FILEDMAY I I 20t5
SECNETANY, BOAÐ OFotL, oâs I mMNG
BEFORE THE BOARD OF OIL, GAS AND MININGDEPARTMENT OF NATURAL RESOURCES
STATE OF UTAH
IN TFIE MATTER OF TITE REQUEST FORAGENCY ACTION OF ENEFIT AMERICANOIL fslc, CO.l FOR AN ORDER ENLARGINGTHE DESIGNATED OIL SIIALE AREACREATED BY CAUSE NOS. I9O-3 AND 190-13
TO INCLUDE LANDS LOCATED INTOWNSHIPS 9 AND 10 SOUTH, RANGES 24
AND 25 EAST, SLM, UINTAH COUNTY, UTAH
RESPONDENT T-K PRODUCTIONCOMPANY'S EXHIBITS
Docket No. 2015-017
Cause No. 190-14
Pursuant to Utah Admin. Code Rule R641-105-500, Respondent T-K Production
Company ("T-K"), by and through its counsel of record, MacDonald &. Miller Mineral
Legal Services, PLLC, hereby respectfully submits the following exhibits intended to be
offered into evidence in support of its Objection to the Request for Agency Action filed
concurrently herewith at the I|/'ay 27,2015 hearing on this cause:
EXHIBIT " A'' _ T-K's potential technical witnesses' resumes (collectively 2pages):
Jeffrey V/ingerter - Sr. Geologist, Hohn Engineering, PLLC(contractor of T-K).Thomas K. Hohn, Sr. Petroleum Engineer, HohnEngineering, PLLC (contractor of T-K).
Thomas Hauptman, President of T-K, will also be testifying but as
afactwitness only.
True and correct copies of Utah Admin. Code Rule R649-3-31 andof the Board's Order entered on June 8, 2001 in Cause No. 190-13(collectively I 8 pages).
o
EXHIBIT '(B)' _
EXHIBIT ..C') _
EXHIBIT "D" _
EXHIBIT ('E)) _
Plat of T-K's State of Utah Oil, Gas and Associated HydrocarbonLeases and Other Business Arrangements within the lands at issueunder the Request for Agency Action (1 page).
True and correct copy of the Cooperative Development Agreementdated effective June 19, 2014, by and between T-K and EAO StateLeases, LLC "and its aff,rliates," without referenced Exhibit "8"(confidential) (1 9 pages).
Well designs and corresponding economic impact analyses(collectively 3 pages).
Respectfully submitted this 1lth day of May, 2015
M¿.cDONALD & MILLERAL SERVICES, PLLC
rederick M.
Attorneys for Respondent T-K ProductionCompany
Esq
1070.01
2
Jeffrey Wingerter
Sr. GeologistHohn Engineering, PLLCBillings, Montana
Professional Resume
Mr. Wingerter has worked over 30 years as a professional geologist. His experience includesboth oil and gas and mineral exploration and development, as well as environmental geology. Hehas been involved in the generation andlor review of 60 wells, resulting in 27 economiccompletions. He is experienced in regional basin evaluation and potential, prospect generation,field development, well-site supervision, well log analysis, land acquisition recommendations,presentation of conceptual to detailed prospects to management and prospective joint venturepartners, permitting, environmental compliance and AFE preparation, and expert testimony, Hehas testified as an expert in the field of Petroleum Geology before oil & gas commissions inWyoming, Montana, Colorado as well as in litigation court cases.
Mr Wingerter holds the following degrees: BA Geology,1978, 'Western State College,Gunnison, Colorado and MS Geology 1982, Eastern Washington University, Cheney,Washington
EXHEff A
Thomas K. Hohn, P.E.Sr. Registered Petroleum EngineerManager/Owner of Hohn Engineering, PLLCBillings, Montana
Professional Resume
Specialties: Reservoir engineering, property evaluation, property acquisitions, fieldoperations, drilling and well completions, project management
Mr. Hohn is a registered professional engineer who graduated from Montana College of MineralScience and Technology in Butte, Montana with a Bachelor of Science degree in PetroleumEngineering in1974. His career includes 4 years with Unocal in Southern California offshoreand onshore operations, 6 years with Petro Lewis Corp in all phases of engineering and
operations management throughout the domestic industry.
He has been an independent consulting petroleum engineer since 1984. He has extensrve
experience in property operation and management, property evaluation, reservoir engineering,project management and field operations. Over the last 25 years he has worked extensively in theshallow gas plays of the Northern Rockies. He has personally drilled and/or completed in excess
of 1000 shallow gas wells, as well as planned and managed several development and explorationprojects for a wide variety of clients. His extensive and unique combination of experience in allphases of petroleum engineering, corporate management, and hands-on field operations makehim one of the leading experts in Northern Rockies gas exploration and development.
In 1999, he founded Hohn Engineering,PLLC, a Petroleum Engineering firm in Billings,Montana. Mr. Hohn is a Registered Professional Petroleum Engineer in the States of Montana,North Dakota, Wyoming and Oklahoma. He has testified frequently as an expert in the field ofPetroleum Engineering before the oil and gas commissions of Montana, North Dakota,Wyoming, and Oklahoma. Additionally he has testified as an expert in various in State and
Federal court cases in Montana, North Dakota, Oklahoma and Texas.
In May, 2013 he was recognized as a Distinguished Alumni by Montana Tech. He serves on theIndustry Advisory Board for the Montana Tech Petroleum Engineering Department. He is also
an active member on several Boards of Directors for a variety of industry and communityorganizations.
R649-3-31. Designated Oil Shale Areas.
1. Designated oil shale areas are subject to the general drilling, plugging and otherperformance standards described in this section, except where the board has adopted,by order, specific standards for individual oil shale areas. As of June 8, 2001, the boardhas adopted specific standards for individual oil shale areas by board orders in CauseNos. 190-5(b), 190-3, and 190-13. The board may adopt specific standards in otherareas, or modify the above orders, in the future.
2. Lands may be designated as an oil shale area by the board, either upon its ownmotion, or upon the petition of an interested person following notice and hearing.
3. As used in this rule, oil shale section means the sequence of strata containing oilshale beds, including any interbedded strata not containing oil shale, consisting of theParachute Creek Member of the Green River Formation of Tertiary Age, defined as thestratigraphic equivalent of the interval between 1,428 feet and 2,755 feet below theKelly Bushing on the induction-electrical log of the Ute Trail No. 10 API No. 43-047-15382 well drilled by Dekalb AgriculturalAssociation, Inc. and located in the NE 1/4 ofSection 34, Township 9 South, Range 21 East, S.L.M., Uintah County, Utah. TheMahogany Zone is defined as the stratigraphic equivalent of the interval between 2,230feet and 2,360 feet below the Kelly Bushing on the induction-electrical log of the wellcited above.
4. For purposes of identifying the oil shale intervals, an appropriate electrical log shallbe run through the oil shale section. One field copy of the log through the oil shalesection shall be made available to the division pursuant to R649-3-23 or upon writtenrequest by the division.
5. On all wells that are intentionally deviated from the veftical within the oil shalesection, pursuant to the provisions of R649-3-10 and R649-3-1 1 , a directional surveyshall be run from a point at least 20 feet below the oil shale section to the surface andshall thereafter be filed with the division within 20 days after reaching total depth.
6.Any oil shale lessee or operator whose oil shale mine workings reach a distance of2,640 feet from a producing well or any oil and gas lessee or operator whose producingwell is approached by oil shale mine workings within a distance of 2,640 feet shallrequest agency action with the board. The board may promulgate an order after noticeand hearing with respect to the running of a directional survey through the oil shalesection, the cost and potential resource loss liability and responsibility as to the oil andgas operator and the oil shale lessee or operator and any other issues regardingmultiple mineral development.
7. The directional survey shall be the confidential property of the parties paying for thesurvey and shall be kept confidential until released by said parties or the division.
7
E'GIIB¡T B
B. ln addition to the requirements pertaining to the cementing of casing contained in theR649-3-8, any casing set into or through the oil shale section shall be cemented overthe entire oil shale section.
9. lf a well is dry, junked or abandoned, a cement plug shall be placed across thatporlion of the oil shale section extending 200 feet above and 200 feet below thelongitudinal center of the Mahogany Zone. The cement plug shall not be required insidea casing cemented in accordance with R649-3-31-8. When the casing is cemented,cement plugs 200 feet in length shall be centered across the top and across the base ofthe Parachute Creek Member of the Green River Formation.
10. ln the event the casing is not cemented in accordance with R649-3-31-8, thedivision shall approve the method and procedure to prevent the migration of oil, gas,and other substances through the wellbore from one formation to another.
11. The division shall approve the adequacy and location of the cement plugs afterexamining the appropriate logs and drilling and testing records for the well, to ensurethat the oil shale section is adequately protected.
12. Upon written request of the owner or operator under R649-8-6, the division shallkeep all well logs confidential. The division may inspect the drilling operations at alltimes, including any mining operations that may affect drilling or producing well bores.
13. Before commencing drilling operations for oil or gas on any land within a designatedoil shale area, the operator shall furnish a copy of the APD, together with a plat or mapas directed under R649-3-4, to all oil shale owners or their lessees whose interests arewithin a radius of 2,640 feet of the proposed well. The operator shall furnish a notice ofintention to plug and abandon any well in the oil shale area, as required under R649-3-24-1, to the owners or their lessees prior to commencement of plugging operations.
14. The operator shall use generally accepted techniques for vertical or directionaldrilling as defined under R649-3-10 and R649-3-1 1 to maintain the well bore within anintact core of a mine pillar. Within 20 days of reaching the total depth or beforecompletion of the well, whichever is the earlier, a directional survey shall be run asprescribed by this rule.
2
,t!
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ú' oI
BEFORE THE BOARD OF OIL, GAS MININGDEPARTMENT OF NATURAL RESOURCES
STATE OF UTAH
FILEDJUIJ 0B Z00t
*'o",1,'Aî3täiîti"t""t
In the Maffer of the Request for Agency )Action of CLIFFS SYNFUEL CORP. to )Enlarge the "Designated Oil Shale AÍea" )Created by Cause No. 190-3 and to )Establish Minimum Protection Standards )for Open Oil and/or Gas Well Bores )Penetrating the Oil Shale Deposits within the )Enlarged "Designated Oil Shale Area" itr )Townships 9, 10 and 11 South, Ranges 24 )and25 East, SLM, Uintåh County, Utah )
FINDINGS OF FACT,CONCLUSIONS OF LAW
AND ORDER
Docket No. 2001-014
Cause No. 190-13
This cause came ou for hearing before the Utah Board of Oil, Gas and Mining
(the "Board") on Wednesday, April 25,200L in the Auditorium of the Department of
Natural Re$ources, 1594 West North Temple, Suite 1050, Salt Lake City, Utah
The following Board members were present and participated at the hearing:
Dave D. Lauriski, Chairnran, Elise L. Erler, Robert J. Bayer, Stephanie Cartwright,
Wayne Allan Mashburn, Kent Petersen and J. James Peacock. Attending and
participating on behalf of the Division of Oil, Gas and Mining (the "Division") were
Lowell Braxton, Director, and lohn Baza, Assistant Director for Oil & Gas. The
Board and Division ryçre represented by Assistant Attorneys General Philip C, Pugsley
and Thomas A. Mitchell, respectively,
¿t
oIAttending and participating on behalf of their respective agencies were:
William Stokcs of the Utah School & Institutional Trust Lands Administration
("SITLA"); Robert Hendricks, Assad Rafoul and Mickey Colthard of the Utah State
Office, U. S. Bureau of Land Management ("BLM"); Jerry Kenczka, Petroleum
Engiueer, of the Vernal District Office of BLM; and Diane Mitchell of the Bureau of
Indian Affairs, Uintah and Ouray Agency ("BIA").
