HomeMy WebLinkAbout20052656.tiff Aug. 18. 2005 2: 12PM No. 0179 P. 9
BROE
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WA FACSIMILE(303)297-7708 AND
FEDERAL EXPRESS
June 30 2005
Ms.Cynthia A.Danner--Weida CPL
Senior Landman
Petro-Canada Resources(USA)Inc.
1099 Ile Street,Suite 400
Denver,Colorado 80202
Re: Proposed Kodak 35-I1 and 35-12 Wells(the"Wells")
N/2 NZ/4 of Section 35,Township 6 North,Range 67 West
Weld County.Colorado(the"Property")
Dear Ms.Danner-Wade:
We have reviewed your letter dated June 14,2005 and we are encouraged by Pee-Canada's
our to drill the proposed Wells directionally. This approach is becoming more feasible end
more of an industry norm. If the Wells are not drilled directionally,the two proposed vertical
surface locations would conflict with our planned noes,under eedst%Weld County industrial
uirial
zoning for the Property.These conflicts have bean shared with you and with various Weld
County staff members.
Your proposed Well surface locations also conflict with the planted extanaie l of Crossroads
Boulevard from state highway 257 eastward across Eastman Kodak's property and our Property,
which is indicated in our development plan,and connects to"O"Street is Greeley. Bros has
participated in meetings regarding the alignment and planting far this regional rood
improvement,which provides the potential for a four land major arterial to connect 1-25 to I-85.
These planning meetings,which an a joint effort of Weld County,City of Greeley and Town of
Windsor have made this apriority for the region and for these municipalities.
warone
of
as it
your Wells conflicts with the anticipated alignment and associated rig6 Y for this
is passes through our Property. This issue was raised in Witched referral letter to Weld County
dated Jima 3,2005.
Given these issues,again,we are very pleased that in your moat recent letter,Petro-Canada
agrees that direction]drilling is ptactiaal for these two wells.
After considerable thought,we respectfully decline your request that Bice pay all of the costs for
this directional drilling,but we continue to request that you directionally drill the Wells. We
believe this is fair and reasonable in this instance for a ntmrber&reasons.
•
g
2005-2656
Aug. 18. 2005 2: 12PM No. 0179 P. 10
These include:
1. Petro Canada will realize cost savings with the consolidation of your operations to one
drilling/oporatiees area,as we have proposed.
2. We also continue to believe that Perm-Canada's proposed directional drilling costs,of
$100,000 per Well,are higher than the actual costs in the industry today.
3. There is also a cost savings oencideration for Petro-Carted&given the tinting of drilling
these wells direodonally with other plmned directional drilling in Section 34,d'ucctly adjacent
to the Property to the west.
4. In connection with an agreement to directionally dill, we me willing to plan a
sufficient operating area so Petro-Canada may dull proposed and fixture wells in Section 35 in a
very feasible manner. In the absence of such in area set-aside,Petro-Canada may not have a
feasible operation&area in the future,as our development plans for the Property and our overall
Great Weser Industrial Park plans move forward,and as additional wells enay be authorized by
the Oil and Gas Conservation Commission.
5. As noted above,in this instance,Petro-Canada's proposed surface locations conflict
with Broe's planned authorized uses tinder the existing Weld County industrial zoning,and the
proposed location of an important public road.
Based on the above,and in this specific case,we believe that drilling directionally fig our
proposed location is a reasonable end accommodating request We leer forward to reaching an
agreement,tall,we will be neighbors in this area for a long time to come,and there will be
opportunities to work together in the future.
Based on the above,we have sent the enclosed tenet to the Weld County Planning Deperkmetrt,
requesting a continuance in the USR hewing so that we can wothc firth&oo the above isssues,or
in the alternative,that it condition its reconunendat'ion on surface locations for the Wells
adjacent to the existing Christensen#1-35 Well, Please note that if the Planning Commission
recommends such a condition,Woe would continue in its offer to enter into a surface use
agreement granting Petro-Canada an ample oil and gas operation area,and otherwise f r'ititating
the drilling of additional wells from the Christensen#1-35 location.
oi
y
Jn Stone
Enclosure
cc; Ted Bannon—Petro Canada
Dwight Johnson--Broe
Eric Swanson—Brae
2
Ft,"
July 13, 2005
PER AMA• Petro-Canada Resources(USA) Inc.
Mr. John Stone
Broe Land Acquisitions II, LLC ("Broe")
352 Clayton Street
Denver, CO 80206
RE: Petro-Canada Resources (USA) Inc. ("PCR")
Kodak 35-11 and Kodak 35-12 wells ("Wells")
N/2NE/4 of Section 35, Township 6 North, Range 67 West
Weld County, Colorado (the "Properties")
Dear Mr. Stone:
We are concerned about several statements made by Broe's representative at the
Weld County Planning Commission meeting on July 5, 2005. Most notably, at the
meeting, Alex Yeros made a statement that the only option PCR offered to Broe was to
drill the Wells at straight hole locations on the Properties. As you are aware, we have
presented numerous other potential options to Broe, none of which Broe has accepted,
nor provided a response to PCR. PCR also offered those options in our letter dated June
14, 2005, a copy of which is attached.
However, putting all that aside, we would again like to propose the following
offer to you- PCR would be willing to trade its right to drill straight hole locations for the
Wells on the Properties, for two straight hole locations on lands where Broe owns
equivalent unleased mineral interest in the immediate vicinity of the Wells. These
locations would have to be approved by PCR's reservoir engineer and geologist, and
would also be subject to PCR's customary due diligence and mutually acceptable lease
terms.
If the offer to trade the straight hole locations for the Wells for alternate locations
as discussed herein is not acceptable to Broe, PCR is willing to meet with you to discuss
other options. PCR continues to want to work with you to have a win-win solution for
both parties.
Finally, PCR unfortunately cannot accept your offer to move the surface location
of the Wells to the existing Christiansen 1-35 location, as the directional kick would be at
least 1300'. The maximum directional kick we can consider is 1000'. The longer the
kick, the more the cost and also it increases the risk of the integrity of the well and future
operations on the wells.
EXIHM
Suite 400, 1099 18th Street • Denver,CO 80202-1904 1
Office:(303)297-2300 • Fax(303)297-7708 • www.petro-canada.ca
We look forward to hearing back from you and working towards getting this
situation resolved. Please contact us at your earliest opportunity, so that we can get
together to discuss this matter.
Sincerely,
gtiZ �: vr`a0.1 t _ 41-c-� z-
Cindi Danner-Weide, CPL
Senior Landman
cc: Sheri Lockman, Weld County Planning and Zoning Department
Mike Wozniak
10)4 :ZFtn ci 4aSi2ccf;
PEW ►uuan, Petro-Canada Resources(USA) Inc. July 13, 2005
Weld County Planning Department
GREELEY OFFICE
Mr. John Stone JUL 2 2 2005
Broe Land Acquisitions II, LLC ("Broe")
352 Clayton Street
Denver, RECEIVED
CO 80206
RE: Petro-Canada Resources (USA) Inc. ("PCR")
Kodak 35-11 and Kodak 35-12 wells ("Wells")
N/2NE/4 of Section 35, Township 6 North, Range 67 West
Weld County, Colorado (the "Properties")
Dear Mr. Stone:
We have had no response to our letter of July 13, 2005, regarding our offer to
trade our right to drill straight hole locations for the Wells on the Properties for two
straight hole locations on lands where Broe owns equivalent unleased mineral interest in
the immediate vicinity of the Wells.
Since this offer is apparently not acceptable to you, we would like to suggest an
alterative offer. PCR would be willing to drill the Wells directionally if Broe is willing
to pay the additional costs of directionally drilling the Wells. The costs are estimated at
$100,000 per well. These costs are actual bid costs we have received in directionally
drilling wells.
If this offer or our prior offer is not acceptable to Broe, PCR is willing to meet
with you to discuss other options. We hope that we can discuss this further at the
proposed August 4, 2005 meeting. PCR continues to want to work with you to have a
win-win solution for both parties. However, we cannot reach a solution if Broe is
unwilling to enter into timely, focused and productive discussions to finally resolve this
matter. In that light, we suggest that you allot ample time and bring those able to make a
decision on behalf of Broe to the August 4th meeting.
We look forward to meeting with you on August 4, 2005 and working towards
getting this situation resolved.
Sincerely(,;.. /
jjtcfr-
Cindi Danner-Weide, CPL
Senior Landman
cc: 'Sheri Lockman, Weld County Planning and Zoning Department EXHIBIT
Mike Wozniak J
Suite 400, 1099 18th Street • Denver,CO 80202-1904
Office:(303)297-2300 • Fax(303)297-7708 • www.petro-canada.ca
Pi!
Krum, Petro-Canada Resources (USA) Inc. K'e/d
oanty
taiw
July 18 2005 cOR'ger •d
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ferit
Weld County Planning Department _ `Cct. 2005
Attention: Sheri Lockman Ytb
1555 N. 17th Avenue
Greeley, CO 80631
Re: Petro-Canada Resources(USA) Inc
USR-1514
Responses - Plat
Dear Sheri:
Attached are(2)copies of the plat which reflects the latest updates. Please let me know if the
information is sufficient so that a Mylar plat can be submitted for recording. Listed below are
Petro-Canada Resources (PCR) responses to comments for USR-1514.
1) Building Permit: PCR representative Dave Gipson will acquire the permit and
deliver it to your offices in person. Permit for the tank battery will be acquired
prior to construction.
2) Town of Windsor: PCR acknowledges the concerns of the town of Windsor
regarding the close proximity of the site to the City of Greeley's proposed
expansion of"O" Street. PCR will adhere to the setback requirements of the
COGCC.
3) City of Greeley: PCR acknowledges the concerns of the City of Greeley in
regards to directionally drilling one well to preserve additional lands for
industrial development. PCR's drilling plan is in accordance with the
requirements of the COGCC.
4) WCPW: The drilling contractor will procure an overweight and over width Weld
County permit from Ted Eyl. The permit will be provided to your offices when
received.
5) A.P.E.N.: The only potential source of air emissions anticipated for the Kodak
production facilities that would require filing an Air Pollutant Emission Notice
(APEN) or air construction permit application are the condensate storage tanks.
According to current Colorado Department of Public Health and Environment
(CDPHE)Air Pollution Control Division requirements, condensate storage tanks
receiving greater than 730-bbl per year must file an APEN and/or construction
permit application 30 days after the first production report is submitted to the
Colorado Oil and Gas Conservation Commission(COGCC). Prima will provide
the Weld County Planning Department with copies of APENs/permit
applications as required if condensate production to individual tank batteries
exceeds 730-bbl per year.
1 , "
Suite 400, 1099 18th Street • Denver, CO 80202-1904 F
Office:(303)297-2300 • Fax(303)297-7708 • www.petro-canada.ca
USR-1514
Responses—Weld County
July 18, 2005
Page 2
6) Stormwater: On March 10, 2003, the US Environmental Protection Agency
(EPA) issued a rule to delay by two years the stormwater permit requirements
applicable to oil and gas exploration and production sites impacting one to five
acres of the land surface. The delay was granted to give EPA additional time to
consider the feasibility and economic impact of applying the stormwater rule to
typical oil and gas sites. On April 14, 2003,the Colorado Water Quality Control
Commission amended Colorado's regulations to include a similar extension. As
of June 30, 2003, one to five acre construction sites associated with oil and gas
exploration,production, processing, and treatment are not required to obtain a
stormwater permit. As a result, stormwater requirements do not apply to the
Kodak USR application.
7) Windsor/Severance Fire Protection District: PCR representative Dave Gipson
will procure the permit prior to tank battery construction.
If additional information is needed for recording the plat or construction, please advise. Thanks
for all your help on this project, it's appreciated.
PETRO-CANADA RESOURCES (USA) INC
Very truly yours,
v v
usan Miller
Operations Tech
Enclosures
07/27/05 WED 10:03 FAX 3033938636 BROE/OMNI lJ 002
J3ftOE
2 Clayton Street
Denver,Colorado 60206
Telephone 303-393-0033
Facsimile 303-393-0041
www.broe.corn
July 26,2005
Cindi Danner-Weide, CPL WA FACSIMILE: (303)297-7708
Senior Landman AND FIRST-CLASS MAIL
Petro-Canada Resources(USA) Inc.
1099 18th Street, Suite 400
Denver,Colorado 80202-1904
Re: Petro-Canada Resources (USA) Inc. ("PCR")
Kodak 35-11 and Kodak 35-12 wells("Wells")
N/2 NE/4 of Section 35,Township 6 North, Range 67 West
Weld County, Colorado (the "Property")
Dear Ms. Danner-Weide:
We apologize for not sooner responding to your letter of July 13,2005 regarding surface locations for the
above-referenced Wells. The letter did not reach my desk until July 25,2005 when I also received your
subsequent letter which is also dated July 13, 2005,but which I suspect was written on July 23, 2005.
Our mail clerk noticed that the address on the July 13, 2005 letter was 352 Clayton Street whereas the
correct address for our office is 252 Clayton Street, which could explain the delivery delay.
We confirm our meeting scheduled for 10:00 a.m. on August 4, 2005, to discuss mutual accommodation
of our respective surface rights in the above-referenced Property. We understand that this time the
meeting will take place in our offices at 252 Clayton Street, 4th Floor,Denver,Colorado. You suggest
that we allocate ample time and bring to the meeting, those able to make a decision on behalf of Broe.
We will bring at least one senior management member, schedule a 2-hour block, and be willing to work
through the lunch hour if necessary.
