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U.S. ARMY CORPS OF ENGINEERS Form Approved -

APPLICATION FOR DEPARTMENT OF THE ARMY PERMIT OMB No. 0710-0003

33 CFR 325. The proponent agency is CECW-CO-R. Expires: 30-SEPTEMBER-2015

Public reporting for this collection of information is estimated to average 11 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of the collection of information, including suggestions for reducing this burden , to Department of Defense, Washington Headquarters, Executive Services and Communications Directorate, Information Management Division and to the Office of Management and Budget, Paperwork Reduction Project (0710-0003). Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for fai ling to comply with a collection of information if it does not display a currently valid OMB control number. Please DO NOT RETURN your form to either of those addresses. Completed applications must be submitted to the District Engineer having jurisdiction over the location of the proposed activity.

PRIVACY ACT STATEMENT

Authorities : Rivers and Harbors Act, Section 10, 33 USC 403; Clean Water Act, Section 404, 33 USC 1344; Marine Protection , Research , and Sanctuaries Act, Section 103, 33 USC 1413; Regulatory Programs of the Corps of Engineers; Final Rule 33 CFR 320-332 . Principal Purpose: Information provided on this form will be used in evaluating the application for a permit. Routine Uses: This information may be shared with the Department of Justice and other federa l, state , and local government agencies, and the public and may be made available as part of a public notice as required by Federal law. Submission of requested information is voluntary, however, if information is not provided the permit application cannot be evaluated nor can a permit be issued. One set of original drawings or good reproducible copies which show the location and character of the proposed activity must be attached to th is application (see sample drawings and/or instructions) and be submitted to the District Engineer having jurisdiction over the location of the proposed activity. An application that is not completed in full will be returned .

(ITEMS 1 THRU 4 TO BE FILLED BY THE CORPS)

1. APPLICATION NO. 2. FIELD OFFICE CODE 3. DATE RECEIVED 4. DATE APPLICATION COMPLETE

(ITEMS BELOW TO BE FILLED BY APPLICANT)

5. APPLICANT'S NAME 8. AUTHORIZED AGENT'S NAME AND TITLE (agent is not requ ired )

First - Conrad Middle - Last - Perry First - Middle - Last -

Company - Cook Inlet Energy, LLC Company-

E-mail Address [email protected] E-mail Address -

6. APPLICANT'S ADDRESS: 9. AGENT'S ADDRESS:

Address- 60 I West 5th A venue, Suite 310 Address-

City - Anchorage State - AK Zip - 99501 Country - City- State - Zip- Country -

7. APPLICANT'S PHONE NOs. w/AREA CODE 10. AGENTS PHONE NOs. w/AREA CODE

a. Residence b. Business c. Fax a. Residence b. Business c. Fax

907-334-6745 907-334-6735

STATEMENT OF AUTHORIZATION

11 . I hereby authorize , .. )t.ni\. \'4g,, Hen.-~ to act in my beh~lf as my agent in the processing of this application and to furnish , upon request , supplemental information in support of this p~

V, \ ~ / ?/'- 11-/~ SIG~E OF APPLICANT DAlE

/I I

NAME, LOCATION, AND DESCRIPTION OF PROJECT OR ACTIVITY

12. PROJECT NAME OR TITLE (see instructions)

Sabre Exploration Drilling and Gas Production

13. NAME OF WATERBODY, IF KNOWN (if applicable) 14. PROJECT STREET ADDRESS (if applicable)

Cook Inlet Address

15. LOCATION OF PROJECT

Latitude : •N 60°48'57 .97" Longitude: •W 151°4 1'49.09" City - State- Zip-

16. OTHER LOCATION DESCRIPTIONS, IF KNOWN (see instructions)

State Tax Parcel ID ADL3591 I l and ADL359112 Municipality Kenai Peninsula Borough

Section - 2 Township - 8N Range - 14W

ENG FORM 4345, DEC 2014 PREVIOUS EDITIONS ARE OBSOLETE. of 3

17. DIRECTIONS TO THE SITE

Directions to the proposed well and subsea completion:

The proposed jack-up rig, subsea tree, and protective cap will be located near the West Foreland, approximately 65 miles southwest from the Anchorage Public Boat Launch.

18. Nature of Activity (Description of project, include all features)

Please see attached supplement.

19. Project Purpose (Describe the reason or purpose of the project, see instructions)


USE BLOCKS 20-23 IF DREDGED AND/OR FILL MATERIAL IS TO BE DISCHARGED

20. Reason(s) for Discharge Please see attached supplement.

21. Type(s) of Material Being Discharged and the Amount of Each Type in Cubic Yards :

Type Type Amount in Cubic Yards Amount in Cubic Yards

22. Surface Area in Acres of Wetlands or Other Waters Filled (see instructions)

Acres

or

Linear Feet

23. Description of Avoidance, Minimization, and Compensation (see instructions)


ENG FORM 4345, DEC 2014

Type Amount in Cubic Yards

of 3

24. Is Any Portion of the Work Already Complete? 0Yes [RjNo IF YES. DESCRIBE THE COMPLETED WORK

25. Addresses of Adjoining Property Owners, Lessees . Etc., Whose Property Adjoins the Waterbody (if more than can be entered here. please attach a supplemental list).

a. Address- Please see attached supplement.

