CALIFORNIAWATERCODETECHNICALREPORT

OptimaConservationResourcesExploration,LLCIndependentCrudeOilProductionCompany

ChinoHills,SanBernardinoCounty,California91709

Submitted:February4,2016

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GENERALINFORMATIONForcompliancewiththeCaliforniaWaterCodeSection13267,thisdocumentliststhegeneralrequirementsfortheinvestigativeorderR4-2016-0023toprovideareportonthedisposaloffluidsassociatedwithoilandgasproductionoperations.ThisreportisintendedfortheappropriateentityoftheCaliforniaRegionalWaterQualityControlBoardtaskedwiththeprotectionofgroundandsurfacewaterqualityandtobeinaccordancewithstateandlocalregulations.CompanyNameOptimaConservationResourcesExploration,LLC(a.k.a.OCRE)GeneralDescriptionOnshoreCrudeOilProductionStandardIndustrialClassification1311PetroleumOperationsLeasesAbacherliLeaseFranco-LangstaffLease

GeographicLocationandAssociationwithWaterwaysandUrbanAreasTheOCREleasefacilityinChinoHillsisnotlocatedinanysignificantproximitytoneitheranybodiesoffreshwaternoranywaterways;therearenosignificantrivers,lakes,tributariesorbeacheslocatedwithintheadjacentsurroundingareas.TheAbacherliandFranco-LangstaffleasesareadjacenttoeachotherandbotharedirectlyconnectedtotheoutskirtsoftheChinoHillsstatepark.Asingledirtroadofapproximatelyonemileinlengthconnectstheleases,theAbacherlisectiontothenorthandtheFranco-Langstaffsectiontotheimmediatesouth.TheFranco-Langstaff(a.k.a.Langstaff)leasedoesnothavedirectaccesstoanyurbannorsuburbanareas;theAbacherlileasedoesborderasuburbanresidentialneighborhoodonitsNortheasternside.TheuninhabitedandrurallandsofthestateparksurroundtheNorthwestern,WesternandSouthernsidesofbothleases.Thefacilityislocatedonprivatelandswheretheoperatingcompany(OCRE)maintainsastrongpositiverelationshipwiththelandownersandthird-partylessees.

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DescriptionofOperationsThefacilityproductionratecurrentlyrangesbetween5-25bblofcrudeoilperdayandbetween0-8bblofwaterperday(withanannualaverageofaround4.5bbl/day).ThetotalnumberofStripperoilwellsinthefacilityis14plus1idlewell.TheLangstaffleasepresentlycontains1activelyproducingwelland1idlewellandtheAbacherlileasepresentlycontains13activelyproducingwells.Eachleaseandallofitscomponents(includingoilwells,tanks,valves,pipelinesandevaporationpond)areillustratedinthefollowingfigures:theAbacherlileaseisincludedinFigure1andtheLangstaffleaseisincludedinFigure2.Waterandoil(i.e.‘producedfluids’)arepumpedfromtheactivewellsthroughtheproductionflowlineandintothestoragetankswherethefreewaterknockoutsystemcompletelyseparatesthewaterfromtheoil.Producedfluidsfirstenterthewashtankwherefreewatersettlestothebottom,oilaccumulatesatthetopandisskimmedintothestocktank.Inthestocktank,skimmedoilistestedforBasicSedimentandWater(BS&W)toensurecontentisbelowtheacceptablethresholdanddirectlytransportedintotheshipmenttankers.Theseparatedwatermovesintotheclarifiers(leak-freemetalcontainers)whereitisthenpumpedintothelinedsumpsandevaporated.Eachleasecontainsitscorrespondingpairofclarifiersandevaporationpond.Pressuresatthewellheadsarerecordedandtankfluidlevelsaregaugedonadailybasis.Inadditionaspartofregularfieldmaintenanceallwells/tanks/valves/pipelinesareinspectedonadailybasisforanyleaksorspillsandfieldequipmentisalsoinspectedandupgradedasneededtoensureproperfieldinfrastructure.Pressuresrecordedfromgaugesonthepipelineshelpmonitoranyleakswithintheproductionsystem.Operatorsalsoinspectpotentialdrainagecourses,roads,ditches,clarifiersandsumpsforevidenceofoilleaks.Operatorsandassociatedpersonnelreceiveadequatetrainingtoensuresafeoperationsandproperpreparationincaseofemergencysituations.Thefacilityisoperatedandattended24hoursperday.OCREanditscontractorsarecommittedtothepreservationoftheenvironment.PREVIOUSSPILLSNospillshaveoccurredonsiteatanyoftheaforementionedleases,thereforenospillhistorycanbeincluded.Inadditiontherehasneverbeenacaseofoilreachinganyoftheevaporationsumps.Intheunlikelycaseofaspill,theevent(s)willberecordedinthefollowingtable

