BLM

Wyoming State Office – Rawlins Field Office

ENVIRONMENTAL ASSESSMENT for the 

Hay Reservoir CBNG Infill and 

Impoundments Project 

Sweetwater County, Wyoming 

August 2007
MISSION STATEMENT 

It is the mission of the Bureau of Land Management to sustain the health, diversity, 

and productivity of the public lands for the use and enjoyment of present and 

future generations. 

BLM/WY/PL-07/032+1310 
United States Department of the Interior 

BUREAU OF LAND MANAGEMENT

Rawlins Field Office 

P.O. Box 2407 (1300 North Third Street)

Rawlins, Wyoming 82301-2407

August 13, 2007 

In Reply Refer To:

1790 (030) 

Re: Environmental Assessment for the Hay 

Reservoir CBNG Infill and Impoundments 

Project 

Dear Reader: 

This is to inform you of the availability of the Hay Reservoir Coalbed Natural Gas (CBNG) Infill 

and Impoundments Project (Project) Environmental Assessment (EA) at the Wyoming Bureau of 

Land Management’s (BLM) website: 

http://www.blm.gov/wy/st/en/info/NEPA/documents/nepadocs07.html 

In order to satisfy the requirements of the National Environmental Policy Act, this EA was 

prepared to analyze impacts associated with the drilling of eight additional CBNG wells and the 

construction and operation of produced water disposal impoundments, north of Wamsutter, 

Wyoming. 

It is expected that this EA can be viewed at our website beginning August 13, 2007. This will 

begin the 30-day public review/comment period for the document. We will review all comments 

and will address substantive comments in the Decision Record. A substantive comment is one 

that would alter conclusions drawn from the analysis based on: 1) new information, 2) why or 

how the analysis is flawed, 3) evidence of flawed assumptions, 4) evidence of error in data 

presented, and 5) requests for clarification that bear on conclusions presented in the analysis. 

Your comments should be as specific as possible. Comments on the alternatives presented and 

on the adequacy of the impact analysis will be accepted by the BLM until September 12, 2007. 

Comments may be submitted via regular mail to: 

Travis Bargsten, Project Manager

Bureau of Land Management 

Rawlins Field Office 

P.O. Box 2407 

Rawlins, Wyoming 82301 
2 

or may be submitted electronically at the address shown below (please refer to the Hay Reservoir 

CBNG Infill and Impoundments Project): 

e-mail: rawlins_wymail@blm.gov 

Please note that comments, including names, e-mail addresses, and street addresses of 

respondents, will be available for public review and disclosure at the above address during 

regular business hours (7:45 a.m. to 4:30 p.m.), Monday through Friday, except holidays. 

Individual respondents may request confidentiality. If you wish to withhold your name, e-mail 

address, or street address from public review or from disclosure under the Freedom of 

Information Act, you must state this plainly at the beginning of your written comment. Such 

requests will be honored to the extent allowed by law. All submissions from organizations or 

businesses, and from individuals identifying themselves as representatives or officials of 

organizations or businesses, will be made available for public inspection in their entirety. 

The EA may also be reviewed at the following locations: 

Bureau of Land Management Bureau of Land Management 

Wyoming State Office Rawlins Field Office 

5353 Yellowstone Road 1300 N. Third Street 

Cheyenne, Wyoming 82009 Rawlins, Wyoming 82301 

If you require additional information regarding this project, please contact Travis Bargsten, 

Project Manger, at the Rawlins address or phone (307) 328-4387. 

 Sincerely,

 Field Manager 

Enclosure 
U.S. Department of the Interior 

Bureau of Land Management 

August 6, 2007 

ENVIRONMENTAL ASSESSMENT TITLE PAGE 

Rawlins Field Office 

EA No. WY-030-07-EA-115 

Name or Title of Action: Hay Reservoir CBNG Infill and Produced Water Impoundment Project 

Proponent: Pinnacle Gas Resources, Inc. 

File Name, Number, and Location: Oil and Gas Leases WYW-153188, WYW-153193 

Location (BLM Surface, Fed Minerals): T.23N., R.97W., 6th P.M., Sec 26, Sec 35 

Location (BLM Surface, WY Minerals): T.23N., R.97W., 6th P.M., Sec 36

 Sweetwater County, Wyoming 

Field Office: Rawlins Field Office (RFO) 

Rawlins Field Office (RFO) Interdisciplinary Team (IDT) 

IDT Member Title 

Travis Bargsten Natural Resource Specialist, Project Lead 

David Simons Environmental Coordinator 

Andy Stone Hydrologist 

Mike Calton Rangeland Management Specialist 

Paul Rau Recreation Planner 

Heath Cline Wildlife Biologist 

Bonni Bruce Archaeologist 

Mark Newman Geologist 

Susan Foley Soil Scientist 

Jon Dull Petroleum Engineer 

Hilaire Peck Engineer 

Heather Nino Realty Specialist 

Activity Code: 1310 

Appendices: A (Master Drilling Plan) 

B (Master Surface Use Plan and Integrated Pest Management Plan) 

C (Water Management Plan and Addenda) 

Hay Reservoir CBNG Infill and Impoundments 1 Environmental Assessment 
INTRODUCTION 

PURPOSE AND NEED FOR THE PROPOSED ACTION 

The Proposed Action as described in this Environmental Assessment (EA) is necessary for the proponent to 

exercise lease rights and develop domestic natural gas resources. In Coalbed Natural Gas (CBNG) 

operations, water is removed from coal formations allowing for desorption of natural gas, principally methane, 

for production and eventual sale. Disposal of this produced water is then necessary to allow for continued 

natural gas production. Down-sizing of well spacing (to 80-acre spacing) has been deemed necessary by the 

Proponent in order to adequately test the feasibility of commercial gas production from the subject oil and gas 

leases. The purpose and need for this project are to allow for the Proponent to determine if coalbed natural 

gas production is feasible from the target formation in this geographic area, in order to provide natural gas for 

eventual sale and consumption. As a pilot project, eventual full-field development could occur should coalbed 

natural gas production prove feasible. A corollary purpose of this project is to evaluate techniques of gas and 

produced water production, and to provide information for potential analysis of subsequent full-field 

development. 

CONFORMANCE WITH LAND USE PLAN 

Oil and gas development is covered on pages 30-32 in the Great Divide Resource Management Plan (RMP), 

which was approved on November 8, 1990. Development of oil and gas reserves as described in the 

Proposed Action is in conformance with the RMP decisions which state that the Management Objective is to 

provide opportunity for leasing, exploration, and development of oil and gas while protecting other resource 

values. 

The development of this project would not affect the achievement of the Wyoming Standards for Healthy 

Rangelands (August 1997). 

RELATIONSHIP TO STATUTES, REGULATIONS, POLICY, PERMITS OR OTHER PLANS 

In 2003, the RFO prepared an EA for a right-of-way (ROW) application by Kennedy Oil to allow for the 

construction of 4 well locations in Section 36 (in T23N/R97W hereafter, unless otherwise specified). Surface 

estate in this Section is public land administered by the BLM, and the mineral estate is owned by the State of 

Wyoming. As a result, the RFO considered the impacts from construction and associated activities. 

Subsequently, a Decision Record and Finding of No Significant Impact (DR/FONSI) was released allowing for 

the ROW authorization. Kennedy subsequently drilled the CBNG wells and converted a wellbore to a 

produced water disposal (reinjection) well. Kennedy Oil then decided to expand the pilot project to better test 

the feasibility of commercial gas production by proposing the drilling of 8 additional CBNG wells adjacent to 

Section 36, in Sections 26 and 35. 

In September of 2005, the RFO released an EA for the Hay Reservoir Coalbed Natural Gas (CBNG) Pilot 

Project (“Hay Reservoir CBNG Pilot”) for public review. In October of 2005, the RFO issued a Decision 

Record/Finding of No Significant Impact for the Hay Reservoir CBNG Pilot. This decision provided for the 

authorization of 8 CBNG well Applications for Permit to Drill (APDs) and a single produced water disposal well 

APD, along with appurtenant access roads and pipeline- and utility-corridors in Sections 26 and 35. The 8 

CBNG wells were proposed by the original proponent, Kennedy Oil, to be located at 160-acre spacing (4 wells 

per section). 

In October of 2006, Pinnacle Gas Resources, Inc. (Proponent) submitted APDs for infill drilling and included a 

proposal to dispose of produced water in surface impoundments. Pinnacle has obtained the lease rights to 

explore and develop natural gas within these leases from Kennedy Oil. 

In July of 2006, Pinnacle submitted a ROW application for the infill drilling of 4 additional locations in Section 

36. An EA was prepared, a DR/FONSI produced, and the ROW was subsequently authorized. 

Hay Reservoir CBNG Infill and Impoundments 2 Environmental Assessment 
In total, then, there are 8 CBNG wells and a single reinjection well currently authorized in Section 36. There 

are a total of 8 CBNG wells and a single reinjection well currently authorized in Sections 26 and 35. At the 

time this EA was in preparation, drilling activity and reinjection operations were on-going. 

PROPOSED ACTION AND ALTERNATIVES 

Proposed Action 

The general location of the proposed wells and impoundments is approximately 56 miles west of Rawlins, 

Wyoming (Figure 1). Access to the project area is provided by existing roads off of Interstate I-80 and 

Sweetwater County Road 67 (Tipton Road). 

On October 22, 2006, the Rawlins Field Office received the first components of a Plan of Development (POD) 

application from the Proponent for the: 

1. Construction, drilling, completion, operation, maintenance, and reclamation of 8 additional CBNG 

wells (and appurtenant access roads, flowlines, and utility corridors) to provide 80-acre spacing in the 

project area 

2. Construction, operation, and reclamation of 8 water impoundments for the evaporation and storage of 

approximately 800 acre-feet of CBNG produced water from the project wells 

3. Installation and operation of up to 4 diesel generators for power generation for a time period of up to 6 

months, and 

Several subsequent changes to the POD application were made, with the most recent changes received June 

21, 2007. Construction activities and operations would be similar to the description provided in the Hay 

Reservoir CBNG Pilot Project EA of September 2005 (WY-030-05-EA-390). A complete description of the 

proposed action is provided in the Appendices. The Master Surface Use Plan (MSUP) contains a 

prediction of total anticipated short-term surface disturbance (new disturbance, not accounting for existing 

disturbance within project area): 

Component 

Well Pads (8)1

Access Roads/Utility Corridors2

Produced Water Impoundments3

Table 1 Total 

Surface Disturbance 

Short-Term Long-Term 

19.3 4.0 

28.2 14.1 

79.4 79.4 

126.9 97.5 

1 Short-term disturbance area approximately equal to 350’ by 300’ for each well (2.4 acres). Long-term 

disturbance area approximately equal to 150’ by 150’ for each well (0.5 acres).

2 Short-term disturbance width of road/utility corridors approximately equal to 80’. Total length of proposed 

access road equal to 2.91 miles. Long-term disturbance area approximately equal to 40’.

3 8 impoundments, total, at 7 locations. 

On November 17, 2006, the RFO Interdisciplinary Team (IDT) met with the proponent and the proponent’s 

permit agent at the proposed project site to conduct an onsite review of the proposal. The proposed well 

locations, access roads, facilities, pipelines, and impoundment locations were reviewed and discussed. 

The POD application includes several required mitigations or practices, including: 

• Use of a bird deterrence system for the produced water impoundments 

• Lining of impoundment facilities with 45 mil liner 

• Leak detection for impoundment facilities 

• Fencing of impoundments and pits to prevent entry by wildlife and livestock 

• Monitoring of project components, including leak detection system and impoundments 

Hay Reservoir CBNG Infill and Impoundments 3 Environmental Assessment 
Hay Reservoir CBNG Infill and Impoundments 4 Environmental Assessment
Produced gas would be transported by an existing pipeline to the Mountain Gas Resources gas compression 

facility located 4 miles north and east of the Project Area, at the junction of the Tipton Road and Luman Ranch 

Road. 

The life of this project is estimated to be from 20-50 years. 

The surface disturbance from activities would be reclaimed as described in the MSUP. Activities within 

Section 36, and addressed within this EA, will be considered under ROW application, whereas other activities 

will be considered under application for on-lease activities. ROW actions within Section 36 addressed in this 

EA include the construction, operation, and reclamation of the produced water impoundments and appurtenant 

access roads and pipelines. No additional drilling is considered within this EA for Section 36. 

Produced Water Disposal 

This project would result in the production of water from the target formation for the life of the project. The 

proponent has predicted a water production curve that anticipates water production would decline to about 

one-half of initial production within 9 months of beginning production. 

Each well is anticipated to produce approximately 1,200 barrels of water per day, initially. This rate would 

decrease to approximately 100 barrels of water per day per well by about 3 years (Figure 2). 

Hay Reservoir pH2O Production Curve (24 Wells) 

0 

5,000 

10,000 

15,000 

20,000 

25,000 

30,000 

35,000 

0 50 100 150 200 

Project Months 

pH2O Production, bbl/day 

Figure 2 

The proponent has developed an estimate of total water production over a 20-year period. Water disposal 

would occur by evaporation from the proposed 8 water impoundments. Seven water impoundments would be 

utilized full-time, with the eighth held empty for emergency capacity. Each pit (including berms around the 

perimeter) would be approximately 750 feet in length, 550 feet in width, and 20 feet in depth. The berms 

would rise above the native ground level and, so, the excavated depth below native ground level would range 

Hay Reservoir CBNG Infill and Impoundments 5 Environmental Assessment 
from approximately 10-20 feet. Total surface disturbance from construction of each impoundment would 

approximately equal 10 acres. A freeboard of at least 2 feet would be maintained on all impoundments. 

Evaporation rates would be augmented by utilizing pump-driven sprinklers/misters. These sprinklers/misters 

would be controlled such that spray is prevented from drifting outside of the impoundments. This would be 

accomplished by using 5-meter tall wind gauges, with sprinkler/mister operation shut down when wind speeds 

exceed approximately 15 mph. 

The Water Management Plan states that “Pinnacle may identify and develop other off-channel containment 

facilities that would be added to the [POD].” If additional impoundment/disposal capacity is necessary, the 

BLM will require Pinnacle to submit new applications, and such actions would be subject to additional NEPA 

analysis and disclosure prior to consideration for authorization. This project proposal does not include a 

proposal for the transport of produced water from federal leases to off-lease impoundments; should such a 

proposal be made, additional review and NEPA analysis would be necessary. 

Some amount of reinjection may be feasible by utilizing the two existing injection wells within the POD. 

Pinnacle expects that the injection rate of both wells, combined, is approximately 1400 bbls per day. The 

period of time over which injection at this rate is feasible is unknown. 

Potential for seepage or release of produced water from the impoundments will be reduced by installation of a 

45-mil liner and leak detection system. During production, the leak detection would be monitored quarterly for 

the first year of use, and then semi-annually until the project is completed and abandoned. 

The impoundments would accumulate water from production inflows, and would lose water by evaporation. 

Pinnacle predicts that water evaporation would not occur during the winter months, when the air temperature 

and snow cover impede evaporation. Over time, water in the pit would evapo-concentrate salts (primarily 

NaCl and KCL, See Figure 3). 

Hay Reservoir Water/Salt Accumulation (1 Pit) 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

0 50 100 150 200 

Project Months 

Water Accumulation, Acre-Feet 

0 

1,000 

2,000 

3,000 

4,000 

5,000 

6,000 

7,000 

8,000 

Salt Accumulation, Cubic Yards 

Water Storage Salt Accumulated 

Figure 3* 

Hay Reservoir CBNG Infill and Impoundments 6 Environmental Assessment 
* Assumes sprayers/misters are operating from beginning through Year 4 of the project, then turned off until 

they are briefly turned on again for short periods in Year 18 and Year 20. 

Upon completion of the project (using a 20-year LOP), Pinnacle predicts that approximately 53,000 yd3

 of salt 

would be left behind in the impoundments. This would result in each of 7 impoundments (with one 

impoundment held for emergency purposes) containing salt solids and precipitates totaling approximately 

4.7% of total pit capacity, or to a depth of approximately 21⁄2 feet in the typical pit. 

Upon completion of the project, the salt remaining in the lined impoundments would be sealed/wrapped 

between the impoundment liner (45 mil thickness) and (if necessary) additional liner that would be welded onto 

the impoundment liner (using a 20 mil liner), sealing the salts. The sealed salt cake would then be buried 

under native fill and mounded. The leak detection system would be kept in-place, and monitored for an 

additional 5 years past the date of field abandonment, on a semi-annual basis. 

Should leachate be detected in the leak detection system, Pinnacle has indicated that they would have a 

trained diver examine the liner, and would weld any tears or punctures (during production) or make repairs to 

the liner (after production has ceased). 

Development of Alternatives 

In the development of alternatives for this analysis, guidance from BLM policy contained in Washington Office 

Instructional Memorandum (WY-IM) 2005-247, dated September 30, 2005: 

“The alternatives that must be analyzed are those: 1) which meet the purpose and need for 

the proposed action; 2) which reduce the adverse environmental effects of the proposed 

action; 3) which are feasible; 4) whose effects can be analyzed; and 5) which are not 

substantially similar in effects to an alternative that is analyzed.” 

No Action Alternative 

NEPA regulations require that alternative analyses in NEPA documents “include the alternative of no action” 

(40 CFR 1502.14(d)). For this analysis, “no action” means that the BLM would reject the proponent’s proposal 

and “the proposed activity would not take place.” 

ALTERNATIVES CONSIDERED, BUT ELIMINATED FROM FURTHER ANALYSIS 

Drilling of Additional Reinjection Wells 

Under this alternative, the Proponent would drill additional injection wells in order to dispose of produced water 

from the project. 

The RFO asked the Proponent to prepare a report that analyzes, in detail, the potential for additional water 

disposal capacity by drilling additional reinjection wells. Specifically, the RFO asked the Proponent to address 

the potential for injection in shallower, deeper, and/or multiple formations relative to the current injection wells 

(completed to the “K-T Sands”). 

On January 19, 2007, the RFO received a report from the Proponent entitled “Evaluation of Water Disposal in 

Section 26 and 35, T23N, R97W.” The RFO reviewed this report and supplemental information provided in the 

Water Management Plan (WMP). 

It is apparent that there is limited feasibility for reinjection of produced water to acceptable formations. On 

January 8, 2007, the Proponent conducted an injection test at the #1-35I. The results of this test indicate that 

the formations currently completed into have limited capacity for injection, with an average injection rate of 

approximately 1400 bbls/day. Each CBNG well is predicted to produce approximately an equal amount of 

water, so an individual injection well would need to be drilled for each producing well. The Proponent 

indicated that this would be prohibitively expensive for them to consider, and is so infeasible. 

Hay Reservoir CBNG Infill and Impoundments 7 Environmental Assessment 
In addition, geological cross-sections and downhole logs were reviewed to determine if potential alternative 

formations exist. As a result of this analysis, no readily-apparent alternative formations can be identified with 

stronger potential for reinjection/disposal. 

Netting of Impoundments 

Under this alternative, the bird deterrence system would be replaced with netting over the impoundments, 

preventing bird entry. 

The Proponent has indicated that this is not a feasible alternative, as the expanse of netting necessary and the 

cost of installing and maintaining that netting, would render the project infeasible. In addition, the Proponent 

indicated that the number of the impoundments would need to be revised significantly upward and the size 

made much smaller, in order to reduce the span for the netting. This would result in an unknown, but 

additional amount of surface disturbance. 

Netting of these pits would be difficult, as well, due to the high winds and snow accumulation in the winter. 

The RFO is uncertain if netting would render the project economically infeasible, as indicated by the 

Proponent. The RFO is unable to corroborate the claim that BLM Pinedale Field Office personnel have visited 

sites “on many occasions” with similar systems and that BLM personnel “were satisfied with their operations” 

(WMP at Page 9). The Proponent has full confidence in the bird deterrence system currently proposed, and is 

willing to “take full responsibility for any take of migratory birds.” 

Removal of Accumulated Salts to an Authorized Disposal Facility 

Under this alternative, the 53,000 yd3 of salts would not remain buried on public lands for perpetuity, but would 

be end-hauled to an appropriate disposal facility. The RFO asked the Proponent to consider such an 

alternative, but the Proponent indicated that the cost of end-hauling the salt (approximately equal to 4,400 

dump truck loads) to a disposal facility such as an authorized landfill would be prohibitively expensive. 

In addition, the use ofroad infrastructure from increased truck traffic to and from the disposal site would likely 

result in substantial, additional impacts (i.e., to wildlife, air quality, etc.). 

AFFECTED ENVIRONMENT 

The following critical elements of the human environment (Table 2) were considered in the course of this 

analysis. 

Table 2 

The Hay Reservoir CBNG Pilot EA (2005) provides a detailed description of the Affected Environment for the 

Proposed Action, and is incorporated by reference. Where additional detail or description has been deemed 

necessary, additional text is provided in this EA. 

Where no measurable effects are anticipated to a Critical Element or resource, descriptions (Affected 

Environment and Environmental Consequences) of that element or resource are limited in order to focus this 

analysis on the principal issues to be considered in making a decision. RFO IDT review of the proposal was 

used to identify what the principal issues are for this project. Where determined by the IDT to be necessary, 

Affected Affected 

Critical Element Yes No Critical Element Yes No 

Air Quality X T and E Species X 

ACEC’s X Wastes, Hazardous/Solid X 

Cultural Resources X Water Quality X 

Prime/Unique Farmlands X Wetlands/Riparian Zones X 

Floodplains X Wild and Scenic Rivers X 

Native American Religious Concerns X Wilderness X 

Environmental Justice X Invasive, Nonnative Species X 

Hay Reservoir CBNG Infill and Impoundments 8 Environmental Assessment 
Affected Environment descriptions are provided when that information is crucial for the context of considering 

the Proposed Action and alternatives. 

Geology/Paleontology 

No known scientifically significant paleontological resources are present in the project area. 

Climate and Air Quality 

The Project Area is located in a continental dry, cold-temperature-boreal climate (Trewartha 1968). This 

climate is characterized by a deficiency of precipitation (i.e., evaporation exceeds precipitation), and generally 

has cold temperatures where fewer than eight months of the year have an average temperature greater than 

50° F, with warm summer days, cool summer nights, and cold winters. 

The wind is often strong and gusty, reflecting and channeling flows in response to complex terrain. During the 

winter months, strong winds are often accompanied by snow, producing blizzard conditions and drifting snow. 

Winds are generally out of the south or southwest. 

Mean annual precipitation is about 5 - 6 inches in the project area depending on elevation. January is the 

driest month (0.5 inches at Rawlins). The majority of precipitation falls as rain from frontal systems and 

thunderstorms. In regard to intensity of rainfall events, the 50-year, 24-hour precipitation rate ranges from 2.2 

inches to 2.6 inches in the project area (Miller et al. 1973). Precipitation in this region varies significantly from 

year to year. For example, at Rawlins, the month of May has had as little as 0.03 inch and January as much 

as 1.9 inches of precipitation. The greatest annual precipitation recorded at Rawlins was 12.6 inches in 1998, 

while the least was 4.9 inches in 1954 (WRCC 2005). 

Mean annual pan evaporation for this portion of southern Wyoming is about 75 inches, while the mean annual 

lake evaporation is around 55 inches. The potential annual evapotranspiration is roughly 20 inches (Martner 

1986). Compared to the average annual precipitation of 10 inches, this gives an average annual deficit of 

approximately 10 inches. 

Soils 

The water erosion hazard potential for these soils is severe and the wind erosion hazard potential is slight. 

Water Resources 

The proposed Project is located in the Great Divide Basin, so named for its position on the Continental Divide. 

Elevations range from 9,225 feet on Whiskey Peak to 6,500 feet on the Basin's floor. The elevations of the 

proposed Project Area are between approximately 6,585 and 6,600 feet. Major water resources in this part of 

the Basin include the Chain Lakes area and numerous playas that serve as drainage basins for intermittent 

streams. There are no major drainages in the Project Area. 

There is a large dry lakebed located in Sections 26, 35, and 36 of T23N, R97W of the Project Area. As a result 

of the arid nature of this location, the only water in the lake occurs from direct rainfall and snowmelt. In the 

event of a 100-year storm, the lake could potentially hold 593 acre-feet of runoff which would fill the lake to a 

depth of approximately six inches. The vast size of the ponded area compared to the contributing watershed 

area prevents the lake from filling any deeper (Applied Hydrology Associates, Inc. 2003). 

Groundwater 

Hydrogeology 

Very little hydrogeologic data exists for the Great Divide Basin. In general, aquifers in Quaternary alluvium, 

wind blown, lacustrine, and gravel deposits are unconfined (i.e. permeable material extends from the land 

surface to the saturated zone). In Tertiary (or deeper) geological units, artesian (confined) conditions exist. 

Hay Reservoir CBNG Infill and Impoundments 9 Environmental Assessment 
Depth to confined or unconfined groundwater generally ranges from 80 to 200 feet (Welder and McGreevy, 

1966; Welder, 1968), but can be substantially deeper. Major recharge areas for the Great Divide Basin occur 

in high areas of the northeast part of the basin, in the southwest near the Rock Springs Uplift, along the 

Rawlins Uplift, and in the high areas around Creston Junction (Fisk, 1967). Fisk (1967) reported that, although 

structurally distinct, there exists direct hydraulic communication between the Great Divide Basin and the 

Washakie Structural Basin. The principal aquifers of the Great Divide Basin include the Madison, Tensleep, 

and Mesaverde. Recharge along the basin periphery tends to migrate towards the basin axis, while discharge 

from the basin flows east, out of the east-central part of the basin via the Wasatch zone of the Wasatch-Fort 

Union aquifer (Fisk, 1967). 

