REVISION - 1/8/2009, 8:07:50 AM-JWD

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ATTACHMENT C SUPPLEMENTAL REPORT-ACTUAL COSTS A unit cost per foot cannot be determined for cement, as the amount of cement does not vary by hole depth- Cement always occupies the interval from 3 to 13 feet. • Demobilization from Project to Gillette, WY: $300 per hour (per diem accounted for due to partial day of plugging and abandonment). Total cost of demobilization: $4,200 (Multiply by 1) If 16 holes that are 6.5 inches in diameter need plugged and abandoned to 531 feet, a drilling company would be able to set up, trip in, plug, trip out, abandon, and move off of an average of three 531-feet deep holes per day, therefore requiring less than 6 full days to complete the project. The only item left to complete would be final grading and seeding of the drill sites. Therefore, using the above-mentioned costs, total cost of the plugging and abandonment project for 16 holes that are 531 feet deep and 6.5 inches in diameter would be approximately $33,659.04; or $2,103.73 per hole; or $3.962 per foot. Using $3.961 per foot, costs for 6.5-inch diameter holes that are deeper than 531 feet can be estimated. For example, a 700 foot deep hole that is 6.5 inches in diameter could cost approximately 700 feet x $3.961 per foot = $2,773.28. To calculate the costs for plugging and abandoning the variety of holes listed on the current NOI we need to first calculate a cost per foot for the larger diameter holes. If we calculate for 16 holes that are 531 feet deep, but are instead 10.5 inches in diameter, we only need to adjust for greater material costs when calculating a cost per foot. Additional time costs will be negligible and we have already over- estimated time by using the highest costs incurred of the three holes shown on the invoices. The total cost per foot can then be used to estimate costs for deeper holes. Fora 10.5-inch diameter hole, the materials need to be adjusted as follows: • The volume of a 10.5-inch diameter hole is 2.61 times the volume of a 6.5-inch diameter hole. • Abandonment Fluid: Approximately 10 sacks Shur-gel x 2.61 = 26.1 sacks of Shur-gel would therefore be needed to exceed product requirements for abandonment fluid. Product per foot at this concentration would equal 2.458 Ib/ft. Total cost of abandonment fluid: 26.1 sacks x $8.75 per sack = $228.38 per hole (Multiply by 16 holes), or $228.38 / 531 feet = $0.445 per foot. • Cement: If a 6.5-inch diameter hole takes 3.59 sacks of Portland Type I Cement to cap, a 10.5- inch diameter hole would take approximately 3.59 sacks x 2.613 = 9.38 sacks. Total cost per hole: 9.38 sacks x $8.09 per sack = $75.88 (Multiply by 16 holes). A unit cost per foot cannot be determined for cement, as the amount of cement does not vary by hole depth- Cement always occupies the interval from 3 to 13 feet. Replacing materials costs fora 6.5-inch diameter hole with the materials costs calculated above for a 10.5-inch hole, the new estimated cost total to plug and abandon 16 holes that are 531 feet deep and 10.5 inches in diameter is $36,663.16; or $2,291.45 per hole; or $4.315 per foot. This footage rate includes all costs for all plugging and abandoning activities including proper backfilling and abandonment of all excavations. It does not include final grading and seeding.