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• Upon hole completion, one truck mounted geophysical logging unit will be used at each hole <br />location. If requested, Ark Land Company will retain in its files all drill and geophysical logs <br />and all un- analyzed drill cores for at least I year, and will make them available for inspection by <br />an authorized officer. <br />Estimated Size and Deoth of Holes <br />Drilling conditions are variable in the exploration area. The initial diameter of each drill hole <br />will be 8.0" to allow for the placement of up to 100 feet of surface casing. This casing is <br />centered and cemented in -place from the top of the hole. Unless continuously cored from the <br />surface, a smaller (5 7/8 ") diameter rotary hole will be drilled to core point (50 ft. above the <br />uppermost mineable seam). This 5 7/8" rotary hole will be cased if necessary to maintain hole <br />integrity. The primary drilling medium will be compressed air with mist/foam injection to aid in <br />the circulation of cuttings to the surface. If air and foam prove to be an insufficient medium, or if <br />lost circulation becomes a problem, drilling mud and lost circulation materials will be used. <br />The core retrieved from the hole will be approximately 3" in diameter although smaller diameter <br />core (1 7/8 ") may be used in some instances. The outer diameter of the cored portion of the hole <br />will be 5 inches or less. <br />Table 1 depicts the estimated depths for each of the proposed holes in the exploration area. <br />Modification of Drill Holes to Surveillance for Water Levels <br />If significant water flows are encountered during drilling, the pertinent regulatory agency will be <br />notified. At that time, it will be determined whether a well installation is required. The <br />necessary well permits will then be obtained from the Colorado Division of Water Resources. <br />No significant water - bearing bedrock or aquifers are anticipated to be encountered. The Mesa <br />Verde Formation is known to contain limited water bearing sandstones, and no known bedrock <br />aquifers exist. If significant quantities of water are encountered, the appropriate regulatory <br />officials will be notified and if so directed, the hole may be completed as additional water <br />monitoring well. <br />Modification of Drill Holes to Methane Drainage Wells (MDW) <br />Eleven of the twelve planned holes in the exploration program will be converted from <br />exploration holes to MDW holes. Upon completion of core drilling and geophysical logging, the <br />bottom of the drill hole will be plugged with cement, and the annulus of the hole reamed to 7 <br />7/8 ". Solid and slotted casing will be installed in manner consistent with approved MDW holes. <br />A locked valve assembly will be left in place for future use as an MDW. The pad site will be <br />partially reclaimed as described below. <br />For reference, the identification of the holes will change upon initiation of drilling <br />Pre -Drill ID <br />Completed MDW <br />2009 -A <br />MDW E4 -35 <br />2009 -B' <br />MDW E4 -37 <br />2009 -C' <br />MDW E4 -52 <br />(Amended 02/04/10) <br />9 <br />