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Home My WebLink About202-130 e e MICROFILMED 07/25/06 DO NOT PLACE ANY NEW MATERIAL UNDER THIS PAGE F:\LaserFiche\CvrPgs _ Inserts\Microfihn _ Marker.doc [Fwd: Exploratory Gas Well]--Ninilchik St~te #)1 (202-130) From: Tho1ilas Maunder <tom_ maunder@adtnin.state.ak.us> Date: Thu, 08Ju12004'07:10:53 -0800 ~~~z . <n....,..·.',·........".....,......,'.,.·.'..·...""',.A,...,,.., "'.',....:,.'..~.,..............,.....'..,..,.,.........'..'...,..',','......,.....'..,_...',.'....'.....',\.'...'. 1,..·.,'..,..'.......,""..,·!.E?.,.,'...".'....,.,....'.......'..,....'...,.",i?'>... . ~:~~,<,.'·.·/~:Q"U East Team, I got a call from this person with the Kenai Borough late yesterday afternoon. He is requesting some language regarding ultimately plugging and abandoning the well to include in their land use permit. According to our records, it appears that the well has yet to be drilled. The permit was issued Dec. 2, 2002. -------- Original Message -------- Exploratory Gas Well Wed, 07 Jul 2004 17:01:15 -0800 Conetta, Dan <DCONETTA@borough.kenai.ak.us> 'tom maunder@admin.state.ak.us' <tom maunder@admin.state.ak.us> Subject: Date: From: To: Tom Maunder, I appreciate all your helpful information. The Kenai Peninsula Borough is about to reissue a land use permit to Marathon Oil for an exploratory gas well on borough land located in Section 34, TIN, RI3W, Seward Meridian (Ninilchik State No. 1 Pad). We would like to include some language in our permit that would direct Marathon to plug and abandon this well according to standards approved by the Oil and Gas Conservation Commission. Could you please provide me an example of some general language that we might use if Marathon decides to abandon this well. P.S. attached is a copy of last year's land use permit. Sincerely, Daniel Conetta Land Management Technician Kenai Peninsula Borough Ph: (907) 714-2211 Fx : ( 907 ) 2 6 2 - 8 618 «Permit. doc» ._~...__.__.__._--_._..._._- . Content-Type: application/msword Pernnt.doc Content-Encoding: base64 1 of 1 7/8/20043:11 PM ,) , \ I, "N ') J ~~~~~ :J! fÆ:fÆ~K~ A.11A.~1i& OIL AND GAS CONSERVATION COMMISSION TONY KNOWLES, GOVERNOR 333 W. ]fH AVENUE, SUITE 100 ANCHORAGE. ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 S. S. Lambe Senior Drilling Engineer Marathon Oil Company P. O. Box 196168 Anchorage, Alaska 99519-6168 Re: Ninilchik State 1 Marathon Oil Company Permit No: 202-130 Surface Location: 1000' FNL, 1100' FWL, SEC. 34, TIN, R13W, SM Bottomhole Location: 5180' FSL, 1650' FEL, SEC. 28, TIN, R13W, SM Dear Mr. Lambe: Enclosed is the approved application for permit to drill the above referenced exploration well. This permit authorizes perforating, testing, and production from depths greater than the top of the Tyonek T-1 geologic marker. Operator must notify AOGCC in advance of any perforation operation at shallower depth This permit to drill does not exempt you from obtaining additional permits or approvals required by law from other governmental agencies, and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. A weekly status report is required from the time the well is spudded until it is suspended or plugged and abandoned. The report should be a generalized synopsis of the week's activities and is exclusively for the Commission's internal use. All dry ditch sample sets submitted to the Commission must be in no greater than 30' sample intervals from below the permafrost or from where samples are fITst caught and 10' sample intervals through target zones. Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless the Commission specifically authorizes a variance. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative Code, or a Commission order, or the terms and conditions of this permit may result in the revocation or suspension of the permit. Diverter and blowout prevention equipment (BOPE) must be tested in accordance with 20 AAC 25 035. Sufficient notice (approximately 24 hours) must be given to allow a representative of the Commission to witness the diverter function test and a test of BOPE installed prior to drilling Permit No. 202-130 December 2, 2002 Page 2 of2 I ) ) new hole. Notice may be given by contacting the Commission petroleum field inspector on the North Slope pager at 659-3607. Sincerely, ~r~ Michael L. Bill Commissioner BY ORDER OF THE COMMISSION DATED this,.2-='day of December, 2002 cc: Department ofFish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. ) ) Alaska Business Unit " ~ M MARATHON t ~ Marathon Oil Company P.O. Box 196168 Anchorage, AK 99519-6168 Telephone 907/561-5311 Fax 907/564-6489 November 20, 2002 Tom Maunder AOGCC 333 West 7th Ave Suite 100 Anchorage, AK 99501 Dear Mr. Maunder: Per your request, I am attaching the Mud Proposal for Ninilchik State #1 from MI Drilling Fluids. The mud proposal is in line with our Ninilchik development philosophy. In future Permit to drills, the mud program will be included. If you would like any other information, please contact me at 564-6332 or ssla mbe@marathonoil.com. Sincerely, ë/¿'~/ ,;.,,,.~-"- /-------- \ Steven S. Lambe Drilling Engineer Enclosure ssl REceiVED NOV 2'0 2002 Alas1(a Oil& Gas Gons. Commission Anchorage ) ') September 17, 2002 Mr. Ben Schoffmann Marathon Oil Company PO Box 196168 Anchorage, AK 99519-6168 Dear Mr. Schoffmann: SUBJECT: FINAL CONSISTENCY DETERMINATION Marathon Ninilchik State No.1 Well STATE J.D. AK 0208-070G The Division of Governmental Coordination (DGC) has completed the State's review of your project for consistency with the Alaska Coastal Management Program (ACMP). Based on the review of your project by the Alaska Departments of Natural Resources, Fish and Game, and the Kenai Peninsula Borough Coastal District, the State concurs with your certification that the project is consistent with the ACMP with the modifications specified later in this letter. Scope of Pro.i ect Reviewed Marathon Oil Company proposes to commence operations to prepare for drilling the Nini1chik State No.1 exploratory gas well during the third or fourth quarter of 2002 from a surface location owned by state of Alaska. It is located at approximately Milepost 126.5 of the Sterling Highway near an existing turnoff and private beach access road. A new section of road will be constructed to provide access to the pad for drilling and future production facilities. The existing private road will be partially removed and reconstructed to maintain beach access. Overhead electric lines that cross the proposed pad location will be relocated. The well will be drilled with a water-based mud system and all drilling waste will be removed to the Kenai Gas Field and disposed in a permitted Class II well. There will be no discharges of drilling waste at Ninilchik State No.1. Marathon proposes to place a dual liner over the entire operational footprint for the drilling rig, diesel storage tank, and mud system. The dual liner is comprised of a 20 mil thick synthetic impermeable liner that is underlain by a felt liner that acts to cushion the surface liner and prevent punctures. Marathon Mr. Ben Schoffmann Final Consistency Determination 070G ) -2- ) September 17, 2002 State 1.0. AK 0208- proposes to use a double-walled diesel storage tank that has an annulus capable of containing 110% of the volume of the inner tank. Marathon will attempt to locate the diesel storage tank at least 100 feet away from the edge of the pad; and will store adequate spill response equipment on site to handle accidental leaks or releases of oil or other hazardous substances. The edges of the liner are bermed using timbers that create a 6-inch freeboard. The total capacity of the lined area under the rig, diesel tank, and mud system is greater than the equivalent volume of 110% of the volume of the diesel tank, plus 12 inches of freeboard. Marathon has received an exemption for both the Proof of Financial Responsibility (FR) and Oil Discharge Prevention and Contingency Plan (C-Plan) Requirements from the Alaska Department of Environmental Conservation (ADEC). This approval is for exploration and development activities within the Ninilchik Unit since it has been determined that only natural gas will be encountered in the shallow stratigraphic intervals that are the focus of this exploration effort. If liquid hydrocarbons are encountered during exploration, Marathon will cease operations and obtain FR and C-Plan approvals from the ADEC. Marathon proposes to drill a new water well on the pad and intends to develop a deep aquifer to avoid affecting shallower aquifers that are utilized by private wells. Maximum water use by the operations drilling could be 42,000 gallons per day for a five-day period when the initial mud system is developed. Thereafter, maximum daily use would not exceed 21,000 gallons per day to maintain the mud system. Marathon has also permitted a portable lift-station and holding tank that accompany the drilling rig camp for domestic wastewater. The wastewater generated is removed by a qualified contractor for disposal. The average maximum use rate for this purpose is approximately 500 gallons per day. No discharges of wastewater will take place nor will there be any discharges of mud or fluids used for drilling operations. Marathon will replace the public parking area lost due to pad construction by expanding the remaining parking area eastward and away from the bluff. The expanded lot will be on state land, be of similar quality and size as the usable portion of the pre-existing parking area, and be designed so that the beach access is not restricted. Marathon is not responsible for continued maintenance of the parking area or the new beach access road. Marathon conducted an archaeological investigation of the site and found no evidence of historic use within the area identified for the proposed pad and in the outlying areas surrounding the pad. The Corps of Engineers has determined that wetlands will not be crossed or filled as part of this project, therefore a Department of the Army permit is not required. The project description was changed in this final consistency determination to reflect the Corps of Engineers determination mentioned above. Two identically worded permit stipulations listed in the September 12 proposed consistency determination (#4 and # 14) were combined in this final consistency determination. The applicant and state agency reviewers concurred with these changes. Authorizations This final consistency determination, developed under 6 AAC 50, applies to the following State authorizations: Mr. Ben Schoffmann Final Consistency Determination 070G ) -3- ') September 17, 2002 State 1.0. AK 0208- Alaska Department of Natural Resources (DNR) Plan of Operations LOICI 02-18 Temporary Water Use Permit A2002-38 Consistency Determination Based on the review of your project by the Alaska Departments ofFish and Game and Natural Resources, and the Kenai Peninsula Borough Coastal District, the State concurs with your certification that the project is consistent with the ACMP with the following modifications, which will appear as stipulations on the Department of Natural Resources Plan of Operations authorization: 1. Roads, pads and work areas must be kept clean. Putrescible waste stored outside must be enclosed in containers that prevent direct contact by wind, birds and animals. Garbage must be hauled away to a DEC approved disposal site. Industrial trash and materials must be stored in a manner that prevents transport by wind. 2. Trash, survey lath, roadway markers, and other debris associated with lessee activities that has accumulated on or along roads or drill pads shall be regularly picked up and properly disposed. 