Representing the Petitioner was Robert G, Pruitt, Jr. of Pruitt, Gushee &
Bachtell, Testif,ing for Petitioner were Gary D. Aho, President of Cliffs Synfuel
Corp., and Howard W, Earuest, Consulting Mining Engineer, both of Rifle, Colorado
Appearing and making a statement in support of the Petition on behalf of his
client, Huntford Resources Corporation, was Phillip Wm. Lear of Snell & Wilmer.
A communication advising of on-going litigation involving unpatented oil shale
mining claims, and that BLM was not objecting to the Petition, was received from
David B. Howell, Field Manager, Vernal Field Office, BLM. Also, Mr. Pruitt
submitted a signed stipulation (letter) between Petitioner and American Gilsonite
Company agreeing to delete an 80-acre parcel from the Petition (see below).
The Board, having considered the testimony presented and the exhibits received
into evidence at the hearing, being fully advised, and for good cause appearing, hereby
makes the following tindings of fact, conclusions of law, aud order.
22001-014.ord
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FINDINGS OF F'ACT
1. Cliffs Synfuel Corp., a Utah corporation qualified to do business in the State
of Utah (herein called "Cliffs"), is the wholly owned subsidiary of Cleveland-Cliffs
Inc., based in Cleveland, Ohio.
2. Cliffs is the sole record owneÍ of oil shale deposits in the following 16,352
acres of fee lands in eastern Uhtah County, Utah, classified as a Designated Oil Shale
Area by the Board's Order dated September 19, 1985 in Cause #L90-3 under Rule
C-28 (now codified as Rule R649-3-31):
SKYLINE I PROPERTY (8,561 acres)
Township 11 South,,Range 25 East. SLM
Section 2:Section 3:
Section 4:
Section 5;
Section 8:
Section 9:
Section 10:
Section 11:
Section 14:
Section 15:
Section 16:
Section 17:
Section 21:Section 22:Section 23:Section 27:
Section 28:
AltAttAllAllAllAllEV2
AlrAllAllEVz, By2Wt/2
EV2NEVI , SEr/+ , EVzSW l+, NW t/+ SW l/c
, BVzNWV¿, NEt/+SWt/¿NE /¿, NTzSE /¿, SE /+ SE /¿, NE /¿ N\il I/¿
AllNWt/¿, N/zSWt/+NE t/¿, Er/zNW V+, NW t/r NW /+NEt/¿NEt/¿
32001-014.ord
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SKYLII\E II ffGeneral Mines" PROPERTY (2,000 acres)
Township 10 South. Range 24 East. SLM
o
Section 25:
Sectiou 36:
Section 6:
Section 7:
Section 18:
NEt/¿ ,WV2SBV4, EV2WVIWYz, Wt/28V2
Township 11 South. Ranee 25 Eas_t. SLM
Lots 3, 4, SWI/¿NW/¿, NW/¿SWI/¿ , SVzSWV+
WY2, SW/+SE/¿WVz,WVIEVI, SË7¿SE/+
SKYLINE II úrSouth Watson" PROPERTY (1,000 acres)
Townshio 11 South- Ranse 25 East. SLMSection 19:
Section 20:
Section 21:
Section 29:
EV2
SY2
SWt/¿SWt/¿
N%
Lots 3, 4,5,6Lots L, 2, SVINV2, SV2
All
Lots 6, 7, N7zSWV4, SV2Syz
Lots I ,2,3,4,NV2, SEYA
Lots 1,2,NVz, SE/¿, EYISWt/4
SKYLINE II'rKoenigsmark" PROPERTY (1,338 acres)
Township 10 South. Ranee 25 East. SLM
Section 5:
Section 6;
Section 7:
SKYLINE II 'rNorth Watson" PROPERTY (2,505 acres)
T_Qwnship 9 South. Range 25 East. SLM
Section 22:
Scction 27:
Section 34:
Township 10 South. Rangç 25 East. SLM
Section 3: Lots 1, 2,3,4, SV2NV2, SVz
42001-0l4.ord
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Section 4: Lots 1, 2, STzNEr/+, SEV+
SKYLINE Il rcStringham" PROPERTY (748 acres)
Townshin 9 South 25 East. SLM
UTAH SHATE & OIL PROPERTY (200 acres)
Township l_Q South. Range_24 East. SLM
Section 25: EVzSEI+
Tow_nship 11 South. Range 25 East. SLM
Section 13:
Section 14:
Section 22:
Section 23:
Section 5:
Section 6:
Section 7:
Section 8:
Section 17:
Section 18:
Section 20:
Section 21;
Section 27:
Section 28:
NWt/¿SW/¿
SEt/¿
Lots 4, 5Lots 1, 2, 3, 4, NEt/+, N'W!/¿SEY+, Sr/zNW r/+,
NEt/¿SWt/¿, SWI/+SW7n
Lot 4Lots 1 ,2 and3
3. Since 1985 Cliffs has acquired additional oil shale fee lands, as follows:
PHILLPS PROPERTY (1,680 acres)
Township 1l...S,outh. Ranse 25 East. SLM
Section 6: SW t/¿ NE I/¿, SE t/+ NW t/¿, NE /¿ SW, NWSE /¿,SYzSEt/¿
NE I/¿, N% SE t/¿, SE t/¿ SE t/+
SWlz+SW/¿
Wt/zWV2, SE7+SW/¡EVzNEVq, NE/¿SE/+Nt/zNE /+, SW /¿ NE t/+, NW t/+
NW t/+ NïV /+, SE /+ NW t/+, NVzSW t/+,
SE'/¿SW'/+, SWZ+SBt/aSW 7+ NW /¿, N%SW /¿, NW'/+SB /¿
WVINEY4, SEZ¿NE/¿
2001-0l4.ord 5
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4, Cliffs is sole owner of four (4) oil shale placer mining claims: CLIFF
No. 6 [160 acres], CLIFF No. 8 [160 acres], CLIFF No. 9 [120 acres] and CLIFF
No. 10 [80 acres], currently under BLM Mineral Patent Application UTU-65275
[covering a total of 520 acres]:
Torynship 10 So,uth. Range ?5 East
Section 31: SW¡/¿
Townsþip 11 South.j.anee 25 East
o
Section 5:Section 6:
Section 8:
W/zS\M\l¿, SW7+NWI/¿
SE/+NEI/+, NEI/+SE%N\M%
NEt/+ (ML-44113, 160 acres)
All (I,IL-47425, 640 acres)
5. Cliffs is the sole Lessee from the State of utah under four (4) oil Shale
Leases, serial uumbers NIL-441L2-A, ML-47 425, ML-44 1 I 3 and ML-481 63 :
Township 9 South. Rang"e-25 East. SLM
Section 32: Lots 1 - 10, SBt/+NWt/¿, SW7¿, N%SE'/¿(ML-481,63,582 acres)
Township 10 S_o,_uth. Ranse 24 East. SLM
Scction 36: EV2EV2 (ML-44I12-4, 160 acres)
Township 10 South. Rangf:25..East. SLM
Section 16:
Section 32:
62001-014.ord
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6. In addition to the foregoing lands containing valuable oil shale deposits
owned by Cliffs, Petitioner specifically requested that two (2) 8O-acre oil shale traçts
owned by others, as to which Cliffs asserts no owuership or control, be included in the
expanded "Designated Oil Shale Area," to wit:
Townshio 11 South. 25 East- SLM
Section 8:
Section 20:Section 21:
WVINEV4 (BLM lands)
SE/+NE/¿ and
SWt/+NW/¿ (bottr 4O-acre parcels owned
by American Gilsonite Company)
7. The foregong3,902 acres (described in paragraphs 3 through 6) were
adequately shown by testimony and exhibits to be underlain by the oil shale bearing
Parachute Creek member of the Green River formation, in most places by the oil shale
rich Mahogany Zone, and ttrus qualiff to also be identified as the enlarged Designated
Oil Shale Area under Rule R649-3-31
8. Renewed drilling activity within the enlarged Þesignated Oil Shale Area for
conventional oil and gas deposits in the Lower Green River, Wasafch and Mesa Verde
formations underlying the valuable oil shale deposits il the Parachute Creek member of
the Upper Green River formation has created a potential for mineral development
conflicts and damage to the oil shale deposits as a result of closely spaced drill holes
penetrating the shallow oil shale deposits, to reach the deeper oil and/or gas deposits,
It is in the public's interest for the Board to require specific safeguards to protect the
72001-0l4.ord
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known oil shale deposits and to assure the integrity of open oil and/or gas well bores
that penetrate the oil shale deposits,
9. The Board finds that Petitioner's proposed well bore casing design and
performance standards for conducting oil and/or gas well drilling through shallow oil
shale deposits would adequately protect both the valuable oil shale deposits and the
open, producing oil andior gas well bores.
10. The Board finds that Petitioner's reconmrended "double-cemented, double
heavy duty casing system" is only a modest departure from standard oil well drilling
practice, and would merely reguire fhe well operator to (1) set and cement fhe "surface
conduÇtor pipe" to the customary depth (as required by near-surface conditions) and (2)
set and cement a heavy duty (minimum 3,000 psi collapse strength) "surface casing"
down to at least 100 feet below the base of ttre Mahogany Zone (a depth calculated not
to exceed 600 feet in the expanded Designated Oil Shale Area) using centralizers every
50 fect to assure a uniform minimum one inch of cement between the surface casing
and the wall of the well bore, then (3) install heavy dufy (minimum 3,000 psi collapse
strength) "production pipe" within the surface casing, in the usual nranner, with
centralizers installed every 50 feet to assure a uniform minimum annulus of one inch
for cement between surface casing and production pipe. In addition to cementing the
surface casing to at least 100 feet below the Mahogany Zote, (4) the production pipe
must be cemented through the entire length of the surface casing and down to the base
I2001-014.0rd
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of the Parachute Creek Member. Abandoned well bores must be plugged with cement
from the surface down to ttre base of the Parachute Creek Member. The cement
mixture used must have an initial compressive strength of 3,000 psi (ultimate 4,000 psi
cornpressive sfrength) and be sulphate-resistant çement of the "Class G" type. A
cement log must be run to assure a good Çement bond and no voids in the cement.
