ADEQ O&G Pit Inspection Form · bales are deteriorated, and there is

November 2, 2010 George Sheffer Southwestern Energy Company P.O. Box 789 Conway, AR 72033 RE: Evans 09-11 #1-35H, 01240-WG-P Dear, Mr. Sheffer: On, October 21, 2010, I performed an inspection of the above referenced drilling site in accordance with the provisions of the Arkansas Water and Air Pollution Control Act and the regulations promulgated thereunder. The inspection revealed the following violation(s): On the south-side of the reserve pit, I observed several small holes in the synthetic liner, and rocks can be seen below the liner. The holes are in close proximity to locations where hosing has been removed from the pit and other tears have been repaired. These holes are within the 2ft freeboard range; however, there is potential for pit fluid leakage. This is a violation of Part II. Section B.3 of the permit, which states that pit liners shall be maintained and protected from puncture or leakage of fluids. On the north-side of the reserve pit, I observed that sediment had entered the pit as well as the pit fluid had a turbid, silty appearance. This sediment is adding to the volume of the pit contents and can potentially lead to overflow and discharge of pit contents. This is a violation of Part II. Section B.4 of the permit, which states that the pit shall contain only water-based drilling fluids, etc. Erosion and sediment control practices are in place; however, rock check dams are full of sediment, hay bales are deteriorated, and there is <80% vegetation cover on some slopes in some areas of the site. It is imperative that these issues be addressed as outlined in Southwestern Energy’s RAPPS and BPM documents before substantial rainfall to prevent sediment from entering waters of the state. The above items require your immediate attention. Please submit a written response to these findings to Cindy Garner, Water Division Enforcement Branch Manager. This response should be mailed to the address below. This response should contain documentation describing the course of action taken to correct each item noted. This corrective action should be completed as soon as possible, and the written response with all necessary documentations (i.e. photos) is due by November 12, 2010. If you need further assistance, please contact the enforcement branch by telephone at 501-682-0639 or by fax at 501-682-0910. Sincerely,

Kerri McCabe Oil and Gas Field Inspector Water Division [email protected] 1-479-968-7339 ext 17 cc: Water Division Enforcement Branch

Water Division Permits Branch

mailto:[email protected]�

ADEQ O&G Pit Inspection Form

Date of Inspection : Oct 21, 2010 Inspector: Kerri McCabe Operator: Seeco, Inc. Drilling Contractor: N/A

Coordinates: Lat 35.362936; Long -92.130708 Drilling Pad Name & #: Evans 09-11 #1-35H (photo 1 of 10)

State Permit #: 01240-WG-P On Site Contact Person: N/A (called Zack Watson) Phone #: 501-428-4575

DETAILS: Section , Township N, Range W County: Cleburne 35, 9N, 11W AFIN: 12-00000

Stage of Well Development: Construction of Pad Air Drilling Water Base Mud Drilling Oil Base Mud Drilling Well completion Well Finished

SECTION A: Drilling Pad

1. Evidence of sediment runoff from the drilling pad or well site observed in waters of the state? Y N NA NE

2. At the time of inspection, was evidence observed of Reg. 2 turbidity standards being exceeded? Y N NA NE

3. Has the Operator implemented erosion and sediment controls in place to minimize sediment runoff from occurring? Y N NA NE 4. Has Operator prepared a storm water erosion and sediment control plan or guidance document? Note: SWN has provided RAPPS to ADEQ inspectors Y N NA NE 5. Does it appear that the erosion and sediment controls are being maintained in good operating condition? Note: 1.) rock checks north of the reserve pit are full of sediment (photo 2 of 10); remaining rock checks are in proper working order, 2.) hay bales east of the access road are deteriorated (photo 3 of 10), and 3.) <80% vegetation coverage along several slopes (photo 4 of 10)

Y N NA NE

6. At the time of the inspection was there evidence that the site had any oil/fluid spills? Y N NA NE

a. If so, were the spills properly contained, cleaned, and disposed of? Y N NA NE

b. Has the spill been reported to ADEQ? Y N NA NE

7. Did any rerouting, filling, or channelization of any “water of the state” occur during drilling pad construction? Y N NA NE

a. If so, was proper authorization received? Y N NA NE

b. Evidence of any Reg. 2 violations due to construction of the drilling pad? Y N NA NE 8. Does it appear that chemicals used in the drilling process are being stored on site properly? Note: removing drill pipe at time of inspection; no drilling Y N NA NE