Groundwater data for the project area comes from several different monitoring wells drilled for hydrogeological 

analysis. Groundwater in the project area is unconfined with depths to initial water typically less than 40 feet 

below ground surface. Water quality results from these monitoring wells can be found in Appendix C. 

Vegetation/Wetlands/Invasive Weeds 

The Great Divide Basin is within the Upper Sonoran zone. The most commonly seen plants in the Project Area 

are greasewood, Gardner’s saltbush, squirreltail, bluegrass and Polanasia spp. 

The Project Area is within the Cyclone Rim Allotment (#10103). Acreage for this allotment is approximately 

308,608 acres, of which approximately 291,954 acres are BLM-administered public lands. Grazing operators 

include Jolley Livestock Grazing Association, LLC, Peterson Livestock, LLC, Alkali Creek Grazing Association, 

LLC, Stratton Sheep Company, and Salisbury Livestock Co. 

Animal Unit Months (AUMs) are determined by livestock type and season. Dormant season grazing is able to 

support more livestock: cattle use in the winter is approximately 12 acres per AUM verses cattle use in the 

summer which is approximately 20 acres per AUM; sheep use in the winter is approximately 10 acres per 

AUM verses summer grazing which is approximately 20 acres per AUM. 

In 2002 a Standards and Guidelines evaluation was performed. Grazing management on this Allotment was 

evaluated by the RFO as satisfactory, and the overall trend of use and sustainability is static. In the Standards 

and Guides Report for the Great Divide Basin (Rawlins Field Office), the Cyclone Rim Allotment passed all 

standards except #2 Riparian/Wetland Health (USDI BLM 2003). The riparian/wetland health standards are 

currently being addressed in management plans or as range improvement projects. There are no riparian or 

wetland areas within the Project Area. 

Wildlife/Fisheries 

Three big game species, pronghorn antelope, mule deer, and elk occur in the Project Area during all or parts 

of the year. No big game crucial winter range occurs within the Project Area. 

The greater sage-grouse is an important upland game bird in the State of Wyoming. The Project Area is not 

within suitable sage grouse habitat for breeding, nesting, brood rearing or winter occupation. According to 

WGF records and RFO records, no leks are located within 2 miles of the Project area. 

Several species of raptors and other migratory birds occur or potentially occur within the Project Area and use 

the area for feeding and travel routes. They include the ferruginous hawk, burrowing owl, golden eagle, 

northern harriers, redtailed hawk, prairie falcon, American kestrel, long-eared owl, short-eared owl, great 

horned owl and Swainson’s hawk. No active nests are known within the Project Area. 

Wild Horses 

The Project Area is within the Lost Creek wild horse Herd Management Area (HMA). The Lost Creek HMA 

encompasses 250,000 acres, of which 235,000 acres are BLM-administered public lands. The “appropriate 

management level” (AML) for this HMA is 70 horses. The current herd population is approximately 116 

Hay Reservoir CBNG Infill and Impoundments 10 Environmental Assessment 
animals. The Project Area is in a portion of the Lost Creek HMA that historically has been used by wild horses 

which most likely came from the Divide HMA administered by the Rock Springs BLM Field Office. 

Recreation and Visual Resources 

Recreational activities occurring in or near the Project Area include hunting for small and big game, camping, 

hiking wildlife and wild horse viewing, ORV use and sightseeing. No developed recreational sites, facilities, or 

special recreational management areas exist within or near the Project Area. 

The project is located within Class III Visual Resource Management (VRM). This classification permits 

changes to the landscape as follows: 

“Contrasts to the basic elements caused by a management activity are evident but should 

remain subordinate to the existing landscape.” 

Cultural Resources 

A cultural resources inventory has been previously-conducted for the area directly impacted by the Proposed 

Action (area of proposed surface disturbance). 

No National Register of Historic Places-eligible sites were discovered where new surface disturbance is 

proposed. 

Socioeconomics 

Oil and gas development represents an important and significant contributor to the economy of Carbon County 

and the State of Wyoming. Natural gas production is important for the region and nation as a source of 

energy. 

Health and Safety 

Hazards associated with existing activities in the project area include occupational hazards from construction 

and development activity, increased traffic on roads, and low-probability events such as rangeland fires. 

Noise 

Artificial noise within the project area currently arises from on-going oil and gas operations, vehicle traffic, and 

jet over-flights at high altitudes. The wind common to this area plays an important role in directing artificiallygenerated noise and in the background noise present. 

ENVIRONMENTAL CONSEQUENCES 

Environmental Consequences- Proposed Action 

Geology/Paleontology 

No measurable impacts to geologic or paleontologic resources are predicted. 

Climate and Air Quality 

The construction and operation of the project would have an impact, though immeasurable, on air quality. The 

impacts would include the addition of dust and vehicle emissions during construction, and the release of 

various production gases. The airborne pollutant concentrations that would result from emissions at the 

location and along the access road would meet all Wyoming and federal ambient air quality standards. 

Likewise, the impact to air quality-related values (visibility, acid deposition, and soils/vegetation) would not be 

noticeable. 

Hay Reservoir CBNG Infill and Impoundments 11 Environmental Assessment 
Soils 

Approximately 126.9 acres of additional surface disturbance would directly impact soils. Soil productivity on 

disturbed areas would be reduced until reclamation is effectively complete. Erosion from the constructed 

facilities would be controlled by the operator in accordance with the MSUP. 

Water Resources 

The construction and use of the produced water impoundments creates the potential for contamination of 

shallow groundwater by produced water in storage. The use of a 45-mil liner, leak detection, and the relative 

impermeability of native soils substantially reduces the risk of groundwater contamination. 

Vegetation/Wetlands/Invasive Weeds 

Vegetation 

Construction of the water treatment facilities and pipeline would result in the short-term disturbance of 

approximately 126.9 acres of surface area. The range site carrying capacities in this area of the Cyclone Rim 

allotment are generally low (~15-20 acres/animal-unit month (AUM)), and it is predicted that less than 

approximately 8 AUM (~780 pounds, air-dry) of forage would be lost during construction operations. 

Invasive Weeds 

The disturbance associated with construction activities may result in the subsequent infestation of projectrelated disturbances by Halogeton, which is present on adjacent disturbances. Sheep use of the project area 

requires that Halogeton be strictly monitored and controlled. 

The Proponent will be required to control weed infestations arising from their operations; the identification and 

monitoring of weed populations (if present) would be necessary to determine if the Proposed Action results in 

the spread of invasive weeds. The Proponent has described how weeds would be controlled in the Integrated 

Pest Management Plan (See Appendix B) 

Wildlife/Fisheries 

Wildlife 

Migratory birds may be attracted to the open impoundments. The effectiveness of the bird deterrence system 

proposed is unknown. Should the bird deterrence system not prove to be totally effective, migratory birds may 

come into contact with the water. 

Salt toxicosis has been reported in ponds with sodium concentrations over 17,000 milligrams per liter (parts 

per million) (Windingstad et al. 1987). Ingestion of water containing high sodium levels can also pose chronic 

effects to aquatic birds, especially if a source of freshwater is not available nearby. Aquatic birds ingesting 

hypersaline water can be more susceptible to avian botulism (Cooch 1964). During cooler temperatures, 

sodium in the hypersaline water can crystallize on the feathers of birds landing in these waterbodies. The 

sodium crystals destroy the feathers' thermoregulatory and buoyancy functions causing the bird to die of 

hypothermia or drowning. Birds preening the salt crystals off their feathers can ingest the salt. Ingestion of as 

little as 4 g of salt crystals (NaCl) could be lethal for waterfowl. Sodium intoxication can cause neurological 

impairment resulting in the bird's inability to hold its head upright (Meteyer et al. 1997). The bird's head will 

droop into the water and cause it to drown. 

Construction activities will result in the temporary displacement of small mammals and other animals that may 

be present. 

No sensitive species are known to occupy the project area, and no impacts to sensitive species are foreseen if 

bird deterrence is effective. 

Hay Reservoir CBNG Infill and Impoundments 12 Environmental Assessment 
Recreation and Visual Resources 

This project is not anticipated to directly affect recreation use in the vicinity. Visual impacts would be 

minimized by painting above ground facilities, re-contouring during intermediate and final reclamation, and 

revegetation of disturbances. 

The reclaimed impoundments are designed with a mounded surface, to shed water away from the 

sequestered salt cake. These mounds will be apparent for perpetuity in a landscape dominated by flat terrain 

with small dune complexes. 

Cultural Resources 

No NRHP-eligible resources were found to be present where surface-disturbing activities are proposed, and so 

no impacts to cultural resources are expected as a result of construction. 

If any cultural artifacts or materials are located during project construction activities, work will stop and the 

Authorized Officer of the BLM will be notified. 

Socioeconomics 

The activity associated with the Proposed Action would result in additional wage-earning revenue for workers 

participating in development activities, and potentially additional royalties, taxes, and other benefits to Federal, 

State, and local governments. 

Health and Safety 

There would be some increased risk caused by the Proposed Action. Risks include higher vehicle accident 

potential due to increased traffic, as well as the normal hazards to industry workers from construction 

operations. 

Hazardous Substances/Wastes 

The Proponent has indicated in their POD application that hazardous substances will be used in project 

operations. The term "hazardous materials" as used here means: 1) any substance, pollutant, or contaminant 

(regardless of quantity) listed as hazardous under the Comprehensive Environmental Response, 

Compensation, and Liability Act (CERCLA) of 1980, as amended, 42 U.S.C. 9601 et seq., and the regulations 

issued under CERCLA; 2) any hazardous waste as defined in the Resource Conservation and Recovery Act 

(RCRA) of 1976, as amended; and 3) any nuclear or nuclear byproduct as defined by the Atomic Energy Act of 

1954, as amended, 42 U.D.C. 2011 et seq. 

The Proponent will be required to provide a contingency plan to the RFO to address accidental releases of 

hazardous substances, produced water, and/or hydrocarbons. 

Impacts to soils, surface and groundwater resources, wildlife, vegetation, and human health could result from 

the accidental release of hazardous materials. Since the project operation would be designed to comply with 

all applicable federal and state laws concerning hazardous materials, no impacts are anticipated. 

The waste salt left buried for perpetuity in the sequestered salt cakes is not expected to be released to the 

environment in the near future (five years from the end of the project). The integrity of the liners sealing the 

salt cake over the long term (i.e., many decades) is unknown. Should the liners’ integrity be compromised 

while the leak detection system is being monitored (during production and up to five years post-abandonment), 

the release should be detected. A repair of the liner or mitigation of the release could then be implemented. 

In addition, this area is subject to irregular and intermittent inundation. Should the salt be released from the 

liner, salts could slowly migrate upward, affecting vegetation by percolating into the root zones of plants 

Hay Reservoir CBNG Infill and Impoundments 13 Environmental Assessment 
present and resulting in salt-kill. As well, the leachate from the salt cake (if the liner is not effective forever) 

could slowly migrate to shallow groundwater, causing contamination of the ground water. 

The abandonment of approximately 53,000 yd3 of salt buried on public lands will potentially limit future uses of 

the land where the impoundments are located. The reclaimed impoundments are designed with a mounded 

surface, to shed water away from the sequestered salt cake. These mounds will be apparent for perpetuity. 

Noise 

The Proposed Action would increase noise levels in the immediate area during construction and water 

treatment operations. Construction activities and associated increased noise levels would be temporary, 

lasting as long as the construction activities were ongoing. At the treatment facility, operations noise would 

occur for the duration of operations. 

EPA has established a level of 55 dBA as a guideline for acceptable environmental noise. A noise level of 60 

dBA is generated between two people engaged in normal conversation standing five feet apart. Anticipated 

background noise levels in rural areas is anticipated to be approximately 40 dBA. Given that the project 

vicinity is subject to frequent winds, the natural noise levels in the project area may approximate 50 dBA 

during the daylight hours. Wind typically adds 5 to 10 dBA. Damage to the unprotected human ear can occur 

at noise levels of 115 dBA and above. The 55 dBA EPA standard represents very low noise levels and 

indicates the level below which no environmental effects could reasonably be expected. 

Based on an average noise level of 85 dBA measured at 50 feet from a typical construction site, the expected 

noise levels would be 85 dBA at 50 feet, 65 dBA at 100 feet, 59 dBA at 500 feet, 55 dBA at 1,500 feet, and 53 

dBA at 2,000 feet from the construction equipment. Therefore, an area of somewhat less than 288 acres 

around the project site would temporarily experience noise levels in excess of the EPA standard. The area 

around the project location would experience temporary noise levels in excess of those associated with normal 

human conversation. The absence of any residence or human receptor likely to experience extended noise 

levels associated with this development under the Proposed Action limits potential impacts due to temporary 

and intermittent increases in noise levels for the duration of drilling and construction activity. 

Environmental Consequences- No Action Alternative 

Under the No Action alternative, the Proposed Action would not be authorized. As such, no additional direct or 

indirect impacts to human health and the environment would occur. On-going natural gas development would 

continue to occur, and future actions would be considered as submitted by proponents in the project area. 

Environmental Consequences: Cumulative Impacts 

Cumulative impacts are those impacts to the environment resulting from incremental impacts of an action 

when added to past, present, and reasonably foreseeable future actions. The Cumulative Impacts 

Assessment Area (CIAA) for the Proposed Action and alternatives is primarily the HUC-12 watershed inclusive 

of the project. Although the domain used for a CIAA typically varies by resource or jurisdictional boundary, the 

predicted impacts from the Proposed Action and alternative actions are expected to be fairly local in scope. In 

addition, where impacts are expected to be un-measurable, cumulative impacts analysis may serve to only 

document existing impacts within a CIAA. As a result, the CIAA for this section of the impacts analysis is 

limited to the affected HUC-12 watershed. 

New surface disturbance arising from construction operations would be located, in all alternatives, within the 

North Red Desert Basin HUC-12 watershed. This watershed is equal to 84,701 acres in size. 

Cumulative Impacts- Existing Setting 

Within the CIAA, primary existing and reasonably foreseeable activities include oil and gas development, 

livestock production, and hunting and other recreation activities. There is a single public road within the 

project area. Primary landscape-scale perturbations have arisen from oil and gas development activities. 

Hay Reservoir CBNG Infill and Impoundments 14 Environmental Assessment 
There are 59 wells producing, shut-in, or in the process of being drilled within the Hydrologic Unit Code (HUC) 

12-level watershed (North Red Desert Basin) in which the project is located (Figure 4). There are, in addition, 

26 approved APD’s (not yet drilled) on file at the Wyoming Oil and Gas Conservation Commission as of 

September 2006. In total, then, there are 85 existing and reasonably foreseeable APDs in the watershed. 

In a 2005 review of surface disturbance within the RFO jurisdiction, the average per-well disturbance area for 

natural gas wells (well pad and access road) was found to be 7.0 acres. This does not account for pipelines, 

compression facilities, and other actions related to natural gas development. In other project areas, these 

ancillary facilities increased the average per-well disturbance by a proportion of approximately 25-30%. So, 

for the purposes of this analysis, and since actual disturbance within the CIAA is unknown, an assumption is 

made that per-well disturbance is equal to 9.0 acres (7.0 acres [pad and road] plus 2.0 acres [pipelines, 

ancillary facilities]). 

Using an assumption of 9.0 acres of disturbance per well, the 85 existing and reasonably foreseeable wells 

would result in a total cumulative oil and gas development disturbance (short-term) of 765.0 acres within the 

watershed. This equals approximately 0.9% of the 84,701-acre watershed area. Undoubtedly, some unknown 

proportion of the existing wells have had reclamation initiated or even successfully completed for production 

operations. Likewise, some of the plugged and abandoned wells within the CIAA may not have been 

completely and/or successfully reclaimed. 

Cumulative Impacts- Proposed Action 

In total, the approval of this project would add approximately 126.9 acres of construction-related surface 

disturbance to the area. This represents approximately a 0.2% increase in extant surface disturbance within 

the CIAA, and corresponding .changes in forage availability and soil productivity. 

Incremental increases in measurable impacts to soils, vegetation, invasive weed infestations, terrestrial 

wildlife, recreation, and noise are expected, but would be small. 

Cumulative Impacts- No Action Alternative 

Under this alternative, no additional impacts would be created; existing development and activities would 

remain, and future activities from oil and gas development are likely to occur. 

Consultation and Coordination 

The RFO has consulted, formally or informally, with the following organizations or agencies: 

• Pinnacle Gas Resources, Inc. (Sheridan, Wyoming): proponent 

• Pearl Field Services (Sheridan, Wyoming): proponent’s permit agent 

• U.S. Fish and Wildlife Service (Rawlins, Woming [Pilot Office Representative]): Federal agency 

• State Historic Preservation Office (Cheyenne, Wyoming): regulatory agency 

The BLM-RFO Interdisciplinary Team (IDT) prepared this EA, conducted field reviews and data gathering, and 

consulted with the above entities. 

• Travis Bargsten, Natural Resource Specialist, Project Lead 

• David Simons, Environmental Planner 

• Andy Stone, Hydrologist 

• Mike Calton, Rangeland Management Specialist 

• Hilaire Peck, Engineer 

• Heather Nino, Realty Specialist 

• Paul Rau, Recreation Planner 

• Heath Cline, Biologist 

• Bonni Bruce, Archaeologist 

Hay Reservoir CBNG Infill and Impoundments 15 Environmental Assessment 
• Mark Newman, Geologist 

• Susan Foley, Soil Scientist 

• Jon Dull, Petroleum Engineer 

Hay Reservoir CBNG Infill and Impoundments 16 Environmental Assessment 
Hay Reservoir CBNG Infill and Impoundments 17 Environmental Assessment
REFERENCES 

Cooch, F. G. 1964. A preliminary study of the survival value of a functional salt gland in prairie Anatidae. Auk 

81:380-393 

Fisk, E.P., 1967, Groundwater geology and hydrology of the Great Divide and Washakie basins south central 

Wyoming: Los Angeles, University of Southern California, unpublished maters thesis, 132 p. 

Meteyer CU, Dubielzig RR, Dein FJ, Baeten LA, Moore MK, Jehl JR Jr and K Wesenberg. 1997. Sodium 

toxicity and pathology associated with exposure of waterfowl to hypersaline playa lakes of southeast 

New Mexico. J. Vet. Diagn. Invest. 9: 269-280 

Welder, G.E., 1968, Ground-water reconnaissance of the Green River Basin southwestern Wyoming: U.S. 

Geological Survey Hydrologic Investigations Atlas HA-290, 2 sheets; accompanying text, 5 p. 

Welder G.E., and McGreevy, L.J., 1966, Ground-water reconnaissance of the Great Divide and Washakie 

Basins and some adjacent areas, southwestern Wyoming: U.S. Geological Survey Hydrologic 

Investigations Atlas HA-219, 3 sheets; accompanying text, 10 p. 

Windingstad, R.M. et al. 1987. Salt toxicosis in waterfowl in North Dakota. Jour. Wildlife Diseases 23(3):443­

446 

WOGCC, 2006. GIS Data for State APDs, Carbon County, Wyoming. 

WSEO, 2007. Ground and Surface Water Appropriations Data (obtained from WSEO website: 

http://seo.state.wy.us/wrdb/index.aspx). 

Hay Reservoir CBNG Infill and Impoundments 18 Environmental Assessment 
APPENDIX A
Pinnacle Gas Resources. Inc.


SweetwaterSouth Federal POD


Sweetwater Countyo Wyoming


Plan of Development (POD) - Interim Coalbed Methane Wells 

The Pinnacle Gas Resources, Inc. (Pinnacle)Srveetwater South Coalbed Methane Federal Plan of 

Development Project is located in Sweetwater County, Wyoming. This POD includes portionsof 

Sections 26 and 35 in Township 23 North, Range 97 West. 

The Sweetwater South Federal POD development proposalconsists of 8 wells at 8 locations with 

attendantdevelopmentsand facilities as shown on the Project Map (seeProject Map in Section 

5). These 8 wells, identified in Appendix 3.1 Proposed Well List, are coalbed methane (CBNG) 

exploration/developmentwells. The listed wells and corresponding leases are located within the 

Sweetwater South Coalbed Methane Federal Plan of Development Project area. Drill site 

locations will be on approved 80-acre spacing, although in the future, Pinnacle may find it 

necessaryto increasethatto 40-acre spacing. 

1. 	 ESTIMATEDIMPORTANTGEOLOGICALMARI(ERS 

Formation Depth(feet) 

Fort Union 1400 

BigRed 3800 

Pleasesee Table I-2: Proposed Well List - Drilling Dara in Appendix 3.1 Proposed Well 

,rsl for target coal seam for each well. 

2.	 ESTIMATED DEPTII OFANTICIPATED WATER ORGAS 

Shallow sands from surface to the top of the Fort Union coals may contain fresh water. 

Any shallow waterzones encountered will be adequately protectedand reported. All 

potentially productive hydrocarbonzoneswill be cemented off.. 

3.	 PRESSI]RE CONTROL PROGRAM 

1.0	 TYPE: 10" 2mmHydril with choke, manifold, and 9"-10" casing head. There will be a 

fiIl line above the uppermost preventer. 

2.0	 PRESSIIRE RATING: 2000 psiBOP,2000psi choke manifold and accumulator, and a 

2000psicasing head. 

3.0	 TESTING PROCEDURE: Hydril preventerand related control equiprient (choke 

manifold, Kelly cocks, etc.) will be pressure-testedto 100% of their ratedworki4g 

pressurefor 10 minutes. Thecasing string will be tested to'10o/o of its intemalyidld 

strensth. 

MDP deficiencies 012407.doc Page 1 of6	 24 Januaty 2007 
SweetwaterSouth Federal POD 

?innacle Gas Resources, Inc. Rev Date 

MASTERDRILLINGPLAN- Section3 

A 

B 

l2-Sep-06 

24- Jan-07 

Master Drillins Plan c 

BOPs will be tested when installed, every 30 days, or when any seal is broken(per 

OnshoreOrder No. 2). The fill line will be 2", the kill line will be2,,,and the choke relief 

linewill be 3". BOP drillsand tests will be recorded in the driller,s log. 

The choke manifold will be located outside the sub-structureor hydraulic BOp closing 

unit will be located atleast 25 feet from the well head. Exact locationsand confisurations 

will dependon the particularig contractedto drill each hole. 

The choke line that connectsthe BOP stack to the choke manifold will be as straisht as 

possibleand tums, if required, will have a targeted T-block if the required BOp stick is 

three thousand poundsor greater.A flare line will be installed after the choke manifold 

and will extend a minimum of 125 feet from the center ofthe drill hole to the pit. 

4. CASINGANDCEMENTINGPROGRAM 

1.0 CasingProgram 

The wells will be drilled to an estimatedtoraldepth of less than 4800' (TMD). Surface 

casing on all Pinnacle GasResources,Inc. wells will always be at least l0% of the total 

depthofthe well. Pinnacle Gas Resources, Inc. will cement all surface casingswith Type 

III cementwith retums of the cement slurryto surface. 

TABLE 4-1 

HOLE SIZE CASING 

DEPTII (inches) SIZE (inches) GRADf, WT./FT. JOINT 

12% 9 5/8 J55 36# ST&C 

TD 8 3/4 7 J-5s z.t# ST&C/LT&C 

Casing strings will be pressuretestedto 0.22 psilft or 1500 psi, whicheveris 

greater.Minimum design factorsfor tension, collapse, andburst are: 

o Tension:1.6 

o Collapse: 1.125 

o Burst:1.0 

2,0 Cementing Program 

1.0.0 SurfacePipe 

Surfacepipewill be cemented back to the surface, with l00o4 excess,usingCBM Lite 

cementand a2%o calcium chloride accelerator with additives. 

2.0.0 ProductionCasing 

Productioncasing will be cemented back to surface using lite cement 
 andthe appropriate 

numberof sacks ofClass G (tail).


A sufficient amount of cementwill be used, in all cases, to ensure that all potentially 

MDPdeficrencies 0I2407 doc Page 2 of6 24 Janu?.ly 2007
Sweetwater South Federal POD 

Pinnacle Gas Resources. Inc. ReY Date 

l2-Sep-06 

MASTER DRILLING PLAN - Section3 B 24- Jan-07 

Master Drillins Plan c 

productive hydrocarbon zones are cemented off. Bond logs will be run in the event of lost 

circu lation . 

3.0.0 	W'OCTime 

WOC time is a nir imurn of 12 hours until cement is stabilized. 

4.0.0 	 Centralizers 

Three(3)on bottom three(3)jts of surface pipe (I on each jt.); three(3)onbottom of 

long string; one(1)in surface forproductioncasing. 

5. 	 MT]DPROGRAM 

TABLE 5-1 

FI]NNEL FLT]ID 

INTERVAL TYPE WEIGHT VISCOSITY LOSS 

O-TD Native/surfactantg/LCM*/bentonite 9.34 35-40 seconds NC 

+Drillingmud would consist of fresh water, native clays, and bentonite gel.As hole 

conditionsdictate, small amounts of polymer additives,potassiumchloride salts, 

surfactants,and loss-circulation materials will be added for hole cleaning and 

stabilization. 

6. 	 WATERSOURCE 

Waterfor the drilling programwill be pulledfrom a privatewater well in the NENE 

SectionI l, TR45, T24N, R97W near Hay Reservoir and from SWS State 0lBR-36-23­

97.Water analysis reports fiom both wells can be found in Appendix 6.2. 

7. 	 EVALUATIONPROGRAM 

Ray(TD-surface), 

2,0 DSTs:None anticipated 

1.0 	 Logs: Dual Induction/Gamma Density(optional) 

3.0 	 Cores:None anticipated 

4.0 	 Samples:10' samples to bottom of producingcasing:1' samples across coal. 

Evaluationprogrammaychangeat the discretion of the well site supervisor. 

