MAXIMIZE YOUR OPPORTUNITIES

1. MAXIMIZE YOUR OPPORTUNITIES JUMPSTART YOUR PROJECT

2. OPPORTUNITIES • How will you gain project approval? (Pre[NEPA]-planning) • Why do you want to do it? (Purpose and Need) • What do you want to do? (Project Description)

3. PRE-PLANNING From concept to project definition… internal first steps • Develop BIG picture description of future project. • Project area location/definition. • How many wells? Surface density? Spacing? • Seismic: source line miles, types of sources. • Explain rationale behind big picture description. • Reservoir characteristics. • Area-specific emerging technologies (directional/horizontal drilling). • Varying mineral ownerships/surface owners, collocated wells. • Determine operational capacities  time frame for project. • # of drill rigs in operation, etc. • Seismic: survey crew/helicopter/data acquisition crew availability.

4. PRE-PLANNING Initiate agency contact - objectives • To secure agency buy-in and lay groundwork for expedited project approval. • Preliminary knowledge of issues as seen by managing agency. • Demonstrate company’s understanding of resource issues. • Better ability to refine scope of project and project time frame. • Suggest a preferred NEPA approach. • Confirm project consistency with land use plan. • Value / positive result depends on agency/company culture and staff.

5. PRE-PLANNING Initial (BIG picture) meeting • Contact likely lead agency first, then meet with all involved agencies. • Explore possible interagency MOU, if several agencies. • Bring project description overview and maps. • Discuss NEPA contractor selection in preparation for next meeting. • Review agency approval process steps in detail, with time lines. • Identify possible sources of delays (example: NOI or NOA review, Section 7 consultation).

6. PRE-PLANNING Results • Viability of scope and timing for project. • Identify most obvious sources of delay. • Funding opportunities. • Staff support. • Confirmation of land use plan consistency. • If not, agency determines if project warrants additional consideration. • Plan amendment/plan revision/new plan needed. • Or, modify project to conform to scope of the land use plan. • Assessment of agency cooperation / enthusiasm and its willingness to work together to secure project approval. • Introduction of key players: POCs within agency and company, possible cooperating agencies.

7. PURPOSE AND NEED • Purpose: Agency objectives for considering a non-agency action. • Regulatory framework for consideration of proposed action and other resource objectives. • Need: Company objectives • Who, what ,why, where, when. • Describe resource opportunities or resource problems.

8. PURPOSE AND NEED Why is the P&N important? • Basis of alternatives evaluation. • “Purpose” provides the basis for development of alternatives to Proposed Action by relating it to other agency objectives. • “Need” sets the minimum standards that the alternatives must meet. • Fully analyzed alternatives must meet the P&N. • Approved alternative must meet the P&N. • Cannot preclude legitimate, reasonable alternatives.

9. PURPOSE AND NEED Example: Geophysical P&N • To determine whether to attempt to develop hydrocarbon resources, pursuant to its rights under valid existing oil and gas leases granted by the BLM. • To determine with greater certainty the potential for occurrence of oil and gas resources in geologic formations underlying the project area; • To verify and/or supplement the existing subsurface geologic data; • To generate new data that may be used to more accurately locate potential reservoirs of commercial quantities of hydrocarbons in areas where geophysical surveys and/or drilling have not occurred; • To eliminate some areas from future exploratory drilling, and focus well-drilling activity in only those areas where the resource is most likely present; and • To reduce unnecessary drilling and construction of associated roads, well pads, and other surface disturbances that would otherwise be needed to evaluate the subsurface formations and possible reservoirs.

10. PURPOSE AND NEED Example: Well exploration and development P&N • Allow COMPANY to exercise its legal right to reasonably drill and develop its leaseholds and extract the leased hydrocarbons from the subsurface; • Add to the existing knowledge of the complex subsurface geology and reservoir characteristics of the Paradox fold and fracture belt; • Further define drilling and completion techniques necessary to produce hydrocarbons from reservoirs in the Paradox fold and fracture belt; • Provide additional data with which to evaluate future well spacing; • Confirm or disprove the interpretation of seismic data obtained from a 2001 geophysical survey; • Provide additional data for use in evaluating the level of activity of future drilling in the Paradox fold and fault system; • Allow natural gas to be transported to a nearby mine where it would be utilized to operate the existing infrastructure; and • Contribute to available domestic oil supply if the wells are productive.