Because the meeting is scheduled,we believe it would be more productive to discuss issues face to face,
rather than exchanging further correspondence prior to the meeting. However, in your most recent letter,
you indicate that PCR has actual bid costs of$100,000 per well for the marginal cost of directional
drilling. If you could provide us with copies of these bids prior to the meeting, it would be helpful in
evaluating PCR's position.
In addition, in your most recent letter, you indicate that PCR would be willing to drill the Wells
directionally if Broe is willing to pay additional costs. This appears to contradict your July 13, 2005
letter, in which you indicate that the two proposed Wells could not be directionally drilled from the
Christianson #1-35 location. Would you please clarify PCR's position as soon as possible,and prior to
our meeting.
Also,you have offered to trade your right to drill straight hole location for the Wells in exchange for two
other straight hole locations where Broe has unleased mineral interests.
i -,
Pro nd ee/urnwnced
07/27/05 WED 10:04 FAX 3033938636 BROE/OMNI Il003
Ms. Danner-Weide
July 26, 2005
Page 2
Although we are willing to discuss this further, all of such locations would also require directional drilling
due to the fact that we have real estate development plans for these properties, which would be negatively
impacted by straight hole surface locations. These development plans,which include residential land uses,
and the related visual land plan have been shown to you previously.
We look forward to meeting with you on August 4, 2005, and working toward a resolution on these
issues.
Very truly yours,
BRO LAND COMPANY,
LLC
En Stone, Vice President
JS/JMM:tlh
cc: Sheri Lockman, Weld County Planning and Zoning
J. Michael Morgan
Lance Astrella
Alex Yeros
Aug. 18. 2005 2: 10PM No. 0179 P. 2
BEAT1T & WOZNIAK, P.C.
column AT LAW
91$x -SUM 11,00
DENVER,COLORADO 80902-5115
SUSAN L.ALDRIDGE TWXPEOm3)
(308)407-4499
DIRECT: (303)407-4465
1AC>QMILi
w.oemaganTaRCrenw.00m (808)407-4494
August 18,2005
VIA FACSIMILE TO: 970-304-6498
Sheri Lockman,Planner
Weld County Planning
and Zoning Department
North Office
918 10'°Street
Greeley,CO 80631
Re: Petro Canada Resources (USA),Inc.'s("PCR")Application for Use by
Special Review(Case Number USR 1514("USR"))
N/2NE/4 of Section 35,Township 6 North,Range 67 West,Weld County,
Colorado("Property")
Kodak 35-11 and Kodak 35-12("Wells")
Dear Ms. Lockman:
We represent Petro-Canada Resources,Inc. ("PCR")in connection with the above
referenced USR. On July 5,2005,PCR appeared before the Weld County Planning and Zoning
Commission concerning its USR. During this hearing,Broe Land Acquisition II,LLC (`BroV),
registered a protest to the approval of PCR's USR and drilling of the Wells contending that the
Wells should not be drilled, or if they are,should be drilled directionally from a significant
distance off the property at sole cost and expense to PCR—which as PCR addressed--is not
economically or technically feasible. Broe's protests offered complaints of PCR's operations but
no suggestions as to how the parties could reach a conclusion acceptable to both parties.
Based on the concerns lodged by Broe,rather than provide a recommendation of approval
to the Board of County Commissioners ("BOCC"),the Planning and Zoning Commission
requested that the parties make continued concerted efforts to reach a resolution acceptable to
both parties. The Planning and Zoning Commission recognized that if a resolution could not be
reached,then a hearing before the BOCC was timely and appropriate.
PCR has engaged in negotiations with Broe concerning its development and Broe's
concerns since at least February,2005. Most recently,PCR and its counsel met with Broe to
discuss various options for the Wells,including directional drilling from closer locations,trading
well site locations, and other options. Unfortunately,Broe was(and has always been)unwilling
EXHIBIT
www.bweergytaneoom Ntf
...
Aug. 18. 2005 2: 10PM No. 0179 P. 3
BEATIT&WOZNIAK,ao.
Sheri Lockman
August 18,2005
Page 2
to entertain any of the proposals provided by PCR and has refused to give PCR surface access, or
offset the cost of directional drilling. In fact,Broe has not offered any concessions or other
alternatives that constitute a compromise on its part. Instead,Broe insists that its contemplated
industrial subdivision-is so unique that PCR must drill all of its future wells(wells in receipt of
valid permits from the COOCC)from one existing well pad. PCR has tried on numerous other
occasions,in both telephonic conferences and through written correspondence,to reach a
resolution to Broe's concerns,also to no avail. The various offers are better delineated in the
attached correspondence dated June 7,2005,June 14,2005,June 30,2005,and July 13,2005.
In light of the fact that the parties are unable to reach resolution to Broe's concerns,and
PCR must continue with its drilling program,PCR seeks to set its USR application before the
BOCC at your earliest possible convenience. We have contacted Mr.Michael Morgan, attorney
for Broe, and informed him of our intent to schedule this on the docket. Could you contact me
so that we may schedule this for the next available BOCC meeting?
Thank you.
Very truly yours,
BEATTY &WOZNIAK,P.C.
agotsiicp/A41p
Susan Aldridge
SLA:tip
Enclosures
cc: Weld County Board of County Commissioners(w/enclosures,via facsimile)
J.Michael Morgan,Esq. (w/enclosures,via facsimile)
Petro Canada Resources,Inc.(w/enclosures,via facsimile)
49934.DOC
EBR I Weld County Planning Department
___Clayton Street Weld OFFICE
Denver,Colorado 80206 AUG 2 9 2005
Telephone 303-393-0033
Facsimilee 303-393-0041
www.broe.com
www. roecam RECEIVED
August 26, 2005
Sheri Lockman, Planner
Weld County Planning
& Zoning Department VIA FACSIMILE: (970) 304-6498
918 10th Street AND FIRST-CLASS MAIL
Greeley, Colorado 80631
Re: Case Number USR 1514
Petro-Canada Resources (USA) Inc. ("PCR")
Kodak 35-11 and Kodak 35-12 wells (the "Wells")
N/2 NE/4 of Section 35,Township 6 North, Range 67 West
Weld County, Colorado (the "Property")
Dear Ms. Lockman:
We have received a copy of Ms. Aldridge's letter to you dated August 18, 2005 regarding the above
referenced matter. Broe's receipt of that copy was delayed, because it was not sent to us directly, but only
to our attorney who was out of his office last week on vacation.
Ms. Aldridge states that Broe has been "unwilling to entertain any of the proposals provided by PCR,"
and our attorney, Mr. Morgan, was contacted and informed of PCR's intent to request scheduling of the
matter on the BOCC docket. Ms. Aldridge is mistaken.
Representatives of PCR and Broe met on August 10, 2005 to discuss mutual accommodation of surface
uses. In the meeting Broe communicated again our development plans for the 1,400 acres of property
Broe own east and west of the current Eastman Kodak facility and the economic benefit of the project to
Windsor, Weld County, and the region. This discussion included the proposal by Weld County, the City
of Greeley and the Town of Windsor to extend Crossroads Boulevard east from SH 257 to connect to O
Street. One of the subject Wells is currently planned in the anticipated roadway alignment, which hinders
the progress of this effort to extend Crossroads Boulevard.
The discussions of the Wells in this meeting were hindered by PCR's steadfast refusal to drill
directionally for more than 1,000 horizontal feet, though such drilling is a common industry practice in
Weld County and is therefore technically feasible. A wide range of ideas were discussed at that meeting,
including possible surface locations different from those initially proposed by either party, the
"swapping" of oil and gas acreage currently held by the parties, and the acquisition by Broe of additional
leases which could be swapped with PCR. Broe agreed to consider those ideas.
In a subsequent telephone conversation, PCR's attorney, Mr. Wozniak, asked if Broe was actively
working on alternatives, and if not, indicated that PCR would request scheduling of the BOCC hearing.
Our attorney informed him that immediately after our meeting, Broe staff had been tasked to explore
those alternatives, was working diligently on them, Broe would respond to PCR as soon as possible, and
scheduling of a BOCC hearing was therefore premature.
EXHIBIT
Ms. Sheri Lockman
August 26, 2005
Page 2
In addition, I left a voice mail for Mr. Hannon of PCR on August 18, 2005, confirming that Broe was
working on alternatives to be presented to PCR. He never returned my call. We were therefore very
surprised to receive a copy of Mr. Aldridge's letter.
We expect to have a proposal ready for presentation to PCR within ten days. In addition, we will be
advising PCR, that as the owner of the minerals to the south of the spacing unit for the proposed wells,
Broe will waive any objection to an "exception" downhole location for the wells. This would
accommodate PCR's refusal to drill directionally for more than 1,000 horizontal feet.
Based on the above, Broe requests that the parties be given until the week of September 12`h, in which to
conclude their negotiations before a BOCC hearing is scheduled.
Very truly yours,
BROE LAND ACQUISITIONS II, LLC
John Stone, Vice President
cc:
Weld County Board of County Comissioners
J. Michael Morgan, Esq.
Lance F. Astrella, Esq.
Michael J. Wozniak, Esq.
Edward L. McLaughlin,Pen-Canada
Clear Day Page 1 of 1
Donna Bechler
From: Sheri Lockman
Sent: Monday, September 12, 2005 2:57 PM
To: Donna Bechler
Subject: RE: Notice re: USR #1514 - Eastman Kodak Company, c/o Petro-Canada Resources (USA) Inc.
Please note that Eastman Kodak is no longer involved in this USR. They have sold the property. The applicant
should only list Petro Canada. Sorry I should have attached a note.
From: Donna Bechler [mailto:dbechler@co.weld.co.us]
Sent: Monday, September 12, 2005 1:10 PM
To: Sheri Lockman; Trevor Jiricek
Subject: Notice re: USR #1514 - Eastman Kodak Company, c/o Petro-Canada Resources (USA) Inc.
L
9/12/2005
BROEWeld County Planning Department
Clayton GREELEY OFFICE
street
Denver,Colorado 80206 SEP 14 2005
Telephone 303-393-0033
Facsimile 303-393-0041
w",cbroecom RECEIVED
September 13,2005
Sheri Lockman, Planner
Weld County Planning
&Zoning Department VIA FACSIMILE: (970) 304-6498
918 10th Street AND FIRST-CLASS MAIL
Greeley, Colorado 80631
Re: Case Number USR 1514
Petro-Canada Resources (USA) Inc. ("PCR")
Kodak 35-11 and Kodak 35-12 wells (the "Wells")
N/2 NE/4 of Section 35, Township 6 North, Range 67 West
Weld County, Colorado (the "Property")
Dear Ms. Lockman:
We have received a copy of Ms. Aldridge's letter to you dated September 12, 2005, asserting that Broe
has failed to communicate with Petro-Canada regarding the above referenced matter. We disagree.
Petro-Canada has refused to discuss the location of the Wells adjacent to the existing site of the
Christensen #1-35 Well, as proposed by Broe. Such location would reduce surface conflicts,
preserve valuable land for development, and create operational efficiencies for Petro-Canada,.
Petro-Canada's primary concern regarding such location relates to the "horizontal kick" of the
Wells, which would exceed Petro-Canada's company policy of 1,000 feet. Among other things,
Broe has been researching the feasibility of a horizontal kick exceeding 1,000 feet and continues
to believe it is not only feasible, but in fact is a rather common industry practice in Weld County.
Broe has authorized an engineer, with over twenty years of experience with oil and gas drilling
and production, to meet with Petro-Canada on Thursday, September 15th to discuss the
feasibility of a horizontal kick. This engineer had authority to call Petit-Canada on Bite's
behalf, and we understand themeeting has been scheduled. The purpose of having the engineer
contact Petro-Canada's office was an effort to address the engineering concerns previously
expressed by Petro-Canada. Putting aside the issue of the cost associated with directional
drilling, which is irrelevant to the County's consideration of this USR, it is evident from the
communications by and through your office that the only concerns of Petro-Canada related to
any relocation of the well and any directional drilling of the same are engineering related. That
being said, it makes little sense for anyone other than the engineers to deal with the same. If
there are concerns that are not either cost or engineering related, it would certainly behoove
Petro-Canada to articulate those issues at this juncture so that the parties can have a meaningful
dialogue and to avoid wasting the resources of your office.
EXHIBIT
I m
Gast X415,4
If Petro-Canada will not agree to directional drilling from the proposed location, then as we
stated in our August 26th letter to you, as the surface and offsetting mineral owner, Broe would
consent to an "exception downhole location" for the Wells. This accommodation would allow
Petro-Canada to drill to bottom hole locations that are within 1,000 feet of the proposed drilling
locations adjacent to Christiensen#1-35 well. Applications now pending before the Colorado
Oil and Gas Conservation Commission generally support the proposition that such bottom hole
locations would be every bit as productive as the"cookie cutter" locations proposed by Petro-
Canada, while avoiding the waste of valuable surface.
A matter which Broe has mentioned in all of its correspondence to Petro-Canada and the County
relates to the alignment of Crossroads Boulevard. As Broe demonstrated in its presentation to
the Planning Commission, one of Petro-Canada's proposed Wells continues to be within the
alignment and expected right-of-way/setback area for Crossroads Boulevard. This is a planned,
four-lane, regional, east-west connector road. The joint planning of this road among Weld
County, Town of Windsor and City of Greeley is progressing, and if the Wells are drilled as
proposed by Petro-Canada, this road project will be hindered. The Town of Windsor mentioned
this concern specifically in its referral comment letter for this USR.
In our letter to you of August 25, 2005, Broe requested that the parties be given until the week of
September 12w, in which to conclude their negotiations before a BOCC hearing is scheduled. In light of
the meeting scheduled for September 15`h, we renew that request.
