DIVISION - Utah · PDF fileDIVISION OF OIL, GAS AND MINING ... Mud logging program TSD Water Mud ... toursheet Functiontesttams on eachtrip

STATE OF UTAHDEPARTMENT OF NATURAL RESOURCES

DIVISION OF OIL, GAS AND MINING

APPLICATION FOR PERMIT TO DRILL 1. WELL NAME and NUMBER

Federal 920-24N

2. TYPE OF WORK

DRILL NEW WELL REENTER P&A WELL DEEPEN WELL 3. FIELD OR WILDCAT

NATURAL BUTTES

4. TYPE OF WELLGas Well Coalbed Methane Well: NO

5. UNIT or COMMUNITIZATION AGREEMENT NAME

6. NAME OF OPERATORKERR-MCGEE OIL & GAS ONSHORE, L.P.

7. OPERATOR PHONE720 929-6587

8. ADDRESS OF OPERATORP.O. Box 173779, Denver, CO, 80217

9. OPERATOR [email protected]

10. MINERAL LEASE NUMBER(FEDERAL, INDIAN, OR STATE)

UTU-0579

11. MINERAL OWNERSHIP

FEDERAL INDIAN STATE FEE 12. SURFACE OWNERSHIP

FEDERAL INDIAN STATE FEE

13. NAME OF SURFACE OWNER (if box 12 = 'fee')

14. SURFACE OWNER PHONE (if box 12 = 'fee')

15. ADDRESS OF SURFACE OWNER (if box 12 = 'fee')

16. SURFACE OWNER E-MAIL (if box 12 = 'fee')

17. INDIAN ALLOTTEE OR TRIBE NAME(if box 12 = 'INDIAN')

Ute

18. INTEND TO COMMINGLE PRODUCTION FROMMULTIPLE FORMATIONS

YES (Submit Commingling Application) NO

19. SLANT

VERTICAL DIRECTIONAL HORIZONTAL

20. LOCATION OF WELL FOOTAGES QTR-QTR SECTION TOWNSHIP RANGE MERIDIAN

LOCATION AT SURFACE 822 FSL 1876 FWL SESW 24 9.0 S 20.0 E S

Top of Uppermost Producing Zone 822 FSL 1876 FWL SESW 24 9.0 S 20.0 E S

At Total Depth 822 FSL 1876 FWL SESW 24 9.0 S 20.0 E S

21. COUNTYUINTAH

22. DISTANCE TO NEAREST LEASE LINE (Feet)822

23. NUMBER OF ACRES IN DRILLING UNIT1920

25. DISTANCE TO NEAREST WELL IN SAME POOL(Applied For Drilling or Completed)

1000

26. PROPOSED DEPTHMD: 10400 TVD:

27. ELEVATION - GROUND LEVEL

4846

28. BOND NUMBER

29. SOURCE OF DRILLING WATER /WATER RIGHTS APPROVAL NUMBER IF APPLICABLE

Permit #43-8496

ATTACHMENTS

VERIFY THE FOLLOWING ARE ATTACHED IN ACCORCANCE WITH THE UTAH OIL AND GAS CONSERVATION GENERAL RULES

WELL PLAT OR MAP PREPARED BY LICENSED SURVEYOR OR ENGINEER COMPLETE DRILLING PLAN

AFFIDAVIT OF STATUS OF SURFACE OWNER AGREEMENT (IF FEE SURFACE) FORM 5. IF OPERATOR IS OTHER THAN THE LEASE OWNER

DIRECTIONAL SURVEY PLAN (IF DIRECTIONALLY OR HORIZONTALLY

DRILLED)

TOPOGRAPHICAL MAP

NAME Kevin McIntyre TITLE Regulatory Analyst I PHONE 720 929-6226

SIGNATURE DATE 09/29/2008 EMAIL [email protected]

API NUMBER ASSIGNED

43047501540000

Permit Manager

APPROVAL

FORM 3

AMENDED REPORT

API Well No: 43047501540000API Well No: 43047501540000

FORM 3STATE OF UTAH

DEPARTMENT OF NATURAL RESOURCES AMENDED REPORTDIVISION OF OIL, GAS AND MINING

APPLICATION FOR PERMIT TO DRILL 1. WELL NAME and NeUdMr 9R20-24N

2. TYPE OF WORK 3. FIELD OR WILDCATDRILL NEW WELL REENTER P&A WELL DEEPEN WELL NATURAL BUTTES

4. TYPE OF WELL 5. UNIT or COMMUNITIZATION AGREEMENT NAMEGas Well Coalbed Methane Well: NO

6. NAME OF OPERATOR 7. OPERATOR PHONEKERR-MCGEE OIL & GAS ONSHORE, L.P. 720 929-6587

8. ADDRESS OF OPERATOR 9. OPERATOR E-MAILP.O. Box 173779, Denver, CO, 80217 [email protected]

10. MINERAL LEASE NUMBER 11. MINERAL OWNERSHIP 12. SURFACE OWNERSHIP(FEDERAL, INDIAN, OR S

FEDERAL INDIAN STATE FEE FEDERAL INDIAN STATE I FEE I

13. NAME OF SURFACE OWNER (if box 12 = 'fee') 14. SURFACE OWNER PHONE (if box 12 = 'fee')

15. ADDRESS OF SURFACE OWNER (if box 12 = 'fee') 16. SURFACE OWNER E-MAIL (if box 12 = 'fee')

17. INDIAN ALLOTTEE OR TRIBE NAME 18. INTEND TO COMMINGLE PRODUCTION FROM 19. SLANT

(if box 12 = 'INDIAN')MULTIPLE FORMATIONS

Ute YES I (Submit Commingling Application) NO l' VERTICALI DIRECTIONAL I HORIZONTAL





21. COUNTY 22. DISTANCE TO NEAREST LEASE LINE (Feet) 23. NUMBER OF ACRES IN DRILLING UNITUINTAH 822 1920

25. DISTANCE TO NEAREST WELL IN SAME POOL 26. PROPOSED DEPTH(Applied For Drilling or Completed) MD: 10400 TVD:1000

27. ELEVATION - GROUND LEVEL 28. BOND NUMBER 29. SOURCE OF DRILLING WATER /WATER RIGHTS APPROVAL NUMBER IF APPLICABLE

4846 Permit #43-8496

ATTACHMENTS




DIRECTIONAL SURVEY PLAN (IF DIRECTIONALLY OR HORIZONTALLY TOPOGRAPHICAL MAPDRILLED)



API NUMBER ASSIGNED APPROVAL

43047501540000

Permit

API Well No: 43047501540000

EORM 3STATE OF UTAH

DEPARTMENT OF NATURAL RESOURCES AMENDED REPORTDIVISION OF OIL, GAS AND MINING

APPLICATION FOR PERMIT TO DRILL 1. WELL NAME and NeUdMr 9R20-24N

2. TYPE OF WORK 3. FIELD OR WILDCATDRILL NEW WELL REENTER P&A WELL DEEPEN WELL NATURAL BUTTES

4. TYPE OF WELL 5. UNIT or COMMUNITIZATION AGREEMENT NAMEGas Well Coalbed Methane Well: NO

6. NAME OF OPERATOR 7. OPERATOR PHONEKERR-MCGEE OIL & GAS ONSHORE, L.P. 720 929-6587

8. ADDRESS OF OPERATOR 9. OPERATOR E-MAILP.O. Box 173779, Denver, CO, 80217 [email protected]

10. MINERAL LEASE NUMBER 11. MINERAL OWNERSHIP 12. SURFACE OWNERSHIP(FEDERAL, INDIAN, ORUS T5

9 FEDERAL INDIAN STATE FEE FEDERAL INDIAN STATE I FEE I

13. NAME OF SURFACE OWNER (if box 12 = 'fee') 14. SURFACE OWNER PHONE (if box 12 = 'fee')

15. ADDRESS OF SURFACE OWNER (if box 12 = 'fee') 16. SURFACE OWNER E-MAIL (if box 12 = 'fee')

17. INDIAN ALLOTTEE OR TRIBE NAME 18. INTEND TO COMMINGLE PRODUCTION FROM 19. SLANT

(if box 12 = 'INDIAN')MULTIPLE FORMATIONS

Ute YES I (Submit Commingling Application) NO l' VERTICALI DIRECTIONAL I HORIZONTAL





21. COUNTY 22. DISTANCE TO NEAREST LEASE LINE (Feet) 23. NUMBER OF ACRES IN DRILLING UNITUINTAH 822 1920

25. DISTANCE TO NEAREST WELL IN SAME POOL 26. PROPOSED DEPTH(Applied For Drilling or Completed) MD: 10400 TVD:1000

27. ELEVATION - GROUND LEVEL 28. BOND NUMBER 29. SOURCE OF DRILLING WATER /WATER RIGHTS APPROVAL NUMBER IF APPLICABLE

4846 Permit #43-8496

ATTACHMENTS




DIRECTIONAL SURVEY PLAN (IF DIRECTIONALLY OR HORIZONTALLY TOPOGRAPHICAL MAP

DRILLED)



API NUMBER ASSIGNED APPROVAL

43047501540000

Permit

Proposed Hole, Casing, and Cement

String Hole Size Casing Size Top (MD) Bottom (MD)

Surf 12.25 9.625 0 2800

Pipe Grade Length Weight

Grade J-55 LT&C 2800 36.0

Cement Interval Top (MD) Bottom (MD)

0 2800

Cement Description Class Sacks Yield Weight

Premium Foamed Cement 215 1.18 15.6




Surf 12.25 9.625 0 2800


Grade J-55 LT&C 2800 36.0


0 2800


Premium Foamed Cement 215 1.18

API Well No: 43047501540000



Surf 12.25 9.625 0 2800


Grade J-55 LT&C 2800 36.0


0 2800


Premium Foamed Cement 215 1.18



Prod 7.875 4.5 0 10400


Grade I-80 LT&C 10400 11.6


0 10400


Premium Lite High Strength 490 3.38 11.0

Pozzuolanic Cement 1650 1.31 14.3




Prod 7.875 4.5 0 10400


Grade I-80 LT&C 10400 11.6


0 10400



Pozzuolanic Cement 1650 1.31

API Well No: 43047501540000



Prod 7.875 4.5 0 10400


Grade I-80 LT&C 10400 11.6


0 10400



Pozzuolanic Cement 1650 1.31


KERR-McGEEOIL& GAS ONSHORELP 1KerrNemee

DRILLINGPROGRAMCOMPANYNAME KERR-McGEE OIL & GASONSHORELP DATE September24, 2008

WELLNAME Federal 920-24N TD 10,400' MDITVD

FIELD NaturalButtes COUNTY Ulntah STATE Utah ELEVATION 4,846" GL KB4.861'SURFACELOCATION SESW 822" FSL &1876'FWL, Sec. 24.T 9S R 20E BHL StraightHole

Latitude: 40.015880 Longitude: -109.616540 NAD27OBJECTIVE ZONE(S) Wasatch/MesaverdeADDITIONALINFO Regulatory Agencles: BLM(MINERALS), BIA(SURFACE),UDOGM,Tri-CountyHealthDept.

e e -

40' 14"

12-1/4" 9-5/8". 361. &66. LTC Arrmist

Catch water sample, if possible,from 0 to 5,01T

Green River @ 1,667'

Top of Birds Nest Water @ 1,900'Mahogany @ 2,419

Preset fl GL @2,800' MD

Note: 12.25'sudace hole willusuallybe drilled ±400' below the bottom oflost circulationzone. Drilled depthmaybe 1200 ofthe estimatedsetdepth depending on theacutal depthof ihe loss zone.

Water Fresh

Mud logging program TSD Water Mud

Ope i hole logging program f/ TD - surf esg 7-?t8" +1/2111.6#, I-80 of a3-105 ppgequivalent i TC casing

Wasatch @ 5,017

Mverde @ 8,179'

MVU2@ 9,059'

MVL1@ 9,485'

IiI

MaxanticipatedMudrequired i

TD@ 10,400' 12.5 ppg

KerraseeKERR-McGEITOth!RGWS NSHORE

API Well No: 43047501540000

KERR-McGEEOIL& GAS ONSHORELP 1KerrNemee

DRILLINGPROGRAMCOMPANYNAME KERR-McGEE OIL & GASONSHORELP DATE September24, 2008

WELLNAME Federal 920-24N TD 10,400' MDITVD

FIELD NaturalButtes COUNTY Ulntah STATE Utah ELEVATION 4,846" GL KB4.861'SURFACELOCATION SESW 822" FSL &1876'FWL, Sec. 24.T 9S R 20E BHL StraightHole

Latitude: 40.015880 Longitude: -109.616540 NAD27

OBJECTIVE ZONE(S) Wasatch/MesaverdeADDITIONALINFO Regulatory Agencles: BLM(MINERALS), BIA(SURFACE),UDOGM,Tri-CountyHealthDept.

e e -

40' 14"

12-1/4" 9-5/8". 361. &66. LTC Arrmist

Catch water sample, if possible,from 0 to 5,01T


Top of Birds Nest Water @ 1,900'

Mahogany @ 2,419


Note: 12.25'sudace hole willusuallybe drilled ±400' below the bottom oflost circulationzone. Drilled depthmaybe 1200 ofthe estimatedsetdepth depending on theacutal depthof ihe loss zone.

Water Fresh

Mud logging program TSD Water Mud

Ope i hole logging program f/ TD - surf esg 7-?t8" +1/2111.6#, I-80 of a3-105 ppgequivalent i TC casing

Wasatch @ 5,017

Mverde @ 8,179'

MVU2@ 9,059'

MVL1@ 9,485'

IiI

MaxanticipatedMudrequired i

TD@ 10,400' 12.5 ppg

KerraseeKERR-McGEITOth!RGWS NSHORE

API Well No: 43047501540000API Well No: g0 ggggDRIl I ING PROGRAM

CASINGEROGRAM

-EME-CONDUCTOR 14" 0-40'

3520 2020 4530DOSURFACE 9 5/8- 0 to 2,800' 36 00 J 55 LTC 0 79 1 54 5 13

T/80 6350 201000PRODUCTION 4-1/2" O lo 10400 11.60 I-80 LTC 1.74 0.94 1,91

1) MaxAnticipated Surf.Press.(MASP)(SurfaceCasing)= (Pore Pressure at next csg point-(0.22 palla-pardal evac gradientx TVD ofnext cag peinl)2} MASP(ProdCasing) = Pore Pressure at TO-(.22 psilft-partial evac gradieni x TD)(Burst Assumptions: TD = 12.5 ppg) .22 psl/R = gradient for partially evac wellbore(CollapseAssumption: FullyEvacuatedCasing.Max MW) (Tension Assumptions: AirWeightofCasing'Buoy.Fact. ofwater)MASP 4160 psi

CEMENTPROGRAM

SURFACE LEAD 500 Premium cml+ 2% CaCI 215 60% 15.60 1.18Option 1 +

,25 pps floceleToP ouT cMTU 250 20 gais sodium sificate + Premium cmt 100 16 60 1.18

+2%CaCl+ 25ppsflocelÃToP our cur(2 as required Premium cmt + 2% CaCI as req. 15 60 1.18

SURFACE NOTEi 11cito a((WateËosurfaço, option giniIkedOption 2 LEAD 2000 Prem cmt + 16% Gel + 10 pps gilsonite 23D 35% 11 00 3,82

+.25 pps Flocele + 3% salt BWOCT^1L 500 Premium cmt + 2% CaCI 180 35% 15 60 1.18

TOP OUT CMT âs fequi(ed Pren itincpn obCaCI

as req. 15 60 1.18

PRODUCTION LEAD 4,610 Premium Lite If + 3% KCi + 0.25 pps 490 60% 11 00 3.38cellofiake + 5 ppg sonile+ 10 gfd

+ 0.5% extender

TAIL 5,890' 50/50 Poz/G + 10% salt + 2% gel 1650 60% 14.30 1.31+.1% R-3

'Substitute caliper hole volume plus 0% excess for LEAD ifaccurate caliper is obtained*Substitute caliper holevolume plus 10% excess for TAILif accurate caliper is obtained

FLOAT EQUIPMENT & CENTRALlZERS

SURFACE Guide shoe, 1 jt, insert float. Centralize first 3 jointswith bow springcentralizers. Thread lock guide shoe.

PRODUCTION Floal shoe, 1 jt, float coNar. Centralize first 3 joints& every thirdjointto lop of tailcement with bowspring centralizers.

ADDITIONALINFORMATION

Test casing head to 750 psi after instating. Test surface casing to 1,500 psi priorto driKingout.BOPE: 11"5Mwithone annularand 2 rams. Test to5.000 psi (annularto2.500 psi) priorto drMngcul. Record on chart recorder&toursheet Functiontest tams on each trip.Maintain safety valva&Inside BOP on rigfloor at all times. Kellytobe equippedwithupper&lower kellyvalves.Drop Totco surveysevery2000'. Madmumallowablehole angleis 5 degrees.Mostrigshave PVT Systemsformudmoniloring.Kno PVTis available,visualmonitoringwiibe utilized.

DRILLINGENGINEER: DATE:Brad Laney

DRILLINGSUPERINTENDENT: DATE:Randy Bayne

Federal

API Well No: g0 ggggDRIl I ING PROGRAM

CASINGEROGRAM

-EME-CONDUCTOR 14" 0-40'

3520 2020 4530DOSURFACE 9 5/8- 0 to 2,800' 36 00 J 55 LTC 0 79 1 54 5 13

T/80 6350 201000PRODUCTION 4-1/2" O lo 10400 11.60 I-80 LTC 1.74 0.94 1,91

1) MaxAnticipated Surf.Press.(MASP)(SurfaceCasing)= (Pore Pressure at next csg point-(0.22 palla-pardal evac gradientx TVD ofnext cag peinl)2} MASP(ProdCasing) = Pore Pressure at TO-(.22 psilft-partial evac gradieni x TD)(Burst Assumptions: TD = 12.5 ppg) .22 psl/R = gradient for partially evac wellbore(CollapseAssumption: FullyEvacuatedCasing.Max MW) (Tension Assumptions: AirWeightofCasing'Buoy.Fact. ofwater)MASP 4160 psi

CEMENTPROGRAM

SURFACE LEAD 500 Premium cml+ 2% CaCI 215 60% 15.60 1.18Option 1 +

,25 pps floceleToP ouT cMTU 250 20 gais sodium sificate + Premium cmt 100 16 60 1.18

+2%CaCl+ 25ppsflocelÃToP our cur(2 as required Premium cmt + 2% CaCI as req. 15 60 1.18

SURFACE NOTEi 11cito a((WateËosurfaço, option giniIkedOption 2 LEAD 2000 Prem cmt + 16% Gel + 10 pps gilsonite 23D 35% 11 00 3,82

+.25 pps Flocele + 3% salt BWOCT^1L 500 Premium cmt + 2% CaCI 180 35% 15 60 1.18

TOP OUT CMT âs fequi(ed Pren itincpn obCaCI

as req. 15 60 1.18

PRODUCTION LEAD 4,610 Premium Lite If + 3% KCi + 0.25 pps 490 60% 11 00 3.38cellofiake + 5 ppg sonile+ 10 gfd

+ 0.5% extender

TAIL 5,890' 50/50 Poz/G + 10% salt + 2% gel 1650 60% 14.30 1.31+.1% R-3

'Substitute caliper hole volume plus 0% excess for LEAD ifaccurate caliper is obtained*Substitute caliper holevolume plus 10% excess for TAILif accurate caliper is obtained

FLOAT EQUIPMENT & CENTRALlZERS

SURFACE Guide shoe, 1 jt, insert float. Centralize first 3 jointswith bow springcentralizers. Thread lock guide shoe.

PRODUCTION Floal shoe, 1 jt, float coNar. Centralize first 3 joints& every thirdjointto lop of tailcement with bowspring centralizers.

ADDITIONALINFORMATION

Test casing head to 750 psi after instating. Test surface casing to 1,500 psi priorto driKingout.BOPE: 11"5Mwithone annularand 2 rams. Test to5.000 psi (annularto2.500 psi) priorto drMngcul. Record on chart recorder&toursheet Functiontest tams on each trip.Maintain safety valva&Inside BOP on rigfloor at all times. Kellytobe equippedwithupper&lower kellyvalves.

Drop Totco surveysevery2000'. Madmumallowablehole angleis 5 degrees.Mostrigshave PVT Systemsformudmoniloring.Kno PVTis available,visualmonitoringwiibe utilized.

