20170111Notice of Filing in Utah Docket.pdf

•
•
•
Jenniffer Nelson Clark (794 7)
333 S. State Street
PO Box45433
Salt Lake City, Utah 84145-0433
[phone]
(801 )324-5935 (fax)
Jenniffer. C lark(a).questar .com
Attorney for Questar Gas Company
REC-!VED
7011 JA.J I I AM 10: 4 I
, · ;."1J:;l.lC
· -COtU !SSl ON
OsT-&-lb-D l
BEFORE THE PUBLIC SERVICE COMMISSION OF UTAH
IN THE MATTER OF THE
APPLICATION OF QUESTAR GAS
COMPANY FOR APPROVAL OF THE
VERMILLION ACQUISITION AS A
WEXPROIIPROPERTY
Docket No. 17-057-01
APPLICATION
(Redacted Version)
Questar Gas Company (Questar Gas or Company) submits this application to the
Utah Public Service Commission (Utah Commission) for an order approving inclusion of
recently acquired properties within the Trail Unit, Whiskey Canyon Unit, Canyon Creek
Unit, and Kinney Unit (collectively, the Vermillion Acquisition) as Wexpro II properties
pursuant to the Wexpro II Agreement. The Trail Unit and Kinney Unit portion of the
acquisition are within the existing Wexpro I Development Drilling Area. The Canyon
Creek Unit and Whiskey Canyon Unit are adjacent to, but not within the existing Wexpro
I Development Drilling Area. Simultaneously with this filing, Questar Gas is applying
for an order approving the Vermillion Acquisition from the Wyoming Public Service
Commission (Wyoming Commission). Under the terms of the Wexpro II Agreement,
which was approved by the Utah Commission on March 28, 2013, and the Wyoming
Commission on April 11, 2013, Questar Gas is required to apply for approval to include
properties acquired by Wexpro, within a Wexpro I Development Drilling area, as Wexpro
1
II properties. Accordingly, Questar Gas is required to seek approval to include the Trail •
Unit and the Kinney Unit properties within the Wexpro II Agreement. Questar Gas
voluntarily offers the Whiskey Canyon Unit and the Canyon Creek Unit properties for
approval into the Wexpro II Agreement. Questar Gas offers the following in support of
this Application:
BACKGROUND
1. On September 12, 2012, Wexpro Company, Questar Gas Company, the
Utah Division of Public Utilities (Division), and the Wyoming Office of Consumer
Advocate entered into the Wexpro II Agreement, subject to the approval of both the Utah
Commission and the Wyoming Commission. On March 28, 2013, the Utah Commission
issued a Report and Order in Docket No. 12-057-13 approving the Wexpro II
Agreement. On April 11 , 2013, the Wyoming Commission held a public hearing and
public deliberations upon the matter in Docket No. 30010-123-GA-12 and rendered a
bench order approving the Wexpro II Agreement. On October 16, 2013, the Wyoming
Commission issued a formal Memorandum Opinion, Findings and Order Approving the
Wexpro II Agreement in Docket No. 30010-123-GA-12.
2. On November 5, 2013, Questar Gas filed an application seeking approval
of the Trail Unit Acquisition as a Wexpro II property before the Utah and Wyoming
Commissions. The Trail Unit Acquisition was an acquisition within a Wexpro I
Development Drilling Area and under the terms of the Wexpro II Agreement Questar Gas
was required to bring the property before both the Utah and Wyoming Commissions for
approval.
2
•
•
•
•
3. On December 23, 2013, the Company, Division, Utah Office of Consumer
Services (OCS), and the Wyoming Office of Consumer Advocates (OCA), entered into a
Settlement Stipulation for the Trail Unit Acquisition. The Utah Commission issued a
report and order approving the Trail Unit Settlement Stipulation on January 17, 2014, and
the Wyoming Commission issued an order approving the Trail Unit Settlement
Stipulation on January 27, 2014.
4. The Trail Unit Settlement Stipulation provides that Wexpro generally
designs its annual drilling program to provide cost-of-service production that is, on
average, at or below the current 5-year Rockies-adjusted NYMEX price (5-Year Forward
Curve). The Trail Unit Settlement Stipulation also provides that the Company and
Wexpro will manage combined cost-of-service production from Wexpro I and Wexpro II
properties to Questar Gas at or below 65% .
5. On August 31, 2015, Questar Gas filed an application seeking approval of
the Canyon Creek Acquisition Area as a Wexpro II property before the Utah and
Wyoming Commissions. The Canyon Creek Acquisition Area was an acquisition within
a Wexpro I Development Drilling Area and under the terms of the Wexpro II Agreement
Questar Gas was required to bring the property before both the Utah and Wyoming
Commissions for approval.
6. On October 26t11, 2015, the Company, Division, OCS, and the OCA,
entered into a Settlement Stipulation for the Canyon Creek Acquisition. The Utah
Commission issued a report and order approving the Canyon Creek Settlement
Stipulation on November 17, 2015, and the Wyoming Commission issued an order
• approving the Canyon Creek Settlement Stipulation on February 24, 2016.
3
7. The Canyon Creek Settlement Stipulation provides clarification and
enhancements of the previous Wexpro II agreements and stipulations. First, it clarifies
the calculation of the 5-Year Forward Curve established in the Trail Unit Settlement
Stipulation. Second, it provides that all post-2015 development drilling and capital
investment would earn the commission-allowed rate of return. It also provides that Dry
Hole and non-commercial well costs will be charged and shared on a 50/50 basis between
Questar Gas customers and Wexpro. It provides for sharing of cost savings from post-
2015 volumes when the annual overall cost of service per decatherm is less than the
market price per decathe1m. It provides that Wexpro will manage its production from
Wexpro I and Wexpro II wells to 55% of the IRP demand beginning in the 2020 IRP
year. Finally, it provides that Questar Gas will maintain on its website, a current copy of
all relevant documents governing the cost-of-service arrangement between Wexpro and
Questar Gas.
VERMILLION ACQUISITION
8. On April 16, 2015 Wexpro Company closed on the acquisition of
additional interests in the natural gas producing properties within the Kinney Unit. These
interests are within the Development Drilling Areas defined in the Wexpro Agreement.
9. On December 15, 2015 Wexpro Development Company (WDC) closed on
an acquisition of additional interests in natural-gas producing properties in the Vermillion
Basin in the Trail Unit, Whiskey Canyon, and Canyon Creek properties. These properties
are shown in Exhibit B. The Whiskey Canyon Unit lies directly adjacent to the Canyon
Creek Unit. The Trail Unit interests are located within Development Drilling Areas as
4
•
•
•
•
•
defined in the Wexpro Agreement. The Whiskey Canyon Unit and the Canyon Creek
Unit are adjacent to the Development Drilling Areas.
