Master Leasing Plan Project Resource Assessment

4/30/2012 Master Leasing Plan Project Resource Assessment Sheldon Kye Energy LLC Prepared for Western Energy Alliance

Master Leasing Plan Project Resource Assessment Sheldon Kye Energy LLC Prepared for Western Energy Alliance 1

Contents Executive Summary... 3 MLP Areas... 4 Oil and Gas Resource Potential in MLP Areas... 4 Potential Impediments for Oil and Gas Development... 5 Introduction... 7 Background...7 MLP Analysis Approach... 11 BLM Process for preparing and approving MLPs... 11 Proposed MLPs that have been approved or under consideration... 12 Wyoming MLPs... 14 Utah MLPs... 16 Colorado MLPs... 18 Montana/North Dakota MLPs... 20 Resource Potential in Defined MLP Areas... 22 Resource Assessment Methodology... 22 MLP Oil and Gas Resource Estimates... 23 Oil & Gas Resource Estimates... 25 Resource Value... 28 Appendix 1: Reference Materials... 30 Appendix 2: Oil & Gas Leasing Reform... 31 IM 2010-117 Oil and Gas Leasing Reform Land Use Planning and Lease Parcels Review... 31 Appendix 3: Proposed MLPs & Designation Status... 36 Appendix 4: USGS Resource Assessment Approaches... 37 U.S. Geological Survey Assessment Concepts for Conventional Petroleum Accumulations...37 U.S. Geological Survey Assessment Concepts for Continuous Petroleum Accumulations... 42 Appendix 5: MLP Oil and Gas Resource Estimates... 48 Colorado MLPs... 48 Wyoming MLP... 50 Utah MLPs... 50 2

Executive Summary The Bureau of Land Management s (BLM s) May 2010 leasing reforms added Master Leasing Plans (MLPs) as another layer of analysis to the normal leasing process. 1 BLM s rationale for MLP development in areas where intensive oil and gas production is expected is so other important resource values can be considered before oil and gas development commitments are made. In order to understand the potential implications of the MLP process on oil and gas exploration and development, the Western Energy Alliance commissioned this study. The focus of this study is to review and consolidate publicly available information regarding MLPs and to assess the potential oil and gas reserves underlying proposed and designated MLP areas that could be placed off limits to oil and gas exploration and development activities. MLPs are a mechanism for completing additional planning and analysis above and beyond that in existing Resource Management Plans (RMPs), and are intended to lead to RMP amendments. MLPs can be proposed by any entity that believes additional restrictions should be applied above and beyond those in current RMPs for areas that meet the following conditions: 1. A substantial portion of the area to be analyzed in the MLP is not currently leased. 2. There is a majority of federal mineral interest. 3. The oil and gas industry has expressed a specific interest in leasing, and there is a moderate or high potential for oil and gas confirmed by the discovery of oil and gas in the general area. 4. Additional analysis or information is needed to address likely resource or cumulative impacts if oil and gas development were to occur. This paper focuses on a number of key issues relating to the MLP process to provide a better understanding of the impacts the process may have on development of the oil and gas resources contained in the MLP areas. It provides the following details in regards to MLPs in the Rocky Mountain region: Status of the MLP plans for each of the Rocky Mountain states and identification of proposed MLP areas; 1 BLM Instruction Memorandum 2010-117, Oil and Gas Leasing Reform Land Use Planning and Lease Parcel Reviews, May 17, 2010. 3

Ranking of the MLPs in terms of acreage size and resource potential; An assessment of the oil and gas resource potential in the MLP areas; and Potential barriers to oil and gas development in proposed and designated MLP areas. MLP Areas Within the Rocky Mountain region, 43 MLPs have been proposed to date. These proposed MLP areas are shown in Figure 1 (areas outlined in black), along with areas that have been designated as MLPs or undergoing MLP development (areas outlined in red). The proposed MLP areas are largely located in Wyoming and Utah with a few in Colorado. Several of the MLP areas cross state boundaries but are treated as 2 MLP areas, one for each state. Out of the 43 MLPs in the Rocky Mountain region that have been proposed by various entities external to BLM and internally by BLM, only 18 are being considered for MLP development or are still undergoing assessment by state BLM offices. Two of these 18 MLP areas are also being considered for potash exploitation in Utah. Figure 1: Proposed MLP Areas (Rocky Mountain Region) Oil and Gas Resource Potential in MLP Areas 4

The size of the resource potential was assessed for each of the developed MLP areas that have been designated or are currently being developed in Figure 1, except for those in Rich County in Utah and Carter County in Montana due to the lack of available information from the USGS assessment process of these areas for resource potential. There was a high degree of uniformity to each of the state Oil and Gas Leasing Reform Implementation Plans for Wyoming, Utah, Montana and Colorado. There is no evidence of similar plans submitted by New Mexico or North Dakota. In these 2 states the local BLM offices have indicated that no MLPs are currently under development. Table 1 provides the consolidated resource potential in terms of total square miles in the MLP areas by state. Table 1: Oil and Gas Resource Potential by State Resource Estimates Total MLP Area (Sq. Mi) Oil & Liquids Mean (BBL) Natural Gas Mean (BCF) NGL Mean This oil and gas resource assessment indicates that upwards of 300 million barrels of hydrocarbon liquids and 10.5 Tcf of natural gas resource is contained in MLP areas in the Rocky Mountain region. The combined value potential value of these resources is in the range of $60-70B, estimated at current prices as per the writing of this report. Potential Impediments for Oil and Gas Development MLPs could impose a number of impediments to oil and natural gas leasing on federal lands that will greatly increase uncertainty: (BBL) Colorado 3,844 85,790,930 5,315 159,828 Wyoming 974 115,848,944 3,652 155,850 Utah 6,058 92,428,327 1,574 10,296,968 Rocky Mountain Total* 10,876 294,068,201 10,541 10,612,647 Additional onerous analysis and regulatory requirements above and beyond the normal federal lands leasing process; Unknown time frames for lease nomination acceptance; Potentially greater interference for MLP areas by external parties; Increased processing and redundant analysis by BLM leading to further delays in obtaining leases and permits; Confusion about the delegation of responsibility among Washington, state, district, and field offices; Lack of internal BLM resources to manage the MLP process leading to further delays; and 5

The specter of changes to designated MLP areas and the potential for new MLPs to be established. These concerns have been widely mentioned in trade press and direct commentary to the Department of the Interior and BLM. The recent trend over the past four years has been for oil and natural gas companies to pursue opportunities on private fee land, and even tribal lands, more so than pursuing federal lands. 6

Introduction The Western Energy Alliance commissioned this paper to provide it with a greater understanding of the proposed MLP areas, the size of the resource potential and impediments that may lead to reduced leasing and exploration work in these areas. This paper focuses on a number of key issues relating to the MLP process to provide the Western Energy Alliance with a better understanding of the impacts the MLP process may have on development of the oil and gas resources contained in the MLP areas. The key issues that are addressed in this paper include: Identification of proposed MLP areas in the Rocky Mountain states; Current status of the proposed MLPs; An estimation of the oil and gas resource potential in the MLP areas; and Potential barriers to oil and gas exploration and development in proposed and designated MLP areas (this has been limited to the summary comments in the Executive Summary). This paper is intended to be used by the Western Energy Alliance to proactively address issues raised by MLPs in order to advocate more effectively on behalf of its members. Background In May 2010, the Bureau of Land Management (BLM) introduced its new program to reform federal onshore oil and gas leasing processes. BLM s rationale for the leasing reform was to present an increased opportunity for public participation and a more thorough environmental review to reduce the number of leasing protests filed, as well as enhance BLM s ability to resolve protests before lease sales. BLM believes that not conducting this pre-leasing process in the past has led to significant protests and legal challenges. Therefore, the intent of establishing an MLP process is to help reduce the number of these potential protests. BLM believes that taking a closer, more thoughtful, look at parcels before they are offered for lease is critical to ensuring environmentally responsible development and reducing protests and appeals. Instead of BLM investing vast amounts of staff time and attention to defend lawsuits and address protests after the fact, BLM believes its goal is to take responsible action in advance. BLM has stated it intends to rely on existing environmental analysis and data if adequate, rather than conducting redundant analysis and data collection. This reform of policy introduces the Master Leasing Plan (MLP) as a mechanism for carrying out additional planning, analysis and decision making for oil and gas leasing and eventual development. MLPs will be prepared for certain areas where oil and gas development is likely and before any significant amount of the area is leased in order to further refine and/or establish conditions for such leasing. The MLP process would take a closer look at Resource 7

Management Plan (RMP) decisions pertaining not only to leasing, but to development as well. Therefore, in most cases, the MLP analysis will be conducted through the plan amendment or plan revision process. Industry, on the other hand, believes that the leasing reforms and MLPs are duplicative with the existing analysis done in RMPs, and will lead to further redundant analysis and delays in an already cumbersome and lengthy federal process. Rather than reducing protests and litigation, MLPs add yet another opportunity for litigation. Under this reformed oil and gas leasing policy, BLM has indicated it will: Engage the public in the development of MLPs prior to leasing in certain areas where significant new oil and gas development is anticipated. The intent is to fully consider other important natural resource values before making a decision on leasing and development in an area. Ensure potential lease sales are fully coordinated both internally and externally, including public participation, and interdisciplinary review of available information, as well as onsite visits to parcels prior to leasing when necessary to supplement or validate existing data. Whereas BLM previously relied upon RMPs to make land use allocations and leasing decisions, BLM stated in its reform Instruction Memorandum, While an RMP may designate land as open to possible leasing, such a designation does not mandate leasing. Therefore, BLM will now prepare a site specific environmental assessment (EA) on all nominated lease tracts before they are included in a lease sale notice to determine whether current land use decisions adequately protect important resource values. BLM has now established four specific criteria designed to determine whether an MLP, and an RMP amendment, is required before leases are issued. Initially, MLPs were to be considered only if an area met all four of the following criteria: 1. A substantial portion of the area to be analyzed in the MLP is not currently leased. 2. There is a majority of federal mineral interest. 3. The oil and gas industry has expressed a specific interest in leasing and there is a moderate or high potential for oil and gas confirmed by the discovery of oil and gas in the general area. 8