Very truly yours,
BROE LAND ACQUISITIONS II, LLC
u
'ohn Stone, Vice President
cc:
J. Michael Morgan, Esq.
Lance F. Astrella, Esq.
Susan L. Aldrich, Esq.
Edward L. McLaughlin, Petro-Canada
09/19/05 MON 13:25 FAX 3033938636 BROE/OMNI 21002
3RoE
a Clayton Street
Denver,Colorado 00306
Telephone 303-393-0033
Faaimile 303-393-004,
www,broe.com
VIA FACSIMILE (303) 297-7708 AND
FIRST CLASS MAIL
September 19, 2005
Edward L. McLaughlin, Vice President
Land &Business Development
Petro-Canada Resources (USA)Inc.
1099 18th Street, Suite 400
Denver, Colorado 80202-1904
Re: Proposed Kodak 35-11 and 35-12 Wells (the"Wells")
N/2 NE/4 of Section 35, Township 6 North, Range 67 West
Weld County, Colorado (the"Property")
Dear Mr. McLaughlin:
Last Thursday, Broe's contract petroleum engineer, Jeff Reale, met with.Petro-Canada regarding
the location of the proposed Wells. We understand the meeting was cordial and some progress
was made.
At that meeting, Petro-Canada indicated that it was working on an economic analysis of the
proposed directional drilling of the Wells, and it would forward that analysis to Broe by the end
of last week for its consideration. We did not receive the analysis on Friday or this morning.
In light of the upcoming hearing, will be possible to forward the analysis to us by close of
business today so that we might have time to consider it and continue our discussions? Please let
us know.
Sincerely,
BROE LAND ACQUISITIONS Ii, LLC
i CQe
John Stone, Vice President
cc: Ms. Sheri Lockman
Mr. Jeff Reale
Mr. Eric Swanson EXHIBIT
Pt and Performance, � 1 cM
1
/a
09/20/05 TUE 18:25 FAX 3033938636 BROE/OMNI 1002
13
z52 Clayton Street
Denver,Colorado 80206
Telephone 303-393-0033
Facsimile 303-393-0041
www.broe.com
VIA FACSIMILE (303) 297-7708 AND
FEDERAL EXPRESS
September 20, 2005
Edward L. McLaughlin,Vice President
Land & Business Development
Petro-Canada Resources (USA) Inc.
1099 18th Street, Suite 400
Denver, Colorado 80202-1904
Re: Proposed Kodak 35-11 and 35-12 Wells (the "Wells")
N/2 NE/4 of Section 35, Township 6 North,Range 67 West
Weld County, Colorado (the"Property")
Dear Mr. McLaughlin:
Thank you for making your operations engineer available in the meeting last week with
our consultant engineer to discuss the feasibility of directionally drilling 1,300 feet
horizontal distance, which is from Broe's proposed surface location and is near the site of
the existing Christiansen#1-35 well. We have noted that this would prevent the waste of
surface lands and avoid conflicts with the proposed alignment of Crossroads Boulevard/
O Street. Unless Petro Canada agrees to Broe's proposed accommodation to consent to
the exception bottomhole location, there isn't a surface location within 1,000 feet of
Petro-Canada's proposed bottom hole locations that wouldn't negatively impact Broe's
surface development plans.
In an effort to continue to make progress toward reaching an agreement and as we stated
in our previous letters to the County on which Petro-Canada was copied, Broe would
consent to such "exception downhole locations" for these Wells to reduce horizontal
drilling distances. Broe owns the surface and 100%of the minerals in the offset area, and
is therefore in a position to grant such a waiver. This accommodation would allow Petro-
Canada to drill to bottom hole locations that are within 1,000 feet of the proposed drilling
locations near the Christiansen#1-35 well.
Applications now pending before the Colorado Oil and Gas Conservation Commission
support the proposition that such bottom hole locations would be as productive as the
locations proposed by Petro-Canada, while avoiding the waste of valuable surface and
conflicts with the proposed Crossroads Blvd/O Street roadway alignment.
Prtund Performance 17-?2 f EXHIBIT
Itety
09/20/05 TOE 18:26 FAX 3033938636 BROE/OMNI Ij003
Mr. Edward McLaughlin
Page 2
In an effort to reach an agreement prior to the Board of County Commissioners meeting
on September 28`h, we request that you let us know your response to our offer to consent
to "exception downhole locations"by the close of business this Thursday, September
22"d.
Sincerely,
BROE LAND ACQUISITIONS II,LLC
161".
Stone,Vice President
cc:
J. Michael Morgan, Esq.
Lance F. Astrella,Esq.
Susan L. Aldrich,Esq.
Sheri Lockman, Weld County
Eric Swanson—Broe
2
BftOE
Clayton Street
Denver,Colorado 80206
Telephone 303-393-0033
Facsimile 303-393-0041
www.broe.com
September 19, 2005
Mr. Bill Jerke
Chairman
Board of County Commissioners
Weld County
915 - 10th Street
Greeley, CO 80631
Dear Commissioner Jerke:
I want to thank you for your continued support of our economic development activities in Weld
County. As you may be aware, we have now submitted our annexation application for the Great
Western Industrial Park to the Town of Windsor, and look forward to the development of the
premier industrial park in the North Front Range, already home to Owens-Illinois and Front
Range Energy.
I also want to make you aware of a plan that an oil and gas company has for operations on our
property that presents significant negative impacts on our development and in the public
infrastructure that we are installing in the area. Petro-Canada has applied for a Use By Special
Review to drill wells in locations that coincide with the planned alignment of the Crossroads Blvd
and O Street connection, as well as on imminently developable property along this arterial
connection.
Following the Weld County Planning Commission hearing on July 5th, we were compelled to
negotiate with Petro-Canada to resolve our well location dispute. As you can imagine, we have
every motivation to try to reach agreement on the unresolved well location, a critical matter given
the substantial financial commitment our company is making to the area and the importance our
project has to the economic vitality of the County. We also recognize that the mineral owners
need to be accommodated through reasonable access to the surface. It should be noted, by the
way, that we own 100% of the mineral estate that Petro-Canada has a lease on, as well as 100%
of the surface rights.
We specifically offered two reasonable alternatives:
(a) additional well surface locations adjacent to their existing base of operations,
approximately 1,300' away from where they have proposed;
(b) an exception to the "bottom-hole" location to reduce the distance of their drilling.
While Petro-Canada claims that we have refused to negotiate, they have also claimed that
directional drilling is not technically or economically feasible. We have confirmed that this is not
true. Today's technology has been made very practical by several companies that utilize these
techniques very successfully throughout Weld County. We have confirmed that directional
drilling is both technically and economically feasible as far as 2,000' from the"bottom-hole"
location. In fact, Petro-Canada is planning to utilize directional drilling just a half mile away
where it was necessary to set back from the Town of Windsor's Waste Water Treatment Plant.
ri,ol„larehynnin,e- _:...
Our proposals to Petro-Canada provide reasonable accommodation for its access in a manner that
reduces the impact on our surface development and consolidates its operations in a location that
will not interfere with the future alignment of Crossroads/O Street.
The outcome of this matter has material impacts on our development. We have estimated in
excess of 8 million square feet of industrial and commercial buildings on our combined 1,500
acre development site, employing more than 2,000 people upon full build-out. The vast majority
of these jobs will be primary sector jobs, serving to anchor and diversify the North Front Range
economy. The economic impact study that was done by UNC estimated nearly $122 million in
potential direct revenue to Weld County from our development, and over$2.6 billion in total
economic benefits. While these figures seem staggering, we are well on our way as we have
already secured two large employers for the Great Western Industrial Park, and have two more
we are in discussion with. Our vision is to attract more Fortune 500 companies to the County,
who will make significant investments and provide strong employment, much like Owens-
Illinois. It should be noted,by the way,that O-I was concerned enough about the potential
conflicts with mineral owners, that it required us to re-assemble the outstanding mineral interests
on its property as a condition to their land acquisition.
The Crossroads/O Street connection is an important infrastructure that will be dedicated to the
public upon completion. This important arterial connection will facilitate circulation of the
substantial industrial and residential traffic our project will produce, keeping it out of Main Street
in Windsor. The Town of Windsor also stipulated in its referral response to Weld County that the
well location was in conflict with the planned alignment of the Crossroads/O Street connection.
We respectfully suggest a couple options:
Firstly, it would behoove all the parties involved to examine closer the alternatives that are on the
table, with a view toward minimizing the impact on each others business plans and damaging our
surface plans. Petro-Canada's claims that our proposals are not technically feasible indicate a
lack of commitment to examining alternatives.
Secondly, we have committed substantial resources and time in the planning of this project, in
conjunction with the Town of Windsor and anticipate completing our annexation process by year
end. It seems to us that this matter should be ultimately decided on in the jurisdiction the
property is being planned in, so that adequate consideration can be given to the planning issues
which have regional significance.
We look forward to diligently pursuing resolution to this matter.
Respectfully,
1711//
i
ILL(/'
ex Yer s'
Managin birector
Great Western
cc: Mr. Lee Morrison, Assistant County Attorney, Weld County
Pat Broe
September 23, 2005
Mr. Glenn Vaad
Commissioner
Board of County Commissioners
Weld County
915 - 10th Street
Greeley, CO 80631
Dear Commissioner Vaad:
I want to thank you for your on-going support of our economic development activities in
Weld County. We are well underway with respect to the development of our 1,500 acre
project next to Eastman Kodak's facility and expect to have the property annexed and zoned
in the Town of Windsor by year-end. We are in discussions with potential users in the Great
Western Industrial Park that will add to the momentum established by Owens Illinois and
Front Range Energy.
Our vision for the project is significant as is the potential economic impact of the industry
that will be based in the industrial park. We have estimated in excess of 8 million square feet
of industrial and commercial buildings on our combined 1,500 acre development site,
employing more than 2,000 people upon full build-out. The vast majority of these jobs will
be primary sector jobs, serving to anchor and diversify the North Front Range economy. The
economic impact study that was done by UNC estimated nearly$122 million in potential
direct revenue to Weld County from our development, and over$2.6 billion in total economic
benefits. While these figures seem staggering, we are well on our way to achieving this as we
have already secured two large employers for the Great Western Industrial Park, and have
two more we are in discussion with. Our vision is to attract more Fortune 500 companies to
the County, who will make significant investments and provide strong employment, much
like Owens-Illinois.
The matter involving Petro-Canada's Use by Special Review for two oil & gas wells within
our Great Western Industrial Park concerns us. The planned well surface locations not only
impact our surface development plans but also the alignment plans for the extension of
crossroads ads Boulevard_., rd, n Street from SH 257 to Greeley.
We know that to have Petro-Canada locate these surface locations at a nearby existing Petro-
Canada well operating area (and drill directionally) is technically feasible. Our proposal
allows Petro-Canada to pursue its mineral interest and allows the surface owner to pursue its
economic development plan and land use rights.
c: Mr. Lee Morrison, Weld County
EXHIBIT
252 Clayton Street, Fourth Floor, Denver, Colorado 80206
09"
BKOE
7ayton Street - •
rer,Colorado 80206
Telephone 303-393-0033 _
Facsimile 303-393-0041
www.broe.com
September 23, 2005
Mr. Bill Jerke
Chairman
Board of County Commissioners
Weld County
915 - 10th Street
Greeley, CO 80631
Dear Commissioner Jerke:
I am attaching an article that was published in the Denver Post yesterday, titled Drilling is Hot, as
is its Debate. The article highlights the position that municipalities are taking to minimize the
impact that oil and gas operators have on surface right owners. Specifically,the La Plata County
commissioners required an oil and gas operator to drill directionally from existing pads to
minimize surface impacts while they pursue their mineral interests.
It's also clear from the article that property owners and developers see a real legal issue with the
initiative that oil and gas operators have to blanket the landscape with oil and gas wells and at the
same time not taking these surface rights into account. The article addresses these concerns in a
variety of ways including having the Director of the state oil and gas commission acknowledge
that the `impact of this drilling has been softened by techniques such as directional drilling, which
allows several wells to be drilled from a single pad'.
While we understand that this can be a complicated matter, we feel it can be distilled down into
three simple propositions:
1. Surface owners and oil and gas operators interests are in conflict,particularly in areas
where land use zoning is important;
2. Directional drilling is technically and economically feasible and a commonly used
technology in the oil and gas industry;
3. Directional drilling can solve many of the issues between surface owners and oil and gas
operators and is a win-win answer.
We hope this article is helpful.
Res full
Alex Ye
Managi Director
cc: Mr. Lee Morrison, Assistant County Attorney, Weld County
Ms. Monica Mika, Director of Planning Services, Weld County
(4. 7BIT
IYialLwd Prr�nnrnnre• �-�.
SUNDAY , SEPTEMBER 25 , 2005
Voice of the Rocky Mountain Empire
TEhE SuMw DENvER POST
oveareeosr.cost { ems DRIVES rosz I &RocicyM0iltil ajnNews I Soo ,,,
Drilling is hot, as is its debate
Energy output sets state record
By Theo Stein and Kim McGuire
Denver Post Staff Writers
DenverPost.com
From the Front Range to the Western Slope,energy development In Colorado Is escalating at a record pace that will generate more than$8
billion In revenue this year-a 60 percent increase in just two years.
The projected 3,950 new drilling permits-up by a third since last year-and nearly 29,000 operating welts In 2005 are both records,the
Colorado Oil and Gas Conservation Commission says.
'This is the first time that we've had oil and gas production from one end of the state to the other,"said state Department of Natural
Resources director Russell George.