11. A copy of the Request for Agency Action was mailed to all operators and
owners within a one-half mile radius of the lands covered by this Petition, and to all
other persons whose legally protected interests may be affected by ttre Request for
Agency Action, all as disclosed by the appropriate federal, state and county real estate
or land reçords.
12. Notice was duly published as required by utah Admin. code Rule
R641-106-100.
13. The vote of the Board members present in the hearing and in this cause was
unanimous in favor of granting the Request for Agency Action as presented at the
hearing.
CONCLUSIONS OF'LAW
1. Due and regular notice of the time, place and purpose of the hearing was
properly given to all interested parties in the form and manner as required by law and
the rules and regulations of the Board and the Division.
o
92001-014.ord
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2. The Board has jurisdiction over all matters covered by the Request for
Agency Action and all interested parties therein, and has the power and authority to
render the order herein set forth pursuant to Utah Code Annotated $ 40-6-5(6) and Utah
Admin. Code Rule Ft649-3-31.
3, The Request for Agency Action satisfies all statutory and regulatory
requirements for the relief sought therein and should be granted.
ORDER
Based upon the Request for Agency Action, testimony and evidence submitted,
and the findings of fact and conclusions of law stated above, the Board hereby orders:
1. The Request for Agency Action, as modified at the hearing, is granted.
2. The following lands are added to the existing Designated Oil Shale Area
established by the Board's order in Cause #190-3 dated September 19, 1985:
IPHILLIPS PROPERTY (1,680 ames)l
Township 1l South. Ranqe 25 East. SLM
Section 6: SW t/¿NE 7¿, SE t/¿ NW /+, NEli¿ SW, NWSE 1/¿,
SY2SEY4
NE/+, NZzSE%, SE%SEI/¿
STV/¿SW%
WY2WVI, SE/¿SWt/+EV2NEV4, NEt/¿SEt/¿
N%NE /+, Srù//+ NE V¿, NW t/+
NW t/¿ NW /+, SE /+ NW t/+, N/zSW 7¿,
SE/rSWt/¿, SW!/¿SEI/¿
SW/¿N\ü /¿ , N/zSW V4, NWV4SEV4WVzNEY+, SEt/+NEt/+
o
Section 7:Section B:
Section 17:
Section 18:
Section 20:Section 21:
Section 27:Section 28:
2001-0l4.ord 10
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ITINPATENTED OIL SHALE MIMNG CLAIMS (520 acres)]
Township 10 South. Range 25 East
Section 31: SWt/¿
Townshin 11 Ranse 25 East
o
Sectíon 5:Section 6:Section 8:
WIzSWV+, SW/+NW/¿SE/¿NEI/¿, NEI/¿SE%NWt/¿
ISTATE OF UTAI{ OIL SIIALE LEASES (L,542 acres)]
Townshin 9 South 25 East. SLM
Section 32: Lots I - 10, SE/¿NW7¿, SW%, N%SE/¿
Township 10 South. Range 24 EAst. SLM
Section 36: EV2EV2
Township 10,South. Ranee 25 East. SLM
Section 16:
Section 32:NEt/+
All
[BLM LANDS (80 acres)l
To_Wnship 11 South. Range 25 East. SLM
Section 8: Wt/zNEV+
Pursuant to stipulation between Petitioner and American Gilsonite Company, the
SEZ+NE/¿ of section 20, andthe swt/+NW1/+ ofsection zL,T.11 s., R. 25 E,, are
2001-014.ord 1l
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not to be considered as being within the Designated Oil Shale Area, and are not covered
by this order.
3. The Board orders that all future oil and/or gas wells drilled within the
enlarged Designated Oil Shale Area, as established by Cause #790-3 and by this order,
shall be cased and cemented according to the following performance standards:
(a) Surface Conductor Pþe shall be set and cemented to the customary
depth as required by soil and near-surface conditions
(b) Surface Casing (having a collapse strength of 3,000 psi) of appropriate
dimensions to allow an annulus of at least one inch between the surface
casing and the wall of the bore hole shall be set using centralizers
every 50 feet and cemented from the surface down to a depth at least
100 feet below the base of the Mahogany Zone in the Parachute Creek
member of the Green River formation.
(c) Produc.fion Pipe (havrng a collapse strength of 3,000 psi) of appropriate
dimensions to allow an annulus of at least one inch between Surface
casing and Production Pipe shall be set with centralizers every 50 feet
to the base of the Parachute Creek member (to assure a uniform
annulus between Surface Casing and/or the wall of the well bore and
the Production Pipe) and cemented ftom the surface down to the base
of the Parachute Creek member of the Green River formation.
2001-0l4,ord 12
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(d) Cement Mixture used around the surface casing and around the
production pipe shall be sulphate resistant (minimum "Class G")
with an idtial compressive strength of 3,000 psi and an ultimate
compressive strength of 4,000 psi.
(e) A Ceme$ Bond Log shall be run to assure a good cement bond and
that there are no voids in the resulting cement job.
4. The Board orders that operators of oil shale mines within the enlarged
Designated Oil Shale Area shall leave a protective pillar of oil shale 3O-feet in diametcr
around each open oil and/or gas well bore, so as to assure integrity of each such cased
well bore against inadvertent damage by mining equipment
5. All oil and/or gas wells drilled into mined or pre-existing permitted oil shale
mine areas shall be located so at to penetrate an existing mine pillar or permanent
barrier wall and then cased and cemented in accordance with the performance standards
of this order.
6. Abandoned well bores must be plugged wÍth sulphate resistant "Class G"
cement from the surface down to the base of the Parachute Creek member.
7, The casing and cementÍng standards of Rule R649-3-37 are modified to the
extent said Rule, as to this Designated Oil Shale Area only, is inconsistent with the
foregoing order.
o
2001-0l4,ord t3
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8. Pursuant to Utah Adminisfrative Code R641 and Utah Code Ann. $ 40-6-10
and $ 63-46b-6 to -10 (1953, as amended), the Board has considered and decided this
matter as a formal adjudication.
9, This Findings of Fact, Conclusion of Law and Order ("Order") is based
exclusively on evidence of record in the adjudicative proceeding or on facts officially
noted, and constiiltes the signed written ordcr stating the Board's decision and the reasons
for the decision, all as required by the Utah Adminisnative Procedures Act, Utah Code
Ann. $ 63-46b-10 and Utah Administrative Code R641-109.
10.
Rcquest Board Reconsideration: As required by Utah Code Ann. $ 63-46b-10(e) to -10(g)
(1953, as amended), the Board hereby notifies all parties in interest that they have the
right to seek judicial review of this final Board Order in this formal adjudication by filing
a timely appeal with the Utah Supreme Court within 30 days after the date that this Order
is issued. utah Code Ann. $ 63-46b-14(3)(a) and -16 (1953, as amended). As an
alternative to seeking immediate judicial review, and not as a prerequisite to seeking
judicial review, the Board also hereby notifies parties fhat they may elect to request that
the Board reconsider this Order, which constitutes a final agency action of the Board.
utah code Ann, $ 6346b-r3, entitled, "Agency review - Reconsideratien," states:
(lXa) Within 20 days after the date that an order is issued forwhich review by the agency or by a superior agenÇy underSection 63-46b-12 is unavailable, and if the order wouldotherwise constitute f,ural agency action, any party may file a
2001-014.0rd I4
it' oo
written request for reconsideration with the agency, stating thespecific grounds upon whiÇh relief is requested.(b) Unless otherwise provided by stafirte, the filing of therequest is not a prerequisite for seeking judicial review of theorder.(2) The request for reconsideration shall be filed with theagency and one copy shall be sent by mail to each paAy by theperson making the request.(3Xa) The agency head, or a person designated for thatpurpose, shall issue a wrítten order granting the request ordenying the request,
(b) If the agency head or the person designated for thatpulpose does not issue an order wittrin 20 days after the fitingof the request, the request for reconsideration shall be
considered to be denied.
Id, The Board also hereby notifies the parties that Utah Administrative Code
R641-110-100, which is part of a group of Board rules entitled, "Rehearing and
Modification of Existing Orders," states:
Any person affected by a final order or decision of the Boardmay file a petition for rehearing. Unless otherwise provided,a petition for rehearing must be filed no later than the 10ü dayof the month following the date of signing of the final order ordecision for which the rehearing is sought, A copy of suchpetition will be served on each other party to the proceedingno later than the 15ft day of that month.
Id. See Utah Administrative Code R641-110-200 for the required contents of a petition
for rehearing. If there is any conflict betwecn the deadline in Utah Code Ann $ 63-46b-13
(1953, as amended) and the deadline in Utah Adminisnative Code R641-110-100 for
moving to rehear this matter, the Board hereby rules that the later of the two deadlines
shall be available to any party moving to rehear this matter. If the Board later denies a
2001-0l4.ord 15
06/08/0L L122L F'AX
JUN-0ï-2001 Tl{U 09130KENNECOTT
FffI NO. fssese+oüi2 3252 @ooz/0ozP, 1?OâS & HININA
tinely petition br retreariqg, drc party rnay still seek judicial review of ttre Order by
perfeoting a timely appeat with tbe Utah Supremc Courr wirhin 30 days úereafrcr,
11, The Board rcüaing continufurg jurisdiction over all the parties and over the
subject maüÊr of his Causo, except to the extent srid jurisiction may be divested by ttre
filiqg of a tfutely appeâl to $eek judÍcial review of this Order by the Uah Supreme Court.