DRILLINGENGINEER: DATE:Brad Laney

DRILLINGSUPERINTENDENT: DATE:Randy Bayne

Federal


Federal 920-24N

EXHIBIT A

PIPE MWS

BUND RAMS CN30H LINN

A CHECK V4tPX-2 klA) DRHJJNGSPOOL

REM † DPRMTED CHOW

azuorar onarra vavrr£9U£N¢ßhPTIONE

SCHEMATIC DIAGRAM OF 5,000 PSI BOP STACK

API Well No: 43047501540000

Federal 920-24N

EXHIBIT A

PIPE MWS

BUND RAMS CN30H LINN

A CHECK V4tPX-2 klA) DRHJJNGSPOOL

REM † DPRMTED CHOW

azuorar onarra vavrr£9U£N¢ßhPTIONE

SCHEMATIC DIAGRAM OF 5,000 PSI BOP STACK


Federal 920-24NSESW Sec. 24, T9S,R20E

UINTAH COUNTY, UTAHUTU-0579

ONSHORE ORDER NO. 1

DRILLING PROGRAM

1. Estimated Tops of Important Geologic Markers:

Fonnation Deptl1

Uinta 0- SurfaceGreen River 1667'Bird's Nest 1900'Mahogany 2419'Wasatch 5017'Mesaverde 8179'MVU2 9059'MVL1 9485'TD 10,400'

2. Estimated Depths of Anticipated Water, Oil, Gas, or Mineral Formations:

Substance Fonnation _Dep_th

Green River 1667'Bird's Nest 1900'Mahogany 2419'

Gas Wasatch 5017'Gas Mesaverde 8179'Gas MVU2 9059'Gas MVL1 9485'Water N/AOther Minerals N/A

3. Pressure Control Equipment (Schematic Attached)

Please see the Natural Buttes UnitStandard Operating Procedure (SOP).

4. Proposed Casing & Cementing Program:

Please see the Natural Buttes UnitSOP. See attached drilling diagram.

5. Drilling Fluids Program:

Please see the Natural Buttes UnitSOP.

6. Evaluation

API Well No: 43047501540000

Federal 920-24NSESW Sec. 24, T9S,R20E


ONSHORE ORDER NO. 1

DRILLING PROGRAM

1. Estimated Tops of Important Geologic Markers:

Fonnation Deptl1

Uinta 0- SurfaceGreen River 1667'Bird's Nest 1900'Mahogany 2419'Wasatch 5017'Mesaverde 8179'MVU2 9059'MVL1 9485'TD 10,400'

2. Estimated Depths of Anticipated Water, Oil, Gas, or Mineral Formations:

Substance Fonnation _Dep_th

Green River 1667'Bird's Nest 1900'Mahogany 2419'

Gas Wasatch 5017'Gas Mesaverde 8179'Gas MVU2 9059'Gas MVL1 9485'Water N/AOther Minerals N/A

3. Pressure Control Equipment (Schematic Attached)

Please see the Natural Buttes UnitStandard Operating Procedure (SOP).

4. Proposed Casing & Cementing Program:

Please see the Natural Buttes UnitSOP. See attached drilling diagram.

5. Drilling Fluids Program:


6. Evaluation



7. Abnormal Conditions:

Maximumanticipated bottomholepressure calculated at 10,400' TD, approximatelyequals 6448psi(calculated at 0.62 psilfoot).

Maximumanticipated surface pressureequalsapproximately 4160psi (bottomholepressuæminus thepressure of a partially evacuated hole calculated at 0.22 psilfoot).

8. Anticipated Starting Dates:

Drilling is planned to commence immediately upon approval of this application.

9. Variances:

Please see Natural Buttes Unit SOP Onshore Order #2 - Air Drilling VarianceKerr-McGee Oil & Gas Onshore LP (KMG)respectfid requests a variance to severalrequirements associated with air drilling outlined in Onshore Order 2

• Blowout Prevention Equipment (BOPE) requirements;• Mud program requirements; and• Special drilling operation (swface equipment placement) requirements associated with

air drilling.

ThisStandard Operating Practices addendum provides supporting information as to whyKMG current air drilling practices for constmcting the surface casing hole should begranted a variance to Onshore Order 2 air drilling requirements.

The reader should note that the air rig is used only to construct a stable surface casinghole through a historically dryficadtlost circulation zone. A conventional rotary rigfollowsthe air rig, and is used to drill and construct the majority ofthe wellbore.

More notable, KMG has used the air rig layoutand procedures outlined below to drill thesurface casing hole in approximately 675 wells without incident of blow out or loss of hfe.

BackgroundIn a typical well, KMG utilizes an air rig fordrilling the surface casing hole, an intervalfromthe surface to surface casing depths, which varies in depthfrom1,700 to 2,800 feet.The air rig drilling operation does not drill throughproductive or over pressured

formationsin KMGfield,but doespenetrate the Uinta and GreenRiver Formations. Thepurpose ofthe air drilling operation is to overcome the severe loss circulation zone in theGreen River knownas the Bird's Nest whilecreating a stable holefor the surface casing.The surface casing hole is generally drilled to approximately 500feetbelow the Bird'sNest.

Before the surface air rig is mobilized, a rathole rig is utilizedto set and cementconductor pipe through a competentsurface formation.Generally,the conductor is set at40feet.In some cases, conductor may be set deeper in areas that the surface formationisnot foundcompetent. This tig also drills the rat and mouse holes inpreparation for thesurface casing and production string drilling operations.

The air rig is then mobilized to drill the surface casing hole by drilling a 12-1/4 inch

API Well No: 43047501540000


7. Abnormal Conditions:

Maximumanticipated bottomholepressure calculated at 10,400' TD, approximatelyequals 6448psi(calculated at 0.62 psilfoot).

Maximumanticipated surface pressureequalsapproximately 4160psi (bottomholepressuæminus thepressure of a partially evacuated hole calculated at 0.22 psilfoot).

8. Anticipated Starting Dates:

Drilling is planned to commence immediately upon approval of this application.

9. Variances:

Please see Natural Buttes Unit SOP Onshore Order #2 - Air Drilling VarianceKerr-McGee Oil & Gas Onshore LP (KMG)respectfid requests a variance to severalrequirements associated with air drilling outlined in Onshore Order 2

• Blowout Prevention Equipment (BOPE) requirements;• Mud program requirements; and• Special drilling operation (swface equipment placement) requirements associated with

air drilling.

ThisStandard Operating Practices addendum provides supporting information as to whyKMG current air drilling practices for constmcting the surface casing hole should begranted a variance to Onshore Order 2 air drilling requirements.

The reader should note that the air rig is used only to construct a stable surface casinghole through a historically dryficadtlost circulation zone. A conventional rotary rigfollowsthe air rig, and is used to drill and construct the majority ofthe wellbore.

More notable, KMG has used the air rig layoutand procedures outlined below to drill thesurface casing hole in approximately 675 wells without incident of blow out or loss of hfe.

BackgroundIn a typical well, KMG utilizes an air rig fordrilling the surface casing hole, an intervalfromthe surface to surface casing depths, which varies in depthfrom1,700 to 2,800 feet.The air rig drilling operation does not drill throughproductive or over pressured

formationsin KMGfield,but doespenetrate the Uinta and GreenRiver Formations. Thepurpose ofthe air drilling operation is to overcome the severe loss circulation zone in theGreen River knownas the Bird's Nest whilecreating a stable holefor the surface casing.The surface casing hole is generally drilled to approximately 500feetbelow the Bird'sNest.

Before the surface air rig is mobilized, a rathole rig is utilizedto set and cementconductor pipe through a competentsurface formation.Generally,the conductor is set at40feet.In some cases, conductor may be set deeper in areas that the surface formationisnot foundcompetent. This tig also drills the rat and mouse holes inpreparation for thesurface casing and production string drilling operations.

The air rig is then mobilized to drill the surface casing hole by drilling a 12-1/4 inch


Federal 920-24N Drilling Program Page 3

to just above the Bird's Nest interval with an air hammer. Thehammer is then trippedand replaced with a 12-1/4 inch tri-cone bit. The td-cone bit is used to dnTIto the surfacecasing point, approximately 500feetbelow the loss circulation zone (Bird's Nest). The 9-5/8 inch surface casing is then run and cemented in place, thereby isolating the lostcirculation zone.

KMGfullyappreciates Onshore Order 2 well control and safety requirements associatedwith a typical air drilling operations. However, the requirements of Onshore Order 2 areexcessive with respect to the air rig layout and driHingoperation procedures that arecurrently in practice to drill and control the swface casing hole in KMG Fiehls.

Variance for BOPE RequirementsThe air rig operation utilizes a properly lubricated and maintained air bowl divertersystem which diverts the drilling returns to a six-inch blooie line. The air bowl is the onlypiece of BOPE equipment which is installed during drilling operations and is su/]icient tocontain the air returns associated with this drilling operation. As was discussed earlier,the drilling ofthe smface hole does not encounter any over pressured or productivezones, and as a result standard BOPE equipment should not be required. In addition,standard drilling practices do not support the use of BOPE on 40feetof conductor pipe.

Variance forMud Material RequirementsOnshore Order 2 also states that sufficient quantities of mud materials shall bemaintained or readily accessible for the purpose of assuring adequate well control. Onceagain, the swface hole drilling operations does not encounter over pressured orproductive intervals, and as a result there is not a need to control pressure in the surfacehole with a mud system. Instead of mud, the air rigs utilize water fromthe reserve pit forwell control, ifnecessary. A skid pump which is located near the reserve pit (seeattachment) will supply the water to the well bore.

Variance forSpecial Drilling Operation (surface equipment placement) RequirementsOnshore Order 2 requires specific safety distances or setbacks for the placement ofassociated standard air drilling equipment, wellbore, and reserve pits. The air rigs usedto drill the surface holes are not typical of an air rig used to drill a producing hole inother parts of the US. Theseare smaller in nature and designed tofit a KMG location.The typical air rig layoutfordrilling surface hole in thefieldis attached.

Typicallythe blooie line dischargepoint is required to be 100feetfromthe well bore. Inthe case of a KMGwell, the reserve pit is only 45feetfromthe dg and is usedfor the drillcuttings. Theblooie line, which transports the drill cuttings fromthe well to the reservepit, subsequently discharges only 45feetfromthe well bore.

Typicallythe air äg compressors are required to be located in the opposite directionfromthe blooie line and a minimum of l00 feetfromthe well bore.At the KMG locations, theair ngcompressors are approximately 40feetfromthe wellbore and approximately60feetfromthe blooie line discharge due to the unique air rig design. Theair compressors(see attachment) are located on the rig (1250 cßn) and on a standby trailer (1170 cßn). Abooster sits betweenthe twocompressors and boosts the outputfrom350psi to 2000psi.Thedesign doesput the booster and standby compressor opposite fromthe blooie line.

Lastly, Onshore Order 2 addresses the needforan automatic igniter or continuous

API Well No: 43047501540000


to just above the Bird's Nest interval with an air hammer. Thehammer is then trippedand replaced with a 12-1/4 inch tri-cone bit. The td-cone bit is used to dnTIto the surfacecasing point, approximately 500feetbelow the loss circulation zone (Bird's Nest). The 9-5/8 inch surface casing is then run and cemented in place, thereby isolating the lostcirculation zone.

KMGfullyappreciates Onshore Order 2 well control and safety requirements associatedwith a typical air drilling operations. However, the requirements of Onshore Order 2 areexcessive with respect to the air rig layout and driHingoperation procedures that arecurrently in practice to drill and control the swface casing hole in KMG Fiehls.

Variance for BOPE RequirementsThe air rig operation utilizes a properly lubricated and maintained air bowl divertersystem which diverts the drilling returns to a six-inch blooie line. The air bowl is the onlypiece of BOPE equipment which is installed during drilling operations and is su/]icient tocontain the air returns associated with this drilling operation. As was discussed earlier,the drilling ofthe smface hole does not encounter any over pressured or productivezones, and as a result standard BOPE equipment should not be required. In addition,standard drilling practices do not support the use of BOPE on 40feetof conductor pipe.

Variance forMud Material RequirementsOnshore Order 2 also states that sufficient quantities of mud materials shall bemaintained or readily accessible for the purpose of assuring adequate well control. Onceagain, the swface hole drilling operations does not encounter over pressured orproductive intervals, and as a result there is not a need to control pressure in the surfacehole with a mud system. Instead of mud, the air rigs utilize water fromthe reserve pit forwell control, ifnecessary. A skid pump which is located near the reserve pit (seeattachment) will supply the water to the well bore.

Variance forSpecial Drilling Operation (surface equipment placement) RequirementsOnshore Order 2 requires specific safety distances or setbacks for the placement ofassociated standard air drilling equipment, wellbore, and reserve pits. The air rigs usedto drill the surface holes are not typical of an air rig used to drill a producing hole inother parts of the US. Theseare smaller in nature and designed tofit a KMG location.The typical air rig layoutfordrilling surface hole in thefieldis attached.

Typicallythe blooie line dischargepoint is required to be 100feetfromthe well bore. Inthe case of a KMGwell, the reserve pit is only 45feetfromthe dg and is usedfor the drillcuttings. Theblooie line, which transports the drill cuttings fromthe well to the reservepit, subsequently discharges only 45feetfromthe well bore.

Typicallythe air äg compressors are required to be located in the opposite directionfromthe blooie line and a minimum of l00 feetfromthe well bore.At the KMG locations, theair ngcompressors are approximately 40feetfromthe wellbore and approximately60feetfromthe blooie line discharge due to the unique air rig design. Theair compressors(see attachment) are located on the rig (1250 cßn) and on a standby trailer (1170 cßn). Abooster sits betweenthe twocompressors and boosts the outputfrom350psi to 2000psi.Thedesign doesput the booster and standby compressor opposite fromthe blooie line.

Lastly, Onshore Order 2 addresses the needforan automatic igniter or continuous



light on the blooie line. Theair rig does not utilize an igniter as the surface hole drillingoperation does not encounter productive formations.

ConclusionThe air rig operating procedures and the attached air rig layout have effectivelymaintained well control while drilling the surface holes in KMGFields. KMGrespectfidly requests a variance fromOnshore Order 2 with respect to air drilling wellcontrol requirements as discussed above..

10. Other Information:

Please see Natural Buttes Unit

API Well No: 43047501540000


light on the blooie line. Theair rig does not utilize an igniter as the surface hole drillingoperation does not encounter productive formations.

ConclusionThe air rig operating procedures and the attached air rig layout have effectivelymaintained well control while drilling the surface holes in KMGFields. KMGrespectfidly requests a variance fromOnshore Order 2 with respect to air drilling wellcontrol requirements as discussed above..


Please see Natural Buttes Unit


Federal 920-24NSESW Sec. 24 ,T9S,R20E


ONSHORE ORDER NO. 1

MULTI-POINT SURFACE USE & OPERAT1ØNSPLAN

L Existing Roads:

Refer to the attached locationdirections.

Refer to Topo Maps A and B for location of access roads within a 2-mile radius.

2. Planned Access Roads:

Approximately 403' +/- of new access road is proposed. Refer to Topo Map B.

Existence ofpipelines; maximum grade; turnouts; major cut and fills,culverts, or bridges;gates, cattle guards, fencecuts, or modifications to existing facilitieswere determinedat the on-site.

Please see the Natural Buttes Unit Standard Operating Procedure (SOP).

3. Location of Existing Wells Within a 1-Mile Radius:

Please refer to Topo Map C.

4. Location of Existing & Proposed Facilities:

Please see the Natural Buttes Unit SOP.

Refer to Topo Map D for the locationof the proposed pipelines.

A right-of-way is required for thepipeline. The pipeline is approximately 1,137 in length and30' in width. A 4" surface steel pipeline willbe constructed utilizingexisting disturbance wherepossible. The pipeline will be butt-welded togetherand pulled into place with a rubber tired

API Well No: 43047501540000

Federal 920-24NSESW Sec. 24 ,T9S,R20E


ONSHORE ORDER NO. 1

MULTI-POINT SURFACE USE & OPERAT1ØNSPLAN

L Existing Roads:

Refer to the attached locationdirections.

Refer to Topo Maps A and B for location of access roads within a 2-mile radius.

2. Planned Access Roads:

Approximately 403' +/- of new access road is proposed. Refer to Topo Map B.

Existence ofpipelines; maximum grade; turnouts; major cut and fills,culverts, or bridges;gates, cattle guards, fencecuts, or modifications to existing facilitieswere determinedat the on-site.

Please see the Natural Buttes Unit Standard Operating Procedure (SOP).

3. Location of Existing Wells Within a 1-Mile Radius:

Please refer to Topo Map C.

4. Location of Existing & Proposed Facilities:

Please see the Natural Buttes Unit SOP.

Refer to Topo Map D for the locationof the proposed pipelines.

A right-of-way is required for thepipeline. The pipeline is approximately 1,137 in length and30' in width. A 4" surface steel pipeline willbe constructed utilizingexisting disturbance wherepossible. The pipeline will be butt-welded togetherand pulled into place with a rubber tired


Federal 920-24N Surface Use & Operations Plan Page 2

Variances to Best Management Practices (BMPs) Requested:

Approximately 1,137' of 4" steel pipeline will be installedon surface within the access corridorfor the well location. As a Best Management Practice(BMP),thepipelinewould be buriedwithintheaccess road corridor if possible. The constmotion of pipelines requires thecorridor of 30 feet.

This exception to the BMP shouldbe granted by theBLM AuthorizedOfficerbecause induratedbedrock, such as sandstone, is at or within 2 feet of the surface and the soil has a poor history forsuccessful rehabilitation.

All facilities will be painted within six months of installation. Facilities required to complywith the Occupational Safety and Health Act (OSHA) will be excluded. The requestedcolor is Shadow gray (2.5Y 6/2), a non-reflective earthtone.

Interim Surface Reclamation Plan:

This exception is requested due to the current twin and multi-well program. If determined that thiswell will not be a candidate for either twinning&/or multi-well the operator shall spread thetopsoil pile on the location up to the rig anchor points. The locationwill be reshaped to theoriginal contour to the extent possible. The operator will reseed the area using the BLMrecommended seed mixture and reclamation methods.

5. Location and Type of Water Supply:

Please see the Natural Buttes SOP,

6. Source of Construction Materials:

Please see the Natural Buttes SOP.

7. Methods of Handling Waste Materials:


A plastic reinforced liner is to be used as discussedduringon-site inspection. It will be a minimum of20 mil thick and felt,with sufficient bedding used to cover any rocks. The liner will overlap thepitwalls and be covered with dirt and/or rocks to hold it in place. No trash or scrap thatcould puncturethe liner will be disposedof in thepit.

Any produced water from theproposed well will be contained in a water tank and will thenbehauled by truck to one of the pre-approved disposalsites: RNI, Sec. 5, T9S, R22E, NBU #159,Sec. 35, T9S R21E, Ace Oilfield,Sec. 2, T6S, R20E, MC&MC,Sec. 12,T6S, R19E, PipelineFacility Sec. 36, T98, R20E,GoatPasture Evaporation Pond SW/4 Sec. 16,T108, R22E, BonanzaEvaporation Pond Sec. 2, T108, R23E (Requestis in lieu offilingForm 3160-5, after initialproduction).

8. Ancillary Facilities:

Please see the Natural Buttes

API Well No: 43047501540000


Variances to Best Management Practices (BMPs) Requested:

Approximately 1,137' of 4" steel pipeline will be installedon surface within the access corridorfor the well location. As a Best Management Practice(BMP),thepipelinewould be buriedwithintheaccess road corridor if possible. The constmotion of pipelines requires thecorridor of 30 feet.

This exception to the BMP shouldbe granted by theBLM AuthorizedOfficerbecause induratedbedrock, such as sandstone, is at or within 2 feet of the surface and the soil has a poor history forsuccessful rehabilitation.

All facilities will be painted within six months of installation. Facilities required to complywith the Occupational Safety and Health Act (OSHA) will be excluded. The requestedcolor is Shadow gray (2.5Y 6/2), a non-reflective earthtone.

Interim Surface Reclamation Plan:

This exception is requested due to the current twin and multi-well program. If determined that thiswell will not be a candidate for either twinning&/or multi-well the operator shall spread thetopsoil pile on the location up to the rig anchor points. The locationwill be reshaped to theoriginal contour to the extent possible. The operator will reseed the area using the BLMrecommended seed mixture and reclamation methods.

5. Location and Type of Water Supply:

Please see the Natural Buttes SOP,

6. Source of Construction Materials:


7. Methods of Handling Waste Materials:


A plastic reinforced liner is to be used as discussedduringon-site inspection. It will be a minimum of20 mil thick and felt,with sufficient bedding used to cover any rocks. The liner will overlap thepitwalls and be covered with dirt and/or rocks to hold it in place. No trash or scrap thatcould puncturethe liner will be disposedof in thepit.

Any produced water from theproposed well will be contained in a water tank and will thenbehauled by truck to one of the pre-approved disposalsites: RNI, Sec. 5, T9S, R22E, NBU #159,Sec. 35, T9S R21E, Ace Oilfield,Sec. 2, T6S, R20E, MC&MC,Sec. 12,T6S, R19E, PipelineFacility Sec. 36, T98, R20E,GoatPasture Evaporation Pond SW/4 Sec. 16,T108, R22E, BonanzaEvaporation Pond Sec. 2, T108, R23E (Requestis in lieu offilingForm 3160-5, after initialproduction).

8. Ancillary Facilities:

Please see the Natural Buttes



9. Well Site Layout: (See LocationLayoutDiagram)

The attached LocationLayoutDiagramdescribesdrillpad cross-sections,cuts and fills,and locationsof themud tanks,reserve pit, flarepit, pipe racks, trailerparking, spoil dirt stockpile(s), and surfacematerial stockpile(s).

Please see the attached diagramto describe rig orientation,parking areas, and access roads.