City- State- Zip-

b. Address-

City- State - Zip-

c. Address-

City- State- Zip-

d. Address-

City - State - Zip-

e. Address-

City - State- Zip-

26. List of Other Certificates or Approvals/Denials received from other Federal. State. or Local Agencies for Work Described in This Application.

IDENTIFICATION AGENCY TYPE APPROVAL* DA TE APPROVED DATE DENIED

NUMBER DATE APPLIED


* Would include but is not restricted to zoning , building , and flood plain permits

27. Application is hereby made for permit or permits to authorize the work described in this application . I certify that this information in this application is complete and accurate. I further certify that I possess the authority to undertake the work described herein or am acting as the duly authorized agent of the

'~/h ~ LJ-'/-1? SIGN~T~~PPLICANT DATE SIGNATURE OF AGENT DATE

The Application~u~t be signed by the person who desires to undertake the proposed activity (applicant) or it may be signed by a duly authorized agent if the statement in block 11 has been filled out and signed.

18 U.S.C. Section 1001 provides that: Whoever, in any manner within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals, or covers up any trick, scheme, or disguises a material fact or makes any false, fictitious or fraudulent statements or representations or makes or uses any false writing or document knowing same to contain any false , fictitious or fraudulent statements or entry, shall be fined not more than $10,000 or imprisoned not more than five years or both.

ENG FORM 4345, DEC 2014 of 3

APPLICATION FOR THE DEPARTMENT OF THE ARMY PERMIT

(33 CFR 325)

TO SUPPLEMENT ENG FORM 4345

October 2016

COOK INLET ENERGY, LLC

Prepared by JACOBS ENGINEERING GROUP INC.

Block 5. APPLICANT'S NAME Conrad Perry Cook Inlet Energy, LLC [email protected]

Block 6. APPLICANT'S ADDRESS 601 W 5th Ave, Suite 310 Anchorage, AK 99501

Block 7. APPLICANT'S PHONE NUMBERS Business Phone: (907) 334-6745 Fax: (907) 334-6735

Block 8. AUTHORIZED AGENT Not applicable

Block 9. AGENT'S ADDRESS Not applicable

Block 10. AGENT'S PHONE NUMBERS Not applicable

Block 12. PROJECT NAME/TITLE Sabre Exploration Drilling and Gas Production

Block 13. NAME OF WATERBODY Cook Inlet, Alaska

Block 14. PROJECT STREET ADDRESS See below for location of project within Cook Inlet

Block 15. LOCATION OF PROJECT Jack-up Rig, Subsea Tree, and Protective Cap: 60°48'57.97"N, 151°41 '49.09"W (NAD 83 coordinates)

Supplement to ENG Form 4345 Page 1 of 14

Block 16. OTHER LOCATION DESCRIPTIONS The jack-up rig, subsea tree, and protective cap components of the Sabre Project will be located within Segment 1 of State of Alaska Oil and Gas Lease Alaska Division of Lands (ADL) number 17602, which is located within the West McArthur River Unit (WMRU). The WMRU is comprised of portions of three tracts leased from the State of Alaska with ADL numbers 17602, 359111 , and 359112. Cook Inlet Energy, LLC (CIE) is the sole working interest owner of the leases within the WMRU.

The well will be directionally drilled to the north, into a lease outside the WMRU. That lease, ADL 18758 Segment 1, is owned by the State of Alaska. CIE is a 70% working interest owner and Hilcorp is a 30% working interest owner in the lease segment.

The applicant is not seeking authorization for the jack-up rig to place its legs on the seafloor at overwinter locations under this permit.

The Section, Township, and Range for the project is:

Jack-up Rig, Subsea Tree, and Protective Cap: Section: 2 Township: 8N Range: 14W Seward Meridian

Block 17. DIRECTIONS TO THE SITE Directions to the Proposed Project Location: From the Anchorage Public Boat Launch, travel southwest following the center of Cook Inlet. The proposed jack-up rig, subs ea tree, and protective cap will be located near the West Foreland, approximately 65 miles southwest from the Anchorage Public Boat Launch.

Block 18. NATURE OF ACTIVITY Project Description The applicant, as the operator of the WMRU, plans to conduct an exploration drilling program commencing in April 2017, to evaluate the Sabre oil and gas reserves within the lease. Drilling activities are on the west side of Cook Inlet, approximately 3 miles offshore in Trading Bay, across from the Kenai Peninsula in South-central Alaska. The operations are expected to take approximately 70 days and will consist of towing a jack-up rig to the location from Seward, AK; drilling one well; support vessel and aircraft activities during drilling; well evaluation including testing if successful ; and well completion, suspension, or abandonment. The rig will be demobilized back to Seward at the conclusion of this program, unless it is contracted by another operator in the Inlet.

The objective of the Sabre Project is to evaluate potential oil and gas reserves . If the evaluation of the prospect is successful, production activities may follow. The applicant plans to use the Spartan 151 jack-up drilling rig (or similar) to conduct drilling and installation operations. The applicant will log, test, and analyze the oil reservoir and then plug and abandon the oil zone. If evaluation of the gas reserves determines development is economical, the applicant plans to install a subsea wellhead and tree on the mud line (subsea

Supplement to ENG Form 4345 Page 2of14

tree). A subsea tree (common in many parts of the world) will allow the well to produce gas via subsea pipelines to shore without the installation of a production platform. The installation of a pipeline or pipelines from the subsea tree to an onshore facility may follow in a subsequent phase of the project, if the well is successful.