4. Additional analysis or information is needed to address likely resource or cumulative impacts if oil and gas development were to occur where there are: multiple use or natural/cultural resource conflicts; impacts on air quality; impacts on the resources or values of any unit of the National Park System, national wildlife refuge, or National Forest wilderness area, as determined after consultation or coordination with the National Park Service (NPS), the Fish and Wildlife Service (FWS) or the Forest Service (FS); and/or impacts on other specially designated areas. As part of the MLP/plan amendment process, BLM will re examine the development scenarios for MLP areas and assess if protection measures are adequate. Establishment of areas subject to MLPs must be approved in advance by the BLM State Director. BLM has indicated that the following resource issues will be considered in addition to other issues of local importance in developing MLPs: Ambient air quality and potential impacts, including cumulative impacts, to air quality from development; The effect of oil and gas leasing on lands that the BLM may identify as having wilderness characteristics and lands with special designations such as lands within the National Landscape Conservation System and Areas of Critical Environmental Concern; Special Recreation Management Areas; Nearby state, tribal, or other federal agency lands, including NPS and FWS lands that could be adversely affected by oil and gas development authorized by BLM; Important cultural resources, including traditional cultural properties of importance to Native American tribes; Paleontological resources; Fisheries and wildlife habitat, migration corridors and rare plants; Status of visual resource inventories and appropriate designations of Visual Resource Management Classes; Watershed conditions, steep slopes and fragile soils; Municipal watersheds and aquifers; Public health and safety (e.g. management of fluids and emissions); and The ability to achieve interim and final reclamation standards. Based on the above, a range of actions can be taken by BLM and other decision makers following consideration of these issues, such as closing an area to leasing, applying new lease stipulations, phasing leasing and development, or applying certain best management practices to development. 9

The additional scrutiny over and above the current RMP process for leasing will occur as BLM field offices form Interdisciplinary Parcel Review Teams (IDPR Teams) of resource specialists to review lease sale parcels and ensure compliance with the National Environmental Policy Act (NEPA) and other legal and policy requirements. In light of changing resource values, new information, and current policy, IDPR Teams will conduct site visits, as needed, to areas proposed for leasing in order to supplement or validate existing data and make informed leasing recommendations. 10

MLP Analysis Approach This analysis is being conducted at the request of the Western Energy Alliance to determine the resource potential contained within MLP areas that could be placed off limits to development. A literature research on all of the Rocky Mountain states was conducted to determine which MLP areas had been proposed and to ascertain their status. Per the instruction memorandum establishing the policy, IM 2010-117, each state BLM office was directed to establish an implementation plan to implement the leasing reforms, including MLPs. Because those plans were not always complete, we contacted all regional BLM offices to obtain both information specifics on the MLP areas and to understand the current position of the BLM on proposed MLPs. In order to establish the precise boundaries and acreage of each of the proposed MLP areas, data were sourced from each of the regional BLM offices. Of the 43 proposed MLP areas, only 18 currently being assessed further are considered in this analysis These 18 MLP areas were then evaluated for resource potential based on an adaptation of US Geological Survey (USGS) methodologies for calculating resource potential for conventional and continuous resource plays. Each oil and gas play in MLP areas was assessed for its resource potential and then the resource calculated across the play. Estimates of the resource potential were calculated using an algorithm to take conventional and continuous resource plays down to crude oil, natural gas, and natural gas liquids potential per square mile. The resource figures for each plan were aggregated to arrive at a total for the entire MLP. BLM, and other, documents were reviewed to assess additional impediments above the current RMP process that may exist for companies looking to lease, explore and develop leases in MLP areas. BLM Process for preparing and approving MLPs In order for BLM to consider the preparation of an MLP proposal in areas identified by both entities internal and external to BLM, the nominated areas must meet the four key MLP criteria, discussed in the Introduction. Each state BLM office conducted a review and developed a plan for implementing IM 2010-117. (BLM State Directors determined which MLP proposals would carry forward into a full assessment and RMP amendment). Each state BLM office is proceeding a bit differently. Some of the specific concerns in each of the state MLP areas are: Environmental groups recommended 21 MLPs in Wyoming, some of which correspond to sage grouse core acres. Despite that, Wyoming BLM is only proceding with one MLP Jack Morrow Hills. 11

Eleven MLPs are being considered in Utah as a means to set aside a portion of the nine million acres proposed for wilderness protection in the Red Rocks Wilderness Act. Although the bill has been proposed in Congress for over two decades without passage, environmental groups continue to try to lock those lands away as wilderness, and MLPs are yet another means for them to attempt to achieve their goal. Four MLPs are under consideration in Colorado, two of which extend into parts of southern Utah while another covers nearly the entire Grand Junction Field Office area. One includes Vermillion Basin and extends into Wyoming to encompass the Adobe Town Wilderness Study Area. Eight MLPs have been recommended in Montana where several RMP revisions are already in the works. Only one MLP has been proposed in New Mexico to cover Otero Mesa. Note that MLPs in Montana and Utah that have been proposed are still in the decision making process of whether or not they will be approved as MLP areas (these have been included in the MLP analysis). As a general rule, resource protections identified through the MLP process will be addressed as new or modified plan decisions that may include lease stipulations for new leases and/or closing certain areas to leasing. For existing leases in the MLP area, new or modified plan decisions are to be applied as conditions of approval, provided they are consistent with rights granted under the existing leases. Several of the planning requirements for oil and gas development plans have already been in place under the RMP planning process, but appear to be further accentuated in the MLP process. Any further imposition to the previous BLM Leasing Policy will potentially be impediments to industry interest for the purpose of leasing. It is recognized that if the resource potential is extensive in the MLP areas that the reward may be worth the additional requirements from the previous BLM leasing policy on federal or federally managed lands. For the purpose of this report, the states of Utah, Colorado, Wyoming and Montana where MLPs have been established, or are being currently evaluated, are the primary focus. Proposed MLPs that have been approved or under consideration Table 2 lists the MLPs that have been developed, are being evaluated, or have been approved for MLP designated status by BLM. As at the time of the writing of this paper only MLPs that have been referenced by state BLM offices by way of their leasing reform implementation plans or through discussions with the BLM offices are referenced. Several other areas have been recommended for MLP assessment by outside entities, however, these have not been included in the paper unless the state BLM offices have agreed that they meet the MLP development guidelines and are under consideration for MLP designation. 12

Table 2: MLPs Designated and Pending Designation State Proposed MLP Area MLP Designation Regional Office Acres Utah Cisco Desert EA Moab FO 321,750.91 Utah McCook Ridge EA Vernal FO 293,572.96 Utah Rich County MLP Salt Lake FO 526,304.13 Utah Five Mile Pass MLP Salt Lake FO 151,019.51 Utah Garrison MLP Fillmore FO 235,125.82 Utah NineMile MLP Price FO 276,799.80 Utah Little Creek Mtn MLP St George FO 63,034.41 Utah White River MLP Vernal FO 42,674.50 Utah Vernal North MLP Vernal FO 266,892.53 Utah Moab Proper MLP Moab FO 756,595.37 Utah San Rafael River MLP Price FO 524,855.69 Wyoming Jack Morrow Hills MLP Rock Springs 623,548.63 Colorado Adobe Town MLP Little Snake 307,756.85 Colorado Eastern Book Cliffs/Piceance Basin MLP White River 460,399.06 Colorado Dinosaur Lowlands MLP White River/Little Snake 732,779.46 Colorado Shale Ridge MLP Grand Junction 959,518.12 Montana Carter MLP Grand Junction 420,418.26 Utah Monticello Proper MLP_POTASH Monticello FO 648,366.80 Utah Lisbon Valley MLP_POTASH Moab FO 392,919.05 Figure 2 maps the proposed and developed MLPs in each of the Rocky Mountains states. Figure 2: Proposed MLP Areas (Rocky Mountain Region) 13

Wyoming MLPs BLM Wyoming prepared and presented its leasing implementation plan in August 2010. Wyoming Field Offices manage approximately 17.7 million acres of BLM administered public lands and 27.9 million acres of federal mineral estate in Wyoming. Wyoming BLM has been aggressively pursued by environmental groups to establish MLPs across the state on federal lands. Wyoming BLM has used industry expressions of interest (EOIs) to determine if MLP criteria 3 (the oil and gas industry has expressed a specific interest in leasing) has been met. As a result of this process, no MLPs have been internally identified in Wyoming. Because of the widespread and mature nature of oil and gas leasing and development in Wyoming, the areas that meet all four MLP criteria are rare. Six different proposal letters from sole organizations or organization consortiums have been submitted concerning numerous MLPs in Wyoming. Proposal letters were submitted by the following groups: The Wilderness Society Theodore Roosevelt Conservation Partnership Greater Yellowstone Coalition Wyoming Wildlife Federation Wyoming Outdoor Council Sportsmen for Responsible Energy Development Wyoming Wilderness Association United Steelworkers Powder River Basin Resource Council Bowhunters of Wyoming Biodiversity Conservation Alliance The Mule Deer Foundation Western Resource Advocates Center for Native Ecosystem Trout Unlimited Colorado Environmental Coalition. Table 3 lists the areas evaluated by BLM Wyoming for MLP development, their acreage and current designation status. The locations of the MLPs that have been developed in Wyoming are displayed in Figure 3 (red area denotes approved MLP or being considered). 14

Table 3: Proposed MLP Areas in Wyoming State Proposed MLP Area MLP Designation Regional Office Acres Wyoming Jack Morrow Hills MLP Rock Springs 623,548.63 Wyoming Greater Adobe Town No Rock Sprngs/Rawlins 923,005.41 Wyoming Adobe Town No Rock Sprngs/Rawlins 203,029.81 Wyoming Clarks Fork No Cody/Worland 808,570.81 Wyoming Greater Little Mountain No Rock Springs 521,444.60 Wyoming North of US189 No Kemmerer 56,891.22 Wyoming Shirley Basin No Rawlins 321,105.32 Wyoming Tunp No Kemmerer 416,482.08 Wyoming SI80_E789 No Rawlins 1,014,204.93 Wyoming Bighorn Front No Cody/ Worland/Lander 641,134.73 Wyoming Fifteen Mile Area No Cody/Worland 268,525.53 Wyoming Absaroka-Beartooth Front No Cody/Worland 1,975,172.86 Wyoming Fortification Creek No Buffalo 100,653.59 Wyoming Entire Bighorn Basin No Cody/Worland 12,248,455.60 Wyoming Bates Hole-Fish Creek No Casper 489,582.91 Wyoming Beaver Rim No Lander 75,370.93 Wyoming Dubois No Lander 117,660.98 Wyoming Newcastle NEWY SG No Buffalo/Newcastle 118,845.52 Wyoming Thunder Basin NEWY SG No Buffalo/Newcastle 770,971.25 Wyoming North Gillette NEWY SG No Buffalo/Newcastle 121,828.30 Wyoming Natrona NEWY SG No Buffalo/Newcastle 228,621.33 Wyoming Buffalo NEWY SG No Buffalo/Newcastle 488,050.45 Wyoming Sweetwater/South Pass No Lander 274,635.52 Wyoming Green Mountain/Ferris Mountain No Rawlins/Lander 196,939.08 Wyoming Miller Mountain No Pinedale 175,901.74 Figure 3: Wyoming MLP Areas 15