10. The Wexpro II Agreement governs the requirements for Wexpro and
Questar Gas relating to this purchase. Section IV-1 provides that "Wexpro will acquire
oil and gas properties or undeveloped leases at its own risk." Section IV-l(a) provides
that "Questar Gas shall apply to the Utah and Wyoming Commissions for approval to
include under this Agreement any oil and gas property that Wexpro acquires within the
Wexpro I development drilling areas." Section IV-1 (b) provides that "Questar Gas may
apply for Commission approval to include these (properties outside the development
drilling areas) properties under this agreement."
11. Wexpro has purchased the Vermillion Acquisition at its own risk and is
selling production from these wells on the open market pending the outcome of a
decision by the Utah and Wyoming Commissions to determine whether this acquisition
should be included as a Wexpro II property. If the Vermillion Acquisition is approved as
a Wexpro II property, then the Acquisition Costs (as defined in the Wexpro II
Agreement) will be adjusted downward for the depreciation of the gas sold from the time
Wexpro closed on the Vermillion Acquisition until Commission approval of this
acquisition as a Wexpro II property.
SUPPORTING INFORMATION
12. Section IV-2 of the Wexpro II Agreement provides that Questar Gas will
file an application with the Utah and Wyoming Commissions requesting approval to
include proposed properties under the Wexpro II Agreement and the application shall
• include the supporting information that is attached to this Application as Exhibits A
5
through P. The Company notes that the Vermillion Acquisition includes four separate
properties that may be analyzed independently of each other. Accordingly, this
Application includes some exhibits that show properties individually, and where
applicable, an aggregate exhibit that shows the properties combined. These are included
in Exhibits A, C, D, E, F, G, H, J, L, 0, and P. In each exhibit, the first portion of the
exhibit (C-1 for example) is for the Trail property. The second, third, and fourth exhibits
are for Whiskey Canyon, Canyon Creek, and Kinney, respectively (for example, Exhibits
C-2, C-3, C-4). The fifth exhibit, where applicable, shows the properties combined (for
example, Exhibit C-5).
Exhibit A: Purchase price and gas pricing assumptions
Exhibit A provides the gas and oil pricing assumptions used in the Vermillion
•
acquisition. Pages one and two show the gas and oil pricing assumptions that were used •
to determine the bid price for Trail, Whiskey Canyon, and Canyon Creek. Pages three
and four show the gas and oil pricing assumptions that were used to determine the market
value for Kinney. A Rockies basis adjustment was applied to derive the spot market
price where the properties are located. Exhibit A-1 provides the gas and oil pricing
assumptions from PIRA and Cambridge Energy Research Associates (CERA) that were
available in November 2016 for the Rockies. The Company is providing this more recent
information given the market price change that occurred in the gas and oil market
following the purchase of the Vermillion Acquisition.
Confidential Exhibit B: Locations of current and future wells
The locations of current and future wells are depicted on a schematic attached to
this Application as Exhibit B. Exhibit B shows that there are 196 current wells (including •
6
•
•
•
all units as well as working interest and overrides) and 117 planned future wells given
current data.
Confidential Exhibit C: Historical production and remaining reserves of
current wells
Exhibit C is broken into five exhibits showing the current wells, their cumulative
production to date and their estimated remaining reserves. Exhibit C-1 shows
information pertaining to Trail wells, Exhibit C-2 shows information pertaining to
Whiskey Canyon wells, Exhibit C-3 shows information pertaining to Canyon Creek
wells, and Exhibit C-4 shows inf01mation pertaining to Kinney wells. Exhibit C-5 shows
the combined information for all four properties.
Confidential Exhibit D: Forecasted production/reserves for future wells
Exhibit D contains five spreadsheets listing the future wells that are planned to be
drilled in each of the properties, and their estimated production/reserves for the life of the
wells. Exhibit D-1 shows planned wells in the Trail unit, Exhibit D-2 shows planned
wells in the Whiskey Canyon unit, Exhibit D-3 shows planned wells in the Canyon Creek
unit, and Exhibit D-4 shows planned wells in the Kinney unit. Exhibit D-5 shows the
combined information for all four properties.
Confidential Exhibit E: Forecasted decline curves for current and future
wells
Exhibit E-1 is an 85-page exhibit showing a rate time plot for each current well,
as well as the anticipated type curve for the future development wells in the Trail Unit.
Exhibit E-2 is a 7-page exhibit showing the same information for the Whiskey Canyon
Unit. Exhibit E-3.1 is a 10-page exhibit showing the same information for the portion of
7
the Canyon Creek Unit that lies outside the Mesaverde Participating Area. Exhibit E-3.2 •
is a 121-page exhibit showing the same information for the portion of the Canyon Creek
Unit containing overriding royalty interests within the Mesaverde Participating Area.
Exhibit E-4 is a 9-page exhibit containing the same information for the Kinney Unit.
Confidential Exhibit F: Estimated drilling ( capital) cost per well
Exhibit F provides a detailed estimate of capital cost to drill a future well. Exhibit
F-1 shows the estimated cost to drill a Trail well to be $1.5 million. Exhibit F-2 shows
the estimated cost to drill a Whiskey Canyon well to be $1.5 million. Exhibit F-3 is a 2-
page exhibit that shows the estimated cost to drill a vertical Canyon Creek well to be $1. 7
million, and a horizontal Canyon Creek well to be $3. 7 million. Exhibit F-4 shows the
estimated cost to drill a Kinney well to be $1.5 million.
Confidential Exhibit G: Estimated operating expenses for current and future
wells
Exhibit G is a summary of the estimated operating expenses for current and future
wells within the Vermillion Acquisition. Exhibits G-1 through G-4 reflect costs
associated with Trail, Whiskey Canyon, Canyon Creek, and Kinney wells, respectively.
The information shown is based on historical data and W expro' s experience operating
and maintaining wells in the Vermillion Acquisition Area.
Confidential Exhibit H: Gross working interest and net revenue interest for
current and future wells
Exhibit H (Exhibit H-1 , Exhibit H-2, Exhibit H-3, Exhibit H-4, Exhibit H-5)
shows the working interest and net revenue interest for the current wells and the future
wells for each of the properties.
8
•
•
•
•
•
Exhibit I: Estimated production tax per Dth for current and future wells
Exhibit I is a summary of the estimated production tax per Dth for current and
future Vermillion Acquisition wells. Production taxes vary based on the market price of
natural gas. Therefore, included in this summary table are natural gas prices ranging
from $2.00 to $6.00 per Dth.
Confidential Exhibit J: Estimated gathering/processing costs per Dth for
current and future wells
Exhibit J is a summary of the estimated gathering/processing costs per Dth for
current and future Vermillion Acquisition wells, by property (Exhibits J-1 through J-4).
Confidential Exhibit K: Description of any land lease, title, and legal issues
related to real property
With respect to the Trail Unit, Whiskey Canyon Unit, and Canyon Creek Unit,
Exhibit K contains (1) a confidential copy of the Purchase and Sale Agreement by and
between QEP Energy Company, Wexpro Development Company, and Wexpro Company
(as operator); (2) a Purchase and Sale Agreement for the Trail, Whiskey Canyon and
Canyon Creek properties; (3) the Assignment for the Trail, Whiskey Canyon and Canyon
Creek properties; (4) the Agreement for the Kinney property; and (5) the Assignment for
the Kinney property.
