Saulcy 4‐1 (API #123‐10770)

Drilling History:

Saulcy #4-1, API NO 123-10770, NWNE Section 4, Township 4N, Range 68W, Weld County, Colorado

In May of 2014, Synergy Resources (SRC) submitted the Kiehn Well pad and several Applications for Permit to Drill (APD). Commission engineering staff reviewed and approved the APDs at the end of June 2014. The review did include an offset well evaluation per Commission’s DJ Basin Horizontal Offset Policy – June 20, 2013 revised December 17, 2013. The APDs had Best Management Practice conditions on the permit requiring the operator to comply with COGCC Policy for Bradenhead Monitoring during Hydraulic Fracturing Treatments in the Greater Wattenberg Area dated May 29, 2012.

All existing oil and gas wells within a 1500’ buffer around the proposed wellbores were reviewed for adequate surface casing depth, to protect any adjacent water well within 1 mile of the proposed facility location, and adequate cement isolation on the production casing above the Niobrara formation. At the time of the Kiehn Well APDs review, the Saulcy #4-1 documents within COGCC document system were reviewed to determine if this well was adequately plugged for the proposed offset hydraulic fracture treatment of the proposed SRC Kiehn Well pad horizontal wells. The review was conducted to verify compliance with Commission Rules 317.r and s and in parallel with DJ Basin Horizontal Offset.

Saulcy #4-1: CompletionWell files in the COGCC data image records for the Saulcy #4-1 file indicated that the well was drilled in late 1982, with a surface casing depth of 242’ cemented with 320 sacks, 3% CACl2 cement; the production casing hole was drilled to a depth of 8,163’, with 5-1/2” pipe set at 8,155’ with 570 sacks, 10% gypsum grade G cement. A comment on the Well-Data summary sheet indicates that the Codell was completed and flowing back to a tank.

Saulcy #4-1: AbandonmentA Sundry Notice, in the well file, dated 3/18/1987, indicated that Donnelly plugged the well in 1984. Casing was pulled during the abandonment under COGCC direction between August and October of 1987. Included on the Sundry Notice is the statement: “P+A Inspection performed 10/84, cut csg at 5,000’; 20 sks @ 3,000 Ft; 25 sks at 300’; 10 sks at surface.” At the time of Commission staff review for the SRC Kiehn Well pad, staff relied on this statement.

At the time of the offset well evaluation for the SRC Kiehn well pad APDs’, it was determined that the Saulcy well had adequate cement coverage over the Niobrara, and the surface casing was set at a depth as to provide adequate isolation for known water zones. The plug at 3,000’, if placed as indicated, met the requirements to provide isolation from the producing zones and the water zones. The Saulcy #4-1 well file does not containing third party plugging documentation, which is required per Rule 311.b. (2014) for any plugging completed today. The lack of third party cement placement during the plugging was not questioned because the completion documentation indicated the plugging work was completed under the direction of the COGCC.

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Timeline of for Abandonment

Tue. October 31, 2017 4:58 PM: COGCC Field staff called Engineering regarding an incident near Berthoud. COGCC Engineering was directed to be on site at first light, while incident details were still evolving. Saulcy 4 1 (API #123 10770) was a well nearest to a reported spill. Mike Leonard and Wild ‐ ‐Well Control (WWC) were notified and in route to the location.

The known facts were from the landowner who stated fluids were discharging into his pasture, on to his driveway ditch and travelling north to the Hwy 60 road ditch. Extraction Oil and Gas (Extraction) was participating in the investigation. Extraction had been stimulating wells several horizontal wells in the Niobrara and Codell formations. API #069 06464 is nearest Extraction well, at approximately 3241’‐ north. A review of the Saulcy #4-1 well file showed the well was drilled in 1982 through the Niobrara and Codell to TD=8146’ (top of Niobrara in completion report is listed as 6933’). Donnely Casing Pulling plugged the Saulcy #4-1 well in 1984. Recently, the Saulcy #4-1 well had surrounding horizontal drilling by SRC Energy. The Saulcy #4-1 well is straddled by 2 wells, SRC Kiehn 32 4CHZ (API #123‐ ‐39713) and SRC Kiehn 32 4NHZ (API #123 39712).‐ ‐