3. Equipment operation and material storage outside the planned footprint of roads, pads, and designated storage areas shall be minimized. Rationale: These measures are necessary to prevent accumulation of solid waste, to prevent the loss of and/or contamination of habitat, to protect lands from unauthorized solid waste disposal or burial and to ensure consistency with the statewide Habitats standard (6 AAC 80.130), Coastal Development standard (6 AAC 80.040), and the Kenai Peninsula Borough Coastal Management Program (KPBCM) enforceable policies 5.4, Habitat Protection; and 12.0, Fish and Wildlife Habitat. 4. Sediment and water quality control measures shall be placed and maintained at all worksites to maintain existing surface flow patterns and prevent introduction of sediments and other contaminants into the Clam Gulch Critical Habitat Area. 5. Surface drainage on the drill pad shall be maintained to direct runoff into a lined sump area away from the Clam Gulch Critical Habitat Area. 6. Spill response equipment and supplies shall be readily available on site to handle accidental leaks or spills of fuel or toxic materials. Rationale: These measures are necessary to protect surface habitats, prevent erosion, and to prevent an accidental hazardous substance discharge from contaminating marine and freshwater habitats in accordance with the Energy Facilities Standard (6 AAC 80.070) and the Habitats Standard (6 AAC 80.130) of the ACMP and the KPBCMP enforceable policies 5.2, Water Resources; 5.4, Habitat Protection; 12.0, Fish and Wildlife Habitat; and 13.2 (c) Storage of Petroleum and Petroleum Products. Mr. Ben Schoffmann Final Consistency Determination 070G ) -4- ) September 17, 2002 State 1.0. AK 0208- 7. Fuel and hazardous substances. Secondary containment shall be provided for fuel or hazardous substances. Secondary containment means an impermeable diked area or portable impermeable containment structure capable of containing no less than the equivalent of 110 percent of the volume of the largest independent container plus 12 inches of freeboard. Double-walled tanks do not qualify as secondary containment unless an exception is granted for a particular tank. Hazardous substances are defined under AS 46.03.826(5) as (a) an element or compound which, when it enters the atmosphere, water, or land, presents an imminent and substantial danger to the public health or welfare, including fish, animals, or vegetation; (b) oil; or (c) a substance defined as a hazardous substance under 42 D.S.C. 9601(14). a. Container means any item that is used to hold fuel or hazardous substances. This includes tanks, drums, double-walled tanks, portable testing facilities, fuel tanks on small equipment such as light plants and generators, flow test holding tanks, slop oil tanks, bladders, and bags. Manifolded tanks must be considered as single independent containers. Vehicles, including mobile seismic tanks, are not intended to be included under this definition. All independent fuel and hazardous substance containers shall be marked with the contents and the lessee or contractor's name using paint or a permanent label. (Note: The permittee is ultimately responsible for contractor's compliance with these Standard Conditions.) b. Secondary containment or a surface liner must be placed under all container or vehicle fuel tank inlet and outlet points, hose connections, and hose ends during fuel or hazardous substance transfers. Appropriate spill response equipment must be on hand during any transfer or handling of fuel or hazardous substances to respond to a spill of up to five gallons. Transfer operations shall be attended by trained personnel at all times. Vehicle refueling shall not occur within the annual floodplain. Surface liner means any safe, non-permeable container (e.g., drip pans, fold-a-tanks, etc.) designed to catch and hold fluids for the purpose of preventing spills. Surface liners should be of aœquate size and volume to contain the worst-case spill that is likely to occur. c. Containers with a total capacity larger than 55 gallons which contain fuel or hazardous substances shall not be stored within 100 feet of a waterbody. d. Timbers used for freeboard on secondary containment shall be stabilized and joined between all timbers, and at all corners, and shall remain attached for the duration of the project. e. The perimeter berm for the pad shall be maintained for the duration of the described pro,þct. f. Fluid management of the secondary containment and the stormwater sump shall assure that no hazardous substances are discharged from the project site. g. Exceptions. After consultation with other resource agencies and affected coastal districts, tre lessee may under unique or special circumstances obtain exceptions to this stipulation on a case-by-case basis. h. Spill notification. The lessee or permittee shall immediately notify ADNR (or the appropriate land manager) and ADEC by phone of any unauthorized discharges of oil to water, any discharge of hazardous substances (other than oil), and any discharge of oil greater than 55 gallons solely to land and outside an impermeable revetment. If a discharge of oil is greater than 10 gallons but less tInn 55 gallons, it must be reported within 48 hours by phone or fax. If a discharge is less than 10 gallons, Mr. Ben Schoffmann Final Consistency Determination 070G ) -5- ') September 17 2002 State I. D, AK 0208- it may be reported in writing on a monthly basis. If an unauthorized discharge greater than 55 gallons is made to a secondary containment, it must be reported within 48 hours by phone or fax. 1. All fires and explosions must also be reported. The ADNR 24 hour spill report number is (907) 451- 2678; the fax number is (907) 451-2751. ADNR and ADEC shall be supplied with all follow-up incident reports. The ADEC oil spill report number is (800) 478-9300. Rationale: These stipulations are necessary to protect the chemical characteristics of surface water and upland habitat that contribute to its ability to support life by reducing the escapement of fuel and foreign fluids, promoting early detection, and decreasing response time, assuring timely rehabilitation and ensuring consistency with the statewide Coastal Development standard (6 AAC 80.040), Habitats standard (6 AAC 80.130), (6 AAC 80.140), Air, Land, and Water Quality standard (6 AAC 80.130), and the KP BCMP Enforceable Policies 5.2 ( a) Water Resources, 5.4, Habitat Protection, 12.0 Fish and Wildlife Habitat, 13.2 Storage of Petroleum and Petroleum Products. 8. The area within and along the road and pad may be cleared of timber, brush, stumps, and snags. Unless waived, logs greater than 4" in diameter which are not removed shall be disposed of as follows: a. Spruce: Logs shall be cut into 24-inch maximum length sections. Sections shall be scattered (not piled) in open areas of the right-of-way to permit rapid drying and prevent spruce bark beetle outbreak. Sections shall not be covered by slash, brush, or other residue. b. All other tree species: Logs shall be cut into 10-15 foot lengths and placed so they cannot roll. Tree sections shall not be piled on top of each other. c. Removal of brush, slash, and immature trees will be accomplished by any of the following three methods: (1) Spreading and scattering in the adjacent brush area without damaging other trees, (2) Chipping and scattering in such a way as to preclude their being washed into any watercourse, or (3) Piling and burning in accordance with procedures and practices established by the DNR, Division of Forestry and the air quality regulations of the DEC. Rationale: This measure is necessary to prevent the spread of spruce bark beetles, provide for the use or proper disposal of wood, maintain compatibility between concurrent uses and to ensure consistency with the statewide Energy Facilities (6 AAC 80.070), Timber Harvest and Processing (6 AAC 80.100), and with KPBCMP Enforceable Policies 5.2 (a) Water Resources, 5.4, Habitat Protection, 12.0 Fish and Wildlife Habitat. 9. Rehabilitation shall be to the satisfaction of the Director. Abandoned gravel structures such as roads and pads shall maintain natural drainage patterns and not cause ponding or erosion. Rationale: This measure is necessary to eliminate maintenance of gravel structures when they are not longer useful and, to the extent practicable, return the disturbed area to a natural condition that is Mr. Ben Schoffmann Final Consistency Determination 070G ì) -6- ) September 17 2002 State I. D. AK 0208- compatible with present and future land use and to ensure consistency with statewide Energy Facilities standard (6 AAC 80.070), Habitats standard (6 AAC 80.130), and the KP BCMP Enjòrceable Policies 5.2 (a) Water Resources, 5.4, Habitat Protection, 12.0 Fish and Wildl?fe Habitat. 10. Surface drainage on the drill pad shall be maintained to direct runoff away from bluff and Cook Inlet marine waters. Rationale: Removal of vegetative cover and organic matter is likely to reduce the water holding capacity and increase the volume of runoff flowing toward the bluff. This stipulation is necessary to prevent gully formation and reduce the potentialfor accelerated erosion and water quality impacts and to ensure consistency with the KPBCMP 3.1 Design and Siting Criteria, 3.3 Erosion, 3.4 Landslides, Mass Wasting, and Avalanche Hazards and the statewide Habitats standard (6 AAC 80.130) and the Air, Land, and Water Quality Standard (6 AAC 80.140). 11. When soils are disturbed, or where vegetative mats are damaged or destroyed in uplands, wetlands, or other habitats the applicant and its representatives are encouraged to accomplish immediate habitat restoration measures. Rationale: This stipulation is necessary for consistency with the KP BCMP Enforceable Policies 5.4, Habitat Protection and the statewide Habitats standard (6 AAC 80.130). 12. All waste generated during the project shall be removed and disposed of. This includes, but is not limited to, human waste, trash, garbage, litter, oil drums, petroleum/petroleum products, ashes from burned materials, and discarded equipment. The project location must be kept clean at all times. Rationale: This stipulation is necessary for consistency with the KP BCMP Enforceable Policies 5.4, Habitat Protection, 12.0 Fish and Wildlife Habitat Protection and the statewide Habitats standard (6 AAC 80.130). 