t2. For all pulposes, the Chairman's signrûrre on a fued cnpy of tlrie Order
shall be deemed the equivate,nt of a signcd original,
IssttED üis 8Ë day or furr¡, , z(X)l
STATE OF UTAIIBOARD OF OIL, GAS AND MINING
Elise L. Astrtrg ChÂiruatrt
200l.0l4.ord 16
Ownership OverviewT-K Production Co.Bonanza Prospect
T9S-R24E, T9S-R25E,and T10S-R25E
Uintah County, Utah
sEc 03 sEc 02 sEc 0r sEc 06 SEC 05 SEC 04 sEc 03 SEC 02 sEc 0l
N
oot-on0o
sEc l0 SEC 11 sEc l2 SEC 07
ML 52853
sEc 08 sEc.09
ML 52854
sEcll0 sEc"1l
-SEC:13'sEc 17 sEc 16 sEc t5 sEc t4 SEC 13 sEc 18 sEclr T
ML 52858
ML 52857
SEC;I6
ML 52856
sEc:l
sEc 20 sEc 2lT9S R24E
SEC 22 sEc 23
ML 52851
(
ML 52859
sEcfl9 sEc,20
ML 52860
T9S R25EsEc 2l sEc 22 sEc 23 sEc 24
sEc 29 sEc 28 sEc 27
State Leases
Other Business Arrangment
sEc 32 sEc 33 sEc 34
sEc 26
ML 52863 ML 52862
sEc 29 sEc 28
/ML 52861
SEC 27 SEC 26 sEc 25
ML 53037
sEc.33 SEC 34 SEC 35 SEC 36SEC 35
ML 52852 ML 52841
sEc.31
ML s2865
sEc,32
SEC 05 sEc 04 sEc 03
TlOS R24E
ML 53038
sEc 0t sEc 06 sEc 05 sEc 04
TlOS R25E
SEC 03 sEc 02 sEc 0lcÉr
sEc 08 sEc 09 SEC IO sEc 1l sEc l2 SEC 07 sEc 08 SEC 09 sEc l0 sEc 1t sEc 12
Êxnlarr c
(.-o()lt¡ir'fl [¡\/e Ðeviopnrent Agrcerrrcltti--hl F'roch¡ctii¡rr (-'onrl:arr1. a¡rel EAO Si:ate l-enseri. l,[,('
COOPERATI\rE T}E\rÆLOPN{ENT AGR,EEII4ENT
THIS COOPERATIVE DEVELOPMENIT AGREEil/ffiNT (the'Agreemenf') is made and
entered into this '1.9 day of June, 2014 (the "Effective Date"), by and between T-I( PtoductionCompany,havingamailingaddressofPOBox2135,Billings,Montana5gl03("TI("),and EAOState Leases ,LLC and affrliates, having a mailing address of 307 West 200 South, Suite 4005, Salt
Lake City, Utah E4101 ("EAO"), (individually a"Pafi" and collectively the "Fatties"), who inconsicleration of mutual promises agree as follows:
,ARTICLE 1"
P.AR.TIES AT\D OFERATIOI{S
1.1 TId is a ly'Iontana eorporation licensed to do business in {Jtah. TI( holds and
operates Utah State Oil, Ga.s and Associated F{ydrocarbons Leases (the"'Ttrd X,eøse") issued by the
Utah School and Institutional Trust Lands Administration ("SITLA") on the Subjeet Lands (on
lands as set out liy the legal descrþtion marked Exhibit "A" to this Agreement) the "TI( Lcase",
ancl will be conclucting future Oil and Gas Operations thereon"
I.2 EAO is alJtahcorporation licensed to do business in Utah. EAO holds a Utah State Lease forOil Shale (the "EAO Leøse") issued b,y SITLA, and will be developing oil shale and associated
substances on the Subject Lands, (on lands as set out by the map marked Exhibit "8" to this
Agreement) the "EAO Lease" ancl will be conducting future N'lining Operations thereon.
AITTICLE 2.PURFOSES
2.1 CoonaÏinaúed Operations. Applicable laws and respective Lease terms require Multiple Use
of the Subject I-ands and expressly provide for the concurrent or simultaneous exploration ancl
extraction of the R.espective Mineral Resources from the Subjeot n-ands. The Parties reeognize and
understand. that oocasional operational conflicts may arise. The Farties therefore agtee thateooperation and coordination of their Concurrent Development Operations and orderly resolutionof conflicts is essential to the commercial viability of their respective Leases and the ma:rimum
ultimate recovery oftheir Respective h4ineral Resources in an expeditious and economical manner
eonsistent with principles of iMultiple Use and this Agrrement. The primary purposes of the
Agreeinent are to: (a) adclress ancl protect the relative rights of tho Farties in a cooperative manirer;
(b) ptotect the safety and health of all personnel; (c) protect the R.espective Mineral R-esourses and
other natural resources from damage, injury and waste;ancl (d) provide for Concurreirt
Development Operations.
2"2 Maxümrnn¡ {/ltir¡late Eco¡romrÍc Reeovely. TI( and EAO desire to protect their relativerights to clevelop their Leases and enjoy their Leaseholds ancl surface rights in a cooirelative,
eoordinatecl ancl hamonious manner that will cornply with applicable law and lesult in the
rnaximum ultimate econornic recovery of their Respective Mineral R.esources with minimumwasfe and conflicts.
ErcilBff DPasc I oi'tr 7
Cucilrei irtirrc l-)svlopnr*irt Agreenrerrt'l -K I'¡'r-rclrrcfi,:¡r {'oiirpany alid F,AO Íjtate l.r:irses, l_L,(.'
2.3 Frofeeting Fensomnael, Equipmrenf, and Resotrrces. TI( and EAO agree that aparamounteonsideration of the Farties while eonducting Conoument Development Operations is protecfinglife, limb, propeúy and other natural resources from damage and injnty while achieving themaximurn ultimate economic recovery of their R.espective Mineral R.esources.
2.4 Froúecting the S¡¡rfnce Estafe. The Farties agree to conduct their operations in a- rrannerthat will minimize damage to surface resollrces consistent with their respective rights to use soinuch of the surface as reasonably necessary to explore foç mine and develop, remove and processtlreir Respeotive lMineral Fr.esources, recognizingthat: (a) EAO's Mining Operations will involvesuiface aird or underground mining of Oil Shale as well as onsite processing and dis¡2osal of theoverburclen and other waste rock; and (b) the drilling of Directional Wells by TI( can sigrrificantlyinctease the time ancl costs to successflilly drill and complete eaeh well, and in some cases thedrillirig of a replacement well at a different surface location to achieve the target objective.
2.5 Expeeúndio¡rs of, Farties. TI( and EAO, by entering into their respeotive Leases,eonternplated present rights to explore for, produce, and remove their Respeotive lMilreralResources. The Parties agree to address and use commerrcially reasonable effofts to coordinateaetivities and to timely address operational conflicts. The Parties also agree to mal<e commerciallyrea-sonable efflorts to conduct their operations and resolve their disputes in a manner that will allowConcurrent Development Operations of the overlapping Leasehold estates. It is therefore agreedflrat among the possible altemativeproeedures fbr Concurrent Development Operations, deftrringoperations of one Party in favor of another shoulcl be a method of last resort and shall be utilizedonly upon agreement of the Farties or by a rule, ordet or directive of,a Governing Agency.
2.6 fl¡lten'ferenee amd Some Ðeñays Anticipated. In the spirit of coordinated and cooperatirreConcurrent Development Operations, TK and EAO rccagnize that some operational interference,inaccessibility to, and delays involving portions of their Respective Mineral Resources may beinevitable. The Parties therefore confitm their understanding and agree that reasonableinterference, and lirnited inaccessibility to and delays involving portions of their RcspectiveMineral ldesources are the quid pro quo to facilitate present conternporaneous mineraldevelopment operations.
AR.TTCLE 3"
DEFTNITTONS
3.i Critical T'ermrs. In acldition to teims dofined in other articles to this Agi'eement, thefollowing definitions shall control this Agreement:
(a) "",Aclive Minirag Operølions" shall meanallprojeeted operations forthe extractionof OilShale within an approved lzfine Plan over afleyear period.
(b) "Barren -A,ïeøs" shall mean those areas contained within an Oil Shale Enclave cleemed orbelieved to be barren of Mineable Reserves, including areas in which the reseles havealready b een mined-out.
f ngt l ol'u-"/
Coo¡rr:t';,tlivtt l-leitltlpnlent i\gt'eetttctr{"l'. 1( F¡'ocfulction {''onrpany anrl 8,4{) Statt: [,c¿rses,. L,L,('
(c) "Cøsimg Progrørn" shall mean the special requirements for casing a wellbore which areimposed by applicable law or this Agreement to protect mineral bearing formations of oneParty from drilling, extraction, or production operations of another.
(d) "Cemercl Bomd Log" shall mean that log run to test the quality of the cement-to-casingboncl around cemented casing of a well.
(e) "Corecwwenl Ðevelogtweenl Opewliot¿s" shall rnean the right of TI( and the right of EAOto eoncluot mineral extraction operations and related activities in close proximity on theSulrject Lands, and on overlapping Leases, at the same time.
(f) *Ðefen'ed tperøtio,r¿s" shall mean that oircumstance when, either by agreement of theParties or by direction of a Goveming Agency, one of the Farties suspends ¿nd ctrefers itsoperations in any particular area of the Subject Lands for a period not to exceed two (2)years in favor of fhe otherPatly's operations continuing on the søme area of the SubjectLands.
(g) "Ðesignated Oil Shøle A.ïeßs" shall mean those areas designated by agreement of theFarties or the Governing Agency as areas targeted for mining of Oil Shale under a curi'entMine Plan.
(h) ""Ðevelaprnerat WeW' shall trnean a well clrillecl to a known produeing formation in apreviously cliscovered field, as distinguished from an Exploratory \Mell.
(i) "Ðfu'ectionøl WeW' shall mean a well in which the wellbore departs materially fi'om theveftical.
(fi *Driltring Islønd' shall mean that geographic area designated for the drilling of: (z) vei"ticalwells frorn a.uthorized. surfacc locations; and (ü) one or more Directional \Vells designatedto bottom hole uncler lands for which no surface locations are available either by agreennentof the Parties, or because of surface conditions, or surface ocoupancy prohibitionscontained in lease or operating stipulations promulgated by the Goveming Agency.
(k) "Exchønge nnf,ormøtion" shall mean ttrose documents; geologic, geographic, ol othermaps or plats; eross-sections; IMine Flans; plans of operations; surueys; correspondence;oral communications; consultant repoús; techirical reports: notices; permits; or updafe toany docurnent required by this Agreement or by rules of the Governing Agency, to be
exchanged or to be submittcd to the Comrnittee, which are reasonably necessary to, and forthe purpose of, enabling the Committee to malce informed judgments regarding theirrespective operating intentions or plans; or any document voluntarily exchanged or sharedwith a Farty or the Committee.
(1) *Explorølion" shall mean in the oil shale context, those operations connected with locatingthe presence of economic deposits of oil shale and establishing their nature, shape, depth,and grade, inclucling geological surveys, geophysical prospecting, boreholes and trial pits,
['agc ^3 oi' l7
{. orl¡r ciir ti r;e Dc:v I ol:rinet I f Agrecnteu t-l--ii [ì¡ r¡¡luciior {_\rrnparil all,J E¡\ù Statc. [,eosr:s" l-i {-'
headings, clrifts or tunnels. In the conventional oil and gas context, Exploration shallinelucle aerial surveys, geophysical surveys, geological studies, core tesiingjand drilling ofExploratory lVells.
(rn)*Expilorøtoty WelF' shalhnean an oil ancl gas well drilled greater than one (1) rmile fi.om awell producing in commercial quantities fì..om apool or common source or.supply or a welldrilled with the expectation of extencling the known limits of an oil and gur ft"ia aheaclypartly eievelopecl.
(n) "Governing Agency" shall mean SITLA, the utah Division of oil, Gas ancl Mining orother state or federal administrative agencies having leasing, regulatoly or operatiónaljurisdiction over the conduct of tlie Farties. There may be cireumstances wleon ono or rllorestate or fcderal agency may have eoncument jurisdiction over the leasing, regulatory oroperations of the Parties.
(o) "n,eases" w 'n e{sse*eolds" shall mean colleotively the TI( Lease and the EAO l-ease.