Confidential Exhibit L: Forecasted long-term cost-of-service analysis
Exhibit L-1 is a 16-page summary showing the estimated cost-of-service analysis
over a 25-year period over the Trail Unit acquisition. Exhibits L-2, L-3 and L-4 show
the same information for Whiskey Canyon, Canyon Creek and Kinney, respectively .
Exhibit L-5 shows a combination of all four. For illustrative purposes, in each of the
9
referenced exhibits, cost-of-service is shown on a cumulative and annual basis with both
allocated and incremental general and administrative (G&A) costs. When Wexpro makes
drilling or acquisition decisions, an incremental analysis on G&A includes only the
additional costs that are incurred because of the new well or acquisition.
Pages 1 through 4 on each exhibit show the cumulative cost of service with
allocated G&A; pages 5 through 8 show the cumulative cost of service with incremental
G&A; pages 9 through 12 show the annual cost of service with allocated G&A; and
pages 13 through 16 show the annual cost of service with incremental G&A. For
comparison purposes the estimated production over the 25-year period has also been
included in each graph.
Confidential Exhibit M: Impact on Questar Gas' gas supply
•
Exhibit M is a bar chart showing the estimated production levels for Wexpro I and •
Wexpro II production, and the incremental Vermillion Acquisition production for the
next five (5) years.
Confidential Exhibit N: Geologic data
Exhibit N is an 8-page exhibit highlighting the geology of the Vermillion
Acquisition Area. Page 1 is an index map showing the location of the Vermillion
Acquisition Area in Southwest Wyoming. On the detailed map, the structural contours
depict the subsurface configuration of the top of the Mesaverde Group. The Mesaverde
is a closed anticlinal structure (upside-down bowl) within the Vermillion Acquisition
Area. This closed structure has served to trap the natural gas in the Mesaverde Group
within the Canyon Creek and Trail Units.
10 •
•
•
•
Page 2 is a Late Cretaceous stratigraphic column for the Vermillion Acquisition
Area. Shown from top to bottom are the different rock formations encountered in the
Vermillion Acquisition wells. The Lance Formation and Fox Hills Sandstone are non­
productive intervals. The Lewis Shale provides the top seal for the gas accumulation in
the Mesaverde Group. This seal is necessary to trap the gas in the anticlinal structure
depicted on the previous page. The red symbols to the right of the diagram depict the
productive members of the Mesaverde Group in the Vermillion Acquisition Area. The
Almond Formation is the most prolific of the productive intervals in recent wells. The
Canyon Creek and Trail formations were the original productive intervals when the fields
were discovered in the 1950s.
Page 3 is a type log for the fields. Open-hole logs (Log) are run in the wells in the
Vermillion Acquisition Area prior to running casing to ensure that the expected
productive sands are present in the well. This is a representative Log for the fields. At
the far left of the Log the Lewis Shale is depicted. Downhole, to the right, the Almond
Formation is the first zone encountered in the Mesaverde Group. The upper portions of
the Almond Formation are a shore face (beach to slightly offshore) depositional
environment. Deeper in the Almond, the environment turns to a coastal plain with river
channels, overbank mudstones, and coal seams. Below the Almond Formation is the
Canyon Creek Member, which is a stack of river channel and point bar sands. The non­
productive Rusty Shale separates the Canyon Creek Member from the Trail Member.
The Trail Member also contains stacked river channels and point bar sands. Together
these three members of the Mesaverde Group comprise the entire productive interval in
the Vermillion Acquisition Area .
11
Page 4 is a table of petrophysical values derived from the Log mentioned in the •
previous paragraph and from core data. This data shows that within the Mesaverde
Group the porosity (open space in the rock) is 10-12%. The water saturation value is the
percent of the porosity occupied by water. Average water saturation in the Almond
formation is approximately 43% and in the Canyon Creek and Trail formations it is 28%
on average. Core permeability averages 0.1 millidarcies. The porosity and permeability
values make the field a high-quality tight-gas accumulation.
Page 5 is a Net Reservoir map showing the Almond shoreface (beach) sands. The
net reservoir thickness of the shoreface sands is the underlying data for the contour map.
The net reservoir thickness values are posted on the map at the existing well locations.
These values are used to project sand thicknesses to areas where wells have not been
drilled. The NW-SE orientation of the shoreline is visible on these maps. The thickest
shoreface sands are present in the northern part of the Canyon Creek Acquisition Area.
The sands thin slightly to the southwest and northeast. Production data shows that the
thinning has only a minor effect on well productivity.
Page 6 is a Net Reservoir map showing the Almond fluvial sands. These sands
trend perpendicular to the shoreface sands and represent rivers that were flowing to the
coast and feeding the shoreline. The fluvial sands are thickest in the central and northern
parts of the Trail Unit and thin to the south. In terms of well productivity, this zone likely
contributes only a small amount of hydrocarbons.
Page 7 is a Net Pay map of the Canyon Creek Member. The Canyon Creek sand
becomes more water saturated down structure. This is depicted in the thinning of the Net
Pay toward the edges of the unit. The Canyon Creek sand was produced extensively in
12
•
•
•
•
•
the early life of the field and has some pressure depletion. It is still a minor contributor to
some new wells. Completing in water-bearing portions of this member is avoided by
using extensive open-hole log evaluations.
Page 8 is a Net Pay map of the Trail Member. The Trail sand behaves somewhat
like the Canyon Creek sand, but is a lower quality reservoir and not as productive. The
Trail Member is a thick, stacked sand package that has many internal complexities that
compartmentalize the reservoir. This heterogeneity may require extensive application of
modem technology to fully develop the resource.
The four Net Pay maps depicted in pages 5-8 represent the entire productive
interval in the Mesaverde Group. The nature of this vertical stack of productive gas
sands provides low-risk future development drilling .
Confidential Exhibit 0: Future development plan for the proposed
properties
Exhibit O is a summary of future wells planned to be drilled from 2017 through
2022 within the Vermillion Acquisition Area.
Highly-Confidential Exhibit P: Other data as requested or as may be
appropriate to an evaluation of the property
Exhibit P includes the Highly Confidential economic models for each property
(Exhibits P-1 through P-4) and a Highly Confidential economic model for all four
combined (Exhibit P-5). Wexpro used these models in the cost-of-service analysis of the
Vermillion Acquisition and they will be provided to each Commission, the OCS, the
Division, and the OCA electronically .
13
Questar Gas has filed the sworn testimony of Barrie L. McKay (QGC Exhibit
2.0) and Brady B. Rasmussen (QGC Exhibit 3.0) in support of this Application. As set
forth in Mr. McKay's testimony, approval of the Vermillion Acquisition as a Wexpro II
property would provide an opportunity for Questar Gas's customers to receive cost-of­
service gas that is estimated to provide lower-cost gas over a 25-year period.