"The real question for us as public managers is,'How do we manage and balance all of the effects?"'George said.
The drilling has drawn opposition from groups as diverse as Weld County housing developers concerned that well pads are gobbling up prime
real estate, and La Plata County hunting guides worried that development will harm forests.Gas seeps, linked to drilling in Garfield County,
have released methane and benzene into creeks and wells and pushed residents to demand a study of possible health Impacts.
With the increasing national reliance on natural gas,experts expect the industry to have a big presence in Colorado for three or four more
decades.
4 "When I drive home to Longmont,I can see drilling rigs In every direction,"said Jim Martin,director of Western Resource Advocates, a
Boulder environmental group."Do we want to drill in everyone's backyard?"
There are now 28,300 working wells in Colorado.The U.S.Energy Information Agency estimates that Saudi Arabia has 1,000 oil and gas
wells.
The drilling is being spurred by the soaring value of natural gas,which rose to$12.79 per thousand cubic feet Friday afternoon on the New
York Mercantile Exchange, In 2001, it sold at$1.83.
On Friday,the state Oil and Gas Conservation Commission issued Its 2,917th permit,the same number as in all of 2004.
Since 2000,natural-gas production in the state has risen by 70 percent to 1.3 trillion cubic feet.Oil production Is up 16 percent,to 22.3
million barrels,the Colorado Geological Survey says.
Among Western states,only Wyoming has seen more activity, with a projected 10,216 drilling permits this year end production of 1.9 trillion
cubic feet of gas and 27 billion barrels of oil,according to the Wyoming Oil and Gas Commission.
The scramble has drawn companies from across the continent,such as Canadian giant EnCana Corp.and Tulsa,Okla.-based Williams Cos.
Inc.
"There's no doubt natural gas has been a valuable resource to Colorado's economy,and at Its current price,it's an even more valuable
resource,"said Greg Panagos,director of Investor relations at Noble Energy Inc.,the largest operator in Colorado.
"But ultimately It's up to state and local governments to determine what the right balance is between resource development and
urbanization,"Panagos said.
The balancing act Is complex.On one side Is the energy Industry-which provides more than 15,000 direct jobs, 40,000 In indirect
employment and about$500 million in state and local tax revenue,according to estimates by the Colorado Oil and Gas Association.
On the other side are homeowners worried about their property values and health,developers competing for land,and environmentalists
worried that some of the state's wildest reaches will be marred forever.
In Weld County,which already has a state-high 40 percent of all operating wells,Noble and Kerr-McGee Rocky Mountain Corp.want to add
thousands more wells by increasing well-field density.
Farmers, ranchers and reai-estate developers have banded together to oppose the plan.
Print Article Page 2 of 3
7eTh "Why do we need wells every 20 acres when companies haven't finished drilling every 40 acres yet?"asked T.R. Rice,an attorney for
landowners. "I think its an effort to stymie landowners from developing acreage that operators think they might want to use In the future."
An oil and gas commission hearing on the Weld County proposal is set for November.
Weld County isn't the only place where energy companies are seeking to Increase well density-a technique for extracting more gas from the
most lucrative fields.
In La Plata County,the states production leader with 1.3 billion cubic feet of coal-bed methane pumped out each day,BP America and
Tulsa-based Samson Resources Inc.want to double the well density across more than 100 square miles.
Two weeks ago,BP signed an agreement with county commissioners requiring it to drill from existing pads only,pay a hefty road-damage
fee and reduce noise from compressors.
In return,county commissioners will not oppose the down spacing request before state regulators at a hearing Monday.
Both companies have said they expect to return with more down-spacing proposals.
"We know there is gas in the Rocky Mountain West,and we know how to get ft out,"BP spokesman Dan Larson said.'And we think we can
do it in a way that minimizes the impact on our neighbors in La Plata County."
The Impact of drilling has been softened by techniques such as directional drilling,which allows several wells to be drilled from a single pad,
said Brian Macke,director of the state oil and gas commission.
There were B3 drilling rigs working In Colorado last week and more on the way,Macke said.
"The demand dynamics we're seeing right now leads us to believe this increase in activity will be fairly long-term;he said. •
•
In the Western Slope's Garfield County,which this year overtook Weld County as tops for new drilling permits and has the second-largest
number of working wens,residents are concerned that government agencies are losing control.
rss Real-estate ads in the Glenwood Springs Post-Independent newspaper note drilling bans as a selling point for a property.
"People here are being steamroiied In a way that you might expect to see In a Third World country;said Duke Cox, president of the Grand
Valley Citizens Alliance."The energy industry seems to have a blank check to do whatever they want to do'
In August,facing a meeting filled with concerned Garfield residents,the state oil and gas commission agreed to study whether drilling was
creating health risks.
The two-year study is being financed by a$371,000 environmental fine levied against En Cana for a gas seep that released benzene into a
creek south of Slit this year.
Officials from EnCana and Williams Cos.Inc.,the two big players In the basin,say they have been able to negotiate agreements with almost
every surface owner that doesn't own gas reserves below their properties to compensate them for disruption and damage.
The county is also conducting a study to see if drilling Is hurting property values,as many residents have claimed.
Williams,which was near bankruptcy three years ago and has made a comeback with drilling in Colorado,has contracted for an additional 10
rigs and plans to increase its drilling by 50 percent to 4,600 wells in the next 10 years.This month,Williams passed EnCana to become the
permit leader in 2005.
To offset the impact of drilling,Williams has leased new,quieter rigs that can drill almost two dozen wells from a single pad and recycles
drilling mud that was stored in open pits.
"We've been here a long,long time,"said Joe Daggers,Williams'vice president of exploration and production."We're going to be a here a
long,long time:
EnCana,which was created by a merger of two Canadian energy companies in 2002 and is the largest company in that country,has drilled
1,000 wells in the past three years and projects it will add 400 to 500 wells a year In the future.
"Colorado is the No.2 state for us in gas production behind Wyoming,"said Eric Marsh,vice president of EnCana Oil and Gas USA."Both
states are absolutely critical to our future."
el.")
http://www.denverpost.com/portlet/article/html/fragments/print_article.jsp?article=3060140 9t26/2005
Print Article Page 3 of 3
On Colorado's Eastern Plains,Yuma County,which is third in the state in new permits this year,with 475, Is grappling with oil and gas
expansion.
Oil and gas provides 40 percent of Yuma County's tax revenues,or about$5.8 million.
County Commissioner Dean Wingfield said many small-farm operators are leaving agriculture to find better-paying Jobs In the off and gas
field.
While that trend has helped spur the focal economy,Wingfield said he worries that residents may become too dependent on a commodity
that can wildly fluctuate.
'Back in the'60s,we never thought we could run out of water,"he said, "Many of our Irrigation wells have now gone dry and left many
farmers in bad shape. But that's what happens when you rely on a nonrenewable resource."
Staff writer Theo Stein can be reached at 303-820-1657 or t£te, denvera4it•CQrfl.
Staff writer Kim McGuire can be reached at 303-820-1240 or kmgqu(regrdenver720.5 cgm.
. r
7bp Colorado operators by permits approved in 2005 ..:
Illr
Permits approved Active welts Biggest counties
In 2005 in Colorado of operation ».,
Company as of Sept 20 as of Sept 20 for 2005 permits Company details
Williams Cos.Inc. 401 1,301 Garfield Tulsa,Okla-based Williams has 61 patient of its reserves in Colorado.
..------..._..._......._................__4444
Encana Corp, 385 2,884 Garfield,Weld Calgary-based EnCana is Canada's largest company by market vaiue..'4;4,-.
rikv Energy Inc.* 303 3,867� Yuma,Weld Noble,which is based in Houston,acquired Colorado-based Patina OililoCas.
hunger Natural . 197 1,460• Las Animas Irving,Texas-based Pioneer is selling offshore wells to focus on the West'
Resources USA Inc.
4444_ ..........,.».._.»w.. �w .............._ 0....
Pletroleum Development 190 896 - Weld PO Corp,,:aased in Bridgeport,W.Va.,is drilling in four Colorado countigs4
......._...._. _ _ _4444__._ .
4444... .�...._.. ......................._........._... ......,:....... .:............_.._...............::..........___..Y:.... _ ._ _....__...._......
Kerr-McGee Rocky 126 3,456 Weld Oklahoma City based KMG is selling North Sea wells and expanding*the
Mountain Corp. Rockies • .
_..__ ` �_....�
Bill Barrett Cap. _ 103 __- » 101.. __��..__.-:Y_ Denver-based Barrett_operaxe_s in Colorado,Utah and Wyoming.
Berry Petroleum Co. 97 _ 629 Yuma • Bakersfield,Calif.-based Berry pUtchased Colorado properties in -�'Decemiierr.
Ja,F,.
The Houston 91 14 Yuma The Houston-based company expanded to Utah in 2003 and M
Exyloration Co. 2004.
4444
United States 72 215 Weld Privately owned,Denver-based DGL Acquisition Co.owns U.S.Exploration'. •
4444 M _ _.. »..._...._......._ »44 4 4 ... --
Statewide total 2,896 28,342 `"'"::r
...
•Includes recently acquired Patina Oa&Gas Corp. s
• Jeffrey A.Roberts and Thomas Mdtey i The Denser Post
.
http://www.denverpost.com/portlet/article/html/fragments/print_artxcle jsp?articlea3060140 9/26/2005
Di iNing boom across Colorado
Inbr�yme�f�nhrest ban elegy hero from acrou the U.S.Is propelling
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SATURDAY, JULY 30, 2005 ROCKY MOUNTAIN NEWS 1C
WALL STREET WEST
Broe development Broe: Growth
seeks to attract jobs expected to offset
Windsor project TOM COLLINS $1 Billion Kodak, H-P layoffs
/ Development
features industrial, ® ,7 _
office, retail spaces `o""N rt-® �
p development officials, already known how many jobs could be
-"` has brought $170 million in cut locally by Kodak or
By John Rebchook • development to a portion of the Hewlett-Packard.
ROCKY MOUNTAIN NEWS land,thanks to the$120 million "Broe has demonstrated
Owens-Illinois plant under over and over again it can really
A 1,543-acre development ,00,o,R I /,. construction and the$50 million utilize the rail infrastructure
in Northern Colorado is expected Front Range Energy ethanol and the other transportation
to have a $6 billion economic population of 17,000 people by plant. Yeros said Owens- infrastructure, and form part-
impact in the state over the next as much as 26.5 percent. Illinois already has hired some nerships with local and state
decade, according to a report The Broe Cos. requested people who had previously officials to develop an overall
by the University of Northern the analysis. The land also worked at the Kodak plant. package to win a company like
Colorado in Greeley. would include a substantial The development potential Owens-Illinois," Johnston said.
The land, in the process of amount of open space. of the land will"revitalize some "In my judgment, Broe played
being annexed to Windsor, is Brian Vogt, economic of the real estate and business a very significant part (in the
ther owned or being purchased development director for the activity, bringing more jobs deal) that brought Owens-
by Great Western Development, state, said Northern Colorado than will be lost by Kodak, Illinois to the table."
a company owned by Denver- may be "spared a lot of bad Hewlett-Packard, Agilent and Yeros said he is currently
based Broe Cos. news"from recently announced Celestica,"Yeros said. looking at four potential users
Great Western is buying layoffs at Kodak and Hewlett- Rod Wensing,Windsor town for a portion of the land. One
most of the land from Kodak Packard in part because the manager, said, "It's certainly company, he said, would likely
Co.The development eventually Broe property, along with a not going to replace all of those make a$20 million to$50 million
is expected to create 2,000 handful of other developments high-tech jobs,but it will perhaps investment. In addition, the
jobs.When completed,the land in the vicinity, can bring new lessen the impact of the losses. Broe Cos. might use some of
would have as much as 8.2 companies to the area. It's going to have a substantial the land to build its own facilities
million square feet of industrial "I think a lot of the negative impact. The Broe development in the energy business. The 33-
space, 1.4 million square feet impacts have already been presents an excellent opportunity year-old Broe Cos.is a privately
of retail and offices, and 2,000 ameliorated because we already for Windsor to create permanent, held company that has more
housing units, according to the have some really great growth primary jobs in Windsor and than $1 billion in assets in real
study by UNC economics pro- opportunities," Vogt said. "We Northern Colorado." estate, transportation, energy
lessor Rhonda R. Corman. The have a lot of prospects in the "I have not seen the study and strategic capital.
report estimated the economic pipeline,ranging from agricultural yet, but the numbers are very Yeros said that part of his
impact over the next decade to to very,very high-tech prospects. impressive,and I hope it comes goal is to bring new companies
Weld County at$2.7 billion. Windsor is at the epicenter for to pass," said J.J. Johnston, and industries to the area to
"It will be a very large a new boom area." president and chief executive help diversify the local economy,
impact,"Corman said Wednesday. Alex Yeros of Great Western officer of the Northern Colorado as well as help grow existing
"It is a very large development." Development said the completed Economic Development Corp. industries.