11. PROJECT DESCRIPTION How are you going to meet your P&N? • Development of a strategic project plan may not be straightforward. • Pre-planning can shape/modify the scope and time frame of the project. • PD may be (somewhat) issue-driven.

12. PROJECT DESCRIPTION Scope and time frame: Ask for what you want! Initial project scope and time frame (company) Land Use Plan consistency Approval time frame (agency) Modified scope and time frame (possible company re-appraisal)

13. PROJECT DESCRIPTION Conceptual or site-specific? • Approach determined by the scope of the project and flexibility of the project. • Example: This EA discusses the purpose, need, and potential environmental impacts of drilling three exploratory oil and gas wells and is a site-specific analysis of potential impacts to the human environment that may result from drilling 3 exploratory oil and gas wells. The three wells were proposed under individual APDs. • Example: The Company proposes to drill approximately 1,800 new wells as infill wells to all productive formations beneath the project area. Of these proposed new wells, the company intends to drill approximately 630 completions by either deepening an existing well bore or by drilling a twin well on the existing pad. • Conceptual approach: Describe operational details in a broad way, but with as many details as possible.

14. PROJECT DESCRIPTION General operational details • Example: Approximately 20 temporary staging areas would be located on public lands where the pipeline would cross a road. The numbers and locations of staging areas on private lands are yet to be determined. The preliminary locations of staging areas on public lands would be chosen to result in the maximum use of existing disturbance; however the final determination of the number and location of the staging areas would be cooperatively chosen by the agency and the pipeline construction company. • Example: Gas will be transported from the wellhead via gathering pipelines to two centralized compressor stations located within the project area but owned by Another Company. Each station consists of two 1,500 HP compressors. The existing compressors are expected to maintain acceptable pressure levels within the existing and new gathering system; however, additional supplemental compression may be needed to accommodate increased volume, throughput, and field pressure needs.

15. PROJECT DESCRIPTION The NEPA analysis will consider the most conservative option. • Example: “Produced water will be trucked to 5 to 10 evaporation ponds, each requiring 10 acres, for disposal.” • Example: “The Company proposes to drill between 2,000 and 3,400 new well bores on new and existing pads. Between 1,000 and 1,700 new well pads would be required.” Within each example, which scenario will be analyzed?

16. PROJECT DESCRIPTION Include “existing environment” • Date, “as of…,” sets baseline. • Keep it current. • Exploratory or well development project: Number of active wells, number of current locations, miles of access road, current produced water disposal, gas and oil processing and disposition, remote monitoring, truck access/frequency. • Geophysical project: Wells (active and P&A), prior seismic surveys, available roads.

17. PROJECT DESCRIPTION Addressing issues • Applicant-committed environmental protection measures. • Allow agency options for additional mitigation. • Include what makes sense. • Company will comply with all applicable rules, regulations, and guidelines. • Company will perform resource surveys as needed and determined by the agency. • Don’t promise too much (at least initially). • Company will pave 20 miles of county road needed for access. • Company will perform offsite mitigation, as determined by the NEPA analysis.

18. PROJECT DESCRIPTION Alternatives Considered • Include them as part of your agency submission. • Helps the agency to formulate its own alternatives. • Address the resources you know to be of concern. • Explain your rationale in detail. • Example: The Company considered an alternate pipeline route that would increase the offset from a MSO nest adjacent to the proposed route. The Company determined that it would be able to construct near the nest during certain times of the year and not affect the owls. • Alternatives that you considered (but rejected) may be fully analyzed in the NEPA document.

19. SUMMARY • Pre-plan: Approach the agency early. • Purpose and need: Clear and detailed. • Project description: Detailed, with operational flexibility, up-front mitigation, and the alternatives you considered. • Set a date for the official kickoff meeting. • Bring P&N, project description, and alternatives considered. • Bring NEPA contractor if possible) And you’re off…

20. MAXIMIZE YOUR OPPORTUNITIES