Additionally, as set forth in Mr. Rasmussen's testimony, Wexpro will continue to manage
its current production and future drilling programs at or below the 5-Year Forward Curve
and to manage combined cost-of-service production from Wexpro I and Wexpro II
properties to Questar Gas at or below the thresholds established in the Canyon Creek
Acquisition.
PRAYER FOR RELIEF
Based upon the foregoing, and supporting testimony, Questar Gas respectfully
requests that the Utah Commission approve each of the properties in the Vermillion
Acquisition as Wexpro II properties.
DATED this 9th day of January, 2017.
Respectfully submitted,
QUESTAR GAS COMPANY
Jenniffer Nelson Clark (7947)
Attorneys for Questar Gas Company
333 S. State Street
PO Box 45433
Salt Lake City, Utah 84145-0433
[phone]
14
•
•
•
•
•
•
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of the Application was served upon
the following persons by email on January tf~';Ol 7:
Patricia E. Schmid
Justin Jetter
Assistant Attorney General
160 East 300 South
P.O. Box 140857
Salt Lake City, UT 84114-0857
[e-mail]
[e-mail]
Chris Parker
Director
Division of Public Utilities
160 East 300 South
P.O. Box 146751
Salt Lake City, UT 84114-6751
[e-mail]
Bryce Freeman
Administrator
Wyoming Office of Consumer
Advocate
2515 Warren Avenue, Suite 304
Cheyenne, WY 82002
[e-mail]
15
Robert J. Moore
Assistant Attorney General
160 East 300 South, 5th Floor
P.O. Box 140857
Salt Lake City, Utah 84114-0857
[e-mail]
Michele Beck
Director
Office of Consumer Services
160 East 300 South
P.O. Box 146782
Salt Lake City, UT 84114-6782
[e-mail]
I van Williams
Senior Counsel
Wyoming Office of Consumer Advocate
2515 Warren Avenue, Suite 304
Cheyenne, WY 82002
I [e-mail]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit A
Page 1 of 4 • Five-Year Forward Curve used to determine bid value for
Trail, Whiskey Canyon, Canyon Creek
A B C
Gas Price ($/MMBTU) Oil Price ($/bbl)
Date Rockies Basis 1/ NYMEXWTI 1/
1 Jan-15 $2.86 $36.37
2 Feb-15 $2.53 $39.74
3 Mar-15 $2.44 $36.32
4 Apr-15 $2.27 $42.88
5 May-15 $2.63 $47.91
6 Jun-15 $2.59 $48.48
7 Jul-15 $2.68 $40.10
8 Aug-15 $2.68 $34.24
9 Sep-15 $2.60 $34.24
10 Oct-15 $2.62 $34.63
11 Nov-15 $2.77 $35.26
12 Dec-15 $2.94 $35.96
13 Jan-16 $3 .04 $36.56
14 Feb-16 $3.00 $37.23 • 15 Mar-16 $2 .90 $37.75
16 Apr-16 $2 .65 $38.24
17 May-16 $2.65 $38.78
18 Jun-16 $2 .68 $39.36
19 Jul-16 $2.79 $39.76
20 Aug-16 $2.76 $40.00
21 Sep-16 $2.70 $40.37
22 Oct-16 $2.77 $40.76
23 Nov-16 $2.92 $41.16
24 Dec-16 $3.11 $41.72
25 Jan-17 $3.22 $41.84
26 Feb-17 $3.20 $42.14
27 Mar-17 $3.12 $42.46
28 Apr-17 $2.77 $42.78
29 May-17 $2.72 $43.09
30 Jun-17 $2.75 $43.41
31 Jul-17 $2.82 $43.67
32 Aug-17 $2.81 $43.94
33 Sep-17 $2.79 $44.22
34 Oct-17 $2.82 $44.51
35 Nov-17 $3.11 $44.80
36 Dec-17 $3.30 $45.10 • 37 Jan-18 $3.41 $45.25
38 Feb-18 $3.39 $45.44
Questar Gas Company
Docket No. 17-057-01
Five-Year Forward Curve used to determine bid value for Application Exhibit A
Trail, Whiskey Canyon, Canyon Creek Page 2 of 4 • A B C
Gas Price ($/MMBTU) Oil Price ($/bbl)
Date Rockies Basis 1/ NYMEXWTI 1/
39 Mar-18 $3.30 $45.65
40 Apr-18 $2.87 $45.87
41 May-18 $2.83 $46.11
42 Jun-18 $2.86 $46.36
43 Jul-18 $2.95 $46.52
44 Aug-18 $2.95 $46.71
45 Sep-18 $2.92 $46.91
46 Oct-18 $2.96 $47.12
47 Nov-18 $3.23 $47.34
48 Dec-18 $3.42 $47.58
49 Jan-19 $3.53 $47.70
50 Feb-19 $3.51 $47.83
51 Mar-19 $3.41 $47.96
52 Apr-19 $3.02 $48.11
53 May-19 $3.02 $48.27
54 Jun-19 $3.05 $48.45
55 Jul-19 $3.09 $48.51
56 Aug-19 $3.11 $48.62 • 57 Sep-19 $3.10 $48.77
58 Oct-19 $3.12 $48.96
59 Nov-19 $3.20 $49.17
60 Dec-19 $3.39 $49.40
61 Jan-20 $3.52 $49.48
62 Feb-20 $3.51 $49.58
63 Mar-20 $3.45 $49.69
64 Apr-20 $3.15 $49.82
65 May-20 $3.15 $49.95
66 Jun-20 $3.18 $50.10
67 Jul-20 $3.21 $50.13
68 Aug-20 $3.24 $50.20
69 Sep-20 $3.23 $50.32
70 Oct-20 $3.27 $50.46
71 Nov-20 $3.35 $50.63
72 Dec-20 $3.53 $50.82
74 Jan-21 Prices held flat after this point at $3.52 and $50.10.
1/ Gas prices are a Rockies price adjusted NYMEX forward index as of August 3, 2015.
