2012-12-12_REVISION - P2010026 (3)

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NOI ATTACHMENT - EAST LONG HEATER TEST (ELHT) 1.0 INTRODUCTION Shell Frontier Oil and Gas Inc. (Shell) has leased approximately 149 acres of oil shale- bearing land to develop a Research, Development and Demonstration (RDD) project in a nahcolite -rich zone of the Eocene Green River Formation in the Piceance Basin, NW Colorado. The East RDD project lies on federal land managed by U.S. Bureau of Land Management (BLM) (Figure 1). The target resources include oil shale and nahcolite (NaHCO In essence, the plan is to leach nahcolite with hot water to create permeability and recover the leachate, then heat the formation to convert kerogen and recover the oil and gas products. In October 2012, Shell met with staff from the White River Office of the Bureau of Land Management and Colorado Division of Reclamation, Mining and Safety to discuss incorporation of testing of horizontal long heaters on the East RDD lease concurrent with RDD activities described above. The Plan of Development has been updated and submitted to BLM describing Shell's plans for incorporating testing of horizontal long heaters on the East RDD lease concurrent with previously described East RDD activities. This attachment provides the details for the modification to Prospecting Notice of Intent (NOI P- 2010 -026) required by the Division of Reclamation, Mining and Safety (DRMs) for incorporating the East Long Heater Test (ELHT) into the East RDD. The ELHT consists of three 1000 -foot long heaters installed on the East RDD lease at a pad site located adjacent to East RDD Pilot (Figure 2). The purpose of the ELHT is to test the tendency for hotspots to form along commercial mineral insulated (MI) heaters installed in a horizontal orientation. This testing supplements the data that will be generated at the East RDD Pilot by testing heaters in a nonvertical orientation and will inform Shell for future design and deployment. 2.0 GEOLOGY The East RDD Pilot site lies in the northern part of the Piceance Basin in northwestern Colorado (Hail and Smith, 1994 [9]) (Figure 3). The Piceance Basin contains the world's richest deposits of oil shale and one of the most significant occurrences of the saline mineral nahcolite, which is NaHCO (sodium bicarbonate or baking soda). An estimated one trillion barrels of oil shale resource occurs within the Parachute Creek and Garden Gulch Members of the Green River Formation. The resource area covers 1,600 square -miles and is bounded by the Colorado River on the south, the White River on the north, the Douglas Creek Arch on the west, and the White River Uplift on the east. The in -place oil shale resource lying beneath the 149 -acre East RDD tract, location for the East RDD Pilot and ELHT, is estimated to be approximately 274 million barrels, based on Fischer Assay (FA) recovery rates. The ELHT is planned for the lower saline nahcolitic oil shale zone of the Parachute Creek Member as characterized in original NOI submittals, and for the illitic sediments near the top of the underlying Garden Gulch Member. Both development intervals are within the Green River oil -shale formation. 1