And the 2,000 housing value of the real estate on the "We need something positive to
units,which would include single- property in today's dollars would help offset the announcements rebchookj@RockyMountainNews.com
family homes, apartments, be more than $1 billion and by Celestica and others." or 303.892.5207
f" "wnhomes and condominiums, possibly as much as$1.5 billion. Toronto-based Celestica said
,vould house an estimated Yeros said Great Western earlier this year it will close its
4,500 residents. That would Development, working with 800-employee plant in Fort
increase Windsor's current state and local economic Collins within a year. It's not
NORTHERN COLORADO'S MANUFACTURING HUB
AVAILABLE Flexible parcel sizes
5 to 500 acres FORT COLLINS 1 ,„A
0 / BEAT WESTERN
RAIL SERVICE Great Western Railway of " "/""/il"4
Colorado provides competitive access, -
daily(M-F)interchange to BNSF&UP asz _
LOCATION Proximity: CREELEY
5 minutes to Greeley LOVELAND 0N
10 minutes to Loveland ESTES PARK
15 minutes to Fort Collins
45 minutes to Denver International Airport
60 minutes to Downtown Denver 257
60 minutes to Cheyenne/I-80
Highway Access: /
3 miles north U of US 34 LONGMONT -
3
7 miles east of 1-25
7 miles west of US 85 25
76
Neighboring Industry: BOULDER
Eastman Kodak(1,500 employees)
Owens-Illinois(150 employees)
DENVER
Anheuser-Busch(120 employees) 470 INTERNATIONAL
Packaging Corp.of America(100 employees) P AIRPORT
Front Range Energy(35 employees)
_
ZONING Heavy Industrial/Light Industrial
INFRASTRUCTURE Sewer 70 - '
Town of Windsor
Water DENVER
Town of Windsor
Power: GWR i Interchange stations
Xcel Energy/Poudre Valley REA ' \---."-
(115kv&230kv) '
Natural Gas: w �" t 3 x�`�"o,�,jw."",o. ,,r
Xcel&Atmos Energy
(high-pressure gas lines) ,, • ° 'tm'. -- NT 't s�,
≤ d m
'I have to commend .,..ill the 4 1_� COti r agencies,
'
The Broe Companies, Great Western Railway of . f Ito\ 1 4 ;f
Colorado and 1r Uwer-s �n pe>r,'ove epttio �s ...� 1 :- i
x
a t reies e tfor dint to �e , ene. I -ays E1 j'°- j era '
creamer itw we ca a nce r new plan' t t , '1\91 ' T E -t
and l oat u acf r a ohs uonl d to Colorado.' 1 - I �# 5� i ! r:
sr
Goaerr_urB. IOwens sl \ q,F. a '�' �,
PLEASE CONTACT: Alex Yeros at 303.393.0033,
xy. � A: sr+. .„m .w. < ' .A
ayeros@broe.com � r al .4 ♦e
ail .
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An affiliate of The BP4)L Companies An al- at Railroad
BOARD OF COUNTY COMMISSIONERS' SIGN POSTING
CERTIFICATE
THE LAST DAY TO POST THE SIGN IS September 16, 2005 THE SIGN SHALL BE POSTED
ADJACENT TO AND VISIBLE FROM A PUBLICALLY MAINTAINED ROAD RIGHT-OF-WAY.
IN THE EVENT THE PROPERTY BEING CONSIDERED FOR A SPECIAL REVIEW IS NOT
ADJACENT TO A PUBLICALLY MAINTAINED ROAD RIGHT-OF-WAY, THE DEPARTMENT
OF PLANNING SERVICES SHALL POST ONE SIGN IN THE MOST PROMINENT PLACE ON
THE PROPERTY AND POST A SECOND SIGN AT THE POINT AT WHICH THE DRIVEWAY
(ACCESS DRIVE) INTERSECTS A PUBLICALLY MAINTAINED ROAD RIGHT-OF-WAY.
I, VONEEN MACKLIN, HEREBY CERTIFY UNDER PENALTIES OF PERJURY THAT THE
SIGN WAS POSTED ON THE PROPERTY AT LEAST TEN DAYS BEFORE THE BOARD OF
COMMISSIONERS HEARING FOR_USR-1514 IN THE AGRICULTURAL ZONE DISTRICT.
VONEEN MACKLIN
Name of Person Posting Sign
Signature of Person Posting Sign
STATE OF COLORADO
)ss.
COUNTY OF WELD ti It 1 The foregoing instrument was subscribed and sworn to me this •l.L day of k _ , 26_ .
WITNESS my hand and official seal.
LOW 46(4
Notary Public / �/
My Commission Expires:L , `7
4
j{ 4 , +
)�� 1F i, r
��/�,
W NOTICE W�
A PUBUG REARING CONCERNING
, THIS PROPERTY WILL BE HELD AT ( C ti
�eld-C�n Cen�enaal Center " 915 N ,
TEeetj C�r�e!ey.
�; J 4Nf fptr`ikCY � , 20. AT ; �� , ( i
'p. NAME: (O"�onela 1 r -- i. tf'��r3 (.41:1;
: 7 ?.
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IIfa 4 J I 9
,I REQUEST aritrno6;J°tk : -,
CASE NU. 51,1 .7,7(:),;,., ACRES
FOR MORE INFORMATION CALL i v '
k+ WELD COUNTY DEPARTMENT OF 5� , 3 �� t,}
'{ t PLANNING SERVICES AT $ � ' ��
Lt • {970)3536100 ext, 3540 �, ' r
f 4 �
it j� Mr`� o-
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WELD COUNTY • BOARD ( COUNTY COMMISSIONERS
DOCKET NUMBER: 2005-67
EXHIBIT
APPLICANT: PETRO-CANADA RESOURCES (USA) INC.
LANDS: N1/2NE'/, SECTION 35, T6N-R67W
RELIEF SOUGHT: APPROVAL TO DRILL TWO WELLS AT LEGAL LOCATIONS
KODAK 35-11 AND 35-12 WELLS ("WELLS")
ALTERNATIVES OFFERED BY PETRO-CANADA:
1. Trade locations for other mutually agreeable locations Broe's Response: No Broe intends to utilize all of the lands acquired from Kodak for
where Broe owns unleased mineral interests. surface development. If Broe was to trade, it would still
require that Petro-Canada directionally drill.
2. Move locations within the drilling windows for the Wells to Broe's Response: No Broe intends to utilize all lands within the windows for surface
minimize interference with Broe's surface use plans. development.
3. Directionally drill from a surface location either within or Broe's Response: No Broe intends to utilize all lands for surface development. Even
outside the drilling windows but no further than 1,000' if an alternative to surface location was acceptable to Broe,
from the bottom hole location (to minimize operational Petro-Canada would bear all cost and risk.
risk). Broe would pay the incremental directional drilling
and completion costs.
4. Drill one Well at a straight hole location within one of the Broe's Response: No Same as above.
drilling windows and directionally drill the second Well
provided that the location does not require excessive
deviation from the straight hole location. Broe would pay
the incremental drilling and completion costs for the Well
directionally drilled.
5. Accept either (3) or (4) above, but in lieu of paying the Broe's Response: No Same as above.
incremental directional costs up-front, Petro-Canada
would offset such costs from Broe's royalty income (if
sufficient).
6. Accept either (3) or (4) above, with Broe contributing to Broe's Response: No Same as above.
the directional related costs.
7. Acquire Petro-Canada's interests in the lease underlying Broe's Response: No
the Wells and allow Broe to directionally drill the Wells
from the Christensen location. The purchase price would
be sufficient to compensate Petro-Canada for its loss of
opportunity to drill the Wells at straight hole locations.
ALTERNATIVES OFFERED BYBROE:
1. Directionally drill the Wells from the pad of the Petro-Canada's Response: No.
Christensen well location at Petro-Canada's sole cost and
risk.
(A) To bottom hole in the legal drilling windows. The significant deviation required to bottom hole the Wells in the drilling windows cannot
be economically justified at this time.
(B) To bottom hole within 1,000 feet of the Moving the bottom hole locations within 1,000 feet of the Christensen location would
Christensen well. adversely affect drainage patterns and potentially make it infeasible to drill an additional 5th
spot well.
1
EXHIBIT
Docket # 2005-67 I
Well Locations
" Township: 6 North, Range 67 West, 6th P.M.
Section 35: NE/4
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- Window Center is '.� �3 '# xx
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Docket # 2005-67
BROE LAND ACQUISITIONS
Township 6 North, Range 67 West, 6th P.M.
Sections 26 & 27
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Unleased Broe land acquisitions from Kodak—recorded conveyances
Unleased additional Kodak lands assumed to be under contract by Broe
O (24) Broe well locations on unleased lands per current COGCC spacing
O Petro-Canada's Kodak 35-11 & 12 Wells
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EXHIBIT
�" V
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4 Christianson 1-35 Well ` i t, , I CAS12 — 15!
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Potential Open
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Proposed Land Uses 6' -,---
I:I)le,
EXHIBIT
II \ji
(ASE - 1519
AFFIDAVITS
1. Mr. Dan Noland
a. Communication with Ms. Jennifer Dai, Well
Planner with Baker Hughes INTEQ
b. Communication with Mr. Jeff Salen, Drilling
Manager with CAZA Drilling.
II. Mr. Ron McCartney, Petroleum Engineer with
McCartney Engineering
III. Mr. Jeff Reale, Project Manager with Schneider
Energy Services, Inc.
EXHIBIT
Affidavit of Daniel Noland
The undersigned, being first duly doth sworn and an employee of The Broe
Companies, Inc., doth hereby state of his own personal knowledge as follows:
1. In conjunction with certain assertions made by Petro-Canada Resources (USA),
Inc. ("PCR") with regard to the feasibility of directional drilling with a reach in excess of
1000 horizontal feet, I spoke with several drilling contractors, including a directional drilling
specialist with substantial familiarity in the Greater Watternburg Area (the"GWA")and the
formations found therein.
2. On September 26, 2005, I communicated with Jennifer Dai of Baker Hughes
INTEQ ("Baker Hughes"),whose designated job is that of Well Planner. Baker Hughes is a
directional drilling specialist company. Ms. Dai represented to me the following:
r
a. In 2004, Baker Hughes drilled approximately 41 wells in the GWA,
and in 2005 has drilled and/or performed services upon approximately
a like number.
b. Of those wells, approximately one-third had horizontal reaches or
"kicks" in excess of 1000 feet, and some of the reaches go as far as
3000 feet.
c. Most of the wells described above are in Weld County, and vertical
wells now constitute but roughly 20%of the work performed by Baker
Hughes in the area.
3. On September 22, 2005, I communicated with Jeff Salen, Drilling Manager, at
Page 1 of 2
Caza Drilling ("Caza"). Mr. Salen represented to me the following:
a. Thus far in 2005, Caza has drilled 71 directional wells in the GWA.
b. The foregoing accounts for roughly 20% of the total wells drilled by
Caza, with most of the directional wells having reaches in the range of
900 to 1500 feet.
c. 25% of Caza's rig fleet is devoted to directional drilling activities.
d. Caza fully anticipates these directional drilling percentages to
increase should the COGCC approve the proposed Rule 318A which
downspaces acreage in the GWA.
Dated this 26th day of September, 2005.
ave
Da "el Noland
City and County of Denver SS
State of Colorado
tei
Daniel Noland did appear before me this d1 day of September, 2005 and
after being first duly sworn did execute the/ foregoing
verification.
o
`toTARY '•. Notary Public 7_�(� ot00ry
My Commission Expires :
•..P Dated this at`tday of se-Pr , no c.
Page 2 of 2
uommiss on Expires July 18 2008
> 27 05 01 : 01p Mccartney Engineering 3038307004 p
w )VIV f.
wu
Affidavit of Ron McCartney
The undersigned, being first duly loth sworn and an employee of McCartney
Engineering, cloth hereby state of his own personal knowledge as follows:
1. I am a petroleum engineer and I work for and under the direct supervision of a
registered petroleum engineer. l have spoken with Glen Miller an engineer with Starlight
Resources, an active operator in the Greater Wattenburg Area ("GWA').
2. Mr. Miller has indicated to me that Starlight Resources has successfully drilled
wells with a reach of 2480 horizontal feet, readies of 900 feet are routine and up to 1500
feet should pose no foreseeable problems.
Dated this 27"'day of September,2005,.
Z44 CD ,`
Ron McCartney I
City and County of Denver
State of Colorado
Ron McCartney did appear before me this day of September, 2005
and after being first duly sworn did execute the foregoing verification.
MCHAGAMBIE Notary
OF cot
STATE OF OLORACO
NOTELB. LIC My Commission Expires: V arok,
rywmaw,rtiaa wine Dated this Q±day of q� -. , 20 of.
r Affidavit of Jeff Reale
The undersigned; being first duly cloth sworn and an employee of Schneider Energy
Services, Inc., Both hereby state of his own personal knowledge as follows:
1. As an employee of Schneider Energy, my job is to provide oil and gas consulting
services. My experience includes drilling, operating, project management, and gas
gathering and processing.
2. In that role, among others, I have participated in or witnessed the drilling of many
directional wells in the Greater Wattenberg Area (the "GWA").
3. Of those wells, 50% have had a reach or kick in excess of 1,000 horizontal feet.
Further at least 2 wells have had a reach in excess of 2,000 feet. In general, there is no
appreciable cost difference between directional wells with minimal reaches and those
exceeding 2000 feet; the increased cost associated with directional drilling is in the initial
drilling procedure, not the ultimate reach of the well.
4. From time to time, concerns have been raised with respect to the relationship of
horizontal drilling and gas/oil ratios ("GOR"). Such concerns are generally illusory based
on feedback from several of my clients who are having positive experiences with the initial
production of their directional wells and are assigning reserve values which are similar of
vertical well reserves.
r
5. I am also aware of the drilling activities of Baker Hughes INTEQ and Caza in the
GWA, and it my understanding that together,they have drilled or serviced in excess of 110
directional wells in 2005 alone. I also understand that each are in the process of increasing
their capacity of servicing directional drilling desires and needs in the GWA. I am unaware
of any appreciable difficulties, or for that matter, concerns, related to directional drilling
and GOR.
Dated this 26th day of September, 2005.