Oil prices are NYMEX WTI forward strip less $11.20 as of August 3,2015. •
Questar Gas Company
Docket No. 17-057-01
Five-Year Forward Curve used to determine bid value for Application Exhibit A
• Kinney Page 3 of 4
A B C
Gas Price ($/MMBTU) Oil Price ($/bbl)
Date Rockies Basis 1/ NYMEXWTI 2/
75 Jan-14 $4.25 $83.29
76 Feb-14 $4.45 $80.58
77 Mar-14 $5.21 $85.69
78 Apr-14 $4.39 $85.37
79 May-14 $4.46 $86.83
80 Jun-14 $4.33 $86.49
81 Jul-14 $4.47 $89.56
82 Aug-14 $3.97 $87.26
83 Sep-14 $3.80 $81.95
84 Oct-14 $3.80 $79.03
85 Nov-14 $3.61 $73.76
86 Dec-14 $3.73 $68.48
87 Jan-15 $3.74 $68.20
88 Feb-15 $3.56 $67.98
89 Mar-15 $3.28 $68.06
90 Apr-15 $3.22 $67.98 • 91 May-15 $3.26 $68.16
92 Jun-15 $3.31 $67.76
93 Jul-15 $3.34 $68.06
94 Aug-15 $3.32 $67.98
95 Sep-15 $3.37 $67.95
96 Oct-15 $3.58 $67.94
97 Nov-15 $3.80 $67.98
98 Dec-15 $3.91 $67.78
99 Jan-16 $3.89 $68.01
100 Feb-16 $3.78 $68.00
101 Mar-16 $3.37 $68.00
102 Apr-16 $3.39 $68.00
103 May-16 $3.45 $68.01
104 Jun-16 $3.48 $67.78
105 Jul-16 $3.50 $68.00
106 Aug-16 $3 .49 $68.00
107 Sep-16 $3.45 $68.02
108 Oct-16 $3.81 $68.06
109 Nov-16 $3 .98 $68.10
110 Dec-16 $4.12 $67.84
111 Jan-17 $3.89 $68.07
112 Feb-17 $3.77 $68.01
113 Mar-17 $3.53 $67.96 • 114 Apr-17 $3.56 $67.95
115 May-17 $3.59 $67.96
Questar Gas Company
Docket No. 17-057-01
Five-Year Forward Curve used to determine bid value for Application Exhibit A
Kinney Page 4 of 4 • A B C
Gas Price ($/MMBTU) Oil Price ($/bbl)
Date Rockies Basis 1/ NYMEXWTI 2/
116 Jun-17 $3.63 $67.98
117 Jul-17 $3.64 $67.87
118 Aug-17 $3.87 $67.83
119 Sep-17 $3.93 $67.84
120 Oct-17 $4.00 $67.88
121 Nov-17 $4.18 $67.94
122 Dec-17 $4.31 $68.03
123 Jan-18 $4.18 $67.98
124 Feb-18 $4.05 $67.95
125 Mar-18 $3.79 $67.92
126 Apr-18 $3.83 $67.89
127 May-18 $3.86 $67.87
128 Jun-18 $3.89 $67.86
129 Jul-18 $3.90 $67.84
130 Aug-18 $3.90 $67.86
131 Sep-18 $3.92 $67.89
132 Oct-18 $4.01 $67.94 • 133 Nov-18 $4.18 $68.01
134 Dec-18 $4.31 $67.63
135 Jan-19 Prices held flat after this point at $4.31 and $67.63.
2/ Gas prices are a Rockies price adjusted NYMEX forward index as of October 27, 2014.
Oil prices are 85% of the NYMEX WTI forward strip as of October 27, 2014.
•
Questar Gas Company
Docket No. 17-057-01
Application Exhibit A-1
Prices Used for Wexpro II Application • Page 1 of 2
A B C D E
Gas Price ($/MMBTU) Oil Price ($/bbl)
Date Henry Hub 1/ Rockies Basis Opal 2/ NYMEXWTI
1 Nov-16 $2.76 -$0.68 $2.08 $50.43
2 Dec-16 $2.85 $0.19 $3.04 $46.43
3 Jan-17 $3.03 $0.24 $3.27 $47.01
4 Feb-17 $3 .06 $0.16 $3.22 $47.57
5 Mar-17 $3.05 -$0.03 $3.02 $48.13
6 Apr-17 $2.96 -$0.17 $2.79 $48.66
7 May-17 $2.98 -$0.22 $2.76 $49.09
8 Jun-17 $3.02 -$0.21 $2.81 $49.49
9 Jul-17 $3.06 -$0.11 $2.95 $49.98
10 Aug-17 $3.05 -$0.09 $2.96 $49.99
11 Sep-17 $3.03 -$0.24 $2.79 $50.44
12 Oct-17 $3.05 -$0.34 $2.71 $50.63
13 Nov-17 $3.11 -$0.23 $2.87 $50.83
14 Dec-17 $3.26 -$0.23 $3.02 $50.84
15 Jan-18 $3.35 -$0.08 $3.27 $51.17 • 16 Feb-18 $3.32 -$0.22 $3.10 $51.30
17 Mar-18 $3.26 -$0.61 $2.65 $51.43
18 Apr-18 $2.85 -$0.35 $2.50 $51.56
19 May-18 $2.82 -$0.31 $2.51 $51.70
20 Jun-18 $2.83 -$0.26 $2.57 $51.85
21 Jul-18 $2.85 -$0.14 $2.71 $51.96
22 Aug-18 $2.85 -$0.10 $2.75 $52.08
23 Sep-18 $2.85 -$0.10 $2.74 $52.21
24 Oct-18 $2.87 -$0.17 $2.70 $52.35
25 Nov-18 $2.93 -$0.18 $2.75 $52.50
26 Dec-18 $3.07 $0.01 $3.07 $52.85
27 Jan-19 $3.17 $0.02 $3.20 $52.75
28 Feb-19 $3.14 $0.05 $3.20 $52.83
29 Mar-19 $3.09 -$0.12 $2.97 $52.91
30 Apr-19 $2.79 -$0.18 $2.61 $52.99
31 May-19 $2.79 -$0.37 $2.41 $53.08
32 Jun-19 $2.82 -$0.36 $2.46 $53.18
33 Jul-19 $2.85 -$0.12 $2.73 $53.22
34 Aug-19 $2.86 -$0.15 $2.72 $53.29
35 Sep-19 $2.86 -$0.34 $2.52 $53.38
36 Oct-19 $2.89 -$0.38 $2.51 $53.49
37 Nov-19 $2.94 -$0.18 $2.76 $53.61
38 Dec-19 $3.08 $0.05 $3.13 $53.75
39 Jan-20 $3.19 $0.19 $3.38 $53.81 • 40 Feb-20 $3.15 $0.30 $3.45 $53.88
41 Mar-20 $3.08 $0.19 $3.28 $53.96
42 Apr-20 $2.79 $0.37 $3.15 $54.06
43 May-20 $2.78 $0.05 $2.83 $54.17
Questar Gas Company
Docket No. 17-057-01
Application Exhibit A-1
Prices Used for Wexpro II Application
Page 2 of 2 •
A B C D E
Gas Price ($/MMBTU) Oil Price ($/bbl)
Date Henry Hub 1/ Rockies Basis Opal 2/ NYMEXWTI
44 Jun-20 $2.81 -$0.15 $2.66 $54.29
45 Jul-20 $2.85 -$0.16 $2.69 $54.31
46 Aug-20 $2.88 -$0.12 $2.76 $54.36
47 Sep-20 $2.88 -$0.15 $2.73 $54.44
48 Oct-20 $2.92 -$0.17 $2.75 $54.53
49 Nov-20 $2.99 -$0.05 $2.94 $54.64
50 Dec-20 $3.14 $0.17 $3.31 $54.78
51 Jan-21 $3.27 $0.33 $3.60 $54.82
52 Feb-21 $3.23 $0.31 $3.54 $54.88
53 Mar-21 $3.17 $0.11 $3.28 $54.95
54 Apr-21 $2.87 $0.29 $3.16 $55.04
55 May-21 $2.86 $0.06 $2.93 $55.15
56 Jun-21 $2.89 -$0.15 $2.74 $55.28
57 Jul-21 $2.93 -$0.17 $2.76 $55.28
58 Aug-21 $2.96 -$0.16 $2.80 $55.31
59 Sep-21 $2.97 -$0.31 $2.66 $55.37 • 60 Oct-21 $3.00 -$0.30 $2.70 $55.46
61 Nov-21 $3.00 -$0.04 $2.96 $55.58
62 Dec-21 $3.00 $0.28 $3.28 $55.16
63 Jan-22 Opal prices held flat after this point at $3.03 and $55.16 for WTI.
1/ Gas prices use an average of the CERA and PIRA price forecasts as of November 01, 2016.