8.	 ABNORMAL CONDITIONS 

1.0	 None anticipated during drilling and completion. 

2.0	 The surface sands and the Forl Union coal arepotentialzonesof lost circulation. 

MDP deficiencies 012407.doc Page 3 of6	 24 Jffiuary 2007 
Sweetwater South Federul POD 

PinnacleGasResources.Inc. Rev Date 

l2-Sep-06 

MASTER DRILLING PLAN - Section 3 B 24- Jan-07 

Master Drillins Plan c 

This will be alleviated by the use oflost circulation materials, as needed. 

3.0 	 Maximum anticipated bottom hole presswe equals 2078 psi. Maximum 

anticipatedsurfacepressurequals 0 psi. 

4.0 	 Piruracledoes not expecto encounter any H2S gasbasedon reports from previous 

drilling in the area at the same depth. 

9, 	 DRILLINGACTIVITY 

1.0 	 Anticipated Starting Date: BLM will be notified of spud date at least 24 hours 

in advance for each individual well. 

2.0 	 Drilling Days: Approximately 10 days 

3.0 	 Completion Days: Approximately 20 days 

4.0 	 Auxiliary EquipmentandAdditional Instructions: 

. A Kelly cock will be kept in the shing at all times. 

o 	 Eachtour, the mud system will be checked periodically. 

o 	 A stabbing valve will be kept on the derrick floor to be stabbed into the drill pipe 

wheneverthe Kelly is not in the shing.


. No bit float will be used.


10. 	 COMPLETION ACTIVITY/STIMI]LATION 

1.0 	 PerforateBig Red Coal: Six (6) shotsperfoot with 4" casing grur. 

2.0 	 Frac with proposedfrac program: 6000#perfoot with 20140 ffacsand. 

3.0 	 Tubing: 27/8" 155,6.4#. 

4.0 	 Drill site: As approved, will be of sufficient size to accommodate all completion 

activities. 

5.0 	 Gas Measurement: Pinnacle proposesand requests approval to use 2" meter 

tubesthat are constructed in accordance with API 143/AGA 2000 Report #3 and 

EFCs that comply with the standards in NTL 2004-1 at the well head. Pinnacle 

will also have a centralized measurementfacility at a custody transfer point 

plannedfor the northeast of Section 26, T23N, R97W. 

11. 	 NOTIFICATION 

:;::i' 

Specific contacts andphonenumbersarelocated in Appendix 4.8 Contact Information. 

MDP deficiencies 012407.doc Page 4 of6	 24 JaNary 200'7 
Sweetwater South Federal POD 

Pinnacle Gas Resources. Inc. Rev Date 

l2-Sep-06 

MASTERDRILLINGPLAN- Section3 B 24- Ian-07 

MasterDrilling Plan c 

All wells (drilling, producing, suspended, or abandoned) shall be identified in accordance 

with 43 CFR 3162.6 which requiresthe name ofthe operator, lease number, well number, 

and location of the well. In accordance with Onshore Oil & Gas Order No.l, all wells 

will be reported on MMS from 3160-6, Monthly Report of Operationsand Production 

(form #3 160-6), starting with the month in which operations commenced and 

continuingeach month until thewell is physically plugged and abandoned. 

All undesirablevents(fires,accidents,blowouts,spills, discharges) as specified in NTL3A will be reported to the Rawlins Field Office. Major events will be reported verbally 

within twenty-four(24) hoursand will be followed with a written report within fifteen 

(15)days.'Otherthan Major Events' will be reported in writing within fifteen (15)days. 'Minor Events' will be reported on the Monthly Report of Operations and Production 

(Form#3160-6). 

No well abandonment operationswill be commenced withoutthe prior approvalof the 

Authorized Officer (AO). In the case of newly-drilled dry holes or failures, and in 

emergencysituations,oral approval will be obtained from the Area Petroleum Engineer. 

A Notice of Intent to Abandon (Form#3 160-5) will be filed with the AO within fifteen 

(15)days following thegrantingoforal approval to plugand abandon. Uponcompletion 

of approval plugging,a regulation marker will be erected in accordance with 43 CFR 

3 162.6. The following information will be permanentlyplacedon the marker with a plate 

or cap, or beaded-onwith a welding torch: Operator Name, Well Name and Number, 

Location by Quarter/Quarter, Section, Township, Range, and Federal LeaseNumber.

A Subsequent Reportof Abandonment (Form#3160-5)will be submitted within thirty 

(30)days following the actual pluggingofthe well bore. This repoft will indicate where 

plugswere placedandthe current status of surface restoration operations.If surface 

restorationhas not been completed at that time, a follow-up report on form 3160-5 will be 

filed when all surfacerestorationwork has been completed and the location is considered 

readyfor final inspection.Pursuantto NTL-4A, lessees and operators are authorized to 

venVflaregasduring initial well evaluation tests, not exceeding a periodof thirty (30) 

days or the productionoffifty (50)MMCF ofgas, whichever occursfirst.An application 

must be filed with the AO, and approval received, for any venting/flaring of gasbeyond 

the initial thirty (30)days or otherwise authorizedtestperiod. 

Not later than the 5s businessday after any well begins productionon whichroyalty is 

due anyvhere on a lease site or allocated to a lease site, or resumes productionin the case 

ofa well which has been off productionfor more than ninety (90)days, the operator shall 

notii/ the AO by letteror Sundry Notice ofthe date onwhichsuchproductionhas begun 

or resumed. 

The notification shallprovide,as a minimum, the following information: 

r Operalorname.address. telephonenumber 

. WelJnameand number 

. Well location, i.e. quarter/quarter, applicable Dependent ResurveyLot Number, 

township,range, and principalmeridian. 

MDP deficiencies 012407.doc Page 5 of6 24 January 2007 
Sweetwater Soath Federal POD 

Pinnacle Gas Resources. Inc. Rev Date 

MASTERDRILLINGPLAN- Section3 

l2-Sep-06 

24- Ian-07 

MasterDrilline Plan c 

o Datewell was placedinto production status 

. Thenatureof the well's production, i.e. crude oil, casinghead gas,naturalgas, 

and entrained liquid hydrocarbons 

e The OCS, Federal, or Indian lease prefx and number on which the well is 

located.Otherwise,the non-Federal or non-Indian land category,i.e. state or 

private. 

As per43 CFR 3162.7-4(d), \'r'ithinsixry(60)days following constructionofa new rank 

battery, a site facility diagramof the battery showing actual conditions andpipingmust 

be submitted to the AO. Facility diagramsshallbe filed within sixty (60) days after 

existingfacilitiesare modified. 

Pursuantto Onshore Oil & Gas Order No.l,lessees andoperatorshavethe responsibility 

to see that their exploration,development,production,and construction operationsare 

conductedin such a mannerwhichconformswith applicable Federallaws and regulations 

ard with State and local laws and regulationsto the extent that such state and local laws 

an regulations are applicable to operationson Federal and Indian lands. 

J,; it 

MDP deficiencies 01240?.doc Page6 of6 24lannuyt0j1.' 
CLIENT: PINNACLE645 RESDURCES, INC. IDSUtr 

PROJECTNAME: SEUTH SVEETVATER PRDJECT REV. 

PROJECTNo.: 40-0034 REV. DATE 2 3-JAN -0 7 

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APPENDIX B 
SURFACEUSEPLAN 

PinnacleGasResources,Inc.


SweetwaterSouthFederalPOD


SweetwaterGounty,Wyoming


Plan of Development (POD) - Interim Coalbed Methane Wells 

The Pinnacle Gas Resources, Inc. Sweetwater South Coalbed Methane Federal Plan of 

DevelopmentProjectis locatedin SweetwaterCounty,Wyoming. This POD includesSections26 

and 35 oft Township 23N, Range Ke 97W. y/w, There are are gigh! elgnr (8) t6t t9d!ry1 anoJf lownsntpzJr\. I nere reoerarwells y9!pIgpj!94 proposeo ln mls proJecr 1! IlpIfojgct 

on ergnrl ol olnerenl welr ruuatruns 

OnemayaccesstheSweetwalerSouthFederalPODexitingInterstate80 at SweetwaterCounty 

Road67 (TiptonRoad),approximately56 mileswestof Rawlins,Wyoming.Travel22.5miles 

northandthentravelwest2.75milesto thenortheastcornerof Section35.TheSweetwaterSouth 

FederalPOD developmentproposal consistsof 8 wells at 8 locationswith attendant 

developmentsandfacilitiesasshownontheProjectMap (seeProjectMap in Section5). These 

eight(8) wells, identifiedin Appendix3.1 Proposedll'ell List, arecoalbedmethane(CBNG) 

exploration/development wells. Thelistedwellsandcorrespondingleasesarelocatedwithin the 

SweetwaterSouthCoalbedMethaneFederalPlanofDevelopmentProjectarea. 

Theprimarytargetedreservoirin theSweetwaterSouthFederalareais coalbedmethane(CBNG) 

from the coal seamswithin the Big Red zone.All unproductivewells will be pluggedand 

abandonedassoonaspracticalaftertheconclusionof productiontesting.Productivewellsmay 

beshut-intemporarilyfor gaspipelineconnectionsand/orSundryNoticesby theBureauofland 

Management(BLM) for productionactivitiesandfacilities. 

1. EXISTINGROADS 

The existing roadswill be maintainedin the sameor better condition as existedprior to 

the start of operations. Maintenanceof existing roadsusedto accessthe drill locations 

will continueuntil final abandonmentandreclamationof the well locationsoccurs.@ 

Excessiveruttinsor othersurfacedisturbanceswill be avoided. 

Operationswill be suspendedtemporarilyduring adverseweatherconditions 

@ whenaccessroutesarewet, soft,or partiallyfrozen. 

Referto theProjectMap,locatedin Section5 ofthis PODsubmission,for thelocationof 

thewell,accessroute,andfor thelocationofexistingroadsnearby. 

2. PROPOSEDACCESSROADS 

Location, designand constructionof all new roadsin the SweetwaterSouthPOD project 

area will be constructed in accordancewith road guidelines contained in the joint 

BLMruSFS publication: Surface Operating Standardsfor Oil and Gas Exploration cmd, 

4. SurfaceUsePlandefici€ncies011607 PageI of20 Jl,iJ ) ) )mfrrar,lary2oo1 _ a LvUl 

.),,':., 
SWEETWATER SOUTE FEDERAL POD 

PinnacleGasResources,Inc. Rev Date 

I I -Sept-2006 

SUMACE USE PLAN _ Section4 B 2l- Oct-2006 

Surface Use Plan c 26-oct-2006 

D 11-Dec-2006 

Development,Third Edition and/or BLM Manual Section 9113 conceming road 

constructionstandardson projectssubjecto federaljurisdiction. It is the responsibility 

ofPinnacle Gas Resources, Inc., or its representative, to determine the appropriate design 

classificationfor the roads in the Sweetwater SouthPOD. Any area that may exceed the 

BLM Gold Book standards will be designed by a licensedprofessionalengineer for 

constructionpurposes. Plans for construction of roads requiring Engineering Road 

Design Plans will be submitted to the BLM for review and acceptance by the BLM civil 

engineer. This review will ensure the design plansmeet or exceed BLM minimum 

standardsaspresentedin the guidebooks. 

Improvedcrowned and ditched roads will provideaccessto the individual well sites per


th; BLM's request. Please see Appendix 4.4 fo. M@EEI road design template.


Intermitt€nt spot upgrades, by applying scoria or gravelto the tracks, may be necessary in


unsafe areas and are depicted on the projectmap"4l44l4qg!t.l4q!_gg9gqlgtt*


will also be crownedand ditched roads.


The access roads will follow 

14 to 16 feet wide 

equipmentand vehicles will be confined to this travel corridor and other areas specificin 

the planof development. All disturbances related to the access routes will be confined 

within the travel corridor. Where feasible, gasand water pipelinesandelectrical cables 

will be installed in disturbance corridors. 

Whereneeded,a Pinnacle Gas Resources, Inc. representative will conduct a'?lans in

Hand" review with contractors to review the access routes to well locations and 

directionalmarkerswill be temporarily placedto mark access routes. The centerline and 

locationsof the roads, pipelinesandstructureswill be staked, color-codedand cleady 

marked. All markerswill be removed as soon as they are no longer needed. 

Altemateroutes of ingress and egress were inspected for the Sweetwater Southproject 

well sites. The chosen accessroutes avoid umecessaryresourceor wildlife impacts and 

allow safe, year-round,environmentallysound access. Properplanninghas resulted in 

minimalnumber of roads and special attentionwasgivento meeting or exceeding the 

minimumvertical and horizontal curves. Proper signage will be installed to ensuresafe 

travel alons the routes that do not meet BLM specifications. 

After wells are completed and equipment is installed, travel to wells will generallybe 

limitedto one visit every other day. A light truck or utility vehicles would be used to 

checkon operations, read meters, and providelight service during the life of the project. 

Well service trips may be rescheduled or postponedduringperiodsofwet weather when 

vehicle traffic could cause fr 

2,1 The proposedresourceroads will adhere to the following specifications: 

2.1.1 Width 

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SWEETWATER SOUTE FEDERAL POD 

Pinnacle Gas Resources. Inc. Rev Date 

I I -Sept-2006 

SIIRI'ACE USE PLAN - Section4	 B 21- Oct-2006 

Surface Use Plan 26-Qct-2006 

D I l-Dec-2006 

Short term ROW disturbance will be uo to 80 feet: ROW width will be 

ffir,i-"tayQ. 

2.7.2 	 Constraction Standards 

These resource access roads will be designedand constructed to meet the standardqofthe 

anticipated traffic flow and all-weather requirements. Construction will include ditching, 

draining,graveling,crowning,and capping the roadbed as necessary to provide a wellconstructed and safe roadway. The BLM Authorized Officer will approve any changes, 

which may become necessary during construction. 

If soils along the primary access road routes are dry during construction, water will be 

appliedto the road surface to facilitate soil compaction and minimize soil loss as a result 

ofwind 	erosion. Pinnacle Gas Resources. Inc. may utilize dust abatement measuressuch 

or chemical treatment of travel 

To minimize surface disturbance, only equipment that is appropriate to the scope and 

scale of the required work will be used. For resource roads that require no dirt worlq 

brush will be material 

The roads depicted on the project map will serve as corridors for the installation of 

pipelines for a majority ofthe POD. This infrastructure has been clearly labeled on the 

projectmap. 

2.2	 Engineered Road Design Staking 

The minimum required staking for the pre-approvalonsite shall be 100 foot centerline 

staking. The minimum staking for engineered sections of spot upgrade sections requiring 

cut and fill shall be the following: 

Cut/Fill(ft)	 Minimum Staking Required 

0-2	 CenterlineStakine on 100 foot intervals 

2-5 Centerline Staking on 50 foot Intervals Showing Limits 

of Disturbance 

>5	 Slope Staking on 50 foot intervals 

2,2.1 	 Stakingwill be completed on 100-foot intervals on tangent sections for through-cuts 

and/orfills less than five (5) feet. Staking will be completed on 50-foot intervals for 

horizontal and vertical curves, balanced tangent sections, and road sections requiring 

more than five (5) feet ofcut and/or fill. 

! 

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SIYEETIYATER SOUTH FEDERAL POD 

PinnacleGasResources.Inc. Rev Date 

I l-Sepf2006 

SURFACE USE PLAN _ Section4 B 21- Oct-2006 

Surtace Use Plan c 26-Oct-2006 

2.3 

2.4 

2.5 

D l1-Dec-2006 

staked, color-coded and clearly marked for all new roads, including those designed and 

constructedon steep, broken or mountainous terrain. All roads will have, at a minimum, 

the centerline staked at a maximum of 300-foot stations or within line of sight. The 

locationfor all structures including culveds, cattleguards, and low water crossings, etc., 

will be staked. 

Routes were selected that avoid unnecessary resourceimpacts and allow for safe, yearround,and environmentally soundaccess. 

Turnouts 

There are notumoutsplamed for this project. 

Drainage Design 

as necessary 

and accommodate traflic. These roads will be constructedrvith rvater 

The access roads will be upgraded and maintained to preventsoilerosiot.t 

all-weatlrer 

tumoutsinstalledas necessary toprovideforproperdrainagealongthe access road route. 

Every eflbrt will be made to retain natural vegetation on steep slopes around construction 

areasto mitigateerosion. 

Culverts,Cuts and Fills 

Culvertswill be a minimum of 18" and will be installed on/along all access roads as 

necessaryor required by the Authorized Officer. The inlet and outlet will be set flush 

with existing groundand lined up in thecenter ofthe draw. The bottom ofthe pipewill 

be bedded on good material before backfilling. Backfill with unfrozen material and no 

rockslarger than two (2) inches in diameter. Pinnacle shall furnish and install culverts of 

thegauge,diameters,lengths, and materials required in BLM Manual Section 9l 13 or as 

approvedby the BLM Authorized Officer. Culverts shall be free from corrosion, dents, or 

other deleterious conditions. Culverts shall be placedon channel bottoms on firm, 

uniformbeds that have been shaped to accept thern and will be aligned to minimize 

corrosion.Backfill shall be thoroughly compacted.No equipment shall be routed over a 

culvert until backfill depth is adequateto protect the culverts. Care shall be taken to 

thoroughlycompact the backfill under the haunches of the culvert. Comrgated sections 

will be wacker packedand the backfill shall be brought up evenly in 6" layers on both 

sides of the culvert. Each layer will be wacker packed.Please see Section 5 Project 

Maps. 

Each culvefi. road design, etc.. is identified by a number, which refers to the 

ouafter/o uarter it lies in. 

.,1.SurfaceUsePlan dcficiencies 0l 1607 Page 4 01 20 18 January 2007 
SWEETWATER SOUTE FEDERAL POD 

Pinnacle Gas Resourc€s.Inc. Rev Date 

11-Sept-2006 

SUMACE USE PLAN _ Section4 B 2l- Oct-2006


SurfaceUse Plan C 26-Oct-2006


D I l-Dec-2006 

The following table depicts the methodology of naming the culverts: 

4 3 2 ,l 

NW/NW NE/NW Nw/NE NE/NE 

5 6 7 8 

Sw/NW SE/NW SW/NE SE/NE 

12 11 {0 9 

NW/SW NE/SW Nw/SE NE/SE 

13 14 15 16 

swsw sE/sw swsE SE/SE 

For example, a culvert located in the NE/SE of Section I 1 will be named the 9-1 1. If two 

or more culverts arepresentin the same quarter/quarter,then an alphabetical suffix will 

be added to the culvert name. The well names andlow water crossinqs arenamed in a 

similar manner. 

2.6	 Surfacing Material 

Thepermittedgravel 

source is owned by Harmel Jolley and is located in Section 27, Township 24 North, 

Range 97 West. These surfacing materials will be installed at the discretion of the 

AuthorizedOfficer. 

2.7	 Gates,Cattle guardsor Fence Cuts -

2.8	 Road Maintenance - primaryaccessroad surface(s) and shoulders will be kept in a safe 

and useable condition and will be maintainedin accordance with the original construction 

standards.All drainage ditchesand culverts will be kept clear and free flowing, and will 

alsobe maintained in accordance with the original construction standards.The access 

roadright-of-way will be kept free oftrash during all operations. 

2.9	 - or reconstructed 

Resources,Inc. will be built to the approved plans,and will comply with all other 

applicablerequirements,stipulations,Conditionsof Approval, and referencedstandards. 

The BLM Authorized Officer will approve any changes that may become necessary 

duringconstruction.Pinnacleis responsible for having a licensedprofessionalengineer 

certifr that the actual construction of the roads meets the design criteria and is 

Construction/QualityControl All roads constructed by Pinnacle Gas 

4. SurlaceUse Plan deficiencies 011607 Page 5 of20	 18 January 200? 

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SIYEETVATER SOATE FEDERAL POD 

Pinnacle Gas Resources, Inc. Rev Date 

I l-Sept2006 

SURFACE USE PLAN _ Section4	 B 21- Oct'2006 

SurfaceUse Plan	 c 26-Oct-2006 

D I l-Dec-2006 

constructedto BLM standards. During the construction phaseofthe project,an adequate 

level of inspection by an engineer or a qualifiedinspector should be available to certifu 

that the road was constructed as designed. 

2.'lO 	 Paleontological Resources - If any paleontologicalresourcesare discovered during 

construction,constructionwill ceaseand the Rawlins Field Manager will be notified 

immediately. 

&EHJ,o* Water Road Crossings - No low water road crossingsare proposedfor the 

SweetwaterSouth Federal POD. 

-

will be installed in disturbance corridorsto minimize surface disturbance and create less 

impacton the landscape. 

2,12 	 Disturbance Corridors Where feasible, gasandwaterpipelinesand electrical cables 

-

South Federal POD boundary. At a later date however,a compressor may be located at 

tJte1-26-23-97locations. Also, multiple generatorsmay be located at the I-35-23-97 

location. 

2,13 	 Compressor Site Access There will be no compressor facilities within the Sweetwater 

3.	 LOCATIONOF EXISTING WELLS 

A listing of permittedwater wells, and their locations, within one mile of the Sweetwater 

SouthCoalbed Methane Federal Plan of Development Project is shown in the Water 

ManagementPlan. This listing was obtained from the Wyoming State Engineer'sOffice 

(wsEo). 

Also shown on the Project Map are the locations of proposed,disposal, drilling, 

producing,shut-in,monitoring, injection, and abandonedoil and gaswells within one 

mile ofthe Sweetwater SouthCoalbedMethaneFederalPlan of Development project. 

4.	 LOCATIONOFEXISTINGAND/ORPROPOSEDFACILITIES 

4.1 	 ExistingFacilities 

-	 Tanl Batteties None klown 

-	 ProductionFacilities See Project Map 

-	 Oil gatheringLines None known 

-	 CasgatheringLines SeeProject Map 

4,2 	 ProposedFacilities 

4.2.1 	 Proihtction Facilities 

Production facilities on each individual well location will be placed on a well pad that 

will be built to the minimum size required to complete the work and at a maximum size 

of approximately 200'x250'. ffi 

4. Surfac€Use Plan deficiencies 0l1607 Page 6 of20	 l8 January 2007

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SWEETWATER SOUTH FEDENAL POD 

PinnocleGasRcsources. Inc. Rev Date 

1 I -Sept-2006 

SURFACE USE PLAN - Section4 B 2l- Oct-2006 

Surfuce Use Plan 26-Oct-2006 

D I l-Dec-2006 

Droductionfacilities for each 

individual well will consist of the wellhead assembly and a small stuctwe (enclosure)to 

be erected (placed)over the wellhead for security purposes.Pinnacle may elect to use 

pumpjacks or PC pumpsto pull theproducedwater. The wellhead will be approximately 

20'v20' n size but will be increased to 20'x40' if pumpjacks are used. Appendix 3.6 

Fignes & Diagrams of the Mast€r Drilling Plan shows a conceptual diagram of a drill 

rig site layout. 

For ease of gas measurementand to lessen tlte frequency of visits to the wellhead, 

Pinnacle Gas Resources, Inc. will install telemetry stations at each wellhead when 

possible(it may not be possibleif there is no radio signal at that looation). A pumperwill 

still be required to visit each well at least once a week but most of the down-hole 

informationwill be transmitted to a central location via tlte telemetry station. 

No Central Delivery Points (CDPs)for gas gathering/metering have been proposedfor 

this POD. It is anticipatedthat the gas will be measured at each wellhead location 

utilizing EFM processor gas metering devices. 

Constructionmaterials needed for installation of the productionfacilities will be obtained 

from tlre site; any additional materials needed, will be purchasedfrom a local supplier 

having a permittedsource of material in the area. 

4.2.2 CentralProcessing/MeteringFacilities 

There are no processingfacilities planned for tJre Sweetwater South Federal POD. 

Producedgas will free flow from the well site to a WGR reciprocating compressor 

northeast ofthe POD boundary. 

4.2.3 Water Gathering and Discharge 

Free water producedfrom each well will be transported from the wellhead via flow line 

to a permitted ir{ection well for disposal. Pinnacle is also proposing the use of offchannel ponds. Pearl Development Company has prepared a Permanent Water 

ManagementPlan(SeeWater Management Plan in Section 6 of the POD). 

J 

The outfall of each discharge will be lined with rock (rip-rap) or some other suitable 

materialin order to preventerosion. Enffained water, which is separated from the gas 

streamat each central productionfacility, will generallybe routed to the closest discharge 

point. 

4. Surface Use Plan deficienci€s 011607	 PaZe 7 of20 . 18 January 2007 

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SWEETWATER SOUTH FEDERAL POD 

Pinnacle Gas Resources, Inc. Rev Date 

I l-Sept-2006 

SURFACE USE PLAN- Section4 B 21- Oct-2006 

Swface Use Plan 26-Oct-2006 

D I l-Dec-2006 

Map"C" displaystheproposedwatergatheringsystemand identifies the discharge points 

for those wells proposedwithin the SweetwaterSouth Federal POD. 

4.2.4 GasGathering and Sales 

where any remaining(entrained)waterwill be 

separatedfrom the gasstreamvia a gas/waterseparator.Thegaswill then be compressed 

and transported via a gas pipeline system to a remote second stage compression facility 

andthen on to sales. Gas from each well will be metered electronically by an EFM 

systemand transported to the initial transportationrelated compressor sitevia a flow line. 

Thegas pipelines and accompanying electricalines(requiredfor supplying powerto the 

pumpsat each well bore) will be buried in adjacentrenches directly next to existing 

accessroads to the greatestextentpossibleto minimize surface disturbances within the 

field. Locator tape will be buried with underground facilities to aid future location. 

Map "A" shows the proposedlocationof the gas pipeline systemwithinthe Pinnacle Gas 

Resources, Inc.'s Sweetwater SouthFederal POD. 