13. Hazardous substances must be removed from the project site and properly managed. Debris (such as soils) contaminated with motor oils, solvents, or other chemicals may be classified as hazardous and shall be recovered from the sited and managed and disposed of. Rationale: This stipulation is necessary for consistency with the KPBCMP Enforceable Policies 5.2 (a) Water Resources; 5.4, Habitat Protection; 12.0, Fish and Wildlife Habitat; 13.2, Storage of Petroleum and Petroleum Products; and the statewide Air, Land, and Water Quality Standard (6 AAC 80.140). This final consistency determination represents a consensus reached between you as the proj ect applicant and the reviewing agencies listed above, regarding the conditions necessary to ensure the proposed project is consistent with the ACMP. Most state permits should be issued within five days after the issuance of the final consistency determination. Other Concerns/Advisories Please be advised that although the State has found the project consistent with the ACMP, based on your project description and any modifications that appear as stipulations contained herein, you are still Mr. Ben Schoffmann Final Consistency Determination 070G ) -7- ) September 17 2002 State 1.0. AK 0208- required to meet all applicable State and federal laws and regulations. Your consistency determination may include reference to specific laws and regulations, but this in no way precludes your responsibility to comply with other applicable laws and regulations. If changes to the approved project are proposed prior to or during its siting, construction, or operation, you are required to contact this office immediately to determine if further review and approval of the revised project is necessary. If the actual use differs from the approved use contained in the project description, the State may amend the State approvals listed in this consistency determination. If the proposed activities reveal cultural or paleontological resources, please stop any work that would disturb such resources and immediately contact the State Historic Preservation Office at (907-269-8720). This final consistency determination is a final administrative decision for the purposes of Alaska Apellate Rules 601-612. Any appeal from this decision to the superior court must be made within 30 days of the date of the determination. If you have any questions regarding this process, please contact me at 257-1352 or Email nbrudie@jpo.doi.gov. Sincerely, Nina Brudie Project Review Coordinator ecc: Charles Underwood, Marathon Oil Company Matt Rader, ADNR DOG Patricia Bettis, ADNR DML W Mark Fink, ADFG Bob Blankenburg, ADEC Dave Casey, COE Dan Bevington, Jennifer Eskue, Kenai Peninsula Borough Bob Shavelson, Cook Inlet Keeper ) ) August 5, 2002 Mr. Steve Davies AOGCC VIA email RE: Marathon Ninilchik State 1 Permit Application Surface Casing Depth Within Marathon's proposal to drill the above mentioned well, the surface casing setting point of 1,965'(1,668' TVD) is designed to meet the AOGCC requirements under Title 20 AAC 25.030. AOGCC has requested under 20 AAC 25.030(c)(3) to quantify the total dissolved solids (TDS) of formation waters in the vicinity of the casing shoe (1,965'). The following facts are understood regarding the casing depth of this project and the protection of plausible drinking water: The surface casing will be set into the Tertiary Beluga formation (Figure 1). The drinking water in the area of the proj ect and across the entire Kenai Peninsula is from Holocene glacial sand and gravel (Figure 1) which is higher quality (less than 1000 ppm TDS, Figures 1 & 2) than the water from the deeper Tertiary sandstones. The deepest water well in the area (SB, TIN RI3W) is 276 feet in depth (Figure 3), while the deepest water well on the Southern Kenai Peninsula is less than 500' deep (Cook Inlet Areawide 1999 Oil and Gas Lease Sale Final Finding of the Director January 20, 1999, Chapter 5, Page 48.; Figure 4). The Tertiary section is a known hydrocarbon bearing interval that is not compatible with drinking water. The shallowest indication of possible hydrocarbon content is at 715' MD (Figure 1) in the SOCAL Falls Creek 2 well.~· TDS calculations (EP A approved Rw calculation using the Resistivity/ Porosity method for Rw's greater than 1.0 ohmm; Figure 2) for the sandstone intervals around the surface casing shoe range from 7000 ppm to 3200 ppm. ~*' Because the TDS is less than 10,000 ppm, these calculations represent an underestimate of TDS due to the effect of reduced influence of Sodium Chloride and the increase of other solids on a percentage basis. A water analysis of this water or one of similar origin and depth is not available to determine the concentration of other components that contribute to TDS. EP A criteria for exemption of an "underground source of drinking water" (40 C.F.R 146.4) can occur and applies in this case if "a freshwater aquifer ... is currently not serving as a source of drinking water and ... cannot be used in the future as a source of drinking water because ...it is at a depth which makes recovery of water for drinking water purposes economically or technologically impractical. Marathon Ninilchik State 1 Permit Application Surface Casing Depth Page 1 f( 1..e>C4k.d 2- ..,~t... A/(i',f ~~ ,btL#/h~. ~~~/ O'~ ,tCl.'~ ~ ~ ~+- e:I'4~ 4.l4-d ~~ .þ. dnl':.~ --J ~:¿@ (P7ò/~þ~ H~ C3 #2.., ~ç~tJ -'""~ 4/<!p-1"~ ~ ù.- ~ lOtX' bf V S"3DO~ " ~ di~ ~I..ø . ) ) Given the above information, the surface casing depth proposed for the Ninilchik State 1 project is sufficient to protect any plausible and economic drinking water in the area even .J 4..<rL& though the TDS for the Tertiary sandstone beds around the casing shoe calculate to less li<..~ _ '..__ than 3200-7000 ppm. ~~ Your consideration of this information and approval of the proj ect are greatly appreciated. Please contact me if you have additional questions. Best regards, David L. Brimberry Senior Geologist CC: Charles Underwood, Marathon RES Steven Lambe. Marathon Drilling Attachment - nsl_TDS_rec_figures.ppt Marathon Ninilchik State 1 Permit Application Surface Casing Depth Page 2 ) ) Figure 2 Marathon Ninilchik State 1 Permit Application Calculated Total Dissolved Solids of Selected Sandstones in (SOCAL Falls Creek 2) August 2002 Rw ohmm (Res.1 Ph i) ......^~..~.~ª...@..§~......E".... ..,.....~..·.º~....,@h§T.E...... 1.9~..@..§_ª,..Eh'W'h Depth 600 1340 1500 TVD 600 1320 1465 TDS ppm 1700 7000 3200 " \""""~'"''''''''-'''''',''''''.'''^''' .". .., "- -ê)~ ? J"¿I-:::Jj¡; ,Æfi¿J .. .;.. þ,'/fj AU<d ~ COMPLETION DATE TOTAL DEPTH OWNER SECTION T1N-R13W · BOUNens 26 BOUNens 26 ., ,,-~.,' """".,"-. ~'''..., ,'..' ..'- ,'~" ". ....... ."...,." "..' ,- "."'-'.'""'~ "."''''^'''''' "" Marth 33 ""'"._...__....~n"g.I~..........._:. ......_."".ª~_ .....___...... ........Ç9ºP~t.......................... ... .. .._.._~4 Cooper-Waldron 34 1981 1981 1984 1985 1988 1983 Figure 3 Marathon Ninilchik State 1 Permit Application DNR Registered Water Wells in Area of Project August 2002 ) ) ) ) Figure 4 Marathon Ninilchik State 1 Permit Application Typical Cook Inlet Welbore Diagram from "Cook Inlet Areawide 1999 Oil and Gas Lease Sale, Final Finding of the Director January 20, 1999, Chapter 5, Page 48 II August 2002 Oil and Gas ..- Prod uc!iof1 Depth O' \e ·1000' Cement·m---....~ -2000' .2600·~ ,I . Steel Casing -j ¡ ·3000' Drilling Mud ..._,--~ -4000' If-- _ Production Tubing Cement·--------)o- -5000' -6000' ,7000 ,8000 Packer .. If : ¡=:: Oil Perforations I' il __ & J (.,:..<' ~Gas J~' __ Cement ~ ::::.-~ Slee ' Production--: Casing Well bore Not to Scale ,9,000 ·10.000' .__.._..__.g.~gJ~.Q"r9.,.I$~Y.,.,. t::.:::l Conglomerate ~ Coal [2] Sand I~:'I Shale ~ I Geologic ].. . ,I-t..:t /::;1., , ,~t"",\'h ~ ~e :....~ 0" ¡~. ,", "~'.'. .~~'.'. '. '~".':~ i 1: 600'--. ,,;:',.,.,' ,lJn:::I:~~:ed... ,;":".' t ~ Maximum ~:,'.'?' .'<;'.', y.' ,',;"".'.' .'~..' ,~... ~ II: Water Well Depth "~1""'~· ....':--....:-...., "." ....~r.... &015 (Southern Peninsular.· ..<:'~. .~:,', '",'~''';'.' ..·..0..:··,' ~ t~wtl" rh.,~~II{·~:~ (J! ~tl8ld '¡ iJl '/ U)II.'! dL,r ;jl~'~ liíutJ1)lliJUI lth:' t~L1h" 1::':;":"]1\1.) ,',"'.' 8teding·F~m~tjo·n·.' .'~'.' I~ . . (.I' .~., . . ..:';/ . . .""" . . Óo . . ...............,'... . OQ.~ . .~ . P. . ;~. . .>:::.;.. . . J~'. . ¡;.¡. ...... I I = 2t100' Þ~~~~~~'~f~~'~~~~~~~~ Shallowest Underground"" . h' ' ',,' . . ~,' . . ..' , '.0' . Injection Disposal Well . .:,'.' .;/.,'.:.... .~'.'" ~',- ",~,'. on Kenai Peninsula ' ~·~~~'~~.~à·=·~'~:.:~~'~ (;~:~~:~.~-~~:~:~~~:~~~~ ~~~ · . . . . . . . . . ~ . . . . . , . , . iÐO . .C.1¡o . ~.... , «:.' . .r..:.:.,. . 't;o. . 0';:" .0:.), ~ to. . f>". . .t~ , . A . . J:Jo,. ø. :::s o ð ~. . ~. . O' . . ~1 ' , . 0. . . '0::." . ~.'. ·~~e.l~l.a.F.~~~II. '~'.'. .~: Gas Zones< 1·7; .'. '''¡' .' . 'i~:.'.' ~'.'. '. '~?'. '.';,,'.' ';1-.:,. ~. . "J _, '4 , . ,~ . . q .. -; C t) ~ ~ ~ :: .. II f.; ',,¡,. . .tt,' . ð . . I~ . . ~!::..' . '¿ . ',':.' ,. -................. · CJ' '.0' .~. . t3' . 'c.' . ,1;1' . ~~ ~~=o~ ~i~ ~É~~ =~~j~~~ · . , . . . . , . . . . . . , . . . ~ , ,.~ . .~:'\ . f>. . . q. . . ('::;:, , . .'~:¡' . ~:~ ~.~ ~~~ ~,~.~~~~~ ~ ~~ ~~~~= _.. .. . I. ~ ...~ ..-:0. U -::;:. ~J ;:~ ~~~ ~:~ ~.~,~~~~.;; ~.~.~ . .r:). . .'::'. . ¡'. . . ~~ . . ,~. . . .~.. I .;:¡.. ..,\0 .c;:.... 11:'.." -1:...7:.0..1':1. ~ ~ ~~~ ~'f: ~.~~ ~~':f ~~=' ~ t ~:~.: ~~~~ ~~~~'::~ :~:.:~:: "!I'- -¿:- -~ --~ - -::--~~- .. ... Primary Oil ~.';~':~',:'~',~:'~'~:':'~'~':'~,' Zones 0 . .0. .", . . ",. . . .. . . ~.. . :~'.' .~e~~.f.o~~~n/. ',':". -'~- ~ - ~..- -'';:' --'.~ - - ~- :-. -: 7<, W':'t- F:':':;d"" .-. -::::.:- I .-:1' "."',;,." .~". "'.:."' .~." '..;::' t.,. I ..."....",.......,. . Q Q r._ _I '::'.10 .1 ~ '=" . ...,. '--,'11 . '.~ ' '.::...... . . ~ . . ~ Q: .................... c¡: ,0· , 0 'Cretaceous =,.. . .~. (, '." ' . ~ . "::1 . . "-:. , . '\:.;0' . . ð.· . I II! ......,......,...... ..., r:~ . .':'" . r, . .:.... . ,_-:.. . . ~::.. ,...".. ., .................... .. .:.: . c. .::. . . .'.. . . ...... . ..... .. t). I ,.,.. , ~,' . .'~ . . .. . . '. . . . . , . c: 'I .. *............ Cook Inlet Wellbore Schematic FIGURE 5.2 A DNR B/96 I' ') Marathon Oil Company ) Alaska Business Unit " , ,M MARATHON ~ P.O. Box 196168 Anchorage, AK 99519·6168 Telephone 907/561·5311 Fax 907/564·6489 June 14,2002 Tom Maunder AOGCC 333 West 7th Ave Suite 100 Anchorage, AK 99501 Dear Mr. Maunder: Attached is the Permit to Drill for Well Number Ninilchik State #1, and the accompanying schematics and procedure. Ninilchik State #1 has an anticipated spud date of 2-1-03. . However, this well may be accelerated into Q4 of 2002. An Exception To Location permlis required and will be addressed separately. We ask for you to approve the attached 10-401 noting the Exception To Location permit is still required. ,-- -- If you would like any other information, please contact me at 564-6332 or ssl~.mbe@ marathonoil.com. II // __.._ ~--~ Steven S. Lambe Drilling Engineer ~ ~I ~~~ .