The subsea tree will be isolated from kinetic impacts (e.g. wayward vessels, vessel anchors, large pieces of floating ice, etc.) by a steel structure (protective cap) placed over top.

There are three major structural activities to the proposed project with both permanent and temporary structures to be situated offshore:

1) Jack-up drilling rig for exploration and development drilling (temporary offshore structure)

2) Natural gas subsea tree (permanent offshore structure) 3) Protective cap (permanent offshore structure)

These proposed facilities are collocated and are presented in relation to other nearby marine structures in Sheet 1 of 6.

Jack-up Drilling Rig Design The Spartan 151 jack-up drilling rig (jack-up rig), or a similar mobile offshore drilling unit (MODU), will be used for drilling activities. Spartan 151 is an A-1 self-elevating MODU with the following structural dimensions (Sheets 2 and 3 of 6):

• Three triangular truss-type legs, 250-feet long • One triangular shaped main deck, approximately 162-foot x 174-foot maximum length

and width • Cantilever drilling derrick extending 58 feet from one end of the main deck to a height of

147 feet • Helicopter landing deck extending 62 feet from the other end of the main deck • Two boom cranes at heights of 100 and 120 feet


Jack-up Drilling Rig Activities In late March or early April 2017, the Spartan 151 or other MODU will be towed to the Sabre Project site from a nearby Alaskan deep water port by three ocean-going tow vessels. Prior to departure, the MODU will undergo inspections by the U. S. Coast Guard (USCG) and CIE to ensure it is ready for the tow and operations. The tow to the Sabre location is estimated to take a maximum of three days. No stops are anticipated unless unforeseen weather forces the rig into a safe harbor.

Upon nearing the Sabre location, a surveyor will be placed on board to conduct a 360-degree side scan sonar to ensure the drilling location is free of debris and boulders. Divers will be deployed ensure that the areas below the leg cans are free of obstacles that may cause damage. The MODU will be held over the staked well location while final survey readings are taken. Once the area is cleared the legs will be lowered and the MODU will be pinned to the sea bed. Ballast water will be taken on to pre-load the legs. Depending on the rate of settlement, the pre-load process may take between 12 and 36 hours. The pre-load ballast water will be discharged under an Alaska Pollutant Discharge Elimination System (APDES) permit and the MODU jacked up to operating air gap of approximately 20 feet above high tide. The tow vessels will be released and replaced by one or two supply vessels.

Materials will be staged at the Offshore Systems Kenai (OSK) or Arctic Slope Regional Corporation (ASRC) docks near Nikiski, Alaska and loaded onto the supply vessels for transshipment to the MODU. These materials will include potable water, diesel fuel, steel tubulars, drilling tooling, bulk cement, mud materials, and other equipment. They will be transferred by crane or via hoses onto the MODU.

The jack-up rig (or similar MODU) will be temporarily located onsite to perform the exploratory and production drilling activities. It will demobilize upon completion. The MODU is expected to be onsite for approximately 70 days. The applicant does not assume responsibility for obtaining permits required for overwinter storage of the jack-up rig.

Sabre Well-Drilling Activities Before commencing drilling operations, the Alaska Oil and Gas Conservation Commission (AOGCC) will inspect the rig and associated equipment. A 30-inch diameter drive pipe will be installed prior to spudding the well to penetrate the seafloor to a target depth of 125 feet to 150 feet. An impact hammer will be used to drive the 30-inch pipe to the target depth or refusal (defined as exceeding 100 blows per foot) . Minimum penetration is expected to be 75 feet below the seafloor. However, ifrefusal is met prior to reaching 75 feet of penetration, the inside of the 30-inch drive pipe will be washed clean of gravel and sediment to the bottom of the pipe with a drill bit and drill pipe. The drilling fluid returns will flow over the top of the 30-inch drive pipe and into the Inlet if authorized by an APDES permit, or will be containerized if not authorized. Driving will continue until 7 5 feet of penetration or refusal . CIE proposes to drive the drive pipe using a Delmag D62-22 impact hammer (or similar). The D62-22 hammer has impact weight of 6,200 kg and reaches a maximum impact energy of 224 kilonewton-meters at a drop height of 3 .6 meters.


Acoustic measurements of underwater noise from similar installations have found noise levels exceeding the marine mammal harassment and injury levels established by the National Marine Fisheries Service (NMFS) and regulated under the Marine Mammal Protection Act (MMPA). Mitigation of these potential impacts to marine mammals is discussed further in Block 23 .

The 30-inch drive pipe will be secured to the jack-up rig and a flow line will be installed. A 30-inch diverter will be installed and tested according AOGCC regulations. Once the 30-inch drive pipe is placed, the jack-up rig will drill to the target formations.

The jack-up rig will be equipped with a blowout preventer stack appropriate for the formations and expected pressures that will be inspected and tested as required by regulation for exploration of both oil and gas formations .