4.2.5 Pipeline and Flow Line Right-of-Ways 

Grader use will be avoided whenever possiblewhen constructing or clearing individual 

pipelineROWs. Brush hogs will be used, if necessary, to remove sagebrush and other 

vegetationto groundlevel. Ditch Witchesor wheeled trenchers will be used whenever 

possibleto reduce surface disturbance. Each ROW will be less than 50 feet wide except 

in very rough topography where it may be necessary to construct a ROW wider than 50 

feetfor safety and reclamation purposes. 

Bladed materials will be replaced in the cleared route once construction is complete. 

Pipelineconstructionwill not blockor change the natural courseof any drainage. 

For the Sweetwater South Federal POD, all proposedundergroundfacilities will be 

installedin corridors whereverpo..ibl" @. 

When the trench is backfilled, the fill dirt will be wheel-packed (wherenecessary)and 

heaped to mitigate settling. Pipeline channel crossingswill be constructed so that the 

pipeis buried at least four (4)feet below the channel bottom. 

Map "O" shows the proposedlocationof pipeline/flow line ROW within the Sweetwater 

South Federal POD. 

4.2.6 Permanent Structures 

All permanent(on-sitefor six (6) months or longer) above-the-ground structures 

constructedor installedon the well location (includingpumpingunits,tank batteries, etc.) 

will be painted"Shale Green", color 5Y 4/2, of the "Standard EnvironmentColors" or 

anotherBLM approved color, except where the Occupational Safety and Health Act 

Rules and Regulationspecifr the use of special safety colors. 

4. SurfaceUse Plan deficiencies 011607 Pag€ 8 of20 
SWEETIYATER SOUTH FEDERAL POD 

PinnacleGasResourc€s.Inc. Rev Date 

I l-Sepr2006 

SURFACE USE PLAN Section4	 B 2l- Oct-2006 

SurfaceUse Plan	 c 26-Qct-2006 

D I 1-Dec-2006 

4,2.7 	 OverheadElectric(Electrical) 

Generators will be installed initially. Overhead electric is not proposeduntil 

approximately2009. The BLM will be notified with a sundry when placementdecisions 

are finalized. Overhead electric lines may be located so that they parallelexisting 

corridorsto distribute powerthroughoutthe field. 

4,2.8 	 Mitigation of Proposed Facilities on Federal Lands 

Pinnacle Gas Resources, Inc. will protectthe biological and hydrologic features of 

riparian areas, woody draw, wetland, and floodplains by locating all well pads, 

compressors, and other nonlinear facilities outside ofthese areas. 

Crossingsof wetland,/riparian areas by linear features, 	 such as pipelines, roads, and power

lines will be avoided to the extent practicable.Where crossings cannot be avoided, 

impacts will be minimized through use of the following measures: 

- Site-specificmitigationplanswill be developed during the APD, PODor Sundry 

Notice approval processfor all proposeddisturbanceto wetland/riparian areas. 

Crossings will be constructed perpendicularto wetland/riparian areas, where 

practical. 

- For powerlines,theminimum number ofpoles necessary to cross the areas will 

be used. 

Wetland areas will be disturbed only during dry conditions ifpossible. 

- No waste material will be deposited belowhigh waterlines in riparian areas, 

floodplains,or in natural drainage ways. 

- The lower edge of soil or other material stockpiles will be located outside the 

active floodplain. 

-	 Drilling mud pits will be located outside of riparian areas, wetlands, and 

floodplains, where practical. If this cannot be avoided, drill pit liners will be 

utilized. 

- Disturbed channels will bere-shapedto their approximate originalconfiguration 

or othergeomorphologicconfigurationandproperlystabilizedwhere applicable. 

- Reclamation of disturbed wetland/riparian areas will begin immediately after 

projectactivitiesare complete. 

PrairieDog colonies will be avoided whereverpossible.If any black-footed fenets are 

located,theUSFWS will be consulted. Absolutely nodisturbancewill be allowed within 

prairiedogcolonies inhabited by black-footed fenets. 

Moist soils near wetlands, streams,lakes, or springs in the projectareawill bepromptly 

re-vegetatedifconstruction activities impact the vegetation in these areas. Re-vegetation 

will be designedto avoid the establishment ofnoxious weeds. 

To mitigate the danger that West Nile Virus poses,Pinnacle Gas Resources, Inc. will 

4.SurfaceUsePlan deficiencies 011607 Page 9 of20	 18.lanuary2007 
SWEETWATER SOUTH FEDERAL POD 

Pinnacle Gas Resources. Inc. Rev Date 

I l-SeDt-2006 

SURIACE USE PLAN Section4	 B 2l- Oct-2006 

SurfaceUse Plan 26-Oct-2006 

D 11-Dec-2006 

implementa pestmanagementstrategy.Pinnacle Gas Resources, Inc. will coordinate its 

efforts with the recommendedproceduresof the Rawlins Weed and Pest Division. This 

will include placing environmentally safe, mosquito insecticide into each water 

containmentfacility within the Sweetwater South Federal POD ifapplicable. 

During construction,emissionsof particulatematter from well pad andresourceroad 

constructionwill be minimized by applying water, or other dust suppressants, with at 

least 50 percentcontrol efficiency. Roads and well locations constructed on soils 

susceptibleto and erosion could be appropriately surfaced,or otherwise stabilized, to 

reduce the amount of fugitive dust generatedby traffic or other activities, and dust 

inhibitors(surfacingmaterials,non-saline dust suppressants, and water) could be used as 

necessaryon local and resource roads that dust 

lem. 

4.3	 Pinnacle Gas Resources, Inc. does not anticipate the need to construct a 

of the individual well locations. 

operations, 	 to 

the access road and any additional areas that may be specified in the approved 

Applicationfor Permit to Drill. 

4.4 During drilling and subsequent all equipment and vehicles will be confined 

5. LOCATIONAND TYPE OF DRILLING WATER SUPPLY 

Water for drilling the wells will be providedby a nearby existing CBNG well and 

transportedto the drill site by truck. Water volume used in drilling operations is 

dependentuponthe depth of the well and any losses that might occur during drilling. 

Waterfordril1ingmay'betakenf|omaprivatewaterwellinthe@ 

near Hay Reservoir and from SWS State 

01BR-36-23-97. A sample analysis report ofthis water can be found in Appendix 6.2. 

No new construction will be required on/along theproposedwater haul route(s). Water 

transferfacilities will be located near proposedareasof disturbance andwill not be 

locatedwithinknown cultural resource sites or sensitive wildlife areas. 

6. CONSTRUCTIONMATERIALS 

Gravel and/or rock will be purchasedfrom a local supplier having a permittedsourceof 

materialsof the area. This material will be used for road construction to access thewells, 

compressorand miscellaneous facilities. Gravel or scoria material will be used in 

necessaryareassuch as spot upgrades, crowned and ditched roads, and low water 

crossings.No construction materialswill be taken from Federal or Indian lands without 

priorapprovalfrom the appropriate SurfaceManagementAgency. 

i:,:: 22 2iia/ 

4.SurfaceUse Plan deficiencies011607 Page l0 of 20	 l8 January 2007
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PinnacleGasResources,Inc. Rev Date 

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SURiACE USE PLAN - Section4	 B 2l- Oct-2006 

SurfaceUse Plan	 C 26-Oct-2006 

D I l-Dec-2006 

7. 	 METHODSFOR HANDLING WASTEDISPOSAL 

7.1 	 Cuttings the drilled cuttings will be deposited into a small earthen reserr'epit to be 

constructedon, or adjacent to, each individual drill pad. The total surface area of impact 

for the reserve pits will be approximately 70 feet wide by I l0 feet long. The resewe pit 

will be constructed by dozer. 

7 ,2 	 Drilling Fluids reservepits il,ill be designed to preventthe collection of surface runoff 

and will be constructed entirely in cut material. The reserve pit will be on the downhill 

side of the well bore for non-constructed pads.The reserve pits will be fenced on three 

non-working sides during drilling, and on the fourlh side at the time the rig is removed. 

The reserue pit and flare pit will be fenced using T-posts and wire panelsapproximately 

50 inches tall. Reserve pitswill not be squeezed. Individual reserve pitswill be closed as 

soon as they are dry, but no later than 90 days from the time drilling and completion 

operationscease.If unforeseencircumstancespreventthe closing of the pits within the 

90-day time frame, an extension will be requested from the BLM Authorized Officer. 

7,3 	 ProducedFluids- waterproducedfrom wells within the Sweetwater South Federal 

POD project areawill be reinjected into approvedwater injection'il'ells or will be 

dischargedinto approved ponds.Pleasesee section 6,Il/ater Managenent Plan. Map "C" 

shows the proposeddischargepoint. 

Any spills of oil, gas, produced water or any other potentially hazardoussubstance will 

be cleaned up and immediately removed to an approved disposal site. The BLM 

Authorized Oflicer will be contacted about any hazardous substance, oil, or produced 

water spills. 

7,4 	 Sewage portable,self-containedchemical toilets will be provided at each drilling 

locationfor human waste disposal. Upon completion of operations. or as required, the 

toilet holding tanks will be pumpedand the contents thereof disposed of in an approved 

sewage disposal facility. Sewage disposal will be in strict accordance with WDEQ rules 

and regulations regarding sewage treatment and disposal. 

7,5 	 Chemicals/Oil - any chemical substances or used motor oil (changeoil) will be placed 

in closed containersand disposed of at an authorized disposal site. The reser.re pits will 

not be used as disposalocations. 

-

will be contained in a self-cor.rtained, porlable dumpster or trash cage to be located at one 

or two central locations. Upon completion of operations (or as needed), the accumulated 

trashwill he hauled off-site to a WDEQ approved sanitary landfill. No trash will be 

placedin the reservepit(s). 

7,6 	 Garbage and Other Waste Material all garbageand non-flammable waste materials 

7,7 	 Drilling Rig immediately after removal of the drilling rig, all deblis and other waste 

materials not contained in the trash cage will be cleaned up and removed f'rom each 

individual rvell location. No potentiallyadversematerials or substances rvill be lel1 on 

these locations. 

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Pinnacle Gas Resources. Inc. Rev Date 

I l-Sept-2006 

SUMACE USE PLAN _ Section4 B 2l- Oct-2006 

SurfaceUsePlan c 26-0ct-2006 

D 1 1-Dec-2006 

7.8	 Open Pits - any open pits remaining upon conclusion of drilling operations will be 

promptlyfenced with said fencing maintained until such time as the pits have been 

backfilled. 

7.9	 H^zardous Materials - Pinnacle Gas Resources,Inc. maintains a file, per 29 CFR 

1910.1200(g),containingcurrent Material Safety Data Sheets (MSDS)for all chemicals, 

compounds,and/or substances which are used during the course of construction, drilling,

completion, and productionoperationsfor this project.Hazardousmaterialswhich may 

be found at the site include drilling mud and cementing productswhich areprimarily 

inhalation hazards, fuels (flammableand/or combustible), materials that may be 

necessaryfor well completion/stimulation activities, such as flammable or combustible 

substancesand acids/gels (corosives). Any spills of oil, gas,ffi{ffi water, or any 

otherpotentiallyhazardoussubstancewill be reported immediately to the BLM and to the 

responsiblepartiesand will be mitigated immediately through cleanup or removal to an 

approved disposal site. 

The opportunity for Superfund Amendments and Reauthorizatioz lct (SARA) listed 

Extremely Hazardous Substances (EHS) at the site is generallylimited to proprietary 

treatingchemicals. All hazardous, EHS, and commercial preparationwill be handled in 

an appropriate mannerto minimize the potentialfor leaks or spills to the environment. 

The operator and its contractorsensurethat all use, production,storage, transport and 

disposalof hazardous and extremely hazardous materials associated with the drilling, 

completionandproductionof wells, and projectoperationswill be in accordance with all 

applicable existing or hereafterpromulgatedfederal, state and local govemmentrules, 

regulationsandguidelines.All project-relatedactivitiesinvolving hazardous materials 

will be conducted in a manner to minimizepotentialenvironmentalimpacts. A file 

containingcunent MSDS for all chemicals, compounds 	 and/or substances which are used 

in thecourseof construction, drilling, completion, andproductionoperationsis located at 

thePinnacleGas Resources, Inc. field office and on each drilling rig. 

8.	 ANCILLARYFACILITIES 

Pinnacle Gas Resources, Inc. does not anticipate the need for any ancillary facilities 

within the Sweetwater South Federal POD. 

9.	 WELLSITE LAYOUT 

9.1 In Appendix 3.6 ofthe Master Drilling Plan, a conceptual diagram ofthe well site layout 

is depicted. The following information describes the field layout stakingfor a 

constructedandnon-constructedwell site: 

9,1,/ 	 Constructedpadstakingprocedure: 

-	 200'reference stakes on cardinal direction(Minimum of2 and visible) 

- Reservepit corners marked adjacent to well bore 

Well padcatchpointsmarked 	 .l :")',i 

4. SurfaceUsePlan deficiencies 011607 Page12of20	 I E January 2007 
SWEETWATER SOUTE FEDERAL POD 

Pinnacle Gas Resources. Inc. Rev Date 

I l-Sept-2006 

SURFACE USE PLAN - Section4 B 2l- Oct-2006 

Surface Use Plan 26-Oct-2006 

D 11-Dec-2006 

9, f.2 	 Non-constructed padstakingprocedure:

* 	 100' reference stakeson cardinal direction (Minimumof2 and visible) 

-	 Comersofdrill pit staked adjacent to well bore. 

9,1.3 	 Well stake markingsto include: 

-	 Well name 

-	 Well number 

- Legal location 

- Well footages 

9.2 	 No permanentliving facilities are plannedon those individual well locations to be 

included within the Sweetwater South Federal POD. There may be a need for a 

temporarytrailer to be on location 

9.3 	 All equipment and vehicles will be confined to the approvedareas in each individual 

Applicationsfor Permit to Drill (i.e.accessroads, well padareas,pipelineROW, etc.) 

9,4 	 Production facilities will be installed on each individual well location as described in 

item4.2(ProposedFacilities). 

-,-,/ 9.5 	 PinnacleGas Resources, Inc. will use u @ pi liner in each individual reserve 

prt. 

9.6 Prior to the commencement 	 of drilling operations, the reserve pit(s)will be fencedon

three(3) sidesaccordingto the following minimum standards: 

l) 	 T-posts and wire panelsapproximately50inches tall. 

2) 	 Standardsteel line postsshall be used betweenthe comer braces. The maximum 

distancebetween any two (2) posts shall be no greaterthan sixteen (16) feet. 

3) 	 Thefourth side ofthe reserve pit will be fenced immediately upon removal ofthe 

drillingrig and the fencing will be maintaineduntil the pit has been backfilled. 

9.7 	 As indicated in 4.2 Proposed Facilities,theproductionfacilities will be fenced during the 

initial evaluation phaseof operations to preventpotentialdamageto the equipment or 

injury to domestic livestock and/or wildlife. Said fencing will be installed accordingto 

the fencing specifications providedin item 9.6 above. 

9,8 	 Any hydrocarbons onthepit will be removed as soon aspossibleafter drilling operations 

arecompleted. 

10. 	PLANSFOR RECLAMATION OF THE SURFACE 

10-{ 	 The primarysurfacedisturbanceassociatedwith drilling and completion operations on 

those wells proposedin conjunctionwith the Sweetwater SouthFederal POD will be ; 

,i_,,i ,2 ,I)iil '' 4.Surface Use Plan deficiencies 	 011607 Page 13of20 	 18 January 2007

' - 	 l---'..r ,...-_...,' "', 
SWEETWATER SOUTH FEDERAL POD 

Pinnacl€ Gas Resources. Inc. Rev Date 

I l-Sept-2006 

SUMACE USE PLAN - Section4	 B 2l- Oct-2006 

SurfaceUse Plan	 c 26-Oct-2006 

D 11-Dec-2006 

limited 	to the excavation of the reserve pit, flare pit, construction of the central 

processing/meteringfacilities'ffi,constructionof 

accessroutes, construction of water containment facilities, and the installation of the 

buried flow lines/pipelines necessary for the transportation of producedfluids and gases 

within 	the project area. Backfilling, leveling, re-contouring, and reseeding (using the 

recommendedseed mixtures) ofthese disturbed areas is plannedas soon as possibleafter 

cessation of drilling and completion operations on the individual well locations. The 

water containment facilitv reclamation will beein when the facilities are no longer 

needed. 

'10,2 	 Once the reserve pit has been backfilled, all compacted surfaces on federal lands 

(including the access road and the well pad areas)will be disked to a depth of rem 

inches in order to break-up the compacted soils and re-establishpercolationin these soils. 

10.3 	 All disked surfaces will be reseeded using the recommended seed mixture or a different 

mixture to be recommended by either the BLM Authorized Officer or the private surface 

owner(s) as appropriate. No introduced species will be used for the reclamation of 

disturbed areas on federal surface. 

The followine seed mixture is recommended on Federal lands. 

Seed Mixture Recommended for Use on Disturbed Areas 

Within the Sweetwater South Federal POD 

Species	 Pounds PLS/Acre 

Grasses


Slenderwheatgrass 2.0


Thickspikewheatgrass-Critana 4.0


Westem wheatgrass 2.0


Indianricegrass 1.0


Bottlebrushsquirreltail 1.0


Needle-and-thread 1.0


Shrubs 

Gardner'ssaltbush	 1.0 

TOTAL	 12.o 

I PinnacleGas Resources, 	 Inc. will use the recommended seedmixture for federalands as described in the 

Site Specific Conditions ofApproval ifthey vary from the table above. 

10.4 	 Seed will be drilled on the contour with a seed drill equipped with a depth regulator in 

orderto ensure even depths of planting. Seedwill be plantedbetween one-quarter (l/4) 

to one-half (1/2) inches deep. Where drilling is not possible (too steep or rocky), 

Pinnacle Gas Resources,Inc. will hand broadcastthe seed at double the rate indicated 

aboveand rake or chain the area to cover the broadcast seed.Areas with high erosion 

potential will have special measures applied, as necessary, to ensure successful 

,. :.. 

4. SurfaceUse Plan deficiencies 0l1607 Page 14 of20	 I 8 January 200t ,! .:.)it7 

''

SWEETWATER SOUTE FEDERAL POD 

Pinnacle Gas Resources, Inc. Rev Date 

I l-Sept-2006 

SURFACE USE PLAN - Section4	 B 2l- Oct-2006 

SurfaceUsePlan	 U 26-Oct-2006 

D 11-Dec-2006 

reclamation.This will include erosion fabric, hydro seeding, water barring, or other such 

measurerequired by the BLM. 

10.5 	 Fall seeding will be completed after September 15ft and prior to groundfrost. If 

applicable, spring seeding will becompletedafter the frost has left the groundandprior 

to May l5*. Theseedingwill be repeated until a satisfactory stand,asdeterminedby the 

Authorized Offrcer, is achieved. The first evaluation of growthwill be made following 

the completion of the first growingseason.No reclamation work will be conducted when 

soils are frozen or overly wet. 

10.6 	 Scarificationand re-seeding activities are considered best in the fall, unless requested 

otherwiseby the BLM Authorized Officer or the privatesurfaceowner(s). 

10.7 

10.8 Pipeline and flow line ROW trenches will be compacted during backfilling and said 

trenches would be maintained in order to correct settlement and erosion. The trenches 

will also be heaped above the cut to ensure propersettling. All disturbed surfacesalong 

thepipeline/flow ROW will bereseededas recommended above. 

10.9 	 Upon final abandonment of each well location and/or centralprocessing facility in 

conjunctionwith the SweetwaterSouth Federal POD, water diversion measures will be 

installedand both the access roads and well locations will be restored to approximately 

the original groundcontour(s) by pushingthe fill material back into the cut and up over 

the back slope(whereapplicable and at the landowner(s) request). 

will be left that would trap water or formponds.All disturbed 

surfaces(includingaccessroads, well pads,water containment facilities and central 

processingfacilities) will be reseeded above. 

10.10 No unnatural depressions 

as recommended 

11.	 SURFACEOWNERSHIP 

Surfaceownership within the POD boundary is federal. The surface ownership of the 

developmentprojectarea is depicted on the Project Map. Contact information is provided 

in Appendix 4.8 Contact Information. 

12. 	OTHERINFORMATION 

'12.1 	 Water Management Plan 

Please see Section 6 of the Plan of Developmentfor information regarding the Water 

ManagementPlan. 

12.2 	 Water Well AgreemenVCertification J4i/ L . ­ 1 icnz 

Pleasesee Section 4, Appendix 4.1 ofthe Plan ofDevelopment for informalion regarding 

theWater WelI Agreement/Certifi cation. 

4. SurfaceUse Plan deficiencies0l1607 Page l5 of20	 1E January 2007
SWEETWATER SOUTH FEDERAL POD 

Pinnacle Gas Resources, Inc. Rev Date 

11-Sepc2006 

SURFACEUSE PLAN _ Section4	 B 21-Oct-2006 

Surl-aceUse Plan	 C 26-Oct-2006 

D I 1-Dec-2006 

12,3 Cultural Clearance Report 

A Class III Cultural Resource Inventory of the proposeddrill sites and access roads and 

other tacilities has been completed by Foothills Archaeological Consultants. The 

necessary repofis have been filed with the Bureau of Land Management Rawlins Field 

Office. 

PinnacleGas Resources, Inc. rvill be responsible for informing all personsassociated 

with this project that they will be subject to prosecutionfor damaging, altering, 

excavating or removing any archaeological. historical, or vedebrate fossil objects or 

site(s). If archaeological, historical, or vertebrate fossil niaterials are discovered, 

Pinnacle Gas Resources, Inc. will suspend all operations that further disturb such 

materials and immediately contact the Authorized Officer. Operationswill not resume 

until written authorization to proceedis issued by the Authorized Officer. Within five (5) 

working days, the Autliorized Officer will evaluate the discovery and inform Pinnacle 

Gas Resources. Inc. of actions that will be necessary to prevent loss of significant cultural 

or scientific values. Pinnacle Gas Resources, Inc. will not be held accountable fbr costs 

associatedwith evaluating any findings and pennissionwill be grantedby the Authorized 

Officerto go aroundthe found site or sundry new operations that will allow development. 

PinnacleGas Resources, Inc. will be responsiblelbr the cost of any necessarymitigation 

required by the Authorized Officer. The Authorized Of'ficer rvill provide technical and 

proceduralguidelinesfor the conduct of mitigation. Upon 	verification from the 

Authorized Officer that the required mitigation has been completed, Pinnacle Gas 

Resources,lnc. will be allowed to resumeoperations. 

12.4 wildlife Habitat Report 

Pleasesee Section 7 of the Plan of Development for infonnation regarding the Wildlife 

Habitat Repon. 

12.5 Integrated Pest Management Plan for Noxious and Invasive Weeds 

Pinnacle Gas Resources, Inc. will be responsible for weed control on disrurbed areas 

within the exterior limits of this permit. Per the Sweetwater County Weed and Pest 

Control office, noxious and invasive weeds observed within the Sweetwater South 

Project area include Canada thistle, Russim knapweed, Halogeton, Black henbane, and 

Hoary cress. Pinnacle Gas Resources, Inc. is proposingto develop CBM reserves in the 

same vicinity as some of the aforementioned infestations. The progam for weed control 

will be implemented when Pinnacle Gas Resources, Inc. disturbs the soil surface. The 

noxiousweed control programdevelopedby Pinnacle Gas Resources, Inc. will adhere to 

BLM requirements. 

To minimize the introduction, infestation and spread of noxious weeds and other weeds 

of concem found within the limits of this permit, Pinnacle Gas Resources, Inc. will 

educate field personneland other contractors to identifi and be aware ofnoxious weeds. 

Precautionary measures, such as washing vehicles and equipment at least weekly and 

when traveling into and out of the project area, will also be implemented to minimize 

4.SLrrl:rce UsePlan deficiencies 	 0l1607 Page l6 oI20	 l8 Januar] 1007
SWEETWATER SOATH FEDEFAL POD


PinnacleGasResources.Inc. Rev Dat€


I I -Sepr-2006 

SURFACEUSE PLAN Section 4 B 2l- Oct2006 

Surface Use Plan c 26-0ct-2006 

D I I -Dec-2006 

seed transportation and dispersal. Noxious weed control measures will be incorporated 

into the cons$ction of all facilities within the exterior limits of this permit to preventthe 

introduction or spread of any noxious weeds. Special consideration will be given to areas 

where noxious weeds are most likely to invade and flourish. 

A weed spraying program designed by, and agreed to, by the BLM and Pinnacle Gas 

Resources, Inc. will be administered on all ofthe disturbed areas. The program involves 

monitoring for spring and fall growth ofnoxious weeds, due to the operations ofPinnacle 

Gas Resources, Inc., along the roadways, dam sites, well locations, all fught-of-Ways, 

and any other disturbed areas. The Sweetwater County Weed and Pest Control office has 

indicated that Canada thistle, Russian knapweed, Halogeton, Black henbane, and Hoary 

cress have been noled in the areas of concem. Following weed spraying, the designed 

seed mixture will be applied to the disturbed area. Weed control shall be conducted in a 

timely manner in cooperation with all agencies, operators and landowners. 

A "Pesticide (JseProposal', or PUP (form #WY-04-9222-l), and pesticidelabel will be 

submitted by Pinnacle Gas Resources, Inc. to the Authorized Officer prior to the 

treatment of the noxious weeds found and upon discovery of any new infestations along 

surfacesPinnacle Gas Resources, Inc. operates on. Pinnacle Gas Resources, Inc. will 

confer with the BLM to complete the "Pesticide UseProposal' (forn #WY -04-9222-1). 

A blank example PIIP is located in Se*ion 9 IPM 

Pinnacle Gas Resources, lnc. will be responsible fiorthe prevenlionand control of all 

noxious weeds on all areas of disturbance due to surlace ooerations bv Pi;rnacle Gas 

Resources, Inc. 

