Attn: Chief Conservation Officer

Transcription

1 Pc11rcllm«:> resources ltd Bankers Hall West, 888 3rd Street SW Calgary, Alberta, Canada T2P 5C5 tel fax November 21, 2016 OROGO Department of Industry, Tourism and Investment Government of the Northwest Territories P.O. Box 1320 Yellowknife NT XlA 2L9 Canada Attn: Chief Conservation Officer Re: 1) AACW Application for Abandonment of Para et al Fort Liard 0-35 (enclosed) 2) AACW Application for Abandonment of Para et al Liard 1-46 (enclosed) Further to my letter of November 7, enclose please find the Application to Alter the Condition of a Well and supporting documentation for the above wells. These two wells have both been suspended with bridge plugs capped with cement and thus this application is only for surface abandonment {"Cut & Cap"). The following are enclosed for each well: 1. Application to Abandon a Well (3 copies with original signatures) 2. Proposed operations and rationale for the same. 3. Current wellbore configuration diagram 4. Proposed wellbore configuration diagram after abandonment 5. Information Disclosure Consent Form As previously undertaken, Paramount will conduct these operations in compliance with the conditions of the current Land Use Permit and Water License, along with the current Operating Approval (unnumbered) for the PL07 License which encompasses these wells. The operations will be performed in compliance with Paramount's Management System, and the Waste Management Plan, Spill Contingency Plan, Emergency Response Plan and Environmental Protection Plan which form a part of the Authorization. As before, some parts of the above plans apply only to Paramount's K-29 - Nahani (sour gas) production facilities and are not applicable to the Liard Operation.

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3 Office of the Regulator of Oil and Gas Operations Version: April 4,2014 (OROGO) o Northwest Territories APPROVAL TO ALTER CONDITION OF A WELL APPLICATION This application is submitted under Section 10 of the Oil and Gas Drilling and Production Regulations. When granted under Section 13 of the Regulations, this form is the requisite approval for the commencement of well operations. An approved copy of this notice is to be posted at each drill site. Well Name Para et al Liard Well Identifier 1871 Operations Authorization No. No number._ Operator Paramount Resources Current Depth m KB Operating Licence No. NWT-OL Licence No. Production Licence _ Contractor Zedi Drilling Rig or Unit To be determined Station Keeping Current Well Status Land Use Permit No. Water Licence No. Location Unit I Coordinates (NAO 27) Swface Ground Level I Seafloor Bottom Not Applicable Land Structure Conventional Land _ Su~~~~~~?J~!l_~_QQ_~ Anticipated Well Status Change _~~~~_~_~_~~~!:_~E ~Q}_~ MV20 16AOO10 Issued by: Mackenzie Valley Land and Water Board._ MV20 16L Issued by: Mackenzie Valley Land and Water Board _ Hole Section 46 Grid _ _ Lat 60 5'32" 0 Long '54"._ _ _- Lat '32" Long '54" m.._ ~Q_~2 Approximate Date of Commencement _I~~~_~ Elevation KB/RT 542.5m Est. Days on Location.-~-~~~ _ Activity Type Top to Abandonment cap - Lower zones abandonned with vu,. e, Select and cement in 2009 Select Select Select Additional Information Cut casing lm below ground & cap with non-sealing steel plate & well sign. Mattson and Chinkeh perforated intervals were previously abandonned (2009) with bridge plug and cement in compliance with existing legislation. See attached diagram. Well filled with inhibited fresh water - Additional bridge plug set at 50 m _~ll~g}!~_~._gg!_~!g~~~sj!.?:g ~.~._!~g!.c..t.!~g~y!!?:~p~~~!:y... '?~~~!l:!jg~ ~ ~'?~_~!!~~!?:~g9:!~g~~ "I certify that the information provided on this form is true and correct" Name Lloyd Doyle Telephone Job Designation Corporate Operating Officer (403) Ext._ _.... _.. _ _. lloyd.doyle@paramountres.com Operator Signature Responsib e Officer of Company OROGO USE ONLY This well approval is granted under section 13 of the Oil and Gas Drilling and Production Regulations and is subject to the terms and conditions attached to this approval and Operations Authorization No. _ Job Designation Well Identifier Unique Well Identifier Signature OROGO Authority Date Instructions: Send three copies of the completed form with original signatures, along with the appropriate supporting technical documentation, to:

4 Abandonment Program for Paramount et al Liard I-46 Well Name: Paramount et al Liard I-46 Area: N, W Location: Latitude: Longitude: UWI: 300I WID: 1871 Spud Date: Rig Release Date: Well Status: Chinkeh and Mattson zones abandoned in 2009 Well is currently suspended Last Workover February 2009 KB Elevation: Ground Elevation: PBTD: TD: m m 2044 mkb 2055 mkb Casing & Cementing Surface Hole: Surface Casing: 311 mm to 505 mkb mm, 53.5 kg/m, J-55, ST&C set at 505 mkb. Cemented with 30 t class 'G' cement plus 2% CaCl2. 3m3 cement returns to surface. Intermediate Hole: 222 mm to 1545 mkb Intermediate Casing: mm, 38.7 kg/m, J-55, LT&C set at 1545 mkb. Cemented with 13t 1:1:2 and 11t 0:1:0 Class G 2 m3 of 3 m3 flush returns to surface Calculated cement top 65 mkb Main Hole: Liner: 156mm to 2055 mkb 114.3mm, 17.4kg/m, J-5, LT&C, set at 2055 mkb. Cemented with 9t 0:1:0 G Liner 1504m Backwashed 1 m3 cement returns Pressure tested liner lap to 14 MPa X 10 min

5 Operational Program: Note: This is only a surface abandonment as downhole operations were completed in This program forms a part of the Liard 2016/17 Abandonment and is governed by the existing Operations Authorization and supporting documents (Safety Plan, Environmental Protection Plan, and Emergency Response Plan which are already on file with OROGO). These documents will be onsite for reference by the site supervisor, along with a bridging document including site specific extracts, emergency contact numbers etc. This document focuses on the describing the operations planned for the well. Overview: This is a cut and cap only as the downhole zones have been abandoned. The Liard I-46 well was drilled in It was dually completed as a Mattson (tubing side) and Chinkeh (annulus side) gas producer. Gas production has declined and the well was suspended in The field is shut-in with some of the facilities decommissioned. The associated Shiha trans-border pipeline (under NEB jurisdiction) was deactivated in 2008, The well was circulated to inhibited water and the uppermost Mattson perforations were abandoned in 2009 by setting bridge 1604 m (14 m above top Mattson perforation). The bridge plug was successfully tested to 14 MPa for 10 minutes (simultaneously retesting the liner 1504 mkb). Eight meters of cement was dump bailed on the bridge plug. The Chinkeh perforations were similarly abandoned by setting a bridge plug at 1210 mkb (7 m above the top Chinkeh perforation), pressure testing to 14 MPa for 15 minutes and dump bailing 6 meters of cement on top. Both zonal abandonments meet the requirements of NEB- OGDPR (1979) 211(2)(a) in force at the time and the current OROGO OGDPR 56 (a) & 56 (b). The surface casing was cemented full length with returns to surface and the intermediate casing was cemented with 2m3 of 3m3 pre-flush returned. The calculated cement top is 65mKB which is over 400m overlap into the surface casing. One m3 of cement was circulated back above the liner on completion of that cement job. The liner lap was successfully pressure tested to 14 MPa for 10 minutes on Based on this all zones outside the casing are believed to be isolated. A further bridge plug is was set in the 178mm casing at 50 mkb on The purpose of this program is to cut and cap the casing, resulting in a permanent abandonment.

6 Proposed Operations: 1. Check for surface casing vent flow. 2. Isolate field piping and bleed down (if needed). 3. Open the wellhead valves (no tubing or hanger in well) and perform "bubble test" (using the same process as the surface casing vent check) on the production Check for combustible gas. (Note: Surface pressure on 2015 inspection was 0 kpa). 4. Remove wellhead. Suck fluid level in well down to 3 meters below ground level. 5. Cut and remove rathole/mousehole 1m below ground if present. Backfill hole with 1 m cement plug if required. 6. Excavate around wellbore approximately 1.5 meters below ground level). Slope sides 1:1 or shallower. 7. Cut and remove conductor pipe. Support casing bowl with picker or similar. Cut three 60 degree windows production casing. Production casing may drop. Cut surface and production casing. in surface casing just below the bowl and then cut casing at least 1 meter below ground level. Stitch weld a 6mm steel plate over the casing stubs (do not seal). 8. Weld pipe signpost to surface casing and install the permanent well sign. 9. Backfill the hole with a 0.3m crown to allow for possible subsidence. Tamp backfill material well. 10. Rig down and remove all equipment and material used in the operations from the lease. END Haul any remain fluid to an approved waste disposal location. Calgary contact (always phone rather than for urgent matters) Dick Heenan dickheenan@shaw.ca R Heenan PERMiT TO -P-RAcricE 3 ' HEENAN E~ER~Y ~EBV!CE$;~TD. Signature.I~ /~ (. <.--.! Date -Z... I 7 / I1/ Z- ( PERMiT NUMBER: P 827 NT/NU Association of Professional Engineers and Geoscientists -----~-.~---~,,~-