SECTION B: Pits and Drilling Fluids

1. At the time of the inspection was the pit or pits covered under an active permit? Y N NA NE 2. At the time of the inspection did it appear the pit or pits meet the construction requirements as required in the permit Part II, Section A item 1? Y N NA NE 3. If containers are used for circulation pits or mud pit, are they being maintained in a leak–free state? Y N NA NE 4. At the time of inspection, is there any evidence that the pit was not constructed with the appropriate liner? (i.e. 20 mil Synthetic Liner, Compacted Clay Liner, and/or Bentonite Liner) Y N NA NE

5. Are there any evidence at the time of inspection, that the reserve pit is not structurally sound? ( i.e. cracks/holes in levees and/or tears/holes in liners) Note: several small holes were observed in a section of liner (upper lip, south-side of reserve pit where hosing was removed) (photo 5 of 10); large rocks visible under liner (photo 6 of 10)

Y N NA NE

6. Is there any indication that seepage is coming from pad or pit? Y N NA NE 7. At the time of the inspection was there any evidence that any pit fluids has been discharged onto the ground or into waters of the state from the pit or from drilling pad? Y N NA NE

a. If so, has the discharge been reported? Y N NA NE b. Has the fluid been properly contained, cleaned up, sampled, and disposed of? Y N NA NE 8. Is a 2 ft. minimum freeboard being maintained in the pit? Note: east-side of reserve pit is near 2ft minimum freeboard limit (photo 7 of 10); sediment entering pit on north-side & increasing pit volume (photo 8 of 10) Y N NA NE

9. Any evidence noted at the time of inspection, that the pit contained unapproved fluids or materials? (i.e. waste oil, hydraulic or completion fluids, trash, or any Nonhazardous Oilfield Waste) Note: sediment entering reserve pit on north-side Y N NA NE

10. According to on site contact person how and where are fluids disposed? N/A

a. Carrier:

b. Destination:

c. Type of Disposal:

SECTION C : Closed out Water Based Drilling Fluids Pit

Date well was finished: 1. Have all drilling fluids and/or solids been removed from the reserve pit? Y N NA NE

2. Does it appear that the pit has been properly closed and seeded? Y N NA NE

3. Has the Operator submitted a completed Statement of Disposition and NOT within 30 days of closure of pit? Y N NA NE Comments:

Zack Watson was called prior to inspection start, and the site had been inspected by a SWN inspector on 10-18-10. Over-all erosion control is structurally sound & in place; however, there are some issues with them being maintained in good operating condition: several rock checks are full of sediment (particularly areas of heavy flow). These should be cleaned to improve their efficiency. Hay bales placed east of the access road are deteriorated & can potentially enter nearby waters of the state to decompose & cause anoxic conditions (wooden stacks & twine are trash). Several aged slopes have <80% vegetation coverage & new excavation sites (i.e., pipeline)

have no erosion controls in place (photo 9 of 10). The silt fence has been removed from the site, but two small sections still remain on site (photo 10 of 10). These should be removed because they are functionally serving as trash. The reserve pit is structurally sound, but there are a few potentially problematic areas: the reserve pit has sediment entering it from the levee on the north-side. This sediment is increasing the pit volume & could lead to fluid seepage. There are also several small holes in the liner (above 2ft freeboard region) as well as large rocks under the liner, which can lead to leaks, etc. Reserve pit is virtually trash-free (a single plastic bottle).

Inspector: Kerri McCabe Arkansas Department of Environmental Quality Date Report: Oct. 25, 2010

© DW 72008 Arkansas Dept. Environmental Quality

Arkansas Department of Environmental Quality (ADEQ) Official Photograph Sheet

Location: Evans 09-11 #1-35H, SE of Quitman, AR in Cleburne Co.

Photographer: Kerri McCabe Witness: Dale Washam

Photo # 1 Of 10 Date: 10-21-10 Time: 1527

Description: Sign outside inspection site



Description: Rock check dam full of sediment





Description: Deteriorated hay bales east of the access road



Description: Slope with <80% vegetated cover





Description: Holes in reserve pit liner (south-side near where hosing was located)



Description: Rocks under reserve pit liner





Description: East-side of reserve pit reaching 2ft minimum freeboard limit



Description: Sediment on inside of reserve pit is washing into the pit.





Description: Vegetation removed & windrowed for pipeline construction



Description: Portion of silt fence still on site

ADEQ O&G Pit Inspection Form · bales are deteriorated, and there is

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