BEFORE THE BOARD OF OIL, GAS AND MINING DEPARTMENT OF NATURAL RESOURCES STATE OF UTAH FILED sEP 2 3 2016 SECNENRY, BOARDOF Oll- GAS & lvllNlNG IN THE MATTER OF THE REQUEST FOR AGENCY ACTION OF AXIA ENERGY II, LLC FOR AN ORDER MODIFYING THE BOARD'S ORDERS ENTERED IN CAUSE NOS. l3t-14, 139-42, 139-90 TO ESTABLISH 1,280-ACRE (OR SUBSTANTIAL EQUIVALENT) DRILLING UNITS FOR THE PRODUCTION OF OIL, GAS AND ASSOCIATED HYDROCARBONS FROM THE LOWER GREEN RIVER.WASATCH (coLToI$ FORMATIONS COMPRTSED OF SECTIONS 25 THROUGH 36 OF TOWNSHIP 2 SOUTH, RANGE 2 WEST, USM AND SECTIONS 25 THROUGH 28 AND 33 THROUGH 36, OF TOWNSHIP 2 SOUTH, RANGE 3 WEST, USM, ALL IN DUCHESNE COUNTY, UTAH MOTION FOR LEAVE TO SUBSTITUTE, REPLACE AND/OR SUPPLEMENT RESPONDENT'S EXHIBITS Docket No. 2016-018 Cause No. 139-140 COMES NOW, EP Energy E&P Company, L.P. ("E1"), by and through its attomeys Fox Rothschild LLP, and pursuant to Utah Admin. Code Rule R641-105-500, hereby files its Motion for Leave to Substitute, Replace and/or Supplement Respondent's Exhibits ("Motion") concerning the exhibits originally filed (collectively, "Original EP Exhibits") with Ep's Response to Amended Request for Agency Action dated September 12, 2016 ("Response"), filed with respect to the Amended and Restated Request for Agency Action dated August 16, 2016 ("4¡nertded-R¡{4") frled in the above-captioned matler by Axia Energy II, LLC ("Axia"). EP respectfully requests that the State of Utah Board of Oil, Gas and Mining ("Board") enter an order permitting the substitution, replacement and/or supplementation of EP's Original Exhibits in the manner set forth more fully below. AC IIVD 423857 t 6v | 09/23 120 t 6
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FILED - Utah Division of Oil ORIGINAL EP EXHIBITS The exhibits originally filed on August 29, ... SUPPLEMENTAL EXHIBIT "L-2" - EP Energy's current 640-acre vertical
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BEFORE THE BOARD OF OIL, GAS AND MININGDEPARTMENT OF NATURAL RESOURCES
STATE OF UTAH
FILEDsEP 2 3 2016
SECNENRY, BOARDOFOll- GAS & lvllNlNG
IN THE MATTER OF THE REQUEST FORAGENCY ACTION OF AXIA ENERGY II,LLC FOR AN ORDER MODIFYING THEBOARD'S ORDERS ENTERED IN CAUSENOS. l3t-14, 139-42, 139-90 TO ESTABLISH1,280-ACRE (OR SUBSTANTIALEQUIVALENT) DRILLING UNITS FOR THEPRODUCTION OF OIL, GAS ANDASSOCIATED HYDROCARBONS FROMTHE LOWER GREEN RIVER.WASATCH(coLToI$ FORMATIONS COMPRTSED OFSECTIONS 25 THROUGH 36 OF TOWNSHIP2 SOUTH, RANGE 2 WEST, USM ANDSECTIONS 25 THROUGH 28 AND 33THROUGH 36, OF TOWNSHIP 2 SOUTH,RANGE 3 WEST, USM, ALL IN DUCHESNECOUNTY, UTAH
MOTION FOR LEAVE TOSUBSTITUTE, REPLACE AND/ORSUPPLEMENT RESPONDENT'S
EXHIBITS
Docket No. 2016-018
Cause No. 139-140
COMES NOW, EP Energy E&P Company, L.P. ("E1"), by and through its attomeys Fox
Rothschild LLP, and pursuant to Utah Admin. Code Rule R641-105-500, hereby files its Motion
for Leave to Substitute, Replace and/or Supplement Respondent's Exhibits ("Motion")
concerning the exhibits originally filed (collectively, "Original EP Exhibits") with Ep's
Response to Amended Request for Agency Action dated September 12, 2016 ("Response"), filed
with respect to the Amended and Restated Request for Agency Action dated August 16, 2016
("4¡nertded-R¡{4") frled in the above-captioned matler by Axia Energy II, LLC ("Axia").
EP respectfully requests that the State of Utah Board of Oil, Gas and Mining ("Board")
enter an order permitting the substitution, replacement and/or supplementation of EP's Original
Exhibits in the manner set forth more fully below.
AC IIVD 423857 t 6v | 09/23 120 t 6
CONFERRAL CERTIFICATION
Counsel for EP hereby certifies that he contacted: (i) Steve Alder, Counsel for the Utah
Division of Oil, Gas and Mining ("Division"); (ii) Michael Johnson, counsel for the Board; (iii)
and David Bolda, counsel for Axia, prior to the filing of this Motion. Axia has no objection to
the granting of the relief sought in this Motion. The Division had not had an opportunity to
respond at the time of the filing of this Motion.