TableISpillHistory

IncidentDate IncidentLocation ReleasedOil(bbl) ReleasedWater(bbl)

Cause

N/A

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FigureIAbacherliLeaseMap

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FigureIILangstaffLeaseMap(NorthernWell=IdleWell,SouthernWell=ActiveWell)

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DiscussionThelocationsofthetwoevaporationponds(i.e.sumps),oneforeachlease,areshowninfigures1and2.Bothofthesumpsarecurrentlyactiveandinuse.Thetwosumpsarelinedwithsodiumbentoniteclaythatservesasabarrierwithultralowpermeability.Theestimatedtotalannualamountofproducedwaterpreviouslyevaporatedfromthesumpsrangesfrom1,000bblto1,800bblwithaprobableaveragehoveringaround1,550bbl.Theestimatedannualamountofproducedwatergoingforwardexpectedtobereleasedintothelinedsumpsandevaporatedis1,700bbl/yearmoreorless.Thedisposedfluidisstrictlyonlywater,thereisnootherfluidassociatedwithproductionoperationsthatisbeingdischargedorhaseverbeendischargedintothesumps.Furthermoretherehavebeennodrilling/frackingoranyotherfieldoperationsthatuseanyothermaterialbesidesH2O.Thewatersproducedaremoderatelylowinsalinitywithsaltconcentrationsbetween3,000ppmto8,000ppm.TheproducedwatersfromboththeAbacherliandtheLangstaffleasescontainanaveragesalinityof5,750ppmmeasuredastheTotalDissolvedSolids(TDS).AppendixIandIIdisplaythechemicalcompositionofthewaterproducedfortheAbacherliandtheLangstaffleaserespectively.Note:AppendixIandAppendixIIarethelaboratoryresultsfromchemicalanalysesperformedbyathird-partycontractorspecializinginanalyticaltesting.Neitherofthetwoactivesumpscontain,norhaveevercontainedinthepast,anysolidifiedwaste.Therearenodomestic,municipalorcommercialwaterwellsoranysortofmonitoringwellswithina½mileradiusofeithersumpnoranywherenearthevicinityoftheleases.Thereisnopastorcurrentsurveying,sampling,constructionoranyothertypeofdataavailableforanynearbywaterwellsormonitoringwellsbecauseofthenonexistenceofsaidwells.Inadditiontothewrittenexplanations,themapsandtheanalyticaltablesprovided,thespreadsheetwiththespecificrequiredinformationoneachsumpisalsoincludedasAppendixIIIinthetechnicalreport.Itistheoperator’sresponsibilityandprofessionalobjectivetofullycomplywithandadheretoimplementedregulationsandmaintainastrongandtransparentrelationshipwithregulatoryagencieswhileensuringasafeandeffectivepetroleumoperation.StatementI,DiegoVasquezcertifyunderpenaltyoflawthatIhavepersonallyexaminedandamfamiliarwiththeinformationsubmittedinthisdocumentandallattachmentsandthat,basedonmyinquiryofthethoseindividualsimmediatelyresponsibleforobtainingtheinformation,Ibelievethattheinformationistrue,accurate,andcomplete.Iamawarethattherearesignificantpenaltiesforsubmittingfalseinformation,includingthepossibilityoffineandimprisonment.