(trt) "lWÈree Pløm" shall mean the pre-design of the detailed layout, rnain roadv,rays, andworkings of a mine; including, but not lirnited to, the general descrþtion of,the geologiccondítions, mineral analysis, pit and overburden areas, reserve analysis, basic rminingequipment, phases of mining, timefrarne for clevelopment and such other data as might bérequired by the Goveming Agency to be submiffed for approval of Mining Operations. TheMine Plan shall be construed as the official document or permit initiating hdiningOperations on the Subject Lands.
(q) "Minirag Aperøtions" shall mean actual mining activities clirected to the s€veranoe,retnoval, processing and transportation of Oil Shale and associated overburden andintelburden. For purposes of this ,Agreemen! Mining Operations shall not includeExploration.
(r) *Mwltiple Ase" shall rnean, as between the Pafties, conducting Mining Operations and Oiland Gas Opelations in a harmonious and coordinated manner that talces into account: (l)the expectations of each Fartyto present enjoyment of its Leasehold estate; (ii)therelativeeconomics of the Parties; ancl (iii) the relative mobilization, planning, and operationalneeds of eaeh Farty without undue impainnent to the productivity and operations of theother.
(s) "Oil ønd Gøs Aperøtíons" shall mean all activities directed to the drilling for, productioir,processing, and transportation of oil ancl gas, including ac,t;ø\ staging, dirt work andclrilling operations. Oil and Gas Operations shall not include geophysical activitieseonducted prior to drilling for oil and gas.
(t) *til SÍ¿ale" shall me¿ur those substances generally known as "oil shale" regarclless ofoolor, which eontain kerogen and other substances which are commonly found in what arecommonly known as "oil shale," as the term is more fully defined in the EAO Lease.
Ptlrc:4 uf-[7
L' o o ¡r r: ra t i vtr l) ev l o ¡r r rr c-rr f A glr:cr tn e lr t'lìli Prir¡lLrrtit'rrr {'orri¡ran.1' and Ë¡\{l State l-cnsr:ri. [,[.(
(tt) *OiI Sleøle Encløves" shall mean those lands within a Designated Oil Shale Area sulrject toActivc Mining Operations in one or more oil shale ore zones or areas not presently being
mined but which contain known mineral resources of Oil Shale.
(v) *Frotective Zone(s)" shall mean an area of the surfaco and the underlying Oil Shale left inplaee on the Subject Lands to serve as aFrotectiveZone f,or existing and future Oil and Gas
Operations being conducted during Concurrent Development Operations.
(w)'"ßes¡tective Miyaerøl Resources" shall mean (i) for TK, the recoverable oil, gas ancl
assoeiated hydrocarbons described ancl covered uncler the Ttr( X-ease; and (il) for EAO, the
recoverable Oil Shale and associated minerals described and covered under EAO I-ease.
(x) "swbjecî n ønds" shall mean those lands sulrject to this Agreement, as described iir Exhibit"4" attaehed hereto, as may be amended from time to time, which encompasses all of the
over"lapping lands between the TI( Lease and EAO I-ease. In adclition, the Sulrject Lanels
shall inelude any additional lands as mutually agreecl upon by the Farties.
(y) "{Imreøsoraøble frufurfererace" shall mean interference in excess of that anticipated
interferenoe necessaríly or appropriately interposed in the spirit of cooperative and
ooordinatecl development of the R.espective Mineral R.esources, it being understood thatsome reasonable clelay resulting fi'om the operations of the other Far{y rnay be bothnecessary and appropriate.
(z) "Wett tr og's" shall mean those electrieal, gammaray-neutron, sonic, or appropriate logs run
by TI( to identify the stratigraphie bottoms and tops of geologic fbrmations or stratigraphio
interuals.
3.2 {J¡ndefirnecB Tenms fo Comforrn and ,Applicable Law. All undefined terms used in this
Agrcement shall have the meaning customatily used in the mining ancl oil and gas indusiries tlnless
the applicable term is defined by statute or regulation of a Governing Agency, in which case the
term shall have the rneaning prescribed by the Governing Agency.
ARTICI,E 4"
T,A.NDS AND LEASES SUBJECT TO AGREEMENT
4..1 lLaned DescriptÍom. This Agreement'shall apply to the operations of the Parties on ttrre
Subjeot Lands clescribecl in Exhibit "4" attaehed hereto ancl incorporated herein by this reference,
all of wliioh are located in Uintah County, Utah.
4.2 Master Area Mnp. The Subject Lands and Subject Leases are depicted on the Master Area
Map aftaohecl to this Agreement as Exhibit "B" ancl incotporated herein by reference.
[''¿r[c 5 r,tl Ë7
r-- t.l'.1 Ë¡ et'ir t i vc Ll t-:t, I i-rp I n e il I A t-|.t,:t:¡ r l,: t I {-l-li [)¡'orlr¡r:(iori {'orri¡rnrri ¡ncl Eii\{) iitate Lelses. l,i,(,'
ARTICT,E 5.
TECÍ{NIC,AT, COORDTNA.TTNG COMMITT'EE
5.1 Comrposütion of Comrmrittee. The Parties agree to establish a Technical CoordinatingComnrittee ("Cornmitlee") consisting of at least one representative of TI( and at least onerepresentative of EAO; and in the event a Governing Agency is required to be a signatory to anyoooperative agreements affecting multiple mineral development conflicts, withthe mutual consentofthe Parties, one representative of each sueh Goveming Agency.
5.2 Funn"groses of Conemittee amd Vemue. The purposes of the Committee shall be to assist theParties in coordinating their activities and operations by: (a) plovicling a forum for discussion ancl
to snbmit Exchange Information rcgardingthe curent ancl proposed operations of each Party; ft)gatheúng, studying, and disseminating technological data regarding ne\{/ or improved tnining,reolamation and transportation praetices and procedures, and oil and gas ddlling, oompletion,procluetion, re-working, plugging ancl abandoning ancl transportation practices and proceclures thatbear on the protection of personnel and equipment and the preseruation of all mineral resourees
subjeot to this Agteement; and (c) aicling in the lesolution of oonflicts which may arise betweenthein. All Committee meetings shall be in Salt Lake City, Utah, unless otherwise agreed by theFa-rtios.
5.3 Master r\nea Map. In addition to the duties enumerated in this Aftiele, the Committee shallmaintain a "Master Area Map" covering the Subject T-ands and Subject Leases and preparecl b¡r 1þç
Parties to which is posted at least once annually by May I of each calenclar year (or as mutuallyagreed upon by the Farties in writing), all modifications made since the last sul¡rnittal, including,but not limited to: (a) boundaries of the Subject Lands and existing roacls; (b) changes in and to theSubjeet Leases; (c) the location and size to scale of existing, planned and proposecl Oil Shale
mines, including roads, pits, overburden storage ateas,processing plants, wotkings, fucilities ancl
related operations; (ct) core hole locations and analysis; (e) the expansion or contraction of OilShale Enclaves: (f) the contraction or expansion of Banen Areas; (g) the location of all gas
oompressors, oil loacl out facilities, pipelines, and operating, plugged or abandoned wells and
relatecl roads; ancl (h) all proposed wells, gas compressors, oil load out facilities, pipelines ancl
related roads. The l\¡laster Area map attached to this Agreement as Exhibit "8" is the baselinelV{aster Area }*zfap.
5.4 ,âgneemrenaú for Plans amd Openations" The Committee shall seek to agree on all lMine Plans
and l/Iining Operations, and all oil and gas plans and Oil ancl Gas Operations, within Oil Sha-le
enclaves, and all amendments to or revisions of those plans and operations. Failure to achieveagreement shall be subject to the proceclures fbr clispute resolution appearing in Article I l.
AR.TICLE 6.
MTTIGATION OF SURFACE IMPACTS
6"1 Sunrfaae Måning and Oitr and Gas Oper"ations.
(a) The Farties shall use oommercially reasonable efforts to locate their respective surfäcemining, underground mining, and oil and gas operations, including roads, pits, dwnps,
l)aqc ú ol l'l
(ìoopcrai iI'e l)cl vlo¡rritcltt Aglcer¡ ¡ent'f-li P¡'ildilction L'r:rrrrpalt'¡ al¡tl [i,'\(] Statc Lt:ases" l-l-(.-
overburden piles, water lines, pipelines, well pads, tanks, eompressors ancl other surfacefaoilities so as not to cause Unreasonable Interference with surface and subsurfaceoperations and to accommodate the existing uses and facilities of the other. Each Partymay construct access or mine haulage roads aoross the oommon surface estat'es oocupieclby the Parties. Plans depicting the location, courses, and distances ofsuoh access roadsshall be submitted to the Committee not later than forty-five (45) days prior to: (l) tlietime of filing said plans with the Goveming ,{gency. Protests or olrjections to thelocation of proposed roaels shall be filed with the Committee within thirty (30) clays ofreceipt of the plans. Resolution of conflicts shall be handled as set forth in Article 11 ofthe Agreement. Operations planned with surface impacts shall also be submitted to theCommittee and the Farties in accordance with Section 7.I by EAO and in aecordanoewith SectionT.2byTI{.
(h) Comsfruaóio¡r amc! IWnåmtemanee of Roads" Any road constructed by aParty for access
shall be constructed atthatParty's own expense, and the constructing Farty shall bear alle)qlenses of maintaining aird improving the road, exeept as hereinafter prorricled"
(e) hlonexen¡¡såve {Jse of, ftoacls" Except as otherwise set forth herein, use of any ¡6u6constructed during the term of this Agreement shall be nonexclusive so long as use bythe non-constructing Part.y does not unreasonably interfere with the use and enjoyrnentof the roacl by the eonstrueting Party. Notwithstanding the foregoing, either Farty shallhave the right to designate certain roads constructed by such Farty as exclusive use roadand prohibit the use of such road by the other Party. For nonexclusive use roads, useconstituting more than incidental and occasional use, or resulting in unreasonable wearatrd tear to the roadway, by the non-constructing Farty shall entitle the constructingParfiz to contributions for maintenance and improvement proportionate to thenon-constructing Party's use as determined in the constructing Farty's reasonablediscretion. R.esolution of continuing disputes regarding what eonstitutes oceasionai orincidental use or a reasonable contribr¡tion shall be resolved as set forth in Article 11 ofthis Agreement.
6.2 Su¡"f,ace Improverraemts amd Faeilities. Each Party shall conduct its operations in amaÍrr:erthat will not enclanger or eause Unreasonable Interferenee with any existing surface facilities,improvements, workings, or structures made or used in conjunction with the Exploration, clrilling'f,or, proclueing, mining, transpoftation, storage, processing, or refining of minerals or with theutilization of such facilities, improvements, workings, or structures. Each Farty shall conduct itsoperatioirs in a manner that will not eirdanger or cause Unleasonable Interfelenoe with existingimprovernents, facilities, structures, and uses of the surface o\l/ner or its other lessees aud
irermittees, ineluding farming, ranching or grazing operations, or with the utilization of suclrimprovements, facilities, and structures.