Drilling cuttings and drilling fluids will be discharged at the site under an APDES permit or containerized and shipped to an appropriate disposal facility. If economically viable gas resources are confirmed upon reaching the target depth and completing the appropriate testing, the portion of the well in the oil-bearing zones below the gas zones will be plugged and permanently abandoned according to AOGCC regulations. The applicant will conduct development and completion of the well. A multi-zone gas completion (tubing, packers, subsurface safety valve, etc.) will be installed in the well. The blowout prevention equipment will be removed and a subsea tree and protective shielding will be installed at the sea floor (discussed further below). The jack-up rig (or similar MODU) will be used in installation of subsea tree and protective cap. If the gas is not economically viable, but the oil is potentially viable, the well may be suspended according to the AOGCC regulations.

Following all installation activities the jack-up rig will begin demobilization by shipping all drilling materials back to the support base. Tow vessels will be secured to the jack-up rig prior to retracting the legs to raise them off the seabed. Once legs are off bottom and the rig is afloat, the legs will be fully retracted and the rig will be towed out of the project area. A post well bottom side scan survey will then be conducted.

If the well is unsuccessful, the well will be permanently abandoned prior to setting the 7" casing according to AOGCC regulations, which includes cutting and removing all casings 10' below the seabed.

Natural Gas Subsea Tree Design Upon development and completion of the well, a wellhead control device known as a production tree will be installed at the surface of the well on the seafloor. This type of "wet" production tree is known as a subsea tree. Subsea completions and subsea trees are common in the North Sea off of Norway and in the Gulf of Mexico and have been successfully installed in depths up to 10,000 feet. A subsea tree is similar to an onshore tree, but with remotely operated valves and remote pressure and temperature sensors.

The water depth at the wellhead location is approximately 30 feet mean lower low water (MLL W). The subsea tree will have the following approximate structural dimensions (Sheet 4 of 6):


• Approximately 8 feet in width at the widest point • Approximately 11 feet in height

The protective cap is by necessity wider and taller in dimension than the subsea tree and determines the final footprint of the structure on the seafloor. However, it will be supported mainly by the subsea tree and four contact points (approximately 4 square feet each) from stabilization legs that will rest on the seabed.

Natural Gas Subsea Tree Installation Activities The pre-fabricated subsea tree will be shipped to one of three ports (Homer, Nikiski, or Anchorage) from an out-of-state fabrication center. The components will be secured to a barge or an offshore supply vessel and transported to the project site. The subsea tree will be submerged from the jack-up rig through a controlled process so that it is positioned over the Sabre # 1 well site. Divers will be on site to position the subsea tree and secure it to the wellhead.

Protective Cap Design The protective cap will be manufactured from steel and will be engineered to withstand the impact of a typical fishing vessel anchors, boulder movement, and other unanticipated impacts.

The protective cap will have the following approximate structural dimensions (Sheets 5 and 6 of6): • 15 feet in diameter at the widest point (or 15 feet wide by 15 feet long) • 20 feet in height

The minimum water level (at the lowest annual tide) is expected to be approximately 6 feet below MLLW or 24 feet at the proposed location (NOAA 2013). The thickness of ice floes in Cook Inlet reaches a normal maximum of about 3 feet. Floes may reach 5 feet in thickness during extreme cold. Therefore, ice floes are not expected to strike or push against the protective cap. In very rare circumstances "stamukhas" or chunks of layered ice greater than 20 feet thick may break free from the mud flats and drift in the Inlet (NOAA 1972). The protective cap is designed to withstand significant impacts from floating objects such as large chunks of ice.

The protective cap will be designed to allow access to the subsea tree for maintenance and control.

Protective Cap Installation Activities After the well is live and subsea tree is installed and operational, the protective steel cap will be lowered from the jack-up rig over top of the subsea tree and mechanically secured in place to the guide posts which are attached to the well.


Block 19. PROPOSED PROJECT PURPOSE The primary purpose of the proposed project is the exploration of natural gas and oil resources in the WMRU. The secondary purpose is the Jong-term production of natural gas from the Sabre #1 well reservoir and transport to energy suppliers. Exploration drilling is planned to begin in April 2017 and installation of the subsea tree and protective cap is planned to begin in July 2017 and will be completed by October 2017.

Block 20. REASONS FOR DISCHARGE No discharge of dredged or fill material are anticipated.

Block 21. TYPES OF MATERIAL BEING DISCHARGED Not applicable

Block 22. SURFACE AREAS OF WETLANDS OR OTHER WATER FILLED Not applicable.

Block 23. DESCRIPTION OF AVOIDANCE, MINIMIZATION, AND COMPENSATION Avoidance: No impacts to wetlands or other non-navigable waters will occur during this project.

A subsea tree will have a smaller footprint on the seafloor than a traditional offshore platform and will not result in a navigational obstacle for smaller vessels .

Minimization: Where impacts to navigable waters of the United States cannot be avoided, they will be minimized.

Prior to placement of the jack-up rig on the seafloor, a high resolution geographical survey (e.g. side scan sonar) of the seafloor will be conducted to ensure the area is clear of any hazards or obstacles. Divers will also be deployed to inspect the area below the legs to ensure no obstacles are present that might damage the legs. These steps will ensure safe placement of the temporary structure onto the seafloor.