12,6 Additional Environmental Information 

12.6,1 Right-of-lvay applications for water lines, gas lines, access roads to lvell locations, 

compressorstation,waterinjectionwells, and transfer facilities have been appiied for at 

the BLM Rarvlins Field Office. Reference Section 10 of this POD book fbr 

documentation. 

72,6.2 Current land use on the siteincludes open range livestock grazinganduse ofthe area by 

rvi ldlife. 

12,6.3 lhe closest occupied drvelling to the federal activities is Harmel Jolley's home. located 

about4 miles alvay fiom the closest federalCBNG well within the Sweetwater South 

FederalPOD. 

12,6.4 The projectarea is located in Sections26 and 35 of Torvnship 23 North, Range 97 West 

in SlveetrvaterCounty. Wyoming. 

12.6.5 ?innacle Gas Resources. Inc.'s BLM Bond number is WY8000093. 

4.SurfaceUse Plan dcficienci.s 011607 Pase l7 of20 l8 Jifluar] 2007 
SWEETWATER SOUTH FEDERAL POD 

PinnacleGas Resources. Inc. Rev Date 

1l-Sept-2006 

SURFACE USE PLAN _ Section4 B 21- Oct-2006 

SurfaceUse Plan 26-Ocr-2006 

D I l-Dec-2006 

13. 	 LESSEE'S OR OPERATOR'S REPRESENTATIVEAND 

CERTIFICATION 

Pleasesee Section 4, Appendix 4.1 ofthe Plan ofDevelopment for information regarding 

the Lessee's or Operator's Representative and Certification. 

14. 	FORMS REQUIRED FOR SURFACE USE PLAN 

14,1 	 Please see Section 6 of the Plan of Developmentfor information regarding the 

Hydrologic Watershed Field Analysis SummarySheet. 

'14.2 	 Pleasesee Section 4, Appendix 4.2 of the Plan of Development for information regarding 

the Surface UseDataSummaryForm. 

14.3 	 Pleasesee Section 4, Appendix 4.1 ofthe Plan ofDevelopmentfor information regarding 

the Self-Certifi cation Statement From Lessee/Ooerator. 

'! 

t'L' ­

" 2 ,ltr,c7 

4. SurfaceUse Plan deficiencies 0l 1607 Pas€ 1 8 of 20 I 8 January 2007 
SWEETWATER SOUTH FEDERAL POD 

PinnacleGasResources.Inc. Rev Date 

1 1-SeDt-2006 

SURFACEUSEPLAN- Section4	 B 21- Oct-2006 

SurfaceUse Plan	 c 26-Oct-2006 

tl I l-Dec-2006 

15. 	CERTIFIGATION 

I hereby certifl that Pinnacle Gas Resources, Inc. will comply with the provisionsofthe 

law or the regulation govemingthe Federal or Indian right of reentry to the surface under 

43CFR3814. 

I also certifu that shall use its best efforts to conduct its approved operations in a manner 

that avoid adverse effects on any propertieswhich are listed, or may be eligible for 

listing,in the National Register of Historic Places Q{RIIP). If historic or archaeological 

materialsare uncovereduring conshuction, the operator will immediately stop work that 

might further disturb such materials, and contactheAO (or his/her representative) atthe 

BLM Rawlins Field Office. Any paleontologicalresourcesor fossils discovered as a 

result of operations associatedwith thesewells will be broughto the attention of the AO 

or his,4rer representativeimmediately. All activities in the vicinity of such discoveries 

will be suspended untilnotifiedto proceedby the AO. 

Further, hereby certified that: 

A. 	 All potentiallyaffected landowners havingproperly permitted water wells with 

the WSEO withineachproposedwell's Circle of Influence (one-halfmileradius) 

were offered a Water Well Agreement; 

B. 	 If a Water Well Agreement is not reached with the landowner, agreesto mitigate 

the impacts of its CBNG wells in accordancewith State of Wyoming water laws; 

and 

C. 	 Has applied for a Permit to Appropriate Groundwater from the WSEO, 

concurrentlywith this APD. 

Brian I)eurloo 

Printed Name 

Signature 

Wvoming Proiect Manager 

Title Date 

i:1,1; 

4. SurfaceUse Plan deficiencies 011607 Page19of20	 l8 January 2007 
SWEETWATER SOUTE FEDERAL POD 

PinnacleGasResources. Inc. Rev Date 

11-Sept-2006 

SURFACE USE PLAN - Section 4 B 2l- Oct-2006 

Surface Use Plan 26-Ocr:2006 

D 11-Dec-2006 

I6. APPENDICES 

1) Appendix 4.1 - Certificates and Statements 

2) Appendix 4.2 - Surface Use Data 

3) Appendix4.3- RoadDesign 

4) Appendix 4.5 - Well Pad Cut & Fill 

5) Appendix 4.6 - SurroundingWells 

6) Appendix 4.7 - Best Management Practices 

7) Appendix 4.8 - Contact Information 

8) Appendix 4.9 - Post ConsFuction Inspection Report 

4. SurfaceUsePlan defici€ncies 011607 Page20 of20 
INTEGRATED PEST MANAGEMENT PLAN FOR 

NOXIOUSAND INVASIVE WEEDS 

Pinnacle Gas Resources, Inc. will beresponsiblefor weed control on disturbed areaswithin the 

exteriorlimits of this permitNoxious weeds observed within the Sweetlvater South Project area 

incltded Canada thistle, Russian htapweed, Halogeton, Black henbane, and Hoary cress. 

PinnacleGasResources, Inc. is proposingto develop CBM reserves in the same vicinity as some 

of the aforementioned infestations. Theprogramfor weed control mentioned in the surface use

plan will be implemented when Pinnacle Gas Resources,inc. disturbs the soil surface. The 

noxious weed control programdeveloped by Pinnacle Gas Resources,Inc. will adhere to BLM 

requirements. 

To minimize the introduction, infestation and spread of noxious weeds and other weedsof 

concernfoundwithin the limits of this permit,Pinnacle Gas Resources, Inc. will educate field 

personneland other contractors to identiff and be aware of noxious weeds. Precautionary 

measures - suchas washing vehicles - may also be implementedto minimize seed trarsportation 

and dispersal. Noxiousweed control measures will be incorporated into the construction of all 

facilities within the exterior limits of this permitto preventthe introduction or spread of any 

noxious weeds. Special consideration will begivento areas where noxious weeds are most likely 

to invade and flourish. 

A weed sprayingprogram designed by, andagreedto, by the BLM and Pinnacle Gas Resources, 

Inc. will be administered onall ofthe disturbed areas.Theprograminvolveswatchingfor spring 

and fall growthof noxious weeds,due to the operations of Pinnacle Gas Resources, Inc., along 

the roadways, damsites, well locations, all Right-of-Ways, andany otherdisturbedareas.The 

SweetwaterCounty Weed and Pest Control offrce has indicated that Canada thistle, Russian 

htapweed, Halogeton, Black henbane, and Hoary cress have been noted in the areas of concem. 

Once the area is deemed clear ofnoxious weeds, the designed seedmixture will be applied to the 

disturbedarea. Weed control shall be conducted in a timely manner in cooperation with all 

agencies,operatorsandlandowners. 

A "Pesticide Use Proposal', or PUP (form #WY-04-9222-l),and pesticidelabel will be 

submittedby Pinnacle Gas Resources, Inc. to the Authorized Officer priorto the treatment of the 

noxious weeds found and upon discovery of any new infestations along surfaces Pinnacle Gas 

Resources,Inc. operateson. We will confer with the BLM to complete the "PesticideUse 

Proposal"(form#Wy -04-9222-1).A blank example PUPis located following this page. 

Pinnacle Gas Resources, Inc. will be responsible for the preventionandcontrol of all noxious 

weedson all areas of disturbance due to surface operationsby Pimacle Gas Resources, Inc. 

rPMSWS 091206 Page I of I lE September 2006 
Hay Reservoir CBNGInfill & Impoundments:Project Map 

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B. CBNG Project Surface Use Data Summary Form Page I 

Company Name:PinnacleGas Resources, Inc. Date: 1t18t2007 

Project Name: SweetwaterSouth Federal POD County: Sweetwater 

Numberof Wells: I LeasesInvolved: WYW153188, WYW153193 

Township(s) Involved: T 23 N R 97 w Sections:26and 35 

T NR w Sections: 

Sections: 

PROPOSEDACTION 

l--Tr-"ns,l' f i.yI w,atntt.)| Acres of Disturbance 

ProposedlmprovedRoads- NA 40 c 

Not within Corridor (includingspot upgrade areas): 

List by road seqmentswhereconstructionwidth varies 

ProposedlmprovedRoads/ UtilitiesCorridor 2.91 80 28.2 

(defineutilities): 

List by road seqments lvhere construction width varies

ProDosed2-Track Roads - NA 3C c 

Not within Corridor: 

ProDosed2-Track/ Utilities Corridor	 NA 4C c 

(detineutilities):Gas, Water, Eleckic 

Proposed2-Trackwith Proposed Utility Corridor NA 4C 0 

(defineutilities):Gas, Water, Electric

't4.9 ProDosed Corridor notwithin Access	 2.46 5C

(defineutilities):Water,Gas (ProposedROW) 

ProposedPipelinenot within a Corridor: o.14 5C 0.85 

ProoosedBuriedPowerCablenot within a corridor:	 NA 2C 0 

ProposedOverhead 	 Power NA 3C c

(withinPOD boundary): 

Numberof Proposed Central Gathering/Metering Facilities: c c

Numberof Proposed Compressors: c c 

0 

Numberof Proposed lmpoundments 0 8 75.2

(definewhetheroff-channel Pits and/or on-channel Reservoirs) 

Numberof Proposed Discharge Points: 0	 8 Disturbance includedinpit 

disturbance. 

Other(Specity): 
B. CBNG Project Surface Use Data Summary Form Page 2 

DESCRIPTION OF AFFECTEDNVIRONMENT

(withinPODboundary) 

ExistinglmprovedRoads: 5.9S 4! 32.7 

Existing2-TrackRoadsnot within Corridor: NA 14 0 

Existing2-Track/ Utilities Corridor NA 4C 0 

(defineutilities):


ExistingCorridornot within Access NA 3C c


(defineutilities):


ExistingPipelinenot within a Corridor: NA c 

ExistingBuriedPowerCablenot within aCorridor: NA c 

ExistingOverhead Power: NA c 

Numberof Existing Central Gathering/Metering Facilities: c

Numberof Existing Compressors: 0 c 0 

Numberof Existing lmpoundments c 0 

(definewhether Off-channel Pits and,lor On-channel Reservoirs)

Numberof Existing Discharge Points: 0 0 Included in pitdisturbance.

PreparedBy: Pearl Development Company 

Telephone: (307)672-8090 

Corridor: feasible, and electrical will be installed 

corridors.Disturbance combine lines(water, in common ideallywithin 

* Disturbance Where gasand water pipelines cables in disturbance 

corridors 2 or more utllity gas,electric) trenches, 

accessroaowavs. 
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sw 1/4, sv'l 1/4, sEc 26, T25N, R97W

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SWEETWATER 

-

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sw 1/4, Nw i/4, sEc 3s, T23N,R97w uEqiifffi#iffiffi* -

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sws FED 07BR-35-23-97


sw 1/4, NE 1/4, SEC 35, T23N,R97W


1980',F.N.L. U9t7,,,,,,,,,,,,,,,,f#fi*iitrW - 1980',F.E.L.


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FIGURE1 

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@:,rurmi#ffi{'SWSFED 15BR-35-23-97 

sw 1/4, st 1/4, sEc 3s, T23N,R97W 

537' F.S.L. - 1963' F.E.L. FIGURE1 
SWEETWATER SOUTE FEDERAL POD 

Pin'rcle Gas Resorrce$ Inc, Rev Date 

b-Seo-06 

SURFACEUSEPLAN- Apperdix4.6 

WELLS AS OF 06 SEPTEMBER 

PINNAGLEGASRESOURCES, 

SURROUNDING 2006 

INC. 

SWEETWATERSOUTHFEDEMLPOD 

PERMIT STAT RAN OTR/ WELL 

US TWP QTR APPLICANT FACILIW NAME USES DEPTH LOG COUNTY 

23 97 23 SENE OAVIS OIL COIIPANY"USD], BLM J T FEDERAL42 MIS 

23 9-l 24 SENW DAVIS OIL CO.X*USDT, BLI'4
 t'115

ENL FLOW1NG WELL


P68343W 23 97 25 UsOI,BLM**CO.ARl"lAGEO. 525T23R96 t115 1160


23 97 26 SWNE UsDI,BLI4*iTEXAs OIL& GAs
 TE{45 FED G #1 MIS 500

ENL FLOW1NG WELL


P68343W 23 9-7 26 usDt, BLtr4**CO. ARI4A GEO, 52m3R96
 14r5 1160


ENL FLOMNG WELL


P58343W PU 23 97 27 USDI, 8!M**CO, ARMA GEO. s2sT23R96 t{t5 1150


23 97 35 NENE PINNACLE GAs RESOURCE' INC. CBM,MIS

1919159W 23 NENW PINNACLE GAs RESOURCES, ]NC, cBt4,t{Is

23 NESE PINNACLE G{S RESOURCES, INC. 5W5FED09BR-35-?397 cBlr4,l4ls

97 NE51A/ PINNACGCAS RESOURCE5, INC, cBt'l,tl15

97 36 PINNACLEGAS RESOURCES, INC cBtr1,t4l5

39/10/1131 2i 97 swsE PINNACLE GAs RESOURCES, INC cBi4,M15

39/10/59W 23 9? 36 CNE PNNACTEGl6 RESOURCES, INC, sws STATE 018R 3€-23-97 cBt4,t4ts 

39/217\4W UNA 23 97 PINNACLE GAS RESOUPCES. INC CBl4,lt1l5

3913lrr4w 23 97 36 SWNE PINNACLEGAS RESOURCES, INC
 sws tfatE 07BR-3G2337CBl4,l,4lS

3915159W 23 97 36 NENW PINNACLE GAs RESOURCES, INC.
 c8t4,14i5


39/6/59W 23 97 36 NESE PINNACLE GAS RESOURCES, iNC,
 CBl"1,t415 

23 9l 36 NESW PINNACLE GAsRESOLJR€ES, INC. CBl,4,l4Is


P52346W 23 l6 NENE SANTAFE ENERGY COI'4PANY l"l$


)nDOM= DomesticWell


CBl.4= CGI Bed l.4ethane Well


MoN= lvbnitonngWell


Append4 6 Surrounding Wells 9/132006 
APPENDIX C 
SWEETWATER SOATH FEDERAL POD 

Pinnacle Gas Resources.Inc. Rev Date 

l4-Aug-06 

WATER MANAGEMENT PLAN_ Section 6 B 23-Oct-06 

Water Management Plar c I 1-Dec-06 

D 23-Feb-07 

E 04-ADr-07 

WATER MANA EMENTPLAN 

PinnacleGas Resources, lnc. 

SweetwaterSouthFederal POD 

SweetwaterGounty,Wyoming 

Plan of Development (POD) - Interim Coalbed Methane Wells 

This Water ManagementPlan(WMP) addressesPinnacle Gas Resources,Inc.'s (Pinnacle)proposed 

SweetwaterSouth Plan of Development (POD) in Sweetwater County, Wyoming. Surlaceownership 

is federal. This plan incorporates state and federal mineral development.Pinnacle is currently 

permifting and constructing the state mineral development. At presentthere are 16 stateand federal 

production wells and two (2) injection wells drilled in the Sweetwater Southprojectarea.A Water 

ManagementPlan Map is included as Map C in the Sweetwater South Federal POD book, "Section 5 

- Project Maps". 

One may access the Sweetwater South Federal POD by exiting Interstate 80 at Sweetwater County 

Road67 (Tipton Road), approximately 56 miles west of Rawlins, Wyoming. Travel22.5 miles north 

and then travel west 2.75 miles to the northeast corner of Section 35. The Sweetwater South Federal 

POD development proposalconsistsof 8 wells at 8 locations with attendant developments and 

facilities as shown on the Project Map (seeProjectMap in Section 5). These eight (8) wells, 

identified in Appendix 3.1 Proposed llell List, are coalbed naturalgas (CBNG) 

exploration/developmentwells. The listed wells and conesponding leases are located within the 

Sweetwater South CoalbedMethane Federal Plal ofDevelopment Projectarea. 

Pinnaclewill comply with all applicable laws, standards and criteria set forth by all appropriate 

Federal,State and Local authorities including Wyoming State Engineers Office (WSEO), Wyoming 

Departmentof Environmental Quality (WDEQ), Wyoming Oil and Gas ConservationCommission 

(WOGCC), Bureauof Land Management (BLM), EnvironmentalProtectionAgency (EPA) and U.S. 

Army Corps ofEngineers (Corps).Regarding the proposedpits, the BLM Right-of-Way is currently 

in placeandbondingis coordinated through the Office of State Lands and Investments (OSLI) for the 

pits in Section36; l4-A permitswill be obtained through the woGCC. Pits in Sections 26 and 35 are 

subject to approval and bonding by the BLM. Pinnacle has requested, and been granted,an exception 

to leave the groundwater monitoring wells open as requested by the BLMI no_ ad_ditionalpermitting is 

requiredwith the WDEQ. , 

.. i;.. r _ 

1.SITEDESCRIPTION 

The Sweetwater SouthPOD is located in Sections 26,35, and 3,{'9f.


97Win Sweetwater County, Wyoming. Pinnacleplansto constiribd,


CBNGwells on a total ofeight (8)well padsonFederal leasehold tn


6.0sws wMP 061307040407 Page I of 12 611812007
SWEETWATER SOUTH FEDERAL POD 

Pinnacle Gas Resources. Inc. Rev Date 

l5-Aug-06 

WATER MANAGEMENT PLAN Section 6	 B 23-Oct-06 

WaterManagementPlan	 C I l-Dec-06 

D 23-Feb-07 

E 04-Apr-07 

T23N, R97W. Each well will produceflom the Big Red coal seam. The POD is located on 

BLM federal lands. 

1.1 ExistingLand and Water Use 

The Sweetwater Southprojectarea includes 16 state and federal wells; the eight (8) proposed 

CBM wells lie on federal surface. Production of livestock and wildlife foraging are the most 

common land uses in the area. 

Existing wells within a l-mile radius of the POD arepresented in Appendix 4.6. Historically, 

the primary use of wells in the area was for stock watering. More recently a number of wells 

have been installed by Pinnacle as monitoring points for evaluatinggroundwater 

characteristics. 

There are no known springs mapped or known to exist within the POD area. A searchof 

stockreservoirs in the Sweetwater SouthFederal POD that are registeredwith the Wyoming 

StateEngineer's Office was completed and no reservoirs existed in the Sweetwater South 

POD projectarea. 

2. WATERMANAGEMENTALTERNATMESANALYSIS 

Pinnacleconductedan analysis of alternative producedwater management options. For a 

discussionofother water management options analyzed for the Sweetwater South Federal 

POD area, pleaseseeAppendix 6.7 Water ManagemenlAbernatlves. Early conversations 

with the Rawlins BLM Office analyzed the use of evaporationponds. After visiting several 

existingoff-channelspondsandgathering information from other operators, Pinnacle 

determinedthe best water management altemativewas off-channel containmentfacilities for 

the purposeof storage with intermittent evaporation. Portableevaporation units will be 

utilized in the summer months.The two (2) injection wells will be used to make up the 

remainingwater balance. 

A summary ofthe alternatives considered and the stage to which each was evaluated is 

provided in Table 6-2. Water managementoptions,including eight (8) off-channel 

containmentstructuresin seven(7) locationsand two (2) injection wells, are being pursued 

by Pinnacle as a result ofthe analysis. Off-channelcontainment structures will be the primary 

methodof produced-waterdisposalfor the project.Ponds utilizing evaporationunits will be 

equippedwith a Super PolecatEvaporator by SMI and will be situated so that the plume 

travelswith the wind direction and maximum coverage ofthe pond is achieved. The 

evaporatorwill be poweredby the same generatorsystem that powersthe wells and will be 

inspectedandmaintained by Pinnacle. During high-wind conditions and ifvisual inspection 

ofthe plume indicatesthat produced water is traveling outside the pond boundaries,the 

evaporatorwill be shut down and, if needed, the pond bermswill be built up. The SMI 

Evaporatorpumpswill be logically controlled accordingto input from 5 meter wind gauges. 

Wind speedwill be used as a high level shut-down to keep the plume from blowing off of the 

pond boundaries.Thesepumpswill be controlled by means of a variable-frequenrydriveto- ;1-i 

tum the pumpsdown or they will be shut down via high wind alarm levels direotly f,iom-the.,i*"r' 

.r',i:, , t.',rt 

--i!_rr:r.., ! i-ii,.,r.?ti8hbanagemefit 6.0sws wMP 061307040407	 Page2 of 12 
SWEETI'YATERSOATH FEDERAL POD 

Pinnacle Gas Resources, Inc, Rev Date 

l5-Aug-06 

WATER MANACEMENT PLAN SECIiON6	 B 23-Oct-06 

Water ManaeementPlan	 c 11-Dec-06 

D 23-Feb-07 

E 04-Aor-07 

datalogger.The high wind level is currently estimated at l5 miles perhour. The high wind 

alarmlevel will be verified in the field according to plumeovershoot. 

Pinnaclewill collect evaporation data from the water storage pondsin an effort to aid the 

agenciesinvolvedin determining theviability ofthis, and future, development projects.The 

data will beprovidedto the BLM and the Office of State Lands and Investments. 

Thefeasibility ofinjection is cumently underevaluationbyPinnacle,with injectionproposed 

in two wells: the SWS FED 0lBR-35-23-97i andthe SWS STATE 03BR-36-23-97i 

Pinnacleexpectsthat the injection wells will be capable oftaking approximately 1400 

bbl/day(41 gpm) combined.The length of time these injection wells will be able to sustain 

1400 bbls/day isunknown.Pinnaclewill providetheRawlins BLM Field Office with an 

assessment ofthe potential,and the limitations, of water disposal by injection. 

TABLE 6.1. SUMMARY OF INJf,CTION WELLS 

Well Name Sec Tws Rng QT/QT	 API# 

sws FED 0r BR-35-23-97i J) 23N 97W NENE 49-037-25383 

SWS STATE 03BR-36.23.97i 36 57N 76W NENW 49-037-25611 

2.'l OtherAlternatives 

Pinnacleplansto develop sufficientpit capacityto manage all produced water from this POD. 

Pleasesee Table 6-3 for the list ofpotential pondssites that will be evaluated for the 

SweetwaterSouthPOD wells. The pondsat these locations will have a total capaciry of 

approximately800 aclft. lf injection provessuccessful,or if productionrates decline faster 

than originally assumed,pond developmentwill be scaled back. For a discussion ofother 

water managementoptions analyzed for the Sweetwater South Federal POD area,pleasesee 

Appendix 6.7 Water ManagementAhernatives. 

3. EXISTINGAND PROPOSED DISCHARGES 

Basedon water productionratesfrom the Sweetwater South state projectarea,the maximum 

productionrate from the Big Red coal seam to be producedin the Sweetwater SouthPOD 

areafor the initialyearofproductionis expected to be approximately 1200 bbVday (35 gpm). 

Themaximumprojectedflow from the 8 federal well padsis estimated to be 9,600 bbliday 

(2S0 gpm). Along with storage for the eight (8) proposed federal wells addressed in this 

POD, Pinnacle will also be using these pondsas storage for eight (8) previously approved 

federalwells and eight (8)approvedstatewells from Section 36, T23N R97W. The 

maximumproductionrate for all 24 wells will be approximately 28,800 bbl/day (840gpm). 

Once all twenty-four (24)wells in the Sweetwater SouthProject Area are in production, 

Pinnaclewill obtain a blended effluentsamplefor analysis. SeeAppendix 6.2 WafefQxdlity:-: 13, 

Analysesfor a list of parameters. ' ' ,r-'-., 3"J" 

;;: r i,:iJ 

6.0 sws wMP 061307040407 Pag€ 3 of 12 ; ..i j.9ll?.@..?;neoo:n er: 
SWEETWATER SOATE FEDERAL POD 

Pinnacle Gas Resources.Inc. Rev Date 

15-Aug-06 

WATERMANAGEMENTPLAN- Section6	 B 23-Oct-06 

Water Management Plan	 C I l-Dec-o6 

D 23-Feb-0'7 

E 04-Apr-07 

The water producedfrom the 8 federal well padswould be discharged to any or all or the 

pondsandinjection wells. Pinnacle is proposingto construct eight (8) ponds all with an 

approximatecapacif of 100 ac-ft. Twelve ( 12)potentialsiteshave been evaluated and are 

listed in Table 6.3 and are shown on Map C, Water ManagementMap. The eight (8) ponds 

will be constructed on federal surface over federal minerals (Sections26 and 35) and on 

federal surface over state minerals (Section36). Pinnacle may identif and develop other offchannelcontainmentfacilities that would be added to the Sweetwater South POD through 

sundrynotice, and would be permittedasappropriate through Wyoming state agencies. 

TAB'LE 6-2. SI,MMARY OF ALTERNATIVE WATER MAIIAGEMENT A"PROACHES. 

Alternativ€ 

Off-channelponds 

ClassII Injection wells 

ClassV shallow 

injection systems 

(horizontal pipe 

networks) 

Inigation 

On-channelReservoirs 

Treafinent and 

discharge 

Direct discharge to 

channels 

Misters 

Level ofAnalysis 

e Site 

Reconnaissance 

Geologic analysis 

Engineering,


testing & cost


evaluation


. Soils & hydraulic 

analysis 

. Engineering & 

costevaluation 

. Fieldsoils 

reconnaissance& 

. Landownerinput 

. Site 

teconnaissance 

General 

engineering& cost 

estimates 

. Regulatory 

review 

Regulatoryreview 

. Conceptual 

analysis 

. Evalualionof 

analogs 

In WMP? 