(..y rr~r~' Sincerely, Enclosure bjv RECFI\/fD JUN ·1 9 2002 A1aIlSa Oil & Gas Cons. CommlSSl01 .' - Anchorage "'~') ff . l' I j t",\ ~ ;\ i .\ f :: .~" ~ ~ ì l' \",i' ~¡ \J t~~ b_ ALAS~ 1a, Type of Work Drill[K Re-EntryD 2. Name of Operator MARATHON OIL COMPANY 3. Address P. O. Box 196168, Anchorage, AK 99519-6168 4. Location of Well at Surface 1,000' FNL, 1,100'FWL, Sec. 34, T1N, R 13 W, SM At top of Productive Interval I 2,700' FSL, 550' FEL, Sec. 28,T1 N, R13W, SM Re-DrillD DeepenD At Total Depth 5,180' FSL, 1650' FEL, Sec. 28, T1N, R13W, SM 12. Distance to Nearest 13. Distance to Nearest Well Property Line(unit boundary 550' feet 16. To be Completed for Deviated Well: Kickoff Depth 250 feet Maximum Hole Angle 18. Casing Program Size Hole Casing Weight Driven 13-3/8" 68 12-1/4" 9-5/8" 40 81/2" 7" 26 7" 41/2" 12.6 Specifica tions Grade Coupling K-55 PE L-80 BTC L-80 BTC L-80 H-521 g:\cmn\drlglsterlinglsu44-1 O\AOGCCPTDR 1.xls , STATE OF ALASKA blL AND GAS CONSERVATION COMM¡ PERMIT TO DRILL 210 AAC 25.005 )ON .' h(\{:>\ 1b. Type of well. Explorat0rG Stratigraphic TesD ServiceD Development GaG Single ZonG 5. Datum Elevation (DF or KB) 10. Field and Pool 185 feet Wildcat Development aiD Multiple Zone[K 6. Property Designation ADL389180 7. Unit or Property Name Ninilchik Exploration Unit 8. Well Number Ninilchik State #1 11. Type Bond (see 20 AAC 25.025) Blanket Surety Number 5194234 9. Approximate Spud Date 02101/03 6,000' feet Amount $200,000 15. Proposed Depth (MD and TVD) /{¡ If '$/ Jtyr ~MD lW'8,000' TVD (see 20 AAC 25.035 (e) (2» 2658 pslg at Total Depth (TVD) Setting Depth feet 14. Number of Acres in Property 5550 17. Anticipated Pressure 60 0 Maximum Surface 8,000' Top Bottom Quantity of Cement Length MD TVD MD TVD (including stage data) +/-140' A' A' +/-140' +/-140' 1965 A' A' 1965 1668 370 5700 A' A' 5700 3535 295 5713 5400 3386 11113 8000 635 The Ninilchik State #1 will be directionally drilled to an estimated total depth of 11 ,113' m~ C8 000' tvpJr~ a new pad. An exception to location permit will be required and will be submitted at a later date. R [ E I V t u Marathon's drilling rig will be used to drill and complete this well. JUN "I 9 2002 The following documents are attached: ..'. . ~:,Ç m,SSIQ(1 Drilling Program, Area Maps, Location Map, Structure Map, Surface use plan, ~~.~~~ ~ Drawing, Blow out Prevention Equipment drawings. 20. Attachments Filing Fee[K Property Pla(8] BOP Sketch[K Drilling Fluid Prograrr0 Time vs Depth PloD Refraction AnalYSiU 21. I hereby certify that the foregoing is true and correct to the best of my knowledge Jl -... /:/ 564-6332 _ -.;¿/l.------=r1ttè Senior Drilling Engineer Commission Use Only Permit Numbe.r : '") ::::> /"--.. API Number Approval Date See Cover Letter J-t//- ~ I ~ 50--133- Y¡:;5'/¿{-a:, IXIf/ðJ- For Other Requirements Conditions of Approval Samples Required [R]Yes DNo Mud Log Required ~Yes DNo Hydrogen Sulfide Measures DYes 00 No Directional Survey Required 0Yes DNo Required Working Pressure for BOPE D2M D3M DSM. DIO~ D1SM <,OOÕ ?.::. \3.\J\>-\;::<"~ /,k?-;L¡ Other: Cow..~\~\Ct-t ~S-\\~~\À\:J~0.\t-'\. ~~\ 'Ð~Û\>'V\-'õ\.J~ '-.), ~ 4t)S. ( Date /~~ Ç;cate Signed S. S. Lambe Approved by ORIGINAL SIGNED BY M L. DiU Form 10-401 Rev. 12-1-85 Diverter Sketct-C:8] Seabed Repou Drilling Prograrr0 20 AAC 25.050 RequirementO Date 6/14/2002 __COrP1i~Siq)ler. 1 rr '\ , :.\ ~ (\ I " "';'" ~'" , I I} ~I .'\¡ \. I: I:.'. 1 II ~ \ '.: /.~.~ ~ \1>-..( ~ ~ 'd w: 'I. 11-- by order of the Commission ) ) DRilLING AND COMPLETION PROGRAM MARATHON Oil COMPANY ALASKA REGION WELL: PAD: SLOT: Ninilchik State #1 Ninilchik State NA FIELD: WBS No.: TYPE: Wildcat NA Exploration Prepared by: S. S. Lambe API No.: NA REVISION NO.: 0 DATE: 6/13/2002 SURFACE LOCATION: 1000' FNL, 1100' FWL, Sec. 34, T1N, R13W, S.M. TARGET:' Tyonek T-1 2700' FSL, 550' FEL, Sec. 28, T1 N, R13W, S.M. (TVD = 3,500') BOTTOMHOLE LOCATION: 5180' FSL, 1650' FEL, Sec. 28, T1N, R13W, S.M. (TVD = 8,000') KB ELEVATION: GL ELEVATION: 185 ft. mean S.L. 164 ft. mean S.L. I. IMPORTANT GEOLOGIC HORIZONS: FORMATION DEPTH(MD) DEPTH(TVD) Tyonek 5,630 3,500 II. ESTIMATED FORMATION TOPS AND CONTENT: FORMATION DEPTH(MD) DEPTH(TVD) POTENTIAL CONTENT Tyonek T-1 TD 5,630 11,113 3,500 8,000 gas/water gas/water III. WEll CONTROL EQUIPMENT DIVERTER SYSTEMS The diverter system will consist of a 21 1/4" X 2000 psi annular preventer and a 16" O.D. nonbifurcated vent line. The vent line valve will be full opening and integrated with the annular in the fail safe design as stipulated in 20AAC 25.035. The vent line will be a minimum of 75' from any source of ignition. Page 1 Ninilchik State #1 Drilling Prognosis.xls ) ') BLOWOUT PREVENTERS The blowout preventer stack will consist of a 13-5/8" x 5000 psi annular preventer, a 13-5/8" x 5000 psi double gate ram type preventer with blind rams in the bottom and pipe rams in the top, a 13-5/8" x 5000 psi drilling spool (mud cross) with 3-1/8" x 5000 psi outlets, and a 13-5/8" x 5000 psi single gate ram type preventer with pipe rams. The choke manifold will be rated 3-1/8" x 5000 psi. It will include a remote hydraulic actuated choke and a hand adjustable choke. Also included is a poor-boy gas buster, and a vacuum-type degasser. A flow sensor will be installed in the flowline and the mudpits will contain sensors to measure the volume of fluid in the surface mud system. Both sensors will contain readouts convenient to the drillers console. WELLHEAD SYSTEM STARTING FLANGE: 21 1/4" 2,000 psi flange top x 20" weld on bottom. CASING HEAD: 13 5/8" 3000 psi top x 9 5/8" SLC bottom with base plate for 13-3/8", two 2" line pipe outlets, one 2" ball valve. (Multibowl System) CASING SPOOL: TUBING HEAD: 135/8" 5,000 psi top x 13 5/8" 3,000 psi bottom, 2 1/16" 5,000 psi studded outlets, one 21/16" 5,000 psi gate valve. CHRISTMAS TREE: 4 1/16" 5,000 psi x 13 5/8" 5,000 psi bottom, including two master valves, one flow tee, one wing valve, one swab valve, and one pnuematic actuated wing valve. Page 2 Ninilchik State #1 Drilling Prognosis.xls ) ) IV. CASING PROGRAM: CASING DESCRIPTION DEPTH SET FROM TO HOLE TYPE SIZE WT. GRADE THREAD (MD) (MDrrvD) SIZE CONDUCTOR: 13 3/8" 68 ppf L-80 PE Surf +/- 140'/140' Driven SURFACE: 9 5/8" 40 ppf L-80 BTC Surf 1,965'/1,668' 12 1/4" INTERM 1: 7" 26 ppf L-80 BTC Surf 5,700'/3,535' 8 1/2" LINER: 4-1/2" 12.6 ppf L-80 H-521 5400 11,113'/8,000' 7" CASING DESIGN SETTING FRAC GRD FORM PRES DESIGN FACTORS SIZE WEIGHT GRADE DEPTH,TVD @ SHOE @ SHOE MASP TENS COLL BURST 13 3/8" 68 ppf L-80 1,668' 18.8 776 1,525 3.96 3.83 3.65 9 5/8" 40 ppf L-80 3,535' 17.7 1,644 1,748 2.67 2.20 2.19 4-1/2" 12.6 ppf L-80 8,000' 15.5 3,720 2,658 1.65 1.88 3.01 All tubulars are new. Page 3 Ninilchik State #1 Drilling Prognosis.xls ') ') V. CEMENTING PROGRAM SURFACE: 9 5/8" 1,965'/1,668' SLURRY: Class "G" + required additives. See cement prognosis. TOP OF CEMENT: WEIGHT: YIELD: WATER REO.: PUMPING TIME: EXCESS (%): ESTIMATED VOLUME: SURFACE 12.0 ppg. 2.50 cu. fUsk 10.84 gallsk 5:30 hrs:min 50 % in open hole. 370 sks. RUNNING AND CEMENTING DETAILS: ENSURE WEAR BUSHING IS REMOVED! 1. Remove thread protectors and visually inspect connections. 2. Make up float shoe and 2 shoe joints. Check float. Fill pipe until circulating. 3. Make up Float Collar. Centralize bottom 4 joints and every 5th to surface wI Bowsprings. 4. Fill pipe until circulating. 5. Run remaining casing and centralizers. MIU circulating head. Test lines. 6. Circulate until no gain in circulating efficiency is made. 7. MU Cementing head with loaded wiper plug. 8. Pump spacer as follows: 50 bbl Mud Clean II @ 8.8 ppg 9. Mix and pump tail slurry. 10. Displace cement with wiper plug and bump plugs. 11. Check floats. 12. NID diverter. Weld on casing head and NIU blowout preventers. 13. Test BOPE. Run wear bushing. Page 4 Ninilchik State #1 Drilling Prognosis.xls ') ) V. CEMENTING PROGRAM (continued) INTERM 1 7" @ 5,700'/3,535' LEAD SLURRY: Class "G" + required additives. See cement prognosis. TOP OF CEMENT: WEIGHT: YIELD: WATER REQ.: PUMPING TIME: EXCESS (%): ESTIMATED VOLUME: 1 ,600 ft. 12.0 ppg. 2.53 cu. ft./sk 10.63 gal/sk hrs:min 30 % 235 sks. TAIL SLURRY: Class "G" + required additives. See cement prognosis. TOP OF CEMENT: WEIGHT: YIELD: WATER REQ.: PUMPING TIME: EXCESS (%): ESTIMATED VOLUME 5,200 ft. 12.8 ppg. 1.79 cu. ft./sk 5.80 gal/sk hrs:min 30 % 60 sks. **Tail Cement across 500' OH with Lead targeted 300' rise in 9-5/8" by 7" annulus. RUNNING AND CEMENTING DETAILS: ENSURE WEAR BUSHING IS REMOVED! 1. Remove thread protectors and visually inspect connections. 2. Make up float shoe and 2 shoe joints. Check float. Fill pipe until circulating. 3. M/U float collar. (seal-lock all connections to top of float collar) 4. Fill pipe until circulating. 5. Run remaining casing. M/U cementing head, install bottom plug and test all lines. 6. Circulate and reciprocate until no gains in circulating efficiency is made. 7. Drop bottom plug and begin pumping spacer. 8. Pump spacer as follows: 30.0 bbls MCS-4D + 6 Ibs/bbl MCS-D + 1 Ibs/bbl Cello Flake + 20 Ibs/bbl Kol Seal + 30.8 Ibs/bbl Bentonite + 92 Ibs/bbl Barite, Bulk @ 10 ppg 9. Mix and pump lead slurry. 10. Mix and pump tail slurry. Drop top plug. 11. Displace cement. Reciprocate as long as possible. Land mandrel hanger in multibowl. 12. Bump plug wI 500-1,000 psi over final circulating pressure. Check floats. 13. WOC Page 5 Ninilchik State #1 Drilling Prognosis.xls ) ') V. CEMENTING PROGRAM (continued) LINER 4-1/2" @ 5,400' MD to 11,113'/8,000' SLURRY: Class "G" + required additives. See cement prognosis. TOP OF CEMENT: WEIGHT: YIELD: WATER REQ.: PUMPING TIME: EXCESS (%): ESTIMATED VOLUME: 5,400 ft. 12.8 ppg. 1.79 cu. ft./sk 5.74 gal/sk 4:30 hrs:min 30 % 635 sks. RUNNING AND CEMENTING DETAILS: ENSURE WEAR BUSHING IS REMOVED! 1. Remove thread protectors and visually inspect connections. 2. Make up float shoe and 4 shoe joints. Check float. Fill pipe until circulating. 3. M/U float collar. (seal-lock all connections to top of float collar) 4. Fill pipe until circulating. 5. Run remaining casing liner on 4" drillpipe. Circulate and condition well. 6. M/U cementing head and test all lines. Establish rotation. 7. Drop bottom plug and begin pumping spacer. 8. Pump spacer as follows: To Be issued At later date 9. Mix and pump slurry. Drop top plug. Attempt to rotate during entire cement job 10. Displace cement with water. 11. Bump plug w/ a minimum of 500 psi over displacement pressure. Check floats. 