If discharge of drilling fluids is allowed under the APDES permit during well construction, the toxicity of the fluids will be minimized by using the least toxic products required to achieve the appropriate fluid properties for the formations and situations encountered. Daily sheen tests will be conducted prior to discharge, and those fluids that exhibit sheen will be containerized and disposed of onshore or in a permitted injection well.

Four listed species that receive protection under the Endangered Species Act of 1973 (ESA) are known to occur within or nearby the project area. They include beluga whales, sea otters, Steller sea lions, and Steller' s eiders . The project is located within the designated critical habitat area for beluga whales. The critical habitat area is divided into two areas (1 and 2) . Area 1 is located north of the North Foreland and Point Possession in northern Cook Inlet. The Sabre Project is located in Area 2, which extends from Area 1 to south of Kalgin Island. Area 2 is primarily used by beluga whales in the fall and winter months, when activities at the project area will be minimal.


The MMP A prohibits the "take" of marine mammals, unless authorized by an incidental harassment authorization (IHA). Harassment of a marine mammal that has the potential to cause a behavioral disturbance is considered a Level B take. Impulsive underwater noise (such as pile driving) in excess of 160 dB is the threshold considered by NMFS at which a Level B take occurs. The applicant will obtain an IHA under the MMPA to allow the disturbance of small number of non-ESA listed species (e.g. harbor seals). The applicant does not intend to harass or disturb listed species, and will employ mitigation measures (e.g. monitoring and shutdown) to prevent takes of listed species.

The applicant proposes to drive a 30-inch conductor to approximately 150 feet below the seafloor using a Delmag D62 or smaller impact hammer. The Delmag D62 hammer has an impact weight of 6,200 kg (13,640 pounds) and reaches a maximum impact energy of 224 kilonewton-meters (165,215 foot-pounds) at a drop height of 3.6 meters (12 feet) . In 2013, underwater noise from impact hammering a 30-inch diameter drive pipe was measured at the Endeavour jack-up rig. The study found noise levels exceeding 160 decibels (dB) up to 1.63 kilometers (disturbance zone), 180 dB to 170 meters (cetacean injury zone), and 190 dB to 55 meters (pinniped injury zone) (BlueCrest 2014). The process of impact hammering the drive pipe is expected to occur intermittently, for a total duration of 10 to 20 hours over one to three days.

Because the Level B, 160 dB isopleth is the largest expected distance at which a take of any type occurs, the applicant proposes to monitor a conservative disturbance zone of 1,800 meters. Monitoring will be conducted by protected species observers (PSOs) on the jack-up rig during all impact hammering.

The applicant proposes to employ the following mitigation measures to prevent (or minimize) harassment of marine mammals during impact hammering:

1. The PSOs will be experienced or will receive training from a qualified marine mammalogist shortly before deployment to the project site.

2. PSOs will have the ability to identify marine mammal species and describe relevant behaviors.

3. Observation shifts for the PSOs will be limited to four hours or less, and alternating shifts will be scheduled to ensure one is on duty at all times.

4. The PSOs will have the authority to call for a shutdown of impact hammering activities if an animal is observed approaching the exclusion zone.

5. The PSOs will observe the exclusion zone for at least one half hour prior to commencing impact hammering.

6. The initiation of an impact hammering session will only commence if the PSO has visibility of the entire exclusion zone and monitors it for the 30 minutes prior. If visibility is lost during hammering, the activity may continue uninterrupted. Presumably, an animal will not purposefully enter the zone of ensonification if the activity is continued.

7. If an interruption of greater than 30 minutes has occurred, visibility must be restored and the exclusion zone must be monitored again for 30 minutes prior to restarting.


8. At the beginning of each hammering session, a soft start or ramp up period will be employed where the impact hammer will strike three blows at 30 percent energy, followed by a one-minute waiting period. This sequence will be repeated three times to allow an animal near or within the exclusion zone time to vacate the area.

For continuous sound, like that expected from drilling or onboard generators, NMFS defines the Level B harassment threshold at 120 dB. In 2011, underwater noise was measured at the Spartan 151 jack-up rig while drilling in Cook Inlet by Marine Acoustics Inc. (MAI). The 2011 MAI study did not measure any continuous noise sources greater than 120 dB emanating from the Spartan 151 at any distance. Some non-continuous sound was measured above 120 dB. Sound measurements were made from 37 meters to nearly 4,000 meters from the rig. The study estimated that noise from the diesel engines (the most significant source of continuous noise on the Spartan 151) is 13 7 dB at 1 meter. Using this baseline, the study estimated the 120 dB isopleth for continuous noise to be 50 meters. The 2013 hydro-acoustic study of the Endeavour measured noise from drilling and diesel generators that did not exceed ambient decibel levels. The Endeavour did have a deep well pump that produced continuous noise above 120 dB up to 260 meters from the rig. The 2011 MAI study did not identify this source of underwater sound on the Spartan 151. For these reasons, the applicant believes that a 50-meter exclusion zone will provide sufficient protection of marine mammals during drilling operations.