Wed. November 1, 2017 6:48 AM: COGCC Engineering arrived at the incident site; waiting for daylight. Mike Leonard reviewed the situation, well history, site layout and introduced Luke Hinrichs from Extraction Oil and Gas (Extraction) “Incident Site Commander” and Ahmed from Wild Well Control (WWC) “Safety Officer”.

The Saulcy #4-1 well had been excavated and exposed. The well was discharging unknown gas and liquid under pressure through holes in the welded cap. Personal gas meters showed gas present in excess of the LEL (Lower Explosive Limit). There were locations within the excavation discharging grey liquid resembling drilling mud with greenish crude oil. For a short time there was a small amount of very clear, odorless liquid discharged from one of these locations that looked like water. The casing was 12 5/8” non-standard casing, and is considerably larger than materials typically available in this ‐basin (8.575” to 10.5”).

Extraction personnel were attempting to locate an appropriately sized wellhead. Extraction and WWC were moving in well control, firefighting, and fire prevention equipment. Excavation exposed some abandoned flowline made out of tubing. It was very corroded with lots of large holes. The flowline was removed and stacked on site for disposal.

Th. November 2, 2017 9:06 AM: COGCC Engineering arrived on site with site preparations work occurring which included stormwater protections, equipment deliveries, water deliveries, and dirt work in progress. The found wellhead required custom milling to fit current wellhead configurations.

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Prior to placing the wellhead on the 10-5/8” casing, the casing was prepared to “hot-tap” in order to discharge the casing’s pressure and direct gas away from the where the wellhead welding was to occur. With the hot tap in place, the measured flow rate was 2 GPM discharged water at a density of 8.6 ppg, just heavier than the fresh water art 8.3 ppg.

Fri. November 3, 2017 10:22 AM: COGCC Engineering arrived while wellhead welding was under way. Berthoud Fire Protection District (BFPD) and WWC were in place for fire response. The wellhead was successfully placed on to the 12-5/5” casing. A flange, crossover spool was placed on wellhead to match the blowout preventer (BOP) bolts. The BOP stack was lifted into place. Then the existing steel casing cap on the 12-5/8” cap was milled.

Sat. November 4, 2017 6:30 AM: Coil tubing rig moved in, rigged up, and ran into the hole with a wash nozzle. Surface casing was reported to have been set at 242’. The plugging report indicated plugs placed at the surface (10 sx) and at 300’ (25 sx). The rig crew ran in hole with tubing to 350’ with wash nozzle on the coil tubing. No resistance was encounter while running the tubing into the hole. Hence, no plugs were encountered or evidence of cement during washed out the hole. Rig down/move out the coil day.

Sun. November 5, 2017 6:25 AM: COGCC Engineering arrived on site. Coil tubing unit has moved out. Began preparing the site for the larger plugging rig by excavating the area around the wellhead. Backfilled placed and compacted around the well for base beam pulling unit. Well fluid discharge tubing was installed so fluids could be monitored during cementing and circulating. Rig mats and pumps were installed.

Mon. November 6, 2017 10:56 AM: COGCC Engineering arrived. Ensign rigged up base beam rig. Site changes required additional stormwater protections. Snow was expected overnight.

Tue. November 7, 2017 8:20 AM: COGCC Engineering arrived with magnetometer and low pressure gauges. There were five inches of snow on the ground. Rig up continued. Ensign milled out welded cap to 8.4375” diameter to allow larger tools and unobstructed fluid returns. Pulled mill out of BOP and found wooden 2X4 alongside of mill. Ran back into hole with mule shoe to 1244’. Rotated and circulated to 1275’. Pulled out of hole for night.