12. Set hydraulic liner hanger. Sting out of liner hanger, pull up 5 stands, reverse out cement. WOC. 13. Clean off and test liner top. Run polish mill. Run and set liner hanger packer hydraulically. Page 6 Ninilchik State #1 Drilling Prognosis.xls ') ') VI. MUD PROGRAM MµD PROPERTIES DEPTH FROM TO TO WEIGHT PV WATER MUD (MD) (MD) (TVD) (ppg) (cp) LOSS TYPE 0' 1,965' 1,668' 8.8 - 9.2 10-15 8 - 12 Freshwater gel 1,965' 5,700' 3,535' 9.0 - 9.2 8 - 14 6-8 FLO PRO/KCL 5,700' 11,113' 8,000' 9.0. - 9.5 8 - 14 6-8 FLO PRO/KCL MUD EQUIPMENT The solids control equipment will consist of two flowline cleaners and the MI centrifuge van. Included will be equipment to de-water the underflow from the mud processing equipment to allow for disposal of the cuttings and solids by slurrification and injection into the disposal well at the KGF. VII. LOGGING, TESTING, AND CORING PROGRAMS LOGGING PROGRAM CONDUCTOR: No logging is planned for this interval. SURFACE: MWD I INTERM 1: MWD + LWD GR only ¡ LINER: Full Suite LWD ¡ MUD LOGGING The well will be mud logged from surface to TD at 11,113' MD. ¡ CORING PROGRAM None Planned TESTING PROGRAM No open hole tests are planned for this well. Page 7 Ninilchik State #1 Drilling Prognosis.xls Ninilchik State #1 Drilling Prognosis.xls Page 8 POTENTIAL INTERFERENCE: None- First Well on new Pad. , ) ) VIII. OTHER INFORMATION DIRECTIONAL PLAN (FROM KB ELEV.) NORTH East VERT DESC MD TVD INCL AZIM COORD COORD SECTION MSL 185 185 0 0 0 0 0 KOP 250 250 0.0 336.0 0 0 0 build @ 3.5 deg/10Oft Start Hold 1,965 1,668 60.0 336.0 748 -333 818 Start Drop 6,029 3,700 60.0 336.0 3964 -1765 4338 drop @ 1.5 deg/10Oft Start Hold 8,829 5,828 18.0 336.0 5537 -2465 6061 TOTAL DEPTH 11,113 8,000 18.0 336.0 6182 -2753 6767 ) ) IX. DRILLING PROGRAM CONDUCTOR: Drive 13-3/8" conductor to +1-140 ft. RKB. Weld starting flange to drive pipe. Move in and rig up rotary drilling rig. Nipple up 21 1/4" diverter, diverter valve, and 16" diverter line. Function test diverter and diverter valve. SURFACE: Drill a 12 1/4" hole to 1,965' MD 11,668' TVD per the directional plan. Run and cement 95/8" casing. wac. Cutoff 9 5/8" and 13-3/8". Connect 9 5/8" SLC by 13 5/8" 3M wellhead. N/U 135/8" 5M BOP'S. Test BOP'S and choke manifold to 25013,000 psi. Set wear bushing. Test surface casing to 1,500 psi. INTERMEDIATE 1: Drill out float equipment and make 20' of new hole. CBU. Test shoe to leak off. Estimated EMW is 18.8 ppg. Drill 8 1/2" directional hole to 5,700' MD/3,535' TVD as per directional plan. Condition hole as required. Make wiper trip. Run and cement 9~' casing. Land casing in multibowl head. wac. Set wear bushing. Test casing to 2,500 psi. '1 \\..4-~ o/V1 The first gas zone is not expected until the Tyonek interval. However, offset wells have noted shallow gas starting around the 2500' TVd intervals. Monitor the mug logs and mud weights while drilling this interval. Maintain mud weights as low as possible to ease the differential sticking tendencies while running the 7" casing. PRODUCTION: Drill float equipment and 20' of new formation wI 7" bi-center bit. CBU. Test shoe to leak off. Estimated EMW 15.5 ppg. Drill ahead to TD @ 11,113' MD 18,000' TVD as per the program. Maintain mud properties to ensure good hole cleaning. At TO, condition hole for logging. POOH and acquire wireline logs. Trip in and condition hole and mud for cementing. Trip out of hole laying down excess drill pipe. MU & RIH 4-1/2" liner on rotatable hanger. Establish rotation. Cement with high compressive light weight cement as per program. Set Liner Hanger. wac. RIH with polish mill and dress TaL. Set liner top packer and test. Clean out 4-1/2" liner. COMPLETION: Completion program to be issued after evaluation of the Tyonek hole section. Page 9 Ninilchik State #1 Drilling Prognosis.xls ) ) X. POTENTIAL HAZARDS Ninilchik State #1 To comply with state regulations the Potential Hazards section and the well shut-in procedures must be posted in the drillers dog house. The man on the break(driller or relief driller) is responsible for shutting the well in(BOPE or diverter as applicable) as soon as warning signs of a kick are detected and an influx is suspected or confirmed. A copy of the approved permit to drill must be kept on location and be readily available to the AOGCC or BLM inspector. This well's primary objective is gas and no oil sands are expected to be encountered. No H2S is anticipated. Gas sands will be encountered from +/- 5,700' MD/3,535' TVD to total depth of the well. These sands will run normal pressured. Lost circulation and differential sticking are potential across the Intermediate section. The fresh water gel and FLOPRO mud systems that will be used to drill the well will help reduce these risks and lost circulation materials will be on location. No well interference hazards exist. XI. NOTES MASP CALCULATIONS: The maximum Anticipated Surface pressure (MASP) for the intermediate casing is based on the highest exposed pore pressure less a column of 30%mud on top of 70% gas. The MASP for the production casing is based on pore pressure less the hydrostatic pressure of gas. Surface casing: 9 5/8" @ 1,668' TVD MASP = (FG + SF)*0.052*TVDs-(GG*TVDs) MASP = (18.8 ppg + 1.0 ppg) x .052 x 1,668' - (.115 x 1,668') MASP = 1,717 psi -192 psi MASP = 1 ,525 psi. Intermediate casing: 7" @ 3,535' TVD MASP = (PP*O .052*TVDtd)-(%mud*0 .052*TVDtd)-(%Gas*GG*TVDtd)) MASP = (8.6*0.052*8,000)) -(.3*0.052*9.5*8,000)-(.7*.115*8,000) MASP = 3,578-1,186-644 MASP = 1,748 psi Production @ 8,000' TVD MASP =PP*0.052*TVDf-(GG*TVDf) MASP =8.6*0.052*8,000 - (.115*8,000) MASP =3,578 - 920 MASP = 2,658 psi Tubulars All tubulars are new. Page 10 Ninilchik State #1 Drilling Prognosis.xls ') ) MARATHON Oil Company Ninilchik State #1 NS#l slot #1 Exploration Kenai Peninsula, Alaska PRO P 0 S ALL 1ST I N G by Baker Hughes INTEQ Your ref Our ref License NS#1 Version #5 prop5244 Date printed Date created Last revised 13-Jun-2002 13-Jun-2002 13-Jun-2002 Field is centred on n60 48 21.994,w150 49 18.963 Structure is centred on 226542.574,2246726.498,999.00000,N Slot location is n60 8 19.341,w151 29 39.407 Slot Grid coordinates are N 2245701.791, E 227619.565 Slot local coordinates are 1000.00 S 1100.00 E Projection type: alaska - Zone 4, Spheroid: Clarke - 1866 Reference North is True North ) ') MARATHON Oil Company PROPOSAL LISTING Page 1 Ninilchik State #l,NS#l Your ref NS#1 Version #5 Exploration,Kenai Peninsula, Alaska Last revised : 13-Jun-2002 Measured Inclin Azimuth True Vert RECTANGULAR Dogleg Vert G RID COO R D S Depth Degrees Degrees Depth COO R DIN ATE S Deg/100ft Sect Easting Northing 0.00 0.00 336.00 0.00 1000.00S 1100.00E 0.00 0.00 227619.57 2245701.79 250.00 0.00 336.00 250.00 1000.00S 1100.00E 0.00 0.00 227619.57 2245701.79 350.00 3.50 336.00 349.94 997.21S 1098.76E 3.50 3.05 227618.39 2245704.61 450.00 7.00 336.00 449.50 988.85S 1095.04E 3.50 12.20 227614.86 2245713.05 550.00 10.50 336.00 548.32 974.96S 1088.85E 3.50 27.41 227608.99 2245727.08 650.00 14.00 336.00 646.03 955.58S 1080.22E 3.50 48.63 227600.80 2245746.65 750.00 17.50 336.00 742.26 930.78S 1069.18E 3.50 75.77 227590.33 2245771.69 850.00 21.00 336.00 836.66 900.67S 1055.78E 3.50 108.73 227577.61 2245802.10 950.00 24.50 336.00 928.86 865.35S 1040.05E 3.50 147.40 227562.69 2245837.77 1050.00 28.00 336.00 1018.54 824.95S 1022.06E 3.50 191.62 227545.62 2245878.56 1150.00 31.50 336.00 1105.34 779.62S 1001.88E 3.50 241.23 227526.48 2245924.34 1250.00 35.00 336.00 1188.96 729.54S 979.58E 3.50 296.05 227505.32 2245974.91 1350.00 38.50 336.00 1269.07 674.89S 955.25E 3.50 355.88 227482.24 2246030.10 1450.00 42.00 336.00 1345.38 615.87S 928.98E 3.50 420.48 227457.31 2246089.70 1550.00 45.50 336.00 . 1417.61 552.71S 900.85E 3.50 489.62 227430.63 2246153.48 1650.00 49.00 336.00 1485.48 485.64S 870.99E 3.50 563.04 227402.30 2246221.21 1750.00 52.50 336.00 1548.74 414.90S 839.50E 3.50 640.47 227372.42 2246292.64 1850.00 56.00 336.00 1607.15 340.78S 806.49E 3.50 721.61 227341.11 2246367.50 1950.00 59.50 336.00 1660.51 263.53S 772.10E 3.50 806.17 227308.48 2246445.51 1964.29 60.00 336.00 1667.70 252.25S 767.08E 3.50 818.51 227303.72 2246456.89 2000.00 60.00 336.00 1685.56 224.00S 754.50E 0.00 849.44 227291.78 2246485.43 2500.00 60.00 336.00 1935.56 171.58N 578.38E 0.00 1282.45 227124.69 2246884.90 3000.00 60.00 336.00 2185.56 567.16N 402.26E 0.00 1715.47 226957.60 2247284.36 3500.00 60.00 336.00 2435.56 962.73N 226.13E 0.00 2148.48 226790.51 2247683.83 4000.00 60.00 336.00 2685.56 1358.31N 50. OlE 0.00 2581.49 226623.42 2248083.30 4500.00 60.00 336.00 2935.56 1753.89N 126.11W 0.00 3014.50 226456.33 2248482.77 5000.00 60.00 336.00 3185.56 2149.46N 302.23W 0.00 3447.52 226289.24 2248882.24 5500.00 60.00 336.00 3435.56 2545.04N 478.35W 0.00 3880.53 226122.14 2249281.71 6000.00 60.00 336.00 3685.56 2940.62N 654.48W 0.00 4313.54 225955.05 2249681.17 6028.88 60.00 336.00 3700.00 2963.47N 664.65W 0.00 4338.55 225945.40 2249704.25 6128.88 58.50 336.00 3751.13 3041.97N 699.60W 1. 50 4424.49 225912.24 2249783.53 6228.88 57.00 336.00 3804.49 3119.23N 734.00W 1. 50 4509.06 225879.61 2249861.55 6328.88 55.50 336.00 3860.04 3195.19N 767.82W 1.50 4592.21 225847.52 2249938.25 6428.88 54.00 336.00 3917.76 3269.79N 801.03W 1.50 4673.87 225816.01 2250013.59 6528.88 52.50 336.00 3977.59 3342.99N 833.62W 1. 50 4753.99 225785.09 2250087.50 6565.47 51.95 336.00 4000.00 3369.41N 845.39W 1. 50 4782.91 225773.93 2250114.18 - ifF T~~(i'"T" 6628.88 51.00 336.00 4039.49 3414.73N 865.5GW 1.50 4832.52 225754.79 2250159.95 6728.88 49.50 336.00 4103.44 3484.96N 896.83W 1.50 4909.40 225725.12 2250230.88 6828.88 48.00 336.00 4169.37 3553.64N 927.41W 1.50 4984.58 225696.11 2250300.23 6928.88 46.50 336.00 4237.25 3620.73N 957.28W 1.50 5058.01 225667.78 2250367.97 7028.88 45.00 336.00 4307.02 3686.16N 986.41W 1.50 5129.64 225640.14 2250434.05 7128.88 43.50 336.00 4378.65 3749.91N 1014.79W 1. 50 5199.42 225613.21 2250498.43 7228.88 42.00 336.00 4452.08 3811.92N 1042.40W 1. 50 5267.30 225587.02 2250561.05 7328.88 40.50 336.00 4527.26 3872.15N 1069.22W 1. 50 5333.23 225561.58 2250621.87 7428.88 39.00 336.00 4604.15 3930.56N 1095.23W 1.50 5397.17 225536.90 2250680.86 7528.88 37.50 336.00 4682.68 3987.12N 1120.41W 1. 50 5459.08 225513.01 2250737.97 7628.88 36.00 336.00 4762.80 4041.78N 1144.74W 1. 50 5518.91 225489.93 2250793.17 7728.88 34.50 336.00 4844.46 4094.50N 1168.22W 1.50 5576.62 225467.66 2250846.41 7828.88 33.00 336.00 4927.61 4145.25N 1190.81W 1. 50 5632.18 225446.22 2250897.66 7928.88 31.50 336.00 5012.18 4194.00N 1212.52W 1.50 5685.54 225425.63 2250946.89 All data in feet unless otherwise stated. Calculation uses minimum curvature method. Coordinates from NW Corner of Sec. 34, T1N, R13W, SM and TVD from Est. RKB (G-1) (185.00 Ft above mean sea level) . Bottom hole distance is 6767.31 on azimuth 336.00 degrees from wellhead. Total Dogleg for wellpath is 102.00 degrees. Vertical section is from wellhead on azimuth 336.00 degrees. Grid is alaska - Zone 4. Grid coordinates in FEET and computed using the Clarke - 1866 spheroid Presented by Baker Hughes INTEQ ) ) MARATHON Oil Company PROPOSAL LISTING Page 2 Ninilchik State #l,NS#l Your ref NS#1 Version #5 Exploration,Kenai Peninsula, Alaska Last revised : 13-Jun-2002 Measured Inclin Azimuth True Vert R E CTANGULAR Dogleg Vert G RID C OORDS Depth Degrees Degrees Depth C 0 o R DIN ATE S Deg/100ft Sect Easting Northing 8028.88 30.00 336.00 5098.11 4240.71N 1233.31W 1. 