Yes- Site 

evaluations 

and Permit 

process 

underwav 

Yes-See 

Table 6-2 

No 

No 

No 

No 

No 

Yes 

Comments 

Pondswill be lined and be 

consfucted with leak detection 

systemsconsisting ofa series of 

drain tile laterals, under thepit, 

draining into a sump. 

Twoinjection wells have been 

permittedthroughand WOGCC and 

drilled by Pimacle. 

Technologyin pilot phase elsewhere 

Uncertainregulatorycompliance 

andcost-effectiveness 

With landownerconsent,side roles 

may be developed on suitable land 

in or near the POD area. 

Verycostprohibitive. 

" 

'' t-t t' ....'.::. 

: i ,ia.l 

6.0SWSWMP 0b'107040407 Page 4 of 12 i.. 6/18/2007.. ,^ _jr .i 

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..li: ii ..... ,:.!;:',' 
SWEETWATER SOUTH FEDERAL POD 

PinnacleGas Resources. Inc. Rev Date 

l5-Aus-06 

SCCIiON 	 B 

Water Management Plan	 c I l-Dec-06 

t., 23-Feb-07 

E 04-Apr-07 

WATER MANAGEMENT PLAN 6	 23-Oct-06 

4. WATERSHEDCHARACTERISTICS 

Productionin the projectarea will occur within the closed ContinentalDivide Basin. 

None ofthe produced water will reach the Colorado River drainage. 

5. WATERSHEDANALYSIS 

All produced-water will be reinjected or discharged to off-channel containment 

structures.With WOGCC and WDEQ approval, produced water and evapoconcentrated 

brine will also be re-injected. The containment structures are placedout ofdrainages and 

are bermed on all sides to prohibit surfacewater run-offfrom enteringthe structure. The 

containmentstructureswill also be fenced to protectwildlife and stock in the area. 

Fenceswill be constntcted using standardwood posts,no more than sixteen (16) feet 

apart,betweencorner braces and strung with five strands ofbarbed wire. The fences will 

be approximately 50 inches high 

No surface dischargeofCBNG-produced wateris proposed in the Sweetwater South 

FederalPOD. Because no water will be added to the surface waterflow systems, preexistingculverts and crossings are not analyzed herein. The watershed analysis provides 

a general description ofwatersheds within the POD and givesspecificconsiderationof 

proposed roads, culvert installations and low water crossings. 

Hydrologic watershedfield analysis sheets for the watershedwithin the POD are located 

in Appendix 6-1. Peak flow analysis was conducted using the method of Miller (2003). 

Resultsofthe peakflow analyses are summarized in Table 6-4. 

TABLE 6-4: 	PEAK STREAM-FLOW ANALYSIS USINGTIfi METHOD OF MILLER' 2OO3: 

PEAK-FLOW CHARACTERISTICS OF WYOMING STREAMS. 

Area ReturnP€riod Peak Discharg€ 

Watershed tmi'l lvrl lcfsl 

Continental DivideBasin 94.07 2 | 49.79 

10 524.15 

2) 804.10 

5.1 Gulverts 

There are four (4) proposed Federalculverts within the POD (SeeSection 5 Project Maps 

and Appendix 6.4 Drainage Structures and Crossings for locations). Additionally, relief 

culveftsalongproposed roads may be necessaryto minimize erosion potential and will be 

added on an as-needed basis. Typical culvert constructionis shown in Appendix 4.3 of 

the Surface Use Plan(SUP) ofthe SweetwaterSouthFederal POD book. 

"! i, i irv 

6.0sws wMP 06r307 Page 6 of 12	 6fi8/2007 
SIIEETI(ATER SOATH FEDERAL POD 

Pinnacle Gas Resources. Inc. Rev Date 

l5-Aue-06 

WATER MANAGEMENT PLAN SCCIiON6 B 23-Ocr06 

Water ManagementPlan c I l-Dec-06 

23-Feb-07 

E 04-Apr-0? 

5.2 Low Water Crossings 

Thereare no proposedFederallow water crossings within the POD. A Typical low water 

crossing construction is shown in Appendix 4.3 ofthe Surface Use Plan ofthe 

SweetwaterSouth Federal POD book. 

5.3 ErosionalFeatures 

No existing erosional featureswere identified that will be impacted by the Sweetwater 

SouthPOD. No surface water discharge is proposedin this POD. No headcuts will be 

constructedor improved as part ofthis POD unless instructed by the BLM authorized 

officer. 

Activities that require in-channel fill will be in compliance with U.S. Army Corps of 

Engineers(USACOE) regulations.A statement ofthat compliance, along with details of 

the in-channel disturbancewill be submitted to the USACOE within 30 days of 

completionof the crossings. 

6. WATER QUALITY 

6.1 ProducedWaterQuality 

The water producedfrom the Sweetlvater SouthPOD Area will be from the Big Red coal 

seam.A waterqualitysamplewas obtained from the SWS State 01BR-36-23-97 and 

SWSStateI lBR-16-23-97. These samples are considered representativeofthe water 

qualitythatwill be produced.Theresults ofthe waterqualityanalysisareincluded in 

Aonendix6.2. 

7. FACILITYDESIGN 

Off-channelcontainmentstructuresaretheprimary facilities that will be installed aspart 

ofthe SweetwaterSouthPOD in order to handleproducedwater.Thepondswill be lined 

with a single 45 mil liner and contain a leak detection system'The leak detection system 

will be installed under each lined reservoir in the Sweetwater Southfield. The leak 

detectionsystemwill consist of four evenly spacedlateralsburiedbeneaththe bottom 

footprintofthe reservoir. The lateralswill be buried with a minimum of 0.5 feet of cover 

andthen trenched/buried todrain with a minimum slope of 0.5% to a manhole. The 

pipingwill consist of4" perforated P.V.C.schedule 40with sock (orequivalent).A

manholewill be set on the backsidetoeofthe reservoir, which will be the central 

gatheringpointfor the leak detection system.Compactionaroundthe manhole will be 

perfonned in one-foot lifts, and will meet 95olo proctordensityspecifications.The 

manholewill be buried at enough depth to allow for a minimum of a 2-foot sump 

(storage)beneaththe incoming lateral system. All pipingburiedfrom the inside toe of 

thereservoirto the manhole will be 4" P.V.C. schedule 40(or equivalent),andwill be 

backfilledwith virgin soil. Two anti seep collars will be installed around thepipe 

beneathbermsandpackedwith bentonite. All pipingburied under the bottom ofthe . -* ,.t .:. 

6.0sws wMP 061307 Page 7 of 12 
SII/EETII/ATER SOATH FEDERAL POD 

Pinnacle Gas Resources,Inc. Rev Date 

l5-Aue-06 

WATERMANAGEMENTPLAN- Section6 B 23-OctO6 

Water Management Plan c I 1-Dec-06 

D 23-F eb-0'l 

E 04-Apr-07 

footprint ofthe reservoir will need to be backfilled and compacted with I % minus 

washedrock/gravel.The leak detection systemwill be inspected quarterlyduringthe first 

year ofuse and then semi-annuallyfor the remainder ofthe life ofthe project 

The soil beneath the pit will be used as a secondary liner. The soils in this area are 

describedas "lean clays" with an average hydraulic conductiviry of4 0E-08 cm/sl 

moisturewill move downward through the soil profile at a rate ofonly 0.5 inch per year. 

Installation of synthetic liners: 

Manufacturedliners shall be installed over smooth fill sub gradewhich is free ofpockets, 

looserocks, or other material that could damage the liner. Inspector/engineershall 

visually inspect surface before installing the liner. All rocks greaterthan 2" diameter will 

be removedfrom the surface before installation. Shouldthere be a largequantityof rock, 

then the materialwill be sieved with a 2" screen to remove the larger rocks before the 

liner can be installed. Should the soil be too rocky andjagged, the engineerreservesthe 

right, with approval ofthe BLM Authorized Officer, to install a layer ofwashed sand as 

subgrade to the liner. The liner will be installed and fused with a minimum of2' overlap 

at the seams.The liner will alsobe keyed in at the top ofthe bermwith compacted fill 

(seekey-in detail in the designs) 

Freeboard: 

The ponds were designed with a minimum of 2 feet offree board according to BLM 

standards(OnshoreOrder#7). Pinnacle will insure that this minimum freeboardis 

availablethroughoutthe life ofthe project (by either isolatingwater to the ponds, 

evaporation,injection,or shutting in wells). 

The wind and wave height was calculated from the given pond design geometry. To 

perfom the calculationPearl used an equationfrom a technical paperentitled"Freeboard 

Allowances for Waves in tnland Reservoirs" by Messrs. Thorndike Saville,Jr., Elmo W. 

McClendon, and Albert L. Cochran that was published in the Joumal of the Waterwavs 

and Harbors, Division of the Proceedings for lhe American Society of Cit:il Engineers, 

May 1962. The equation relates wind speed, accelerationdue to gravity, wave height, 

andeffectivefetch length. This equation can be seen below: 

, a -1ol7

4=o.oozs8L

v' tv') 

The effective fetch length was detemined by a trial-and-errorprocessusing the pond 

geometryand assumedwind directions at 6 degree intervals. The equation used can be 

seen below and is also sited in the article entitled "Freeboard Allowances for Waves in 

lnland Reseruoirs": 

6 0 sws wMP 061307 Page 8 of 12 6fi8/200',7 
SWEETWATER SOUTH FEDERAL POD 

Pinnacle Gas Resources.Inc. Rev Date 

l5-Aug-06 

WATER MANAGEMENT PLAN' SECIiON6 B 23-Oct-06 

Water Management Plan c I l-Dec-06 

D 23-Feb-07 

E 04-Apr-07 

I vaCOSa tt'­ Fe = 

13.512 

Basedon this trial-and-error processand the geomehy of the ponds,the effective length 

was calculate to be 542]2 feet (which was the largest fetch length calculatedfrom the 3 

trials). The wind speed required to create a two foot wave based on the pond geometry at 

SweetwaterSouth is approxim ately 125 mph. These calculations showthat the freeboard 

of2 feet should be sufficient and overtoppingwill not be an issue. 

The pondswill be protectedby a five (5) strandbarbedwire perimeter fence but will not 

be netted. Pinnacleis proposingihis action for two reasons:I .) Waterproduction rates 

andevaporationrates have dictated that proposed ponds must selve primarily as storage 

pondsandsecondarilyas evaporation ponds. The pondslose their storage capacity if 

designedfor netting resulting in an order ofmagnitude increasein surfacedisturbance. 

2.) Per discussions with operators and consultants in the PinedaleAnticline area, ponds 

without netting have been approved by the Wyoming DEQ office and have been 

successfulwater storage facilities without impacting migratory birds. Pinnacle 

understandsthat the BLM Pinedale field office representativeshave visited the AntiCline 

Disposal,LLC (ACD) treatmentfacility on many occasions and were satisfiedwith their 

operations.ACD has been in operation since 2002.They have very similar water quality 

to Pinnacle's producedwater and have never netted their facility. ACD's facility is 

situatedmuch nearer to the Central Fllway and has never taken a migratory bird 

(evidenceofa rodent skull was found during one clean-out). 

Although the pondswill not be netted, Pinnacle recognizesthe need to keep birds fiom 

using the pondsandhas selected added preventative measures in an effoft to maximize 

deterrentresults.Pinnacleproposesto install railroad ties on two sides of each pondand 

string 620' of cable, on a 300' pulley system, across the pond attachingthe cable to the 

railroadties. Flags will be attached to the cable and the pulley systemwill allow the flags 

to be easily replaced, aiding maintenanceofthe system. Additionally, Pinnaclewill 

stationraptor models on one side ofeach pit. The models, called ScreechOwls, sit on a 

swivel base designedto move in the wind and a photo cell activates the four scare sounds 

during daylight hours.Pinnacle will take full responsibilityfor any take of migratory 

birds. 

Constructiondiagramsfor the off-channel containmentstructuresarepresented in 

Appendix 6.3. Interior and exterior berm slopes are 4H:lV. The design high-waterlevel 

is two (2) feet below the top of berm, allowing two (2) feet of freeboard. Typical berm 

top width is l5 feet. Soil will be removed and used to build the pit bermsduring 

construction.During reclamation, the bermed soil will be used to reconstruct the contour 

ofthe landscape. 

fl3;::':-."'-,. ,::: 4 t i.-,i !-r -, , ..,ti 

.ii','i;t I :i:j

6.0sws wMP 061307 Page 9 of 12 6^8n00'7 

.Prie :,J ii: ,__-,i) ,): L,-.,\ ,1 '' ', .,i {'c] 1 
SIIEETIYATER SOATH FEDERAL POD 

Pinnacle Gas Resources,Inc. Rev Date 

l5-Aue-06 

WATERMANAGEMENTPLAN- Section6	 B 23-Oct-o6 

Water Management Plan	 c I l-Dec-06 

D 23-Feb-07 

E 04-Apr-07 

24 hr/50 yr storm event: 

The water storage ponds would be located in the middle ofthe Great Divide basin, which 

is classified as a closed basin. Any precipitationthat occurs within the basin/watershed 

will not leave the basin. The sub-watershed area(Noth Red Desert Basin) that could 

potentially contribute to the proposedpondsis estimated at approximately 84732Acres. 

A 24 hour/50 year stormevent could producea rainfall intensity of approximately2.2 

inches. The soils around the Sweetwater SouthPOD are lean clays that allow for a high 

curuenumber,or a very slow infiltration ratelfaster run offrate. Il a24 hour/50year 

stom eventwere to occur, Pinnacle estimates that there could be approximately 2-6 

inchesofstanding water, depending on the topography. The pondsare being proposed in 

fairly flat areas throughout the POD. 

Of concern arehow the leak detection systemwould be protectedand how to ensure that 

the salts would remain sequestered ifa storm event ofthat intensitywere to occur. When 

the wells are in operation, the pondswill be able to handle the standing water around the 

berms.The pondsare built to a 4:l slope and will be compacted to 95% proctor density. 

The back side of the bems will also be seeded. Pearl is confident that with the slopes 

provided, the vegetation, the compaction, andthe height above original groundthat the 

bermsintegrity during a stom event shall not be compromised. 

CE&MT Laboratories(Gillette) performed a permeability test on the soils sampledat 

SweetwaterSouthPOD. The soil sample was taken near the 09BR-35-23-97well 

location, at an interval of 0- l0 feet. The permeability of this soil was tested to ASTM 

D5084 specifications and showed a hydraulicconductivity of4.0E-08 cm/sec.These 

resultsshow that the soils near that location are very impermeable.With the low 

pemeability rate and the evaporation rates shown for passive pan evaporation,it is 

reasonableto assume that precipitation from a run offwill evaporatefaster than it could 

infiltrate the soil to any rneasurabledepth. Based on this information,Pimiacle believes 

that the leak detectionsystem will not be compromised due to infiltration. When the 

pondsarereclaimed, a 20-mil liner will be placedover the top of the salt cake. This salt 

cakeis estimated to displace 4.7 acre-ft per pond which equates to approximately 1.36 

feet of storage, if the production assumptions hold true. The fused liner, along with a 

clay cap contoured to preventstandingwater over the reclaimed ponds, will provide 

adequateprotectionfrom water infiltration and salt rnigration. The leak detection will 

remain in place to monitor these sites for leakage.The system will be monitored 

quarterly for the first yearfollowing reclamationand then semi-annuallyfor the next five 

(5) years. If, after this time period, no problems are found, monitoring will cease. If water 

shouldbe found in the leak detection system, the water will be sampledto verifl water 

quality and repairs and improvementswill be made to the site. Ifthis provesnot to be 

possible, the salts will be removed and disposed ofat an approved. 

7.1 Downstreamlmpacts 

No produced water will be discharged to surface water.Therefore,no downsream 

impacts are expectedas a result of activities proposedin this POD. ,'tli 

,l t ','::,t 

6^8/200',1 6 0 sws wMP 061307 Page10 of 12	 ' ­ _ "_i 

-., l,;ii-r ._. :. _ 
SWEETWATER SOUTH FEDERAL POD 

Pinnacle Gas Resources. Inc. Rev Date 

l5-Aus-06 

WATER MANAGEMENT PLAN Section6 B 23-Oct-06


WaterManagementPlan c I l-Dec-06


23-Feb-01 

E 04-ADr-07 

8. MONITORING AND MITIGATION 

8.1 Containment Structures 

Pinnaclewill conduct, at a minimum, bi-monthly inspection and monitoring of all offchannel containment facilities, including the leak detection system. Outfalls will be 

inspectedfor signs oferosion. The perimeterofeach structurewill be inspected for break 

out of impounded waters to the surface. Water level in the ponds will be noted. 

Containmentstructuresthat do not perform as designed will be taken off-line and 

repairedif possibleor abandoned and reclaimed ifrepair is not possible. Ponds will also 

be fenced for the protectionof wildlife in the area, as required by the BLM Rawlins Field 

Office. 

Additionally, shouldthe required freeboard not be met and the pond capacity exceeded, 

waterproduction will cease and wells will be shut-in until the water level reaches a safe 

limit. 

8.2 Groundwater 

Groundwater monitoring wells were drilled in several locationsin SWS projectarea(see 

projectrrap for locations). The purposeofthe groundwatermonitoringwells is to 

providetheinitial indication ofthe depth-to-waterlevel, stratigraphy, lithology, and 

waterqualitycharacteristics ofthe uppermost aquifers across the POD. Initial

monitoringresultswere submitted to WDEQ's Groundwater PollutionControl Program. 

All ponds on federal surface andpondsoverlyingfederalminerals will be lined. The 

groundwaterqualityin State Section 16 T23N R97W has been characterized as Class IV 

and Pinnacle is currently evaluatingthepossibilityof unlined pondsin that area. 

Pinnacleisproposinga water and gaspipelineconidor from Section 26T2lN R97W to 

state Section 16T23N R97W in order to maximize water management flexibility.Please 

seeSection11 Right-of-Way Applications for a copy ofthe ROW applicationsubmitted 

to the Rawlins BLM Field Office on October 31,2006. Any water management 

altemativesproposedin state Section 16, T23N R97W, may be addedto the Sweetwater 

SouthFederalPODwater management planvia Sundry Applicationto the BLM Please 

seeAppendix 6.2 for the Ground Water MonitoringWell data. 

8.3 Roads,Culverts and Low Water Crossings 

Pinnacle'sStormWater Pollution PreventionPlan(SWPPP)for major construction 

activitiesrequiresbi-weekly monitoring. Monitoringis also required followingmajor 

stormsand/orrunoff events. Correctiveactionwill be taken to mitigate any problems 

notedin insnections. 

9. RECLAMATION 

All facilities addressedin the water management plan will be reclaimed in accordance 

with specifications outlinedin the Surface Use Plan(seeSection2 ofthe Sweet\#aEf i' i 

i;;; ".''=t 

ziil 

6 0 sws wMP 061307 Pagellofl2 ' r,/ts/pgol4:l il3i.a;eir r ,-r:i,: Ci1;,,r: 
SWEETWATER SOUTH FEDERAL POD 

PinnacleGas R€sources. Inc, Rev Date 

l5-Aue-06 

SCCIiON 	 B 

Water Management Plan	 c I l-Dec-06 

D 23-F eb-07 

E 04-Apr-07 

WATER MANAGEMENT PLAN 6	 2l-Oct-06 

SouthFederal POD book). Wheneverpossible,surfacestructuresdeemed unnecessary 

due to reducedwater production will, with prior approval, be phasedout and reclaimed. 

Waterwill be re-routed to other existing dischargelocations. Because the proposed 

pondswill be lined, Pinnacle is expecting little to no soil damage. Brine from the 

proposedpondswill either be trucked to an appropriate disposal site or injected at the 

injection wells in the projectarea. Pinnacle is currently in the processofrequesting 

approvalof the WOGCC to use the existing injection wells for this use The BLM will 

be notified via sundry notice before any surface-disturbing reclamation takes place. 

In order to mitigate the possibility of oversprayfrom the evaporation system,Pinnacle 

will use the excavated soil to build berms capable of containing any overspray. 

Following evaporationofthe water from the storageponds,Pinnacleplansto fold, weld, 

andbury the liners in place, effectively disposing ofthe remaining solid salts so that they 

will be preventedfrom returning to the surface.The following discussion addressesthe 

issue of anticipated solidsdepositionin the produced water storage ponds: 

The potentialsolidsdepositionin the proposedlined storage pondsin the Sweetwater 

SouthFederalPOD has been modeled and the analysis can be found in Section? 

Appendix 6.3 Watel ContainmentFacilities. 

Based on the solids deposition information,at the end ofthe Project, Pinnacle is 

convincedthatthe pond liners would be sufficient sizeto effectively dispose of any 

precipitated salts and ensure that no salts would come into contact with the native soil. 

The liner would be large enough to wrap the entire salt cake and would be welded 

(seamed) shut. The liner area has been calculated as 350,000 ft'per pond. In the 

unlikely eventthat the solid cake has a surface area larger than the liner area, an 

additional liner ofequivalent weight would be welded to the existing liner to create a 

continuous,uniform barrier betweensalt and soil. 

10. BONDING 

The reclamation costs for the ofl-channelcontainmentstructureswere estimated by Pearl 

DevelopmentCompany.Reclamationcosts are provided in Appendix 6.3, ryater 

C on tainment Facilities. 

11. LITERATURE CITED

Characteristics U.S. 

GeologicalSurveyWater-ResourcesInvestigationsReport 03-41 07­

l) Miller,Kirk A., 2003, Peak-Flow of Wyoming Streams, 

' l : , t - ..':' .'..F 

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SWEEWATER SOUTH FEDERAL POD


Pinnacle Gas Resources. Inc. Rev Issued For Date 

Review l5-Sep-06 

WATER MANAGEMENT PLAN 

Water Manaqement Plan 

A"PENDD( 6.1


HYDRoLoGIC WATERSHED FIf,LD ANALYSIS SIIEETS


HYDROLOGIC WATERSIIED FMLD ANAI,YSIS SUMMARY SIIEET


POD Name: SWEEWATER SOUTE FEDERAL POD 

Company: Pinnacle Gas ResourcesInc. 

Watershedinvolved: Continental Divide Closed Basin 

WatershedArea: 60206 acres 

Average Watershed Slope, ft./mi.: 3.87 

Existins Channel Information 

Average Bank Full Width, ft.: 5 ft. 

AverageChamelSlope, feet/foot: .0007 feet/foot 

Average Channel Width, ft. and Depth, ft.: W 5 ft.' D 3 ft. 

General Channel Condition: Stable 

Peak Flow Analysis: The method for determining peak flow is outlined in Peak-Flow 

Characteristics of Wyoming Streams (Miller, 2003, USGS-WRIR 03-4107). 

Recurrence 

Interval (Years) 

Exceedance 

Probability(%) 

Peak Flow, cfs (at 

POD boundary or 

reservoiroutlet) 

Contributing 

Area, sq mi 

Peak Flow at 

Wrtershed 

Outlet, (cfs) 

2 50 t49.79 94.0't t49;19 

l0 10 524.15 94.07 524.15 

25 4 804.10 94.07 804.l0 

Ci: : .. ,.. . 

HD Hydr. watershedAnalysis Page I of 1 t0/24/2006 
rNC"'2393SaitCrcek Highway (8260 * ENER9Y LABARATOR/ES, P"O" Box 3258'Caspel lW 82602

' Toll Free 888,235.0515307"n5,A5f5' Fax 3A7"234.1639' caspe,@eneruvlab,cpm EetTPnttdtx 

LABORATORY -{NALYTICAL REPORT 

Clientr l(enlledy Oil Rcport Date: 04/14/04 

Projecti Sweet'vlatel CollccfionDrter ll/07/03 i I:30 

Lab ID; C03110285-002 DateRcceivedr I l/07/0i 

Cliert Sarnple lD: KSSWS l-16 MatriE Aqleols 

,$rS 9t&?ol8Pgv'vrol1 

MCU 

MAJORIONS 

Alkafnity.Toial as CaCO3 '1940 mg/L 10 42320S 11i11/031231 lslb 

Bicarbonate as HCO3 2360 mg/L 10 A2320 B 11/11/031231 , slb 

Cajcium 66 S mg/L 10 e2i0 7 11112103 19.281 cp

Chloride 12000 mg/L 10 A450GC|A 11/:1/0313:20/il 

Fluoride 24 mgn. 0't A4sOGF C 11/10/0312:29/slb 

Magnesium 19I mgtr 10 E2007 11112103 19'.28 I cp 

Potassium 772 mg/L 10 E2007 l1/12/0319:28/ cp 

Sodium 8020 mgA t0 E200 7 11'203 19117 I cp 

Sulfa{e ND mg/L 10 E2m 7 11/1203f9:28/cp 

PHYSICAL PROPERTIES 

Conduclivily 35900 umhos/cm 10 A2510B 11/11/03 08:34i dd 

pH 8m su 0 010 42320 B 11/11/0312:31/slb 

Solids.Tolal DissoJved TDS@ 180 C 20600 nlgn- 1C 42540 C 11110i0310i00 /js 

SodiumAdsorplion Ratio(SAR) 220 unitless 010 Calcl'llalion 11/14/0312:04 / ks 

Calclum,SAR 3 34 meqtr 0 0s0 E200 7 11112JO319:281 cp

Magnesi!m.SAR 165 meq& 0 080 tzan 7 11112t0319-.28| cF 

Sodlum,SAR 349 meq/L 0 040 E2A0 7 11h2103 19117 I cp 

DATA QUALTTY 

A-/C Ba:ance (! 5) -286 % Calculation 11114103 12:.12 lks

Ariols 3n meq/L Calculalion 11114103 12:12 lks

Calions 356 meq/L Calculalion 11114103121121ks 

Solids.Total Dissolled Calculaled 21300 nrg/L Calculalion 11/14i03 1212/ ks

TDS Balance (080" I 20) 0 970 dec % Calculallon 11/14103 12.12Ik

Rcport RL- Analylerepodinglin1it. MCL- Malomum coniaminantlelel 

Dcflniliols: eCL- euality conlrollimit. ND'Notdelecled al the reponing iimit 

/ ,r tat^ 
lnter'fTlountoin Loborqtories lnc.