Only Jack Morrow Hills in southwest Wyoming has been designated as an MLP. The other areas that have been proposed to BLM for MLP development were rejected by BLM based on not meeting the criteria outlined by BLM to develop a proposal for MLP designation. Utah MLPs BLM Utah prepared and presented its leasing implementation plan in September 2010. BLM Utah manages approximately 23 million surface acres and 32 million acres of federal mineral estate within 4 districts (Canyon Country, Color Country, Green River and West Desert) and the Grand Staircase-Escalante National Monument. As of end of 2011, Utah was in transition in terms of complying with the timely implementation of the BLM s Oil and Gas Leasing Reform. It was noted that in the Utah oil and gas leasing reform implementation plan, Utah s congressional, industrial, county and state government, and environmental community interests are very active in all planning and activity level projects, such as Oil and Gas Leasing Reform, within Utah. In response to the 77 parcels in Utah from the December 2008 lease sale that were withdrawn by Secretary Ken Salazar in February 2009, a report was completed Stiles Report 2 by a multidisciplinary review team that made one of three recommendations for each of the 77 parcels: lease (open), defer, or remove from further consideration for leasing (close). BLM Utah reviewed and considered which areas would meet the four BLM criteria for evaluating areas that would be appropriate for MLP preparation. In addition, organizations external to the government submitted seven recommendations for MLPs in Utah. Each of these external recommendations has been evaluated against the MLP establishment criteria to determine if MLP preparation is warranted. The following parties submitted these seven proposals: Trout Unlimited; A coalition of The Wilderness Society, Colorado Environmental Coalition, Center for Native Ecosystems and Southern Utah Wilderness Alliance; and Southern Utah Wilderness Alliance. It should be noted that additional recommendations from external parties to BLM are expected to be submitted in the future. 2 The Stiles Report was completed by an eleven-person, multi-disciplinary review team that evaluated the 77 parcels (the Stiles parcels) from the December 2008 lease sale that were withdrawn by Secretary Salazar in February 2009. From the review the team made one of three recommendations for each of the Stiles parcels: lease (open), defer, or remove from further consideration for leasing (close). 16

Table 4 lists the areas evaluated by BLM Utah for MLP preparation, their acreage and current designation status based on BLM s internal review and external recommendations for MLP preparation. Table 4: Proposed MLP Areas in Utah State Proposed MLP Area MLP Designation Regional Office Acres Utah Cisco Desert EA Moab FO 321,750.91 Utah McCook Ridge EA Vernal FO 293,572.96 Utah Rich County MLP Salt Lake FO 526,304.13 Utah Five Mile Pass MLP Salt Lake FO 151,019.51 Utah Garrison MLP Fillmore FO 235,125.82 Utah Nine Mile MLP Price FO 276,799.80 Utah Little Creek Mtn MLP St George FO 63,034.41 Utah White River MLP Vernal FO 42,674.50 Utah Vernal North MLP Vernal FO 266,892.53 Utah Moab Proper MLP Moab FO 756,595.37 Utah San Rafael River MLP Price FO 524,855.69 Utah Monticello Proper MLP_POTASH Monticello FO 648,366.80 Utah Lisbon Valley MLP_POTASH Moab FO 392,919.05 Figure 4 displays the Utah MLPs that have been prepared and have been designated as MLPs or are still being considered. At the time of the writing of this paper all the MLPs that have been prepared have either been designated or are still being considered for MLP designation. 17

Figure 4: Utah MLP Areas Colorado MLPs BLM Colorado prepared and presented its leasing implementation plan in March 2011. The following external entities identified four potential MLP areas in Colorado: The Wilderness Society Biodiversity Conservation Alliance Center for Native Ecosystems Colorado Environmental Coalition. While these externally identified MLP areas do not meet all four leasing reform criteria policy, the BLM Colorado State Director decided to conduct an MLP analysis in all four areas during ongoing RMP revisions or amendments. The four MLPs and their field offices are: Greater Adobe Town (Little Snake Field Office) Dinosaur Lowlands (White River and Little Snake Field Offices) Eastern Book Cliffs/Piceance Basin (Grand Junction and White River Field Offices) Shale Ridges and Canyons (Grand Junction Field Office). 18

BLM Colorado has indicated that during these planning efforts, it will ensure adequate environmental review and analysis prior to making oil and gas leasing decisions. Additionally, BLM Colorado identified and will analyze a fifth MLP area North Park that is located in the Kremmling Field Office, which is also currently conducting an RMP revision. Given this MLP area is being analyzed and has not been proposed at this time we have not include it as one that has been prepared for MLP designation. Table 5 lists the areas evaluated by BLM Colorado for MLP development, their acreage and current designation status. Table 5: Proposed MLP Areas in Utah State Proposed MLP Area MLP Designation Regional Office Acres Colorado Adobe Town MLP Little Snake 307,756.85 Colorado Eastern Book Cliffs/Piceance Basin MLP White River 460,399.06 Colorado Dinosaur Lowlands MLP White River/Little Snake 732,779.46 Colorado Shale Ridge MLP Grand Junction 959,518.12 Figure 5 displays the Colorado MLPs that have been proposed (black outline); are being considered or approved (in red). Figure 5: Colorado MLP Areas 19

Montana/North Dakota MLPs In response to the federal request for BLM Montana State Office to develop a process to propose areas for MLP development, an implementation strategy was prepared and presented in August 2010. As part of the leasing reform process, external parties are encouraged to nominate areas for potential MLP development. External parties submitted two MLP recommendations: One is within the Western Montana District, Dillon Field Office, and includes the Centennial Valley/Beaverhead Headwaters area and the other is within the HiLine District, Malta Field Office, and includes the Bitter Creek/Frenchman Breaks area. These external recommendations were provided to BLM by: The Wilderness Society Greater Yellowstone Coalition National Wildlife Federation Theodore Roosevelt Conservation Partnership. Table 6 lists the only area in Montana/North Dakota that has been mentioned, by way of phone call to the regional field office in Billings, as currently being evaluated for MLP preparation. The other areas proposed by external parties, mentioned above, are not included in Table 6 below due to BLM s assessment of the proposed MLP recommendations not meeting the MLP designation criteria. Table 6: Proposed MLP Area in Montana/North Dakota State Proposed MLP Area MLP Designation Regional Office Acres Montana Carter MLP Billings 420,418.26 Figure 6 displays (in red) the Montana/North Dakota MLP that is under consideration for MLP preparation. The areas that have been mentioned above and proposed by external parties for MLP establishment have not been included in either Table 6 or Figure 6 due to lack of information available supporting MLP preparation at this time by BLM. 20

Figure 6: Montana/North Dakota MLP Areas 21

Resource Potential in Defined MLP Areas Sheldon Kye Energy LLC A comprehensive assessment of the resource potential of the MLP areas has been undertaken to understand the potential size of the oil and gas resource development opportunity that may be impacted by the MLP process. The resource estimates have been assessed for all potential plays in each of the MLP areas and the potential hydrocarbon resource in terms of crude oil, associated gas, natural gas liquids, and dry gas and liquids. Plays in each region have also been assessed on conventional oil and gas reservoir plays as well as continuous plays such as coal seam gas and shale oil and gas plays. A United States Geologic Survey (USGS) methodology has been used, along with the supporting data from the USGS reservoir and basin simulation modeling, as a means to understand the resource potential for the defined MLP acreages. We have reported all estimated resource figures as the arithmetic mean of the simulated results to provide a more realistic assessment of the potential commercial resource that may be available if exploration and development activities were to be undertaken under current geologic and engineering technologies. Resource Assessment Methodology In order to obtain the resource data needed to develop MLP resource estimates, we relied on the information developed by the USGS in recent studies undertaken in the Rocky Mountain region. The USGS took regional geologic structures and decomposed them by oil and gas bearing horizon and derived resource estimates based on geologic formation characteristics. A stochastic process was run using the geologic characteristic ranges (i.e., porosity, permeability, total organic carbon, etc.) and the output reported in terms of probability ranges (P95, P50, the Mean, and P5). These USGS resource estimates were used as a basis to determine the potential resource in the USGS assessment area in terms of resource per square mile. We then evaluated to the extent that the MLP fit within the USGS assessment boundaries and prorated the area accordingly to determine the MLP footprint within the resource assessment area. Finally, we tabulated the oil and gas resource by the prorated MLP area for each of the oil and gas bearing horizons taking into account both conventional and continuous plays. This methodology was used to quantify the amount of acreage in the MLP area that would be covered by the boundaries of the USGS play area. Figure 7 provides an example of how the individual resource plays within an MLP region are quantified in terms of USGS play boundaries and the boundaries of the MLP. 22

Figure 7: MLP Resource Area MLP Oil and Gas Resource Estimates Briefly stated by the USGS, conventional accumulations are described in terms of discrete fields or pools localized in structural or stratigraphic traps by the buoyancy of oil or gas in water. In contrast, continuous accumulations are petroleum accumulations (oil or gas) that have large spatial dimensions and indistinctly defined boundaries and exist more or less independently of the water column. The resource estimates that have been created for the MLP areas in this analysis have therefore been separated out between conventional oil and gas plays and resource plays, to be consistent with the USGS methodology. USGS Reserve and Resource Calculation Procedure The key attributes of the reserve and resource calculation procedure, undertaken by the USGS for regional studies, are highlighted below for conventional and for continuous oil and gas resources. Appendix 4 provides greater detail on the USGS reserve and resource estimation process for conventional and continuous oil and gas resources. 23

Conventional Resource Estimation Procedure A minimum accumulation size (field size or pool size), expressed as barrels of oil for oil accumulations and barrels of oil equivalent for gas accumulations, is chosen for the assessment unit. Petroleum in accumulations expected to be smaller than the minimum size is not considered to be a significant resource within the 30-year forecast span and is excluded from the assessment. Probabilities for the occurrence of adequate charge, adequate rocks, and adequate timing for at least one undiscovered accumulation of minimum size or greater are assigned to the assessment unit; this defines the geologic risk. The probability that essential petroleumrelated activities will be possible in the next 30 years, at least somewhere in the assessment unit, is also assigned; this defines the access risk. The number of undiscovered oil accumulations and the number of undiscovered gas accumulations in the assessment unit that are greater than or equal to the minimum size are estimated. Sizes of these undiscovered oil accumulations and undiscovered gas accumulations are estimated. Size estimates include both the reserves estimated at the time of discovery and anticipated reserve additions as accumulations are exploited after discovery (reserve growth). For undiscovered oil accumulations, ratios of gas/oil and natural-gas liquids/gas are estimated. For undiscovered gas accumulations, the ratio of total liquids/gas is estimated. These ratios are used to assess the co-products associated with oil in oil accumulations and with gas in gas accumulations. Continuous Resource Estimation Procedure A minimum estimated ultimate recovery (EUR) of oil (for an oil-prone assessment unit) or gas (for a gas-prone assessment unit) per cell is chosen for the assessment unit. Petroleum in cells expected to have a EUR less than the minimum is not considered to be a significant resource within the 30-year forecast span, and is excluded from the assessment. Probabilities for the occurrence of adequate charge, adequate rocks, and adequate timing for at least one untested cell having the minimum EUR or greater are assigned to the assessment unit; this defines the geologic risk. The probability that necessary petroleumrelated activities will be possible in the next 30 years, at least somewhere in the assessment unit, is also assigned; this defines the access risk. The number of untested cells within an assessment unit having potential to contribute to reserves within 30 years is estimated. This probability distribution results from the combination of probability distributions for: 1. the total assessment-unit area; 2. the area per cell of untested cells having potential for additions to reserves in the next 30 years; 24