A 50-meter exclusion zone is common for in-water work like dredging or excavation activities that do not exceed the Level B threshold for underwater noise. These activities occur daily in Cook Inlet and have not generally required continuous monitoring of exclusion zones by trained PSOs dedicated solely to the task of observation. The ensonified area of a 50 meter radius (radiating outward from a 26-meter radius rig) is less than one hundredth of a square mile. Trading bay is approximately 120 square miles, making the probability of a chance encounter exceedingly small. The continuous, low level noise from drilling and diesel engines would presumably be a deterrent, and is unlikely to startle, or surprise an approaching marine mammal.

During drilling operations, approximately 20 to 30 crew members will be working on the rig at any given time. The applicant proposes to include marine mammal awareness training for all those on board the rig as part of the orientation to the rig's health, safety, and environmental policies. Rig workers will be asked to notify the drilling engineer to suspend drilling and to notify the rig engineer to reduce operation of onboard generators to the extent possible if any marine mammals are sighted in the immediate vicinity of the rig. Sightings will be reported to the environmental manager onboard the rig and documented. A description of the animal or identification of species, the number of animals seen, and the estimated distance from the rig will be included in the sighting reports.

In addition to the mitigation measures proposed above, other impacts to marine mammals during drilling operations will be minimized in several ways.

1. Vessel and air traffic: a. The applicant will educate all small and large vessel captains and owners regarding

the potential presence of the protected species in the vicinity of the vessel routes.


L Education will include presentation of species status, identification of behavioral changes in animals feeling threatened (e.g., increased movements, vocalization, prolonged diving, rapid swimming, calf shielding, etc.), and penalties associated with impacts to the protected species.

IL The importance of minimizing impacts through education, understanding, and behavior modification will be stressed.

iii. Additional crew members may be trained to aid in the detection of Cook Inlet beluga whales and Steller sea lions.

b. Slow vessel speeds (2 to 4 knots) and direct travel routes will be used. c. Vessel operations will be restricted or carefully monitored when there is reduced

visibility, winds greater than 30 knots, or wave heights greater than 6 feet. d. Vessel operators will be asked to reduce speed and, to the extent practical, avoid

multiple changes in direction and speed in the presence of any listed species. If a listed species is observed approaching the vessel route, vessels' engines will be put in neutral and the listed species will be allowed to pass.

e. Vessels will avoid approaching within 100 meters of a protected species . f. Vessels will follow the U. S. Fish and Wildlife Service (USFWS) guidelines for

avoiding vessel impacts to sea otters and the NMFS marine mammal viewing guidelines and regulations. Vessel captains will receive a copy of the guidelines and be educated regarding their implementation and importance.

g. Under no circumstances other than take-off, landing, or in case of an emergency, shall aircraft be operated at an altitude lower than 1,500 feet above sea level.

2. Pollution and Discharges: a. The potential for discharges of refined petroleum products to Cook Inlet from the

jack-up rig and the support vessels will be minimized by implementation of a Spill Prevention, Control, and Countermeasure (SPCC) Plan.

b. Fuel storage will be located in enclosures with a containment capacity of 125 percent of the total volume of the enclosure to prevent spills.

c. All vessels will be equipped with spill kits and absorbent material to immediately contain and remediate any spills.

d. Supplies will be maintained on-hand to respond to the largest possible fuel or oil leak or spill that could result from construction or operation of the drilling rig.

e. Any transfer or bunkering of fuel for offshore activities will be performed dockside or will comply with USCG regulations.

f. All vessels will adhere to USCG regulations regarding visibility, and will maintain stationary positions and slow travel speeds to minimize the risk of collision with other vessels.

g. Drilling and testing fluids will comply with the conditions of the Alaska Pollutant Discharge Elimination general or individual permit.

h. The black water and graywater generated on the jack-up rig will be treated through a marine sanitation device and discharged below the water surface in compliance with the APDES permit.

3. Potential Blowouts: a. The applicant will implement a blowout prevention and response plan to minimize the

potential for an oil or natural gas blowout.


b. The jack-up drilling rig will be equipped with a blowout preventer that will be regularly pressure- and function-tested to meet AOGCC requirements.

Block 24. ALREADY COMPLETED WORK No other work has been completed.

Block 25. ADDRESSES OF ADJOINING PROPERTY OWNERS Table 1 lists the adjoining lessee offshore properties surrounding the WMRU. Table 2 lists the owners of onshore properties adjoining the WMRU.

Table 1 Lessee Properties Adjoining the West McArthur River Unit

AOL Serial No. Owner Lessee Lessee Mailing Address

Cook Inlet Energy, 601 W 51h Ave., Suite 310 LLC 70% Anchorage, AK 99501

18758 Segment 1 State of Alaska Hilcorp Alaska, LLC 3800 Centerpoint Dr., Suite 1400

30% Anchorage, AK 99503

18758 Segments State of Alaska Hilcorp Alaska, LLC

3800 Centerpoint Dr., Suite 1400 2, 3, A, and B Anchorage, AK 99503

17602 Segment 1 State of Alaska Cook Inlet Energy, 601 W 5th Ave., Suite 310 LLC Anchorage, AK 99501

17602 Segments State of Alaska Hilcorp Alaska , LLC

3800 Centerpoint Dr., Suite 1400 2, 3, A, and B Anchorage, AK 99503

392210 Segment State of Alaska Cook Inlet Energy, 601 W 5th Ave., Suite 310

1 LLC Anchorage, AK 99501

Cook Inlet Energy, 601 W 5th Ave., Suite 310

392210 Segment LLC 60% Anchorage, AK 99501 State of Alaska A

ConocoPhillips PO Box 100360 (AT0-2008), Alaska, Inc. 40% Anchorage, AK 99510-0360