6.3 lteclamaatio¡r. Eaeh Party shall be responsible for all realarnation work arising out of itsoperations. In areas where fwo or more Parties utilize the surface for their operations or haveimprovements, facilities, or struetures, each Party will bear its orm costs of reclamation, but willeooperate and coordinate to cause any joint reclarnation go be accomplished in an expeditious,comnrereially pruclenl and timely tr'afilar, ancl in accordance with the applicable law and rules,
fla3r: 'i tL [ 7
Cclo ¡rer:t I ìr,i llc v lop nr il¡rt Agrtrei rir:tr I-lìli l'r'¡rciuc{iorr Cotri¡rnri¡ ancl i--lAO Statc Le¡sci¡^ 1.1,,('
orclers or clireotivcs ofthe Goveming,Agency. Costs ofjoirúreclamation will be shared in the sameproportion as the cost of reelaiming the speeific jointly used road or site bears to each Pafty's useand operation of the road or site controlled. Failure to agree on reclamation costs shall be subject tothe procedures for dispute resolution appearing in Article 11.
6.4' Riglat to ,Acquire Surfaee Sites, R.oads, and Faciltties" Should either Farty desire toabandon operations on the Subject Lands or any part thereof, prior to tennination of thisAgreement, the tetminating Party shall provide the other with prior written notice of its intentionsto abanclon operations and offer the non-abandoning Party the right to purchase any surfaoe sites,faoilities, equþments, and roads and assume full liability for the continued use, mainteuanoe, andreelamation of suoh surface sites, facílities, equipment, and roads. Within thifty (30) business daysofreceipt of,such written notice, the non-abandoning Farty shall declare its intentions in writing toacquire all or a portion of the surface sites, faeilities, equipment, or roads and agree to assumeliability for their continued use, maintenance, and reclamation. Failwe to respond within thirty(30) business days shall be cleemecl a rejeetion of the offer, and the abandoning Par.ty inay proceeclto remove it faeilities anel equipment and reclaim its sites.
6"5 E¡evin"onm¡elaûal: Ðisposal of Waste Materiaüs" EachFaity shall complywith all applicableenvironmental laws governing disposal of wastc materials and shall exercise striet care inhanclling, transportation, and disposal of waste nnaterials designafecl as hazardous or toxic by theapplicable environmental laws.
6.6 Ïlannages. Each Pafi shall be liable to the other for actual darnages arising fi'omUnreasonable Interference with the respective operations caused by surfaoe use.
AR.T'ICLE 7.MIT'IGATTON OF S{/tsSUR.FACE TMPACTS
7.I MilnimgOperations"
(a) Gemenal Frovisions. iMining Operations shall be conducted in compliance withapplicable law. Further, EAO shall conduct all Exploration and l\,(ining Operafions, sofal as reasonably practieable, in amarn'ter that will not: (z) car.lse unclue waste to the oilancl gas reservoirs in the Subjeot La-nds; (ii) cause Unreasonable lnterference witÏr theorderly Exploration of oil ancl gas or witln Oil and Gas Operations; or (iii) constitute ahazædto oil and gas equipment and personnel.
(b) Oil Shnle Enctrnves. EAO may designate Oil Shale Enclaves and shall depict such areason the Master Area Map. EAO shall trpdate the Master r\rea map periodically as
specified in this Agrøement inclicating the changes by expansion or contraction of OilShale Enclaves and Active Mining Operations.
(c) Mine Flans. As Mine Flans are cleveloped or modifrecl for the Sulrject Lancls, or asrcquired by a Governing Ageney or agreed to by the Padies, EAO shall submit to TI(ancl the Committee a Minc Plan projecting the acfimlmining development contemplated
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during the period of at least two (2) years. The Mine PIan shall include all Oil ShaleEnelaves and Froteotive Zones within the Subject Lands and shall show changesoccurring since the last submitted Mine Plan to all mine workings; mined out, reclaimedancl abandoned areas; and, new pit developments projectecl over the specified period.iVÍine Plans shall also depict the looation of all existing, shut-in, and plugged andabandoned wells. TI( understands that Mine Flans must be flexible to accomnrodateunknown undergrouncl mining conclitions and a-grees to cooperate in solving unforeseenproblems.
(d) fn"otective Zones" EAO shall establish Protective Zones arouncl each existingproducing, shut-in, or plugged and abandoned well of a size and dirnension requirecl byapplicable law. If no applicable law addtesses the size and dimension of FrotectiveZones, each suoh Protective Zones shall be as agreed by the Parties or as established by aGoverning Agency. Proteetive Zone dirnensions may be adjustcd from time to time bythe Committee to comply with ehanges in applicable law or to reflect latesf knownengineering desigirs. Protective Zones are to be clepicted on the Mine Flans ancl theMaster Area Map.
(e) Dis{nmce Lfrru¡ttafio¡rs. EAO shall mine no eloser than one hundred anclfrfty (150) feetof any existing drilled, completed, or shut-in wellhead for which no Frotectiv e Zanehasbeen established in its Mine Plan. Fuither EAO shall give at least ninety (90) clayswritten notiee to TI( that it will mine within three hundred (300) feet of a proposecl welllocation. Such notice shall include the reason the proposed well location cannot beavoidecl through EAO's commercially reasonable efforts. \ñiithin fifteen (15) days ofproviding notice, TI( shall respond to EAO ancl the Commiftee with an alternative welllocation or its position that the proposed well arising out of this section shall be resolveclas set forth in Article I I of this Agreement.
(f) iWümimg Openations. EAO will use cornmercially leasonable efforts to conduot itsMining Operations and planned future operations to give clue regard to existing Oil anclGas Operations and plans of development of TI(, inclucling, but not limited to,schecluling its mine phases and plans in such a manner as to cause the least praeticableclisruption to existing and planned Oil and Gas Operations or . Commercially reasonableefiorts include, but are not limited to, staging its mining in areas already exploitect by TI(or determinecl by TI( to be non-econoinic, thus allowing TK to explore for and developarrcas before Mining Operations are coÍmleneed, or planning its mine expansions andnew pits in areas that would ercate the least placticable interference with Oil airci Gas '
Operations, consistent with geologic factors and orderly economic development of theOil Shale reserves.
(g) lVtrasfer Anea Map Update. EÄ.O shall prepare and submit to TI( and file with theCommittee on an as-needed basis, an upclate to the Master Area hrÍap, includiirg thechanges by expansion or contraction of Oil Shale Enclaves, Barren Areas and FrotectiveZomes.
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(h) [Jmitúzatiom. EAO may unitize its Leases for cooperative and unit development of oilShale resources in its sole and absolute discretion in accorclance withthe applicable law,
(i) Dam'næges. EAO will be liable to TI( for darnages or injury resulting from Unreasona6leInterference with Oil and Gas Operations, negligence in colrclucting Concurrent' Development Operations, and breaeh of the ,{greement. Damages shall be limited toaotual monetary clamages and shall not ínclucle incidental or."nr"qrr.ntíal damages.
7.2 Oin amct Gas Operatio¡ls.
(a) Genenal Fnovüsio¡es. Oil and Gas Operations shall be conducted in complianoe withapplieabìe law. Further, Ttr( shall concluct Oil and Gas Operations, so far ai reasonablypracticable, in a manner that will not: (r) cause undue waste to the Oil Shale cleposits inthe'Subjeet Lancls; (il) cause Unreasonable Interference with the orderly coñduot ofi\4ining Operations; or (iii) oonstitute ahazardto mining equipmenf ancf personnel.
(b) Fìnms of Openatioms. As Flans of Operation are developecl or rnodified for the SubjectLands, or as required by a Governing Agency or ugreèd to by the parties, TI( sftallsubmit to E1{Q a plan of projected operations contemplatecl for the periocl. Flans foroperation shall show all existing drilled, completãcl, shut-in, uå,t phggrcl andabandonecl wells, and proposed wells to be drillecl. TI( agrees to accornmodate MinePlans ancl Mining operations so far as reasonably practicable.
(c) Masfer Area VIap [IpdaÉe. TK shall prepare and subrnit to EAo and file wiih ttreCommittee on an as-needed basis, an update to the l\{aster ,Area Xzlap, inclucling theehanges to proposed well locations, surface facilities ancl pipelines.
(d) Dnillimg im Ðesignated Oi[ Shale Areas. Subject to the terms of this .A.greement anclapplicable law=, TT( rnay ctrill Exploratory \lVells and Development \A/ells at loeations ofits choosing in Designated Oil Shale,Areas.
(e) Drilling i¡e Oil Shale E¡¡claves.
(Ð Ðevenopmemt Wenls. The drilling of Development \Mells in Oil ShaleEnclaves is expressly permittecl in accordanee with well density establisheclby the Goveming Agency order or wellJocation and siting rules, subject toapproval of the Governing Ageney a-nd the committee, and to the teims ofthis ,{greement. TI( will use cornmercially reasonable efforts to locate itswells in Baren Areas, within Protective Zones or within Dr-illiirg Islanclsestablishecl by the Governing Agency or by agreement of the Fariies so long
,as such efforts do not unreasonably interfere with TId,s oil and GasOperations or cause it to incur signif,rcant or material aclditional costs.
(iù Ex¡rXoratory Wells. The drillings of Exploratory \Mells in Oil ShaleEnclaves is expressly authorized, but shall be limited to (a) wells ch.illed fiorna-Barcen Area; or (b) if no Banen Areas are reasonably available, tlten by
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ds or at such locations as maybe agreecl to byprotocol for the location and drilling of its
geologic locations within Barren Ar-eas; thenably available, fi.om Drilling Islands establishecl
liy the committee or at such locations as may be agreedio by the parties.
(iiÐ Directüonat Ðrf,lErmg. Except as directed by the Governing Agency, theParties agree that TI( is under no obligation tô drill any Direciional \Mell onthe Subject Lands and Subject I-éases. F{oweverj TI( agr-ees to usecomtnercially reasonable efforts to directionally drill its wells- in Oil ShaleEnclaves either from Barren Areas or from Drillings trsla-nds provideddrilling directionally would not cause it to incur sig-nificant or. materialadditional costs.
(fl Ðaillfirag Fluid. Ttr( agrees to use a drilling medium through the EAO Lea-seholds a¡rcleontinguous oil shale l€sources within one thousand five-hundred (1,500) feet of thesurface that will rninimize the Oil Shale frorn dissolving in solutiorì ánd that will notcause unreasonable waste, or othetwise cause Unreasonàble trnterference with existingor possible Ptu" Mining Operations or prooessing of Oil Shale deposits. TI( agrees tõadd other aclrnixtures cleemed by the Commíttee arnd current practice to be reasona6lyneeessary for thc protection of the Oil Shale or in overcoming associated problems, ítbeing the intention of the Farties to prevent enlarged drill holes.
(g) im . T'I{ will use commerciallyle e drill its ùells so as to give duãexi plans, including, but not limited to, schecluling
in such cause the leasterations. asonable effortsthe drilli in areas akearJy
minecl by EAO, allowing EAO !9 mine through areas befure oil and gas dríllingoperations are commencecl, or drilling in areas that would create the least-practieablãinterference to lVlining operations, consisfent with geologic fäctors and oiderly andeconomio development of the oil and gas reserves.