3. the percentage of the total assessment-unit area that is untested; 4. the percentage of the untested area that has potential for additions to reserves in the forecast span of 30 years. A probability distribution is established for estimated unrecovered resources of oil (for an oil-prone assessment unit) or gas (for a gas prone assessment unit) per untested cell having potential for additions to reserves in the next 30 years. This distribution is based on reservoir-performance data from the assessment unit under consideration and/or an analog area. For oil-prone assessment units, ratios of gas/oil and natural gas liquids/gas are estimated. For gas-prone assessment units, the ratio of total liquids/gas is estimated. These ratios are used to assess the co-products associated with oil in oil accumulations and gas in gas accumulations. The combination of geologic and access probabilities, number of untested cells having potential, EUR per untested cell having potential, and co-product ratios yields probability distributions for potential additions to reserves of oil, gas, and co-products in the assessment unit. Oil & Gas Resource Estimates The amount of acreage underlying the proposed and designated MLP areas is displayed in Figure 8. Utah, with its 12 MLP areas, constitutes the largest amount of acreage that will be potentially impacted by the MLP process. The effective MLP areas have been separated out between conventional and continuous resource plays. (Note that both represent the same acreages in the MLP areas.) Figure 8: MLP Acreage 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Effective MLP Area (Acres) Effective Area (Acres) 25

The aggregate oil and gas resource figures are separated out by state and then MLP areas in Table 7. The figures are tabulated converting acres to total square miles (the measure the USGS uses for its resource assessments) and then the individual oil and gas resource for each of the MLP areas. We provided the Mean estimates, using the USGS data and modifying if for MLP acreage, for the tabulated resource estimates. Note that two MLP areas have not been included in the assessment (Rich County in Utah and Carter in Montana). Although there is evidence of some resource potential in these areas, information was not available to determine the size from the USGS sources as was used for all of the other MLP areas. A full breakdown of the oil and gas resource by geologic play can be found in Appendix 5. Table 7: Aggregate Resource Estimates by State MLPs Resource Estimates Total MLP Area (Sq. Mi) Oil Mean (BBL) Assoc Gas Mean (BCF) NGL Mean Rocky Mountain Total* 10,876 93,370,243 133 10,612,647 10,408 200,697,958 * Rich County and Carter MLPs are not included. (BBL) Dry Gas Mean Liquids Mean (BCF) Colorado (totals) 3,844 2,489,922 3 159,828 5,312 83,301,008 MLP: CO Adobe Town 481 1,180,279 2 92,806 3,069 78,651,459 MLP: CO Dinosaur Lowlands 1,145 1,106,030 1 31,321 250 684,252 MLP: CO Eastern book Cliffs 719 175,311 1 30,615 370 486,335 MLP: CO Shale Ridge 1,499 28,302 0 5,086 1,623 3,478,963 Wyoming (totals) 974 1,029,780 3 155,850 3,649 114,819,164 MLP: WY Jack Morrow Hills 974 1,029,780 3 155,850 3,649 114,819,164 Utah (totals) 6,058 89,850,541 127 10,296,968 1,446 2,577,786 MLP: UT Cisco Desert 503 177,073 0 10,680 184 287,746 MLP: UT Five Mile Pass 238 2,384,862 1 47,723 3 150,699 MLP: UT Garrison 367 6,132,665 1 47,919 5 235,766 MLP: UT Lisbon Valley 614 14,298,944 22 1,941,762 41 0 MLP: UT Little Creek Mtn. 8 80,130 0 1,603 0 5,063 MLP: UT McCook Ridge 459 119,774 0 2,161 344 607,001 MLP: UT Moab Proper 1,182 32,477,632 51 4,410,384 94 0 MLP: UT Monticello Proper 1,013 21,721,504 37 2,979,816 8 0 MLP: UT Nine Mile 432 604,726 2 90,449 576 989,807 MLP: UT San Rafael River 820 11,569,938 13 727,995 15 0 MLP: UT Vernal North 355 191,596 0 22,762 101 173,523 MLP: UT White River 67 91,697 0 13,715 74 128,180 (BBL) 26

Conventional and continuous resources have been aggregated together in Table 7 to provide resource estimates in the MLP areas; however, it is recognized that conventional and continuous resources are approached differently for exploration, development and exploitation. Figures 9, 10 and 11 provide a split of conventional and continuous resources in terms of barrels of oil equivalent (BOE) and then a breakout of barrels (BBLs) and billion cubic feet (BCF) of gas. Figure 9: Aggregate Resource Estimates (BOE) 1,200,000,000 1,000,000,000 800,000,000 600,000,000 400,000,000 200,000,000 0 Barrels of Oil Equivalent Barrels of Oil Equivalent Figure 10: Aggregate Resource Estimates (BBLs) 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 Oil & Liquids (bbls) Oil & Liquids (Mean BBLs) 27

Figure 11: Aggregate Resource Estimates (BCF) 6,000 5,000 4,000 3,000 2,000 1,000 0 Dry & Assoc. Gas (Bcf) Dry & Assoc. Gas (Bcf) These figures display that Utah has a heavy leaning towards conventional oil on MLP areas with smaller amount of resources in natural gas and continuous oil. The Wyoming MLP area displays a heavy leaning towards continuous oil and condensate and natural gas resources and a lesser degree of conventional resources. Colorado MLP areas are similar to Wyoming with a heavy leaning towards continuous oil and condensate and natural gas resources and to a much lesser degree conventional resources. Resource Value The results from this oil and gas resource assessment indicate that upwards of 300 million barrels of hydrocarbon liquids and some 10.5 Tcf of gas resource falls within the MLP boundaries in the Rocky Mountain region. In terms of current value of this potential resource, a range of $60-70B is estimated at current prices as at the time of this report. 28

Appendices 29

Appendix 1: Reference Materials 1. Bureau of Land Management Oil and Gas Leasing Reform Implementation Strategy. 2. Oil and Gas Leasing Reform Land Use Planning and Lease Parcel Reviews, May 2011, http://www.blm.gov/wo/st/en/info/regulations/instruction_memos_and_bulletins/ national_instruction/2010/im_2010-117.html 3. Master Leasing Plan Recommendations for MLPs in Wyoming, Utah and Colorado. 4. Wyoming s Oil and Gas Leasing Reform Master Leasing Plans External MLP Nomination Evaluation Preliminary GIS Screen, October 2010. 5. Oil and Gas Leasing Reform Implementation Plan Utah State Office, September 2010. 6. Master Leasing Plan (MLP) Assessment Glen Canyon-San Juan River, Utah State Office, November 2010. 7. Master Leasing Plan (MLP) Assessment San Rafael River, Utah State Office, November 2010. 8. Master Leasing Plan (MLP) Assessment Moab, Utah State Office, November 2010. 9. Master Leasing Plan (MLP) Assessment Vernal, Utah State Office, November 2010 10. Master Leasing Plan (MLP) Assessment Book Cliffs Divide-Grand Valley-Cisco Desert, Utah State Office, November 2010. 11. Bureau of Land Management - EMS TRANSMISSION 05/17/2010 - Instruction Memorandum No. 2010-117. 12. Wyoming s Oil and Gas Leasing Reform Implementation Plan, August 2010. 13. Employment, Government Revenue, and Energy Security Impacts of Current Federal Lands Policy in the Western U.S., prepared for American Petroleum Institute by EIS Solutions, January 2012. 14. BLM Leasing Reform Questions and Answers. 15. BLM New Oil and Gas Policy Fact Sheet, January 6, 2010. 16. USGS Wyoming and Utah Digital Data Series Documents (DDS-69). 17. U.S. Geological Survey Assessment Concepts for Continuous Petroleum Accumulations, U.S. Geological Survey Digital Data Series DDS 69 D James W. Schmoker, U.S. Geological Survey, Denver, Colorado: Version 1, 2005. 18. U.S. Geological Survey Assessment Concepts for Conventional Petroleum Accumulations, U.S. Geological Survey Digital Data Series DDS 69 D, James W. Schmoker and T.R. Klett, U.S. Geological Survey, Denver, Colorado: Version 1, 2005. 30

Appendix 2: Oil & Gas Leasing Reform Sheldon Kye Energy LLC IM 2010-117 Oil and Gas Leasing Reform Land Use Planning and Lease Parcels Review This is a summary of the Leasing Reform pertaining to the Master Leasing Program; for complete document, see http://www.blm.gov/wo/st/en/info/regulations/instruction_memos_and_bulletins/national_in struction/2010/im_2010-117.html Purpose: This Instruction Memorandum (IM) establishes a process for ensuring orderly, effective, timely, and environmentally responsible leasing of oil and gas resources on federal lands. The leasing process established in this IM will create more certainty and predictability, protect multiple-use values when the Bureau of Land Management (BLM) makes leasing decisions, and provide for consideration of natural and cultural resources as well as meaningful public involvement. Policy/Action: The following policy applies to the leasing of federal minerals under BLMadministered surface, state-owned surface, and private surface estates. The BLM does not manage leasing on tribal lands; therefore, this policy does not apply to tribal lands. In addition, sections I through III.F of this policy do not apply to the leasing of federal minerals under lands managed by other federal surface management agencies. Those sections, however, do apply to split estate lands within National Forest System (NFS) units if leasing decisions for such lands have not been analyzed in documentation prepared jointly by the U.S. Forest Service (FS) and the BLM for lands within the external boundaries of NFS units. This policy (1) addresses land use plan review, state office standardization of lease stipulations, and adaptive management; (2) introduces the Master Leasing Plan concept; and (3) identifies process requirements for reviewing oil and gas leasing expressions of interest. The U.S. Department of the Interior protects America s natural resources and heritage, honors our cultures and tribal communities, and supplies the energy to power our future. The department fulfills its broad-ranging missions through the work of its bureaus and offices, including the BLM, the Bureau of Indian Affairs, the Bureau of Reclamation (BOR), the National Park Service (NPS), and the U.S. Fish and Wildlife Service (FWS). As a land management agency with a multiple-use mission, the BLM will make land use decisions that sustain the health and productivity of the public lands for the use and enjoyment of present and future generations. The BLM recognizes that, in some cases, leasing of oil and gas resources may not be consistent with protection of other important resources and values, including units of the National Park System; national wildlife refuges; other specially designated areas; wildlife; and cultural, historic, and paleontological values. 31