Location size may change prior to the drilling of the well due to the current rig availability. If theproposed location is not large enough to accommodate the drilling rig. The location will be re-surveyed and a form 3160-5 will be submitted.

10. Plans for Reclamation of the Surface:


Upon reclamation of thepit the followingseed mixture will be used. A total of 12 lbs/acre will be usedif the seeds are drilled (24 lbs/acre if the seeds are broadcast). The per acre requirements for drilledseed are:

Crested Wheatgrass 12 lbs.

Operator shall call the BLM for the seed mixture when final reclamation occurs.

11. Surface/Mineral Ownership:

The well pad and access road are located on lands owned by:

Ute Indian TribeP.O. Box 70Fort Duchesne, Utah 84026(435) 722-5141

The mineral ownership is listed below:

United Statesof AmericaBureau of Land Management170 South 500 EastVernal, UT 84078

API Well No: 43047501540000


9. Well Site Layout: (See LocationLayoutDiagram)

The attached LocationLayoutDiagramdescribesdrillpad cross-sections,cuts and fills,and locationsof themud tanks,reserve pit, flarepit, pipe racks, trailerparking, spoil dirt stockpile(s), and surfacematerial stockpile(s).

Please see the attached diagramto describe rig orientation,parking areas, and access roads.

Location size may change prior to the drilling of the well due to the current rig availability. If theproposed location is not large enough to accommodate the drilling rig. The location will be re-surveyed and a form 3160-5 will be submitted.

10. Plans for Reclamation of the Surface:


Upon reclamation of thepit the followingseed mixture will be used. A total of 12 lbs/acre will be usedif the seeds are drilled (24 lbs/acre if the seeds are broadcast). The per acre requirements for drilledseed are:

Crested Wheatgrass 12 lbs.

Operator shall call the BLM for the seed mixture when final reclamation occurs.

11. Surface/Mineral Ownership:

The well pad and access road are located on lands owned by:

Ute Indian TribeP.O. Box 70Fort Duchesne, Utah 84026(435) 722-5141

The mineral ownership is listed below:

United Statesof AmericaBureau of Land Management170 South 500 EastVernal, UT 84078



12. Stipulations/Notices/Mitigation:

There are no stipulations or notices for this location.


A Class III archaeologicalsurvey and a paleontological survey have been performed and will besubmitted.

This locationis not within 460' fromthe boundaryof the Natural Buttes Unit, nor is it within 460' ofany non-committed tract lying within the boundaries of the Unit.

14. Lessee's or Operator's Representative & Certification:

Kevin McIntyre Randy BayneRegulatory Analyst Drilling ManagerKerr-McGee Oil & Gas Onshore LP Kerr-McGee Oil & Gas Onshore LPP.O. Box 173779 1368 South 1200 EastDenver, CO 80217-3779 Vemal, UT 84078(720) 929-6226 (435) 781-7018

Certification: All lease and/or unit operations will be conducted in such a manner that fullcomplianceis made with all applicable laws, regulations, Onshore Oil and Gas Orders, the approved Plan ofOperations,and any applicable Notice to Lessees.

Kerr-McGee Oil & GasOnshoreLP is considered to be the operator of the subject welL Kerr-McGeeOil & Gas Onshore LP agrees to be responsible under the terms and conditions of the lease for theoperations conducted upon leased lands.

The Operator will be fully responsible for the actions of its subcontractors. A complete copy of theapproved "Application for Permit to Drill" will be furnished to the field representative(s) to ensurecompliance and shall be on locationduring all construction and drillingoperations.

Bond coverage pursuant to 43 CFR 3104 for lease activities is being provided by Bureau of LandManagement NationwideBond #WYB000291.

I herebycertify that I, or persons under my supervision,have inspectedtheproposed drill site andaccess route, that I am familiarwith theconditions thatcurrentlyexist; thatthe statementsmade in thisplan are, to thebest of my knowledge,trueand correct; and thework associated with the operationsproposedherein will be performed by theOperator,its contractors, and subcontractors in conformitywith thisplan and thetermsand conditions under which it is approved.

"><g

.

9/24/2008KevinMcIntyre

API Well No: 43047501540000


12. Stipulations/Notices/Mitigation:

There are no stipulations or notices for this location.


A Class III archaeologicalsurvey and a paleontological survey have been performed and will besubmitted.

This locationis not within 460' fromthe boundaryof the Natural Buttes Unit, nor is it within 460' ofany non-committed tract lying within the boundaries of the Unit.

14. Lessee's or Operator's Representative & Certification:

Kevin McIntyre Randy BayneRegulatory Analyst Drilling ManagerKerr-McGee Oil & Gas Onshore LP Kerr-McGee Oil & Gas Onshore LPP.O. Box 173779 1368 South 1200 EastDenver, CO 80217-3779 Vemal, UT 84078(720) 929-6226 (435) 781-7018

Certification: All lease and/or unit operations will be conducted in such a manner that fullcomplianceis made with all applicable laws, regulations, Onshore Oil and Gas Orders, the approved Plan ofOperations,and any applicable Notice to Lessees.

Kerr-McGee Oil & GasOnshoreLP is considered to be the operator of the subject welL Kerr-McGeeOil & Gas Onshore LP agrees to be responsible under the terms and conditions of the lease for theoperations conducted upon leased lands.

The Operator will be fully responsible for the actions of its subcontractors. A complete copy of theapproved "Application for Permit to Drill" will be furnished to the field representative(s) to ensurecompliance and shall be on locationduring all construction and drillingoperations.

Bond coverage pursuant to 43 CFR 3104 for lease activities is being provided by Bureau of LandManagement NationwideBond #WYB000291.

I herebycertify that I, or persons under my supervision,have inspectedtheproposed drill site andaccess route, that I am familiarwith theconditions thatcurrentlyexist; thatthe statementsmade in thisplan are, to thebest of my knowledge,trueand correct; and thework associated with the operationsproposedherein will be performed by theOperator,its contractors, and subcontractors in conformitywith thisplan and thetermsand conditions under which it is approved.

"><g

.

9/24/2008KevinMcIntyre


T9S, R20E, S.L B.&M.SB8'26'W 81 58 (G.L.O.)

$88 26'58"W 2692.14' (Meas.) Found 1968Brass Cap.Pile of Stones

Found 1968Brass Cap.Pile of Stones.

O

FEDERAL 920-24N (Proposed Well Head)

NAD 83 LATITUDE = 40.01585' (40' 00' 57.05")LONGITUDE- 109.61723 (109' 37 02.04")

NAD 27 LATITUDE = 40.01588' (40' 00 57.18")LONGITUDE = 109.61654' (109' 36' 59.55") O

Found 1968

P

od

' 24

WELLLOCATION:FEDERAL920-24NELEV. UNGRADED GROUND = 4846 2' ° $

1876 Proposed

Found 1968Brass Cap.Pile of Stones. Found 1968Cap is on a Brass Cop, i

Fence Line. Galvanised Pipe

Found 1968& Cap.

Brass cap. (g ) SB9'04'00"W - 2551.20' (Meas.) Piis of stones.Pile of Stones. S88 08'02"W - 2662.15 eas

S89'O4'W 38.60 (G.L.O.) cap is on o

cap is an S88'07'W 40.35 (G.L.O.) Fence Line,

Fence Line.o o o

NOTES: o o - o

A = Section Corners Located1. Well footages are measured at right angles

to the Section Lines.SC A LE

2. G.L.O. distances are shown in feet or SURVEYOR'S CERTIFICATEchains. 1 chain = 66 feet.

3. Bearings are based on Global Positioning THIS IS TO CERTIFY THAT THE A PLAT WAS

Satellite observations. PREPARED FROM FIELD NO SURVEYS

4. Basis of elevation is the Northwest Corner MADE BY ME OR UNDER M D THAT

of Section 12, T9S, R20E, S.L.B.&M. The THE SAME ARE TRUE AN '19 EST OF

elevation of this Section Corner is shown MY KNOWLEDGE AND B No 6028691on the Ouray SE 7.5 Min. Quadrongle as E' HN

being 4676'. LA

REG ERE LAN V

Kerr-McGee s"4,SETROAFnUOT

E OF

Oil & Gas Onshore, LP1099 18th Street - Denver, Colorado 80202 9 TIMBERLINE -

ENGINEERING & LAND SURVEYING, INC.FEDERAL 920-24N 38 WEST 100 NORTH - VERNAL, UTAH 84078

WELL PLAT CONSULTING, LLC URVEYED: SURVEYEDBY: B.J.s. SHEET822' FSL, 1876' FWL 371coffeen Avenue

Sheridan WY 82801 DRAWN BY: B.R.B.SE ¾SW ¾OF SECTION 24, T9S, R20E, y 3ey,sy4.ogog

S.L.B.&M.UINTAHCOUNTY, UTAH. Fax 307-674-0182 SCALE 1" = 1000' D12Last Revised: OF

API Well No: 43047501540000

T9S, R20E, S.L B.&M.SB8'26'W 81 58 (G.L.O.)

$88 26'58"W 2692.14' (Meas.) Found 1968Brass Cap.Pile of Stones

Found 1968Brass Cap.Pile of Stones.

O

FEDERAL 920-24N (Proposed Well Head)

NAD 83 LATITUDE = 40.01585' (40' 00' 57.05")LONGITUDE- 109.61723 (109' 37 02.04")

NAD 27 LATITUDE = 40.01588' (40' 00 57.18")LONGITUDE = 109.61654' (109' 36' 59.55") O

Found 1968

P

od

' 24

WELLLOCATION:FEDERAL920-24NELEV. UNGRADED GROUND = 4846 2' ° $

1876 Proposed

Found 1968Brass Cap.Pile of Stones. Found 1968Cap is on a Brass Cop, i

Fence Line. Galvanised Pipe

Found 1968& Cap.

Brass cap. (g ) SB9'04'00"W - 2551.20' (Meas.) Piis of stones.Pile of Stones. S88 08'02"W - 2662.15 eas

S89'O4'W 38.60 (G.L.O.) cap is on o

cap is an S88'07'W 40.35 (G.L.O.) Fence Line,

Fence Line.o o o

NOTES: o o - o

A = Section Corners Located1. Well footages are measured at right angles

to the Section Lines.SC A LE

2. G.L.O. distances are shown in feet or SURVEYOR'S CERTIFICATEchains. 1 chain = 66 feet.

3. Bearings are based on Global Positioning THIS IS TO CERTIFY THAT THE A PLAT WAS

Satellite observations. PREPARED FROM FIELD NO SURVEYS

4. Basis of elevation is the Northwest Corner MADE BY ME OR UNDER M D THAT

of Section 12, T9S, R20E, S.L.B.&M. The THE SAME ARE TRUE AN '19 EST OF

elevation of this Section Corner is shown MY KNOWLEDGE AND B No 6028691on the Ouray SE 7.5 Min. Quadrongle as E' HN

being 4676'. LA

REG ERE LAN V

Kerr-McGee s"4,SETROAFnUOT

E OF

Oil & Gas Onshore, LP1099 18th Street - Denver, Colorado 80202 9 TIMBERLINE -

ENGINEERING & LAND SURVEYING, INC.FEDERAL 920-24N 38 WEST 100 NORTH - VERNAL, UTAH 84078

WELL PLAT CONSULTING, LLC URVEYED: SURVEYEDBY: B.J.s. SHEET822' FSL, 1876' FWL 371coffeen Avenue

Sheridan WY 82801 DRAWN BY: B.R.B.SE ¾SW ¾OF SECTION 24, T9S, R20E, y 3ey,sy4.ogog

S.L.B.&M.UINTAHCOUNTY, UTAH. Fax 307-674-0182 SCALE 1" = 1000' D12Last Revised: OF

API Well No: 43047501540000

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API Well No: 43047501540000Al I Well No: 43047501540000

PHOTOVIEW; FROMCORNER#5 TO LOCATIONSTAKE CAMERÄANGLE SOUTHEASTERLY

PHOTOVIEW: FROM BEGINN1NGOF PROPOSED ROAD CAMERAANGLE: SOUTHERLY

Kerr-McGeeOil & Gas Onshore, LP

1099 18th Street - Denver, Colorado 80202

O LOCATION PHOTOS DATETAKEN:07-31-08

FEDERAL920-24N DATEDRAWN:08.01-08

822' FSL, 1876' FWL TAKENBY: M.S,B, DRAWNBY:BR.B. REVISED: 09-12-08

CONSULTING, LLCSE# SW¾ OF SECTION 24, T9S, R20E, n Agog; g,rri,berli'ti,e («ss; zoo-oss SHEET

S.L.B.&M.UINTAHCOUNTY,UTAH. Ph ».307.674.0609 Engineering & Land Surveying, Inc. 4Far 307.6N.0182 38 WEST 100 NORTH VERNAL.,UTAH 84078 OF


Kerr-McGee Oil & Gas Onshore, LPFEDERAL 920-24N

Section 24, T9S, R20E, S.L.B.&M.

PROCEED IN A WESTERLY DIRECTION FROM VERNAL, UTAH ALONG U.S.

HIGHWAY 40 APPROXIMATELY 13.9 MILES TO THE JUNCTION OF STATE HIGHWAY

88. EXIT LEFT AND PROCEED IN A SOUTHERLY DIRECTION ALONG STATE

HIGHWAY 88 APPROXIMATELY 16.8 MILES TO OURAY, UTAH. FROM OURAY,PROCEED IN A SOUTHERLY DIRECTION ALONG THE SEEP IUDGE ROAD (COUNTY

B ROAD 2810) APPROXIMATELY 5.3 MILES TO THE INTERSECTION OF AN EXISTING

ROAD TO THE EAST. EXIT LEFT AND PROCEED IN A NORTHEASTERLY DIRECTION

ALONG EXISTING ROAD APPROXIMATELY 3.8 MILES TO THE PROPOSED ACCESS

ROAD. FOLLOW ROAD FLAGS IN A SOUTHWESTERLY DIRECTION

APPROXIMATELY 3,530 FEET TO THE PROPOSED LOCATION.

TOTAL DISTANCE FROM VERNAL, UTAH TO THE PROPOSED WELL LOCATION ISAPPROXIMATELY 40.5 MILES IN A SOUTHERLY DIRECTION.

II

SHEET 9 OF

API Well No: 43047501540000

Kerr-McGee Oil & Gas Onshore, LPFEDERAL 920-24N

Section 24, T9S, R20E, S.L.B.&M.

PROCEED IN A WESTERLY DIRECTION FROM VERNAL, UTAH ALONG U.S.

HIGHWAY 40 APPROXIMATELY 13.9 MILES TO THE JUNCTION OF STATE HIGHWAY

88. EXIT LEFT AND PROCEED IN A SOUTHERLY DIRECTION ALONG STATE

HIGHWAY 88 APPROXIMATELY 16.8 MILES TO OURAY, UTAH. FROM OURAY,PROCEED IN A SOUTHERLY DIRECTION ALONG THE SEEP IUDGE ROAD (COUNTY

B ROAD 2810) APPROXIMATELY 5.3 MILES TO THE INTERSECTION OF AN EXISTING

ROAD TO THE EAST. EXIT LEFT AND PROCEED IN A NORTHEASTERLY DIRECTION

ALONG EXISTING ROAD APPROXIMATELY 3.8 MILES TO THE PROPOSED ACCESS

ROAD. FOLLOW ROAD FLAGS IN A SOUTHWESTERLY DIRECTION

APPROXIMATELY 3,530 FEET TO THE PROPOSED LOCATION.

TOTAL DISTANCE FROM VERNAL, UTAH TO THE PROPOSED WELL LOCATION ISAPPROXIMATELY 40.5 MILES IN A SOUTHERLY DIRECTION.

II

SHEET 9 OF

API Well No: 43047501540000API Well No: 43047501540000I

TSS

±3.8 miles

edera 920-2

T10S

LegendProposed Federal 920-24N Well Location

Access Route - Proposed

Kerr-McGee Oil & Gas Onshore, LP1099 18th Street, Denver, Colorado 80202 N

Federal 920-24N 609

Topo A822' FSL, 1876' FWL CON5ULTJNG,LLC

371 Coffeen Avenue Scale. T:100,000 ADB3 USP Central Sheet No:

SE¼.SW¼,Section 24, T9S, R20E Sheridan,WYB2801

S.L.B.&M., Uintah County, Utah 1"$°Li" "',a JELo 26 Aug 20085 Of

API Well No: 43047501540000I

TSS

±3.8 miles

edera 920-2

T10S

LegendProposed Federal 920-24N Well Location

Access Route - Proposed

Kerr-McGee Oil & Gas Onshore, LP1099 18th Street, Denver, Colorado 80202 N

Federal 920-24N 609

Topo A822' FSL, 1876' FWL CON5ULTJNG,LLC

371 Coffeen Avenue Scale. T:100,000 ADB3 USP Central Sheet No:

SE¼.SW¼,Section 24, T9S, R20E Sheridan,WYB2801

S.L.B.&M., Uintah County, Utah 1"$°Li" "',a JELo 26 Aug 20085 Of


±e. mi to Ouray19

F dera 92 24P403ft d'20-24

ra 92 2

25

Legend Total Proposed Road Length: ±612ft

O Well- Proposed Well Pad Road - Proposed

--- Road - Existing

Kerr-McGee Oil & Gas Onshore, LP1099 18tli Street, Denver, Colorado 80202 ' N

Federal 920-24N 609

Topo B822' FSL,1876' FWL CONSULTlNG, l.LC

371 CoffeenAvenue Scale: 1" - 2000ft ADB3 USPCentral Sheet No:

SE¼ SW¼, Section 24,T9S, R20E Shendan,wYB2801

S.L.B.&M., Uintah County, Utah 1"$U,To"L" "";JELo t 26 Aug


dera 92 24PF ra 0-24

NB

E2DD2 H

20 -a

NO2USL 0e e

NBU

Legend Well locations derived from State of Utah, Dept. of Natural Resources Division of Oil. Gas and Mining

O Well - Proposed V¾ll - 1 Mile Radius O Producing Location Abandoned Shut-In

Well Pad A Approved permit {APD};not yet spudded -O Temporarily-Abandoned

Spudded (Drillingcommenced: Not yet comple IPlugged and Abandoned

Kerr-McGee Oil & Gas Onshore, LP1099 lath Street, Denver, Colorado ao2o2 N

609Federaf 920-24N

Topo C822' FSI., 1876' FWL CONSULTING, l.l.C

371 CoÏfeenAvenue Cale. 1" = 2000ft ADB3 USP Central sheetNo:

SE¼ SW¼, Section 24, T9S, R20E sherraan,wye2soi

S.LB.&M., Uintah County, Utah Ì iQ °i°" 1 JELO 26 Aug 2DOS7 OÎ


NBO2 24L

9 02U

D

Tie-In Point

Legend Total Proposed Pipeline Length ±1 137ft

O Well Proposed Well Pad • " " Pipeline - Proposed Road - Proposed"""" Pipeline - Existing --- Road - Existing

Kerr-McGee Oil & Gas Onshore, LP1099 18th Street, Denver, Colorado ao2o2 N

Fedral 920-24NTopo D

822' FSL, 1876' FWL CONSULTING, LLC371 Coffeen Avenue Scale: 19 2000ft ADfl3 USP Centra Sheet Nu:

SE¼ SW¼, Section 24, T9S, R20E sheridas,wya2soi

S.LB.&M., Uintah County, UtahÌ$°ÀUoi

,"iJELo 28 Aug

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N A T U R A L B U T T E S U N I TN A T U R A L B U T T E S U N I T

24

25

23

26

19

30

14 13 18

T 9 S R 20 ET 9 S R 21 E

4304715380NBU 2

4304715379NBU 7

4304731188NBU 78

4304731133NBU 7-19GR

4304730472NBU 45-24B

4304730453NBU 50-19B

4304730450NBU 46-26B

4304730293NBU 12-23B

4304750148NBU 920-24P

4304750147NBU 920-24L

4304750146NBU 920-24I

4304750116NBU 719-26E

4304750113NBU 920-24B

4304740265NBU 720-26E

4304740264NBU 717-26E

4304740218NBU 737-30E

4304740210NBU 718-26E

4304738108NBU 921-30E

4304738107NBU 921-30C

4304737764NBU 920-24M

4304737099NBU 921-30D

4304737016NBU 920-26K

4304737015NBU 920-26F

4304737012NBU 920-26C

4304737010NBU 920-25J

4304737009NBU 920-25G

4304737008NBU 920-25F

4304737007NBU 920-25E

4304737006NBU 920-25D

4304737005NBU 920-25C

4304736999NBU 920-25L

4304736998NBU 920-25K

4304733140NBU 506-23E

4304733065NBU 483-19E

4304732382NBU 355-19E

4304750155Federal 920-24O4304750154

Federal 920-24N

4304737763FEDERAL 920-24H

4304737762FEDERAL 920-24G

4304737081FEDERAL 920-25A

4304737080FEDERAL 920-25H

4304737079FEDERAL 920-25I

4304737004FEDERAL 920-25B

4304730499CIGE 29-23-9-20

Map Produced by Diana MasonMap Prepared:

Well Name: Federal 920-24NAPI Number: 4304750154

Township 09.0 S Section 24Range 20.0 EMeridian: SLBM

F1,300 0 1,300650 Feet

1:12,000

UnitsSTATUS

ACTIVE

EXPLORATORY

GAS STORAGE

NF PP OIL

NF SECONDARY

PI OIL

PP GAS

PP GEOTHERML

PP OIL

SECONDARY

TERMINATED

FieldsSTATUS

ACTIVE

COMBINED

Sections

Township

Wells Query Events

D <all other values>

GIS_STAT_TYPE

" <Null>

APD

H DRL

4 GI

!* GS

N LA

G NEW

7 OPS

ª PA

* PGW

' POW

O RET

¸ SGW

· SOW

6 TA

" TW

¸ WD

¸ WI

=* WS

â Bottom Hole Location

Tooele

Millard

Iron

San Juan

Kane

Juab

Uintah

Box Elder

Emery

Garfield

Grand

Utah

Beaver Wayne

Duchesne

Sevier

Summit

Rich

Washington

Carbon

Sanpete

Cache

Piute

Davis

Wasatch

Weber

DaggettSalt Lake

Morgan

Location Map

Operator: KERR-MCGEE OIL & GAS ONSHORE, L.P.