C-060324 Cook Inlet Cook Inlet Energy, 601 W 5th Ave., Suite 310 Region , Inc. LLC Anchorage, AK 99501

Table 2 Onshore Property Owners Adjoining the West McArthur River Unit

Kenai Peninsula Borough Parcel ID

22104012

22104015

22104016

Owner Owner Mailing Address

Diocese of Sitka & Alaska PO Box 210569 Anchorage, Orthodox Church AK 99521-0569

Person, Ward E. P.O. Box 1295

Anchor Point, AK 99556

Salamatof Native Association, PO Box 2682 Kenai , AK Inc. 99611


Kenai Peninsula Owner Owner Mailing Address

Borough Parcel ID

22104018 Hilcorp Alaska LLC 13155 Noel Rd. Ste 100

Dallas, TX 75240

22104003

22104044 Bureau of Indian Affairs 3601 C St. STE 1100 22104046 Anchorage, AK 99503-594 7

22104047

22104014 383 Adams Rd. Shelbyville 22104013

Manire, Mace TN 37160-6455

22104019

22104020 Alaska State Department of 550 W ih Ave, STE 650

Natural Resources Anchorage, AK 99501-3576 21126024

22104002 Herring, Page PO Box 1286 Cordova, AK

99574-1286

22104004 Anderson, Christopher M. and PO Box 87 4804

Angie C. Wasilla, AK 99687-4804

22104005 Carlson, Michael 14800 s 1300 w

Bluffdale, UT 84065

Block 26. LIST OF OTHER CERTIFICATIONS OR APPROVALS/DENIALS RECEIVED FROM OTHER FEDERAL, ST ATE, OR LOCAL AGENCIES FOR WORK DESCRIBED IN THIS APPLICATION Table 3 presents the primary permits and authorizations either currently in effect or in the application phase for exploration drilling. The list is not exhaustive of all potential permits or authorizations.

Table 3 Permits/Authorizations for the Sabre Project

Permit/Approval Approval Date

Alaska Department of Environmental Conservation

Alaska Pollutant Discharge Elimination System (APDES) Permit - Individual or General Permit

Expected March 2017 Domestic Wastewater Treatment and Disposal

System Approval (concurrent with APDES)

Minor Air Permit Expected April 2017

Oil Discharge Prevention and Contingency Plan Major amendment approval expected November 2016

Alaska Oil and Gas Conservation Commission

Permit to Drill

Application for Sundry Approval for completion and Expected March 2017 well testing (concurrent with Permit to Drill)

Alaska Department of Natural Resources


Expiration Date

To be determined

To be determined

August 2017

To be determined

Permit/Approval Approval Date

Unit Plan of Operations Expected February 2017

Alaska State Historic Preservation Office

National Historic Preservation Act Section 106 Expected March 2017

Review

National Marine Fisheries Service

Endangered Species Act (ESA) Section 7 Consultation

Magnuson-Stevens Essential Fish Habitat Expected January 2017

(concurrent with ESA)

Marine Mammal Protection Act (MMPA) Incidental Harassment Authorization (IHA) or Letter of Expected March 2017

Concurrence

U.S. Fish and Wildlife Service

Endangered Species Act (ESA) Section 7 Expected January 2017 Consultation

U.S. Environmental Protection Agency

Spill Prevention, Control and Countermeasure Expected March 2017

(SPCC) Plan

U.S. Coast Guard

Vessel and Facility Response Plans Expected March 2017

Private Aids to Navigation Permit

Notice to Mariners Prior to rig movement to

Sabre site


Expiration Date

To be determined

To be determined

March 2018

To be determined

To be determined

To be determined

N/A

REFERENCES BlueCrest (BlueCrest Alaska Operating, LLC). 2014 (September). Cosmopolitan State 2013

Drilling Program Marine Mammal Monitoring and Mitigation 90-day Report. Prepared by Owl Ridge Natural Resource Consultants, LLC.

NOAA (National Oceanic and Atmospheric Administration). 2013 (October). Tides & Currents: Nikiski, AK - Station ID: 9455760. Accessed on 8 September 2016 from https: //tidesandcurrents.noaa.gov/stationhome.html?id=9455760

NOAA. 1972 (August). NOAA Technical Memorandum AR-5: Forecasting Ice in Cook Inlet Alaska.


FIGURES

Sheets 1 through 6

"" 1'iW

l _____ _J__

TRADING BAY STATE GAME

REFUGE

I I I I I

KUSrATAN R/16.J'

i .

! I

I i

i I

I

J ----

Tige r Eye

"'" 15W

; .

. • ! WEST FORELAND

! ' !

::..: .. . .... i

r ~1 A FLA /TS

·-. - . -.... -· ·-~----· _ _[ ____ . __ I

Approximate Dlotance from Sabre Well to Trading Bay Production Facility = 5,256.4 meters.

; Approximate Distance from Sabre Well to West McArthur Production FacllHy= 4,788.8 meters. Approximate Distance from Sabre Well to Dolly Varden Platform = 3,416.8 meters .

