Logan Wash Mine Annual Report
<br />Permit No.: M-1977-424
<br />area. Reconnaissance for wells located outside the permitted area in distant drainages has yet to
<br />be conducted. Of the 8 identified wells, one well, Well LWCW-lA, will remain in place as a
<br />compliance well until final closure. In the previous reporting period, Wells LW-108, LW-112,
<br />and LW-242 were abandoned in accordance with Colorado Division of Water Resources rules.
<br />The other 4 wells, LW-32, LW-45, LW-116, and LW-22, are not scheduled to be abandoned
<br />because of a request by Mr. Ned Prather, a local rancher, to use the wells for stock water
<br />purposes. Mr. Prather grazes his cattle at the high elevations (Wells LW-32, LW-45, and LW-
<br />116) during the summer months. See the 2006 annual report for more information on the location
<br />of these wells. Currently, OOSI intends to transfer ownership of the wells to Mr. Prather, with
<br />exception of Well LW-22 which is located on BLM land. If ownership of this well is acceptable
<br />to BLM, OOSI will initiate the transfer process and Mr. Prather will need to arrange for water use
<br />through the BLM. Reconnaissance to date has not revealed any other monitoring wells within the
<br />permit area and the Logan Wash drainage.
<br />2.4 Status Summary
<br />Areas remaining in the permit include Areas 1, 2, 3, 4, 10, portions of Area 13 (Miscellaneous
<br />Access Roads); and the 0.65 acre Soil Barrow Area. Areas 1 through 4 include the Upper and
<br />Lower Mine Dumps (face areas), Upper Mine Bench, Lower Mine Bench, and the Research Mine
<br />Bench and Dump, respectively. Area 10 is the former Helo Pad.
<br />Area 13, Miscellaneous Access Roads (Table 2), includes a number of older roads that have been
<br />reclaimed. In this report, the Mine Bench and Portal roads referred to in Table 2, consist of the
<br />Lower Access Road (1.0 acres), Upper Access Road (5.3 acres), Upper Bench Road (1.4 acres
<br />including bench), and Lower Bench Road (0.9 acres). Area 1, the Upper and Lower Mine Dump
<br />faces (12.36 acres) were revegetated during 2003-2005. Area 2, the Upper Mine Bench (0.74
<br />acres) was revegetated in 2004 and 2005. Area 4, the Research Mine Bench (2.75 acres) and
<br />Dump (1.51 acres), Area 10, the former Helo Pad (0.24 acres), and the Upper Bench Road and
<br />Lower Access Road areas of Area 13 were revegetated in the fall of 2005. In addition, the toe of
<br />the Lower Dump (1.64 acres) was identified as an area requiring reclamation after a major storm
<br />event in 2004 deposited debris flow material from the Lower Dump at the toe of the dump.
<br />Areas not expected to be reclaimed under the mine permit are the Lower Bench (Area 3, 2.1
<br />acres), the Lower Bench Road (Area 13, 0.9 acres), and the Upper Access Road (Area 13, BLM
<br />"tramroad" right-of--way, 5.3 acres). These areas comprise a total of approximately 8.3 acres.
<br />Current plans are for these areas to be released from the mine permit and incorporated into a
<br />Colorado Oil and Gas Conservation Commission (COGCC) Application Permit to Drill (APD)
<br />submitted by OOGC. OOGC intends to construct a gas well on the Lower Bench and has
<br />acquired a BLM right-of--way to access the well by way of the Upper Access Road and the Lower
<br />Bench Road. However, OOGC has not established a date for construction of a drill pad on the
<br />Lower Bench. A memorandum of understanding between OOSI and OOGC stipulates that
<br />reclamation of the entire Lower Bench, the Lower Bench Road, and the Upper Access Road will
<br />be the responsibility of OOGC. In addition, any other disturbance of previously reclaimed areas
<br />within the mine permit area will be repaired and reclaimed by OOGC. OOSI and OOGC will
<br />provide DRMS with any required documentation of this change in land use and permit
<br />jurisdiction.
<br />OOSI anticipates requesting release of warranty for Areas 1 (12.36 acres), 2 (0.74 acres), 4 (4.26 acres),
<br />and ] 0 (0.24 acres), the revegetated portions of Area 13 (1.26 acres), the "Lower Dump
<br />Western Water 8 Land, Inc. 3
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