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DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866 -3567 <br />FAX: (303) 832 -8106 <br />September 8, 2011 V <br />Mr. Roger Day <br />American Shale Oil, LLC <br />P.O. Box 1470 <br />Rifle, CO 81650 <br />Dear Mr. Day, <br />Sincerely, <br />Travis Marshall <br />Environmental Protection Specialist <br />Mined Land Reclamation <br />STATE OF COLORADO <br />RECE ED <br />SEP 12 2011 <br />vivisiGA0i Redd rt Sian, <br />Re: American Shale Oil, LLC, Notice of Intent (NOI) File No. P- 2008 -046, Request for <br />Modification. <br />COLORADO <br />D I V I S I O N O F <br />RECLAMATION <br />MINING <br />SAFETY <br />John W. Hickenlooper <br />Governor <br />Mike King <br />Executive Director <br />Loretta E. Pineda <br />Director <br />On August 4th, 2011 the Division of Reclamation, Mining and Safety (Division) received the <br />American Shale Oil, LLC — Casing Cement Operations & Evaluations report. Based on the <br />results of the report, wells TM -1, TM -2, TM -3, TM -4, TM -5 and TM -6 were not completed per <br />the requirements approved in the NOI. The tests conducted and indications stated in the report <br />revealed that the cement ratings for the tomography wells have a poor rating from the top of the <br />scanned column to depths varying between 258' below ground surface (bgs) to 696' bgs. Due to <br />the non - compliance in the completion of the tomography wells American Shale Oil, LLC <br />(AMSO) must submit a modification to the NOI that specifies how AMSO intends to address the <br />non - compliance of these wells and ensure that the Uinta, A- Groove, and other aquifers are <br />adequately isolated to prevent comingling and that adequate aquifer protection has been <br />established. It is the Division's understanding that AMSO will direct a secondary contractor to <br />perform additional cement logging in the tomography wells that have not had equipment installed, <br />to acquire more information about the quality of the cement job. Furthermore, as an added <br />measure of assurance, AMSO will contract to have all of the test results evaluated by a third party <br />expert in the field. <br />AMSO must submit the above required NOI modification within 60 days of the date of this letter. <br />Additionally, AMSO must secure Division approval of the modification and the Division's <br />written concurrence that any additional measures taken to isolate and protect the groundwater <br />aquifers is adequate, prior to initiating the heating phase of the NOI operation. <br />If you need additional information, please contact me at the Division of Reclamation, Mining and <br />Safety, Grand Junction Field Office, 101 S. 3rd St., Suite 301, Grand Junction, Colorado 81501, <br />telephone no. 970.241.2042. <br />Office of Office of <br />Denver • Grand Junction • Durango Active and Inactive Mines <br />