2011-08-10_INSPECTION - P2010007

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OBSERVATIONS PERMIT #: P- 2010 -007 INSPECTOR'S INITIALS: RCO INSPECTION DATE: July 28, 2011 This was a partial monitoring inspection of a prospecting NOI that was approved in 2010 for a series of drilling pads and drill holes. The operator named on page one was present throughout the inspection. Drilling activity has already commenced at the drill pads, with some holes completed, and some of the pads reclaimed. Drilling equipment is still present at one of the approved pad sites. There is a drill rig set up at the pad on NA Spur Road #1. The operator retrieved several boxes of core from the last drilling shift, to deliver to the office for analysis. The disturbance is within the area defined by corner stakes, which is the approved pad size. Topsoil and slash removed prior to constructing the pad are stored adjacent to the pad for use in reclamation. All drilling fluids are contained in plastic -lined sumps or vessels on the site. Any hydrocarbons stored onsite have secondary containment, as required. Sediment is controlled by berms on the pad or by wattles along the toe of fill slopes. The CIS #1 pad is still present (not yet recontoured) though drilling equipment has been removed to another pad location. The plastic -lined sumps still remain, for additional drilling activity according to the operator. The former drill hole was completed and closed (and the collar location marked). All other drilling features are removed. No reclamation, besides clean -up from the last drilling, has been performed. The inspection continued by walking down the access trail to the CIS #2 pad, where reclamation of the site is currently well underway. All drilling equipment has been removed and the site is cleaned up. The holes are closed, sumps are backfilled, and the pad has been recontoured completely. Topsoil has been respread and slash from the timber that was removed earlier has been scattered across the site. Seeding will occur this fall or next spring. The road between CIS #1 and CIS #2 was not yet recontoured or ripped, but those activities are to occur soon and then the trail will be seeded and covered with slash. Pad CIS #3 and CIS #4 are adjacent to the forest road and therefore are easily accessible by vehicle. These sites are also nearly reclaimed, with recontouring and topsoiling done, and slash is scattered. All debris and evidence of drilling has been removed. The sites do not show any revegetation yet. The sites appear stabilized and there is no apparent erosion or offsite sediment transport. The operator will provide drill hole permanent abandonment reports for all holes within one year of closure, and will provide all information concerning prospecting activity and reclamation performed in the annual reports. The reclamation performed to -date looks good, and the current disturbance complies with the approved plans. There was no problem noted in this inspection. For questions concerning this report, please contact this inspector at the Division's Durango Field Office: DRMS - Durango Field Office 691 CR 233, Room A -2 Durango, CO 81301 Telephone: 970 - 247 -5193 Page 2 of 3