Under applicable laws and policies, there is no presumed preference for oil and gas development over other uses. In making its oil and gas leasing and development decisions, the BLM will consult and coordinate with other land and resource managers (federal and non-federal), as appropriate. It is BLM policy to exercise its discretionary authorities, including its oil and gas leasing authority, through the use of an informed, deliberative process that includes: communication with the public, tribal governments, and federal, state, and local agencies; consideration of current science and other available data; compliance with existing laws, regulations, and policies; and consideration of important resources and values. To that end, state offices will continue to respond to expressions of interest from industry in leasing particular parcels, but will also take the initiative to strategically plan for leasing and development in areas that have the potential for oil and gas development but have not been fully leased. Upon issuance, this policy will guide land use planning and leasing procedures for future parcels not currently under review by the field offices as of the date of this IM. For parcels currently under review by the field offices, State Directors will determine whether it is appropriate to apply any part of this policy to those parcels (i.e., a Master Leasing Plan or the Interdisciplinary Review of Lease Sale Parcels process, including potential site visits and a closer look at program-specific guidance). Each state office will develop an implementation plan and timeline to execute this IM, as explained in section IV of this IM, and will submit this implementation plan and timeline to the Director for review and approval by August 16, 2010. Lease parcels undergoing review in conformance with this IM and a Director-approved implementation plan will no longer be subject to the leasing briefing paper process set forth in the memorandum from the Acting Director, dated February 13, 2009. State offices will also submit a post-implementation report, as explained in section IV of this IM, to the Washington Office (WO) by May 18, 2011. II. Master Leasing Plans RMPs identify oil and gas planning decisions, such as areas closed to leasing, open to leasing, or open to leasing with major or moderate constraints (lease stipulations) based on known resource values and reasonably foreseeable oil and gas development scenarios. Many of the BLM s RMPs completed since 2005 also establish resource condition objectives and the general/typical best management practices that will be employed to accomplish these objectives in areas open to leasing. In some areas, however, additional planning and analysis 32

may be necessary prior to new oil and gas leasing because of changing circumstances, updated policies, and new information. Criteria for determining whether such additional planning and analysis is warranted are listed below. This policy introduces the Master Leasing Plan (MLP) concept as a mechanism for completing the additional planning, analysis, and decision-making that may be necessary for areas meeting the listed criteria. Field offices may be familiar with Master Development Plans (MDPs) (e.g., Plans of Development (PODs), Full-Field Development analysis documents, etc.) that support individual post-lease development decisions. Unlike the MDP, the MLP process will be conducted before lease issuance and will reconsider RMP decisions pertaining to leasing. Similar to the MDP, the MLP will analyze likely development scenarios and varying mitigation levels, but at a less site-specific level than would typically be conducted in an MDP where a development plan has been fully defined by the operator(s). The MLP process will be conducted through the NEPA process using an interdisciplinary team that will coordinate and/or consult with the public and other stakeholders that may be affected by the BLM s MLP decisions. The MLP will ordinarily be initiated as a land use plan amendment. However, if it is anticipated that the likely outcome of the MLP will not result in the creation of new lease stipulations or changes to existing RMP decisions warranting a plan amendment, it may not be necessary to initiate the MLP as a plan amendment. The MLP process may also be combined with a plan revision process if schedules permit. The preparation of an MLP is required when all 4 of the following criteria are met: 1. A substantial portion of the area to be analyzed in the MLP is not currently leased. 2. There is a majority of federal mineral interest. 3. The oil and gas industry has expressed a specific interest in leasing and there is a moderate or high potential for oil and gas confirmed by the discovery of oil and gas in the general area. 4. Additional analysis or information is needed to address likely resource or cumulative impacts if oil and gas development were to occur whether there are: multiple use or natural/cultural resource conflicts; impacts on air quality; impacts on the resources or values of any unit of the National Park System, national wildlife refuge, or National Forest wilderness area, as determined after consultation or coordination with the National Park Service (NPS), the Fish and Wildlife Service (FWS) or the Forest Service (FS); and/or impacts on other specially designated areas. An MLP may also be completed under other circumstances at the discretion of the Field Manager, District Manager or State Director. 33

The MLP should enable field offices to (1) evaluate in-field considerations, such as optimal parcel configurations and potential development scenarios; (2) identify and address potential resource conflicts and environmental impacts from development; (3) develop mitigation strategies; and (4) consider a range of new constraints, including prohibiting surface occupancy or closing areas to leasing. A. Identifying and Evaluating Potential Resource Conflicts in an MLP The following is a non-exhaustive list of important national and local resource issues that should be considered when developing an MLP: Ambient air quality and potential impacts, including cumulative impacts, to air quality from development; The effect of oil and gas leasing on lands that the BLM may identify as having wilderness characteristics and lands with special designations such as lands within the National Landscape Conservation System and Areas of Critical Environmental Concern; Special Recreation Management Areas; Nearby state, tribal, or other federal agency lands, including NPS and FWS lands that could be adversely affected by oil and gas development authorized by the BLM; Important cultural resources, including traditional cultural properties of importance to Native American tribes; Paleontological resources; Fisheries and wildlife habitat, migration corridors and rare plants; Status of visual resource inventories and appropriate designations of Visual Resource Management Classes; Watershed conditions, steep slopes and fragile soils; Municipal watersheds and aquifers; Public health and safety (e.g. management of fluids and emissions); and The ability to achieve interim and final reclamation standards. B. Potential MLP Decisions As a general rule, resource protections identified through the MLP process will be addressed as new or modified plan decisions that may include lease stipulations for new leases and/or closing certain areas to leasing. For existing leases in the MLP area, new or modified plan decisions should be applied as conditions of approval provided they are consistent with rights granted under the existing leases. The following are examples of other planning decisions that may be made through the MLP process with supporting NEPA analysis: 34

Phased leasing in the MLP areas; Lease stipulations including no surface occupancy, timing limitation and controlled surface use; Planned or required unitization of federal lands; Phased development; Caps on new surface disturbance, pending acceptable interim or final reclamation; and Best management practices, such as: o use of existing infrastructure o multiple wells on a single pad o requirements to reduce or capture emissions o liquids gathering systems to centralized offsite production facilities o placement of all linear disturbances in corridors o extensive interim reclamation of roadway disturbance to the road surface and of pads to the wellhead o final reclamation, restoring the landform and native plant community. 35

Appendix 3: Proposed MLPs & Designation Status State Proposed MLP Area MLP Designation Regional Office Acres Utah Rich County MLP Salt Lake FO 526,304.13 Utah Five Mile Pass MLP Salt Lake FO 151,019.51 Utah Garrison MLP Fillmore FO 235,125.82 Utah NineMile MLP Price FO 276,799.80 Utah Little Creek Mtn MLP St George FO 63,034.41 Utah Monticello Proper MLP_POTASH Monticello FO 648,366.80 Utah Cisco Desert EA Moab FO 321,750.91 Utah McCook Ridge EA Vernal FO 293,572.96 Utah White River MLP Vernal FO 42,674.50 Utah Vernal North MLP Vernal FO 266,892.53 Utah Moab Proper MLP Moab FO 756,595.37 Utah Lisbon Valley MLP_POTASH Moab FO 392,919.05 Utah San Rafael River MLP Price FO 524,855.69 Rock Wyoming Greater Adobe Town No Sprngs/Rawlins 923,005.41 Wyoming Adobe Town No Rock Sprngs/Rawlins 203,029.81 Wyoming Clarks Fork No Cody/Worland 808,570.81 Wyoming Greater Little Mountain No Rock Springs 521,444.60 Wyoming North of US189 No Kemmerer 56,891.22 Wyoming Shirley Basin No Rawlins 321,105.32 Wyoming Tunp No Kemmerer 416,482.08 Wyoming SI80_E789 No Rawlins 1,014,204.93 Wyoming Bighorn Front No Cody/ Worland/Lander 641,134.73 Wyoming Fifteen Mile Area No Cody/Worland 268,525.53 Wyoming Jack Morrow Hills MLP Rock Springs 623,548.63 Wyoming Absaroka-Beartooth Front No Cody/Worland 1,975,172.86 Wyoming Fortification Creek No Buffalo 100,653.59 Wyoming Entire Bighorn Basin No Cody/Worland 12,248,455.60 Wyoming Bates Hole-Fish Creek No Casper 489,582.91 Wyoming Beaver Rim No Lander 75,370.93 Wyoming Dubois No Lander 117,660.98 Wyoming Newcastle NEWY SG No Buffalo/Newcastle 118,845.52 Wyoming Thunder Basin NEWY SG No Buffalo/Newcastle 770,971.25 Wyoming North Gillette NEWY SG No Buffalo/Newcastle 121,828.30 Wyoming Natrona NEWY SG No Buffalo/Newcastle 228,621.33 Wyoming Buffalo NEWY SG No Buffalo/Newcastle 488,050.45 Wyoming Sweetwater/South Pass No Lander 274,635.52 Wyoming Green Mountain/Ferris Mountain No Rawlins/Lander 196,939.08 Wyoming Miller Mountain No Pinedale 175,901.74 Colorado Adobe Town MLP Little Snake 307,756.85 Colorado Eastern Book Cliffs/Piceance Basin MLP White River 460,399.06 Colorado Dinosaur Lowlands MLP White River/Little Snake 732,779.46 Colorado Shale Ridge MLP Grand Junction 959,518.12 Montana Carter MLP Grand Junction 420,418.26 Designation status is whether or not a prepared MLP has been given designation status or is still under review by the regional BLM offices. 36

Appendix 4: USGS Resource Assessment Approaches U.S. Geological Survey Assessment Concepts for Conventional Petroleum Accumulations Introduction The U.S. Geological Survey (USGS) periodically conducts assessments of the recoverable oil and natural-gas resources of areas within the United States and also in other regions of the world. The purpose of these assessments is to develop geology-based, well-documented estimates of quantities of petroleum having the potential to be added to reserves within some future time frame. For the National Oil and Gas Assessment (NOGA) series begun by the USGS in 2000, the future time frame the forecast span is 30 years. In recent years, the USGS has distinguished between conventional and continuous petroleum accumulations for purposes of resource assessment (Gautier and others, 1995; U.S. Geological Survey National Oil and Gas Resource Assessment Team, 1995; U.S. Geological Survey World Energy Assessment Team, 2000). Briefly stated, conventional accumulations are described in terms of discrete fields or pools localized in structural or stratigraphic traps by the buoyancy of oil or gas in water. In contrast, continuous accumulations are petroleum accumulations (oil or gas) that have large spatial dimensions and indistinctly defined boundaries, and which exist more or less independently of the water column (Schmoker, 1995). Conventional accumulations float, bubble-like, in water; continuous accumulations do not. Because of their fundamental geologic dissimilarities, the USGS assesses conventional and continuous accumulations using different resource-assessment models and methods. The primary purpose of this report is to describe the fundamental concepts behind USGS resource assessments of conventional accumulations. The basic USGS assessment model is called the Seventh Approximation, which is a term that expresses both the evolution of the model and the idea that an exact analysis of undiscovered resources can never be achieved. The Seventh Approximation is the model used to assess potential additions to reserves in undiscovered conventional accumulations as part of the ongoing NOGA series of domestic petroleum assessments. Computer programs are used in conjunction with the Seventh Approximation to calculate resource estimates. However, assessment results are controlled by geology-based input 37

