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Division of Geology and Minerals <br />Board of County Commissioners <br />February 4, 2003 <br />Page 2 <br />may have to conduct maintenance operations on one or more of the wells utilizing a <br />truck mounted workover drilling rig and the 75 foot setback may not be sufficient for the <br />maintenance operations. <br />For your information, a workover rig is anchored to the surface of the earth utilizing 4 <br />anchors or "deadmen" and those anchors are customarily set approximately 90 feet from <br />the workover rig. Given those dimensions, safety concerns dictate that the Mined <br />Segment be larger than 75 feet, and more importantly, Hall Irwin must be required to <br />obtain the consent of the oil and gas operator before encroaching closer than 150 feet to <br />an existing wellhead. <br />Further, paragraph 2 of the narrative states that Hall Irwin will provide a 20-foot <br />access road to the wells and production facilities at all times. The fact of the matter is <br />that Merit now has access to its wells and production facilities and if Hall Irwin wants to <br />alter that access or utilize Merit's access roads, it should be required to obtain Merit's <br />consent. Paragraph 3 of the narrative provides that mining operations will not be <br />conducted Goser than 75 feet to a production facility, and in most cases a 75 foot <br />setback will be adequate, but a greater setback may be required depending on the <br />location of the access road being used by the oil transporter. The bottom line is that Hall <br />Irwin's mining, processing and batch plant operations must be coordinated in advance <br />with Merit and with the consent of Merit. <br />In addition to the Notice of the MLRB permit application, Merit received a notice from <br />the Town of Milliken for the annexation of the land covered by the MLRB application. A <br />plat attached to the annexation materials indicates that the mining plan will require the <br />relocation of the flow lines for the wells, and perhaps the access roads for the wells. If <br />Hall Irwin's mining plans require the relocation of some or all of Merit's existing facilities, <br />Hall Iruvin should be required, as a condition to the approval of the mining plan, to enter <br />into a facilities relocation agreement with Merit providing for the relocation of the Merit <br />facilities. Until agreement is reached, there should be no implication that Hall Irvin has <br />the ability to conduct its mining operation without taking into account the property rights <br />of those to be affected by the operation. <br />Merit has no fundamental objection to Hall Irwin's plan to mine the property for <br />sand and gravel as long as its operations and the rights of the mineral owners are not <br />affected by the mining plan. Merit has a working history with Hall Irwin and that history <br />makes it clear that Merit must be diligent when dealing with Hall Irvvin to ensure all <br />agreements are in place and in writing before positions are changed with respect to <br />operations. <br />For your information, Merit's basic operational requirements are (i) a flat working <br />space of at least 150 feet around each of the three wellheads to permit Merit to operate, <br />maintain and service the wells with a truck mounted workover rig that can have a derrick <br />height of 90 to 100 feet, (ii) continued unfettered daily access to the wells sufficient to <br />accommodate workover rigs and access to the production facilities for the wells to permit <br />the Merit pumpers to operate and maintain the wells and facilities, (iii) an easement that <br />is 15 feet in width on each side of the flowlines for the wells so the flowlines may be <br />maintained and repaired 'rf necessary, and (iv) no structures, roads, utilities, <br />