Jeff Reale
City and County of Denver
State of Colorado
Jeff Reale did appear before me this Z-- rifn day of September, 2005 and
after being first duly sworn did execute the foregoing verification.
N ary Public
My Commission Expires :
McCLF N‘‘ Dated this 2b day of cx , 20pc
S'�,���OS A q�� yo�0,
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MyCommission Etpres 09/16/2007
Mit [ GREAT WESTERN OIL & GAS ��YMill
Location: COLORADO Slot: Slot#5 WINDSOR 26-43 ALTNS
Field: WELD COUNTY Well: WINDSOR 26-43 ALT --"--- ---- ---
INTEQ Installation: SEC.26-T6N-67W Wellbore: WINDSOR 26-43 ALT(PWB) I N 1 I•Q
WELL PROFILE DATA
Point MD Inc Azi ND I North East deg/100ft V. Sect
Tie on 0.00 0.00 39.59 0.00 0.00 0.00 0.00 0.00
KOP 200.00 0.00 39.59 200.00 0.00 0.00 0.00 0.00
End of Build 1100.00 18.00 39.59 1085.27 108.05 89.36 2.00 140.21
End of Hold 5041.45 18.00 39.59 4833.81 !, 1046.63 865.59 0.00 1358.19
Target 5941.45 0.00 39.59 5719.08 I 1154.68 954.95 2.00 1498.40
T.D. & End of Hold 1 7472.37 0.00 39.59 7250.00 1154.68 954.95 0.00 1498.40
Scale 1 cm=100 ft East (feet) ->
-400 -200 -0 200 400 600 800 1000 1200 1400
-1200 I I I I I I. . ._.I- __ MI I 11600
0
0
CO LEGAL BOX:200'X 200'
II -600 Tie on-0.00 Inc,0.00 Md,0.00 Tvd,0.00 VS CENTER @ BHL 1400
E 1980'FSL 8 660'FEL
a
0 0 26-43 BHL72
1200
cn
600 1000
,..-. 1200 800 A
Z
1800 600 O
N ?
.4..• 2400 400 M
t P.
T
G3000 200
o
O 3600 Surface 0.00 N 0.00 E -0
t- cn
0
N SURFACE HOLE LOCATION Cu
41
' 4200 830'FSL&1620'FEL 200
N
` I 3
F I,
V 4800 -400 0
5400
N
mu.6000 26-43 BHL _
GM
6600
v _ Jul
7200 W -I E
T.D.&End of Hold-7250.0011 Tvd,1154.68 N 954.95E ..e ..m.
7
ca.-,ca.-, 800 Plat tom•m„�o. 4�
e....].•WINDSOR m IA.T,R.R.,1.
-600 -0 600 1200 1800 2400 3000 ..---mete—++++•Rac+•^
Oatt Ill
Scale 1 cm=300 ft Vertical Section (feet) -> ,� � �:.,-,-.—
Azimuth 39.59 with reference 0.00 N,0.00 E from Slot 05 WINDSOR 2643 ALT
GREAT WESTERN OIL&GAS,Slot#5 PROPOSAL LISTING Page 1
WINDSOR 26-43 ALT Wellbore: WINDSOR 26-43 ALT(PWB) WEIS
SEC.26-T6N-67W, Wellpath: WINDSOR 26-43 ALT(PWP#1) INTEQ
WELD COUNTY,COLORADO Date Printed: 14-Sep-2005
Wellbore
Name Created Last Revised
WINDSOR 26-43 ALT(PWB) 8-Jun-2005 14-Sep-2005
Well
Name __-. . Government ID.-._ _. _..... Last Revised
WINDSOR 26-43 ALT 8-Jun-2005
Slot
Name Grid Northing Grid Easting Latitude Longitude North �East_
Slot#5 WINDSOR 26-43 1409118.9038 3179150.1012 N40 27 16.7327 W104 51 22.4332 1808.13S '1010.12E
ALT
Installation
Name JEasting Northing Coord System Name _—_ _INorth Algment
SEC.26-76N-67W 3178126.994 1410919.625: CO83-NF on NORTH AMERICAN DATUM 1983 True
daturftl
IsE eld
us Easting Northing [Coord System Name North Alignment
..eLD COUNTY 3178126.994; 1410919.625, CO83-NF on NORTH AMERICAN DATUM 1983 True
datum
Created By
•
Comments
All data is in Feet unless otherwise stated
Coordinates are from Slot MD's are from Rig and TVD's are from Rig(Datum#1 0.00ft above Mean Sea Level)
Vertical Section is from 0.00N 0.00E on azimuth 39.59 degrees
Bottom hole distance is 1498.40 Feet on azimuth 39.59 degrees from Wellhead
Calculation method uses Minimum Curvature method
Prepared by Baker Hughes INTEQ
GREAT WESTERN OIL&GAS,Slot#5 PROPOSAL LISTING Page 2 �raRnn
WINDSOR 26-43 ALT Wellbore:WINDSOR 26-43 ALT(PWB) 1
ES
SEC.26-T6N-67W, Wellpath: WINDSOR 26-43 ALT(PWP#1) INTEQ
WELD COUNTY,COLORADO Date Printed: 14-Sep-2005
Welloath Re ort
MDIftl Incfdeg] _-Azildeg] _ __ TVIDffti N�ft] Eastift] Dogleg L f1g 00ft] I Vertical Secuon[RL
0.00 0.00 39.59 0.00 O.OON 0.00E 0.00 0.00
1000 0.00 39.59 100.0 0.00N -__ 0.00E _-_ 0.00 0.00
200.0 __ . 0.00 3959 200.0_ COON 0.00E 0.00 0.00
_. 30000 2.00 39.59 299.9 1,35N 1.11E _--_. 2.0.0 175
40I 4_00. 39.59 399. 5.38N -_. 4.45E 2.00 6.98
50 _ 6.00, 39.59_ 499.45_ _ 12.09N 10.00E 2.00 -- 15.69
__. 60 8.00' 39.59 598.7 21.48N __. 17.77E, 2.00 _-. 27.88
__.. 70 1000 39.59 697.4 33.54N 2774E. 2.00 43.52
80 12.00 3959 795.6 4824N, 39.90E 2 00 62.60
90 14.00 3959 893.0 65.58N 54.23E 200 85.10100 16.00 39.59 989.6 85_52N 70.73E 2 00 110.98
110 18.00 3959 1085.2 108.05N 89.36E 2.00 140.21120 18.00 39.59 1180.3 13186N 109.05E 0.00' 171.11130 18.00. 39.59 1275.4 155.68N 12.8.750 0.00 202.02
1400.Oa 18.00 39.59 1370.5_ 179.49N 148.44E . 0.00. 232.9292 1500.0 18.00 39.59 1465.6 203.30N 168.13E 000 263.82
1600.0 18_00_. .._3959 1560.80 227.11N 187.83E, 0.00 ___.. 294.72 1700.0 18.00 39.59 1655.90 250.93N 1800.0 18.00 39.59 1751.01 274.74N: 0.00 356.52
22722E_-_
1900.0 18.00 39.59 _._ 1846.11227 22E 0 00 325.62
298.55N-
-__ _. .246.91E 0.00] 387.43
2000.0 18.00. 39.59 1941.2 322.37N 266.61E 0.00 418.33;Ja. 2100.0
2200.0 18.00
18.00 39.59
39.59 2036.3
346.18N
369.9N 286.30E
305.99E 0.00
0.00: 449.23
12300,0 18.00 39.59 2226 4 393.81N 325 69E 0.00 58110.0
2400. 3
OOf 1800 39.59, 2321 417.62N_ _. 345.38E 0.00 541.9
2500.00 _ - 18.00 39.59' 2416.7 441.43N 365.08E 0.00 572.8
_0_-
2600.0 18.00 39.59 _-. 2511.8 465.24N _--.. 38477E' 0.00 603.7
2700.0 18 00; 39 59 2606.96 489.06N4 __. 404.46E 0.00 634.6
2800.0 18.00, -_-__39.59 2702.07 512.87N 424.16E 0.00 665.
-___
29000 18.00 39.59 2797.1 -__ 536.68N, 443.85E 0.00 696.44
3000.0 18.00 39.59 2892.2 560.50N' _-- 463.55E 0.00 727.35
3100.0 18.00 39.59 2987.3 584.31N 483.24E 0.00 758.25
3200.0 18.00 3959 30824 608.12N 502.93E_-_ 0.00 789.1_
3300.0 18.00 39.59' 3177_5 631.93N _... 522.63E --- 0.00 820.0
3400.00 1800_--_. 39.59 3272.7 655.75N 542.32E 0.00 850.9_
18.00 39.59 __._. 3367.8 _ 679,56N 562.02E_-_ 0.00 881.8
_3500.00
3600.0 1800;.-_ 39.59 3402,91, 703.38N 581.71E 0.00 912.7
3700.0 18,00 39.59 3558.01; __. 727.19N 601.400 - 0.00 9430
3800.0_ _ 18.00 39.59 3653,j _751.OON _ 621.10E 0.00 _974.5
. ._ 3900.0 - 18.00 39.59 3748.2 774.81N, 640.79E _ __-- 0.00 1005.46'
4000.0 18.00 39.59 3843.3 798.63N 660.49E 0.00 __.. 1036.36
_41000 __. 1800.__ 39.59 _. 3938. 822.44N -___- 68018E 0.00 1067.2
4200.0 18.00 39.59 4033_ 846.25N 699.87E 0.00 1098.1
4300.0 -__ 18_00_... 39.59 -__ 4128.6 870.07N 719.57E. 0.00 1129.0
4400.0 18.00 _.- 3959__.. 42237. 893.88N __-.. 73926E 0.00�_-- 1159.9
4500.00 18.00 39.59 4318.8 9178_9N. 758.96E 0.00_. 1190.8
4600.00 18.00 39.59 4413.9 , 941.51N_ ___.. 778.65E. 0.00 _-_ 1221.7
_ 39.59 4509 07 __-- 965.32N1
46000 18.00' _ 798.34E 000,, 1252.6
4800.0 18.09 9.59 4604.1 9.13N 818.04E 0.00_ 1283.56
3 8
9 59 4699 2 1012.94x4 837.73E 4900.0 18.003E 0.00_, - 1314.48
5000.0 18 00
45.36
5041.4 18.00 39.59 _ 4833.81 1046.63N 865.59E 0.00I4 1358.16
All data is in Feet unless otherwise stated
Coordinates are from Slot MD's are from Rig and ND's are from Rig(Datum#1 0.00ft above Mean Sea Level)
Vertical Section is from 0.OON 0.00E on azimuth 39.59 degrees
Bottom hole distance is 1498.40 Feet on azimuth 39.59 degrees from Wellhead
Calculation method uses Minimum Curvature method
Prepared by Baker Hughes INTEQ
GREAT WESTERN OIL&GAS,Slot#5 PROPOSAL LISTING Page 3 Mil
WINDSOR 26-43 ALT Wellbore: WINDSOR 26-43 ALT(PWB) WINS
SEC.26-T6N-67W, Wellpath:WINDSOR 26-43 ALT(PWP#1) INTEQ
WELD COUNTY,COLORADO Date Printed: 14-Sep-2005 rMD[
ellpath Report
ft] Inc[deg] - Azi(deg] TVD[ft] NorthLft] EastLftl. _ Dogleg ldeg/100Q1 Verticl SectionLftL
51414 1600 39.59, 4929.4 1069.16N 884.22E 200 1387.4
52414 14_00 3959!__. 5026.0 1089.10N 900.726__ 2.00 1413.3
5341.4 12.00 39.59 5123.4 1106.43N 915.05E 2.00 1435.8
54414 10.00 _3959 5221.61,- 1121.14N_ 92721E 2.00 1454.8
55414 _-_ 800, 39.59 5320.38 1133.19N 93718E 2.00 _-_ 1470.5.
