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the pressure used during injection does not initiate new fractures or propagate existing fractures in <br />the injection zones. In no case shall injection initiate fractures in the confining zone or cause the <br />migration �f injection or formation fluids into a USDW. <br />Shell has performed a Step Pressure Test and a Microfrac Test on the 0804 (SAW) to provide <br />information on the fon fracture pressure. During the Step Pressure Test, the pressure was <br />incrementally increased and then shut in for one hour to allow pressure to fall off. The pressure fall- <br />offs have the same behavior (decay rate with time) indicating that the formation did not break down <br />In any of the pressure test steps. The highest pressure achieved was 700 psi corresponding to a <br />bottom hole pressure (BHP) of 1,787 psi at 2,220 or 0.805 psi/ft gradient. <br />During the Microfrac test, the breakdown occurred at BHP 2,096 psi, measured at 2,220 feet which <br />corresponds to a gradient of 0.94 psi /ft. In the microfrac test, the fracture pressure was also <br />monitored as fracture closed, it was then reopened and closed twice more. A conservative fracture <br />gradient value will be used to determine the maximum allowable injection pressure (MAP), 0.68 <br />psi/ft, the smallest value from the test results below. <br />• Stage <br />1 <br />2 <br />3 <br />Step <br />Breakdown <br />Closure <br />Reopening <br />Closure <br />Reopening <br />Closure <br />BHP © <br />2,220' <br />. (psi) <br />2,096 <br />1,520 <br />1,620 <br />1,540 <br />1,540 <br />1,580 <br />Fracture <br />Gradient <br />(psi /ft)* <br />0.94 <br />0.68 <br />0.73 <br />0.69 <br />0.69 <br />0.71 <br />*calculated as BHP/2,220' (measured pressure depth) <br />The formation fracture pressure can be determined according to the following formula: <br />FP = [fg - (0.433 * sg)] * d <br />FP = formation fracture pressure (measured at surface) <br />fg = fracture gradient (from submitted data or tests) <br />sg = specific gravity (of injected fluid) <br />d = depth to top of injection zone (or top perforation) <br />Shell estimates that at the operating concentration of 15 wt% and 300 degrees Fahrenheit, the <br />produced brine has a specific gravity of 1.16. At a depth of 2,090 feet (top of the injection zone) and <br />using the fracture gradient (0.68 psi /ft), the fracture pressure Is approximately 370 psig. <br />Shell Is also authorized to inject an Inert gas Into the annulus between the casing and tubing strings. <br />To be able to effectively displace the fluids in the well and counterbalance the hydrostatic pressures <br />exerted by the barren liquor at 370 psig, at the greatest depth, an annular pressure of 1510 psig is <br />required. The Gas Cap MAIP is set at 1,510 psig. <br />Shell has proposed to use a nitrogen gas blanket to maintain positive pressure on the leach solution <br />and thereby Induce movement of the brine solution back up the production tubing, and to help <br />control upward leaching of the solution into overlying layers. <br />Permit CO32210 -00000 <br />12 FINAL t: == .,i,l.,. Statement of Basis <br />