151"45'0"W

.... -..----·

TRADING BAY Sf ATE

GAME REFUGE ... ~ .

•

gl--~~~~~~~~~~~~~~~~~~~~~~~~--::--:-~~---, .il *Proposed Sabre 1 Well N 1 inch = 2 miles

Location (July 2016) $ All Locations Are Approximate •Plattorm

• Onsh0<e Facility Common Carrier Pipeline Miles

- Non-Common Gas Pipeline -Non-Common Oil Pipeline NAD 1983 StatePlane Alaska 4, Feet

- Proposed Pipeline

* Inactive Pipeline - NOAA Contours (meters)

C~~~~~ Proposed Well 4k

: :unit Boundaries Trading Bay State Game Management Unit

Applicant: Cook Inlet Energy File No.: Waterway: Cook Inlet Proposed Activity: Exploration drilling & well head installation Sec: 2 T.: SN R.: 14W M. : Seward

Lat. : 60°48'57.97"N Long. :151°41 '49.09"W

JACO es·

LOCATION OF JACK-UP RIG POSITIONED OVER PLATFORM DURING -PRODUCTION DRILLING

DRILL F'LOOR

I 53'-4 1/4"

VARIES 18' ~ 32·-s·--l I

SEA LEVE

250'-3" L I f-_4o' MAX~

WATER DEPTH VARIES

(150' MAX)

VARIES

DR ECO KINGPOST CRANE W/120' BOOM

BAKER MARINE MODEL 900 CRANE W/100' BOOM

VARIES

"ru:::- ~o: ~~_J

BASELINE or HULL

Jack-up Rig Elevation View

~p~l~~.nt: Cook Inlet Energy

aterway : Cook Inlet oposed Activity: Exploration dri lling & well head installation

ec .. 2 T .. SN R. : 14W M.: Seward at. : 60°48'57.9T'N Long.: 151°41'49.09"W heet 2 of 6 Date: 09/16/2016

25'-6 3/4" HEU/JACK

18'

JACO as·

26'-3!'

55'

'--40' 174'-o!·----------i

32'-6'

30'

~ORILLING

CA

i& 'k· r~ 25'tj ¥

27'-9' 120'----------i 26'-3!'

SHAKER HOUSE

3

BAKER MARINE MODEL 900 CRANE WITH 100' BOOM

D t::::;

II ol I PIPE RACK P /S

,...-----,0 ,''

10'-3' 16'-0 114'

32'

162'-6~· I I 10' 10' I I AY~~-t 64'

55'

26'-3!'

)5~ 2~5' " f : .. 4 4..,

r :ANTILEVER 30' BEAM P/S

HYDRAULIC PUMP HOUSE P/S

LOCATION OF DRILL RIG

7'-6'

Jack-up Rig Plan View

Applicant: Cook Inlet Energy File No.: Waterway: Cook Inlet Proposed Exploration drilling & well head installation Sec.: 2 T .. SN R. : 14W M .. Seward Lat.: 60°48'57.97"N Long.: 151°41'49.09'W Sheet 3 of 6 Date: 09/1612016

32'

P-TANKS

JACO es·

SEA LEVEL

MEAN LOWER LOW WATER 30ft

MUD LINE

10.3 ft

Sub .. ea Tree Elevation View

Applicant: Cook Inlet Energy File No.: Waterway: Cook Inlet

TOTAL WIDTH 8 FT

Proposed Activity: Exploration drilling & well head installation Sec.: 2 T.: BN R.: 14W M.: Seward Lat.: 00·4a·s1.9rN Long.: 1s1 ·41·49_09·w • •~oes· Sheet 4 of 6 Date: 09/16/2016 ..,,14~

15 ft

0 '

c5

' ' ' ' '

, , , , ,

' ' '

, ,

' ' ' ' '

~~~~~~~1stt

,

'

,

'

, , , ,

' ' '

, , , ,

, , Guide Posts

' ' ' ' ' '

b

Protective Cap Plan View

~~~l~~~t: Cook Inlet Energy

aterway: Cook Inlet reposed Activity: Exploration drilling & well head installation ec.: 2 T.: SN R. : 14W M .. Seward at.: 60°48'57.9T'N Long.:151°41'49.09"W heet 5 of 6 Date: 09/16/2016

JACO es·

SEA LEVEL

WATER DEPTH 10 ft ------------------------------------------ '1t ----------- -- ----------------------------------------------------------------------------------------·

The minimum water level (at the lowest annual tide) is expected to be approximately 6 feet below MLLW or 24 ft at the proposed location (NOAA2013)

MEAN LOWER LOW WATER (MLLW)

30 ft

MUD LINE

TREE

WELL HEAD

CONDUCTOR

15 ft

I 6 ft

11 ft

3 ft

PROTECTIVE CAP

GUIDE POSTS

Protective Cap Elevation View

pplicant: Cook Inlet Energy file No ..

20 ft

rivaterway: Cook Inlet

~Proposed Activity: Exploration drilling & well head installation

ec.: 2 T .. SN R. : 14W M.: Seward at.: 60"48'57.97"N Long.:151 "41 '49.09"W heel 6 of 6 Date: 09/1612016

JACO es·

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