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

2. Page 2 PRB Infiltration StudyMBOGC & ALL Consulting Research Funding & Cooperators 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 Fidelity Exploration & Production Company An MDU Resources Group, Inc. Company Fidelity Exploration & Production Company An MDU Resources Group, Inc. Company Anadarko Petroleum Additional Cooperators Desired… Western Research Project

3. Page 3 PRB Infiltration StudyMBOGC & ALL Consulting 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

4. Page 4 PRB Infiltration StudyMBOGC & ALL Consulting 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

5. Page 5 PRB Infiltration StudyMBOGC & ALL Consulting Prospective Research Sites

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

7. Page 7 PRB Infiltration StudyMBOGC & ALL Consulting 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

8. Page 8 PRB Infiltration StudyMBOGC & ALL Consulting 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

9. Page 9 PRB Infiltration StudyMBOGC & ALL Consulting Skewed Site Reservoir Reservoir Dam Monitoring Stations

10. Page 10 PRB Infiltration StudyMBOGC & ALL Consulting Influent & Pre-Treatment

11. Page 11 PRB Infiltration StudyMBOGC & ALL Consulting Pre-Treatment System PW Reservoir Reservoir Dam Zeolite Treatment System Monitoring Stations

12. Page 12 PRB Infiltration StudyMBOGC & ALL Consulting Skewed Site Monitoring Monitoring StationsPW Reservoir

13. Page 13 PRB Infiltration StudyMBOGC & ALL Consulting Seven Brothers & CX Ranch Fidelity Exploration Montana/Wyoming Tongue River Watershed

14. Page 14 PRB Infiltration StudyMBOGC & ALL Consulting 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

15. Page 15 PRB Infiltration StudyMBOGC & ALL Consulting Site Selection Techniques Field evaluation practices include identification of suitable topographic features, landowner preferences, soil characteristics, and more… 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

16. Page 16 PRB Infiltration StudyMBOGC & ALL Consulting Good Soil Characteristics ~25’ 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. 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.)

17. Page 17 PRB Infiltration StudyMBOGC & ALL Consulting Preliminary Data Collection Trenching Equipment Site exploration trench

18. Page 18 PRB Infiltration StudyMBOGC & ALL Consulting 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

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

20. Page 20 PRB Infiltration StudyMBOGC & ALL Consulting Culp Draw Setting Cottonwood Trees View into draw at approximate Dam location

21. Page 21 PRB Infiltration StudyMBOGC & ALL Consulting Inside Culp Draw

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

23. Page 23 PRB Infiltration StudyMBOGC & ALL Consulting Pre-CBNG Mineral Deposits 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) Salt and Mineral Deposits

24. Page 24 PRB Infiltration StudyMBOGC & ALL Consulting Natural Mineral Deposits 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

25. Page 25 PRB Infiltration StudyMBOGC & ALL Consulting Elegant Environmental Solutions 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

26. Page 26 PRB Infiltration StudyMBOGC & ALL Consulting Coordinated Water Management 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.

27. Page 27 PRB Infiltration StudyMBOGC & ALL Consulting Produced Water Treatment Zeolite Pre-TreatmentSAR Reduction using Gypsum

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

29. Page 29 PRB Infiltration StudyMBOGC & ALL Consulting 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.

30. Page 30 PRB Infiltration StudyMBOGC & ALL Consulting Contact Information ALL Project Manager Dan Arthur, P.E Project Research Manager ALL Consulting 1305 E. 15 th 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