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WPXENERGY <br />VIA ELECTRONIC MAIL (gjdaub@ daubandassociates.com) <br />March 14, 2013 <br />Daub & Associates, Inc. <br />Attn: Jerry Daub, PG, CPG <br />1985'/2 South Broadway <br />Grand Junction, CO 81507 <br />RE: Townships 1-2 South, Range 98 West <br />Rio Blanco County, Colorado <br />Mr. Daub: <br />This is to respond to your email dated January 23, 2013 to WPX Energy (WPX) Geologist Renee <br />Wild, regarding WPX's natural gas drilling operations, and the nahcolite and oil shale operations by <br />Natural Soda, Inc. (NSI) and Natural Soda Holdings, Inc. (NSHI) respectively in the above -referenced <br />area of the Piceance Basin. WPX would like to request a meeting with representatives of NSI and NSHI <br />to discuss the requests in that January 23rd email and what can be done to accommodate all parties' needs, <br />as we all move forward in our respective operations. <br />WPX was provided maps from your office detailing NSI's lease boundaries in the Natec and <br />Rock School Sodium Lease areas and the optimal mining zones for nahcolite, flanked by transition and <br />halite facies. The area leased by NSI covers nearly 8,300 acres that largely overlap with WPX federal oil <br />and gas leasehold. As we have discussed generally in the past, WPX has been amenable to limiting the <br />vertical section of our wells to a 400' radius from the center of the drilling pad through 3,500' total <br />vertical depth (TVD) inside these mapped nahcolite facies. Going forward, WPX believes it may be <br />beneficial to both NSI and WPX to set out that prior understanding in a written agreement. Our <br />understanding was any acreage held by NSI within the halite facies was not an objective of NSI, and <br />therefore would not be pursued for development. As a result we are unclear on the basis for the request in <br />your January 23rd email for WPX to "... keep the 400' radius from the center of the pad for all wells/well <br />pads within the NSI Federal sodium lease as well as NSI's Rock School located north-northwest of their <br />current operations." WPX does not see justification or need for maintaining the same limit on the <br />vertical section of our oil and gas wells across the entire NSI leased area, given that the area has <br />previously been represented by NSI as dominated by non -mineable halite facies. WPX would like to <br />discuss with NSI whether there is a demonstrable need to extend the further application of the limited <br />vertical section. <br />We are aware that NSHI was awarded a 160 acre Oil Shale Research, Development and <br />Demonstration (RD&D) lease in the N''NY of Section 35, TIS-R98W, which is expandable to a 640 <br />acres Preference Right Lease (PRL). NSHI has indicated their preference is to preserve this area <br />exclusively for oil shale operations. WPX will make every effort not to conflict with NSHI's operations <br />and work with NSHI in order to reasonably accommodate each other in this area, consistent with the <br />requirements of oil shale stipulations on the WPX leases in this area; however, at this time WPX cannot <br />agree to a comprehensive limit on all operations in the entire 640 -acre area of the RD&D lease, nor does <br />that request seem reasonable on its face. Among other things, WPX has made adjustments to its plans, <br />prior to the issuance of the RD&D lease, so that 3 pads planned in the southern portion of Section 26 - <br />TI S-R98W would be moved to the N'/2N'/2 of Section 35 in order to accommodate NSI's future nahcolite <br />WPX Energy Rocky Mountain, LLC 11001 17th Street I Suite 1200 I Denver, CO 80202 1303.572.3900 Tel 1303.629.8281 Fax I www.wpxenergy.com <br />