parameters supplied by knowledgeable assessment geologists, as opposed to computergenerated projections of historical statistical trends. The Seventh Approximation has an antecedent in the assessment model for undiscovered conventional accumulations used by the USGS in the 1995 National Assessment of United States Oil and Gas Resources (Gautier and others, 1995; U.S. Geological Survey National Oil and Gas Resource Assessment Team, 1995). The Seventh Approximation was first described by us in 1999 (Schmoker and Klett, 1999), and it was the model used to assess undiscovered conventional resources in the USGS World Petroleum Assessment 2000. Documentation for the World Petroleum Assessment 2000 (U.S. Geological Survey World Energy Assessment Team, 2000) described the Seventh Approximation in considerable detail, as well as operational procedures and practical considerations associated with its implementation. The reader is referred to that reference for more detail than is provided here. Geologic Nature of Conventional Accumulations Conventional accumulations, as recognized by the USGS for purposes of resource assessment, are defined by two key geologic characteristics: (1) they occupy limited, discrete volumes of rock bounded by traps, seals, and down-dip water contacts, and (2) they depend upon the buoyancy of oil or gas in water for their existence. Because of these properties, conventional accumulations are commonly assessed in terms of the sizes and numbers of discrete accumulations (for example, individual oil and gas fields). Some unconventional accumulations are so designated because, for example, they are overlain by deep water, are in a remote area, or require unusual engineering techniques. However, these circumstances do not necessarily make them unconventional from the standpoint of resource assessment. As long as accumulations are discrete and float in water, they are considered to be conventional in terms of USGS resource-assessment nomenclature and models, and the Seventh Approximation is applicable. Petroleum Volumes Assessed The Seventh Approximation assessment model provides a means to estimate quantities of undiscovered oil, gas, and natural gas liquids (petroleum) in conventional accumulations that have the potential to be added to reserves in some specified future time span. For purposes of this model, undiscovered petroleum is that which is postulated from geologic knowledge and theory to exist outside of known accumulations, and which resides in accumulations having sizes equal to or exceeding a stated minimum volume. Undiscovered petroleum volumes include initial accumulation sizes as they are perceived at the time of discovery, as well as any reserves anticipated to be added as these discoveries are developed and produced. The Seventh Approximation does not attempt to predict volumes of petroleum that will actually be discovered in a given future time span. To do so would require full knowledge of 38

future petroleum economics and exploration technologies, and the extent of exploration effort that will be conducted in the area being assessed. Rather, the Seventh Approximation is used to estimate volumes of petroleum having potential, from a geologic standpoint, to be discovered in a specified time frame. In order for USGS resource assessments to be of near-term relevance to the society that funds them, the assessment scope needs to be constrained from that of crustal abundance to those petroleum resources that might be recoverable in the foreseeable future. Such constraint is supplied by limiting assessments of undiscovered resources in conventional accumulations to those quantities of oil and gas having the potential to be added to reserves within some specified forecast span. Forecast span is the number of years that a resource assessment looks into the future. A forecast span of 30 years approximately one generation was used by the USGS in the World Petroleum Assessment 2000 (U.S. Geological Survey World Energy Assessment Team, 2000), and a 30-year forecast span has also been adopted for the current NOGA series begun in 2000. Given the numerous unforeseen developments of the past few decades that have significantly affected the petroleum industry and the possibility for surprises of similar magnitude in the future, 30 years appears to be approaching the limits of a realistic forecast span. A particular forecast span should not be interpreted too literally. An algorithm does not exist for calculating potential additions to reserves in the next 30 years, as opposed to the next 29 or 31 years, for example. It is more appropriate to equate a forecast span to the idea of a societally relevant resource inventory. The 30-year forecast span imposes limits upon the volume of potential additions to reserves assessed in conventional accumulations. Entire groups or classes of conventional accumulations are excluded from assessment consideration if they are not considered to be practicable in the timeframe of 30 years. An example to illustrate the point might be small, isolated, stratigraphically trapped accumulations in very deep water. Another way of thinking about constraints upon the scope of assessed undiscovered resources is to visualize the volume of petroleum residing in conventional accumulations as being ranked in the form of a pyramid, with a relatively small volume of high-quality resources near the top and increasing volumes of progressively lower quality and less practicable resources towards the base. A forecast span of 30 years can be regarded as a slice through the resource pyramid at some quality level. Accumulation categories below the slice are not assessed. 39

Probability Distributions The uncertainties associated with the variables required for an assessment of undiscovered conventional resources are considerable, leading to a substantial range of possible input values. Many of the variables that make up the set of input data are therefore represented by probability distributions rather than by single (point) values. Resource forecasts derived from these input data are also represented by probability distributions. The probability distributions for some input variables show the uncertainty of a fixed but unknown value, whereas other probability distributions represent input variables that have a naturally occurring range of values. F100 (minimum), F50 (median), and F0 (maximum) fractiles are the input parameters estimated for all variables represented by probability distributions. These three fractiles are not specifically linked to a particular type of probability distribution (for example, lognormal). The choice of probability-distribution type is an operational decision that is not constrained by the basic Seventh Approximation assessment model. For the NOGA series, a truncated, shifted lognormal distribution is used for the sizes of undiscovered accumulations, and triangular distributions are used for all other input variables represented by probability distributions. Fundamental Assessment Procedure To begin an assessment of undiscovered conventional resources using the Seventh Approximation, the volume of rocks to be assessed is apportioned into reasonably homogeneous sub-units. For the NOGA series, these sub-units are divisions of total petroleum systems, termed assessment units. Assessment units are considered and assessed individually. The essence of the assessment procedure is as follows: A minimum accumulation size (field size or pool size), expressed as barrels of oil for oil accumulations and barrels of oil equivalent for gas accumulations, is chosen for the assessment unit. Petroleum in accumulations expected to be smaller than the minimum size is not considered to be a significant resource within the 30-year forecast span and is excluded from the assessment. Probabilities for the occurrence of adequate charge, adequate rocks, and adequate timing for at least one undiscovered accumulation of minimum size or greater are assigned to the assessment unit; this defines the geologic risk. The probability that essential petroleumrelated activities will be possible in the next 30 years, at least somewhere in the assessment unit, is also assigned; this defines the access risk. The number of undiscovered oil accumulations and the number of undiscovered gas accumulations in the assessment unit that are greater than or equal to the minimum size are estimated. Sizes of these undiscovered oil accumulations and undiscovered gas accumulations are estimated. Size estimates include both the reserves estimated at the time of discovery and 40

anticipated reserve additions as accumulations are exploited after discovery (reserve growth). For undiscovered oil accumulations, ratios of gas/oil and natural-gas liquids/gas are estimated. For undiscovered gas accumulations, the ratio of total liquids/gas is estimated. These ratios are used to assess the coproducts associated with oil in oil accumulations and with gas in gas accumulations. The combination of geologic and access probabilities, number of undiscovered accumulations, sizes of undiscovered accumulations, and coproduct ratios yields probability distributions for potential additions to reserves of oil, gas, and coproducts in the assessment unit. An important aspect of this assessment procedure is that historical exploration and discovery patterns serve only as a starting point for the assessment forecast, and they are not necessarily projected as characteristic of future exploration and development trends. With historical data as a point of reference, input parameters can be chosen to reflect perceived impacts of future change, such as improved technologies and newly developed geologic concepts, as well as the recognition that the larger fields in an assessment unit tend to be found first. 41

U.S. Geological Survey Assessment Concepts for Continuous Petroleum Accumulations Introduction The U.S. Geological Survey (USGS) periodically conducts assessments of the recoverable oil and natural gas resources of areas within the United States and also in other regions of the world. The purpose of these assessments is to develop geology-based, well-documented estimates of quantities of petroleum having the potential to be added to reserves within some future time frame. For the National Oil and Gas Assessment (NOGA) series begun by the USGS in 2000, the future time frame the forecast span is 30 years. In recent years, the USGS has distinguished between conventional and continuous petroleum accumulations for purposes of resource assessment (Gautier and others, 1995; U.S. Geological Survey National Oil and Gas Resource Assessment Team, 1995; U.S. Geological Survey World Energy Assessment Team, 2000). Briefly stated, conventional accumulations are described in terms of discrete fields or pools localized in structural or stratigraphic traps by the buoyancy of oil or gas in water. In contrast, continuous accumulations are petroleum accumulations (oil or gas) that have large spatial dimensions and indistinctly defined boundaries, and which exist more or less independently of the water column (Schmoker, 1995). Conventional accumulations float, bubble-like, in water; continuous accumulations do not. Because of their fundamental geologic dissimilarities, the USGS assesses conventional and continuous accumulations using different resource-assessment models and methods. The primary purpose of this report is to describe the fundamental concepts supporting USGS resource assessments of continuous accumulations. The basic assessment model, called the FORSPAN model, was first documented by Schmoker (1999) and has an antecedent in the approach used to assess continuous accumulations in the USGS 1995 National Assessment of United States Oil and Gas Resources (Gautier and others, 1995; Schmoker, 1995). FORSPAN is the model used to assess potential additions to reserves in continuous accumulations as part of the ongoing NOGA series of domestic petroleum assessments. Computer programs are used in conjunction with FORSPAN to calculate resource estimates. However, assessment results are controlled by geology-based and engineering-based input parameters, as opposed to computer-generated projections of historical statistical trends. Scope of Assessed Resources The estimated in-place volumes of petroleum in many continuous accumulations are large to extremely large, extending into the hundreds and even thousands of trillion cubic feet for gas, 42

and into the tens and hundreds of billion barrels for oil. The ultimate resource base is enormous. However, in order for USGS resource assessments to be of near-term relevance to the society that funds them, the assessment scope needs to be constrained from that of crustal abundance to resources that might be recoverable in the foreseeable future. Such constraint is supplied by limiting assessments of continuous accumulations to those quantities of oil and gas having the potential to be added to reserves within some specified forecast span (Schmoker, 1999). Forecast span is the number of years that a resource assessment looks into the future. A forecast span of 30 years approximately one generation was used by the USGS in the World Petroleum Assessment 2000 (U.S. Geological Survey World Energy Assessment Team, 2000), and a 30-year forecast span has also been adopted for the current NOGA series begun in 2000. Given the numerous unforeseen developments of the past few decades that have significantly affected the petroleum industry and the possibility for surprises of similar magnitude in the future, 30 years appears to be approaching the limits of a realistic forecast span. A particular forecast span should not be interpreted too literally. An algorithm does not exist for calculating potential additions to reserves in the next 30 years, as opposed to the next 29 or 31 years, for example. It is more appropriate to equate a forecast span to the idea of a societally relevant resource inventory. The 30-year forecast span imposes limits upon the potential additions to reserves assessed in continuous accumulations: Entire groups or classes of continuous accumulations are excluded from assessment consideration if they are not considered to be practicable in the time frame of 30 years. An example to illustrate the point might be gas hydrates in Antarctica. Portions of continuous accumulations are excluded from assessment consideration if the untested area of a continuous accumulation that has potential to contribute to reserves in the next 30 years is thought to be less than the untested area that might ultimately contribute to reserves. For example, the area of a continuous accumulation considered to have potential in a 30-year time frame might be limited to known sweet spots and their postulated extensions. Categorizing the Assessed Resources of Continuous Accumulations In the terminology of recent USGS petroleum resource assessments, undiscovered resources are those postulated to exist outside of known fields, whereas reserve growth (which is synonymous with field growth) describes resources added to known fields as they are further developed and produced (Attanasi and Root, 1994; U.S. Geological Survey National Oil and Gas Resource Assessment Team, 1995; U.S. Geological Survey World Energy Assessment 43

