "s8~5, arjd porEion of Lcrt 2 af U. 3. Sarasf :Vo. 4''.r~9; . Sac• 25, FxactiOna.l AIi exCluding pprtion of L~it 1, 'Lcta 2, 3, 4, of U. S. &ervep No. 4E4~, anci porti~ af U. 3. 8iuvay :~io. 45SU. Q3~IG1 ~Sess. 17, B~;S~; 8ze. 1!3> pOYLLOA OE S~Ba SY~$ ~$ICIO YUFYii2Y .~.. Q. ~i'~`/2~ . ~- 20, AIl; ~ ~e~. 29. Frnctiaaal A.fE exeiuding U. S. H[ikR'9Y RIO. 455d3~ ^aea. 50, Fractionat All. Ix ~~BTLMONY W3iERL~OP~ tl~e undersigned authorized officer of the Bm~e:i.u of r'~'~`~ ~1~~B'~en~+ ~°ccordance with the pmvisions o# tfie Act of dune 17,1948 (6Z 9tat. ¢; g) ~}~ in the name of the United Stat~, Giusod these lettei~s to ~ rasde Patent, ;md },he Seai of tlie Bureau tq ~~toreuuto afftaed. ~SEAt,J C~rvEx under my ]~and, in AncLcra~~, Atap±~ TRI~3T`i-FIHST da of the y gCTOBE:i~ sn tfce qear of oai~ Lo~d one thoasand nine hwidred nnd ~%Ty_~( ;u~~ af the Inde- pendeitce uf Ghe Uuited Stat~s tha ane hwidrad a.~~d?'I1~7ETY-FI33T. ~%' %`~~~ ..~' sy__ ~e~-i1~~'`___ ~~?°-c~.------------------__ Puter_t nTnmber __50±6? : a+25~ ia~-v:esaa u.. oo.u.~.ar.u.n.~,.rH~ ~ ~Aurora Gas, LLC 2500 Citywest Blvd., Suite 2500 Houston, Texas 77042 7~~5 0390 aaoo 6~99 5647 Mr. Kevin Banks State of Alaska, DNR Division of Oil and Gas 550 W. 7th Avenue, Suite 1100 Anchorage, AK 99501-3560 o~zasoa$~~s7 ~~`''., ~_ - ~ ~~ ~~ ~°~ ~ ~ a ~ ~ . ~s ~ ~~ =`~ `s3 Q _ ~ c 67I09i~3 ~° tf9 ~.;i:e~ c•~; :~~~::'~ , --4a ~ ~~, ir~~l~~'e ~r.~ -~ ~, ~ ~Aurvra Gas, L~C 2500 Citywest Blvd., Suite 2500 Houston, Texas 77042 7005 ~390 aaaa 6~99 5654 Mr. Mike Franger State of Alaska, MHT Trust Land Office 718 L Street Suite 202 Anchorage, Alaska 999501 042J80087767 -~;~ ~ $ ~ ~~ 4 o ~~.~v~ N c Q7/09I09 ~~:'~ ~ cn ~afJed ~sam~y~`~3 :: - ~ ~