5641.4 _ 6.00 - 39.59 5419.631_ 1142.58 944 95E 2.00 1482.71
57414 4.001 39.59 5519.2 1-149.30 950.50E 2.00 _ 1491.4
5841.4 _ 2.00 39_59 5619.1 1153.33h_ 953.84E __-2.00 _1496._6_
.. _ 59414 0.00 39.59 5719.0 1154.681\ 954.95E
-- -__2.00 1498.4
60000 0.00 39.59 5777_6 1154.68N. 954.95E 0.00 1498,4
6100.0- 0.00 39.59 5877.6 1154.68N 954.95E 0.00 1498.4
62000 0.00 39.59 5977.6 1154.68N 954.95E 0.00 1498.4
6300.0 _ 0.00 39.59 6077.6 1154.68N 954.95E 0.00 1498.4
_._6400.0 _-_ 0.00 39.59 61776 _-_ 1154.68N 954.95E 0.00 1498.4
_--__ 65000 - 0.00 39.59 62776 1154.68N 954.95E 0.00 1498.40
__. 6600.004 0.00 _ - _.3959 6377.6 -1154.68N 95495E 0.00 -__1498.40
6700.00 0.00 39.59 6477_6 1154.68N __. . 954.95E 0004_ 1498.40
.._6800.00 __.._ 0.00 39.59 65776 1154.68N 95495E .__0.00 1498.40
690000, 0.00 39.59 _.- 66776 1154.68N _. 954.95E_-. 0.00 1498.4
.7000.0 0.00 39.594 _ 67776 _1.154.68N _ 954.95E 0.00 1498.4
_.. 7100.0 0.00__- 39.59] 68776 1154.68N 954.95E 0.00 1498.4
7200.0 0.00 39.59. 6977.6 1154.68N 954.95E 0.00 1498.4_
7300.0 0.001 39.59 7077.6 1154.68N 954.95E 0.00 1498.4
7400.0- _. 00O_. 3959 71776 1154.68M __- 954.95E 0.00 1498.4
7472.3 0.00 39.59i 7250.00 1154.68 954.95E 000 1498.4
r-. All data is in Feet unless otherwise stated
Coordinates are from Slot MD's are from Rig and ND's are from Rig(Datum#1 0.OOft above Mean Sea Level)
Vertical Section is from 0.OON 0.00E on azimuth 39.59 degrees
Bottom hole distance is 1498.40 Feet on azimuth 39.59 degrees from Wellhead
Calculation method uses Minimum Curvature method
Prepared by Baker Hughes INTEQ
GREAT WESTERN OIL&GAS,SIot#5 PROPOSAL LISTING Page 4 hind
WINDSOR 26-43 ALT Wellbore: WINDSOR 26-43 ALT(PWB) WIES
SEC.26-T6N-67W, Wellpath: WINDSOR 26-43 ALT(PWP#1) INTEQ
WELD COUNTY,COLORADO Date Printed: 14-Sep-2005
Tar ets
Name I NorthLftl Eastfftl TVDJft] If Latitude Lon Ule - Eastin Northing Last Revised__
26-438HL 1154.68N 954.95E 6000.0q N40 27 281425 W104_. 51 10.0796 3180096.6' _ 1410280.42 1-Sep 2005
All data is in Feet unless otherwise stated
Coordinates are from Slot MD's are from Rig and ND's are from Rig(Datum#1 0.00ft above Mean Sea Level)
Vertical Section is from 0.00N 0.00E on azimuth 39.59 degrees
Bottom hole distance is 1498.40 Feet on azimuth 39.59 degrees from Wellhead
Calculation method uses Minimum Curvature method
Prepared by Baker Hughes INTEQ
09/21/2005 04:33 3032977708 PETR0-CANADA PAGE 02/03
pm.. AM%, Petro-Canada Resources(USA) Inc.
September 21,2005
VIA FACSIMILE TRANSMISSION(303)393-0041
Mr. John Stone, Vice President
Broe Land Acquisitions II,LLC
252 Clayton Street
Denver, CO 80206
Re: Proposed Kodak 35-11 and 35-12 Wells rarer)
Township 6 North.Range 67 West
Section 35: N''NE'/.
Weld County,Colorado
Dear Mr.Stone:
Pursuant to our meeting last week and in response to your letter of yesterday,we have again
reviewed the feasibility of directionally drilling the Wells from the surface location of the existing
Christensen 1-35 well ("Christensen Well") as requested by Broe.
To reiterate our prior position, Petro-Canada believes it is technically and economically
impractical to directionally drill the Wells from the Christensen Well location (which is a minimum
of 1,250 feet south of the southern edge of the legal drilling windows for the Wells) or any other
surface location that requires a substantial bottom hole deviation. In addition to the incremental up-
front drilling costs, operating directional wells in low gas to oil ratio ("GOR") areas such as this area
introduces significant production and reserve recovery risks not present in low GOR vertical wells.
Notably, because the gas production will not naturally lift the oil produced from low GOR wells, it
would be necessary to utilize artificial lift methods (plungers) to produce the Wells. Even in low
GOR vertical wells, plungers have difficulty lifting the oil, and we believe that the drag increase
caused by the "S" curve configuration in directional wells will significantly decrease ultimate
recovery and production rates while increasing operating costs. The further the deviation the greater
the cost and the risk, and in no event do we believe a kick of greater than 1,000 feet is economically
justified.
After considering all factors, and with the limited available production data (i.e. directional
wells drilled in this area with adequate production history), we estimate the adverse economic effect
to Petro-Canada of drilling the Wells with a kick of up to 1,000 feet to be approximately $370,000
per Well. Although Petro-Canada has the right to locate the Wells at their presently proposed surface
locations (which are in compliance with the rules of the Colorado Oil and Gas Conservation
Commission ("COGCC") in the interest of cooperation, we have offered numerous alternatives to
reasonably accommodate Broe's surface use plans. Among these alternatives, Petro-Canada has
offered to directionally drill the Wells with moderate directional deviations within the drilling
windows prescribed by the COGCC provided that Broe contribute to the incremental drilling costs.
Broe has yet to accept this or any other alternative offer by Petro-Canada.
EXHIBIT
Suite 400,1099 18th Street • Denver,CO 80202-1904
Office:(303)297.2300 • Fax(303)297-7708 • www.petro-canada.ce
llSj2 #15I9
09/21/2005 04:33 3032977708 PETRO-CANADA PAGE 03/03
Mr.Jobn Stone,Vice President
Broe Land Acquisitions 11,LLC Page 2 of 2
September 21,2005
The only option offered by Broe is that Petro-Canada directionally drill the Wells from the
location of the Christensen Well. For reasons discussed above,we are not agreeable to directionally
drilling the Wells to their legally permitted bottom hole locations as it would require excessive
bottom hole deviations. In response to Broe's suggestion that the Wells be bottom holed within
1,000 feet of the Christensen Well to mitigate the cost and risk of directional drilling, the resulting
density from such bottom hole placement would adversely affect the drainage e the areas fof a m the Wells
and the Christensen Well. In addition,this configuration would likely pr drilling
spot well between the Christensen Well and the Wells, resulting in further economic loss to Petro-
Canada. Finally, we have no assurances that the COGCC would ultimately approve such well
placement. Regardless of the extent of the deviation of the Welts, Broe has continually taken the
position that Petro-Canada bear the entire economic burden of directional drilling, This is
unacceptable to Petro-Canada.
In light of the upcoming hearing with the Weld County Commissioners, we hope that Broe
will re-evaluate our numerous prior proposals. In the interest of effectiveness, and if Broe truly
desires to resolve these issues, we would suggest that you call for discussion rather than continue to
exchange written correspondence, which to-date has been time consuming and has not led to any
suitable results for either party.
Sin ely,
o10.4126121/141(7\--3
L.M ughlin
Vice President
ELM/kv
cc: Ms. Shed Lockman(via email slockman@co.weld.co.us)
Weld County—Planning and Zoning
Sep. 12. 2005 8: 28AM No. 0275 P. 2
BEATTY & WOZNIAK, P.C.
ATTORNEYS AT LAW
ais SIXTEENTH STREET—SUITE uoo
DENVER.COLORADO 80202-5]15
SUSAN L.ALDRIDGE
2ELF•PRONE
DDiECi: (303)407.4465 (308)407-4499
E-MAIL: SALDRID0E®9WENERGYLAW.00M FACSIMILE
(808)407-4494
September 12, 2005
VIA FACSIMILE TO: 970-304-6498
Sheri Lockman, Planner
Weld County Planning
and Zoning Department
North Office
918 10th Street
Greeley, CO 80631
Re: Petro Canada Resources (USA),Inc.'s ("PCR")Application for Use by
Special Review (Case Number USR 1514 ("USR"))
N/2NE/4 of Section 35,Township 6 North,Range 67 West,Weld County,
Colorado ("Property")
Kodak 35-11 and Kodak 35-12 ("Wells")
Dear Ms. Lockman:
As you know,we represent Petro-Canada Resources, Inc. ("PCR")in connection with the
above referenced USR. We understand that the Board of County Commissioners hearing
concerning this matter will take place on September 28, 2005, at 10:00 a.m. We anticipate Broe
and its counsel are aware of this date and time or shall be made aware in the near future. We
have copied Broe's counsel, Mr. Morgan, on this letter,but are unable to communicate directly
with Broe as it is represented by counsel.
As of this date, the parties have still not reached an agreement concerning the Wells and,
unfortunately,PCR has received no proposals or had further communications with respect to a
proposal, since the meeting with Broe on August 10,2005. Although PCR received a voicemail
message from Broe on August 19,2005 stating that Broe would be calling soon to set up a
meeting, no follow-up call was received by PCR. Additionally,PCR received an August 26,
2005 letter from John Stone of Broe contending that Broe expected to provide PCR a proposal
within ten days (which would have been Monday, September 5, 2005),but PCR has received no
proposal from Broe. Furthermore,PCR has received no calls from anyone within Broe to
schedule a meeting or discuss proposals concerning the Wells. At best, PCR received a
telephone call from an engineer who allegedly works with Broe, and may have had ideas to share
with PCR concerning the Wells,but apparently, as we understand,had no authority to call PCR
or act on behalf of Broe.
50644 srovwbwenergylaw.eom
Sep. 12. 2005 8: 28AM No, 0275 P. 3
SNAPPY & WOZNIAK,p.C.
Sheri Lockman
September 12, 2005
Page 2
We look forward to the hearing on the 28th. Obviously, if the parties can work out an
agreement concerning the Wells prior to that date,they certainly will do so. However,based on
Broe's prior course of conduct since PCR started negotiations concerning the wells there appears
to be little indication that Broe will provide a meaningful concession to resolve this matter. We
are hopeful the Commission can assist in this regard.
If you have any questions concerning this matter,please contact me. Thank you.
Very truly yours,
BEATTY&WOZNIAK, P.C.
ate'
7,
Susan L. Aldridge
cc: J. Michael Morgan, Esq.
Petro-Canada Resources, Inc.
r
vilVl, 4VVJ PO JI rnn JVJ DCJ Jci Lill6 t m WHIINEY a 002;002
e, '0) O0RSEY
MICHAEL J.WOZNIAK
(303)6294424
FAX (303)629.3450
•
woznlak.mIke@dorsay.com
•
July 1, 2005
VIA TELECOPY TO: (970) 304-6498
Ms. Sheri Lockman
Planning and Zoning Department
Weld County, Colorado
918 10th Street
Greeley, CO 80631
Re: Petro Canada Resources (USA), Inc.'s ("PCR") Application for Use by Special
Review (Case Number USR 1514 ("USR")— N/2NE/4 of Section 35 Township 6
North, Range 67 West, Weld County, Colorado ("Property")— Kodak 35-11 and
Kodak 35-12 ("Wells")
Dear Ms Lockman:
We represent PCR in the Use by Special Review referenced above currently pending
before the Board of County Commissioners and set for hearing on Tuesday, July 5, 2005 at
1:30 p.m. We are in receipt of Broe Land Acquisitions II, LLC's ("Broe") June 30, 2005
correspondence to you in which it asks for a 30-day continuance and suggests other conditions
of approval on the USR.
Please accept this letter as our request that you deny any request for such a
continuance. This matter has been properly pending on the BOCC's docket and both Broe and
PCR have discussed these two wells over an extended period of time. Moreover, PCR has
appeared at the Town of Windsor hearings and has secured the Town's approval through its
public hearing process. Broe chose not to participate in the Town's process to any meaningful
degree. A continuance at this late date would prejudice the rights of PCR.
Furthermore, Broe's suggested condition that the Kodak 35-11 and Kodak 35-12 Wells
be drilled directionally from the Christensen 1-35 Well pad is not economically and technically
feasible. Evidence of the technical and economic ramifications of this proposed condition will be
presented at the hearing.
DORSET F. WHITNEY LLP • WWW DOR5EY.COM T 362.fl29.99 au • F 305 u-^. 3450
REPu6LIC PLAZA RUILDING SUITE non A7D SEVENTEENTH STREET DENVER.Co 8 0202-5 047
Ur/uI/LuuO 13 : 51 FAX 303 629 3450 00RSEY & WHITNEY a 003/003
t 5�) IDOFISEY
Ms. Sheri Lockman
July 1, 2005
Page 2
Thank you in advance for your cooperation. Please feel free to call me should you have
any questions.
Very truly yours,
DORSEY & WHITNEY LLP
Michael J. Wozniak
cc: Cynthia Danner-Weide (via telecopy)
John Stone (via telecopy)
Lee Morrison
D0R5'v a wH rtN[v LLP4X47-9362-3552\1 7/1/2005 2:07 PM
Aug. 18. 2005 11 : 54AM No. 0174 P. 11/15
BZOE
232 Clay=Ent
Du,,.r,Calerado 50204
rdapnone 303,3930333 •
FSbSI0 303-393an
waw,6recnrn
June 30,2005
Ms. Sheri Lockman
Planning and Zoning Department
Weld County,Colorado
91810'5 street
Greeley,Co 80631
VIA FACSIMILE (970-304 6498) and OVERNIGHT DELIVERY
RE!Petro Canada Resources(USA),1nc.'s("PCR")Application for Use by Special
Review(Case Number USR 1514)(aUSR")—NA NE/4 of Section 35 Township 6 North,
Range 67 West,Weld County, Colorado("Property")-Kodak 35-11 and Kodak 35-12
("Wells")
Dear Ms.Lockman:
As a follow up to our recent discussions,this letter outlines certain objections of Brae
Land Acquisitions it,LLC("Broe") to the location of the Wells outlined in the PCR's
USR application.
Brae has recently purchase the subject property,and certain surrounding property from
Eastman Kodak Company. Bros has planned real estate development uses for the
Property,which am allowed under the current Weld County zoning for the Property,T-1
(lndustsial)Zone District The planned locations of the Wells conflict with these planned
uses. A copy of ow current proposed development plan.indicating PCR's proposed
surface well locations,is annexed to this letter as Exhibit 1. Bite has shared these
development plans with PCR,Weld County staff and with the Board of County
Commissioners.