API W

ell No: 43047501540000

3 API Number: 4304750154 44 47 23 Well Name: Federal 920-24N

43 73 93 4 47 1 B 35 19U ¯ B 20 4 43 47 38r TOWOShip 09.0 S Range 20.0 E Section 24Meridian: SLBM

O 3 40 43 471 37 OpefâÍOr: KERR-MCGEE OIL & GAS ONSHORE, L.P.N 6- N 7

Map Prepared:Map Produced by Diana Mason

4 47 4 units weils cueryEvents

4304737763 B 50 9B STATUS<allothervalues>

FEDERAL 920-24H ACTIVE

EXPLORATORY GIS_STAT_TYPE

4304737762 GAS STORAGE<Null>

FEDERAL920-24GNFPPOIL APD

NF SECONDARY DRL

PI OIL GI

PP GASGS

24 PP GEOTHERML

30 5 47 pp OIL LAN 0- 4L

SECONDARY NEW

43 73 65 TERMINATED OPS

4304730472 43 47 14 U 3- E Fields PA

4304730499 NBU 45-24B U 20 41STATUS

PGWCIGE 29-23-9-20 ACTIVE

A POWCOMBINED

RETSections

TownshipSGW

SOW

4 47 14 TA

U 20 4F 43 47 **

A L BUTTES F I ELD 4304750154Fe4d3e0a952 -5254( U 1 F WD

Federal 920-24N ‡ WI

UR A Y F I ELD 30 737764N 20-24M ws

Bottom Hole Location

04 8 Cache

4 47 09 30 37888 B 9 -30 Box Elder Rich Location Map43 73 05 U 21 0 vmb r

N30 372124 047 04

43U47 000D U 0 5CFED

OR4AL300425B FEDOR

L2008125? DavisLaor

summ

B 46 6 Tooele

UtahsatchDuchesne

U tah

JuabCarbon

Sanpete4304737080 Millard Emery Grand43 473 00 FEDERAL 920-25E 30 38 8

04 70 5 30 4 10 04 70 U 0- G N 9 -3 sevierB 9 -26 N 7 8- E B 92 -25 4 47 70 X

B 92 -25 Beaver Piute wayne30 4 64

N 7 - Iron GarfieldSan Juan

Washington Kane4 47 02

4304737079 B 3 0FEDERAL 920-25

43 75 16 4 47 69804926925 4 47 01

30 37 16 U 9- E 43 47 26 B 92 -25 BU 20 5JN 9 0- U 20- 6E

1,300 650

1:12,000

1,300

3 API Number: 4304750154 44 47 23 Well Name: Federal 920-24N

43 73 93 4 47 1 B 35 19U ¯ B 20 4 43 47 38r TOWOShip 09.0 S Range 20.0 E Section 24Meridian: SLBM

O 3 40 43 471 37 OpefâÍOr: KERR-MCGEE OIL & GAS ONSHORE, L.P.N 6- N 7

Map Prepared:Map Produced by Diana Mason

4 47 4 units weils cueryEvents

4304737763 B 50 9B STATUS<allothervalues>

FEDERAL 920-24H ACTIVE

EXPLORATORY GIS_STAT_TYPE

4304737762 GAS STORAGE<Null>

FEDERAL920-24GNFPPOIL APD

NF SECONDARY DRL

PI OIL GI

PP GASGS

24 PP GEOTHERML

30 5 47pp OIL LA

N 0- 4LSECONDARY NEW

43 73 65 TERMINATED OPS

4304730472 43 47 14 U 3- E Fields PA

4304730499 NBU 45-24B U 20 41STATUS

PGWCIGE 29-23-9-20 ACTIVE

A POWCOMBINED

RETSections

TownshipSGW

SOW

4 47 14 TA

U 20 4F 43 47 13

A L BUTTES F I ELD 4304750154Fe4d3e0a952 -5254( U -1 F WD

Federal 920-24N ‡ *I

UR A Y F I ELD 30 737764N 20-24M ws

Bottom Hole Location

04 8 Cache

4 47 09 30 37888 B 9 -30 Box Elder Rich Location Map43 73 05 U 21 Op vmb r

N30 372124 047 04

43U47 000D U 0 5CFED

OR4AL300425B FEDOR

L2008125? DavisLaor

summ

B 46 6 Tooele

UtahsatchDuchesne

U tah

JuabCarbon

Sanpete4304737080 Millard Emery Grand43 473 00 FEDERAL 920-25E 30 38 8

04 70 5 30 4 10 04 70 U 0- G N 9 -3 sevierB 9 -26 N 7 8- E B 92 -25 4 47 70

B 92 -25 Beaver Piute wayne30 4 64

N 7 - Iron GarfieldSan Juan

Washington Kane4 47 02

4304737079 B 3 0FEDERAL 920-25

43 75 16 4 47 69804926925 4 47 01

30 37 16 U 9- E 43 47 26 B 92 -25 BU 20 5JN 9 0- U 20- 6E

1,300 650

1:12,000

1,300

WORKSHEETAPPLICATION FOR PERMIT TO DRILL

APD RECEIVED: 9/24/2008 API NO. ASSIGNED: 43047501540000

WELL NAME: Federal 920-24N

OPERATOR: KERR-MCGEE OIL & GAS ONSHORE, L.P. (N2995) PHONE NUMBER: 720 929-6226

CONTACT: Kevin McIntyre

PROPOSED LOCATION: SESW 24 090S 200E Permit Tech Review:

SURFACE: 0822 FSL 1876 FWL Engineering Review:

BOTTOM: 0822 FSL 1876 FWL Geology Review:

COUNTY: UINTAH

LATITUDE: 40.01577 LONGITUDE: -109.61661

UTM SURF EASTINGS: 618063.00 NORTHINGS: 4430214.00

FIELD NAME: NATURAL BUTTES

LEASE TYPE: 1 - Federal

LEASE NUMBER: UTU-0579 PROPOSED FORMATION: WSMVD

SURFACE OWNER: 2 - Indian COALBED METHANE: NO

RECEIVED AND/OR REVIEWED: LOCATION AND SITING:

PLAT R649-2-3.

Bond: FEDERAL - WYB000291 Unit:

Potash R649-3-2. General

Oil Shale 190-5

Oil Shale 190-3 R649-3-3. Exception

Oil Shale 190-13 Drilling Unit

Water Permit: Permit #43-8496 Board Cause No: R649-3-2

RDCC Review: Effective Date:

Fee Surface Agreement Siting:

Intent to Commingle R649-3-11. Directional Drill

Comments: Presite Completed

Stipulations: 4 - Federal Approval - dmason 17 - Oil Shale 190-5(b) - dmason


I

I








COUNTY: UINTAH







I


PLAT R649-2-3.

Bond: FEDERAL - WYBOOO291 Unit:


Oil Shale 190-5







I


Stipulations: 4 - Federal Approval - dmason17 - Oil Shale 190-5(b) -


I

I








COUNTY: UINTAH







I


PLAT R649-2-3.

Bond: FEDERAL - WYBOOO291 Unit:


Oil Shale 190-5







I


Stipulations: 4 - Federal Approval - dmason17 - Oil Shale 190-5(b) -

Permit To Drill

******************Well Name: Federal 920-24N

API Well Number: 43047501540000

Lease Number: UTU-0579

Surface Owner: INDIAN

Approval Date: 9/29/2008

Issued to:KERR-MCGEE OIL & GAS ONSHORE, L.P. , P.O. Box 173779, Denver, CO 80217

Authority:Pursuant to Utah Code Ann. §40-6-1 et seq., and Utah Administrative Code R649-3-1 et seq., theUtah Division of Oil, Gas and Mining issues conditions of approval, and permit to drill the listedwell. This permit is issued in accordance with the requirements of R649-3-2.

Duration:This approval shall expire one year from the above date unless substantial and continuous operationis underway, or a request for extension is made prior to the expiration date

General:Compliance with the requirements of Utah Admin. R. 649-1 et seq., the Oil and Gas ConservationGeneral Rules, and the applicable terms and provisions of the approved Application for permit to drill.

Conditions of Approval:State approval of this well does not supercede the required federal approval, which must be obtainedprior to drilling.

In accordance with the Order in Cause No. 190-5(b) dated October 28, 1982, the operator shallcomply with the requirements of Rules R649-3-31 and R649-3-27 pertaining to Designated Oil ShaleAreas. Additionally, the operators shall ensure that the surface and or production casing is properlycemented over the entire oil shale section as defined by Rule R649-3-31. The Operator shall reportthe actual depth the oil shale is encountered to the division.

Notification Requirements:Notify the Division with 24 hours of spudding the well. • Contact Carol Daniels at (801) 538-5284.

Notify the Division prior to commencing operations to plug and abandon the well. • Contact Dustin Doucet at (801) 538-5281 office (801) 733-0983 home


- State of Utahi DEPARTMENT OF NATURAL RESOURCES

%.gg,M MICHAEL R. STYLER

JON M. HUNTSMAN, JR. Exoutin Drætor

amoror Division of Oil, Gas and MiningGARY R. HERBERT JOHN R. BAZALieutenant Gowrær Drision Omctor

Permit To Drillkkkkkkkkkkkkkkkkkk

Well Name: Federal 920-24NAPI Well Number: 43047501540000

Lease Number: UTU-0579Surface Owner: INDIANApproval Date: 9/29/2008


Authority:Pursuant to Utah Code Ann. §40-6-1et seq., and Utah Administrative Code R649-3-1 et seq., theUtah Division of Oil, Gas and Mining issues conditions of approval, and permit to drill the listedwell. This permit is issued in accordance with the requirements of R649-3-2.





Notification Requirements:Notify the Division with 24 hours of spudding the well.

• Contact Carol Daniels at (801) 538-5284.

Notify the Division prior to commencing operations to plug and abandon the well.• Contact Dustin Doucet at (801) 538-5281 office (801) 733-0983

API Well No: 43047501540000

State of UtahDEPARTMENT OF NATURAL RESOURCES

%.ggy MICHAEL R. STYLER

JON M. HUNTSMAN, JR. Exoutin Drætor

amoror Division of Oil, Gas and MiningGARY R. HERBERT JOHN R. BAZALieutenant Gowrær Drision Omctor

Permit To Drillkkkkkkkkkkkkkkkkkk

Well Name: Federal 920-24NAPI Well Number: 43047501540000

Lease Number: UTU-0579Surface Owner: INDIANApproval Date: 9/29/2008


Authority:Pursuant to Utah Code Ann. §40-6-1et seq., and Utah Administrative Code R649-3-1 et seq., theUtah Division of Oil, Gas and Mining issues conditions of approval, and permit to drill the listedwell. This permit is issued in accordance with the requirements of R649-3-2.





Notification Requirements:Notify the Division with 24 hours of spudding the well.

• Contact Carol Daniels at (801) 538-5284.

Notify the Division prior to commencing operations to plug and abandon the well.• Contact Dustin Doucet at (801) 538-5281 office (801) 733-0983

Reporting Requirements:All required reports, forms and submittals will be promptly filed with the Division, including but notlimited to the Entity Action Form (Form 6), Report of Water Encountered During Drilling (Form 7),Weekly Progress Reports for drilling and completion operations, and Sundry Notices and Reports onWells requesting approval of change of plans or other operational actions.

Approved By:

Gil HuntAssociate Director, Oil & Gas



Approved By:

Gil HuntAssociate Director, Oil &

API Well No: 43047501540000


Approved By:

Gil HuntAssociate Director, Oil &

API Well No: 43047501540000


DIVISION OF OIL, GAS, AND MINING

FORM 9

5.LEASE DESIGNATION AND SERIAL NUMBER: UTU-0579

SUNDRY NOTICES AND REPORTS ON WELLSDo not use this form for proposals to drill new wells, significantly deepen existing wells below currentbottom-hole depth, reenter plugged wells, or to drill horizontal laterals. Use APPLICATION FOR PERMIT TODRILL form for such proposals.

6. IF INDIAN, ALLOTTEE OR TRIBE NAME: Ute

7.UNIT or CA AGREEMENT NAME:

1. TYPE OF WELL Gas Well

8. WELL NAME and NUMBER: Federal 920-24N

2. NAME OF OPERATOR: KERR-MCGEE OIL & GAS ONSHORE, L.P.

9. API NUMBER: 43047501540000

3. ADDRESS OF OPERATOR: P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779

9. FIELD and POOL or WILDCAT: NATURAL BUTTES

4. LOCATION OF WELL FOOTAGES AT SURFACE: 0822 FSL 1876 FWL QTR/QTR, SECTION, TOWNSHIP, RANGE, MERIDIAN: Qtr/Qtr: SESW Section: 24 Township: 09.0S Range: 20.0E Meridian: S

COUNTY: UINTAH

STATE: UTAH

11.

CHECK APPROPRIATE BOXES TO INDICATE NATURE OF NOTICE, REPORT, OR OTHER DATA

TYPE OF SUBMISSION TYPE OF ACTION

NOTICE OF INTENTApproximate date work will start:

9/28/2009

SUBSEQUENT REPORTDate of Work Completion:

SPUD REPORTDate of Spud:

DRILLING REPORTReport Date:

ACIDIZE ALTER CASING CASING REPAIR

CHANGE TO PREVIOUS PLANS CHANGE TUBING CHANGE WELL NAME

CHANGE WELL STATUS COMMINGLE PRODUCING FORMATIONS CONVERT WELL TYPE

DEEPEN FRACTURE TREAT NEW CONSTRUCTION

OPERATOR CHANGE PLUG AND ABANDON PLUG BACK

PRODUCTION START OR RESUME RECLAMATION OF WELL SITE RECOMPLETE DIFFERENT FORMATION

REPERFORATE CURRENT FORMATION SIDETRACK TO REPAIR WELL TEMPORARY ABANDON

TUBING REPAIR VENT OR FLARE WATER DISPOSAL

WATER SHUTOFF SI TA STATUS EXTENSION APD EXTENSION

WILDCAT WELL DETERMINATION OTHER OTHER:

12. DESCRIBE PROPOSED OR COMPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.

Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests anextension to this APD for the maximum time allowed. Please contact the

undersigned with any questions and/or comments. Thank you.

NAME (PLEASE PRINT) Danielle Piernot

TITLE Regulatory Analyst

SIGNATURE N/A

DATE 9/24/2009

PHONE NUMBER:720 929-6007 Ext

PHONE NUMBER720 929-6156

September 24, 2009

September 30, 2009

iPI Well No: 43047501540000

FORM 9STATE OF UTAH

DEPARTMENT OF NATURAL RESOURCESDIVISION OF OIL, GAS, AND MINING 5.LEASOE9D9ESIGNATION AND SERIAL NUMBER:

SUNDRY NOTICES AND REPORTS ON WELLS IFINDIAN,ALLOTTEEORTRIBENAME:

Do not use this form for proposals to drill new wells, significantly deepen existing wells below currentbottom-hole depth, reenter plugged wells, or to drill horizontal laterals. Use APPLICATION FOR PERMIT TO 7.UNIT or CA AGREEMENT NAME:

DRILL form for such proposals.

1. TYPE OF WELL 8. WELL NAME and NUMBER:Gas Well Federal 920-24N

2.NAMEOFOPERATOR: 9.APINUMBER:KERR-MCGEEOIL&GASONSHORE,L.P. 43047501540000

3. ADDRESS OF OPERATOR: PHONE NUMBER: 9. FIELD and POOL or WILDCAT:P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779 720 929-6007 Ext NATURAL BUTTES

4.LOCATIONOFWELL COUNTY:FOOTAGES AT SURFACE: UINTAH

0822 FSL 1876 FWLQTR/QTR, SECTION, TOWNSHIP, RANGE, MERIDIAN: STATE:

Qtr/Qtr: SESW Section: 24 Township: 09.0S Range: 20.0E Meridian: S UTAH

11.CHECK APPROPRIATE BOXES TO INDICATE NATURE OF NOTICE, REPORT, OR OTHER DATA



/ NOTICE OF INTENTApproximate date work will start: CHANGE TO PREVIOUS PLANS CHANGE TUBING CHANGE WELL NAME

9/28/2009CHANGE WELL STATUS COMMINGLE PRODUCING FORMATIONS CONVERT WELL TYPE

SUBSEQUENT REPORT DEEPEN FRACTURE TREAT NEW CONSTRUCTIONDate of Work Completion:



O SPUD REPORTDate of Spud: REPERFORATE CURRENT FORMATION SIDETRACK TO REPAIR WELL TEMPORARY ABANDON


DRILLING REPORT WATER SHUTOFF SI TA STATUS EXTENSION APD EXTENSIONReport Date:


12. DESCRIBE PROPOSED OR CC MPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests an

extension to this APD for the maximum time allowed. Please contact the Approved by theundersigned with any questions and/or comments. Thank you. Utah Division of

Oil, Gas and Mining

Date: September 30, 2009

By:

NAME (PLEASE PRINT) PHONE NUMBER TITLEDanielle Piernot 720 929-6156 Regulatory Analyst

SIGNATURE DATEN/A 9/24/2009

RECEIVED September 24,

iPI Well No: 43047501540000

FORM 9STATE OF UTAH

DEPARTMENT OF NATURAL RESOURCESDIVISION OF OIL, GAS, AND MINING 5.LEASOE9D9ESIGNATION AND SERIAL NUMBER:

SUNDRY NOTICES AND REPORTS ON WELLS IFINDIAN,ALLOTTEEORTRIBENAME:



1. TYPE OF WELL 8. WELL NAME and NUMBER:Gas Well Federal 920-24N

2.NAMEOFOPERATOR: 9.APINUMBER:KERR-MCGEEOIL&GASONSHORE,L.P. 43047501540000




Qtr/Qtr: SESW Section: 24 Township: 09.0S Range: 20.0E Meridian: S UTAH















Oil, Gas and Mining


By:




The Utah Division of Oil, Gas, and Mining

- State of Utah- Department of Natural Resources

Electronic Permitting System - Sundry Notices

Request for Permit Extension Validation Well Number 43047501540000

API: 43047501540000Well Name: Federal 920-24N

Location: 0822 FSL 1876 FWL QTR SESW SEC 24 TWNP 090S RNG 200E MER SCompany Permit Issued to: KERR-MCGEE OIL & GAS ONSHORE, L.P.

Date Original Permit Issued: 10/1/2008

The undersigned as owner with legal rights to drill on the property as permitted above, hereby verifies thatthe information as submitted in the previously approved application to drill, remains valid and does notrequire revision. Following is a checklist of some items related to the application, which should be verified.

If located on private land, has the ownership changed, if so, has the surface agreement beenupdated? Yes No

Have any wells been drilled in the vicinity of the proposed well which would affect the spacing orsiting requirements for this location? Yes No

Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well? Yes No

Have there been any changes to the access route including ownership, or rightof- way, which couldaffect the proposed location? Yes No

Has the approved source of water for drilling changed? Yes No

Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? Yes No

Is bonding still in place, which covers this proposed well? Yes No

Signature: Danielle Piernot Date: 9/24/2009

Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHORE, L.P.

September 24, 2009

September 30, 2009

UTAH

[gg The Utah Division of Oil, Gas, and Mining- State of Utah- Department of Natural ResourcesElectronic Permitting System - Sundry Notices

OTI GAS & MINTNG






• If located on private land, has the ownership changed, if so, has the surface agreement beenupdated? I Yes I ) No

• Have any wells been drilled in the vicinity of the proposed well which would affect the spacing orsiting requirements for this location? I i Yes i i No

• Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well?

_

I Yes i i No

•Have there been any changes to_the access route including ownership, or rightof- way, which couldaffect the proposed location? I:_ I Yes I:BI No

• Has the approved source of water for drilling changed? I Yes I:¾) No

• Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? I i Yes i No

Approved by the•Is bonding still in place, which covers this proposed well? I i Yes . No Utah Division of

Oil, Gas and MiningSignature: Danielle Piernot Date: 9/24/2009

Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHOR te; September 30, 2009

By:


UTAH

[gg The Utah Division of Oil, Gas, and Mining- State of Utah- Department of Natural Resources

Electronic Permitting System - Sundry NoticesOTI GAS & MINTNG






• If located on private land, has the ownership changed, if so, has the surface agreement beenupdated? I Yes I ) No

• Have any wells been drilled in the vicinity of the proposed well which would affect the spacing orsiting requirements for this location? I i Yes i i No

• Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well?