50 5736.67 225405.90 2250994.05 8128.88 28.50 336.00 5185.36 4285.34N 1253.19W 1. 50 5785.53 225387.04 2251039.13 8228.88 27.00 336.00 5273.86 4327.88N 1272.12W 1. 50 5832.09 225369.08 2251082.08 8328.88 25.50 336.00 5363.54 4368.28N 1290.11W 1.50 5876.32 225352.01 2251122.88 8428.88 24.00 336.00 5454.35 4406.53N 1307.14W 1.50 5918.18 225335.86 2251161. 51 8528.88 22.50 336.00 5546.23 4442.59N 1323.20W 1.50 5957.65 225320.62 2251197.92 8628.88 21. 00 336.00 5639.11 4476.44N 1338.27W 1.50 5994.71 225306.32 2251232.11 8693.89 20.02 336.00 5700.00 4497.25N 1347.53W 1.50 6017.49 225297.53 2251253.12 - T 2. 71'tf'i:4 ~ 8728.88 19.50 336.00 5732.93 4508.06N 1352.34W 1.50 6029.32 225292.97 2251264.04 8828.88 18.00 336.00 5827.62 4537.42N 1365.42W 1.50 6061. 46 225280.57 2251293.69 9000.00 18.00 336.00 5990.36 4585.73N 1386.93W 0.00 6114.34 225260.16 2251342.47 9500.00 18.00 336.00 6465.89 4726.88N 1449.77W 0.00 6268.85 225200.54 2251485.01 10000.00 18.00 336.00 6941.42 4868.03N 1512.62W 0.00 6423.36 225140.92 2251627.55 10500.00 18.00 336.00 7416.94 5009.18N 1575.46W 0.00 6577.87 225081.30 2251770.09 11000.00 18.00 336.00 7892.47 5150.33N 1638.30W 0.00 6732.38 225021.67 2251912.63 11113.06 18.00 336.00 8000.00 5182.25N 1652.51W 0.00 6767.31 225008.19 2251944.86 - -r; b. All data in feet unless otherwise stated. Calculation uses ~n1mum curvature method. Coordinates from NW Corner of Sec. 34, T1N, R13W, SM and TVD from Est. RKB (G-1) (185.00 Ft above mean sea level) . Bottom hole distance is 6767.31 on azimuth 336.00 degrees from wellhead. Total Dogleg for wellpath is 102.00 degrees. Vertical section is from wellhead on azimuth 336.00 degrees. Grid is alaska - Zone 4. Grid coordinates in FEET and computed using the Clarke - 1866 spheroid Presented by Baker Hughes INTEQ 1600.00W 13-Jun-2002 1300.00W 13-Jun-2002 850.00W 13-Jun-2002 5150.00N 4400.00N 3400.00N 8000.00 5700.00 4000.00 NS#l - TD Tgt - 6/13 NS#l - T2 Tgt - 6/13 NS#l - TE Tgt - 6/13 ----------------------------------------------------------------------------------------------------------- 0.00 0.00 1000.00S 1100.00E 1965.00 1668.06 251.69S 766.83E 9 5/8" Casing 0.00 0.00 1000.00S 1100.00E 5700.00 3535.56 2703.27N 548.80W 7 Casing 0.00 0.00 1000.00S 1100.00E 11113.06 8000.00 5182.25N 1652.51W 4 1/2 Liner Targets associated with this wellpath --------- ===---- Target name Geographic Location T.V.D. Rectangular Coordinates Revised ----------------------------------------------------------------------------------------------------------- 250.00 250.00 1000.00S 1100.00E KOP 1964.29 1667.70 252.25S 767.08E End of Build 6028.88 3700.00 2963.47N 664.65W End of Hold 6565.47 4000.00 3369.41N 845.39W TE Target 8693.89 5700.00 4497.25N 1347.53W T2 Target 8828.88 5827.62 4537.42N 1365.42W End of Drop 11113.06 8000.00 5182.25N 1652.51W TD Casing positions in string 'A' --~ -------- Top MD Top TVD Rectangular Coords. Bot MD Bot TVD Rectangular Coords. Casing ----------------------------------------------------------------------------------------------------------- Comment Rectangular Coords. TVD MD ------------------- -------- Comments in wellpath PROPOSAL LISTING Page 3 Your ref : NS#l Version #5 Last revised : 13-Jun-2002 MARATHON Oil Company Nini1chik State #l,NS#l Exploration,Kenai Peninsula, Alaska ) ) M MARATHON ..... ... ) ) Created by Sutherland For: S Lambe Dot. plotted: 13-Jun-2D02 Plot Reference is NSI1 Version 65. Coordinates are in feet reference slot N I. True Vertical Depth. ore reference E.t. RKB (0-1). Rill ~ INTEQ MARATHON Oil Company Structure : N1nilchlk State # 1 Well : NS# 1 Field: Exploration Location: Kenai Peninsula, Alaska <- West (feet) 3000 2500 2000 1500 500 1000 500 - Liner I~ QÇ5~ - K 0 P 0 ",;V? ~ Q ~ "Q' <:>Q <, . <:>Q ~. <:>C) ",;'" <:>Q ",;'ò' <:>C) ~. ~~Q<:>Q~ <:> <:>C>.J'r;) Ç5 ~X:) 9 - End of Build ~ o - 500 - DLS: 3.50 deg per 100 ft 1000- TE Target Casing End of Hold 7 Casing 1500 - 5/8 2000 - ~ 2500 - -+- ~ Q) TANGENT ANGLE Q) - 3000 - DEG (p '-" 60.00 ·0 ...I:: 0 -+- 0- ~ Q) 3500 - 7 Casing ~ 0 End of Hold 60ðg?50 0 4000 - TE Target 55.50 () 52.5u :.;:: 49.50 10... 46,50 Q) 43.50 > 4500 - 40.50 Q) OLS: 1.50 deg per 100 ft 37.50 ::J 34.50 L. I- 5000 - 31.50 I ---- WELL PROFILE DATA ---- 28.50 V 25.50 5500 - T2 Target 22.50 . ----- Point ----- MO Olr TVD E"'t v. Sect Oea/1 DO 19.50 End of Drop 18.00 6000 - 0.00 338.00 0.00 0.00 End of Hold 260.00 0,00 338.00 250.00 0.00 0.00 6500 - End of BuIld 1a6-l.29 80.00 1667.70 7.7.75 -332.92 818.5\ 3.50 TARGET ANGLE 7000 - 18.00 DEG End of Drop 0828.8/1 '8.00 338.00 =7.82 ~3H2 -2'~..2 8De1..8 1.50 7500 - T ,D, a- end of Hold 18.00 338.00 8000.00 8182.23 -2732.31 8787.31 0.00 8000 - 4 1/2 Liner ~\ TD 8500 500 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 7000 7500 o Vertical Section (feet) -> Azimuth 336.00 with reference 0.00 Nt 0.00 E from slot # 1 o 6500 - 6000 - 5500 - 5000 - 4500 - 4000 ^ I - 3500 Z 0 """I -+- - 3000 ::r ~ -+. CD - 2500 CD -+- '-" - 2000 - 1500 - 1000 - 500 - 0 ) ) MARATHON Oil Company Ninilchik State #1 NS#l slot #1 Exploration Kenai Peninsula, Alaska PRO P 0 S ALL 1ST I N G by Baker Hughes INTEQ Your ref Our ref License NS#l Version #5 prop5244 Date printed Date created Last revised l3-Jun-2002 l3-Jun-2002 l3-Jun-2002 Field is centred on n60 48 21.994,w150 49 18.963 Structure is centred on 226542.574,2246726.498,999.00000,N Slot location is n60 8 19.341,w15l 29 39.407 Slot Grid coordinates are N 2245701.791, E 227619.565 Slot local coordinates are 1000.00 S 1100.00 E Projection type: alaska - Zone 4, Spheroid: Clarke - 1866 Reference North is True North ') ) MARATHON Oil Company PROPOSAL LISTING Page 1 Ninilchik State #l,NS#l Your ref NS#l Version #5 Exploration,Kenai Peninsula, Alaska Last revised : 13-Jun-2002 Measured Inclin. Azimuth True Vert RECTANGULAR Dogleg Vert Depth Degrees Degrees Depth COO R D I NATES Deg/100ft Sect 0.00 0.00 336.00 0.00 0.00 N 0.00 E 0.00 0.00 250.00 0.00 336.00 250.00 0.00 N 0.00 E 0.00 0.00 KOP 350.00 3.50 336.00 349.94 2.79 N 1. 24 W 3.50 3.05 450.00 7.00 336.00 449.50 11.15 N 4.96 W 3.50 12.20 550.00 10.50 336.00 548.32 25.04 N 11 . 15 W 3.50 27.41 650.00 14.00 336.00 646.03 44.42 N 19.78 W 3.50 48.63 750.00 17.50 336.00 742.26 69.22 N 30.82 W 3.50 75.77 850.00 21. 00 336.00 836.66 99.33 N 44.22 W 3.50 108.73 950.00 24.50 336.00 928.86 134.65 N 59. 95 W 3.50 147.40 1050.00 28.00 336.00 1018.54 175.05 N 77 . 94 W 3.50 191. 62 1150.00 31.50 336.00 1105.34 220.38 N 98.12 W 3.50 241.23 1250.00 35.00 336.00 1188.96 270.46 N 120.42 W 3.50 296.05 1350.00 38.50 336.00 1269.07 325.11 N 144.75 W 3.50 355.88 1450.00 42.00 336.00 1345.38 384.13 N 171. 02 W 3.50 420.48 1550.00 45.50 336.00 1417.61 447.29 N 199.15 W 3.50 489.62 1650.00 49.00 336.00 1485.48 514.36 N 229.01 W 3.50 563.04 1750.00 52.50 336.00 1548.74 585.10 N 260.50 W 3.50 640.47 1850.00 56.00 336.00 1607.15 659.22 N 293.51 W 3.50 721.61 1950.00 59.50 336.00 1660.51 736.47 N 327.90 W 3.50 806.17 1964.29 60.00 336.00 1667.70 747.75 N 332.92 W 3.50 818.51 End of Build 2000.00 60.00 336.00 1685.56 776.00 N 345.50 W 0.00 849.44 2500.00 60.00 336.00 1935.56 1171.58 N 521.62 W 0.00 1282.45 3000.00 60.00 336.00 2185.56 1567.16 N 697.74 W 0.00 1715.47 3500.00 60.00 336.00 2435.56 1962.73 N 873.87 W 0.00 2148.48 4000.00 60.00 336.00 2685.56 2358.31 N 1049.99 W 0.00 2581.49 4500.00 60.00 336.00 2935.56 2753.89 N 1226.11 W 0.00 3014.50 5000.00 60.00 336.00 3185.56 3149.46 N 1402.23 W 0.00 3447.52 5500.00 60.00 336.00 3435.56 3545.04 N 1578.35 W 0.00 3880.53 6000.00 60.00 336.00 3685.56 3940.62 N 1754.48 W 0.00 4313.54 6028.88 60.00 336.00 3700.00 3963.47 N 1764.65 W 0.00 4338.55 End of Hold 6128.88 58.50 336.00 3751.13 4041.97 N 1799.60 W 1.50 4424.49 6228.88 57.00 336.00 3804.49 4119.23 N 1834.00 W 1.50 4509.06 6328.88 55.50 336.00 3860.04 4195.19 N 1867.82 W 1.50 4592.21 6428.88 54.00 336.00 3917.76 4269.79 N 1901.03 W 1.50 4673.87 6528.88 52.50 336.00 3977.59 4342.99 N 1933.62 W 1.50 4753.99 6565.47 51.95 336.00 4000.00 4369.41 N 1945.39 W 1.50 4782.91 TE Target 6628.88 51. 00 336.00 4039.49 4414.73 N 1965.56 W 1.50 4832.52 6728.88 49.50 336.00 4103.44 4484.96 N 1996.83 W 1.50 4909.40 6828.88 48.00 336.00 4169.37 4553.64 N 2027.41 W 1. 50 4984.58 6928.88 46.50 336.00 4237.25 4620.73 N 2057.28 W 1.50 5058.01 7028.88 45.00 336.00 4307.02 4686.16 N 2086.41 W 1.50 5129.64 7128.88 43.50 336.00 4378.65 4749.91 N 2114.79 W 1.50 5199.42 7228.88 42.00 336.00 4452.08 4811.92 N 2142.40 W 1.50 5267.30 7328.88 40.50 336.00 4527.26 4872.15 N 2169.22 W 1.50 5333.23 7428.88 39.00 336.00 4604.15 4930.56 N 2195.23 W 1. 50 5397.17 7528.88 37.50 336.00 4682.68 4987.12 N 2220.41 W 1.50 5459.08 7628.88 36.00 336.00 4762.80 5041.78 N 2244.74 W 1.50 5518.91 7728.88 34.50 336.00 4844.46 5094.50 N 2268.22 W 1.50 5576.62 7828.88 33.00 336.00 4927.61 5145.25 N 2290.81 W 1.50 5632.18 7928.88 31.50 336.00 5012.18 5194.00 N 2312.52 W 1. 50 5685.54 All data is in feet unless otherwise stated. Coordinates from slot #1 and TVD from Est. RKB (G-1) (185.00 Ft above mean sea level) . Bottom hole distance is 6767.31 on az~uth 336.00 degrees from wellhead. Total Dogleg for wellpath is 102.00 degrees. Vertical section is from wellhead on az~uth 336.00 degrees. Calculation uses the min~um curvature method. Presented by Baker Hughes INTEQ 'I J ') MARATHON Oil Company PROPOSAL LISTING Page 2 Ninilchik State #l,NS#l Your ref NS#l Version #5 Exploration,Kenai Peninsula, Alaska Last revised : 13-Jun-2002 Measured Inclin. Azimuth True Vert R E CTANGULAR Dogleg Vert Depth Degrees Degrees Depth C 0 o R DIN ATE S Deg/100ft Sect 8028.88 30.00 336.00 5098.11 5240.71 N 2333.31 W 1.50 5736.67 8128.88 28.50 336.00 5185.36 5285.34 N 2353.19 W 1.50 5785.53 8228.88 27.00 336.00 5273.86 5327.88 N 2372 . 12 W 1.50 5832.09 8328.88 25.50 336.00 5363.54 5368.28 N 2390.11 w 1.50 5876.32 8428.88 24.00 336.00 5454.35 5406.53 N 2407.14 W 1.50 5918.18 8528.88 22.50 336.00 5546.23 5442.59 N 2423.20 W 1.50 5957.65 8628.88 21. 