Wed. November 8, 2017 12:01 PM: COGCC Engineering arrived after bradenhead meeting. Went back in with 4.625” rock bit. Rotated and circulated to 1055’. Rotated at that depth for 1 hour with no gain. Pulled out of hole with rock bit, found more wood, and trash fragments. Ran back into hole with Mule shoe to 1055’. Discussed plan forward. Indications are that this is a relatively fragile hole. More pipe runs may cause the hole to be lost. We will start plugging at current depth of 1055’. Deepest water well within 1 mile 260’. There is a 400’ deep water well 1.23 mi. to the NE. Discharge location

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monitoring tubes have no liquids in them, just some clean/odorless mud at the bottoms.

Thur. November 9, 2017 8:03 AM: COGCC Engineering arrived. Ran in hole (RIH) with mule shoe to 1054’. Placed 100-sx gas-block cement plug. This was a flash set cement. By the time the tubing had been pulled up to, clear the cement and washout was started the cement was too hard for pulse shut in cycle (see below) to have any effect. Tagged Top of Cement (TOC) at 865’. Pumped second plug 150 sx Class C (not flash set). Estimated TOC 282’. Pulled out of cement and pulsed cement 3 times; 20 psi pressure build each time. No change at the discharge location monitoring tubes. Cement cured overnight.

Fri. November 10, 2017 6:30 AM: COGCC Engineering arrived. RIH and tagged at 572’ (290’ low) 49.7% loss. Could be very oversized hole or cement going into formation or fault. No change at the discharge location monitoring tubes. Next, plug 100sx Class C. Estimated TOC at 207’ but expected to drink cement again. Pumped plug then pulled up and pulsed two times. Tagged at 423’ (216’ low) 63.8% loss. No change at the discharge location monitoring tubes. Next plug 100 sx Class C. Estimated TOC 157’. Tagged at 275’ (118’ low) 62.9% loss. That puts TOC 33’ below the reported surface casing shoe.

Sat. November 11, 2017 7:14 AM: COGCC Engineering arrived. Set end of tubing at 275’. Set 166 sx balanced cement plug and pulled tubing out of hole. Pumped 26 Bbl fresh water down casing to “bullhead” the cement down the casing. This amount of water in the casing should have pushed the cement to a depth of 182’ (60’ above the reported surface casing shoe). Fresh water (8.34 ppg/no cement) came up immediately at several points outside the casing. None were further than a few inches from the casing (shallow hole in casing is likely). No flow was detected at discharge location monitoring tubes. Tagged TOC at 37’ KB (hole in casing). KB (Kelly Bushing) was 13’ above the ground; putting TOC at 24’ below ground. To cut below hot tap is 8’ below ground leaving 16’ of casing to top off before cut/cap/backfill tomorrow.

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COGIS - Inspection/Incident InquiryInspectio

n Doc # Location ID

Overall I.R.

Overall F.R. C.A.

Count

C.A. Respon

seDate Pass/Fail

Pass/Fail

01/08/2018

682403224

407442

11/28/2017

682403086

407442 P

11/22/2017

682403084

407442 I

11/15/2017

682403082

407442 I

11/14/2017

682403080

407442 I

11/13/2017

682403078

407442

11/13/2017

679700676

407442

11/12/2017

678800410

407442

11/11/20 68070493 40744

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17 8 2 11/10/20

17 68070493

7 40744

2

11/09/2017

680704936

407442

11/08/2017

680704935

407442

11/07/2017

680704934

407442

11/06/2017

680704933

407442

11/04/2017

680704932

407442

11/03/2017

682403076

407442

11/03/2017

680704931

407442

11/02/2017

680704930

407442

11/01/2017

679700673

407442

11/01/2017

680704928

407442

10/30/2017

679700671

407442

10/30/2017

680704927

407442

10/29/2017

678800409

407442

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