_

I Yes i i No

•Have there been any changes to_the access route including ownership, or rightof- way, which couldaffect the proposed location? I:_ I Yes I:BI No

• Has the approved source of water for drilling changed? I Yes I:¾) No

• Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? I i Yes i No

Approved by the•Is bonding still in place, which covers this proposed well? I i Yes . No Utah Division of


Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHOR te; September 30, 2009

By:


RECEIVEDForm3160-3 \ FOR$$P R(August2007) OMBNo.1004-

DEPARTUMNENT0

TAHEÌËE 5. LeaseSe

BUREAU OF LAND MANAGEMEUTU-0579

APPLICATION FOR PERMIT TO D Ì eIfIndian,Alloteeor TribeName

D 7 KUnh or CAAgreement,NameandNo.la. Typeof work: RILL REENTER N/A

8. Lease NameandWellNo.lb. TypeofWell: Omen GasWell 0&er SingleZone MultipleZone Federal 920-24N

2. Nameof 0perator 9. API WellNo.Kerr-McGee Oil & Gas Onshore, LP 93-¿ g |-- Ô Ö/

3a. Address 3b PhoneNo.(include area cok) 10.FieldandPool,orExploratoryP.O. Box 173779, Denver, CO 80217-3779 720.929.6226 Natural Buttes Field

4. LocationofWell (Reportlocationclearly and in acconhnce with avy State requirements.*) 11.Sec.,T.R.M. or B1k.andSurveyor Area

At surface SESW 822' FSL & 1876' FWL LAT40.01588 LON -109.61654 (NAD 27) Sec. 24, T 9S, R 20E

At proposedprod.zone N/A

14. Distanceinmilesanddirectionfromnearesttownor postoffice* 12.Countyor Parish 13. State9.7 milessoutheast of Ouray, Utah Uintah UT

15. Distancefromproposed*822' 16. No.of acresin lease 17. SpacingUnitdedicatedto thiswell

locationr

eaarseeine,ft 1920 Not a unit well

nearest drig.unit line,if any)

18. Distancefromproposedlocation* 1,000, 19.ProposedDepth 20. BLM/BIABondNo.onfileto nea st well d illienag,completed' 10,400' WYBOOO291

21. Elevations(ShowwhetherDF,KDB,RT,GL,etc.) 22. Approximatedatework will start* 23. Estimatedduration4846.2' 10 days

24. Attachments

Thefollowing,completed inaccordancewith the requirementsof OnshoreOilandGasOrderNo.1, mustbe attached to this form:

1. Wellplateertifiedby a registered surveyor. 4. Bondto cover the operations unless covered by an existing bond on file (see2. A DrillingPlan. Item20 above).

3. A SurfaceUse Plan (if the locationis on National ForestSystemLands, the 5. OperatorcertificationSUPO must be filedwiththeappropriate ForestServiceOffice). 6. Suchothersite specific informationand/orplansas may be required by the

BLM.

25. Signature Name (PrintedTyped) DateKevin Mcintyre 09/24/2008

TitleRegulatory Analyst i

Approvedby (Si nature) NamedamOSH Sþarger °"' Aus64 amTitle ActingA ReldManager omce

ApplicationapprovWoesnot warrantorcerti§W'tfeTplicantholds legalorequitabletitletothoserights inthesubjectleasewhichwouldentitletheapplicanttocConnddi

ionpnpsrovha,egf

ny, are attached. I)O (Ñ$ŸŸÑÛÁl.ÁÎITitle 18U.S.C.Section1001andTitle43 U.S.C.Section1212,makeit a crimeforanypersonknowinglyand willfullytomaketoany departmentor agencyof the UnitedStatesanyfalse,fictitiousor fraudulentstatementsor representationsas toanymatterwithinitsjurisdiction.

(Continued on page 2) (Instructions on page 2)

NOTICEOFAPPROVALNOSap&¢d Mi neceNED

AFMSS# ossxsou y og

RECEIVEDForm3160-3 \ FOR$$P R(August2007) OMBNo.1004-

DEPARTUMNENT0

TAHEÌËE 5. LeaseSe

BUREAU OF LAND MANAGEMEUTU-0579

APPLICATION FOR PERMIT TO D Ì eIfIndian,Alloteeor TribeName

D 7 KUnh or CAAgreement,NameandNo.la. Typeof work: RILL REENTER N/A

8. Lease NameandWellNo.lb. TypeofWell: Omen GasWell 0&er SingleZone MultipleZone Federal 920-24N

2. Nameof 0perator 9. API WellNo.Kerr-McGee Oil & Gas Onshore, LP 93-¿ g |-- Ô Ö/

3a. Address 3b PhoneNo.(include area cok) 10.FieldandPool,orExploratoryP.O. Box 173779, Denver, CO 80217-3779 720.929.6226 Natural Buttes Field

4. LocationofWell (Reportlocationclearly and in acconhnce with avy State requirements.*) 11.Sec.,T.R.M. or B1k.andSurveyor Area

At surface SESW 822' FSL & 1876' FWL LAT40.01588 LON -109.61654 (NAD 27) Sec. 24, T 9S, R 20E

At proposedprod.zone N/A

14. Distanceinmilesanddirectionfromnearesttownor postoffice* 12.Countyor Parish 13. State9.7 milessoutheast of Ouray, Utah Uintah UT

15. Distancefromproposed*822' 16. No.of acresin lease 17. SpacingUnitdedicatedto thiswell

locationr

eaarseeine,ft 1920

Not a unit wellnearest drig.unit line,if any)

18. Distancefromproposedlocation* 1,000, 19.ProposedDepth 20. BLM/BIABondNo.onfileto nea st well d illienag,completed' 10,400' WYBOOO291

21. Elevations(ShowwhetherDF,KDB,RT,GL,etc.) 22. Approximatedatework will start* 23. Estimatedduration4846.2' 10 days

24. Attachments

Thefollowing,completed inaccordancewith the requirementsof OnshoreOilandGasOrderNo.1, mustbe attached to this form:

1. Wellplateertifiedby a registered surveyor. 4. Bondto cover the operations unless covered by an existing bond on file (see2. A DrillingPlan. Item20 above).

3. A SurfaceUse Plan (if the locationis on National ForestSystemLands, the 5. OperatorcertificationSUPO must be filedwiththeappropriate ForestServiceOffice). 6. Suchothersite specific informationand/orplansas may be required by the

BLM.

25. Signature Name (PrintedTyped) DateKevin Mcintyre 09/24/2008

TitleRegulatory Analyst i

Approvedby (Si nature) NamedamOSH Sþarger °"' Aus64 amTitle ActingA ReldManager omce

ApplicationapprovWoesnot warrantorcerti§W'tfeTplicantholds legalorequitabletitletothoserights inthesubjectleasewhichwouldentitletheapplicanttocConnddi

ionpnpsrovha,egf

ny, are attached. I)O (Ñ$ŸŸÑÛÁl.ÁÎITitle 18U.S.C.Section1001andTitle43 U.S.C.Section1212,makeit a crimeforanypersonknowinglyand willfullytomaketoany departmentor agencyof the UnitedStatesanyfalse,fictitiousor fraudulentstatementsor representationsas toanymatterwithinitsjurisdiction.

(Continued on page 2) (Instructions on page 2)

NOTICEOFAPPROVALNOSap&¢d Mi neceNED

AFMSS# ossxsou y og

ML IIMMR-MR U WE misi-R

UNITED STATES DEPARTMENT OF THE INTERIORBUREAU OF LAND MANAGEMENT

VERNAL FIELD OFFICE' 170 South 500 East VERNAL, UT 84078 (435) 781-4400

CONDITIONS OF APPROVAL FOR APPLICATION FOR PERMIT TO DRILL

Company: Kerr McGee Oil & Gas Onshore, LP Location: SESW, Sec. 24, T9S, R20EWell No: Federal 920-24N Lease No: UTU-0579API No: 43-047-50154 Agreement: N/A

OFFICE NUMBER: (435) 781-4400

OFFICE FAX NUMBER: (435) 781-3420

A COPY OF THESE CONDITIONS SHALL BE FURNISHED TO YOURFIELD REPRESENTATIVE TO INSURE COMPLIANCE

All lease and/or unit operations are to be conducted in such a manner that full compliance is made with theapplicable laws, regulations (43 CFR Part 3160), and this approved Application for Permit to Drill includingSurface and Downhole Conditions of Approval. The operator is considered fully responsible for the actions of hissubcontractors. A copy of the approved APD must be on location during construction, drilling, and completionoperations. This permit is approved for a two (2) year period, or until lease expiration, whichever occursfirst. An additional extension, up to two (2) years, may be applied for by sundry notice prior to expiration.

NOTIFICATION REQUIREMENTS

Construction Activity - The Ute Tribe Energy & Minerals Dept. and BLM(Notify Ute Tribe Energy & Minerals Dept. Environmental Scientist shall be notified at least 48 hours inand BLM Environmental Scientist) advance of any construction activity. The Ute Tribal office is

open Monday through Thursday.

Construction Completion - Upon completion of the pertinent APD/ROW construction,(Notify Ute Tribe Energy & Minerals Dept. notify the Ute Tribe Energy & Minerals Dept. for a Tribaland BLM Environmental Scientist) Technician to verify the Affidavit of Completion. Notify the

BLM Environmental Scientist prior to moving on the drillingrig.

Spud Notice - Twenty-Four (24) hours prior to spudding the well.(Notify BLM Petroleum Engineer)

Casing String & Cementing - Twenty-Four (24) hours prior to running casing and cementing(Notify BLM Supv. Petroleum Tech.) all casing strings to: ut vn [email protected].

BOP & Related Equipment Tests - Twenty-Four (24) hours prior to initiating pressure tests.(Notify BLM Supv. Petroleum Tech.)

First Production Notice - Within Five (5) business days after new well begins or(Notify BLM Petroleum Engineer) production resumes after well has been off production for more

than ninety (90)

ML IIMMR-MR U WE misi-R

UNITED STATES DEPARTMENT OF THE INTERIORBUREAU OF LAND MANAGEMENT

VERNAL FIELD OFFICE' 170 South 500 East VERNAL, UT 84078 (435) 781-4400

CONDITIONS OF APPROVAL FOR APPLICATION FOR PERMIT TO DRILL

Company: Kerr McGee Oil & Gas Onshore, LP Location: SESW, Sec. 24, T9S, R20EWell No: Federal 920-24N Lease No: UTU-0579API No: 43-047-50154 Agreement: N/A

OFFICE NUMBER: (435) 781-4400

OFFICE FAX NUMBER: (435) 781-3420

A COPY OF THESE CONDITIONS SHALL BE FURNISHED TO YOURFIELD REPRESENTATIVE TO INSURE COMPLIANCE

All lease and/or unit operations are to be conducted in such a manner that full compliance is made with theapplicable laws, regulations (43 CFR Part 3160), and this approved Application for Permit to Drill includingSurface and Downhole Conditions of Approval. The operator is considered fully responsible for the actions of hissubcontractors. A copy of the approved APD must be on location during construction, drilling, and completionoperations. This permit is approved for a two (2) year period, or until lease expiration, whichever occursfirst. An additional extension, up to two (2) years, may be applied for by sundry notice prior to expiration.

NOTIFICATION REQUIREMENTS

Construction Activity - The Ute Tribe Energy & Minerals Dept. and BLM(Notify Ute Tribe Energy & Minerals Dept. Environmental Scientist shall be notified at least 48 hours inand BLM Environmental Scientist) advance of any construction activity. The Ute Tribal office is

open Monday through Thursday.

Construction Completion - Upon completion of the pertinent APD/ROW construction,(Notify Ute Tribe Energy & Minerals Dept. notify the Ute Tribe Energy & Minerals Dept. for a Tribaland BLM Environmental Scientist) Technician to verify the Affidavit of Completion. Notify the

BLM Environmental Scientist prior to moving on the drillingrig.

Spud Notice - Twenty-Four (24) hours prior to spudding the well.(Notify BLM Petroleum Engineer)

Casing String & Cementing - Twenty-Four (24) hours prior to running casing and cementing(Notify BLM Supv. Petroleum Tech.) all casing strings to: ut vn [email protected].

BOP & Related Equipment Tests - Twenty-Four (24) hours prior to initiating pressure tests.(Notify BLM Supv. Petroleum Tech.)

First Production Notice - Within Five (5) business days after new well begins or(Notify BLM Petroleum Engineer) production resumes after well has been off production for more

than ninety (90)

Page 2 of 9Well: Federal 920-24N

8/5/2010

SURFACE USE PROGRAMCONDITIONS OF APPROVAL (COAs)

Site-Specific Conditions of Approval:

1. Paint new and old (existing) facilities "shadow gray."2. Monitor by a permitted paleontologist during the construction process.3. Monitor location by a permitted archaeologist during construction.4. In accordance with the guidelines specified in the Utah BLM Field Office Guidelines for Raptor

Protection from Human and Land Use Disturbances, 2002 (See Appendix D), a raptor surveyshall be conducted prior to construction of the proposed location, pipeline, or access road ifconstruction will take place during raptor nesting season (January 01 through September 30) andconduct its operations according to specification in the guidelines. The USFWS recommends a¼ mile avoidance buffer surrounding active burrowing nests between March 1 and August 31.

5. If project construction operations are scheduled to occur after June 10, 2010, KMG will conductadditional biological surveys in accordance with the guidelines specified in the USFWS RarePlant Conservation Measures for Uinta Basin hookless cactus (See Appendix D) and conduct itsoperation according to its specifications.

BIA Standard Conditions of Approval:

1. Soil erosion will be mitigated by reseeding all disturbed areas.2. The gathering pipelines will be constructed to lie on the surface. The surface pipelines will not

be bladed or cleared of vegetation. Where pipelines are constructed parallel to roads they maybe welded on the road and then lifted from the road onto the right-of-way. Where pipelines donot parallel roads but cross-country between sites, they shall be welded in place at well sites oron access roads and then pulled between stations with a suitable piece of equipment. Traffic willbe restricted along these areas so that the pipeline right-of-way will not be used as an accessroad.

3. An open drilling system shall be used, unless otherwise specified in 10.0 Additional Stipulationsof this document and in the Application for Permit to Drill. A closed drilling system shall beused in all flood plain areas, and other highly sensitive areas, recommended by the Ute TribeTechnician, BIA, and other agencies involved.

4. The reserve pit shall be lined with a synthetic leak proof liner. After the drilling operation iscomplete, excess fluids shall be removed from the reserve pit and either hauled to an approveddisposal site or shall be used to drill other wells. When the fluids are removed the pit shall bebackfilled a minimum of 3.0' below the soil surface elevation.

5. A closed production system shall be used. This means all produced water and oil field fluidwastes shall be contained in leak proof tanks. These fluids shall be disposed of in eitherapproved injection wells or disposal pits.

6. Major low water crossings will be armored with pit run material to protect them from erosion.7. All personnel shall refrain from collecting any paleontological fossils and from disturbing any

fossil resources in the


8/5/2010

SURFACE USE PROGRAMCONDITIONS OF APPROVAL (COAs)

Site-Specific Conditions of Approval:

1. Paint new and old (existing) facilities "shadow gray."2. Monitor by a permitted paleontologist during the construction process.3. Monitor location by a permitted archaeologist during construction.4. In accordance with the guidelines specified in the Utah BLM Field Office Guidelines for Raptor

Protection from Human and Land Use Disturbances, 2002 (See Appendix D), a raptor surveyshall be conducted prior to construction of the proposed location, pipeline, or access road ifconstruction will take place during raptor nesting season (January 01 through September 30) andconduct its operations according to specification in the guidelines. The USFWS recommends a¼ mile avoidance buffer surrounding active burrowing nests between March 1 and August 31.

5. If project construction operations are scheduled to occur after June 10, 2010, KMG will conductadditional biological surveys in accordance with the guidelines specified in the USFWS RarePlant Conservation Measures for Uinta Basin hookless cactus (See Appendix D) and conduct itsoperation according to its specifications.

BIA Standard Conditions of Approval:

1. Soil erosion will be mitigated by reseeding all disturbed areas.2. The gathering pipelines will be constructed to lie on the surface. The surface pipelines will not

be bladed or cleared of vegetation. Where pipelines are constructed parallel to roads they maybe welded on the road and then lifted from the road onto the right-of-way. Where pipelines donot parallel roads but cross-country between sites, they shall be welded in place at well sites oron access roads and then pulled between stations with a suitable piece of equipment. Traffic willbe restricted along these areas so that the pipeline right-of-way will not be used as an accessroad.

3. An open drilling system shall be used, unless otherwise specified in 10.0 Additional Stipulationsof this document and in the Application for Permit to Drill. A closed drilling system shall beused in all flood plain areas, and other highly sensitive areas, recommended by the Ute TribeTechnician, BIA, and other agencies involved.

4. The reserve pit shall be lined with a synthetic leak proof liner. After the drilling operation iscomplete, excess fluids shall be removed from the reserve pit and either hauled to an approveddisposal site or shall be used to drill other wells. When the fluids are removed the pit shall bebackfilled a minimum of 3.0' below the soil surface elevation.

5. A closed production system shall be used. This means all produced water and oil field fluidwastes shall be contained in leak proof tanks. These fluids shall be disposed of in eitherapproved injection wells or disposal pits.

6. Major low water crossings will be armored with pit run material to protect them from erosion.7. All personnel shall refrain from collecting any paleontological fossils and from disturbing any

fossil resources in the


8/5/2010

8. If fossils are exposed or identified during construction, all construction must cease andimmediate notification to the Energy and Minerals Department and the Cultural RightsProtection Officer.

9. Before the site is abandoned the company will be required to restore the right-of-way to near itsoriginal state. The disturbed area will be reseeded with desirable perennial vegetation. Ifnecessary, the Bureau of Indian Affairs or Bureau of Land Management will provide a suitableseed mixture.

10. Noxious weeds will be controlled on all surface disturbances within the project area. If noxiousweeds spread from the project area onto adjoining land, the company will also be responsible fortheir control.

11. If project construction operations are scheduled to occur after December 31, 2009, KMG shallconduct annual raptor surveys in accordance with the guidelines specified in the Utah FieldOffice Guidelines for Raptor Protection from Human and Land Use Disturbances, 2002 (SeeAppendix E) and conduct its operations according to applicable seasonal restrictions and spatialoffsets.

12. USFWS threatened and endangered plant and animal conservation measures will be followed, asappropriate to the species identified by the biological resource survey (See Appendix E).

13. All personnel shall refrain from collecting artifacts and from disturbing any significant culturalresources in the area.

14. If artifacts or any culturally sensitive materials are exposed or identified during construction, allconstruction must cease and immediate notification to the Energy and Minerals Department andthe Cultural Rights Protection


8/5/2010

8. If fossils are exposed or identified during construction, all construction must cease andimmediate notification to the Energy and Minerals Department and the Cultural RightsProtection Officer.

9. Before the site is abandoned the company will be required to restore the right-of-way to near itsoriginal state. The disturbed area will be reseeded with desirable perennial vegetation. Ifnecessary, the Bureau of Indian Affairs or Bureau of Land Management will provide a suitableseed mixture.

10. Noxious weeds will be controlled on all surface disturbances within the project area. If noxiousweeds spread from the project area onto adjoining land, the company will also be responsible fortheir control.

11. If project construction operations are scheduled to occur after December 31, 2009, KMG shallconduct annual raptor surveys in accordance with the guidelines specified in the Utah FieldOffice Guidelines for Raptor Protection from Human and Land Use Disturbances, 2002 (SeeAppendix E) and conduct its operations according to applicable seasonal restrictions and spatialoffsets.

12. USFWS threatened and endangered plant and animal conservation measures will be followed, asappropriate to the species identified by the biological resource survey (See Appendix E).

13. All personnel shall refrain from collecting artifacts and from disturbing any significant culturalresources in the area.

14. If artifacts or any culturally sensitive materials are exposed or identified during construction, allconstruction must cease and immediate notification to the Energy and Minerals Department andthe Cultural Rights Protection


8/5/2010

DOWNHOLE PROGRAMCONDITIONS OF APPROVAL (COAs)

SITE SPECIFIC DOWNHOLE COAs:

• Surface casing cement shall be brought to surface.

• Production casing cement shall be brought 200' up and into the surface casing.Cement Top (TOC) standard will place cement behind casing across formation lost circulationzone, Birds Nest Zone.

COA specification fulfills operators performance standard stated in APD (where operators TOCis calculated with an excess to reach surface).

• Operator is to notify BLM Vernal Field Office and active gilsonite mining operator (or leaseholder) located within a 2 mile radius, 48 hours prior to pad explosives blasting. Well is notclose to gilsonite vein, but on trend to gilisonite vein deposits.

• A copy of Kerr McGee's Standard Operating Practices (SOP version: dated 7/17/08 andapproved 7/28/08) shall be on location.