00 336.00 5639.11 5476.44 N 2438.27 W 1.50 5994.71 8693.89 20.02 336.00 5700.00 5497.25 N 2447.53 w 1.50 6017.49 T2 Target 8728.88 19.50 336.00 5732.93 5508.06 N 2452.34 W 1.50 6029.32 8828.88 18.00 336.00 5827.62 5537.42 N 2465.42 W 1.50 6061.46 End of Drop 9000.00 18.00 336.00 5990.36 5585.73 N 2486.93 W 0.00 6114.34 9500.00 18.00 336.00 6465.89 5726.88 N 2549.77 w 0.00 6268.85 10000.00 18.00 336.00 6941.42 5868.03 N 2612.62 W 0.00 6423.36 10500.00 18.00 336.00 7416.94 6009.18 N 2675.46 w 0.00 6577.87 11000.00 18.00 336.00 7892.47 6150.33 N 2738.30 w 0.00 6732.38 11113.06 18.00 336.00 8000.00 6182.25 N 2752.51 W 0.00 6767.31 TD All data is in feet unless otherwise stated. Coordinates from slot #1 and TVD from Est. RKB (G-1) (185.00 Ft above mean sea level). Bottom hole distance is 6767.31 on azimuth 336.00 degrees from wellhead. Total Dogleg for wellpath is 102.00 degrees. Vertical section is from wellhead on azimuth 336.00 degrees. Calculation uses the minimum curvature method. Presented by Baker Hughes INTEQ ) '> MARATHON Oil Company Ninilchik State #l,NS#l Exploration,Kenai Peninsula, Alaska PROPOSAL LISTING Page 3 Your ref NS#l Version #5 Last revised : 13-Jun-2002 Comments in wellpath ======- Me TVD Rectangular Coords. Comment ----------------------------------------------------------------------------------------------------------- 250.00 250.00 0.00 N 0.00 E KOP 1964.29 1667.70 747.75 N 332.92 W End of Build 6028.88 3700.00 3963.47 N 1764.65 W End of Hold 6565.47 4000.00 4369.41 N 1945.39 W TE Target 8693.89 5700.00 5497.25 N 2447.53 W T2 Target 8828.88 5827.62 5537.42 N 2465.42 W End of Drop 11113.06 8000.00 6182.25 N 2752.51 W TD Casing positions in string 'A' Top Me Top TVD Rectangular Coords. Bot Me Bot TVD Rectangular Coords. Casing ----------------------------------------------------------------------------------------------------------- 0.00 0.00 0.00 0.00 0.00 0.00 O.OON O.OOE 1965.00 1668.06 748.31N 333.17W 9 5/8" Casing O.OON O.OOE 5700.00 3535.56 3703.27N 1648.80W 7 Casing O.OON O.OOE 11113.06 8000.00 6182.25N 2752.51W 4 1/2 Liner Targets associated with this wellpath Geographic Location T.V.D. Rectangular Coordinates Revised Target name ----------------------------------------------------------------------------------------------------------- NS#l - TD Tgt - 6/13 NS#l - T2 Tgt - 6/13 NS#l - TE Tgt - 6/13 8000.00 5700.00 4000.00 6150.00N 5400.00N 4400.00N 2700.00W 2400.00W 1950.00W 13-Jun-2002 13-Jun-2002 13-Jun-2002 ~ 13'~ ...~,...~ J I iX1 I ,Id: I 0 t. ;~ .. J ~ ;~: I R~ J '5W 9l >0' J .=.: 5V 9... 11-600 PT I I A-600 PT I ' , I , , ~ -[i1 I I ~JP i ~ - I 6X~ I ~ ~ I U· . 1 . : ut s 8 . " ~ I ! ...... . . . T "t . ., . ì J 5.. GTA1IR [':.1. J M-h I~: ~. ~ I.... C . - - . " ... PI.L PIT' I I 1 r-----ì I f I L________ ¡ I I CENTRIFUGE! I I UNIT I I " I 4' X 10" I I . I I I I I I I I r I I I I DlJ4P t I I - I I I () I I ....--..., I ..... I I/~IRBDY' L__,___J IIDEGASSER) I' I '" ¿I I ~ I ....-- II ~------t ~-----~: r I t..__.J U J I 1 1 j I ,--' 11 I 1 r I II I I ~ I II I 'I f ~ l 11 I I œ 1>1« IJI I ~ t I ~ '" 4: I I ~ " 1 I ~ f I ~ II I J :!II: 1~1 I tll 1 Ø!: t I U I I e=I I I II I L_____J L__ ___J I r---,..-----,.-ì I " I IUP\) .....'oJ I , L. I I I 1.4t...... -49.... ~ "--- 12' x KCDIoW 3' , 14'-0' ~ 7S HP , X 5 W : ,J !l 4 , ... .. . ,. . I :J II' _ATEJI t 7'5HP 6)(5 U· .. ~ ;8 ~. 75HP 6 X 5' 11- ~ :Ht IIJI 'lID&( .. . , ....ç < KIll TIIIIif \.. 121 1/4" 2M Diverter I ~ I Diverter Spool / 116" Automatic Hydraulic Knife Valve ) ¡ ': ,:::0: ( ) Marathon Oil Ninilchik State # 1 Diverter ~ I I ...... ~ ,/ I I '\ ) I Flow line 116" Diverter Line I Flow Nipple I 13 5/8" 5M Annular Preventer 13 5/8" 5M Double Ram Preventer I ------. 2 1/16" 5M Manually I Operated Valves ') Marathon Oil Ninilchik State # 1 BOP Stack ) .. I Flow Line I I ~ ~ / I I I I ) < I Pipe Ram I I Blind Ram I 3 1/8" 5M Hydraulically Operated Valve < I /1 ,¡ IChoke(J®[Ixl t ) I I \ < I I í ) ~~ :~ IXI[XlIXl)Kill I \21/16115MCheck ~:/ ': Valve ) < 113 5/8" 5M Cross I I Pipe Ram I 135/8" 5M Single ~ Ram Preventer 3 1/8" 5M Manually Operated Valve ) Marathon Oil Ninilchik State #1 Choke Manifold ') ITO Gas Buster To Blooey Line Bleed off Line to Shakers r----\ I I ~ I I , I I I I \..-1 r-'I ~ I~ r----\ I I ~ , I ~~: ø ~ 8 ]@[]@C 0 ]@[J0C 'I IL-JI i I I r-'I ø q I I ( 'I I I L-J r-'I I I t 13" 5M Valves 29/16" 10M Swaco Hydraulically Operated Choke ~ I From BOP Stack 3 1/8" 5M Manually Adjustable Choke ) ) SURFACE USE PLAN FOR Ninilchik State # 1 Surface Location: NW 1/4, Sec. 34, T1 N, R13W, S.M. 1. Existing Roads The Sterling Highway will be used for access to the Ninilchik State well site and is shown on the attached map. Ninilchik, Alaska is the nearest town to the site. 2. Access Roads to be Constructed or Reconstructed A new pad and access road will be permitted, and constructed for this program. 3. Location of Existing Wells There are no existing wells in the near vicinity of the proposed pad location. 4. Location of Existing and/or Proposed Facilities No facilities are proposed at this time, however, a gravel drilling pad will be required. 5. Location of Water Supply A water well will be drilled from the pad to a point below any local potable drinking water sources as stipulated. 6. Construction Materials Gravel will be required for the drilling site and possibly the access road. 7. Method of Handling Waste Disposal a) Mud and Cuttings Cuttings will be dewatered on location. The cuttings and excess mud will be hauled to Pad 41-18 in the Kenai Gas Field for disposal into Well KU 11-17, a Class" disposal well (AOGCC Disposal Injection Order No.9, Permit #81-176). M :\W ells\Ninilchik\Ninilchik State\SU R FUSE.doc Surface Use Plan Ninilchik State # 1 Page 2 ) ') b) Garbage All household and approved industrial garbage will be hauled to the Kenai Peninsula Borough Soldotna Landfill. c) Completion Fluids Clear fluids will be hauled to Pad 34-31 of the Kenai Gas Field and injected in Well WD #1, an approved disposal well (AOGCC Permit #7-194). d) Chemicals Unused chemicals will be returned to the vendor who provided them. Efforts will be made to minimize the use of all chemicals. e) Sewage Sewage will be hauled to the Kenai sanitation facility. 8. Ancillary Facilities A minimal camp will be established on the pad to house various supervisory and service company personnel. Approximately four trailer house type structures will be required for this purpose. Bottled water will be used for human consumption. Potable water will be obtained from the water well on the pad. S & R will collect and transport sanitary wastes to their ADEC approved disposal facility. No additional structures will be necessary. 9. Plans for Reclamation of the Surface Reclamation of the pad, if required by the landowner, will occur after abandonment of all wells. 10. Surface Ownership The State of Alaska is the surface owner of the land at the Ninilchik State pad. 11. Operator's Representative and Certification I hereby certify that I, or persons under my direct supervision, have inspected the proposed drill site and access route; that I am familiar with the conditions that currently exist; that the statements made in this plan are, to the best of my knowledge, true and correct; and that the work associated with operations proposed herein will be performed by Marathon Oil Company and its contractors and M :\W ells\Ninilchik\Ninilchik State\SU R FUS E.doc Surface Use Plan Ninilchik State # 1 Page 3 ) ) subcontractors in conformity with this plan and the terms and conditions under which it is approved. This statement is subject to the provisions of 18 U.S.C. 1001 for the filing of a false statement. Name & Title: --~ Marathon Oil Company P. O. Box 196168 Anchorage, Alaska 99519-6168 (907) 564-6332 Senior Drilling Engineer Date: June 14, 2002 M:\Wells\Ninilchik\Ninilchik State\SU RFUSE.doc ') ) R14W R13W Marathon Ninilchik State 1 PTD 10,973' MD f MCG1 -¢- T 1 5 o I 3 I ~i l /:~¡~t! ' I':-'I'~ ~ I MILES STUCTURE TYONEK T2 CI = 500' MARATHON OIL COMPANY ALASKA REGION Marathon Ninilchik State 1 Location COOK INLET, ALASKA June 2002 o:freehand\ninilchik\ninst1_loc. fh9 Marathon Oil Company Ninilchik State 1 Location June 2002 -' .~ ...¡ LJI 1 " , .. ,. ~ ·/.J/~ - Sterrng -'.. . i . . Ilighw:ay , -_t~~,:,~",.: 7 / '_'lN~PW 0 "-c¡, Jti.. - ~, + + . ..J';¡:7.". //.....' BHL r r/ ~ / / + I /, + / M~ rathoo s~~/~ J ~hil~hik S~at~ 1 " /J'~ ~/ >1 . / '0. ,.J,I .,. -,-- .. ../'" /'f i/ + , ' " // ~,·,'I"'I /;' I - . I~, / . / +1 J/'. .. .ON". ,. ':- ¡.¡~~ .., , ( '- ~ ,. , ... ~ - f¡~¿¡ ~ ~ ...... .... ,I , "-Q. j~ + Ö'¡<~""""->"~:<ð~' r I _^ J I - " I ~ ( ';J ~ . ; , \) :. ~D'Q -'¥ 0( /~. G ,. , .. . .. -".1 ~ ," .. Tlï~R 13W .. ·r + .' . T'~N~- ~ 13W+ NI" ILCHIK ... ~ , ~ ... 1V_~ar¡: tho ~ , . l'inikhiÁ E x-J 1'0 J;a tio Ii + U _it :..I -.J+ +, š ) ~ Ninilchik State Surface Lócation located at Mile 126.5 Sterling ...)ighWay. ) ') DRilliNG FLUIDS M-I Drilling Fluids L.L.C. 721 West First Avenue Anchorage, Alaska 99501 Phone (907) 274-5564 Fax (907) 2709-6729 Marathon Oil Company PO Box 190168 Anchorage, Alaska 99519 ATTN: Steve Lambe Steve; Enclosed is the recommended drilling fluid program for Well Nini1chik State #1 to be drilled next year. The following is a brief synopsis of the program. Overview: Ninilchik State #1 is a grassroots exploration well targeting the Tyonek formation in a Ninilchik field. A 13-3/8" conductor will be driven to +/- 120'. The 12-1/4" interval will be directionally drilled to +/- 1965' MD. After setting the 9-5/8" casing, an 8-1/2" hole will be directionally drilled to 5700' MD . After setting 7" casing, a 7" hole will be then drilled to 11113' MD. A 4-1/2" liner will then be run and cemented. Completion procedures will follow. Surface Interval: This interval will be drilled with a typical GellGelex spud mud. Polypac UL should be used to control fluid loss. Due to the high angle of this interval (60 degrees at T.D.), plan on a 1 - 2% concentration of Lubetex to aid in directional work and angle building. Maintain mud weight as low as possible through dilution and utilization of all solids control equipment as needed. Intermediate Interval: This interval will be drilled with the standard FloPro fluid with 60/0 KCl. SafeCarb Fine & Medium (20 ppb), will be used to prevent fluid losses to the formation. A mud w'eight of 9.5 PPG is anticipated and should be achieved with barite additions and not drill solids. Wellbore stability (sloughing coal) will be handled with 2 PPB concentrations of Ventrol 401 and As- phasol D (Soltex). 