Team, 2000). However, in the case of continuous accumulations, the distinction between undiscovered resources and reserve-growth resources is not well defined. The existence, location, and production characteristics of continuous accumulations that already have appreciable development are well known, implying that the assessment of such accumulations is basically an exercise in estimating reserve growth. On the other hand, even the existence of some assessed continuous accumulations is not certain. Such accumulations are only postulated to be present, and their assessment therefore equates to estimating undiscovered resources. Estimates of resources within sparsely developed continuous accumulations fall somewhere between these two end points. A further complication is that continuous accumulations are sometimes overlain by conventional fields. As an example, the fractured-shale continuous oil accumulation in the Bakken Formation (Mississippian-Devonian), Williston Basin, North Dakota, is overlain by a number of relatively small conventional oil fields in Mississippian carbonate rocks. In theory, reserves developed in the Bakken continuous accumulation could therefore be attributed to reserve growth of an overlying conventional field by the process of new pool discoveries, although this would make little geologic, engineering, or economic sense. In an effort to reduce confusion between undiscovered resources and reserve-growth resources in continuous accumulations, and also to avoid introducing a new term that would not be a part of existing resource-classification schemes, assessed resources in continuous accumulations are referred to here simply as potential additions to reserves. Resource-Assessment Approach Overview Two basic assessment approaches have been employed by the USGS and others for continuous accumulations. The first approach is based on estimates of volumes of oil or gas in-place. A volumetric estimate of total in-place petroleum can be combined with a recovery factor for the accumulation to narrow the assessment scope from a treatment of crustal abundance to a prediction of potential additions to reserves within a forecast span. The combining of overall recovery factor and total petroleum in-place to obtain a resource estimate for a continuous accumulation is analogous to the familiar idea of recovering a percentage of the petroleum in-place from a conventional field or pool. Although the total oil or gas in-place of a continuous accumulation can be quantitatively appraised from geologic considerations, the estimation of an overall recovery factor must sometimes be quite qualitative. 44

The second assessment approach is based on the production performance of continuous petroleum reservoirs, as empirically shown by wells. In this method, estimates of in-place oil or gas volumes are not developed. Instead, production data are the foundation for forecasts of potential additions to reserves within a given time span. Such reservoir-performance assessment models are particularly well suited to continuous accumulations that are already partially developed. The wells themselves serve as comprehensive analog computers that evaluate and weight all relevant reservoir parameters. Lacking sufficient drilling and production data, the assessor must draw upon information from analog accumulations. The assessment model for continuous accumulations used in the USGS 1995 National Assessment (Gautier and others, 1995; Schmoker, 1995) and the revised USGS model (FORSPAN) discussed here are both reservoir-performance models. The use of reservoirperformance models for domestic assessments takes full advantage of the development activity that is occurring in many U.S. continuous accumulations. Examples of previous assessments of continuous accumulations based on reservoir-performance methods can be found in National Petroleum Council (1992), Gautier and others (1995), Schmoker (1996), Schmoker and others (1996a, b), and Kuuskraa and others (1998). Petroleum-Charged Cells In USGS reservoir-performance assessment models, the petroleum of a continuous accumulation is regarded as residing in cells. A cell is a volume within a continuous accumulation having areal dimensions related to the drainage area (which is not necessarily the current spacing) of wells and extending vertically through the strata to be assessed. From this point of view, a continuous accumulation consists of a collection of petroleumcontaining cells, virtually all of which are capable of producing some oil and gas, but which may vary significantly in their production (and thus economic) characteristics. Cells can be divided into three resource-assessment categories: (1) cells already tested by drilling, (2) untested cells, and (3) untested cells having potential to contribute to reserves in the time span of the forecast. For simplicity, the cells of each category are depicted as areally contiguous in figure 2, but this is rarely the actual case. Only cells of the third category (those untested cells having potential for additions to reserves within the forecast span) contribute directly to the resource assessment. In many cases, most of the untested cells having potential for additions to reserves within 30 years will be localized in areas (sweet spots) where production characteristics are relatively favorable. One or more sweet spots may already be known to exist. An important component of the assessment is to postulate, on the basis of geologic understanding and principles of petroleum engineering, the presence or absence of additional sweet spots. 45

Assessment Procedure The uncertainties associated with the variables required for an assessment of a continuous accumulation are considerable, leading to a substantial range of possible input values. Many of the variables that make up the set of input data are therefore represented by probability distributions rather than by single (point) values. Resource forecasts derived from these input data are also represented by probability distributions. The probability distributions for some input variables show the uncertainty of a fixed but unknown value, whereas other probability distributions represent input variables that have a naturally occurring range of values. The F100 (minimum), F50 (median), and F0 (maximum) fractiles are the input parameters estimated for all variables represented by probability distributions. To begin an assessment of potential additions to reserves using the USGS FORSPAN reservoir-performance model, a continuous accumulation is apportioned (if necessary) into more homogeneous sub-units. For the NOGA series, these sub-units are divisions of total petroleum systems, termed assessment units. Assessment units are considered and assessed individually. The essence of the assessment procedure is as follows: A minimum estimated ultimate recovery (EUR) of oil (for an oil-prone assessment unit) or gas (for a gas-prone assessment unit) per cell is chosen for the assessment unit. Petroleum in cells expected to have a EUR less than the minimum is not considered to be a significant resource within the 30-year forecast span, and is excluded from the assessment. Probabilities for the occurrence of adequate charge, adequate rocks, and adequate timing for at least one untested cell having the minimum EUR or greater are assigned to the assessment unit; this defines the geologic risk. The probability that necessary petroleum related activities will be possible in the next 30 years, at least somewhere in the assessment unit, is also assigned; this defines the access risk. The number of untested cells within an assessment unit having potential to contribute to reserves within 30 years is estimated. This probability distribution results from the combination of probability distributions for (1) the total assessment-unit area, (2) the area per cell of untested cells having potential for additions to reserves in the next 30 years, (3) the percentage of the total assessment-unit area that is untested, and (4) the percentage of the untested area that has potential for additions to reserves in the forecast span of 30 years. A probability distribution is established for EUR of oil (for an oil-prone assessment unit) or gas (for a gas prone assessment unit) per untested cell having potential for additions to 46

reserves in the next 30 years. This distribution is based on reservoir-performance data from the assessment unit under consideration and (or) an analog area. For oil-prone assessment units, ratios of gas/oil and natural gas liquids/gas are estimated. For gas-prone assessment units, the ratio of total liquids/gas is estimated. These ratios are used to assess the coproducts associated with oil in oil accumulations and gas in gas accumulations. The combination of geologic and access probabilities, number of untested cells having potential, EUR per untested cell having potential, and coproduct ratios yields probability distributions for potential additions to reserves of oil, gas, and coproducts in the assessment unit. An important aspect of this assessment procedure is that historical production and development patterns serve only as a starting point for the assessment forecast. With past production performance as a point of reference, input parameters can be chosen to reflect perceived impacts of future change, such as improved technologies and newly developed geologic and engineering concepts. Input parameters can also be chosen so that historical data representing early-discovered sweet spots are not projected to be characteristic of all future development. Allocation Percentages and Ancillary Data Two additional data elements are also recorded at the assessment-unit level. The first element consists of percentages necessary to allocate assessed potential additions to reserves to various land entities of interest within the assessment unit. Such land entities could, for example, be surface and mineral ownerships, special use categories of State or Federal lands, or ecological zones. Percentages can also be entered to allocate assessed petroleum volumes to the offshore portion of each entity, if applicable. The second additional data element establishes a modest set of ancillary information useful for economic and environmental analyses of assessment results. These data do not contribute directly to assessment calculations. Ancillary data for untested cells in continuous oil accumulations are estimates of API gravity of oil, sulfur content of oil, drilling depth, and water depth (if applicable). Ancillary data for untested cells in continuous gas accumulations are estimates of inert-gas content, carbon dioxide content, hydrogen sulfide content, drilling depth, and water depth. 47

Appendix 5: MLP Oil and Gas Resource Estimates Colorado MLPs MLP: CO Adobe Town Total MLP Area: 480.9 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas NGL Mean Mean BCF BBL Dry Gas Mean Liquids BCFMean BBL 50370101 Sub-Cretaceous Conventional Oil and Gas 465.00 302084.28 0.5848 21027.25 24.5083 736144.39 50370201 Mowry Conventional Oil and Gas 465.00 125545.00 0.2113 29579.05 3.6973 73913.08 50370261 Mowry Continuous Gas 465.00 221.8698 4437396.94 50370361 Niobrara Continuous Oil 30.60 696443.51 0.4179 25071.97 50370461 Hilliard-Baxter-Mancos Continuous Gas 465.00 332.9413 21308246.05 50370501 Mesaverde Conventional Oil and Gas 155.00 56205.85 0.4635 17127.83 0.9108 10795.61 50370561 Almond Continuous Gas 284.00 723.6063 10854095.21 50370562 Rock Springs-Ericson Continuous Gas 438.00 782.7721 9393265.75 50370581 Mesaverde Coalbed Gas 72.80 3.8809 0.00 50370701 Lewis Conventional Oil and Gas 371.00 12.0990 483660.33 50370761 Lewis Continuous Gas 285.00 745.9371 29837482.12 50370801 Lance-Fort Union Conventional Oil and Gas 453.00 11.6523 116406.79 50370861 Lance-Fort Union Continuous Gas 70.50 140.0052 1400052.35 50370881 Lance Coalbed Gas 300.00 13.4714 50370882 Fort Union Coalbed Gas 228.00 45.1326 50370981 Wasatch-Green River Coalbed Gas 108.00 6.7258 Totals MLP: CO Adobe Town 481 1,180,279 2 92,806 3,069 78,651,459 MLP: CO Shale Ridge Total MLP Area: 1499.2 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas NGL Mean Mean BCF BBL Dry Gas Mean BCF Liquids Mean BBL 50200263 Piceance Basin Continuous Gas 156.70 867.4746 2602423.93 50200264 Piceance Basin Transitional Gas 242.00 74.6041 149208.18 50200282 Mesaverde Group Coalbed Gas 1021.00 58.7630 50200361 Piceance Basin Continuous Gas 627.60 320.5789 320578.87 50200363 Uinta-Piceance Transitional and Migrated Gas 686.00 301.5997 406751.97 50200501 Uinta Green River Conventional Oil and Gas 25.00 28302.30 0.0849 5086.01 Totals MLP: CO Shale Ridge 1,499 28,302 0 5,086 1,623 3,478,963 48