• Drilling plan specifics and practices are referenced in the Kerr McGee Oil & Gas StandardOperating Procedures (SOP version: July 28, 2008). The operators drilling plan items 3 to 9reference the SOP. Kerr McGee shall adhere to the referenced requirements in the SOP.Kerr McGee and their contractors shall adhere to all Oil and Gas rules and requirements listed inthe Code of Federal Regulations and all Federal Onshore Oil and Gas Orders except wherevariances have been granted.

• A Gamma Ray well Log shall be run from the well Total Depth to the surface.A copy of the Gamma Ray well Log shall be submitted to the BLM Vernal Field Office.

• Conductor casing shall be set into competent formation.

• A variance is granted for Onshore Order #2 Drilling Operations III. E. "Blooie line discharge 100feet from well bore and securely anchored". Blooie line can be 45 feet.All requirements will be adhered to covering air/gas drilling operations as described in OnshoreOrder #2 III. E. 1. Drilling Operations, Special Drilling Operations, air/gas


8/5/2010

DOWNHOLE PROGRAMCONDITIONS OF APPROVAL (COAs)

SITE SPECIFIC DOWNHOLE COAs:

• Surface casing cement shall be brought to surface.

• Production casing cement shall be brought 200' up and into the surface casing.Cement Top (TOC) standard will place cement behind casing across formation lost circulationzone, Birds Nest Zone.

COA specification fulfills operators performance standard stated in APD (where operators TOCis calculated with an excess to reach surface).

• Operator is to notify BLM Vernal Field Office and active gilsonite mining operator (or leaseholder) located within a 2 mile radius, 48 hours prior to pad explosives blasting. Well is notclose to gilsonite vein, but on trend to gilisonite vein deposits.

• A copy of Kerr McGee's Standard Operating Practices (SOP version: dated 7/17/08 andapproved 7/28/08) shall be on location.

• Drilling plan specifics and practices are referenced in the Kerr McGee Oil & Gas StandardOperating Procedures (SOP version: July 28, 2008). The operators drilling plan items 3 to 9reference the SOP. Kerr McGee shall adhere to the referenced requirements in the SOP.Kerr McGee and their contractors shall adhere to all Oil and Gas rules and requirements listed inthe Code of Federal Regulations and all Federal Onshore Oil and Gas Orders except wherevariances have been granted.

• A Gamma Ray well Log shall be run from the well Total Depth to the surface.A copy of the Gamma Ray well Log shall be submitted to the BLM Vernal Field Office.

• Conductor casing shall be set into competent formation.

• A variance is granted for Onshore Order #2 Drilling Operations III. E. "Blooie line discharge 100feet from well bore and securely anchored". Blooie line can be 45 feet.All requirements will be adhered to covering air/gas drilling operations as described in OnshoreOrder #2 III. E. 1. Drilling Operations, Special Drilling Operations, air/gas


8/5/2010

All provisions outlined in Onshore Oil & Gas Order #2 Drilling Operations shall be strictlyadhered to. The following items are emphasized:

DRILLING/COMPLETION/PRODUCING OPERATING STANDARDS

• The spud date and time shall be reported orally to Vernal Field Office within 24 hours ofspudding.

• Notify Vernal Field Office Supervisory Petroleum Engineering Technician at least 24 hours inadvance of casing cementing operations and BOPE & casing pressure tests.

• All requirements listed in Onshore Order #2 III. E. Special Drilling Operations are applicable forair drilling of surface hole.

• Blowout prevention equipment (BOPE) shall remain in use until the well is completed orabandoned. Closing unit controls shall remain unobstructed and readily accessible at all times.Choke manifolds shall be located outside of the rig substructure.

• All BOPE components shall be inspected daily and those inspections shall be recorded in thedaily drilling report. Components shall be operated and tested as required by Onshore Oil & GasOrder No. 2 to insure good mechanical working order. All BOPE pressure tests shall beperformed by a test pump with a chart recorder and by the rig pumps. Test shall bereported in the driller's log.

• BOP drills shall be initially conducted by each drilling crew within 24 hours of drilling out fromunder the surface casing and weekly thereafter as specified in Onshore Oil & Gas Order No. 2.

• Casing pressure tests are required before drilling out from under all casing strings set andcemented in place.

• No aggressive/fresh hard-banded drill pipe shall be used within casing.

• Cement baskets shall not be run on surface casing.

• The operator must report all shows of water or water-bearing sands to the BLM. If flowingwater is encountered it must be sampled, analyzed, and a copy of the analyses submitted to theBLM Vernal Field Office.

• The operator must report encounters of all non oil & gas mineral resources (such as Gilsonite, tarsands, oil shale, trona, etc.) to the Vernal Field Office, in writing, within 5 working days of eachencounter. Each report shall include the well name/number, well location, date and depth (fromKB or GL) of encounter, vertical footage of the encounter and, the name of the person makingthe report (along with a telephone number) should the BLM need to obtain additional


8/5/2010

All provisions outlined in Onshore Oil & Gas Order #2 Drilling Operations shall be strictlyadhered to. The following items are emphasized:

DRILLING/COMPLETION/PRODUCING OPERATING STANDARDS

• The spud date and time shall be reported orally to Vernal Field Office within 24 hours ofspudding.

• Notify Vernal Field Office Supervisory Petroleum Engineering Technician at least 24 hours inadvance of casing cementing operations and BOPE & casing pressure tests.

• All requirements listed in Onshore Order #2 III. E. Special Drilling Operations are applicable forair drilling of surface hole.

• Blowout prevention equipment (BOPE) shall remain in use until the well is completed orabandoned. Closing unit controls shall remain unobstructed and readily accessible at all times.Choke manifolds shall be located outside of the rig substructure.

• All BOPE components shall be inspected daily and those inspections shall be recorded in thedaily drilling report. Components shall be operated and tested as required by Onshore Oil & GasOrder No. 2 to insure good mechanical working order. All BOPE pressure tests shall beperformed by a test pump with a chart recorder and by the rig pumps. Test shall bereported in the driller's log.

• BOP drills shall be initially conducted by each drilling crew within 24 hours of drilling out fromunder the surface casing and weekly thereafter as specified in Onshore Oil & Gas Order No. 2.

• Casing pressure tests are required before drilling out from under all casing strings set andcemented in place.

• No aggressive/fresh hard-banded drill pipe shall be used within casing.

• Cement baskets shall not be run on surface casing.

• The operator must report all shows of water or water-bearing sands to the BLM. If flowingwater is encountered it must be sampled, analyzed, and a copy of the analyses submitted to theBLM Vernal Field Office.

• The operator must report encounters of all non oil & gas mineral resources (such as Gilsonite, tarsands, oil shale, trona, etc.) to the Vernal Field Office, in writing, within 5 working days of eachencounter. Each report shall include the well name/number, well location, date and depth (fromKB or GL) of encounter, vertical footage of the encounter and, the name of the person makingthe report (along with a telephone number) should the BLM need to obtain additional


8/5/2010

• A complete set of angular deviation and directional surveys of a directional well will besubmitted to the Vernal BLM office engineer within 30 days of the completion of the well.

• While actively drilling, chronologic drilling progress reports shall be filed directly with theBLM, Vernal Field Office on a weekly basis in sundry, letter format or e-mail to the PetroleumEngineers until the well is completed.

• A cement bond log (CBL) will be run from the production casing shoe to the top of cement andshall be utilized to determine the bond quality for the production casing. Submit a field copy ofthe CBL to this office.

• Please submit an electronic copy of all other logs run on this well in LAS format [email protected]. This submission will supersede the requirement forsubmittal of paper logs to the BLM.

• There shall be no deviation from the proposed drilling, completion, and/or workover program asapproved. Safe drilling and operating practices must be observed. Any changes in operationmust have prior approval from the BLM Vernal Field


8/5/2010

• A complete set of angular deviation and directional surveys of a directional well will besubmitted to the Vernal BLM office engineer within 30 days of the completion of the well.

• While actively drilling, chronologic drilling progress reports shall be filed directly with theBLM, Vernal Field Office on a weekly basis in sundry, letter format or e-mail to the PetroleumEngineers until the well is completed.

• A cement bond log (CBL) will be run from the production casing shoe to the top of cement andshall be utilized to determine the bond quality for the production casing. Submit a field copy ofthe CBL to this office.

• Please submit an electronic copy of all other logs run on this well in LAS format [email protected]. This submission will supersede the requirement forsubmittal of paper logs to the BLM.

• There shall be no deviation from the proposed drilling, completion, and/or workover program asapproved. Safe drilling and operating practices must be observed. Any changes in operationmust have prior approval from the BLM Vernal Field


8/5/2010

OPERATING REQUIREMENT REMINDERS:

• All wells, whether drilling, producing, suspended, or abandoned, shall be identified inaccordance with 43 CFR 3162.6. There shall be a sign or marker with the name of the operator,lease serial number, well number, and surveyed description of the well.

• In accordance with 43 CFR 3162.4-3, this well shall be reported on the "Monthly Report ofOperations" (Oil and Gas Operations Report ((OGOR)) starting with the month in whichoperations commence and continue each month until the well is physically plugged andabandoned. This report shall be filed in duplicate, directly with the Minerals ManagementService, P.O. Box 17110, Denver, Colorado 80217-0110, or call 1-800-525-7922 (303) 231-

3650 for reporting information.

• Should the well be successfully completed for production, the BLM Vernal Field office must benotified when it is placed in a producing status. Such notification will be by writtencommunication and must be received in this office by not later than the fifth business dayfollowing the date on which the well is placed on production. The notification shall provide, as aminimum, the following informational items:

o Operator name, address, and telephone number.

o Well name and number.

o Well location (¼¼,Sec., Twn, Rng, and P.M.).

o Date well was placed in a producing status (date of first production for which royalty will

be paid).

o The nature of the well's production, (i.e., crude oil, or crude oil and casing head gas, ornatural gas and entrained liquid hydrocarbons).

o The Federal or Indian lease prefix and number on which the well is located; otherwise thenon-Federal or non-Indian land category, i.e., State or private.

o Unit agreement and/or participating area name and number, if applicable.

o Communitization agreement number, if applicable.

• Any venting or flaring of gas shall be done in accordance with Notice to Lessees (NTL) 4A andneeds prior approval from the BLM Vernal Field Office.

• All undesirable events (fires, accidents, blowouts, spills, discharges) as specified in NTL 3A willbe reported to the BLM, Vernal Field Office. Major events, as defined in NTL3A, shall bereported verbally within 24 hours, followed by a written report within 15 days. "Other thanMajor Events" will be reported in writing within 15 days. "Minor Events" will be reported onthe Monthly Report of Operations and


8/5/2010

OPERATING REQUIREMENT REMINDERS:

• All wells, whether drilling, producing, suspended, or abandoned, shall be identified inaccordance with 43 CFR 3162.6. There shall be a sign or marker with the name of the operator,lease serial number, well number, and surveyed description of the well.

• In accordance with 43 CFR 3162.4-3, this well shall be reported on the "Monthly Report ofOperations" (Oil and Gas Operations Report ((OGOR)) starting with the month in whichoperations commence and continue each month until the well is physically plugged andabandoned. This report shall be filed in duplicate, directly with the Minerals ManagementService, P.O. Box 17110, Denver, Colorado 80217-0110, or call 1-800-525-7922 (303) 231-

3650 for reporting information.

• Should the well be successfully completed for production, the BLM Vernal Field office must benotified when it is placed in a producing status. Such notification will be by writtencommunication and must be received in this office by not later than the fifth business dayfollowing the date on which the well is placed on production. The notification shall provide, as aminimum, the following informational items:

o Operator name, address, and telephone number.

o Well name and number.

o Well location (¼¼,Sec., Twn, Rng, and P.M.).

o Date well was placed in a producing status (date of first production for which royalty will

be paid).

o The nature of the well's production, (i.e., crude oil, or crude oil and casing head gas, ornatural gas and entrained liquid hydrocarbons).

o The Federal or Indian lease prefix and number on which the well is located; otherwise thenon-Federal or non-Indian land category, i.e., State or private.

o Unit agreement and/or participating area name and number, if applicable.

o Communitization agreement number, if applicable.

• Any venting or flaring of gas shall be done in accordance with Notice to Lessees (NTL) 4A andneeds prior approval from the BLM Vernal Field Office.

• All undesirable events (fires, accidents, blowouts, spills, discharges) as specified in NTL 3A willbe reported to the BLM, Vernal Field Office. Major events, as defined in NTL3A, shall bereported verbally within 24 hours, followed by a written report within 15 days. "Other thanMajor Events" will be reported in writing within 15 days. "Minor Events" will be reported onthe Monthly Report of Operations and


8/5/2010

• Whether the well is completed as a dry hole or as a producer, "Well Completion andRecompletion Report and Log" (BLM Form 3160-4) shall be submitted not later than 30 daysafter completion of the well or after completion of operations being performed, in accordancewith 43 CFR 3162.4-1. Two copies of all logs run, core descriptions, and all other surveys ordata obtained and compiled during the drilling, workover, and/or completion operations, shall befiled on BLM Form 3160-4. Submit with the well completion report a geologic report including,at a minimum, formation tops, and a summary and conclusions. Also include deviation surveys,sample descriptions, strip logs, core data, drill stem test data, and results of production tests ifperformed. Samples (cuttings, fluid, and/or gas) shall be submitted only when requested by theBLM, Vernal Field Office.

• All off-lease storage, off-lease measurement, or commingling on-lease or off-lease, shall haveprior written approval from the BLM Vernal Field Office.

• Oil and gas meters shall be calibrated in place prior to any deliveries. The BLM Vernal FieldOffice Petroleum Engineers will be provided with a date and time for the initial meter calibrationand all future meter proving schedules. A copy of the meter calibration reports shall besubmitted to the BLM Vernal Field Office. All measurement facilities will conform to the APIstandards for liquid hydrocarbons and the AGA standards for natural gas measurement. Allmeasurement points shall be identified as the point of sale or allocation for royalty purposes.

• A schematic facilities diagram as required by Onshore Oil & Gas Order No. 3 shall be submittedto the BLM Vernal Field Office within 30 days of installation or first production, whichever

occurs first. All site security regulations as specified in Onshore Oil & Gas Order No. 3 shall beadhered to. All product lines entering and leaving hydrocarbon storage tanks will be effectivelysealed in accordance with Onshore Oil & Gas Order No. 3.

• Any additional construction, reconstruction, or alterations of facilities, including roads, gatheringlines, batteries, etc., which will result in the disturbance of new ground, shall require the filing ofa suitable plan and need prior approval of the BLM Vernal Field Office. Emergency approvalmay be obtained orally, but such approval does not waive the written report requirement.

• No location shall be constructed or moved, no well shall be plugged, and no drilling or workoverequipment shall be removed from a well to be placed in a suspended status without priorapproval of the BLM Vernal Field Office. If operations are to be suspended for more than 30days, prior approval of the BLM Vernal Field Office shall be obtained and notification givenbefore resumption of operations.

• Pursuant to Onshore Oil & Gas Order No. 7, this is authorization for pit disposal of waterproduced from this well for a period of 90 days from the date of initial production. A permanentdisposal method must be approved by this office and in operation prior to the end of this 90-dayperiod. In order to meet this deadline, an application for the proposed permanent disposalmethod shall be submitted along with any necessary water analyses, as soon as possible, but nolater than 45 days after the date of first production. Any method of disposal which has not beenapproved prior to the end of the authorized 90-day period will be considered as an Incident ofNoncompliance and will be grounds for issuing a shut-in order until an acceptable manner fordisposing of said water is provided and approved by this


8/5/2010

• Whether the well is completed as a dry hole or as a producer, "Well Completion andRecompletion Report and Log" (BLM Form 3160-4) shall be submitted not later than 30 daysafter completion of the well or after completion of operations being performed, in accordancewith 43 CFR 3162.4-1. Two copies of all logs run, core descriptions, and all other surveys ordata obtained and compiled during the drilling, workover, and/or completion operations, shall befiled on BLM Form 3160-4. Submit with the well completion report a geologic report including,at a minimum, formation tops, and a summary and conclusions. Also include deviation surveys,sample descriptions, strip logs, core data, drill stem test data, and results of production tests ifperformed. Samples (cuttings, fluid, and/or gas) shall be submitted only when requested by theBLM, Vernal Field Office.

• All off-lease storage, off-lease measurement, or commingling on-lease or off-lease, shall haveprior written approval from the BLM Vernal Field Office.

• Oil and gas meters shall be calibrated in place prior to any deliveries. The BLM Vernal FieldOffice Petroleum Engineers will be provided with a date and time for the initial meter calibrationand all future meter proving schedules. A copy of the meter calibration reports shall besubmitted to the BLM Vernal Field Office. All measurement facilities will conform to the APIstandards for liquid hydrocarbons and the AGA standards for natural gas measurement. Allmeasurement points shall be identified as the point of sale or allocation for royalty purposes.

• A schematic facilities diagram as required by Onshore Oil & Gas Order No. 3 shall be submittedto the BLM Vernal Field Office within 30 days of installation or first production, whichever

occurs first. All site security regulations as specified in Onshore Oil & Gas Order No. 3 shall beadhered to. All product lines entering and leaving hydrocarbon storage tanks will be effectivelysealed in accordance with Onshore Oil & Gas Order No. 3.

• Any additional construction, reconstruction, or alterations of facilities, including roads, gatheringlines, batteries, etc., which will result in the disturbance of new ground, shall require the filing ofa suitable plan and need prior approval of the BLM Vernal Field Office. Emergency approvalmay be obtained orally, but such approval does not waive the written report requirement.

• No location shall be constructed or moved, no well shall be plugged, and no drilling or workoverequipment shall be removed from a well to be placed in a suspended status without priorapproval of the BLM Vernal Field Office. If operations are to be suspended for more than 30days, prior approval of the BLM Vernal Field Office shall be obtained and notification givenbefore resumption of operations.

• Pursuant to Onshore Oil & Gas Order No. 7, this is authorization for pit disposal of waterproduced from this well for a period of 90 days from the date of initial production. A permanentdisposal method must be approved by this office and in operation prior to the end of this 90-dayperiod. In order to meet this deadline, an application for the proposed permanent disposalmethod shall be submitted along with any necessary water analyses, as soon as possible, but nolater than 45 days after the date of first production. Any method of disposal which has not beenapproved prior to the end of the authorized 90-day period will be considered as an Incident ofNoncompliance and will be grounds for issuing a shut-in order until an acceptable manner fordisposing of said water is provided and approved by this


8/5/2010

• Unless the plugging is to take place immediately upon receipt of oral approval, the Field OfficePetroleum Engineers must be notified at least 24 hours in advance of the plugging of the well, inorder that a representative may witness plugging operations. If a well is suspended orabandoned, all pits must be fenced immediately until they are backfilled. The "SubsequentReport of Abandonment" (Form BLM 3160-5) must be submitted within 30 days after the actualplugging of the well bore, showing location of plugs, amount of cement in each, and amount ofcasing left in hole, and the current status of the surface


8/5/2010

• Unless the plugging is to take place immediately upon receipt of oral approval, the Field OfficePetroleum Engineers must be notified at least 24 hours in advance of the plugging of the well, inorder that a representative may witness plugging operations. If a well is suspended orabandoned, all pits must be fenced immediately until they are backfilled. The "SubsequentReport of Abandonment" (Form BLM 3160-5) must be submitted within 30 days after the actualplugging of the well bore, showing location of plugs, amount of cement in each, and amount ofcasing left in hole, and the current status of the surface

API Well No: 43047501540000



FORM 9






8. WELL NAME and NUMBER: FEDERAL 920-24N


9. API NUMBER: 43047501540000

3. ADDRESS OF OPERATOR: PHONE NUMBER: P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779 720 929-6007 Ext



COUNTY: UINTAH

STATE: UTAH

11.




9/30/2010

















NAME (PLEASE PRINT) PHONE NUMBER Danielle Piernot 720 929-6156


SIGNATURE N/A

DATE 9/30/2010

September 30, 2010

October 06, 2010

iPI Well No: 43047501540000

FORM 9


DIVISION OF OIL, GAS, AND MINING LEAs0E57D9ESIGNATION AND SERIAL NUMBER:

SUNDRY NOTICES AND REPORTS ON WELLS teF INDIAN, ALLOTTEE OR TRIBE NAME:

Do not use this form for proposals to drill new wells, significantly deepen e×isting wells below currentbottom-hole depth, reenter plugged wells, or to drill horizontal laterals. Use APPLICATION FOR PERMIT TO 7.UNIT or CA AGREEMENT NAME:


1. TYPE OF WELL 8. WELL NAME and NUMBER:Gas Well FEDERAL 920-24N

2. NAME OF OPERATOR: 9. API NUMBER:KERR-MCGEE OIL&GAS ONSHORE,L.P. 43047501540000




Qtr/Qtr: SESW Section: 24 Township: 09.05 Range: 20.0E Meridian: S UTAH




NOTICE OF INTENTApproximate date work will start: CHANGE TO PREVIOUS PLANS CHANGE TUBING CHANGE WELL NAME











Oil, Gas and Mining

Dat·e 6, 2010




iPI Well No: 43047501540000

FORM 9


DIVISION OF OIL, GAS, AND MINING LEAs0E57D9ESIGNATION AND SERIAL NUMBER:

SUNDRY NOTICES AND REPORTS ON WELLS teF INDIAN, ALLOTTEE OR TRIBE NAME:

Do not use this form for proposals to drill new wells, significantly deepen e×isting wells below currentbottom-hole depth, reenter plugged wells, or to drill horizontal laterals. Use APPLICATION FOR PERMIT TO 7.UNIT or CA AGREEMENT NAME:



2. NAME OF OPERATOR: 9. API NUMBER:KERR-MCGEE OIL&GAS ONSHORE,L.P. 43047501540000








NOTICE OF INTENTApproximate date work will start: CHANGE TO PREVIOUS PLANS CHANGE TUBING CHANGE WELL NAME











Oil, Gas and Mining

Dat·e 6, 2010








API: 43047501540000Well Name: FEDERAL 920-24N













September 30, 2010September 30, 2010

October 06, 2010

UTAH

DNR The Utah Division of Oil, Gas, and Mining'

- State of Utah- Department of Natural ResourcesElectronic Permitting System - Sundry Notices

OTI GAS MlNTNG



Location: 0822 FSL 1876 FWL QTR SESW SEC 24 TWNP 0905 RNG 200E MER SCompany Permit Issued to: KERR-MCGEE OIL & GAS ONSHORE, L.P.



