2014-07-28_PERMIT FILE - P2014014 (2)

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Section III. PROJECT DESCRIPTION Item No. 5. Describe proposed surface excavation or other land disturbance, including roads, pits, trenches, waste piles, drill pads and collar areas of underground workings, ponds, etc. Site Location and Background The NSHI RD&D lease consists of 160 acres and is situated between the Yellow Creek and Ryan Gulch drainages, encompassing Lots 1, 2, 3, and 4 in the N %of the N % of Section 35,T1S, R98W, 6th Principal Meridian, Rio Blanco County, Colorado. Meeker, Colorado, lies approximately 41 miles to the northeast. Surface elevation on the lease ranges from approximately 6,650 to 6,770 feet. The topography is characterized by shallow alluvial valleys and broad soil-covered ridges and mesas. Pinyon, juniper and sagebrush are the dominant vegetative cover. NSHI has delineated approximately 4.6 acres within the 160-acre RD&D Lease area for various aspects of the surface operations. NSHI intends to drill and complete an in situ Oil Shale Reactor (OSR) production well or wells to test the effectiveness of their leaching and kerogen conversion technology on a small scale. To the west of the initial project area is a previously disturbed area which is under partial reclamation. A portion of this reclamation area contains a utility corridor and will be used without incurring additional project surface disturbance. Other surface disturbances are expected to include an access road and natural gas line, a well pad sized to accommodate the processing equipment and up to three wells, a single mud pit, and a monitoring well pad. The monitoring well pad and portions of the access road and natural gas pipeline corridor are located within a BLM-identified exclusion zone. The BLM was contacted regarding the location of the surface facilities within the exclusion zone and has approved the locations. The DS-6 monitor well pad was permitted and bonded under Technical Revision 35 to NSI Drilling Activity Permit M1983-194. The proposed access roads Access to the NSHI OSR pad and facilities will be from existing roads on NSHI and NSI leases to minimize surface disturbance and continue the use of best management practices. Two roads are proposed for initial research and development operations. The access road from the north and west will be on previously disturbed land. The access road from the north and east will involve constructing a 20-foot- wide by 445-foot-long road that will disturb a maximum of 1.20 acres. Additional roads may be constructed in the future, coincident with project expansion. Pits A single mud pit will be dug and used to contain the drilling mud while drilling the OSR well. The mud pit will have the following approximate dimensions: 12 feet wide, 60 feet long and 10 feet deep. Upon completing the drilling activities, the drilling fluid will be removed and disposed of at an appropriate disposal facility, and the pit will be filled in, re-contoured, and reclaimed. Daub &Associates, Inc. Page 7 of 17 NSHI RD&D DRMS NOI 2014