1-2% Lubetex addition may be required to aid in sliding and torque reduction. Clean, brand new fluid should be spotted in the open hole prior to running the 7" casing. This fluid can be recovered during cementing and utilized in the production interval. Production Interval: This interval will also use the standard FloPro fluid with 6% KCl. Plan on recovering as much of the intennediate fluid as economically possible for use in this interval. Mud weights of 9.5 PPG are antici- pated. Twenty ppb of SafeCarb Fine & Medium will be used to reduce fonnation losses. Fluid loss should be maintained between 6 - 8 cc' s API for this interval. Lubetex additions may be required to reduce torque & drag. Tony Tykalsky Project Engineer, M-I Drilling Fluids ') ) Drilling Fluids Program MARATHON OIL COMPANY Well Ninilchik State #1 Kenai, Alaska Prepared by: Tony Tykalsky Reviewed by: Lee Dewees Presented to: Steve Lambe August 22nd, 2002 M-I Drilling Fluids L.L.c. 721 West First Avenue Anchorage, Alaska 99501 (907) 274-5564 (907) 279-6729 Fax ~ DRILLING r .... FLUIDS t ~ ) ') Interval Summary 12-1/4" hole Well Ninilchik State #1 o -1965' ~ Drilling Fluid System Gel/Gelex Spud Mud .. Key Products MI Gel I Gelex I Soda Ash I Caustic Soda I MI Bar I Drilling Deter- gent I Polypac UL I Desco CF I Lubetex Solids Control Shale Shakers I Desilter Potential Problems Hole cleaning, bit balling, difficulty building angle, drill solids buildup Interval Drilling Fluid Properties Depth Interval (ft) 0-1965' Mud Weight (ppg) 8.8 -9.2 Plastic Viscosity (cp.) 8 -12 Funnel Viscosity (sec/qt) 75 - 50 API Fluid Loss (mIl30min) NC - 10 pH Drill Solids (% ) +1- 5% 9.0- 9.5 · Fill wellbore and one surface pit with drillwater. · Treat drill water with Soda Ash to reduce hardness. · Build spud mud with 20 - 25 PPB M-I Gel, add gelex for a funnel visocsity of 75 sec/qt. · Lower funnel viscosity to 50 - 60 after gravel zone has been drilled. · Increase funnel viscosity if fill on connections begins to occur. · Reduce fluid loss with additions of Polypac Supreme UL prior to running surface casing. · Add 2 - 5 PPB ofM-I Seal Fine to mud system if seepage losses becomes a problem.. · Add Lubetex as needed to aid in hole building and directional control. · Condition mud prior to cementing casing to reduce yield point and gel strengths. · Estimated volume usage for interval- 1550 barrels. M-I Drilling Fluids L.L.c. 721 West First Avenue Anchorage, Alaska 99501 (907) 274-5564 (907) 279-6729 Fax ~ DRILLING r ~ FLUIDS ) ) Interval Summary - 8-1/2" hole Well Ninilchik State #1 1965 -5700' I i Drilling Fluid System 6% KCI FloPro System Estimated Proosity - 5 - 40 mDarcy Key Products Flo- Vis, DualFlo, KCI, Barite, Lubetex, Ventrol 40 I, Asphasol D SafeCarb F & M / Conqor 404 / Drilling Detergent, Lubetex Solids Control Shale Shakers / Desilter / Centrifuge i'" Potential Problems Coal sloughing, drill solids buildup, seepage losses, bit balling, high torque & drag Interval Drilling. Fluid Properties Depth Interval (ft) 1965 - 4000' 4000 - 5700' Mud Weight (ppg) 9.0-9.5 9.0-9.5 Plastic Viscosity (cp.) 8 -12 10 - 14 Yield Point (lb./lOOft2) 15 - 20 15 - 20 API Fluid Loss (mI/30min) 8 -10 +/- 8 pH .Drill Solids (% ) +/ - 5% +/ - 5% 9.0-9.5 9.0-9.5 · Isolate one pit with drill water to accomplish the abandonment. · Clean other rig pits and build new 6% KCI FloPro fluid using the following fonnula. · Drill water; 21 PPB KCI; 0.25 PPB Greencide 25G; 2 PPB DualFlo; 2 PPB Flo- Vis; Caustic Soda for 9.0 - 9.5 pH, 0.5 PPB Conqor 404 for 2000 ppm, 15 PPB SafeCarb F, 5 PPB SafeCarb M, 2 PPB Ventrol 401; 2 PPB Asphasol D; Lubetex for torque & drag · Increase additions of DualFlo to reduce API fluid to 8 cc's below 4000'. · Maintain Conqor 404 concentration at +/ - 2000 ppm. · Increase Ventrol 401 and Asphasol D concentrations if running coal becomes a problem. · Centrifuge surface system during trips to aid in removing drill solids. · Build and spot new fluid in open hole (+/- 227 bbls) with 2% Lubetex prior to running 7" cas- mg. · Estimated volume usage for interval - 1593 barrels. M-I Drilling Fluids L.L.c. 721 West First Avenue Anchorage, Alaska 99501 (907) 274-5564 (907) 279-6729 Fax ~ DRILLING , ~ FLUIDS ) ) Interval Summary - 7" hole Well Ninilchik State #1 5700 -11113' Drilling Fluid System 6% KCl FloPro System Estimated Proosity - 5 - 40 mDarcy Key Products Flo- Vis, DualFlo, KCl, Barite, Ventrol 401, Lubetex, Asphasol D _I SafeCarb F & M, Conqor 404, Drilling Detergent, KlaGuard Solids Control Shale Shakers / Desilter / Centrifuge Potential Problems Coal sloughing, drill solids buildup, seepage losses, bit balling, high torque & drag 'I .1 Interval Drilling Fluid Properties Depth In terval (ft) 5700 - 11113' .Plastic Viscosity (cp.) 10 - 14 9.0-9.5 Yield API Point Fluid Loss (lb.!100ft2) (mI/30min) 15 - 20 6 - 8 pH Drill Solids (% ) +/- 5% , Mud Weight (ppg) 9.0- 9.5 · Isolate one pit with intermediate fluid to drill out cement. Try and recover as much intermedi- ate fluid as economically feasible to use on this interval. As needed, build additional volume usilizing the following formula. · Drill water; 21 PPB KCl; 0.25 PPB Greencide 25G; 2 PPB DualFlo; 2 PPB Flo-Vis; Caustic Soda for 9.0 - 9.5 pH, 0.5 PPB Conqor 404 for 2000 ppm, 15 PPB SafeCarb F, 5 PPB SafeCarb M, 2 PPB Ventrol401; 2 PPB Asphasol D; Lubetex for torque & drag · Maintain Conqor 404 concentration at +/- 2000 ppm. · Increase Ventrol 401 and Asphasol D concentrations if running coal becomes a problem. · If swabbing becomes a problem, condition mud (reduced rheology) and add 1- 2 % KlaGuard · Centrifuge surface system during trips to aid in removing drill solids. · Add 1 - 2 drums of Drilling Detergent if bit balling becomes a problem. · Estimated volume usage for interval - 1182 barrels. M-I Drilling Fluids L.L.c. 721 West First Avenue Anchorage, Alaska 99501 (907) 274-5564 (907) 279-6729 Fax P""f-j DRilLING , ~ FLUIDS ¡-;-'..; ->~.: :'- - , .. - ,. ,-. =-.,ni"¡132öitREV:4!gj ,; Pay töthß';orderÔf: Commission / .. ~¡Oi , MATCH AMOU.NT IN , WORDS WITH. NUMBERS , ï /$ , roo ~ÆrO..' , . ~ . -_ _ c __ One Hundr:ed DollarS and~ö'~C~nt:~s N A 1:,1 :~~~·~~~~~~..:~A~:~~:'::&'.'~IÚm'.'~'''(~~~'i'V¡!'''¡i~¡;Mf'ji;ij"('ilf~~!t~1!!¡¡;J¡:~! VOID AFTER'180DAY$':' -/ 11100 ~ 5 B 1..111 I:. 2 5 2000 5 71: 0 .1110 7 B 5 b 9111 ~,~:~~~ {~~~~~Ji~I~~~ ,6/ 18iioº~~c-_. j -.,--~-_~--,j-tçtQ ~_ ~_______u_____~~~__ _ __~ ____ '~__'__h'_ ,i<:;\o::i:,¿;{r-:n~rO)J,'~~(e~,~~~~~~rr~~tf~Ji' '-. tk~i~'t{flÁ~~t~Yj;mmt~m~l ) F¡LI)O;~~ïì\8U= ~~:~~~~____'_~__~_m_J _ 'm ¡':iT"jl{ INDICATE SERVICES I ..- ,- _~_~_~___u ~'_h__'_'_'__"__________ on I~~~~C?'~' ';:¡O;~-~~~~ÖYEE CÓM~,- ¡-- 'l~~~..~~~.~~~~~ Filling Fee for Permit to DriLL 'N'i-l1i.:Lchik State #1 "- RECEIVED JUN 1 9 2002 Alaska Oil & Gas Cons. CommtSSIOi; Anchorage ) ') TRANSMIT AL LETTER CHECK LIST CIRCLE APPROPRIATE LETTERlPARAGRAPHS TO BE INCLUDED IN TRANSMITTAL LETTER WELL NAME Ai~,lc-4;£ .<;j¿;;Ä :#í 202, ----/30 PTD# CHECK WHAT APPLIES ADD-ONS (OPTIONS) MULTI LATERAL (If API number last two (2) digits are between 60-69) "CLUE" The permit is for a new wellbore segment of existing well Permit No, API No. Production should continue to be reported as a function' of the original API number, stated above. HOLE In accordance with 20 AAC 25.005(1), all records, data and logs acquired for the pilot hole must be clearly differentiated in both name (name on permit plus PH) and API number (SO 70/80) from records, data and logs acquired for well (name on permit). PILOT (PH) SPACING EXCEPTION / DRY DITCH SAMPLE Rev: 07/10/02 C\jody\templates The permit is approved subject to full compliance with 20 AAC 25.055. Approval to peñorate and produce is contingent upon issuance of a conservation order approvin,g a spacing , exception. (Company Name) assumes the liability of any protest to the spacing exception that may occur. All dry ditch sample sets submitted to the Commission must be in no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. ~ ~ c.kd...!t6/- ~ abrh~if .þJCf ~v¿ /~. A WELL PERMIT CHECKLI~ COMP ANY MARATHON FIELD & POOL Exploratory WELL NAME Ninilchik State 1 Initial Class/Type EXP I-GAS ADMINISTRATION 1. Permit fee attached. 2. Lease number appropriate. 3. Unique well name and number. 4. W ell located in a defined pool. 5. Well located proper distance from drilling unit boundary. 6. W ell located proper distance from other wells. APPR DATE 7. Sufficient acreage available in drilling unit. 8. If deviated, is wellbore plat included. 9. Operator only affected party. 10. Operator has appropriate bond in force. 11. Permit can be issued without conservation order. SFD 10/20/2002 12. Permit can be issued without administrative approval. 13. Can permit be approved before 15-day wait. 14. ACMP Finding of Consistency has been issued for this project ENGINEERING 15. Conductor string provided 16. Surface casing protects all known USDWs. 17. CMT vol adequate to circulate on conductor & surf csg. 18. CMT vol adequate to tie-in long string to surf csg. 19. CMT will cover all known productive horizons. 20. Casing designs adequate for C, T, B & permafrost. 21. Adequate tankage or reserve pit. 22. If a re-drill, has a 10-403 for abandonment been approved. 23. Adequate wellbore separation proposed. 24. If diverter required, does it meet regulations 25. Drilling fluid program schematic & equip list adequate DATE 26. BOPEs, do they meet regulation 27. BOPE press rating appropriate; test to 3000 psig. 11/21/200228. Choke manifold complies w/API RP-53 (May 84) 29. Work will occur without operation shutdown. 30. Is presence of H2S gas probable. 31. Permit can be issued w/o hydrogen sulfide measures. 32. Data presented on potential overpressure ?ones 33. Seismic analysis of shallow gas zones. 34. Seabed condition survey (if off-shore) 35. Contact name/phone for weekly progress reports [exploratory only] APPR TEM ~ "ft// GEOLOGY APPR DATE SFD 6/21/02 GEOLOGY: ENGINERING: TEM:1!2 !J1JJ t~ -;}- \ WGA: COMMISSION: RPC: COT: SFD: SFD DTS: MLB: PROGRAM: Exploritory (EXP).....!.... Development (DEV)_ Redril_ Service (SER)_ Well bore seg_ Annular disposal para req_ GEOL AREA 820 UNIT No. 051432 ON/OFF SHORE On Yes Yes Yes. No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes No No No No Surface location in ADL 384305, Top Prod Int and TD in ADL 389180. Undefined, exploratory gas pool within the Tertiary-aged Tyonek Formation. Property line nearest to the target zone is ADL 389180 / 384305 boundary, across which ownership & landownership do not change.* Nearest well is MGO #2 BHL, which is 4000' away. Only well within Section 34. 1 , 6-26-02: C.UndelWood: Application in progress. 9-20-2002: Nina Brudie: Project deemed consistent on 9/17/2002SFD 6/26/02: Requested justification from S. Lambe. 8-12-02: Received justification. Surface casing set at 1965' MD (1668' TVD) will lie within water having calculated salinity in offset wells between 1000 and 5300 ppm TDS. For surface casing to be set in water> 1 0,000 ppm, it would have to be set at approximately 5,000' MD (about 3,185' TVD). Surface casing set at 1965' MD (1668' TVD) and cemented to surface meets the intent of20 AAC 25.030 (c)(3) to protect strata that are known or potential sources of drinking water.**SF) NA Received mud program on November 20, program is similar to others Marathon has employed. MASP estimated at 2658 psi. (' H2S is not anticipated Normal pressure gradient expected Not applicable; delineation well Not applicable; onshore well S. Lambe, 907-564-6332 Comments/Instructions **Surface casing will be set at ~ 1965' MD (1668' TVD) in the Beluga Formation. Deepest water well registered with DNR in vicinity is 276' (all others are less than 160'), and deepest water well in S. Kenai Penninsula is <500'. Although the estimated salinity at the proposeè casing shoe is less than the 10,000 ppm freshwater cut-off, Marathon's proposed casing program meets the intent of the casing regulations because water at this depth is not now an economically feasible source of drinking water, nor will it be in the forseeable future SFD * ADDITIONAL TEXT FOR APPROVAL LETTER: "This permit authorizes perforating, testing and production from depths greater than the top of the Tyonek T -1 geologic marker. Operator must notify AOGCC in advance of any perforation operation at shallower depth."