•If located o_nprivate_land, has the ownership changed, if so, has the surface agreement beenupdated? I

_

i Yes igi No

• Have any wells been drilled in the vicinity of the_proposed well which would affect the spacing orsiting requirements for this location? :__I Yes g:I No

• Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well? I:_:I Yes IÏiÏ:I No

• Have there been any changes to the access route including ownership, or rightof- way, which couldaffect the proposed location? I___I Yes igi No

• Has the approved source of water for drilling changed? I_

I Yes IÎiÏI No

• Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? __:I Yes ig:I No

Approved by the•Is bonding still in place, which covers this proposed well? liiil Yes i i No Utah Division of


Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHOPÑ,age; October 06, 2010

By:


UTAH



Electronic Permitting System - Sundry NoticesOTI GAS MlNTNG



Location: 0822 FSL 1876 FWL QTR SESW SEC 24 TWNP 0905 RNG 200E MER SCompany Permit Issued to: KERR-MCGEE OIL & GAS ONSHORE, L.P.



•If located o_nprivate_land, has the ownership changed, if so, has the surface agreement beenupdated? I

_

i Yes igi No

• Have any wells been drilled in the vicinity of the_proposed well which would affect the spacing orsiting requirements for this location? :__I Yes g:I No

• Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well? I:_:I Yes IÏiÏ:I No

• Have there been any changes to the access route including ownership, or rightof- way, which couldaffect the proposed location? I___I Yes igi No

• Has the approved source of water for drilling changed? I_

I Yes IÎiÏI No

• Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? __:I Yes ig:I No

Approved by the•Is bonding still in place, which covers this proposed well? liiil Yes i i No Utah Division of


Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHOPÑ,age; October 06, 2010

By:




FORM 9








9. API NUMBER: 43047501540000




COUNTY: UINTAH

STATE: UTAH

11.




4/12/2011















Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests tochange the total depth (TD) to include the Blackhawk formation, which is in

the Mesaverde group for this well. In addition, Kerr-McGee respectfullyrequest approval in the well design, which includes hole and casing sizechanges. Please see attached for additional details. Please contact theundersigned if you have any questions and/or comments. Thank you.

NAME (PLEASE PRINT) PHONE NUMBER Andy Lytle 720 929-6100


SIGNATURE N/A

DATE 4/12/2011

04/14/2011

Apr. 12, 2011

Sundry Number: 14349 API Well Number: 43047501540000

FORM 9STATE OF UTAH

DEPARTMENT OF NATURAL RESOURCESDIVISION OF OIL, GAS, AND MINING 5.LEASOE5DESIGNATION AND SERIAL NUMBER:

SUNDRY NOTICES AND REPORTS ON WELLS iteF INDIAN, ALLOTTEE OR TRIBE NAME:




2. NAME OF OPERATOR: 9. API NUMBER:KERR-MCGEE OIL & GAS ONSHORE, L.P. 43047501540000

3. ADDRESS OF OPERATOR: PHONE NUMBER: 9. FIELD and POOL or WILDCAT:P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779 720 929-6515 E×t NATURAL BUTTES

4.LOCATIONOFVVELL COUNTY:FOOTAGES AT SURFACE: UINTAH











SPUD REPORTDate of Spud: REPERFORATE CURRENT FORMATION SIDETRACK TO REPAIR WELL TEMPORARY ABANDON




12. DESCRIBE PROPOSED OR C( MPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests to

change the total depth (TD) to include the Blackhawk formation, which is inthe Mesaverde group for this well. In addition, Kerr-McGee respectfully Approved by therequest approval in the well design, which includes hole and casing size Utah Division ofchanges. Please see attached for additional details. Please contact the Oil, Gas and Miningundersigned if you have any questions and/or comments. Thank you.

Date: 04/14/2011

By:

NAME (PLEASE PRINT) PHONE NUMBER TITLEAndy Lytle 720 929-6100 Regulatory Analyst

SIGNATURE DATEN/A

FORM 9STATE OF UTAH























12. DESCRIBE PROPOSED OR C( MPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests to

change the total depth (TD) to include the Blackhawk formation, which is inthe Mesaverde group for this well. In addition, Kerr-McGee respectfully Approved by therequest approval in the well design, which includes hole and casing size Utah Division ofchanges. Please see attached for additional details. Please contact the Oil, Gas and Miningundersigned if you have any questions and/or comments. Thank you.

Date: 04/14/2011

By:

NAME (PLEASE PRINT) PHONE NUMBER TITLEAndy Lytle 720 929-6100 Regulatory Analyst

SIGNATURE DATEN/A

COMPANY NAME KERR-McGEE OIL & GAS ONSHORE LP DATEWELL NAME TD 11,461' TVD 11,461' MDFIELD Natural Buttes COUNTY Uintah STATE Utah FINISHED ELEVATION 4,825'SURFACE LOCATION Sec 24 T 9S R 20E

NAD 27BTM HOLE LOCATION Sec 24 T 9S R 20E

NAD 27OBJECTIVE ZONE(S)ADDITIONAL INFO

GEOLOGICAL MECHANICALFORMATION HOLE CASING MUD

LOGS TOPS DEPTH SIZE SIZE WEIGHT40' 14"

11.00' 8-5/8", 28#, IJ-55, LTC Air mist

Green River @

Mahogany @

MD

Wasatch @

Mud logging program TBDCased hole logging program from TD - surf csg 7-7/8" Water / Fresh

Water Mud

8.3-12.0 ppg

Mverde @ TVD

MVU2 @ TVD

MVU1 @ TVD

Sego @ TVD

Castlegate @ TVD

MN5 @ TVD

13.0 ppg TD @ MD

or equivalent BTC/LTC csg

Note: 11" surface hole will usually be drilled ±400' below the lost circulation zone (aka bird's nest). Drilled depth may be ±200' of the estimated set depth depending on the acutal depth of the loss zone.

4-1/2" 11.6#

HCP-110

Mud requiredMax anticipated

SESW 822 FSL 1876 FWL

SESW 822 FSL 1876 FWLLatitude: 40.015850 -109.617230

Wasatch/Mesaverde

10,514'

10,861'

10,464'

Longitude:

Longitude:

Regulatory Agencies: BLM (Minerals), TRIBAL (Surface), UDOGM Tri-County Health Dept.

40.015850 -109.617230

11,461'

Top of Birds Nest @ 1,905'

All water flows encountered while drilling will be reported to the appropriate agencies.

2,299'

9,124'

Preset f/ GL @

April 12, 2011

2,750'

Latitude:

KERR-McGEE OIL & GAS ONSHORE LPDRILLING PROGRAM

8,192'

11,461'

1,669'

9,680'

FEDERAL 920-24N

TVD

4,988'

FEDERAL 920-24N BLM- Vertical Program Blackhawk 8 625 Casing Template- 04072011 (4).xlsApr. 12, 2011



COMPANY NAME KERR-McGEE OIL & GAS ONSHORE LP DATE April 12, 2011

WELL NAME FEDERAL 920-24N TD 11,461' TVD 11,461' MD

FIELD Natural Buttes COUNTY Uintah STATE Utah FINISHED ELEVATION 4,825'

SURFACE LOCATION SESW 822 FSL 1876 FWL Sec 24 T 9S R 20E

Latitude: 40.015850 Longitude: -109.617230 NAD 27

BTM HOLE LOCATION SESW 822 FSL 1876 FWL Sec 24 T 9S R 20E


OBJECTIVE ZONE(S) Wasatch/Mesaverde

ADDITIONAL INFO Regulatory Agencies: BLM (Minerals), TRIBAL (Surface), UDOGM Tri-County Health Dept.

O O *

O " * O O B

0 0 " B "40' 14"

11.00' 8-5/8", 28#, IJ-55, LTC Air nist

AII water flows encountered whiledrilling will be reported to theappropriate agencies.


Top of Birds Nest @ 1,905'Mahogany @ 2,299'


Note: 11" surface hole willusually be drilled±400' below the lost circulation zone (akabird's nest). Drilled depth may be ±200' ofthe estimated set depth depending on theacutal depth of the loss zone.

Wasatch @ 4,988'

Mud logging program TBDCased hole logging program from TD -surf csg 7 7/8" 4-1/2" 11.6# Water / Fresh

HCP-110 Water Mud

or equivalent BTC/LTC csg 8.3-1 .0 ppg

Mverde i 8,192' TVD

MVU2 g 9,124' TVD

MVU1 g 9,680' TVD

Sego @ 10,464' TVD

Castlegate @ 10,514' TVD

MN5 @ 10,861' TVD

Max anticipatedA ud required 11,461' TVD' 13.0 ppg TD @ 11,461' MD

FEDERAL 920-24N BLM- Vertical Program Blackhawk 8 625 Casing Template- 04072011


COMPANY NAME KERR-McGEE OIL & GAS ONSHORE LP DATE April 12, 2011

WELL NAME FEDERAL 920-24N TD 11,461' TVD 11,461' MD

FIELD Natural Buttes COUNTY Uintah STATE Utah FINISHED ELEVATION 4,825'

SURFACE LOCATION SESW 822 FSL 1876 FWL Sec 24 T 9S R 20E


BTM HOLE LOCATION SESW 822 FSL 1876 FWL Sec 24 T 9S R 20E


OBJECTIVE ZONE(S) Wasatch/Mesaverde

ADDITIONAL INFO Regulatory Agencies: BLM (Minerals), TRIBAL (Surface), UDOGM Tri-County Health Dept.

O O *

O " * O O B

0 0 " B "40' 14"

11.00' 8-5/8", 28#, IJ-55, LTC Air nist

AII water flows encountered whiledrilling will be reported to theappropriate agencies.


Top of Birds Nest @ 1,905'Mahogany @ 2,299'


Note: 11" surface hole willusually be drilled±400' below the lost circulation zone (akabird's nest). Drilled depth may be ±200' ofthe estimated set depth depending on theacutal depth of the loss zone.

Wasatch @ 4,988'

Mud logging program TBDCased hole logging program from TD -surf csg 7 7/8" 4-1/2" 11.6# Water / Fresh

HCP-110 Water Mud

or equivalent BTC/LTC csg 8.3-1 .0 ppg

Mverde i 8,192' TVD

MVU2 g 9,124' TVD

MVU1 g 9,680' TVD

Sego @ 10,464' TVD

Castlegate @ 10,514' TVD

MN5 @ 10,861' TVD

Max anticipatedA ud required 11,461' TVD' 13.0 ppg TD @ 11,461' MD


CASING PROGRAM DESIGN FACTORSLTC BTC

SIZE INTERVAL WT. GR. CPLG. BURST COLLAPSECONDUCTOR 14"

3,390 348,000 N/ASURFACE to LTC 1.97 5.16 N/A

10,690 279,000 367,000PRODUCTION 4-1/2" to LTC or BTC 1.19 2.62 3.44

Surface Casing:(Burst Assumptions: TD = ppg)

(Collapse Assumption: Fully Evacuated Casing, Max MW) (Tension Assumptions: Air Weight of Casing*Buoy.Fact. of water)Production casing:

(Burst Assumptions: Pressure test with 8.4ppg @ psi)(Collapse Assumption: Fully Evacuated Casing, Max MW) (Tension Assumptions: Air Weight of Casing*Buoy.Fact. of water)

CEMENT PROGRAM

FT. OF FILL DESCRIPTION SACKS EXCESS WEIGHT YIELDSURFACE LEAD 500' 180 60% 1.15Option 1

TOP OUT CMT (6 jobs) 1,200' 270 0% 1.15

SURFACEOption 2 LEAD 2,250' 210 35% 3.82

TAIL 500' 150 35% 1.15

TOP OUT CMT as required as req. 1.15PRODUCTION LEAD 320 10% 3.38

TAIL 1,340 10% 1.31

*Substitute caliper hole volume plus 0% excess for LEAD if accurate caliper is obtained *Substitute caliper hole volume plus 10% excess for TAIL if accurate caliper is obtained

FLOAT EQUIPMENT & CENTRALIZERS

SURFACE Guide shoe, 1 jt, insert float. Centralize first 3 joints with bow spring centralizers. Thread lock guide shoe

PRODUCTION Float shoe, 1 jt, float collar. No centralizers will be used.

ADDITIONAL INFORMATION

Test casing head to 750 psi after installing. Test surface casing to 1,500 psi prior to drilling out.

BOPE: 11" 5M with one annular and 2 rams. The BOPE will be installed before the production hole is drilled and tested to 5,000 psi (annular to

2,500 psi) prior to drilling out the surface casing shoe. Record on chart recorder and tour sheet. Function test rams on each trip. Maintain

safety valve and inside BOP on rig floor at all times. Most rigs have top drives; however, if used, the Kelly is to be equipped with upper

and lower kelly valves.

Surveys will be taken at 1,000' minimum intervals.

Most rigs have PVT System for mud monitoring. If no PVT is available, visual monitoring will be utilized.

DRILLING ENGINEER: DATE:Nick Spence / Emile Goodwin

DRILLING SUPERINTENDENT: DATE:Kenny Gathings / Lovel Young

IJ-55

0-40'

DRILLING PROGRAMKERR-McGEE OIL & GAS ONSHORE LP

HCP-11011,461

14.30+ 0.5% extender

4,481' Premium Lite II +0.25 pps

50/50 Poz/G + 10% salt + 2% gel6,980'

celloflake + 5 pps gilsonite + 10% gel

+ 0.1% R-3

TENSION

1,8802,750

9000

28.00

11.60

15.80

8-5/8"

0

Fracture at surface shoe with 0.1 psi/ft gas gradient above

8,650

Premium cmt + 2% CaCl

0

0.66 psi/ft = bottomhole gradient

13.0

Premium cmt + 2% CaCl+ 0.25 pps flocele

Premium cmt + 2% CaCl

+ 0.25 pps Flocele + 3% salt BWOW

+ 0.25 pps flocele20 gals sodium silicate + Premium cmt

65/35 Poz + 6% Gel + 10 pps gilsoniteNOTE: If well will circulate water to surface, option 2 will be utilized

+ 2% CaCl + 0.25 pps flocele

11.00

1.46

1.12

15.80

15.80

15.80

0.73 psi/ft = frac gradient @ surface shoe

11.00

FEDERAL 920-24N BLM- Vertical Program Blackhawk 8 625 Casing Template- 04072011 (4).xlsApr. 12, 2011


KERR-McGEE OIL & GAS ONSHORE LPDRII I ING PROGRAM

CASING PROGRAM • •-

CONDUCTOR 14" 0-40'

3,390 1,880 348,000 N/A

SURFACE 8-5/8" O to 2,750 28.00 IJ-55 LTC 1.97 1.46 5.16 N/A

10,690 8,650 279,000 367,000

PRODUCTION 4-1/2" O to 11,461 11.60 HCP-110 LTC or BTC 1.19 1.12 2.62 3.44

Surface Casing:(Burst Assumptions: TD = 13.0 ppg) 0.73 psiMt = frac gradient @surface shoe

Fracture at surface shoe with 0.1 psiMt gas gradient above(Collapse Assumption: Fully Evacuated Casing, Max MW) (Tension Assumptions: Air Weight of Casing*Buoy.Fact. of water)

Production casing:(Burst Assumptions: Pressure test with 8.4ppg @ 9000 psi) 0.66 psiMt = bottomhole gradient(Collapse Assumption: Fully Evacuated Casing, Max MW) (Tension Assumptions: Air Weight of Casing*Buoy.Fact. of water)

CFMFNT PROGRAM

SURFACE LEAD 500' Premium cmt + 2% CaCI 180 60% 15.80 1.15

Option 1 + 0.25 pps floceleTOP OUT CMT (6 jobs) 1,200' 20 gals sodium silicate + Premium cmt 270 0% 15.80 1.15

+ 2% CaCI + 0.25 pps flocele

SURFACE NOTE: If well will circulate water to surface, oation 2 will be utilizedOption 2 LEAD 2,250' 65/35 Poz + 6% Gel + 10 pps gilsonite 210 35% 11.00 3.82

+ 0.25 pps Flocele + 3% salt BWOWTAIL 500' Premium cmt + 2% CaCI 150 35% 15.80 1.15

+ 0.25 pps floceleTOP OUT CMT as required Premium cmt + 2% CaCI as req. 15.80 1.15

PRODUCTION LEAD 4,481' Premium Lite Il +0.25 pps 320 10% 11.00 3.38celloflake + 5 pps gilsonite + 10% gel

+ 0.5% extenderTAIL 6,980' 50/50 Poz/G + 10% salt + 2% gel 1,340 10% 14.30 1.31

+ 0.1% R-3*Substitute caliper hole volume plus 0% excess for LEAD if accurate caliper is obtained*Substitute caliper hole volume plus 10% excess for TAIL if accurate caliper is obtained

FI OAT FOUIPMFNT A CFNTRAI 17FRS


PRODUCTION Float shoe, 1 jt, Boat collar. No centralizers willbe used.

ADDITIONAL INFORMATlON








DRILLING ENGINEER: DATE:

Nick Spence / Emile Goodwin

DRILLING SUPERINTENDENT: DATE:

Kenny Gathings / Lovel Young


KERR-McGEE OIL & GAS ONSHORE LPDRII I ING PROGRAM

CASING PROGRAM • •-

CONDUCTOR 14" 0-40'

3,390 1,880 348,000 N/A

SURFACE 8-5/8" O to 2,750 28.00 IJ-55 LTC 1.97 1.46 5.16 N/A

10,690 8,650 279,000 367,000

PRODUCTION 4-1/2" O to 11,461 11.60 HCP-110 LTC or BTC 1.19 1.12 2.62 3.44

Surface Casing:(Burst Assumptions: TD = 13.0 ppg) 0.73 psiMt = frac gradient @surface shoe

Fracture at surface shoe with 0.1 psiMt gas gradient above(Collapse Assumption: Fully Evacuated Casing, Max MW) (Tension Assumptions: Air Weight of Casing*Buoy.Fact. of water)

Production casing:(Burst Assumptions: Pressure test with 8.4ppg @ 9000 psi) 0.66 psiMt = bottomhole gradient(Collapse Assumption: Fully Evacuated Casing, Max MW) (Tension Assumptions: Air Weight of Casing*Buoy.Fact. of water)

CFMFNT PROGRAM

SURFACE LEAD 500' Premium cmt + 2% CaCI 180 60% 15.80 1.15

Option 1 + 0.25 pps floceleTOP OUT CMT (6 jobs) 1,200' 20 gals sodium silicate + Premium cmt 270 0% 15.80 1.15

+ 2% CaCI + 0.25 pps flocele

SURFACE NOTE: If well will circulate water to surface, oation 2 will be utilizedOption 2 LEAD 2,250' 65/35 Poz + 6% Gel + 10 pps gilsonite 210 35% 11.00 3.82

+ 0.25 pps Flocele + 3% salt BWOWTAIL 500' Premium cmt + 2% CaCI 150 35% 15.80 1.15

+ 0.25 pps floceleTOP OUT CMT as required Premium cmt + 2% CaCI as req. 15.80 1.15

PRODUCTION LEAD 4,481' Premium Lite Il +0.25 pps 320 10% 11.00 3.38celloflake + 5 pps gilsonite + 10% gel

+ 0.5% extenderTAIL 6,980' 50/50 Poz/G + 10% salt + 2% gel 1,340 10% 14.30 1.31

+ 0.1% R-3*Substitute caliper hole volume plus 0% excess for LEAD if accurate caliper is obtained*Substitute caliper hole volume plus 10% excess for TAIL if accurate caliper is obtained

FI OAT FOUIPMFNT A CFNTRAI 17FRS


PRODUCTION Float shoe, 1 jt, Boat collar. No centralizers willbe used.

ADDITIONAL INFORMATlON








DRILLING ENGINEER: DATE:

Nick Spence / Emile Goodwin

DRILLING SUPERINTENDENT: DATE:

Kenny Gathings / Lovel Young




FORM 9








9. API NUMBER: 43047501540000




COUNTY: UINTAH

STATE: UTAH

11.




