2018-06-01_REVISION - C1980007 ‎(3)‎

• Permit No: C1980007
• IBM Index Class Name: Revision
• Doc Date: 6/1/2018
• Doc Name: Comment Forwarded To Applicant
• From: Shannon Hughes, Wild Earth Guardians
• To: DRMS
• Type & Sequence: PR15
• Email Name: LDS
• Media Type: D
• Archive: No

Table 2: Model inputs: Flaring Scenario
The capital expenditures discussed in this study include the cost of the flare, the wellheads installed on
each GVB, the gathering lines and the monitoring and control system. The cost of the flare and
monitoring and control system is incurred in the first year; the cost of the wellheads and gathering lines
are allocated annually for the life of the project.
3 The length of gathering line is determined by taking the historical length of roads that are visible from satellite imagery (Map
1), and service the existing GVBs placed in the e -seam, and by dividing this length by the number of GVBs that were in place
(Exhibit 1); the resultant value of 1,212 feet per GVB was used to determine the total length of gathering line that would be
installed each year. It was forecasted that 14 GVBs will be placed into service each year for a total of 16,968 ft. of gathering line.
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In ut Value I Comments
Project evaluation period
10 years
Cost of drilling and completion is a
GVBs
N/A
"cost of mining" and not charged to
the project
Lognormal distribution,
Results of data analysis (see figure
GVB production
median value is 11,403 scfm,
below)
pio is 19,241, p90 is 5,589.
Price quote from Andrew Bates,
6 inch gathering line
16,969 ft.3 annually at $16.96
drilling and completion Engineer
per ft.
with Protocom Consulting -
Farmington, NM (Exhibit 2)
14 new GVBs installed
Number of GVBs employed based on
annually, 5 GVBs operating at
forecasts discussed earlier in study.
Wellheads
any one time, seven new
Wellhead cost quote from Andrew
wellheads installed annually,
Bates.
reusing when possible.
Monitoring/control system
$405,000 installed at start-up
Quote from Arista report, Batesconfirmed
as reasonable
Annual operating and
Max extreme distribution,
maintenance costs
with likeliest value of
Quote from Andrew Bates.
$362,000.
$328,000 for system with
Flare system
$2,800 for installation
Quote from Aereon (Exhibit 3).
Beta distribution, with likeliest
California Cap -And -Trade Program
Carbon price
value of $14.75 per ton, max
latest Joint Auction Settlement
value is $20.00, min value is
prices, with forecast for future
$12.75.
prices through 2020.
Registration with California
$20,000 to validate project,
Verbal quote from verifier.
Climate Action Reserve.
$10,000 to verify annually
Federal Royalty
12.5 percent
BLM web -site
Project financing
80 percent debt financed at 8 percent interest
Taxes
Pre-tax analysis
The capital expenditures discussed in this study include the cost of the flare, the wellheads installed on
each GVB, the gathering lines and the monitoring and control system. The cost of the flare and
monitoring and control system is incurred in the first year; the cost of the wellheads and gathering lines
are allocated annually for the life of the project.
3 The length of gathering line is determined by taking the historical length of roads that are visible from satellite imagery (Map
1), and service the existing GVBs placed in the e -seam, and by dividing this length by the number of GVBs that were in place
(Exhibit 1); the resultant value of 1,212 feet per GVB was used to determine the total length of gathering line that would be
installed each year. It was forecasted that 14 GVBs will be placed into service each year for a total of 16,968 ft. of gathering line.
14