Oil prices us the NYMEX WTI forward strip as of November 01, 2016.
2/ Gas transportation differential of$ -0.085 from Opal to Vermillion.
Oil transportation differential of$ -8.20 from WTI to SW WS at Vermillion.
•
•
•
•
non-Confidential -Redacted Version
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit B
•
•
•
non-Confidential -Redacted Version
Historical production and remaining reserves of current Trail wells 1/
A C D
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20 REDACTED
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
so
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-1
G H
non-Confidential -Redacted Version
Historical production and remaining reserves of current Trail wells 1/
A C D
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-1
G H
73
74
75
76
77
78
79
80
81 REDACTED
1/
•
•
•
•
•
•
non-Confidential -Redacted Version
Historical production and remaining reserves of current Whiskey Canyon wells 1/
1
2
3
4
1/
A B C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-2
G H
•
•
•
non-Confidential -Redacted Version
Historical production and remaining reserves of current Canyon Creek wells 1/
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
A C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-3
Page 1 of 2
G H
non-Confidential -Redacted Version
Historical production and remaining reserves of current Canyon Creek wells 1/
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
1/
A B C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-3
Page 2 of 2
G H
•
•
•
non-Confidential -Redacted Version
• Historical production and remaining reserves of current Kinney wells 1/
•
•
2
3
4
5
6
7
1/
A C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-4
G H
• Historical production and remaining reserves of current wells 1/
A
4
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31 • 32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68 • 69
70
71
72
73
74
non-Confidential -Redacted Version
C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-5
Page 1 of 3
G H
Historical production and remaining reserves of current wells 1/
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
A
non-Confidential -Redacted Version
C D
REDACTED
Que~arGasCompany
Docket No. 17-057-01
Application Exhibit C-5
Page 2 of 3
G H
•
•
•
•
•
•
non-Confidential -Redacted Version
Historical production and remaining reserves of current wells 1/
A C D
149
150
151
152
153
154
155 REDACTED
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209 REDACTED
210
211
212
213
214
1/
Questar Gas Company
Docket No. 17-057-01
Application Exhibit C-5
Page 3 of 3
G H
• Forecast reserves for future Trail wells
A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22 • 23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52 • 53
54
55
56
non-Confidential -Redacted Version
B C D E
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit D-1
Page 1 of 2
G
Forecast reserves for future Trail wells
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
A
non-Confidential -Redacted Version
B C D E
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit D-1
Page 2 of 2
G
•
•
•
•
•
•
non-Confidential -Redacted Version
Forecast reserves for future Whiskey Canyon wells
A B C D E
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit D-2
G
•
•
•
non-Confidential -Redacted Version
Forecast reserves for future Canyon Creek wells
A B C D E
1
2
3
4
5
6
7
8 REDACTED 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Questar Gas Company
Docket No. 17-057-01
Application Exhibit D-3
G
• Forecast reserves for future Kinney well
A
1
•
•
non-Confidential -Redacted Version
B C D E
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit 0-4
F G
• Forecast reserves for future wells
A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24 • 25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
so
51
52
53
54
55
56 • 57
58
59
60
61
non-Confidential -Redacted Version
B C D E
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit D-5
Page 1 of 2
G
Forecast reserves for future wells
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
A
non-Confidential -Redacted Version
B C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit D-5
Page 2 of 2
G
•
•
•
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibits E-1 through E-4
The following E Exhibits are redacted:
Exhibit E-1
Exhibit E-2
Exhibit E-3.1
Exhibit E-3.2
Exhibit E-4
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14 • 15
16
17
18
19
20
21
22
23
24
25
26
•
A
non-Confidential -Redacted Version
Estimated Drilling Capital Cost per Well
Trail Vertical
B
REDACTED
C
Questar Gas Company
Docket 17-057-01
Application Exhibit F-1
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15 • 16
17
18
19
20
21
22
23
24
25
26
•
A
non-Confidential -Redacted Version
Estimated Drilling Capital Cost per Well
Whiskey Canyon Vertical
B
REDACTED
C
Questar Gas Company
Docket 17-057-01
Application Exhibit F-2
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14 • 15
16
17
18
19
20
21
22
23
24
25
26
•
A
non-Confidential -Redacted Version
Estimated Drilling Capital Cost per Well
Canyon Creek Vertical
B C
Questar Gas Company
Docket 17-057-01
Application Exhibit F-3.1
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14 • 15
16
17
18
19
20
21
22
23
24
25
26
•
A
non-Confidential -Redacted Version
Estimated Drilling Capital Cost per Well
Canyon Creek Horizontal
B
REDACTED
C
Questar Gas Company
Docket 17-057-01
Application Exhibit F-3.2
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15 • 16
17
18
19
20
21
22
23
24
25
26
•
A
non-Confidential -Redacted Version
Estimated Drilling Capital Cost per Well
Kinney Vertical
B
REDACTED
C
Questar Gas Company
Docket 17-057-01
Application Exhibit F-4
•
•
•
1
2
3
non-Confidential -Redacted Version
Questar Gas Company
Docket 17-057-01
Application Exhibit G-1
Estimated Operating Expenses for Current and Future Trail Wells
A B
REDACTED
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket 17-057-01
Application Exhibit G-2
Estimated Operating Expenses for Current and Future Whiskey Canyon Wells
1
2
3
A B
REDACTED
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket 17-057-01
Application Exhibit G-3
Estimated Operating Expenses for Current and Future Canyon Creek Wells
1
2
3
A B
REDACTED
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket 17-057-01
Application Exhibit G-4
Estimated Operating Expenses for Current and Future Kinney Wells
1
2
3
A
Expense Type
B
Expense Amount
REDACTED
•
•
•
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
so
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
A
non-Confidential -Redacted Version
C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-1
Page 1 of 2
73
74
75
76
77
78
79
80
81
82
1/
A
non-Confidential -Redacted Version
C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-1
Page 2 of 2 •
•
•
•
•
•
1
2
3
4
5
1/
A
non-Confidential -Redacted Version
B C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-2
•
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27 • 28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
so
51
52
53
54
55
56
57
58
59
60 • 61
62
63
64
65
66
non-Confidential -Redacted Verision
A B C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-3
Page 1 of 2
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
1/
A
non-Confidential -Redacted Verision
B C D
REDACTED
E
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-3
Page.