(h) Extstimg Geophysieal Imf,or¡matio¡¡. TI( agrees that EAO ma-y review, on a conf,iclentialbasis, all existing proprietary geophysical information and dáta owned by TX( ftom thesurface of the Subjeot Lancls to the depth of one thousand (1,000) feet or the 6ottorn ofthe Oil Shale fofmation, whichever is ãeepcr. Sueh review shall be atEAO,s sole cost. ,
(Ð Well Logs" TI( agrees to provicle, on a conficlential basis ) any gamma rãy-nevtron,gammaray-sonic, or other lJl/ell Logs it runs through the Oil Shalã geologic zones in theSubject Lands from the surface to the depth of one thousand (1,00õ) fee[ or the 6offomof the Oil Shale fomation, whichever is deeper. In aclclition,'EAg may have arepresentative present at the location of each new well drilled
"n ih" Subjecf La¡ds for
the puqpose of reviewing and sampling clrill cuttings from the surface to thã depth of one
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thousand (1,000) feet, orthc bottom of the Oil Shale formation, whicheveris cleeperSuch review ancl sampling shall be at EAû's and it representative's sole risk and cost.
(¡) Casimg Fn'ogram" In adclition to the requirements of applicable law pertaining to wellcasiug requirements, TI( agrees to set well casing from the top of the Oil Shale zones orsections through the entire geologic zone of all Oil Shale deposits to a maxirnum depthof the geologic zone. Cement used in setting the casing or in plugging a well whichcomes in contact with the Oil Shale geologic zones shall be of a chemical compositiondesignecl to minimize dissolution or other impairment of the oil shale.
(k) lDry T{oles" If a well is detetmined to be a dry hole. TK agrees to place cement ¡rlugs atleast one hundred (100) feet across the top ancl the base of the Oil Shale geologic zonesiclentified by EAO to a maximum depth of the geologic zoire and across any oil, gas, orvr/ater shows or as directed by the Governrnental Ageney. TI{ shall set trrlugs inside aproperly cernentecl easing striirg. Ìilo well will be ternporarily abandoned with an openhole in the Oil Shale geolo gic zone unless otherwise agreed to by the Farties.
(l) {Jmüúizatûo¡n. TI( may unitize its Leases for cooperaiive development of the oil and gasdeposits, in its sole and absolute disoretion in accordance with applicable law.
(m) Damrages" Ttr( will be liable to EAO for damages or injury resulting frorn unclue wasteof Oil Shale deposits, Undue Interferenoe with Mining Operations, negligenee inconclucting Concurrent Operations, and breach of this Agreement. Damages shall belimited to actual rnonetary damages and shall not include incidental or consequentialda-mages.
ARTNCI,E 8.
INF'OR.M,ATION EXCHANGE
8.1 Gemena[ Frovüsioms. The Fafiies agrec to provide to the Cornmittee the original orphotocopies of all E,.eohange Information and other relevant inforrnation to enable the Committeeto make informed juclgnents regarding their respective operating intentions and plans. The Fafiiesagree to mainlainthe confidentiality of all Exchange Infonnation and other infonnation designatedas sueh by a Party, in accorclance with Scction 12.6.
AR.TICT,E 9.T,IMXTATTON ON T.IAETT,XTY
9.1 Exfna Costs. Each Farty shall bear the costs of oonforming operations to ConcurrentDevelopment Operations, including but not limited to, the costs of admixhres to cfrilling fluids;well casing, cementing, ancl plugging requirements in corurection with Oil ancl Gas Operations;ancJ any rnoclifications to lMine Flans for Mining Operations.
(a) Assocúated Costs of Courpliance by TK. TK agrees to bear all opera;tional costs inexcess of normal and customary operating costs for oil and gas wells drilled whioh are
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designed to proteot or mitigate interference with or damage to the Oil Shale deposit as acost of, the privilege of conducting coordinated Concurrent Development Operations.Such additíonal costs shall include, but are not limited to, costs fol drilling fluidaclmixfui'es, defeiral of operations, well casing and cementing prograrns, and pluggingancl abancloning programs.
(b) Assoeiafec! Costs of Con"mpliamce hy EAO. EAO agrees to bear all operatìonal costs inexeess of nonnal and customary opemtins costs for Mining Operations whioh aredesigned to protect or mitigate interference with or acecss to the oil ancl gas deioosits asa eost of the privilege of conducting coordinated Concument Development Operations.Suctr additional costs shall inolude, but are not limited to, additional sureys, speeialequípment and deferral of operations, ProteetiveZones, costs of determining Oil ShaleEnclaves, and additional monitoring equiprnent and personnel.
cì') Cosfs of Smspennc{ñmg or I}efernimg OperaúÉoms" Each Farty shall bear its own eosts ofsuspension of Lease terms and Defencd Operations directed by the Governing Ageney orby agrecment of thc Partics, incluclirig, but not lirnited to: (a) oosts of relooation, removing,or storing surface equipment; (b) placing mining facilities in care-taker status; allct (o)mobilizing eqtrþment ancl personnel for start-up of operations at the end of the period ofDefered Operations.
9.3 Costs of Re|ocatimg, R.emnovimgu axrd Sfonåmg EquiprmenÉ and Facittties Not Assoeúatedwifla Deferred O¡leratioms. Each Farry shall bear its own costs of relooating, removing,and storing equipment and facilities under circumstances not amounting to suspension oflease terrns and Deferred Operations.
9.4, Cosfs of Loss of Wtrimena[ R.esounces" The Parties agreethatminerals left in plaoe either inProtective Zones or by virtue of inability to access deposits to accomrnodaúe the operationsof the other shall be deerned aeceptable waste for the period of Deferrcd Operations, or asother wise agreed by the Parties.
AR.TECLE 10.
NNDEVTNTT'Y
10.1 Imclemnmiúy amd Agneeme¡'rt to Hoåd I{armåess. TI( agrees to inclemnify ancl to defenclarid hold EAO, its officers, employees, contractons, subcontractors, and agents, hamrlessfor, fiom, and against any and all claims, damages, judgments, losses, and expenses,ineluding attomey fees, arising out of or resulting from, directly or indírectly, TI{'snegligenoe in failing to comply with the adclitional operating requirements neeessary toimplemont and comply with úhis Agreement. Reciprocally, EAO agrees to indemnify andto ciefencl ancl hold TI(, its officers, employees, oontractors, subcontractors, and agents,hannless for, from, and against any and all claims, damages, judgrnents, losses, andexpenses, including attorney fees, arising out of or resulting from, directly or inclirectly,EAO's negligence in failing to comply with the additional operating requirementsnecessary to implement and comply with this Agreement. This indemnity shall apply to
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clamage to, or loss of, materials, tools, and equipment ownecl or supplied by the Farties,their offlrcers, employees, contractors, subcontractors, and agents or suppliecl by a thirclparty and used in normal and eustomary operations. This indemnity shall survive thctermination of this ,Agreernent so long as the incident for which indemnity is soughtoccurred during flre term of this Agreement, and shall continue thereafter so long as eitherFarly is subject to any possible claim or threatened, pending, or completed action, suit orproceeding, whether civil, criminal, or investigative.
IA.2 Speeñal Envúnonw¡emtal Imclem'nniúy" Each Party will indemnify and hold the other, itsofficers, employees, eontractors, subconh'actors, and agents, harmless for, from, andagainst any claims or injuries directly or indirectly arising out of the indemni$ring Party'soperations attributable to: (a) the usc, generation, manufacture, productiou, storage,release, threatened release, cliseharge, disposal, or presenee of ahazardous substanoe orhazarclous or toxic material (as defined by all applicable environmental laws) on, under, orabout the Subject Lands; (b) the violation of any environmental laws; (c) any elairm,
inquiry, investigation, or prooeecling relatingto any environmental conditions on or aboutthe Sulrject Lands; (d) any other environmeirtal contamination of the Subjeot Land-s oracljacent propedy; and (e) any remedial work required by the applicable environmentalla-ws. This indemnif,rcation obligation ineludes, without lirnitation, all consequentialdamages, and the costs of any required or necessary investigation, analyses, repair,eleanup, remediation, detoxif,rcation, testing or monitoring of the Subject Lancls 4ncl thepreparation and implementation of any closure, remedial, or other required plans. Thisinclemnity shall survive the termination of this Agreement and shall continue thereafter so
long as either Farty is subject to any possible claim or threatened, pending, or completedaction, suit or proceeding, whether civil, criminal, or investigative, regarding ths health,industrial hygiene, or environmental eonditions on, under, or about the Subject Lands.
,AITTTCT,E Xl.DTSFUTE RESOLUTION
11.i ResoluÉåom by Techmical CoordimatËng Comamiúfee. At any time it appears ta any
Committee member or to any Farty that therc is an existing or potential conflict withrespect to the perfonnanee of obligations under this Agreement, the Committee memberor tlre Pafty may call a meeting of the Commiffee to consider ancl attempt to arive at asatisfactory resolution of tlie conflict. If the conflict is resolved to the satisfactiori of the
Coinmitiee ancl the Palty involved, a written rnemorandum of resôlution shall be ¡-nacle
and sigried by the Farties or their representatives.
11.2 Dispuúe Resolution. The Parties aeknowledge that in the event a clispute cannot be
resolved by the Committee or the Parties SITLA and the Boarcl of Oil, Gas ancl lVlininghave jurisdiction to participate in dispute resolution depencling upon the nature of the
dispute between the Parties.
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AR.TXCT,E 12"MISCET,X,/LNEOIIS FR.OVISIOAIS
I2.1 Effeative tr)ate" This Agreement shall become effective as of the date first written above.
12.2 lìleadings. The heaclings of the Agreement are for reference only and will not limit orclefine tlie meaning of a-ny provision of the dgreement.
12.3 Couuaferpan"ts ,{¡¡thonized. This Agreement may be executed in multiple cor.lnterparts,each of which shall be cleerned an original, but all of which shall constitute one and thesame Agreement.
I2.4 T"en"rmimatiom of Agreemremú" Except as otherwise provided, this Agreernent shallterminate upon the first to oecur of, (a) the temrination of all of one Farty's Leases; (b)eomplotion of the operations of one or both of the Parties; or (c) by written agreement ofthe Parties.
12.5 Nofiees" Notioes fi'orn any Farty to the other ol'to the Cornmitrlee shall be in wri-ûing alrdsha-ll be deemecl to have been given when hand-delivered or when (a) deposited in theUnited States mail, cerfified mail, postage prepaid, addressed to the recipienf Farty; or (b)transmífted by express delivery service, delivery guaranteecl, freight prepaid. The datenotioe is deemecl to be effective shall be the date on which the notice is actually received.