7 KB 542.5m GL PARAMOUNT ET AL FT. LIARD I-46 60deg 10' N, 123deg 15' W Current configuration Permanent bridge plug 50mKB 505m mm, kg/m J-55 LT&C 30T O:1:0 Cement to surface mm, kg/m 6m cement plug mKB J-55 LT&C 1210mKB 13t 1:1:2 & 11t 0:1:0 'G' 2m3 of 3m3 flush Chinkeh Perforations mKB Calc cmt top = 65mKB Baker CMS liner hanger P-test to 14MPa X 15 min m cement plug Weatherford perm'nt Bridge Plug 1504mKB 1545mKB mKB 1604mKB mm, kg/m J-55 LT&C 9t 0:1:0 'G' Backwash 1m3 cmt returns Mattson Perforations m Spent TCP guns 8m cement plug m Baker 'S' premanent BP 1633m Mattson Perforations m Spent TCP guns 2044m 2055m I-46 WELLBORE /23/2016

8 KB 542.5m GL PARAMOUNT ET AL FT. LIARD I-46 60deg 10' N, 123deg 15' W Proposed Abandonment Cut 1m below ground Weld non-sealing steel plate Permanent bridge plug 50mKB 505m mm, kg/m J-55 LT&C 30T O:1:0 - Cement to surf. Cement to surface mm, kg/m 6m cement plug mKB J-55 LT&C 1210mKB 13t 1:1:2 & 11t 0:1:0 'G' 2m3 of 3m3 flush Chinkeh Perforations mKB Calc cmt top = 65mKB Baker CMS liner hanger P-test to 14MPa X 15 min m cement plug Weatherford perm'nt Bridge Plug 1504mKB 1545mKB mKB 1604mKB mm, kg/m J-55 LT&C 9t 0:1:0 'G' Backwash 1m3 cmt returns Mattson Perforations m Spent TCP guns 8m cement plug m Baker 'S' premanent BP 1633m Mattson Perforations m Spent TCP guns 2044m 2055m I-46 Proposed abandonment11/23/2016

9 INFORMATION DISCLOSURE CONSENT FORM Pursuant to subsection 91 (3) of the Petroleum Resources Act (PRA) Subject to its obligations under section 91 of the PRA and the objectives expressed by the Government of the Northwest Territories Oil and Gas Regulator (Regulator) in its Information Disclosure Guidelines, issued under section 18 of the Oil and Gas Operations Act (OGOA) on May 10, 2016, the Regulator wishes to facilitate public access to information about the regulation of oil and gas works and activities under OGOA, while protecting an applicant's right to maintain privilege over certain information. Paramount Resources Ltd (the Applicant), requires authorizations, approvals, orders, or other consents from the Regulator in respect of the following works or activities: Abandonment of Para et al Liard The Applicant (please mark box or boxes): o Does not consent to the public disclosure of any information with respect to the above-noted works or activities, other than information or documentation that the Regulator is already permitted to disclose under section 91 of the PRA, and has provided a rationale for non-disclosure in the space provided on the reverse of this form. or Consents to the public disclosure of all the information indicated by the Applicant below with respect to the above-noted works or activities, with the exception of any information noted in the space provided on the reverse of this form where accompanied by a rationale for non-disclosure: ~ This completed Information Disclosure Consent form ~ A brief project description (approximately 1-5 pages) that includes the name of the applicant, the scope, purpose, location, timing and nature of the proposed work or activity. This project description may be used for the purposes of a preliminary screening under Part V of the Mackenzie Valley Resource Management Act. ~ The contents of an application for an Authorization under section 10(1)(b) of OGOA, including but not limited to: The completed application for the Authorization; All required documentation supporting the application, including the safety plan and environmental protection plan where applicable; Correspondence and Information Requests between the Regulator and the Applicant; Page 1 of 2,..,.1: :.: ','.~ ", :, I..! -

10 The approved Authorization, including any conditions imposed by the Regulator; The completed application for any associated approvals (such as well approvals); Any associated approvals issued, including any conditions imposed by the Regulator; Subsequent amendments to any authorizations or approvals issued by the Regulator; and Any requests to vary or seek exemption from a regulatory requirement under section 54 of OGOA. Classes of information or documentation obtained by the Regulator as a result of carrying on a work or activity that is authorized under OGOA, as described in subsection 91(8) of PRA, remain privileged for the periods of time described in that subsection. By providing its consent to the disclosure of the above information, the Applicant hereby releases OROGO, its officers, agents or employees from any claims, demands, losses or liability arising out of or related to the disclosure of the information. This consent remains in effect until it is revoked or amended by written notice to OROGO, in which case the amended consent would apply to information provided to the Regulator after the date of the written notice. The Applicant hereby affirms that it has read and fully understands this Information Disclosure Consent Form and release of liability. Paramount Resources Ltd Name f Applicant Company Date Lloyd Doyle er, on behalf of Name of Officer (print) Information the Applicant Does Not Consent to Disclose: Contact information and phone numbers in Emergency Response Plan and other documents. Applicant will provide a copy of the document with these redacted upon request. Rationale for Non-Disclosure (use additional paper if necessary): Public release of this information is unnecessary and is not relevant to the application process. It is an invasion of personal privacy and may be contrary to law. Page 2 of 2 ': -!,;,..;.,.:. I. \-