Included in Broe's development plans is the proposed future alignment of Crossroads
Boulevard,which is planned to be extended east from state highway 257 to connect to
"0"Street in Greeley. Bros has participated in meetings at the request of engineering
staffs from Weld County,City of Greeley and Town of Windsor to discuss this alignment
of the future Crossroads Boulevard and"0"Street. It is apparent that at least one of the
planned Wells could interfere with this road alignment, See,Rxhbit 1. The comments of
the Town of Windsor on this application recognize this apparent conflict
•
Aug. 18. 2005 11 : 54AM No. 0174 P. 12/15 /
Broe has proposed an ample oil and gas operatons area,around PCIt's existing
Christensen#1.35 Well,from which PCIt could drill both of these wells directionally.
By consolidating their operations PCR should be able to reduce certain of its operating
eoeb. Broe would also consider the possibility of expanding this area to accommodate
certain future wells,to the advantage of Pile. A copy of Broe's correspondence to PCB,
dated June 7,2005,is annexed to this letter as Exhibit 2. There appears to be no dispute
that directional drilling of these wells from the Broe proposed surface location is
teclmicslly feasible and within oil industry norms. Broe is currently negotiating in good
faith with PCR to reach a feasible and mutually accommodating agreement regarding the
location of the Wells.
We believe the incompatibility is supported by Section 23.3-220(AX4)of the Weld
County Planning Code provides that an applicant for a USR must show that the proposed
USR,"will be compatible with future development of the surrounding area as permitted
by the existing zoning and with the flints development as projected"under the
Comprehensive Plan. As shown above,the surface locations of the wells,as proposed by
PCIt,would not have such compatibility.
We understand that directional drilling of the proposed wells from the proposed oil and
gas operations area is both authorized by the tines of the Colorado Oil and Gas
Conservation Commission,and is consistent with established industry practice.
Accordingly,we believe the requirements of Section 23-3-220(AX4)of the Planning
Code,that Proposed USR be located so as to be compatible with future development
already permitted by the Code,is an enforceable local regulation.
te-
Based on the above,Bros respectfully requests that(l)the hearing in this matter be
continued for 30 days to permit continued negotiations between the parties,or in the
alternative,that(2)the USR be conditioned upon a surface location for the wells that is
within an oil and gas operations area surrounding the Christensen#1-35 Well.
Sincerel
kIsk
tone
Brea Land Acquisitions II,LLC
Encl: Exhibits I&Ti
Cc: Ms.Monicafaniels-Mica,Weld County Planning &Zoning
Ms, Cynthia Danner-Weide,PCR
Mr.Lee Morrison,Weld County Assistant Attorney
> >
Exhibit 1 •
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Aug. 18. 2005 11 : 53AM No. 0174 P. 7/15
•
•
am*, Petro-Oneida Resources(USA)lac.
VIA FACSIMILE and U.S.Man
June 14,2005
Mr.John Stone
Broe Land Acquisitions II, LLC ("Broe")
352 Clayton Street
Denver,Colorado 80206
Re: Petro-Canada Resources(USA),Inc. ("PCR")
Kodak 35-II and 35-12 Wells(the"Wells)
NE/4 of Section 35,Township 6 North,Range 67 West
Weld County, Colorado(the"Property")
Dear Mr. Stone:
We have reviewed your letter dated June 7,2005 and wanted to follow up with our June
9, 2005 call concerning the requests contained in your letter.
As you acknowledge,PCR and Broe have been communicating for some time concerning
PCR's Wells on the Property. As a result, we had hoped to see our proposed Wells reflected on
your plat,but did not. As you know,PCR,received applications for permits to drill ("APDs")
float the Colorado Oil and Gas Conservation Commission("COGCC")on April 5,2005 with
respect to each of the Wells. Accordingly,PCR filed applications for use by special review with
Weld County,and the final hearing on the approval of those applications is scheduled for July 5,
2005. We do not anticipate a problem in obtaining approval on those applications.
We have,however,heard your concerns regarding the Wells and your development,and
are hopeful we can reach an agreement acceptable to all parties concerning the location and
drilling of the Wells. You have requested that we drill the Wells directionally. As we discussed
in our telephone call, we will consider drilling directionally but not without Broe being
responsible for the additional directional costs.
Specifically,for PCR to drill the Wells directionally, aloe would be required to pay the
incremental costs of directionally drilling prior to PCR drilling the Wells. Our costs,however,
obtained from CAZA, differ significantly from what you have suggested as reasonable costs
concerning the directionally drilling of two wells. We estimate the directionally drilling costs for
both Wells to be approximately$200,000. Brae would need to pay those costs for it to be
economically productive for PCR to drill the Wells directionally versus vertically. The estimates
you received from CAM appear to include only the additional drilling costs. There are other
--tests in addition to the directional drilling,including additional casing costs, down-hole
Suit.400,1099 1819 Straat • Denver,CO.0202.1904
Office:(303)297.2300 • Far(303)297.7708 • www,patracanada.oe
Aug. 18. 2005 11 : 53AM No. 0174 P. 8/15
•
equipment,down-hole tools, as well as additional personnel costs that are not associated with
CAZA's directional bid.
Rather than Broe paying the costs in advance,PCR may also be amenable to having Broe
relinquish its approximate 7.27%royalty interest in the two Wells and pay PCR the incremental
cost of drilling less and except the value of the royalty interest,if the reserve value would cover
the cost of directional drilling.
If paying the directional costs is unacceptable to Broe, and if Broe is unwilling to
relinquish its royalty interest,PCR would consider one other alternative. PCR would consider
foregoing the drilling of the two Wells, if Broe were willing to grant PCR a lease or leases on
other mutually agreeable tracts where Bros owns the tmleased minerals. However,any wells that
may be drilled in a newly leased area would be drilled as straight hole locations.
We would like to meet to discuss these options at yaw earliest convenience. If you have
another reasonable alternative, we are willing to entertain that as well. If we cannot agree to an
alternative solution,PCR intends to drill the Wells as straight hole locations. Please contact me
to schedule a mutually agreeable time and location to discuss these proposals.
Sincerely, O
N.
/
Cindi Datmer-Weide,CPL
Senior Landman
•
Aug. 18. 2005 11 : 53AM No. 0174 P. 4/15
8 OE
an dayS Sbeet
Dante Coanie 60205
a, ns •
ladJe 30 n
9ann40m
Inn 7,1005 VIA FAX DOS)2077108 AND
FED&RAL EXPRESS 1
Cynthia A.Danner-Weide,CPL
Sankt Landman
Petro-Canada Rasoureea(USA)Inc. .
1099 11*Street,Suite 400 f
Denver.Colorado 80202
lte: Request Fez AOoofmttlodatlrm Regarding Ih let 10 '
pmpoecd Nodak 35-11 and 35-12 Wells(lit•'Wells")
NEM of Section 35,Township 6 North.Lingo 67 Vied
Weld County,Colorado(the'Psupc.t/') .
Doer Ms.DeanarWeide:
We have prevtouely advlsedPetrc-Cmada Resotmnes(LISA)that the Bose Land Ac inide:Ana 11,LW("Bret')is
under cannot to purchase the Property and=thin adjacent Jams, Faro-Canada has also totted tes of Its intent to
drill the Wells an the Property. Because indoctsial development of the Property is the meson for Its acquisition by
BtF
oe,the surface location of the wells and other on and pa 9eeiltes it of miens esteem In fact,placement of
tbnsc fatilitice at certain surface location could have Bevan and adna=economic impacts on Bros
Ws Butetc requmxd utgotiatpas aith Petro Canada regsnEng the mace location of proposed on sad gas
inanities, Based on our eonversations with Petro Canada mid subsequent inveadgation we bra developed the
knowing p:oposal under which we believe the respccwe tights oftmo end Peuo Cena&a to use ofthe surface of the
Property may be mummy accommodated.
$act
We begat sbnMe our land development plans with you end yam tcamtn Febniety 2005. Since than,we have met
over thephane and Mpmstm to reiterate our plans for developing the land both OA the east and west aides of the
•
Kodak pita site.Since we last met.in Aptt 2005,we have expended idenitleaattraoarQ*is undaratsnd your
coneoma including meeting will:numbs:number of marts is the on and gas fatten.inrb'ding dr:llzcs,petoleuua
en®oecd,well service companies and oil and gas drilling consultants. Throng's this process,we fool we now
adeotantly tmdeMsmnd the Ins smmsmuiding the loodan of there planned wells and believe we have a meoaehle
end mutually aeroamtrodadng solution_
Out DevelonnxdtPlem
Wo have epeut a uigni lennt amount of time and money working withn teem of lend planners,civil engineers sad other
consultant doting ow landpl®ing and development ptooese atthe Property. We have began tie annexation process
for a pordoa of the land and a large manufacturer is=peeled to begin oonstrcedoa of faallWee within the armored area
within the neat few months. We heart also met and shared our land plan and roadway plats with the following public .
entities:
1. Town of Windsor—tvlayor,Town Manager,Town Allnrncy,Pouringe1�Department
t
2. Cry of Greeley-Mayor,City Waage;Planning Department,
3. Wald county-All of the County Commit-00=k Planning Depa:trne"t,Count Attorney.
1 1
Aug. 18. 2005 11 : 53AM No. 0174 . P. 5/15
Broe'e serfaca development plans have been wall received in these internal discussions and the plans appear to be
consistent with the developateatplans for each of the mnnicipatirics.
?men`s nnilipaplena
Eako-C Snit currently proposes to drill both of the Wells verriraity;the Kodak 435-11 Well at a location that is 850 FM-and
619 feet FEL dilution 35,and ms Kodak#35-12 Well'centime t l 49 8 SSt f SetitiOn Rule 321 pe3S. Beth
well would be within the ddllivg window authoratdby
Canada to directionally drill the Walls,sucb that Metz bottom hole loeationsteatsks within the authorized drilling window,but
their surface location acoowmodatcs sor ce development coneideratians.
Because FeKbCanada proposes to titan!on lands Which have been rotted industrial by Weld County,`use by epeeial
scheduled abearingb aro a before the Weld Co frons the unty Platro-Canada hes nning Corm isaionboil July 5,200ed fre these 5,rmitt and its appliealimns are
nut Rationale
The strews locations you etteemtlyplaa to utLize in drilling have significant conflicts with our development plans,a
content which we have ahead with you previously.
The well planned in the NE/4NB/4 of Section 35(the Kodak f135.11)would conflict with the intersection of future
node/south County Road 213A and Rum ant/westernismads Boulevard.Crossoads lioaleved its planned 5
tans major arterial road which weal provide regional east west access between I-25 wad O Street fa Greeley. We also
have a wmblaatlon of light Industcsl,flex,retail and,nsiden ial planned for the site. Clearly,an oil&gas well is not
suitable or neeepatsble with the planned roadway network not is it compadb1e with(be planned uses_
The well planned bribe NW/4Np/4 of Seaton 35(die Kodak 135-12)15 also in close proximity to the future
Crossroads Boulevard and is within an areaplanued for light industrial,ilex end/or office space. None et these
planted uses are nibble ar compailbls with an oil and gas well operation.
Ptawstnd Well sn&Paelitics 1M duos
Given gto landplacntog eonstraints mentioned above cad the incotopahisSity Of them plans with the operation atoll
and gas wells in the immediate area we feel that the tr on icasooablestelees location for the two new wells,and their relaSteile es(l production facilities,Wen"a,This location would
uldadjacent ow your Petro
Canada Christiansen��35 Well end In produation
m consolidate Its operadon5,
$cffitid(What I. Wen").
alndlarto what 10 planned err wells 3445,34-41 and 34-44 in Section 34.
The hrthenaal leek component attic directional drums requtrao,at for each wall would be appleximatnly 1,300'
from the=tttenttypennitted bottom hole location. This equates to an appretdmate teat of only about 100200
footttttwl borehole distance when compared tea vertical bore hole,which we undaratand has minimal coat imps=on
both drilling and Operations. The ftnisbed array of well heeds should be collinear patfl in ao area that is as
condoned as is practically possible, All sn5,te equipment should be lonrcd es close as possible to the Existing Wall
and Tim to the south of the latitudinal line tanning through the Existing Wc11
we contemplate that BIOS would gnat Petro-Colds,for the life elite lasses enexelusive"oil and gas Operations
area?large enough to accommodate the WEN Well and the proposed Walls. Eros would also consider waiving
aedtacka for the dialing of finite wells and placement of related production f elides In this way,petro.Canada
would be assisted(flaying senesce location for these wells,regardless of the rinsing of surface development in
Wades to oil and gas development. Reasonable tights of way for the accessary gathering line and access road would
also be pried.
— 2
Aug. 18. 1005 11 : 53AM No. 0174 P. 6/15
We have diem=ed the planted location with a number of oil and gas industry experts and they agree that this solution
is a msonable one. This location would result in deviated ddllta&whio6 is cogent plaamad tar the 3 wells in
Section 34 and it is reasonable to expect that if coordinated wen,the two proposed wells in Secdon 35*odd be
draled using the same rig as is plannd in Section 3d,thus making the drilling
alCaLion April 2 >d cost•
effective, We note that a eanory review of Weld County drilling permit issued by
COmameaous Codall/Niobren wells permuted for directional droning. These seclude tummy in which die stn{ace and
bofem.bole locations are bt exceea of 1,300 horizontal feet.
Conclusion and Request
Overall,we feel this is a ressonabk and mutually eceonsmoddiap request We would like to work with Petro-Canada
in the next few weeks toted a surface use agreement ince:potating these tonne whhh we could then present to the •
Weld County Planing Centzveaion at it scheduled bearing- -
Whoa you have batiks opportuelty to consider tha above,pleat eoataa me Se that we can begin in earnest that
process
SittoaalY "
Stone
et: Ted Ramon—Petro Canada
Dwight Johnson-13m
DanNoland-Brno
c egg Sots_Kodak
Eric Swanson,-Pima
3
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