MLP: CO Dinosaur Lowlands Total MLP Area: 1145 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50200201 Uinta-Piceance Basin Conventional Gas 259.50 1.0849 8688.84 50200263 Piceance Basin Continuous Gas 19.00 105.1820 315545.98 50200264 Piceance Basin Transitional Gas 117.60 36.2539 72507.78 50200282 Mesaverde Group Coalbed Gas 462.00 26.5901 50200361 Piceance Basin Continuous Gas 142.20 72.6359 72635.94 50200362 Uinta Basin Continuous Gas 4.00 1.8744 3748.71 50200401 Hanging Wall 885.40 805861.01 0.2418 14504.05 4.8331 155104.35 50200402 Paleozoic/Mesozoic 885.40 229639.77 0.0690 4142.88 1.7528 56019.93 50200501 Uinta Green River Conventional Oil and Gas 62.30 70529.34 0.2115 12674.33 Totals MLP: CO Dinosaur Lowlands 1,145 1,106,030 1 31,321 250 684,252 MLP: CO Eastern book Cliffs Total MLP Area: 719.4 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50200201 Uinta-Piceance Basin Conventional Gas 715.70 2.9922 23963.80 50200264 Piceance Basin Transitional Gas 20.40 6.2889 12577.88 50200281 Uinta Basin Blackhawk Coalbed Gas 50200282 Mesaverde Group Coalbed Gas 719.40 41.4046 50200361 Piceance Basin Continuous Gas 53.00 27.0725 27072.47 50200362 Uinta Basin Continuous Gas 90.50 42.4073 84814.63 50200363 Uinta-Piceance Transitional and Migrated Gas 568.00 249.7210 336785.89 50200401 Hanging Wall 4.70 4277.78 0.0013 76.99 0.0257 823.35 50200402 Paleozoic/Mesozoic 4.70 1219.00 0.0004 21.99 0.0093 297.37 50200501 Uinta Green River Conventional Oil and Gas 150.00 169813.81 0.5093 30516.04 Totals MLP: CO Eastern book Cliffs 719 175,311 1 30,615 370 486,335 49

Wyoming MLP MLP: WY Jack Morrow Hills Total MLP Area: 974.3 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50370101 Sub-Cretaceous Conventional Oil and Gas 870.90 565774.6237 1.0952 39382.01 45.9016 1378727.20 50370201 Mowry Conventional Oil and Gas 870.20 234944.6484 0.3955 55354.17 6.9191 138320.78 50370261 Mowry Continuous Gas 814.80 388.7732 7775464.57 50370401 Hilliard-Baxter-Mancos Conventional Oil and Gas318.00 0.4962 31729.53 50370461 Hilliard-Baxter-Mancos Continuous Gas 845.80 605.5952 38758095.73 50370501 Mesaverde Conventional Oil and Gas 423.70 153641.40 1.2671 46819.76 2.4897 29510.33 50370561 Almond Continuous Gas 170.40 434.1638 6512457.13 50370562 Rock Springs-Ericson Continuous Gas 331.60 592.6193 7111431.33 50370581 Mesaverde Coalbed Gas 241.30 12.8634 50370601 Mesaverde-Lance-Fort Union Conventional Oil and 278.00 Gas 75419.67 0.3252 14294.13 10.2606 461468.27 50370661 Mesaverde-Lance-Fort Union Continuous Gas 278.00 696.8144 31356645.92 50370681 Mesaverde Coalbed Gas 30.20 1.6142 50370682 Fort Union Coalbed Gas 81.00 3.5352 50370701 Lewis Conventional Oil and Gas 439.00 14.3166 572309.66 50370761 Lewis Continuous Gas 169.50 443.6362 17745449.89 50370801 Lance-Fort Union Conventional Oil and Gas 573.80 14.7596 147448.60 50370861 Lance-Fort Union Continuous Gas 141.00 280.0105 2800104.71 50370881 Lance Coalbed Gas 267.90 12.0300 50370882 Fort Union Coalbed Gas 415.10 82.1690 Totals MLP: WY Jack Morrow Hills 975 1,029,780 3 155,850 3,649 114,819,164 Utah MLPs MLP: UT Cisco Desert Total MLP Area: 502.7 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50200201 Uinta-Piceance Basin Conventional Gas 91.80 0.3838 3073.74 50200282 Mesaverde Group Coalbed Gas 91.80 5.2835 0.00 50200362 Uinta Basin Continuous Gas 42.90 20.1025 40204.95 50200363 Uinta-Piceance Transitional and Migrated Gas 358.50 157.6144 212566.45 50200402 Paleozoic/Mesozoic 504.20 130770.69 0.0393 2359.21 0.9981 31901.12 50200501 Uinta Green River Conventional Oil and Gas 40.90 46302.57 0.1389 8320.71 Totals MLP: UT Cisco Desert 503 177,073 0 10,680 184 287,746 MLP: UT Five Mile Pass Total MLP Area: 235 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50190103 Sevier Thrust System 238.10 2384862.19 0.7954 47722.61 3.4434 150698.81 Total MLP: UT Five Mile Pass 238 2,384,862 1 47,723 3 150,699 50

MLP: UT Garrison Total MLP Area: 367.4 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50190101 Neogene Basins 372.20 3910062.86 0.5083 30528.17 50190102 Ranges and Other Structures 372.20 2222601.84 0.2891 17390.66 5.3555 235766.30 50190103 Sevier Thrust System Totals MLP: UT Garrison 367 6,132,665 1 47,919 5 235,766 MLP: UT Lisbon Valley Total MLP Area: 613.9 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 2101 Buried Fault Block Play 613.00 3271623.87 11.1366 1794905.86 12.6622 Not Calculated 2103 Fractured Interbed Play 613.90 9550600.60 7.6406 Not Calculated 2105 Salt Anticline Flank Play 613.90 1476719.52 3.6877 146856.08 28.6451 Not Calculated Totals MLP: UT Lisbon Valley 614 14,298,944 22 1,941,762 41 0 MLP: UT Little Creek Mtn. Total MLP Area: 98.5 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50190103 Sevier Thrust System 8.00 80129.77 0.0267 1603.45 0.1157 5063.38 Totals MLP: UT Little Creek Mtn. 8 80,130 0 1,603 0 5,063 MLP: UT McCook Ridge Total MLP Area: 458.7 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50200201 Uinta-Piceance Basin Conventional Gas 461.80 1.9307 15462.46 50200262 Uinta Basin Transitional Gas 102.20 76.1455 114218.26 50200282 Mesaverde Group Coalbed Gas 455.90 26.2390 50200362 Uinta Basin Continuous Gas 413.10 193.5742 387148.33 50200363 Uinta-Piceance Transitional and Migrated Gas 102.80 45.1960 60953.50 50200402 Paleozoic/Mesozoic 461.80 119773.71 0.0360 2160.81 0.9142 29218.44 Totals MLP: UT McCook Ridge 459 119,774 0 2,161 344 607,001 MLP: UT Moab Proper Total MLP Area: 1182.2 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 2101 Buried Fault Block Play 1394.37 7430940.18 25.2948 4076825.03 28.7601 Not Calculated 2103 Fractured Interbed Play 1394.37 21692573.64 17.3544 Not Calculated 2105 Salt Anticline Flank Play 1394.37 3354118.58 8.3760 333558.75 65.0625 Not Calculated Totals MLP: UT Moab Proper 1,182 32,477,632 51 4,410,384 94 0 51

MLP: UT Monticello Proper Total MLP Area: 1013.1 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 2102 Porous Carbonate Mound Play 1005.00 11294832.74 28.2371 2979755.22 7.6092 Not Calculated 2103 Fractured Interbed Play 669.40 10414028.41 8.3314 Not Calculated 2106 Permo-Triassic Unconformity Play 10.30 12642.83 0.0013 60.78 Not Calculated Totals MLP: UT Monticello Proper 1,013 21,721,504 37 2,979,816 8 0 MLP: UT Nine Mile Total MLP Area: 432.5 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF 50200201 Uinta-Piceance Basin Conventional Gas 434.60 1.8170 50200261 Uinta Basin Continuous Gas 109.10 249.6183 50200262 Uinta Basin Transitional Gas 154.60 115.1868 50200281 Uinta Basin Blackhawk Coalbed Gas 27.70 5.0591 50200362 Uinta Basin Continuous Gas 415.00 194.4645 50200363 Uinta-Piceance Transitional and Migrated Gas 19.60 8.6171 50200402 Paleozoic/Mesozoic 434.60 112719.04 0.0339 2033.54 0.8604 50200501 Uinta Green River Conventional Oil and Gas 434.60 492007.21 1.4756 88415.14 Totals MLP: UT Nine Mile 432.00 604726.25 1.51 90448.68 575.62 MLP: UT San Rafael River Total MLP Area: 820.1 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 2101 Buried Fault Block Play 230.16 1226579.17 4.1753 672936.20 4.7473 Not Calculated 2103 Fractured Interbed Play 629.27 9789715.65 7.8319 Not Calculated 2105 Salt Anticline Flank Play 230.16 553643.53 1.3826 55058.47 10.7395 Not Calculated Totals MLP: UT San Rafael River 820.00 11569938.35 13.39 727994.67 15.49 0.00 MLP: UT Vernal North Total MLP Area: 354.5 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50200201 Uinta-Piceance Basin Conventional Gas 61.70 0.2580 2065.90 50200261 Uinta Basin Continuous Gas 27.90 63.8346 95751.86 50200262 Uinta Basin Transitional Gas 6.60 4.9174 7376.13 50200282 Mesaverde Group Coalbed Gas 55.50 3.1943 50200362 Uinta Basin Continuous Gas 51.20 23.9918 47983.53 50200363 Uinta-Piceance Transitional and Migrated Gas 9.50 4.1767 5632.86 50200401 Hanging Wall 61.70 56157.24 0.0169 1010.73 0.3368 10808.60 50200402 Paleozoic/Mesozoic 61.70 16002.68 0.0048 288.70 0.1221 3903.81 50200501 Uinta Green River Conventional Oil and Gas 105.50 119435.71 0.3582 21462.95 Totals MLP: UT Vernal North 355 191,596 0 22,762 101 173,523 52

MLP: UT White River Total MLP Area: 66.7 Sq Mi USGS Assessment Code Name Effective Area Oil Mean BBL Assoc Gas Mean BCF NGL Mean BBL Dry Gas Mean BCF Liquids Mean BBL 50200262 Uinta Basin Transitional Gas 55.70 41.5000 62250.07 50200282 Mesaverde Group Coalbed Gas 30.00 1.7266 50200362 Uinta Basin Continuous Gas 65.90 30.8800 61760.05 50200402 Paleozoic/Mesozoic 65.90 17092.00 0.0051 308.35 0.1305 4169.54 50200501 Uinta Green River Conventional Oil and Gas 65.90 74604.87 0.2237 13406.71 Totals MLP: UT Vernal North 67 91,697 0 13,715 74 128,180 53