Tïre aclclresses for notification are
T-K Produotion Company (or its Committee member)2EI2 lsr Ave NorthSuitc 408Eillings MT 59101
.Attn: Thomas IVl. F{auptman, President
Office hlumber: (406) 259-8480Faosimile Number: (406) 259-2124
EAO State Leases, I-LCe/o Enefit American Oil Co307 \tr/est 200 SouthSuite 4005Satrt Lake Ciry, UT 84l0l
Attn: R.ikki L. Hrenko, Nlanager
Italrt: l ri oi' l -/
Office }üumber: (801) 363-0206
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12.6 Comfüclemtånliúy. The Parties shall keep the Exchange Information and other infonnationclesignated as confidential in strict confïclence, and shall not diselose it to any other pensonor entity or use it for any purpose other than fbr the specific scope of this Agreementwithout the prior written consent of the other. All confidential information shall rernain theproperty of the Far*ry who developed it; and as to information jointly developecl by theCommitteg the joint property of the Farties. Both Parties shall protect and safeguarcl theExchange Information ancl shall prevent the unauthorized use, disseminátion, oÍ.publication of the information. All Exchange Information and any other confidentialinfurmatíon stamped "confidential" and shall be treated as confideirtial by the Fartiesunless it was lawfully in the possession of the receiving Party prior to disalosure, hasl¡ecome part of the public record at the Governing,Agency or part of the public domain,was received by a Party from another souÍce which has not breached any conficlentialityrequirement, or is cornpelled to be diselosed by law"
Upon termination of this Agreement or uporl the disclosing Farty's request, all ExchangeInformation and all records, any compositions, articles, documents and other iterns whichcontain, cliselose and/or embody any eonfidential infbrrnation (including, withoutlimitation, all copies, reproductions, sulrullaries and notes of the contents thereof), shall beretumed to the disolosing Pafi or destroyed by the receiving F arty, and,the receiving Faitywill certify that the provisions of tliis parugraphhave been compliecl with.
Itmaenclment hy Agreemrent. This Agreement may not be supplemented, modiflred, oramencled except by a wriften agreement signed by a duly authorized representative of eachParty.
12"7
T2.E
12.9
12"10
12.11
t2"12
Agemcy. This ,{greement shall not be construecl to create, either expressly or byirnplication, the relationship of agent ancl principal, joint venturers, rnining partners orgeneral partners between or among the Farties. hlo Farty is authorized to act on belialf ofthe other Party on any matter related to the subject matter of this Agreernent.
Suecessons amd ,Assigms. This Agreement shall be binding upon and inure to the benef,it ofthe Parties and their respective successors and assigns.
Comstrmctiom of,Agneenacnt" No rule of strict construction shall be applied with respect tothis Agreernent agaínst any Pafty to the Agreement" \A/henever possible, each prorrisionshall be interpreted in a manner to be valid under applicable law. Flowever, if anyprovision is held to be prohibited by or invalid uncler applicable law, such provision will beineffective only to the extent of sueh prohibition or invalidity, ancl this Agreernent shall not'lie cleemed void as the result of any of its incliviclual provisions being deemed invalicl.
Goven"ming tr aw. This Agreement shall be governed by the laws of the State of [Jtahwithout giving effect to the conflict of laws pr.inciples.
ConfÏicf wüth Applicahle LeEw. In the event any term or provision of this Agreernenfconflicts with applicable law, applicable law shall control.
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12.13 Emfine Agreement. T'his Agteement constitutes the entire agreement between the Fartiespertaining to its subject matter. All prior ancl contemporaneous agreements,represenfations, and understanclings of the Parties, oral or written, pertainingto ihe subjectmatter are superseded by and merged in the Agreement.
T-K PRODUCTTON COMPANIY EAO State LEASES, LLC
lt/Thomas M. HauptmanPresident
Rild<i L. FlrenkoManager
{'ate 17,_,1 !''
STATE OF MONTAN
COIINTY OF YELLOWSTONE
on this \Îh oun (-. .2ol4, before me personally appeared Thomas M.Hauptman to me personally known, who, being by me duly sworn, did say that he is thePresident of T-K Production Company and that said instrument was signed on behalf ofsaicl corporation and acknowledged said instrument to be the free act and deed of saidcorpolation.
'Witness my hand and seal.
My commission expires:
))
)
KATHYONgNOTARY PUBIEhTü.
State ol MonttmResiding at Billin€3, mol{m¡
My Commrssion ExphrcJULY 25. 2015
KathyNotary of MontanaR.esiding at Billings, Montana
STATE OF UTAH
couNrY oF SnlÌ I aìt¿
On this â5*h day of Jun¿ . 2014, before me personally appeared Rikki L.Flrenko to me personally known, who, being by me duly sworn, did say that she is theManager of EAO State LEASES, LLC and that said instrument was signed on behalf ofsaid corporation and acknowledged said instrument to be the free act and deed of saidcorporation.
V/itress my hancl and seal.My commisrioo enpir'"rig"q*SgJ0t tl
J
Notary for StateResiding at &Wloke Cil5, Ltlah
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Emily June MongelsonNolory Public Sto,c ol UtohMy Commission Expirer onr
1, 201 1bcr¡
AugurlComm, Num
EXHTBIT AI,EGAN, DESCRIFTXON
Attaehed to aird made apartof Cooperative Development T_KFrocltrction Cornpany and EAO State Lease,LLc,c-overin unty, Utah
State of Utah oil and gas leases are numbered and Td( Production Company is Lessee.
Following tracts of land are all in:
Secfion 19: S% beingFart ofStateML_52g5g
Section 2E: S% being parr of State ML-52S61
Section 30: Lots 1 thr.u 15, NZzNE%, SE'/¿NE%(All less Mining craims) rreing state 1ML-52E63
Section 31: Lots 7,2,3, SWZ¿NE%, NrM%, S%(Lots aka Part of N/2N8, part ofSENE) being Stare ML-52864.
hIOTE: Oil Shale lease is ,,less Mining claims,,
Seetion 32: Lots I thru 10, SEy4hlIV%, S\M%,N%SE% (All less Mining Clairns) being Srare ML_52E65
Section 33: Lot 1, NTW74N\M% being State ML-52g66(Lot akapart of SWt/iDi.Wt/ò
I{OTE: Oil Shale leasc is .,less lMining claims,,
Section 33: Lots 2,3,4,5, NE%, E1/1\Wy4(Lots aka part of lt{/2S/2)
and further less Mining Clairnsand less River iri S/2SE cumently in Enduring lease - will be
Td{ lease in August 2014.
TK Production/KGH Operating Co
KHG Operat¡ng Company
State 28-13
SESE Sec 28, T9S-R25W
APD Pending Opt¡on 1
APt 43-047-54984
Conductor
Surface Casing 1000 Ft
40
Option l APD Pending
Depths are approximate
Not to scale
Entire well will be directionally surveyed as it is drilled.
Run open hole logs from TD to shoe of surface pipe as required.
Production Casing (Surface to TD)
Hole Size Casing Size Weight Grade
7 7 /8 s t/2 1s.5 J-ss
Cement to Surface with follow¡ng program:
P Burst
4,8rOP Collapse
4,040
Lead
Sacks Bbl
695 243
185 44
Density(lbs/eal)
L2.5
74
Yield (ft3lsack)
r.962
Compressive
Strength (PSl)
1400+
3000+135
Total Cost to Drill, Case and Cement 5944,802
Surface casing (Surface to 1000 ftlHole Size Casing Size Weight72r/4 9 s/8 40
Grade
N-80
P Burst
5,750
P Collapse
3,930
Cement to Surface with following program
Sacks Bbl
101
Density(lbs/eal)
15.8
Compressive
Y¡eld (ft3/sack) Strength (PSl)
7.t74 3000+Tail 485
Production Casing 7000 ft
BffitBrr E - L
Option 22OOO ft Surface CasingTK Production/KGH Operating Co
NE Uintah County, Utah
Option 2 2000 ft Surface Casing
Depths are approximateNot to scale
Conductor 40
Surface Casin 2000 Ft
Depth to Oil Shale Zone will vary with locationis exhibit assumes a 1400-1500 foot depth to the Oil Shale Zone.
of surface casing will depend on oil Shale d
Entire well will be directionally surveyed as it is drilled.
Run open hole logs from TD to shoe of surface pipe as required.
Production €asing (Surface to TD)
Hole Size Casing Size Weight Grade
7 1/8 s r/2 1s.s J-ss
Cement to Surface with following program:
P Burst
4,810
P Collapse
4,040
Compressive
Strength (PSl)
1400+
3000+
Sa c
44
ks
695
185
Bbt
Density(lbs/cal)
72.5
74
Yield
(ft3lsack)
t.9621.35
Lead
Tail
243
Total Cost to Drill, Case and Cement
lncremental cost over proposedS1,o54,ooo
s109,198
Surface Casing (Surface to 2000 ft)Hole Size Casing Size Weight Grade
t2t/4 9-s/8 40 N-80
Cement to Surface with following program:
P Burst
5,750
P Collapse
3,090
Compressive
Strength (PSl)
750+
3000+
Lead
Bb
65Ta
Sacks
33s
310
121.5
Density(lbs/cal)
12.5
15.8
Yield
(ft3/sack)
2.064
L.77
Production Casing 7000 ft
EXHIEIT E - Z
TK Production/KGH Operating Co
NE Uintah County, Utah
OPTION 3: lntermediate Casing Program
Conductor 40
Surface Casing 400 Ft
lntermediate Casing 2000 Ft
OPTION 3: lntermediate Cas¡ng at 2000 ft
Depths are approximate
Not to scale
Surface Casing (Surface to 400 ft)Hole Size Casing Size Weight Grade
17 u2 t33/8 68 N-80
Cement to Surface with following program:
sacks Bb' Densitv'r (lbs/eal)
P Burst P Collapse
5,020 2,260
Yield Compressive(ft3/sack) Streneth (PSl)
450 93.3 15.8 L.174 3000+
Depth to Oil Shale Zone will vary with location.
This exhibit assumes a 1400-1500 foot depth to the Oil Shale Zone.
Setting depth of intermediate casing will depend on Oil Shale depth
Entire well will be directionally surveyed as it is drilled.
Run open hole logs from TD to shoe of surface pipe as required.
Production Casing (Surface to TD)
Hole Size Casing Size Weight7 7 /8 s r/2 ls.s
Cement to Surface with following program:
Grade
J-5s
Density
(lbs/cal)
L2.5
L4
P Burst
4,810
Yield
(ft3/sack)
r.9621.35
P Collapse
4,040
Compressive
Strength (PSl)
1500+
3000+
Lead
Tail
Sa cks
695
185
Bbl
243
44
Total Cost to Drill, Case and Cement
lncremental cost over proposedSt,422,ooo5477,198
lntermediate Casing (Surface to 2000 ft)Hole Size Casing Size Weight
72 t/4 9 s/8 40
Cement to Surface with following program:
Sacks BbtDensity
(lbs/cal)
L2.5
15.8
P Collapse
3,950
Compressive
Strength (PSl)
750+
3000+
Grade
K-55
P Burst
2,570
Yield
(ft3lsack)
2.064
1.77
Lead
Tail
335
310
t2r.565
Production Casing 7000 ft
EXHtBtÌ E - 3