02/04/2016AgentandOperatorforOptimaConservationResourcesExploration,LLCGeologistandGISSpecialist

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AppendixIChemicalAnalysis–ProducedWaterAbacherli

CHEMICAL LABORATORY REPORTCHEMICAL ANALYSIS OF WATER

DATE: February 17, 2012

TO: Alberto VazquezFROM: GT Analytical

SAMPLE SOURCE: Abacherli #1DATE SAMPLED: 2/12/12DATE RECEIVED: 2/13/12DATE ANALYZED: 2/13/12 to 2/16/12ANALYST: MT

pH (Lab): 7.07Total Hardness (as CaCO3): mg/l 256Calcium (as CaCO3): mg/l 145Magnesium (as CaCO3): mg/l 111Total Alkalinity (as CaCO3): (Field) mg/l 1,020Chloride: mg/l 2,700Sulfate: mg/l NDBoron: mg/l 7Conductivity (mmhos/cm @ 25 C): 9.02Resistivity (ohm meter @ 25 C): 1.109Specific Gravity @ 60 F: 0.9995Silicon (AA): mg/l 22.5Silica (SiO2) by Calc. mg/l 48.2Barium (AA): mg/l 0.3Iron (AA): mg/l 124.0ND=Non Detected

RADICALS -ANIONS

(meq/L) (mg/L)Bicarbonate HC03 20.40 1244Sulfate SO4 0.00 0Chloride Cl 76.16 2700Borate B4O7 0.33 26

TOTAL 97 3,970

CATIONS(meq/L) (mg/L)

Calcium Ca 2.90 58Magnesium Mg 2.22 27Barium Ba 0.00 0Silicon Si 0.80 23Sodium Na 90.97 2091

TOTAL 96.90 2,199

Total Dissolved Solids (by calculation): 6,169Total Dissolved Solids (by evaporation): 5,500

All results are expressed in mg/l where indicated.

cc: D06677

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AppendixIIChemicalAnalysis–ProducedWaterLangstaff

CHEMICAL LABORATORY REPORTCHEMICAL ANALYSIS OF WATER

DATE: February 17, 2012

TO: Alberto VazquezFROM: GT Analytical

SAMPLE SOURCE: Abacherli FL#55DATE SAMPLED: 2/12/12DATE RECEIVED: 2/13/12DATE ANALYZED: 2/13/12 to 2/16/12ANALYST: MT

pH (Lab): 7.12Total Hardness (as CaCO3): mg/l 1,223Calcium (as CaCO3): mg/l 661Magnesium (as CaCO3): mg/l 562Total Alkalinity (as CaCO3): (Field) mg/l 400Chloride: mg/l 2,195Sulfate: mg/l 2,300Boron: mg/l < 1.0Conductivity (mmhos/cm @ 25 C): 2.26Resistivity (ohm meter @ 25 C): 2.257Specific Gravity @ 60 F: 0.9989Silicon (AA): mg/l 41.3Silica (SiO2) by Calc. mg/l 88.4Barium (AA): mg/l 0.1Iron (AA): mg/l 17.7ND=Non Detected

RADICALS -ANIONS

(meq/L) (mg/L)Bicarbonate HC03 8.00 488Sulfate SO4 47.92 2300Chloride Cl 61.92 2195Borate B4O7 0.00 0

TOTAL 118 4,983

CATIONS(meq/L) (mg/L)

Calcium Ca 13.22 264Magnesium Mg 11.24 137Barium Ba 0.00 0Silicon Si 1.47 41Sodium Na 91.90 2113

TOTAL 117.83 2,555

Total Dissolved Solids (by calculation): 7,538Total Dissolved Solids (by evaporation): 3,870

All results are expressed in mg/l where indicated.

cc: D06679

AppendixIIISpecificSumpInformation(CopiedfromMicrosoftExcelSpreadsheet)

AppendixIII-SumpInformationSpreadsheet

A B C D E F G H I J K L M N OOwner Field County Sump Sump Sump Sump Years Volume Fluid Sump When Material Solidified Whatand Name Name Location Volume(ft^3) First Sump Discharge Composition Filledwith Sump Usedto Waste? composition

Operator (Lat,Long) (LxWxD) Excavated Active Annual(bbl) Material? Filled Fill ofSolid?

OCRE Mahala San Abacherli 33.92242 175'x200'x5' 1981 35 1400 Water Yes 1981 Bentonite No N/ABernardino Sump -117.66394 Clay

OCRE Mahala San Langstaff 33.90536 70'x75'x10' 1981 35 200 Water Yes 1981 Bentonite No N/ABernardino Sump -117.67083 Clay