1673 Terra Avenue 

Sheridan, WY 82801 

SampleAnalysisReport 

-)LIENT: PinnacleGasResources,Inc. Date Reported: 3/27 /2006 

1 East Alger ReportlD: S0603232001 

Suite206 

Sheridan, WY 82801 Work Order: 30603232 

Proiect: 

Lab lD: 

Kennedy-Rawlins 

s0603232-00'1 

collectionDate: 3/15/200612:20 PM 

DateReceived: 3i16120062:00 PIM 

Client Sample lD: sw 23-16 

warer r7ci /t"l-' ll lkz '1 l Sampler: Rich Sweeny 

Result PQL Qual Units Date Analyzed/lnit Method 

General Parameters 

pH 7.9 0.1 s.u, 03/21120061752WN EPA150.1 

1752 WN Electrical Conductivity 47600 5 !mhos/cm	 03/2112006 st\,,125108 

03/2012006 TotalDissolved Solids (180) 30200 10 mg/L 1016 EB sM 2540 

Alkalinity,Total(AsCaco3) 1840 5 mg/L 03/21120061752 WN stvl 23208 

Hardness,calcium/Magnesium(Ascaco3) 382 1 mg/L 03/2312006933 KB SM23408 

Cyanide,Total	 ND 5 pg/L 03/2412006019 RM EPA 335.4 

Phenolics,Total Recoverable 10 10 Lrg/L 03/24120061151 RM EP A 420.2 

Radium226 25.2! 1.3 o.2 pCi/L 03/26120061609 SH stvl7500 RA B 

TPH418.1 10 1 mg/L 03/2712006948 SH EPA418.1 

SodiumAdsorptionRatio 247 0.1 03/2312006933 KB Calculation 

Aniohs 

WN Alkalinity, Bicabonate as HCO3 2240 5 mg/L	 03/21120061752 sN,,!23208 

Chlorid-" 15700 5 mg/L 03/2220061938 LK EPA 300.0 

Fluoride 1.8 0.1 mg/L 03/21120061752WN sM 4500FC 

Sulfate ND 10 mg/L ost22t20061947 LK EPA 300.0 

J tion" 

Calcium 102 1 mg/L 03/21120061304 TC EPA 200.7 

lvlagnesium 3'1 1 mg/L 03t21120061304TC EPA 200.7 

Potassium 130 1 mg/L 03/21120061304 TC EPA200.7 

Sodium 11100 '1 mg/L 03/21120061304 TC EPA 200.7 

Cation/Anion-Milliequivalents 

Bicarbonateas HCO3 36.79 0.01 meq/L 03/2312006933 KB st\,l t0s0F 

443.69 0.01 meq/L 03/231200693s KB SM1O3OF Chloride 

0.09 0.01 meq/L 03/23i2006933 KB SM1O3OF Fluoride 

ND 0.01 meq/L 03/2312006933 KB stvl1030F Sulfate 

Calcium 5.10 0.01 meq/L 03/23/2006S33 KB st\,l1030F 

Magnesium 2.54 0.01 rneq/L 03/2312006933 KB sl\,11030F 

Potassium 3.32 0.01 meq/L 03/2312006933 KB sN,,l1030F 

Sodium	 483.85 0.01 meq/L 03/2312006933 KB sN41030F 

These results applyonly to the samples tested. 

Qualiflers: ' Value exceeds lvlaxjmumContaminantLevel Anal!'tedelectedin the associated MethodBlank 

E Value above quantitalionrange	 Holding times for preparationor analysis exceeded 

J Anal''te detected belowquaniitationlimits L Analyzedby a contract laboratory / , ­

ND Not Detected atthe ReportingLimit S SpikeRecovery outside acceptedrecoveryliniils' l, 7 2ou 

Page 1 of 2 

WadeNieuwsma,ProjectManager 
lnter'lTlountqin Loborotories, Inc. 

I til3 terra Avenue 

Sheridan, WY 82801 

SampleAnalysisRePort 

-/:LIENT: PinnacleGasResources,Inc. DateReported: 3t27 /2006 

'1EastAlger Report lD: s0603232001 

Suite206 

Sheridan,WY 82801 Work Order: s0603232 

Project: 

LablD: 

Kennedy-Rawlins 

s0603232-001 

CollectionDate: 

Date Beceived: 

3/15/200612:20PlVl 

3i16120062:00 PlVl 

CIientSampleID: sw 23-16 Sampler: Rich Sweeny 

Water 

Result PQL Qual Units Date Analyzed/lnit Method 

DissolvedMetals 

Boron 1700 T00 Lrsa 03/20/20061846TC EPA200.7 

Cadmium 0.1 l-lg/L 03/27120061015 MS EPA 200.8 

Chromium ND 1 pg/L 03/20/20061846 TC EPA200.7 

Copper 

lron 

132 

ND 

1 

30 

[g/L 

[9/L 

03/27120061015 MS 

03/20120061846 TC 

EPA200.8 

EPA 200.7 

Leao 

lvlanganese 

[,,lercury 

Nickel 

12 

70 

ND 

ND 

2 

'10 

1 

10 

l.1g/L 

1.rg/L 

Pg/L 

[g/L 

03/27120061015 l\,4S 

03/20120061846 TC 

03/23120061035 PQ 

03/20120061846 TC 

EPA 200.8 

EPA200.7 

EPA 245.1 

EPA 200.7 

ND 3 [g/L 03/27120061015 |\r{S EPA 200.8 

Zinc 470 10 Fg/L 03/20/20061846TC EPA 200.7 

Total Metals(200-2) 

Aluminum 3080 Fs/L 03/24120061408TC EPA 200.7 

Antimony 

qrsenic 

8 

70 

5 

'l 

pg/L 

!rg/L 

03/27120061012MS 

03t27t20061012 MS 

EPA 200.8 

EPA 200.8 

.--l ]arium 

Beryllium 

Selenium 

86300 

ND 

28 

100 

0.9 

5 

pg/L 

gg/L 

Fg/L 

03/27120061012 lvls 

03/24120A61 40a Tc 

03/27120061012MS 

EPA 200.8 

EPA 200.7 

EPA 200.8 

Thallium 10 10 [g/L 03/27120061012 MS EPA2OO,B 

Theseresults apply only to the samples tested. 

Qualifiers: " Value exceeds MaximumContaminantLevel Analytedetectedin the associaled MelhodBlank 

E Value above quantitationrange H Holdingtimes for preparationor analysis exceeded 

J Analytedelectedbelowquantitaiion limits L Analyzed by a contract laboratory 

ND NotDetectedat the Reporting Limit s SpikeRecoveryoulsideacceptedrecoverylimits -'' r i ) ?oo6 

WadeNieuwsma,ProjectManager 
ffi i\lc. * 1705Wesl Firsf StreeL 

ToltFree 866.686.7175' 307.686^7175 gllette@ene,gylab"cam ENERGYLABORATORTES, ' Gi ette'WY82716 

' Fax307"682.4625" W 

LABORATORYANALYTICAL REPORT 

Ctient: Kcn$cdyOil ReportDater 0 t/04i05 

Project: SouLhSW S{atc 23-16 CollectiotrDatel 12i24i0415100 

SampFRQ/Typc; DstcRecciYcd:t2/27t04 

75-001 

Clicnt Sample ID: SouthSW Stale ?j'l6 Matri[: 

Loeation: sas ll6Gltr 23- l"tr 

Lab lD: G0,l1203 SampledBy: 

Aqalyses Result Units RL QCL Metlod 

MAJOR IONS 

Bica$onateas HCO3 2134 m9/L 5 A2320B 

Chloride 16500 mg/L D 10 E300 0 

Sulfale ND rng/L '1 E3000 

MAJOR IONS,TOTAL


Caldum 114 mg/L D 5 E200.7


Magnesium 24 mg/L D E200 7


Sodlum t0800 mg/L D 20 e2007


MAJOR IONS, TOTAL MILLIEQUIVALENTS 

Ray lvlcConncll 

AQUEOUS 

AnrlysisDate / BY 

12n7n4 21'.34 Idaa 

1r28l0416:31/ tlf 

12129104 19'.27 I tlt 

1230/0415:18/ tih 

12130104 15',181 t1h

1Z30lM 15:18,/ dh 

12130/0415:18/tlh 

12Y30/0415:18/ h 

1260i0415:18/ rlh 

2A'.31 

l2l29lo420131| iw 

12''810411.43I tlh 

1229/0420:31 /lw 

128/04 11:43/ rlh 

12nQI04 21.37 | car 

12129104 | jw 

12125104 t 1tt 

2Ot31 

1Lr31lc110:24 | car 

1A2S!0410.52I tt'! 

1229/0414:50ldh 

12129104 | 10152 Itt

12127104 21-.34 I daa 

01,i03i0515:54 /cw 

01/03/0515:S/ cw 

1230/0411:53/ daa 

Calcium,meq 

lVagnesium. meq 

Sodium,rneq 

METALS,DISSOLVED 

Cadmfum 

Copper 

lrotl 

Lead 

Manganese 

Merc!ry 

Lt\c 

METALS,TOTAL 

Alumlnum 

METALS,TOTAL RECOVEMBLE 

Arsenic 

Badum 

Selenium 

NON.IIIETALS 

Alkalinity,Tolalascaco3 

Hatdness.Totalas CaCO3 

SodiumAdsopliorRatlo,Tolal(SAR) 

Solids.Tolal Dissolved TDS@ 180C 

Reporl RL- Analt'terepodinglimit


Dcfioltionsr eCL- Quatilycontrolllmit


57 meqtL D 02 E20o7 

20 meq/L D E2007 

472 meq/L D 07 EaOD7 

0 1 ugtl 01 EzOOB 

13 ugtl 1 E200.8 

181 'JgiL 200 E200 7 

ND Ug/L 2 9200.8 

602 tlgtr E200.7 

ND Lrg/L 006 E200I 

21 ugi L i0 E200 I 

ugrL 50 E200 I 

27 ug/L 04 E200 8 

99000 ug/L 100 E200 7 

ND ug/L 5 E200 I 

1740 mgfl- 5 M32O B 

380 mg/L 10 A2340B 

241 unitless 01 Calculalion 

28000 mg/L zo A2540C 

MCL- Maxltnlmcontanrinant level

ND- Noi deiecled st lhe rePodingllmit 

D" RLIncrcaseduelo sarnple fialrixinterfercnce 1.,'t . 

Q4 aia'f) , ) 20C6 

PattyTibbetts


QualityAssurance
 Manager 
Groimd Water Monitorine Well Data 

\-/' i 
Table 1 

GroundWater Quality Summary 

Pinnacle-Sweetwater South 

Parameter 

ClassI Classll Classlll Fed09-35South 

Dn,s.u. 

Electrical Conductivity, umhos/cm 

TotalDissolvedSolids(180),nrg/l 

TotalDissolvedSolids(calc),mg/l 

ttalhrtv. Total{as CaCO3),mq/l 

llrtrocen,Ammonia1asN1, mg/l 

Radiunr226 

6 s-e.o l 

500 

x 

0.58 

.5pCi/l 

4.5'9.0| 

2000 | 

.5pCl 

6.5-8.5 

X 

5000 

.spCi/l 

8.6 

2230 

1480 

1560 

565 

2.1 

Sodium Adsorption Ratio 8 31.4 

Anions,mg/l 

Alkalinitv.Bicaronateas HCO3,mg/l 

Chloride,mg/l 250 100 2000 

632 

83 

Fluoride,mq/l 

Nitrooen, Nitrate-Nrtrate (asN),mg/l 

Sulfate. mq/l 

1.4-2.4' 

10 

250 

X 

200 3000 

2.3 

1.42 

)ations, mg/l 

0alcium,mg/l 

Vlaqnesium,mq/l 

Potassium,mg/l 

Sodium,mg/l 

x X 

11 

I 

10 

579 

ca---torvanon.lrttttiequivalenslqg !) 

BrcarbonateasHCO3 

Chloride 

Fluoride 

Nitrate+ Nitrateas N 

X 

X 

x 

X 

X 

x 

x 

10.35 

2.32 

0.1'l 

0.07 

Sulfate x 10.98 

Calcium 

,4aonesium 

Potassium 

Sodium 

x 

X 

X x 

X 

0.54 

0.97 

a.25 

26.64 

T^til MAfAf 'n.lll I2DD.2\ 

Alumlnum X 

0.05 0.1 

5 

0.2 

195 

0.'139 

Barium 

llium 

Boron 

Cadmium 

Chromium 

Sobelt 

1.0 

0.75 

0.01 

0.05 

0.1 

0.75 

0.01 

0.1 

4.2 

5 

0.05 

0.05 

4.2 

0.0032 

0.1 

0.0099 

0.359 

0.17 

lopper 

fon 

Leao 

Lithium 

Manqanese 

Mercury 

Nickle 

Selenium 

Silver 

Uranium 

Vanadium 

0.3 

0.05 

0.05 

0.002 

0 01 

0.05 

5 

x 

5 

5 

5 

2.5 

0.2 

4.2 

a.02 

X 

5 

0.1 

0.5 

X 

0.1 

0.00005 

X 

0.05 

5 

0.1 

0.527 

278 

0.358 

0.7 

7.49 

ND 

0.39 

ND 

0 015 

0.045 

0.33 

Zinc 5 2 25 

Class lV 

'Chapter8 Class l, ll, &lll pafameter limit based combinedtotalof 228 

frle 8.02.05.02 Data 1of 1 
Table I 

Ground\tfaterQualitySummary 

PinnaclesweetwaterSouth 

AboveClassI 

)oveClassI 

AboveClassIll 

.ChapterB Class l, ll, &lllparameter limit 

1of1 
Table1 

GroundWaterQualitySummary 

Pin nacle-Sweetwater South 

*Chapter limit based combinedtotalof 8 Class I, ll, &lll pafarneter 

1of 1 
Table1 

GroundWater OualitY Summary 

Pinnacle-Sweetwater South 

.Chapter8 Class l, ll, &lll parameterlimit based combinedtotalof 

'1of 1 
Table 1 

GroundWaterQualitySummary 

Pinnacle-Sweetwater South 

parameter .ChaptefI Class I, ll, limit based combinedtotalof 

'1of 1 
(ottsoLllrnr(1,(Lolt{ccns& mRTCnlRts TCsTlll€,lllc 

qEOI€CHNIC,4LEl.iqlNEERiNq I'{4T€RIALSLABOR-4IORY 

qeoraqY ccNsrRuc'r]oNgNqlNeEaNq 

October9,2006 

ProjectNo. 406-1743-4 

Company 

l\ilr. Dave Nicolarsen 

1082East Brundage Lane 

SheridanWY 82801 

Pearl Development 

Project: PinnacleSweetwaterProject


Permeabiiity
 Testing 

Dear Mr. Nicolarsen: 

Flexible in general 

sampleswere acquired by Pearl Development personneland deliveredto our laboratoryon or about 

September'15,2006. Permeability are tabulated "Permeability 

At yourrequesi,we conducted Wall Permeability accordancewithASTM D5084. Soil 

test results onthe attached Test'sheet. All 

resultswere initially transmittedtoyouvia email upon completion. 

testsample to an average 

usinga wax density test meihod. To facilitate remolding, wasmoisture to higher 

Thepermeability was remolded dry density that was determinedin the laboratory 

the test sample conditioned 

moisturecontentfor testing while targetjng the in-situ drydensity.The moisture densil/data was as follows: 

Sample Wet Density Dry Densiiy MoistureContent 

(pcr) (pcf) (%) 

1 92 88 4.3 

2 97 o? 4.3 

3 83 80 4.3 

permeability 10'1 86 18.7 test samole 

Please cofitact our office ifyouhaveanyquestionsor if we can be of further assistance. 

Sincerely, 

,/) ,- 4t 

.t a+/d")- ra'P'-'-----­

RachelRobinson TaunyaErnst, P. E. 

Staff Geologisi 

attachments:PermeabilityTest 

t" 

406-1743-A,/pINNACLEPERi4COVI 0-9{6.DOC

P.O.Box4093 3677 N. Highway 126, Suite A 

Gilleiie,WY 82717 4aga Farr West, UT 8.1404 

307-6866409 801732-1255 

307-686-6501(ia)i) 801-732-1256(fax) 
t

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!\)N)'---< 

Ie6yslereg 
Environmental 

Oil & Gas 

DataManagement 

Computeri Networks 

Technical Memorandum


Tol BrianDeurloo,PinnacleGasResources, IncFroml JakeCrissup, ALLConsulting 

BruceLanghus. ALL Consulting 

GG: Gordonolson,PinnacleGasResources, Inc., Brent Marchant, PinnacleGasResources, Inc. 

DanArthur,ALL Consulting 

Date: June23, 2006 

Re: WaterManagement Optionsin Sweetwater CBNGProjectArea 

lntroduction 

ALL Consulting memorandum GasResources, (ALL)haspreparedthis technical forPinnacte Inc (Pinnacle)in 

ofurto preseit'tnepotentiationg term alternatives forproduced watermanagement in the Sweetwater CBNG 

irolect Jr"a in the GreaterGreJnRiverBasinof Wyoming. This memo consistsof a brief summaryof he 

and comparative known and assumed variablesthatwere utilized to analyzethe technical feasibility economic 

analysisofthe various water management alternatives.

Summaryof KnownVariablesandAssumptions 

Water a produced qu;lityandquantityare the two most pivotalvariableswhenconsidering watermanagement 

pf"n. Watei""mpleanalysesindicatethatthe water qualityhasa relatively highTotalDissolvedSolids(TDS), 

rangingfromZO,OOO mgll anionsthat account for this highTDS are to over 30,000 mg/LTDS. Theprimary 

sodjuri and chloride.Bicarbonatealsohas a significantpresencein the water. Theestimatedinitialwater 

perwell(lbout35gallonsperminuteperwell).Accordingto decline pioauctionis around1,200Barrels/day 


estimatesprovidedbypinnacle, declinesat a rate consistent with the followingequation:
 thewaterproduction 

Q(t) = 15.9rt*

'oott 

Where: 

t =timein months 

Q(t) = 15"*"r"|. Oroduction rateingallonsperminute

Thisequationhasa correlation'z= 0.99 whencomparedto the waterproductiondeclinedatapiovidedby 

pinnacle.Forcomparison, R2= a perfectmatch,andgenerallyanyR'above0 8 is a correlation 1 is considered 

considereda reliable predictorof actual conditions.As water isproduced,however,thisequationmayor may 

notprovetobe accurate. 

wellsto be broughtonlineoverihe next 6 Thisproductiondeclineequationwas coupled with the projected. 


years.Basedon discussions with Pinnacle, itwas assumed that 48 wellswouldbe brought onlinein2006' 64


ivouhne nrougnt online and 2009, and40wouldbebroughtonlineactlyearin 2010 eachyearin 2007,2003, 

and 201 1 (atotalof 320 wellsover 6 years).The following graph (Figure 1)wasgenerated, whichdepictsthe 

total annuil volumeof water produced,aswell as the average barrelsof water producedperdayeachyear. 

Water volumes peakinyear4 (2009)at close to 600 milliongallonsof water (onaverage,40,000barrelsper 

day).Thehighestprojectedmonthlyproductionis 61 million gallons (on average,48,400barrelsperday),and 

occursinOct and Nov of 2009. 
Technicali\,4enro 

Figure1 

SweetwaterCBNG Annual WaterProduced 

Year1 ihroughYear20 ffi

www.ALL-LLC.com 

compiled 

were based ondiscussions 

Note:Assumotions for this graph 

withPinnaclestaff 

30000 s _ 

r.oooE& 

3d 

i6 

2ooooE$ 

;g 

15000 ­

10000 

5000 

0 

T0 11 12 13 14 

Typically,waterof this quality (TDS greaterthan20,000)is best managedthroughre-injection.However,this . 

O6ir"n& upp""1. to fe entirety ieasinEastheinjectionrate of the existing injectionwellsappears.tobelessthan 

1 banel per'minute(estimatedto be between05 and 0.6banelperminute,oraround700 barrels perday) An 

injectionrateof 0.6 BBuminutewas used for the analysesin this memo' 

Undertheconditionsoutlinedabove,it is imperative that the watermanagementplanbeflej(ible enough to 

handlepeakvolumeswhilealsonot being overlydesignedso that theinfrastructureof the watermanagement 

ptanis not appticaUeduringtheyearswh6nproductionratesaredecliningin the field. To do this, it.is important 

io have a portfoliof water management thatcanbe leveraged overthelife of theproject techniques 

WaterManagementOptions 

ClassII Disqosal lniection 

In order to handlethe anticipated peak ofwaterproduced,at least 43 injection wellswould be requiredif amount 

injectionwas the "sole"management practice.Thisis assuming eachproductlonwell will, on average' follow 

thewaterproductiondeclinecurveandhave a temporarypitnext-toit that will augment thewater management 

io ron1",j"gt"" with evaporation.Thisis roughly Iinjectionwellfor every 7 5 productionwells on the entire 

project. 

The graphbelow(Figure 2) shows the waterproducedoverthe life of the project,andhowthe water is 

r"nJgub is injection is the ;solesource"of water management. lt should bepointedoutthat there is some 

',temp6rarl,storagein the pitsadjacentto thewellpads,but these pitscannotbereliedon for long term water 

manaoement. 

Page2 
Technicali\4emo 

500 

3E 

:>
 6 b400


E 9.oo 

b= 

E3 - zoo 

Figure2 

SouthSweelwaierCBNG AnnualWater Balance 

Low PressureIniectionOnlY 

Yea 	I through Year 20 www.ALL-LLC.com 

7 A 910 11 12 13 14 15 16 1 7 18 19 20 123456 Year 

ffitnjection -SurfaceEvaPoraijon IExcess Watef _NetSlorago -Max Siotage 

Figure3 

MonthlyLowPressureIniectionWell 

Requirements 

E 50.00 

= 40.00 

ii., i

.96 

Eo 

30.00 

20.00 

o) 10.00 

I 

0.00 

1234 9 	1011 12131415 16171819 20 

Year 

: 

Page3 
TechnicalMemo 

Thegraphabove(Figure3) showstherequirednumberof lowpressureinjectionwellsona monthbymonth 

.

j basijoverthe20yearlifeoftheproject.Thisgraphshorvsthatthetotalinjectionwellcountwillneedto bein 

praCe operatingbyineendoi tn6seconayEaiinordertomanagetheanticipatedamountofwater.Thisis 

"no considering wellsare.anticipated iiota goooicenarii t6 nein,especially thefactthatproduction beingdrilled 

intoth-enext6 yearsandtheieii timiteitrigavailability.Therefore,itis importanttoeitherperformworkonthe 

injectionwellsto tmproveiniectlonrates,oilowertheiequiredvolumeofwaterto beinjectedthroughenhanced 

evaporation.Furthermore, thatthewellswillacceptwaterat a colst?Il.trateof 0.6banelsper thisassumes 

minute,whichis likelytodeclineovertimeastheinjectionzonebecomesaturated.lt isunknownhowfastthe 

injectionratewilldecline,andit maybepossiblefortheinitialinjectionrateto behigherbyacidtreatingand/or 

fracingtheinjectionweu. 

