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NATURAL SODA, INC. - DETERMINATION OF RECLAMATION AND ARO LIABILITY PROVISION AS AT
<br />30-Jun-06
<br />Footnote
<br />Activity Estimate (S) Assumptions & Comments references
<br />1 Demolition & removal of buildings and all surface activities
<br />Assume that the majority of the operating equipmen, piping and wiring inside
<br />the building has salvage value based upon the price of copper, iron and
<br />stainless steel. We currently have a contractor performing demolition for us.
<br />He is charging us a nominal fee and we are giving him the pipe that he's
<br />removing. Assume that this will be the case for the building. Assume
<br />$50,000/week for 3 weeks. Assume that the cement pad can be buried in
<br />Subtotal: $ 150,000 place and reclaimed. Assume exterior walls will be tom down.
<br />2. Reclamation of surface and restoration to natural state
<br />Recontouring, installation offence, initial 133 500
<br />The State of Colorado -Division of Reclamation, Mining and Safety (DRMS)
<br />000laae
<br />acres at
<br />44.5
<br />seeding of
<br />$33, has permitted up to 73 acres of disturbance before the bond must be
<br />15 acres at
<br />seed +
<br />tabor
<br />Reseeding: 7,500 increased. A total of 74.5 acres have been disturbed; however, 30 acres
<br />$500/acre have been reclaimed already. DMRS conducted an inspection in May 2007
<br /> confirming that 30 acres have been reclaimed. Approximately 15 of the 30
<br /> acres require overseeding. An estimate of $3,000 per acre was obtained
<br /> from Diamond J Constriction, the company currently performing
<br /> reclamation,includes seed.
<br />Subtotal: $ 141,000
<br />3 Plugging & abandonment ("P&A") of underground wells
<br />Item Description Aquifer 1
<br />3(a) Monitorwelis 3
<br />1 3M-TDR DS 13,700
<br />3
<br />2 4A-1V DS 13,700 3
<br />3 4A-5M DS 13,700
<br />4 88-1 Sub 20,000
<br />4
<br />5 89-1 B 10,800 5
<br />6 89-2 A 9,200
<br />7 89-3 P 5,600 5
<br />5
<br />8 90-1 A 9,200 3
<br />9 90-2 DS 13,700 4
<br />10 90-3 B 8,800 5
<br />11 90.4 A 9,200 3
<br />12 93-2M Sub 13,700 3
<br />13 94-1M Sub 13,700 4
<br />14 BG-1 B 8,800 4
<br />15 BG-4 B 8,800 3
<br />16 DS-2 DS 13'700 P & A per DMRS/BLM Nimes P&A with rig is $7/ft. However, they have 3
<br />17 DS-3 DS 13.700 significant experience in the basin performing P&A with crane truck at $3/ft. 3
<br />18 EX-2 DS 13,700 Assume $4000 for wireline and bridge plug (Himes recommends Rocky
<br />6
<br />19 IRI-1 P 5'600 Mountain) Assume bentonite with cement above plug and at surface. Include 5
<br />20 IRI-4 A 9,200 costs for bentonite and cement based upon depth: $4000 for DS; $2000 for 6
<br />21 IRI-5 P 5,600 B; $1000 for A; $400 for Perched. Assume cement mixed and poured by
<br />4
<br />22 IRI-6 B 8,800 Nimes. 3
<br />23 IRI-7 DS 13,700
<br />6
<br />24 IRI-8 P 5,600 3
<br />25 MU-2 DS 13,700 6
<br />26 MWA-2 P 5,600 4
<br />27 MWB-2 n B 8,800 3
<br />28 MWD-1 DS 13,700 3
<br />29 MWD-2 DS 13,700
<br />Sub-total: $ 317,700
<br />3(b) Rock School Lease wells
<br />3
<br />30 )RI-3 DS 13,700 3
<br />31 IRI-9 DS 13,700 3
<br />32 IRI-10 DS 13,700 4
<br />33 IRI-11 B 10,800 3
<br />34 IRI-PW1 DS 13,700 3
<br />35 IRI-PW2 DS 13,700
<br />Sub-total: $ 79,300
<br />2
<br />3(c) Production wells
<br />36 88-1- Moved -subsidence monitor well
<br />aa.- 20,000
<br /> 20,000
<br /> 20,000
<br />40 1A5HR Scheduled to P&A Sept 2008 20,000 Assume small Himes labor and rig only, no materials, Mob/Demob = $41It =
<br /> 20.000 $8000. Add cost of plug set by wireline = $4000 and $8,000 cement per hole.
<br />42 5H 20,000 Total cost per hole = $21,750 to accomplish P & A per UIC Permit.
<br />43 6H 20,000
<br />44 1-3A 20,000
<br />45 1-56 - ivot constructed, place holder well
<br />46 7H-1R 20,000
<br />47 7H-21 20,000
<br />Sub-total: $ 200,000
<br />Sub-total all wells: $ 597,000
<br />ARO_Provisions_Aug 2008 Page 1 of 2 9/2/2008
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