10/1/2011



















SIGNATURE N/A

DATE 9/19/2011

09/20/2011

Sep. 19, 2011


FORM 9STATE OF UTAH























12. DESCRIBE PROPOSED OR C( MPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests an

extension to this APD for the maximum time allowed. Please contact theundersigned with any questions and/or comments. Thank you. Approved by the

Utah Division ofOil, Gas and Mining

Date: 09/20/2011

By:


SIGNATURE DATEN/A

FORM 9STATE OF UTAH























12. DESCRIBE PROPOSED OR C( MPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests an

extension to this APD for the maximum time allowed. Please contact theundersigned with any questions and/or comments. Thank you. Approved by the

Utah Division ofOil, Gas and Mining

Date: 09/20/2011

By:


SIGNATURE DATEN/A


















Sep. 19, 2011


UTAH

DNR The Utah Division of Oil, Gas, and Mining- State of Utah- Department of Natural Resources

Electronic Permitting System - Sundry NoticesTI, GA% Pr NINTPM






• If located on private land, has the ownership changed, if so, has the surface agreement beenupdated? Yes © No

• Have any wells been drilled in the vicinity of the proposed well which would affect the spacing orsiting requirements for this location? Yes © No

• Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well? Yes © No

• Have there been any changes to the access route including ownership, or rightof- way, which couldaffect the proposed location? Yes © No

' Has the approved source of water for drilling changed? Yes © No

• Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? Yes © No

' Is bonding still in place, which covers this proposed well? U Yes No

Signature: Danielle Piernot Date: 9/19/2011Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHORE,

UTAH

DNR The Utah Division of Oil, Gas, and Mining- State of Utah- Department of Natural Resources

Electronic Permitting System - Sundry NoticesTI, BAS Pr N1NTMG






•If located on private_land, has the ownership changed, if so, has the surface agreement beenupdated? O Yes No

• Have any wells been drilled in the vicinity of the roposed well which would affect the spacing orsiting requirements for this location? O Yes No

• Has there been any unit or other agreements put in place that could affect the permitting or operationof this proposed well? O Yes @ No

• Have there been any changes to the access route including ownership, or rightof- way, which couldaffect the proposed location? O Yes @ No

• Has the approved source of water for drilling changed? O Yes @ No

• Have there been any physical changes to the surface location or access route which will require achange in plans from what was discussed at the onsite evaluation? O Yes @ No

• Is bonding still in place, which covers this proposed well? @ Yes O No

Signature: Danielle Piernot Date: 9/19/2011Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHORE,

F rm 3160 5 UNITED STATES C VEr FORM APPROVEDr (August 2007)DEPARTMENT OF THE INTERIOR OMB NO. 1004-0135

BUREAU OF LAND MANAGEMENT Expires: July 31, 2010

JUL18 N 5. Lease Serial Ño.SUNDRY NOTICES AND REPORTS ON WELLS UTUO579

Do not use this form for proposals to dri/I or to re-enter anabandoned well. Use form 3160-3 (APD) for such proposa 6. It Indian, Allottee or Tribe Name

SUBMIT IN TRIPLICATE - Other instructions on reverse side. 7. If Unit or CA/Agreement, Name and/or No.

1. Type of Well 8. Well Name and No.

O Oil Well g Gas Well 0 Other FEDERAL 920-24N

2. Name of Operator Contact: L)ANlbLLEE PIERNO I 9. API Well No.KERR MCGEE OIL & GAS ONSHOREEl-Mail: [email protected] 43-047-50154-00-X1

3a. Address 3b. I'11oneNo. (mclude area code) 10. Field and Pool, or Exploratory1368 SOUTH 1200 EAST Ph: 720.929.6156 NATURAL BUTTESVERNAL, UT 84078 Fx: 720.929.7156

4. Location of Well (Footage, Sec., T., R., Ad.,or surveyDescription) 11. County or Parish, and State

Sec 24 T9S R20E SESW 822FSL 1876FWL UINTAH COUNTY, UT

12. CHECK APPROPRIATE BOX(ES) TO INDICATE NATURE OF NOTICE, REPORT, OR OTHER DATA


O Acidize O Deepen Production (Start/Resume) O Water Shut-Offg Notice of Intent 0

O Alter Casing O Fracture Treat O Reclamation O Well Integrity0 Subsequent Report

0 Casing Repair 0 New Construction 0 Recomplete Other0 Final Abandonment Notice O Change Plans O Plug and Abandon 0 Temporarily Abandon PDange to Original A

O Convert to Injection 0 Plug Back O Water Disposal13. Describe Proposed or Completed Op eration (clearly state all pertinent details,including estimated starting dateof any proposed work and approximate durationthereotIf the proposal is to deepen directionally or recomplete horizontally, give subsurface locations and measured and true vertical depths of all pertinent markers and zones.

Attach the Bond under which the work will be performed or provide the Bond No. on file with BLM/BIA. Required subsequent reports shall be filed within 30 daysfollowing completion of the involved operations. If the operation results in a multiple completion or recompletion in a new interval, a Form 3160-4 shall be filed oncetesting has been completed. Final Abandonment Notices shall be filed only after all requirements, including reclamation, have been completed, and the operator hasdetermined that the site is ready for final inspection.)

Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests anextension to this APD for the maximum timeallowed. The original APD was approved on 8/04/2010.

Please contact the undersigned withany questions and/or commen VERNALFIE D F ICEThank you ENG.SEP1O2012

GEOL.

00NDITIONSOFAP OPET

14. I herebycertify that the toregomgis true and correct.Electronic Submission #142951 verifid by the BLMWell Information System

For KERR MCGEE OIL & GAS UNSHORE L, sent to the VernalCommitted to AFMSS for processing by ROEIN R. HANSENon 07/25/2012 (12RRH3914SE)

Name(Printed/Typed) DANIELLE E PIERNOT Title REGULATORY ANALYST ll

Signature (Electronic Submission) Date 07/16/2012THIS SPACE FOR FEDERAL OR STATE OFFICE USE

Aseistant Field ManagerApproved By Title Lands &MineralResources $Dite5 2012

Conditions of i n , e attached. Approval of this notice does not warrant orcertify that th c o legal or equitable title to those rights in the subject lease UCD A l gi I n Aegs s=which would en e e applicant to conduct operations thereon. Office WI-Il Mi- I i I.U Vrs I CTitle 18 U.S.C. Section 1001 and Title 43 U.S.C. Section 1212, make it a crime for any person knowingly and willÑlyto make to any department or agency ofthe

F rm 3160 5 UNITED STATES C VEr FORM APPROVEDr (August 2007)DEPARTMENT OF THE INTERIOR OMB NO. 1004-0135

BUREAU OF LAND MANAGEMENT Expires: July 31, 2010

JUL18 N 5. Lease Serial Ño.SUNDRY NOTICES AND REPORTS ON WELLS UTUO579

Do not use this form for proposals to dri/I or to re-enter anabandoned well. Use form 3160-3 (APD) for such proposa 6. It Indian, Allottee or Tribe Name

SUBMIT IN TRIPLICATE - Other instructions on reverse side. 7. If Unit or CA/Agreement, Name and/or No.

1. Type of Well 8. Well Name and No.

O Oil Well g Gas Well 0 Other FEDERAL 920-24N

2. Name of Operator Contact: L)ANlbLLEE PIERNO I 9. API Well No.KERR MCGEE OIL & GAS ONSHOREEl-Mail: [email protected] 43-047-50154-00-X1

3a. Address 3b. I'11oneNo. (mclude area code) 10. Field and Pool, or Exploratory1368 SOUTH 1200 EAST Ph: 720.929.6156 NATURAL BUTTESVERNAL, UT 84078 Fx: 720.929.7156

4. Location of Well (Footage, Sec., T., R., Ad.,or surveyDescription) 11. County or Parish, and State

Sec 24 T9S R20E SESW 822FSL 1876FWL UINTAH COUNTY, UT

12. CHECK APPROPRIATE BOX(ES) TO INDICATE NATURE OF NOTICE, REPORT, OR OTHER DATA


O Acidize O Deepen Production (Start/Resume) O Water Shut-Offg Notice of Intent 0

O Alter Casing O Fracture Treat O Reclamation O Well Integrity0 Subsequent Report

0 Casing Repair 0 New Construction 0 Recomplete Other

0 Final Abandonment Notice O Change Plans O Plug and Abandon 0 Temporarily Abandon PDange to Original A

O Convert to Injection 0 Plug Back O Water Disposal13. Describe Proposed or Completed Op eration (clearly state all pertinent details,including estimated starting dateof any proposed work and approximate durationthereotIf the proposal is to deepen directionally or recomplete horizontally, give subsurface locations and measured and true vertical depths of all pertinent markers and zones.

Attach the Bond under which the work will be performed or provide the Bond No. on file with BLM/BIA. Required subsequent reports shall be filed within 30 daysfollowing completion of the involved operations. If the operation results in a multiple completion or recompletion in a new interval, a Form 3160-4 shall be filed oncetesting has been completed. Final Abandonment Notices shall be filed only after all requirements, including reclamation, have been completed, and the operator hasdetermined that the site is ready for final inspection.)

Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests anextension to this APD for the maximum timeallowed. The original APD was approved on 8/04/2010.

Please contact the undersigned withany questions and/or commen VERNALFIE D F ICEThank you ENG.SEP1O2012

GEOL.

00NDITIONSOFAP OPET

14. I herebycertify that the toregomgis true and correct.Electronic Submission #142951 verifid by the BLMWell Information System

For KERR MCGEE OIL & GAS UNSHORE L, sent to the VernalCommitted to AFMSS for processing by ROEIN R. HANSENon 07/25/2012 (12RRH3914SE)

Name(Printed/Typed) DANIELLE E PIERNOT Title REGULATORY ANALYST ll

Signature (Electronic Submission) Date 07/16/2012

THIS SPACE FOR FEDERAL OR STATE OFFICE USE

Aseistant Field ManagerApproved By Title Lands &MineralResources $Dite5 2012

Conditions of i n , e attached. Approval of this notice does not warrant orcertify that th c o legal or equitable title to those rights in the subject lease UCD A l gi I n Aegs s=which would en e e applicant to conduct operations thereon. Office WI-Il Mi- I i I.U Vrs I CTitle 18 U.S.C. Section 1001 and Title 43 U.S.C. Section 1212, make it a crime for any person knowingly and willÑlyto make to any department or agency ofthe

CONDITIONS OF APPROVAL

Kerr McGee Oil and Gas Onshore LP.

Notice of IntentAPD Extension

Lease: UTU-0579Well: Federal 920-24NLocation: SESW Sec 24-T9S-R20E

An extension for the referenced APD is granted with the following conditions:

1. The extension and APD shall expire on 08/04/2014.

2. No other extension shall be granted.

If you have any other questions concerning this matter, please contact Robin L Hansen of thisoffice at (435)

CONDITIONS OF APPROVAL

Kerr McGee Oil and Gas Onshore LP.

Notice of IntentAPD Extension

Lease: UTU-0579Well: Federal 920-24NLocation: SESW Sec 24-T9S-R20E

An extension for the referenced APD is granted with the following conditions:

1. The extension and APD shall expire on 08/04/2014.

2. No other extension shall be granted.

If you have any other questions concerning this matter, please contact Robin L Hansen of thisoffice at (435)

RECEIVED: Sep. 27, 2012



FORM 9


SUNDRY NOTICES AND REPORTS ON WELLS

Do not use this form for proposals to drill new wells, significantly deepen existing wells belowcurrent bottom-hole depth, reenter plugged wells, or to drill horizontal laterals. Use APPLICATIONFOR PERMIT TO DRILL form for such proposals.


7.UNIT or CA AGREEMENT NAME: NATURAL BUTTES




9. API NUMBER: 43047501540000




COUNTY: UINTAH

STATE: UTAH

11.




10 /1 /2012















Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requestsan extension to this APD for the maximum time allowed. Please contact

the undersigned with any questions and/or comments. Thank you.



SIGNATURE N/A

DATE 9 /27 /2012

October 01, 2012

Sundry Number: 30243 API Well Number: 43047501540000Sundry Number: 30243 API Well Number: 43047501540000

FORM 9STATE OF UTAH

DEPARTMENTOF NATURALRESOURCES5.LEASE DESIGNATION AND SERIAL NUMBER:DIVISION OF OIL, GAS, AND MINING UTU-0579

SUNDRY NOTICES AND REPORTS ON WELLS 6. IF INDIAN, ALLOTTEE OR TRIBE NAME:Ute

Do not use this form for proposals to drill new wells, significantly deepen existing wells belowcurrent bottom-hole depth, reenter plugged wells, or to drill horizontal laterals. Use APPLICATION 7.UNITor CA AGREEMENT NAME:

FOR PERMIT TO DRILL form for such proposals. NATURALBUTTES



3. ADDRESS OF OPERATOR: PHONE NUMBER: 9. FIELD and POOL or WILDCAT:P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779 720 929-6 5NIATIERALBUTTES

4. LOCATION OF WELL COUNTY:FOOTAGESATSURFACE: UINTAH

0822 FSL 1876 FWLQTRIQTR, SECTION, TOWNSHIP, RANGE, MERIDIAN: STATE:

QtrlQtr: SESW Section: 24 Township: 09.0S Range: 20.0E Meridian: S UTAH

CHECK APPROPRIATE BOXES TO INDICATENATURE OF NOTICE, REPORT, OR OTHER DATA


ACI DIZE ALTER CASING CASING REPAIRNOTICE OF INTENT

Approximate date work will start: CHANGE TO PREVIOUS PLANS CHANGE TUBING CHANGE WELL NAME




PRODUCTION START OR RESUME RECLAMATION OF WELL SITE RECOMPLETE DIFFERENT FORMATIONSPUD REPORT

Date of Spud: REPERFORATE CURRENT FORMATION SIDETRACK TO REPAIR WELL TEMPORARY ABANDON



WILDCATWELLDETERMINATION OTHER OTHER:

12. DESCRIBE PROPOSED OR COMPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests Approved by thean extension to this APD for the maximum time allowed. Please contact utah Division of

the undersigned with any questions and/or comments. Thank you. Oil, Gas and Mining

Date: October 01, 2012

By:



RECEIVED: Sep. 27,


FORM 9STATE OF UTAH

























Date: October 01, 2012

By:



RECEIVED: Sep. 27,








Date Original Permit Issued: 10 /1 /2008

The undersigned as owner with legal rights to drill on the property as permitted above, hereby verifies that theinformation as submitted in the previously approved application to drill, remains valid and does not require revision.Following is a checklist of some items related to the application, which should be verified.

If located on private land, has the ownership changed, if so, has the surface agreement been updated? Yes No

Have any wells been drilled in the vicinity of the proposed well which would affect the spacing or sitingrequirements for this location? Yes No

Has there been any unit or other agreements put in place that could affect the permitting or operation of thisproposed well? Yes No

Have there been any changes to the access route including ownership, or rightof- way, which could affect theproposed location? Yes No


Have there been any physical changes to the surface location or access route which will require a change inplans from what was discussed at the onsite evaluation? Yes No


Signature: Danielle Piernot Date: 9 /27 /2012



UTAH



OTI. EMI Pr N1NTrie






* If located on private land, has the ownership changed, if so, has the surface agreement been updated? OYes No

• Have any wells been drilled in the vicinity of the proposed well which would affect the spacing or sitingrequirements for this location? O Yes No

• Has there been any unit or other agreements put in place that could affect the permitting or operation of thisproposed well? (_) Yes No

• Have there been any changes to the access route including ownership, or rightof- way, which could affect theproposed location? O Yes i No

· Has the approved source of water for drilling changed? O Yes No

• Have there been any physical changes to the surface location or access route which will require a change inplans from what was discussed at the onsite evaluation? Yes No

' Is bonding still in place, which covers this proposed well? Yes No

Signature: Danielle Piernot Date: 9/27/2012Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHORE, L.P.

RECEIVED: Sep. 27,


UTAH



Electronic Permitting System - Sundry NoticesOTI. EMI Pr N1NTrie













Signature: Danielle Piernot Date: 9/27/2012Title: Regulatory Analyst Representing: KERR-MCGEE OIL & GAS ONSHORE, L.P.

RECEIVED: Sep. 27,




FORM 9









9. API NUMBER: 43047501540000




COUNTY: UINTAH

STATE: UTAH

11.




10 /1 /2013

















NAME (PLEASE PRINT) PHONE NUMBER Teena Paulo 720 929-6236

TITLE Staff Regulatory Specialist

SIGNATURE N/A

DATE 9 /4 /2013

September 12, 2013


FORM 9STATE OF UTAH


























By:

NAME (PLEASE PRINT) PHONE NUMBER TITLETeena Paulo 720 929-6236 Staff Regulatory Specialist


RECEIVED: Sep. 04,


FORM 9STATE OF UTAH


























By:



RECEIVED: Sep. 04,

















Signature: Teena Paulo Date: 9 /4 /2013

Title: Staff Regulatory Specialist Representing: KERR-MCGEE OIL & GAS ONSHORE, L.P.


UTAH



OTI. EMI Pr N1NTrie













Signature: Teena Paulo Date: 9/4/2013Title: Staff Regulatory Specialist Representing: KERR-MCGEE OIL & GAS ONSHORE, L.P.

RECEIVED: Sep. 04,


UTAH

















RECEIVED: Sep. 04,

RECEIVED: Aug. 25, 2014



FORM 9




6. IF INDIAN, ALLOTTEE OR TRIBE NAME: UTE





9. API NUMBER: 43047501540000




COUNTY: UINTAH

STATE: UTAH

11.




10 /1 /2014

















NAME (PLEASE PRINT) PHONE NUMBER Teena Paulo 720 929-6236

TITLE Staff Regulatory Specialist

SIGNATURE N/A

DATE 8 /25 /2014

September 04, 2014


FORM 9STATE OF UTAH


SUNDRY NOTICES AND REPORTS ON WELLS 6 F INDIAN, ALLOTTEE OR TRIBE NAME:





3. ADDRESS OF OPERATOR: PHONE NUMBER: 9. FIELD and POOL or WILDCAT:P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779 720 929-6 10ATIERALBUTTES
















12. DESCRIBE PROPOSED OR COMPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests Approved by thean extension to this APD for the maximum time allowed. Please contact LSeþtnilahdoß4>,f2014


Date:



RECEIVED: Aug. 25,


FORM 9STATE OF UTAH


SUNDRY NOTICES AND REPORTS ON WELLS 6 F INDIAN, ALLOTTEE OR TRIBE NAME:





3. ADDRESS OF OPERATOR: PHONE NUMBER: 9. FIELD and POOL or WILDCAT:P.O. Box 173779 1099 18th Street, Suite 600, Denver, CO, 80217 3779 720 929-6 10ATIERALBUTTES
















12. DESCRIBE PROPOSED OR COMPLETED OPERATIONS. Clearly show all pertinent details including dates, depths, volumes, etc.Kerr-McGee Oil & Gas Onshore, L.P. (Kerr-McGee) respectfully requests Approved by thean extension to this APD for the maximum time allowed. Please contact LSeþtnilahdoß4>,f2014


Date:



RECEIVED: Aug. 25,

RECEIVED: Aug. 25, 2014
















Signature: Teena Paulo Date: 8 /25 /2014

Title: Staff Regulatory Specialist Representing: KERR-MCGEE OIL & GAS ONSHORE, L.P.


UTAH



OTI. EMI Pr N1NTrie














RECEIVED: Aug. 25,


UTAH

















RECEIVED: Aug. 25,

State of UtahDEPARTMENT OF NATURAL RESOURCES

MICHAEL R. STYLER

GARY R. HERBERT Executive Director

Governor DIVISion of Oil, Gas and MiningSPENCER J. COX JOHN R. BAZA

Lieutenant Governor Division Director December 3, 2015

Kerr-McGee Oil & Gas Onshore, LP.1099 18th Street, Suite 600Denver, CO 80217

Re: APD Rescinded - Federal 920-24N, Sec. 24, T.9, R.20E,Uintah County, Utah API No. 43-047-50154

Ladies and Gentlemen:

The Application for Permit to Drill (APD) for the subject well wasapproved by the Division of Oil, Gas and Mining (Division) on October 1, 2008.On September 30, 2009, October 6, 2010, September 20, 2011, October 1, 2012 ,

2012, September 12, 2013 and September 4, 2014, the Division granted a one-year APD extension. No drilling activity at this location has been reported to theDivision. Therefore, approval to drill the well is hereby rescinded, effectiveDecember 3, 2015.

A new APD must be filed with this office for approval oriorto thecommencement of any future work on the subject location.

If any previously unreported operations have been performed on this welllocation, it is imperative that you notify the Division immediately.

Sincerely,

MasonE ironmental Scientist

ec: Well FileBureau of Land Management, Vernal

UTAH

DNR

1594 West North Temple, Suite 1210, PO Box 145801, Salt Lake City, UT 84114-5801telephone (801) 538-5340 • facsimile (801) 359-3940 • TTY (801) 538-7458 • www ogm.utah.gov

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