If theinjectionratecanbeenhanced,eitherbytreatingand/orfracingtheinjectionwells,or by injectingat a 

pressurehigherthan the frac pressure,then the numberof requiredinjection-we1lscouldbe reduced 

Rter reviewingthestepratediagnostictestperformed.by ALLbelievesit may lignincantly.- Senn:dlil?0-11, Assuming bepossibleto injectaooveitretraciressur"a-ndachievein initialinjectionrateof5 baneldminute. 

thisinjectionrateis sustainable, it maybe possibleto.minimzethe numberof injectionwellsrequiredto six. 

rigures+ s preseniinewaterbaianceandmonthty-requiredinjection yell colnLlol thisscenario.This

"no anOmaynotbetechnicallyfeasibleto sustain,however,additional injectionwells wouldbean.ideal',situation, 


couldbeaddedonanas neededbasis.lt shouldalsobenotedthatthisoptioncarriesa certaindegreeof risk


as programwouldberequiredtoensurenoimpactsonanyaquifersconsidered 

USDWs.Fore*"mpl",ii-tn""riron'itoringprograminbicatesthata USDWis beingimpacted, 

havetobeabandonedentirely. 

anditislikelythata .-itoring thisoptionmay 

Figure4 

South Sweetwabr CBNGAnnualWater Balancs 

HighPressurcIniectionOnlY 

Year1 throughYear20 wwrv,AL|"LLC,6olra 

500 

E :oo 

e :300 

F= 

- zoo 

910 1 8 19 20 

12345t' 3 4 5 6 7/ Aa 910.. Year Year

11 12 13 14 15 16 1 7 la 

Blnjection I'i-SudaceEvaporaiion I ExcessWaier' -Net Storage -[Iax Storag; -Total ProducedWatel 

,".i.-i-i )/ 2cJ0 Page4 
TechnicalMemo 

Figure5 

MonthlyHighPressurelnjectionWell


Requirements


-6 7.00 

= 6.00 

5.00 .= +, 

o= .q6

so 

4.00 

3.00 

o 2.00 

o 1.00 

0.00 

1011 12 't314 15 to 17 18 10 20 

Year 

EnhancedEvaqontion 

Enhancedevaporationcanhavea significantimpactonthevolumeof waterthatneedsto be injected'thus 

proleJtdueto tirefact.thatan enhancedevaporationpitis much morecost loweringthecostof the overatt. 

on the assumptions listedabove,therequirednumberof efficientto constructtnun ,nj"at.nwell. Based 

"n versus43) by constructingapproximatelv reduced(10 injec1onwetrs 21 ;6;;;;Jb;;;-oe signinca;r1y t2 o nr each(300'by300'by 6' deep,fora total of265AF). enhancedevaporation pitsthatar; a;;roxi*-t"v 'pit"

The dimensionsof tne evaporatron *"t" basedoff of the dimensionsof the existingpitthatKennedy 

constructed bv onsectionlo in rownstip zg iange 97. lt shouldbe notedthatallof the pitswouldneedto be 

oitne ntsty"ai andallof the injectionwellswouldneedto be constructed ;;;;il6 inc tineory tne 

"no o[them to enhance evaporation.Theaerators tn" tn" i"."no year. racn pit*outo'n"uu2 aerators 

wouldservetoenhancetheevaporationbyatomizingthewaterandsprayingitiryg"th-gairabovethe

""Ji,t

theywouldberunally""r. O"p"nOinionsitespecifiiconditions, vendorsreporl2Qok (winier months) to 80%

(summermonths)of thewate untniorgl.rth" aeratorswillbe evaporated. Eachaeratorcanoperateat 70 

itliionr ot *"t", d"r minute.A46OV3 phisepowersourceis required to operate theseaerators-ll-tnlspower 

:ffi; ;;; ;;;;;,"t"i, l'r"it L"ti*iateosb gailons of diesel is requiredto run thegeneratoreachdavper 

unit. For42 aerators ".V*i requireoverhalfa mlllion gallons of diesel peryearif operating i"rnJ, this-would 

pits' electricityis not availableattheevaporation 

is coupledwith Thefollowinggraph (Figure 6) showshowthewateris managedwhenenhancedevaporation where ini""irn. fli1'"oufOnLrioteOin figrtl 6 th"i th" onlytimejnje-ction wellsareoperated isduringmonths

thereis morewaterproducedtnin whatis evapoiated (winter months). Thisleadsto lessimpactto the 

recelvingaquifer,andultimatelya longer life for theinjectionwells' 

FigureTShowsthenumberofinjectionW€llsrequiredeachmonthoverthecourseofa20year|ifespa

10 injection wellswill be requiredat the endof Year 2' 

nfi-iO *"if. wouldneed-to be operated duringthe wintermonths(when enhanced evaporation 

dropstozeroafteryear 

shown,witha constant injectionriie of 0.0 barreilminute, rs not as 

effective)upuntilYearo. nt tnat pirnl,in" numo""ror required inlectionwellsessentially 

thenumber 7. asall of thewaterproduceo*L"iJ'0" n".Jr"o throughenha;cedevaporation.Furthermore, of 

Page5 
TechnicalMemo 

injectionwellsrequiredcouldbeevenless if injectionratesare improved throughacidtreating,fracingand/or 

injectingathighpressures. 

Figure6 

SweetwaterCBNG Annual Water Balance 

Low Pressurelnjection and Enhanced Evaporation 

Year 1 through Year 20 vww-ALL-LLC,com 

100 

90 

80 

70 500 

Sc 

60,g 

E > q g 6 b4tl0 

:a €t, 

g : 300 40e 

F= !0 - 200 

2A 

10 

0 

1234 5 6 7I9'q. 11 12 13 14 15 16 17 1E 19 20 

Elnjection a::-jEvaPorationFEvaporalors lExcess Water' *Net -[,4ax Storage -TotalPrcduced Slorage waie. 

Figure7 

MonthlyLowPressureInjectionWellRequirements 

WithEnhancedEvaPoration 

12.00 

6 10.00 

8.00 

E ­

6.00 

5(J 4.00 o 

2.00 

C) 

0.00 

123456 1011121314151617181920 

Year 

Page6 
L 

Technical\'4emo 

Figure8 

MonthlyEnhancedEvaporationRequirements 

ozv 

F

(u

o +, .1A 

>o luJo .10 

o 

(!, 

E. U 

11 13 15 17 19 

Year 

Figure8 shows thenumberof evaporation pitsrequiredon a monthtomonthbasisoverthe20yearlifeof the 

pr6ject.Similarto the injection weil requirements, themaximum number of evaporation pitsis requireduring 

of the aerators ihe'wintermonthsfromVear 1 through Year7. During the summer monthstheeffectiveness is 

notedby the fact that the evaporation pitsdonot have to run at full capacity to manageall of the water'The 

numbeiofrequiredpitscouldconceivablydecreaseif the dimensionsofeachpitwere increased. 

WaterTreatment 

Applicablewater treatment optionsare limited basedon the knownTotalDissolvedSolids(TDS) of ihe water 

alongwith the initial waterpioductionrate. Table 1 providesa summary of the watertreatmenttechnologies 

considered for the Sweetwater CBNG Project. 

As stated in Table1, the HigginsLoop ion exchange processthatis common in the PRBwas deemed not 

economicalfor the producedwaterin the Big Red coal due to the highlevel of chlorides,. thussecondary 

treatmentwouldbeiequired.Otherdesalinization treatment processes,suchas electro-dialysis, weredeemed 

not economical as they requirerawwater with a TDS of less than10,000 mg/L to be effective, thusprewouldbe reqiired. Due to the initialproductionrateof the producedwater,rapidspray.evaporation treatment 

(RSE)wasnot considered economical as RSE consumes alarge amountof energy/BBl treated.However' 

iisf L discussed later in this memoas an option formanagingthe concentrated reject waterto a solid.

Reactorwith The three treatmentprocessesthat seem to be mosteconomical are'1)theArmel/HBOxidation 

secondaryand tertiary treatments(suchas RO and RSE), 2) reverse osmosisasa stand alonewater treatment, 

and 3) Freeze ThawEvaporation (FTE).

Page7 
TechnicalMemo 

Table1. ofWaterTreatmentTech iesReviewed 

lowenergyrequired, 

possiblecontinuous 

regenerationofresin, 

efficient,mobile 

treatmentPossible 

cleantechnology,no 

chemicaladdition, 

mobiletreatment 

possible, less 

removesofweakly 

ionizedspecies,high 

removalrate,mobile 

highqualltytreated 

water,higher 

conversionefficiencY 

Minimal energY 

required,natural 

process 

-ggressiveoxidaiionof 

monovalent salts 

followedbY 

precipitationofthe 

contaminants 

preandposl 

treatmentrequlre 

for high efficiency, 

produceffluent 

concenrale 

lessefficientwith 

highconcentration 

influent,require 

membrane 

highenergY 

requiredforheating 

air,required 

handlingofsolids 

lowerconverslon 

efficiency, long 

operationcycle 

highenergy 

requirement, may 

requiresecondary 

RO to polishwater 

EMITreportsthattheir 

processwouldneed 

secondarytreatment 

forchloridesandthat 

treatmentwouldcost 

TDSvalueslessthan '10,000mg/Lrequired 

for these technologies 

tobeconsidered


effective,therefore


pre-treatment
 would 

be necessary, tnus


increasing
 thecostto 

treatthewater 

Highenergycosts 

makeuneconomical 

forrawwaterbased 

onvolume,butmay 

beapplicableio 

eliminatereiectwater 

Largeareaofland 

requiredtohandle 

water.ApProx10 

acresfor1000 

Pilotresultsfrom 

Pinedaleanticline 

seemfavorable,but 

fullscaleimPlementWthouta Prelon exchange 

(HigginsLooP) 

RapidSpraY 

Evaporation 

(RSE) 

Reverse 

Osmosis 

(Ro) 

regeneration


waste


wasteinsludge 

format the end 

of evaporation 

concentrated 

brineat the end 

of evaporation 

thatcanbe 

madesolid 

wasteinsludge 

form 

concentrated 

highpressure 

requirements, even 

removesmonovalent traceamountsof oil 

salts,dissolved &greasecan 

treatmentfoulingwill 

wastefrom be a concern,and 

memDrane thereislikelyto be a 

backwashduring 60%bnnestreambY 

membrane volume,ormore. 

etc., 

compactmodules fouling,maYrequire concenraie costswillbehigher, 

pretreatmentto streamfromthe but the brinestream 

reducefouling illtration willbemore 

operation concentrated 

contaminants causemembrane cleaning, Withpretreatment 

Page8 i.):.1 ' -,:l)al:ril 
TechnicalMemo 

Armel'41B oxid ation Re acto r 

The Armel/HBOxidationReactoris the main chem jcal/physical step treatment thatis partof a multi-step 

tecnnotogythatis being appliedin the PinedaleFieldandin the PowderRiverBasinwest of Gillette,under 

variousJonditions.prio-rresearchconductedonthistechnology leadsusto believe it may haveapplicationsto 

thisproject.NewparkEnvironmental water proprietary' and they solutions (NEWS) deems thetechnology 

operatethe two existingplantsundeTcontract 

oftheirprocess 

on a perbarrelcostto the operatorswhoareusing.ii.. ALL has


*itn i"" 1inczitlfWS personnel)intermsof understanding theapplicability and.cost


to tne "5"f.""proOuceO CBNGpro1ect.PreliminarydiscussionswithRon.indicatedthat waterstieaminihe Sweehrvater 

t"""0 on ir.," performanceof their existingwaterplants,and th,e qualityof the waterin the Sweetwaterprolect' 

(RSE or a crystallizer) treatmentwouldalsoberequiredto meet a that secondary (reverseosmosts)andtert-iary 

5,000TDSdischargerequ|remenlALLprovidedwaterqua|ityana|ysesandth:prolegl:9-w:lTquant

NEWSandRonindicatedhe would lookai it closer todeterminea solid cost estimatealongwiththetechnical 

teasiuirityoftreatingthewater.Hedidprovidearoughestimate,basedonourphoneconversat

gZ.OOlg'6L.This iicludesall facetsof the managemehtof the waier (permifting,constructingthe water 

osmosis, thereject disposingof the trealmlntptantwith secondary reverse ma-naging waterwith a crystallizer, 

solidcake,etc). Theeconompsof this rateareprovidedin the economicanalysis.NEWSdidindicatethat 

treatmentcostscouldbeloweredon a perbarrelbasisundervariouscircumstancesthatcouldbenegotiatedin 

a conlracl 

ReverseOsmosts 

Reverseosmosis(Ro)canbeusedeitheraSaprimarytreatment,oraSaSecondarytreatmenttol:the

Ceactoroiscussed)bove.ROappliesan operating pressurehigherthantheosmoticpressureof salt presentin


thewaterto drive purewater th.ugh fl1" riremnrinb, therebyiejectinothesalts. lt ls reversal of the osmosis


flowsfrom tnE nigh",concentration soiuti; solution
 to tie lower concentration to attain 

;;;.;;;;;;ri"r units,to a large scaleplant' iaiuii equifOrium.SeveralRo optioniareavailable,frommobiletrailer-mounted 


Themobi|eunitsarenotcapableof hand|ingthevolumeandqua|ityof the.water in question,Soit iS more


p"1"nt. costs can behighas membrane foulingfromoil
 feasibleto rely on a large scate,oesign-built Operational 


&grease, canbea concern'
 ironbacteria,andotherconstituents 

FreezeThawEvaqoration(FTE)


Thistechnologyis currentiybeingusedin the RedDesertareaby Samsonto treat 1000barrelsofwaterper


Oay(annuatai6rage1.Thesysteirutilizesthenaturalseasonsof ihe RedDesertto 1) evaporate water through


ipiay summerandwintermonthsand2) in wintermonthsthespraythatdoesnotevaporate


"uapor"tionln'both pointofwaterwith high TDSbeinglowerthan.purewatet,the water
 i[J"i to'" fr""." pad.Dueto the freezing 

fromthewaterthatdoesfreeze Theconcentrated irrit ooesnot treezj in the wintermonthsis-separated brine


i" Ji"",t"o to a holdingpondandthewaterthatis frozen is ableto be putto be putto bene{icial use(stock


waterrng,lanO applicaiion, f acre pits. Eachpitis linedandis 13 feetdeep,with3 feet of
 etc)as it thaws in the summermonths.Theexistingfacilitythatmanages1000


O"""fi i,t *"t", blr CayrequireslO-inOiviOua 


ir""no"rOwnen ihe pitis ai fult capacity(iea totat of 100 AF of storage). In orderto managethemaximum


urourt oi *ui"1" producedfromtheprolict,+ooot tnese pitswouldneedto be constructed (tohandle 
 thepeak


oi +o,ooobarels/day).Dueto the laigeland requirements, maybe moreapproprlateon a
 thistechnology 

someof thewaterfor beneficial use For example, if 100 of .*urrli."ur" to augmentinjectionandreclaim 

is roughlywhat
 tneiepitswerecon|tructed,
 iney lould feasibly manage10,000barrelsofwaterperday,which-


i, i" o" producedtowirdsttreena oi tne piojectslrfe(year 20). Duringperiodsof full capacity,the


""p5"6J or handled evaporation
 excesswater could be injected in enhanced ponds' 

ReiectW ate rM a n ag e m e nt


In the eventthata water traatmentprocess a concentrated commonlyreferredto as
 is utilized, brinestream, 


water,will be generated.Du"to curr"nt r"gulaiions, well,or it needsto be dried outto a solid
 ,,reject, this reject watercannotbedisposedofina class Il


tnj6ilonwett. lt eithjr needstote injected intoi Class I injection 


wasteanddisposedof accordingly


it. :­

Page9 
Technical\4emo 

Class Ilnjection 

currenflythewoGCC reportsthat the two class I injection wells in the state of wyomingarerunningat full 

tn"retor",a ClassI injection well would needto be permittedand constructedto managethe 

""p"City, permitting costbetween$60,000and$80'000'and coirceniiateorejeciwater. activitiesare anticipated,to 

couldlast from 8 months tooue,, y""i The construction ofthe ClassI well will be dependant ondrillingdepth

and conditions. A well that is 10,00bfeet deep maycost somewhere near $1.8million dollars, whilea well in the 

12,000to 15,000 depthrangemaycost ovei $3iniltion. Bolhth-e cost andtime requiredfor this option 

n'lil it u"ty un"ttrictive, is thereis a chance thataguitableiniectionzonemaynot be found. 

ZeroDischarge 

n Crystatiizer (RSE)canbe utilized to concentrate thewastestreamand and/or-aRapidSprayEvaporator 

eliminatetheneedfor a liquid dischirge. bonversionofreject waterinto solids/salts formcan be accomplished

thereject by extracting.water by using a crystallizer. The crystallizer furtherconcentrates waterstream andrecirculatingit itrrougnthetreatmentprocess.Total volume of the reject water is reducedwhilethe associated 

flows through a RSE.Liquidsare ioS in"i""r"" significantly.The resultant concentrate(sludge-water) 

anddisposal.ofthe reduced volumeof evaporateJandth; dissol;edsolidsremaininsludgestate.Handling of surfacesoi6or wastein sludge formis easier,but the disposaloisolid waste must avoid contamination 

groundwater by disposing of it in a lined cell

As the concentration ForFTE, the brinestreamis sent to a separatepitwhere it ispassivelyevaporated. of the 

concendatedbrineincreases,the evaporationrate also increases.This has been notedat the above 

mentionedprojectin the RedDesertarea. 

ComparativeEconomicAnalysis 

thatovef20 yearsa total of '132.7millionbarrelsof waterare producedfromthisproject,five Assuming gatheredfromPinnacleandfrom *,-npurfi"" economicmodelswere created basedon cost information 


variousvendors.Theresultsof the economicmodelsarepresentedinTables3,4, 5, 6, and7. Although these


cost estimates arepresentedin a range of values,iheyshouldnot be usedfor budgetary purposes,butrather in


relativetermsto understand may compare to one another.Totalcostincludestheupfrontcapitalcost
 howthey-


and-theannuatoperational costov;r tn! nexiZOyears. Net Present Value(NP\4 and inflationwere not


consideredin the analysisastheywill impact eachmodelin a relativelysimilarmanner,so they weredeemed


unnecessary for a comparative analysis.


Table3 presentsthe"LowPressureInjectiononly"optionif the wateris injected ata-rateof 0 6.barrels/minute 

Oelowtfr! trac pressure,Table4 presentsthe"Hi'ghPressureInjectionOnly"optionif the-water is injected at a 

aboveihe frac pressuie,Table5 presentsthe "EnhancedEvaporationand Low iate ot S barrels/minute 


eressuretniection"option, andTable7 presentsthe
 Table6 presentsthe rough costestimatedfrom NEWS to treat thewater'discharge 

ii" water to openplayas,andsolidifythereFctwater through a crystallizer, 

rough"1""ncostestimateto constructandopeiatea iTE treatment systemthatcouldhandleall of the water 

produceo. 

Thetreatmentoptionsmayneed to be further exploredwith the BLM,as they maynotqllowth9waterto be


oi".nutg;Jt" the surface Lvenif it is treatedto 5,000 TDS. Furthermore, withNEWSinitialcost estimate an


order oi magnitudemoreexpensivethan otheroptions;it appears thattreatmentof the waterwiih this 

technologyis not aneconomicallyfeasibleoptionat this time' 

Page10 
- -

- -

- -

- -

- -

- -

TechficaliVemo 

Trhle 3- I Onlv {Below Frac Pressure CostEstimate 

CapitalCost 20Year Operational Cost TotalCost 

UnitCost Units Subtotal UnitCost Subtotal 

Reservoir $2,000- $440,000- capcost $88,000- $528,000­

Construction $2,500 220 $550,000 1% pervear $110,400 $660,400 

$500,000- $21,500,000 - $0.1 0 - 013,300,000 $34,800,000

BBL $20,000,000$45,800,000 niectionWells $600,000 perwell 43 $25,800,000$0.15OET - ­ $21,940,000- $13,388,000 $35,328,000 

TotalCost $26,350,000 $20,110,400 $45rt60,400 

Table 4 Hioh Pressure I JOStEstimate 

CapitalCoS! 20Year Operational Cost TotalCost

Unit Cost Units Subtotal Unit Cost Subtotal 

Reservoir $2,000- $440,000- cap cost $88,000 $528,000 

Construction $2,500 perAF 220 $550,000 1% pervear $110,400 $060,400 

- $0.10 - 013,300,000$16,300,000 $500,000- $3,000,000 

niectionWells $750,000 perwell 6 $4,500.000 $0.25DeTBBL $33,200,000$37,700,000 - - F13,388,000$16,828,000 

fotalCost $5,050,000 $33,3'10,400 $38,360,401 $3,440,000 

T.hla h trnhancFd andIn CostEstimate


CapitalCost 20 Year Operational
 Cost Total Cost 

UnitCost Units Subtotal Unit Cost Subtotal - ­ - cap cost $317,500 $847,500 Reservoir $2,000-

perAF 265 

$530,000 

3% per year $397,000 $1,059,500 C.)nstnrclion $2.500 $662,500 - ­ $500,000- - qn $5,000,000$0.1 0 - 813,300,000 $18,300,00u

$600,000 oerwell 10 $6,000,000 1F PETBBL $20,000,000$26,000,000 

$20,700- $869,400- $0.15- f18,000,000$18,869,400 

$23.000 perevaporator 42 $966,000 $0.20 DETBBL - ­ $24.000,000$24,966,000 

$6,399,400 - 031,617,500 
 $38,016,900

IotalCost $7.628.500 $44,397,000$52,025,500


T:hlc 6 Cost Estimate - Wateris Managed on a oontract Basis


CapitalCost 20YearOperational
 Cost TotalCost 

UnitCost U nits Subtotal UnitCost Subtotal 

Reservoir $2,000- $440,000- capcost $88,000 $528,000 

0onstruction $2,500 perAF 220 $550,000 1% pervear $110,400 $660,400 

SZOO,UUU,UUU­ freatment $200- ltzttb,uuu,uuuSvstem $o persystem $0 $2.50DETBBL $333,000,000$333,000,000 - $440,000- $266,U66,UUUDZUb,CZO,UUU 

fotalCost $550,000 $333,110,400 $333,680,40( 

FTtr - ofreservoirs 

CapitalCost 20YearOperational 

Tahla 7 CostEstimate costincludedin construction 

Cost Total Cost 

UnitCost Units Subtotal UnitCost Subtotal- ­ - capcost $ 1,600,000 $9,600,000 Reservoir $2,000- $8,000,000 

Construction s2 500 perAF 4,000 $10,000,000 1% pervear $2,000,000$12,000,000 

freatment $0.50- 867,000,000$67,000,000 

Svstem $0 persystem 0 $o $1.50PCTBBL - $200,000,000 $200,000,000 - $8,000,000- i68,600,000 $76,500,000 

TotalCost $10,000,000 $202,000,000$212,000,000 

Page11 
TechnicalMemo 

PathForward 

Basedon the findings presentedin this Technical Memo,ALLwould like to providethe following as suggested 

itemsto tend to as Pinnactemoves foMardwith the development ofthe sweetwater CBNGproject: 

1. 	 Determineviabilttyofinjectionattheproject,includingtesting of existinginiectionwells dilled byKennedy 

ALL understands thatactivitiestowardsachievingthismay currently beinprogress,or Pinnacleplansto begin 

themshorly after July'1Oth.Thisappearsto be the flrst and most critical stepin developing a comprehensve 

waterman;gementpian. ALL can estimatetheimpactsof the skin to further enhancePinnacle'seffectiveness 

when treating boththe existing andproposedinjectionwells. 

2. 	Evaluateotherpotential opfions, 	 or unproductive injection such as Ft union sands coals 

with WOGCC staffindicatethat there is limited availabilityof injectionzonesin the area asother 

operatorshavegoneas deep as '13,000feet and notfound a suitable injectionzone, so this.maynotbe a 

pioductiveexerc-ise, at Pinnacle's ALLcan review drilllogs to determine ifthere areother 

Discussions 

howevei, request, 

suitableinjection zones.Otheropportunities mayalso exist for water injection:

in the immediateareathatcould be of . 	 In addition to PGR'S wells,thereis oil and gasdevelopment 

useforwatermanagement'TheHayReSerVoirFie|d(24N-97W)containSapproximate|y

includingat least one Temporarily Abandoned(TA) well. This oii and gasfieldhasproducedlittle 

water a TA,d We||may be a-nd apparent|y has not neededa disposal we|1,neverthe|ess, 


purchasable intoa disposal of the wells in this
 inO couiO be converted well. Currentownershrp 


fieldis unknown althoughEncanais a major operator'


, 	 Thenearestoilfieldwith injection wellsappearsto be PatrickDraw in 18N-99W. Thisfieldincludes


approximately wells; the operator(Anadarko)maychooseto use CBN-Gwaterfrom
 28 injection pdR to enhance partof their injectionactivity.This would entaila 15 to 2O-milepipeline,however. 

A 10-inch waterpipetinemightbeinstalled forapproximately $430,000 permile._ The20-mileline

might over the cost of 50 new injection total $gmittibnwhich may or may not be an improvement 


wells.


3. 	 tnvestigatetheoptionofpermiftinginjectionat pressuresexceedingnaturalfracturegradients 

ALL estimates thatbasedon the information provided fromKennedy's 	 steptestperformed 
 in 2003 that injection 

could be permittedto as highas 5 barrels perminute(7,200barrelsperday).This would re'quiresomeworK


with the WOGCC,andgatheringadditional information onthe two existinginjection
 wells and the newly drilled


injectionwellwould heip facilit;tethat. Thiswould also requirea better understanding
 of the underground 

sourcesof drinkingwater(USDW) in the area that couldpossiblybe impacted if water is injected abovethe


traituiegraaient,a"nC monitoringprogramwouldbe required toensureimpacts
 it is tilety tfrat a comprehensive 


couldbjquicklyidentifiedand mitigated. In the event thehighpressureinjectiondoes impact a USDW, this


optionwould likely haveto be abandoned


4. 	 Seekto maximize the use of evaporation pitsequippedwithevaporationacceleratars(eg , mister'. 

JanelleWrigley(Rawlins FO ROWSpecialist)saidthatwe can,transfeT federalwater onto stateland for 

evaporation-andinjection.She said if we want to transfer water from federalto federal for injectionit would


eitn",requirea $obs/BBLfee, or a waiver that would haveto be grantedfrom the WyomingBLMoffice(she


does not have the authoritytoapprovethison the FO level). lf it is Pinnacle's intentiontobuildpitsonstateland


and transfer thewaterto those piis,a formal requestforROW would needto be madewith BLM for the portions


ofthepioelinethatcrossesfederalsurface.


(,li t ., ,.,...; .. 

Page12 
TechnicalMemo 

5. As a longer term solution, continueevaluationof water treatnent options. 

viable, discussions 

option.As new technologies emergeand treatment optionsare better understood, an economically Althoughit appears that water treatmentis not economically shouldbepursuedtowardthis 

viable 

option may presentitself. Preliminary discussions wjth John Boysen(CrystalSolutions,lnc) indicated thaihe is 

workingwith the DOE andwith another companythat specializes in the extraction of methane hydratesfrom 

deep in the oceanon a technology thatwould enhance FTE and make it more viable. The technology is eady in 

conceptphaseat this point,but John is interested in obtaining afew barrels of Pinnacle's CBNGwater for pilot 

scale treatment tests,andpotentially a ield application testinthesummerof 2007. 

'..l-:.:.-.,'­

....''.''., 

' i ^^- vrt 27 2006 

Page13 

I