HEARING DATE AND LEGAL STANDARD
The hearing in the above-captioned matter is scheduled for September 28, 2016. See
Board September 2016 Hearing Agenda. Exhibits filed less than thirty (30) days before a
scheduled hearing date may be allowed by the Board upon good cause shown. See Utah Admin.
Code Rule R641-1 05-500.
SUBSTITUTION, REPLACEMENT AND/OR SUPPLEMENTATION OF ORIGINAL EP EXHIBITS
The exhibits originally filed on August 29, 2016 by Axia with respect to its Amended
RAA are currently subject to that certain Motion for Leave to File Substitute and Additional
Exhibits dated September 21, 2016 ("Axia Motion"). Based upon the content and exhibits
offered in the Axia Motion, EP wishes to substitute, replace and/or supplement the Original EP
Exhibits, in order to facilitate its presentation of evidence to the Board at the hearing, so that
such presentation is more responsive to the matters raised in the exhibits associated with the
Axia Motion. EP believes that such substitutions, replacements and/or supplementation will aid
in the Board's decision in the above~captioned matter, and will provide all parties with additional
information necessary to understand the positions of both EP and Axia. EP also believes that the
timing of this Motion provides all parties to the above-captioned matter to with the opportunity
to review and formulate opinions about EP's exhibits proffered herewith.
2 ACTIVE 42385716vl 09/23/2016
Specifically, EP respectfully requests that the Board grant its leave for EP to substitute,
replace and/or supplement its Original EP Exhibits with the exhibits attached hereto and
incorporated herein as Exhibit "A," as follows:
Land Exhibits
SUPPLEMENTAL EXHIBIT "L-2" - EP Energy's current 640-acre vertical development program in and adjacent to the Amended RAA lands
SUPPLEMENTAL EXHIBIT "L-3" - Selected portion of RAA 139-140 showing the existing and proposed spacing and setbacks
Geology Exhibits
SUPPLEMENTAL EXHIBIT "G-1" - Induced and natural fractures orientation
REPLACEMENT EXHIBIT "G-5" - EP Energy Petrophysical Model Comparison
REPLACEMENT EXHIBIT "G-6" - Area of Preferred Geologic Facies
139-90: 640 spacing, 4 wells/unit- HZ, vert or combo, 1,320' /640' setbacks, 05/09/2012
Proposed Spacing: 139-140: stand up 1,280 spacing, 32 wells/unit- LLHW, SLHW, vert, direct or combo. (lay down option in 2S-3W) Effective as to all future wells after pt LLHW is completed 330' "heel to toe" and 560' lateral HZ unit line setbacks 330' lateral interwell setbacks for HZ wells 100' vertical setbacks between HZ wellbores 330' setbacks between vert/direct and HZ wellbores 660' unit line setbacks for vertical/direct wells
Supplemental Exhibit ~~L-3" EP ENERGYA- 11
Induced & Natural Fracture Orientations
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SUPPLEMENTAL EXHIBIT "G-1" 1 i EP Ef'.lERGYA
EP Energy Petrophysical Model Comparison
Reference (FT)
1:1000
Gamma Ray Resistivity Poros1ty + Sw Lithology Porosity+ Sw Net ~ =:=
cv I I _,....,;7, E- 10050 c cu 0 c
N 0 v N I I -----,--s.,_ E-· 10100 !U v ... !U u. ...
Ln u.. I • =d E- 10150
o::t b .... 0 "'C M I · ~ E- 10200 Qj !U
;: ·x 3: <( I I -c"" F- 10750
cv z
Target Interval Net Avg Eft Por
Axia castle Peak Target 222.5 7.1%
EP Castle Peak Target 106.3 5.3%
Axia Uteland Butte Target 282.5 7.00%
I EP Uteland Butte Target Net 91.75 8 .3%
REPLACEMENT EXHIBIT "G-5"
Bo So Area RF Reserves, BO
1.4 79.1% 1280 10% 88,633,226
1.4 28% 1280 10% 11,189,196
1.4 74.8% 1280 10% 104,917,951
1.4 28.5% 1280 10% 15,394,328
EP WI SA 10-22-22 Well Axia Uteland Butte Frac Zone
~-.1• Multi-variable Statistical
Wells
8
8
8
8
Model by EP Petrophysicist Axia Data from Cause 139-140
• Axia 300' UB Frac Zone • Newfield UB Frac Zone 145'
based on Microseismic Cause 139-134 EP + Axia Reserves Very Different
'\ Ill • r ... I • Axia Bd 32-34H 22 ~i BB 32 44H-22 I
1 : • l
6 I 5 139-140 1 • r\.. 4 4 3 2 1
II 4 3 6 5 3 • 2 • J I
• I 139-138 t"' I '>C" ~I.A, "=t Q ..,,.,
• EP Locations Directly Effected By Cause 139-40
r~v l ; 1 I ,.
fl 0 EP Other Locations Adjacent To Cause 139-40
1 \ ,r • 12 8 • • I 10 11 9 9
I I • I I l J u I v . !
• Natural Fracture Orientation East West • 16 EP Well Locations Directly Effected By Cause 139-40 • 28 EP Total Well Locations Within Or Sections Surrounding Cause 139-40 • Proposed 330' Between Well Setback Is Not Adequate To Protect Correlative Rights