F
•
•
• A
1
2
3
4
5
6
7
8
•
•
non-Confidential -Redacted Version
B C D
REDACTED
E
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-4
•
•
•
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
so
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
A
non-Confidential -Redacted Version
B C D
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-5
Page 1 of 4
non-Confidential -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-5
Page 2 of 4 • A B C D
73
74 REDACTED 75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103 • 104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140 • 141
142
143 ocnA.rTcn 144
•
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174 • 175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211 • 212
213
214
215
216
non-Confidential -Redacted Version
A B C D
I\LLIM\., I LL.I
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-5
Page 3 of 4
217
218
219
1/
2/
A
non-Confidential -Redacted Version
C D
Questar Gas Company
Docket No. 17-057-01
Application Exhibit H-5
Page 4 of 4 •
•
•
•
•
•
Questar Gas Company
Docket No. 17-057-01
Application Exhibit I
Estimated Production Tax per Dth for Current and Future Wells 1/
A B
Gas PriceLDth TaxLDth
1 $2.00 $0.25
2 $2.50 $0.31
3 $3.00 $0.37
4 $3.50 $0.44
5 $4.00 $0.50
6 $4.50 $0.56
7 $5.00 $0.62
8 $5.50 $0.68
9 $6.00 $0.75
1/lncludes Ad Valorem, Severance & Conservation taxes
2/Tax rates are applied to taxable value which is gross value less gathering/transportation
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit J-1
REDACTED
•
•
•
non-Confidential • Redacted Version
Questar Gas Company
Docket No. I 7-057-01
Application Exhibit J-2
REDACTED
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit J-3
REDACTED
•
•
•
non-Confidential -Redacted Version
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit J-4
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Exhibit K Pages 1-205 are REDACTED
lj s ompany non-CONFIDENTIAL -Redacted Version (§ m C
KEC le e . 17-057-01
WHEN RECORDED RETURN TO:
Wexpro Development Company
333 So. State Street
PO Box 45003
Salt Lake City, Utah 84145
Attention: Michael Thatcher
A.P~fl~tion Exhibit K JAN 1 1 1:Yage 206 of 309
WEXPRO COMPANY
BRADY B. RASMUSSEN
ASSIGNMENT AND BILL OF SALE
STATE OF WYOMING
COUNTY OF SWEETWATER
§
§
§
This ASSIGNMENT AND BILL OF SALE (this "Assignment"), dated December 15,
2015 (the "Closing Date"), but effective as of 7:00 a.m. (Mountain Time) on July 1, 2015 (the
"Effective Time"), is between QEP Energy Company, a Texas corporation ("Assignor") whose
address is 1050 17th Street, Suite 800, Denver, CO 80265, and Wexpro Development Company,
a Utah corporation ("Assignee") whose address is 333 South State Street, Salt Lake City, UT
84111. Assignor and Assignee are each, individually, referred to herein as a "Party" and,
collectively, as the "Parties."
Capitalized terms used but not defined herein shall have the respective meanings set forth
in that certain Purchase and Sale Agreement (the "Purchase Agreement"), dated as of November
4, 2015, between Assignor, Assignee and Wexpro Company ("WexproCo"), as operator of the
Trail Unit and the Canyon Creek Unit.
As of the Closing Date, the Parties and WexproCo, as operator of the Trail Unit and the
Canyon Creek Unit, have entered into that certain Joint Use Agreement dated as of the Closing
Date (the "Joint Use Agreement').
Section 1.
Time.
Assignment. The assignment herein shall be deemed effective as of the Effective
For Ten Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Assignor does hereby forever GRANT, BARGAIN,
SELL, CONVEY, ASSIGN, TRANSFER, SET OVER AND DELIVER to Assignee all of
Assignor's right, title and interest, as of the Effective Time and excluding any right, title and
interests acquired by Assignor after the Effective Time, in and to the assets described in Section
1 (a) through Section I (h) below, subject to the terms and reservations hereof and of the Purchase
Agreement and specifically LESS AND EXCEPT the Excluded Assets (as defined hereinafter)
( collectively, the "Assets"):
(a) the oil and gas leases of Assignor (together with any and all other right, title and
interest of Assignor in and to the leasehold estates created thereby subject to the terms,
conditions, covenants and obligations set forth in such leases and/or on Exhibit A-1, Exhibit A-2
or Exhibit A-3, as applicable), described on (i) Exhibit A-1, subject to any reservations or depth
restrictions described on Exhibit A-1 (Assignor's interest in such leases and other right, title and
ll!~~~I IIJJl~~~Hllll]~IIJl!l:~~ll~l l~WI~ Ill) ~Jl134 .BK# 1212 PG# ~~4
~f~VEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 1 ot 38
•
•
•
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 207 of 309
interest as so limited, the "Trail Leases"), (ii) Exhibit A-2, subject to any reservations or depth
restrictions described on Exhibit A-2 (Assignor's interest in such leases and other right, title and
interest as so limited, the "CC Leases"), and (iii) Exhibit A-3, subject to any reservations or
depth restrictions described on Exhibit A-3 (Assignor's interest in such leases and other right,
title and interest as so limited, the "WC Leases"), in each case with respect to the Conveyed
Depths only in and to such leases and other right, title and interest (the Trail Leases, the CC
Leases and the WC Leases, collectively as so limited, the "Leases");
(b) all rights and interests in, under or derived from all unitization agreements in
effect with respect to any of the Leases and the units created thereby, in each case, INS OF AR
and only insofar as such rights and interests cover the Conveyed Depths (such rights and
interests of Assignor as so limited, the "Units");
(c) the wells set forth on (i) Exhibit B-1 (Assignor's interest in such wells, the "Trail
Wells"), (ii) Exhibit B-2 (Assignor's interest in such wells, the "CC Wells"), and (iii) Exhibit B-3
(Assignor's interest in such wells, the "WC Wells"), in each case with respect to the Conveyed
Depths only (the Trail Wells, the CC Wells and the WC Wells, collectively as so limited, the
"Wells"); and all Hydrocarbons produced therefrom or allocated thereto from and after the
Effective Time (including all Hydrocarbons in storage or existing in pipelines, plants and/or
tanks (including inventory) as of the Effective Time);
( d) to the extent that they may be assigned, all Applicable Contracts and all rights
thereunder;
(e) to the extent that they may be assigned and subject to the Joint Use Agreement, a
non-exclusive undivided interest in all permits, licenses, servitudes, easements and rights-of-way
to the extent used primarily in connection with the ownership or operation of any of the Leases,
Wells, Units or other Assets;
(f) subject to the Joint Use Agreement, all equipment, machinery, fixtures and other
personal, movable and mixed property, operational and nonoperational, used solely in connection
with the Wells, including pipelines, gathering systems, manifolds, well equipment, casing,
tubing, pumps, motors, fixtures, machinery, compression equipment, flow lines, processing and
separation facilities, pads, structures, materials and other items primarily used in the operation
thereof;
(g) all Imbalances relating to the Assets; and
(h) copies of the following, to the extent primarily relating to Assignor's ownership
and operation of the Assets and in Assignor's or its Affiliates' possession: all title records; title
opinions; well logs; well tests; well files; mud logs; directional surveys; core reports; daily
drilling records; machinery and equipment maintenance files; health, environmental and safety
2
REJ1~~~111Jm~~w111~11J111n1l1~,1~1J1J1~111n11~134 BK# 1212 PG# ~~5
STEVEN DALE DAVIS, CLERK al SWEETWATER COUNTY, WY Page 2 of 38
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 208 of 309
information and records; production and accounting records in Excel format reflecting current
ownership decks, well master files, division of interest files, Working Interest owner name and
address files and revenue and joint interest billing account information; Tax records ( other than
with respect to Income Taxes); all Applicable Contracts; and all files regarding the Applicable
Contracts and related files.
