Powder River Basin (MT & WY) Coal Bed Methane Infiltration Study Project Workplan

1. Powder River Basin (MT & WY)Coal Bed Methane Infiltration StudyProject Workplan Prepared by Montana Board of Oil & Gas Conservation (Billings, MT) ALL Consulting (Tulsa, OK) DOE Contract: DE-AD26-03NT30489 MBOGC Contract: 2003-01 MBOGC & ALL Consulting

2. Funding U.S. DOE-FE NPTO/NETL Montana BOGC ALL Consulting Industry Cooperators Cooperation with stakeholders and other related and applicable research is a priority for the project Research Funding & Cooperators Fidelity Exploration & Production Company An MDU Resources Group, Inc. Company Anadarko Petroleum Western Research Project Additional Cooperators Desired… MBOGC & ALL Consulting

3. Objectives • Improving efficiencies and reducing costs • Enhance understanding • Document current usages • Characterize and forecast infiltration systems • Develop a guidebook • Pursue cooperation with other complimentary research MBOGC & ALL Consulting

4. Project Overview • Phase I • Data Gathering • Field Analysis • Site-Specific Data Collection • Phase II • Technical Analysis • Modeling • Analysis Methods • Phase III • Analysis & Review • Report Development • Technology Transfer MBOGC & ALL Consulting

5. Prospective Research Sites MBOGC & ALL Consulting

6. Skewed Site Anadarko Petroleum BLM Buffalo Field Office U.S. Geological Survey Johnson County, Wyoming Powder River Watershed MBOGC & ALL Consulting

7. Skewed Site • Project funding provided by BLM and DOE’s National Petroleum Technology Office • BLM Buffalo Field Office and USGS are leading a coordinated research effort for infiltration system in Johnson County, Wyoming • Site part of the Big George Unit operated by Anadarko Petroleum • Extensive monitoring system to facilitate analysis water chemistry and infiltration/migration of produced water from CBNG operations • System monitoring is ongoing MBOGC & ALL Consulting

8. Objectives • Compliment ongoing research being performed by BLM, USGS and Anadarko • Focus Issues • Siting criteria used and lessons learned • design, permitting & regulatory concerns • Operations and related effectiveness • Fate & effects of produced water • Analysis Procedures MBOGC & ALL Consulting

9. Skewed Site Reservoir Monitoring Stations Reservoir Dam MBOGC & ALL Consulting

10. Influent & Pre-Treatment MBOGC & ALL Consulting

11. Pre-Treatment System Monitoring Stations Reservoir Dam Zeolite Treatment System PW Reservoir MBOGC & ALL Consulting

12. Skewed Site Monitoring Monitoring Stations PW Reservoir MBOGC & ALL Consulting

13. Seven Brothers & CX Ranch Fidelity Exploration Montana/Wyoming Tongue River Watershed MBOGC & ALL Consulting

14. Seven Brothers Ranch • Seven Brothers/CX Ranch • Located along the Montana/Wyoming boarder • Development underway by Fidelity Exploration • Project is an expansion of the CX Ranch Field MBOGC & ALL Consulting

15. Field evaluation practices include identification of suitable topographic features, landowner preferences, soil characteristics, and more… Site Selection Techniques Thick clay soil with absence of permeable layers Gentle sloping area (<4/1 slope) with good usable berm on 1 to 3 sides of proposed pond placement. Trenching is a common and economical way to gain preliminary soils data for site suitability analysis MBOGC & ALL Consulting

16. Good Soil Characteristics Thick impermeable clays provide barriers to downward infiltration of produced water to be stored in the impoundment Because of equipment that is common in CBM development areas in the PRB, trenching is commonly used as a “first-cut” in assessing the feasibility of a potential impoundment site. ~25’ Safety is always an issue. Operators may choose to install temporary fences in some locations to avoid accidents to humans, cattle, and wildlife. Trenching may be followed by additional subsurface data collection, possibly using drilling or other techniques (e.g., hydroprobe, augering, etc.) MBOGC & ALL Consulting

17. Preliminary Data Collection Trenching Equipment Site exploration trench MBOGC & ALL Consulting

18. Depositional Challenges The Powder River Basin has broad heterogeneities relative to the depositional environment. In this example, a permeable and weathered coal seam is identified below about 15 feet of clay having intermittent sand and claystone layers. ~15’ Clay mix Weathered coal showing signs of sulfate deposits MBOGC & ALL Consulting

19. Culp Draw Site(potential site) Anadarko Petroleum Johnson County, Wyoming Beaver Creek Watershed MBOGC & ALL Consulting

20. Culp Draw Setting Cottonwood Trees View into draw at approximate Dam location MBOGC & ALL Consulting

21. Inside Culp Draw MBOGC & ALL Consulting

22. Local soil and bedrock deposits can impact chemical fate of “water” in the PRB, including Produced water, rainfall, snow melt, etc. Geochemistry Issues Gypsum Deposits in Coal MBOGC & ALL Consulting

23. Existing soils in the PRB may naturally contain high levels of various compounds, such as salts and metals At Culp Draw, as is common in the region, evaporated water has left visible mineral deposits (PRIOR TO CBNG DEVELOPMENT) Pre-CBNG Mineral Deposits Salt and Mineral Deposits MBOGC & ALL Consulting

24. Natural mineral deposits are common throughout the PRB and in Culp Draw Background analysis and identification of local “natural” deposits can help to avoid confusion pertaining to causation of visible and measurable environmental variations Natural Mineral Deposits MBOGC & ALL Consulting

25. Cottonwood trees are common to the local area at Culp Draw Cottonwoods have an exceptional capacity absorb groundwater and are approximately three (3) times more effective than simple evaporation for volume reduction of water The use of cottonwoods for groundwater management could be evaluated at the Culp Draw site Elegant Environmental Solutions MBOGC & ALL Consulting

26. Irrigation for is one of the produced water management practices used in the Big George Unit by Anadarko Petroleum Wildlife watering is an important local beneficial use of CBNG produced water in the PRB. Wildlife, such as Antelope, are attracted to CBNG reservoirs. Coordinated Water Management MBOGC & ALL Consulting

27. Produced Water Treatment Zeolite Pre-Treatment SAR Reduction using Gypsum MBOGC & ALL Consulting

28. Surface Discharge Beaver Dam CBNG Produced Water Discharge from Anadarko Petroleum’s Big George Unit into Beaver Creek Burger Draw, downstream of CBNG produced water discharges MBOGC & ALL Consulting

29. Closing… • New sites are currently under review by the research team and industry cooperators • Final selections to be determined by Summer 2004 • Researchers, DOE, and the Western Research Project are working to cooperate on complimentary issues • Coal Creek Site • Beaver Creek Site • DOE currently considering shallow seismic to research using previously funded DOE research by Montana Tech • Coordination with other researchers/cooperators desired (Universities, government, etc.) • Collaboration, technical, guidance, review, etc. MBOGC & ALL Consulting

30. ALL Project Manager Dan Arthur, P.E Project Research Manager ALL Consulting 1305 E. 15th Street Suite 205 Tulsa, Oklahoma 74120 918-382-7581 darthur@all-llc.com www.all-llc.com/cbm MBOGC Project Manager Tom Richmond Administrator Montana BOGC 2535 St. Johns Billings, Montana 406-656-0040 trichmond@mt.state.us www.bogc.dnrc.state.mt.us Contact Information MBOGC & ALL Consulting