As used in this Assignment, "Conveyed Depths" means from the surface of the earth
down to the stratigraphic equivalent of the base of the Mesaverde formation found at a measured
depth of 10,112 feet and a true vertical depth of 10,098 feet as found in the Canyon Creek 74
well (API # 49-037-26756), located in the NWSE of Section 4, Tl2N-RIOI W, and "Retained
Depths" means all depths below the stratigraphic equivalent of the base of the Mesaverde
formation found at a measured depth of 10,112 feet and a true vertical depth of 10,098 feet as
found in the Canyon Creek 74 well (API # 49-037-26756), located in the NWSE of Section 4,
Tl2N-Rl01 W.
EXCEPTING AND RESERVING to Assignor, however, as to each of the Assets
described in Section I (a) through Section 1 (h),
(a) (i) Assignor's record title to the Federal and State Leases constituting any of the
Trail Leases, the CC Leases and the WC Leases, (ii) Assignor's operating rights in and to the
Trail Leases, the CC Leases, the WC Leases, the Trail Wells, the CC Wells and the WC Wells
insofar and only insofar as such cover rights attributable to the Retained Depths, (iii) all rights
and interests in, under or derived from all unitization agreements in effect with respect to any of
the Trail Leases, the CC Leases and the WC Leases, and the units created thereby, in each case,
insofar and only insofar as such cover rights attributable to the Retained Depths, and (iv) the
wells set forth on Exhibit C;
(b) subject to the Joint Use Agreement, a sub-surface, non-exclusive easement in and
through the Conveyed Depths for drilling, exploratory, geological, geophysical and operational
purposes to the extent necessary in connection with the ownership, exploration, development and
operation of the Retained Depths, but not for any purpose that would cause production in such
easement, or cause unreasonable subsurface interference with existing production, from the
Conveyed Depths (including perforation, open hole completion, fracture operations, or other
stimulation operations within the Conveyed Depths);
(c) subject to the Joint Use Agreement, a non-exclusive undivided interest in all
permits, licenses, servitudes, easements and rights-of-way and Applicable Contracts to the extent
used in connection with the ownership or operation of the Retained Depths;
(d) a non-exclusive undivided interest in all Contracts to which Assignor is a party or
by which the Assets are bound, in each case, to the extent relating to the Retained Depths;
3
REJ!~~~r,,1,m~~w,11~11J11,~l1l1~, 1~~w~ 1111 JJl134 BK# 1212 PG# ~~6
STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Page 3 ol 38
•
•
•
•
•
non-CONFIDENTIAL-Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 209 of 309
(e) subject to the Joint Use Agreement, all equipment, machinery, fixtures and other
personal, movable and mixed property, operational and nonoperational, primarily attributable to
or used in connection with the properties described in clause (a) of this definition of "Excluded
Assets," including pipelines, gathering systems, manifolds, well equipment, casing, tubing,
pumps, motors, fixtures, machinery, compression equipment, flow lines, processing and
separation facilities, pads, structures, materials and other items primarily used in the operation
thereof;
(f) all of Assignor's corporate minute books, financial records and other business
records that relate to Assignor's business generally (including the ownership and operation of the
Assets);
(g) to the extent that they do not relate to the Assumed Obligations for which
Assignee is providing indemnification under the Purchase Agreement, all trade credits, all
accounts, all receivables of Assignor and all other proceeds, income or revenues of Assignor
attributable to the Assets and attributable to any period oftime prior to the Effective Time;
(h) to the extent that they do not relate to the Assumed Obligations for which
Assignee is providing indemnification under the Purchase Agreement, Assignor's right with
respect to all claims and causes of action of Assignor arising under or with respect to any
Contract that are attributable to periods of time prior to the Effective Time (including claims for
adjustments or refunds);
(i) to the extent that they do not relate to the Assumed Obligations for which
Assignee is providing indemnification under the Purchase Agreement, all rights and interests of
Assignor (i) under any policy or agreement of insurance or indemnity, (ii) under any bond or (iii)
to any insurance or condemnation proceeds or awards arising, in each case, from acts, omissions
or events or damage to or destruction of property;
(j) Assignor's rights with respect to all Hydrocarbons produced and sold from the
Assets with respect to all periods prior to the Effective Time;
(k) all claims of Assignor or its Affiliates for refunds of, credits attributable to, loss
carry forwards with respect to or similar Tax assets relating to (i) Asset Taxes attributable to any
period (or portion thereof) prior to the Effective Time, (ii) Income Taxes, (iii) any Taxes
attributable to the Excluded Assets or (iv) any other Taxes relating to the ownership or operation
of the Assets that are attributable to any period (or portion thereof) prior to the Effective Time;
(1) all of Assignor's personal computers and associated peripherals and all of
Assignor's radio and telephone equipment;
4
REJ!~mr11Jm[~u11111~11J11m1i1~,1~~~1[111w1~134 BK# 1212 PG# ~~7
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 4 of 38
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 210 of 309
(m) all of Assignor's proprietary computer software, patents, trade secrets, copyrights,
names, trademarks, logos and other intellectual property;
(n) all documents and instruments of Assignor that may be protected by an attorney-
client privilege or any attorney work product doctrine;
( o) all data of Assignor that cannot be disclosed to Assignee as a result of
confidentiality arrangements under agreements with Third Parties;
(p) all audit rights of Assignor arising under any of the Applicable Contracts or
otherwise with respect to any period prior to the Effective Time or to any of the Excluded Assets,
except for any Imbalances assumed by Assignee;
(q) (i) all geophysical and other seismic and related technical data and information
relating to the Assets which Assignor may not disclose, assign or transfer under its existing
agreements and licenses without making any additional payments or incurring any liabilities or
obligations and (ii) all geophysical and other seismic and related technical data and information
owned by Assignor relating to the Assets set forth on Exhibit C;
(r) correspondence between Assignor or any of its representatives and documents
prepared or received by Assignor or its Affiliates, in each case, with respect to any of the
prospective purchasers or the transactions contemplated by the Purchase Agreement;
(s) any offices, office leases and any personal property located in or on such offices
or office leases;
(t) any Hedge Contracts;
(u) any debt instruments of Assignor;
(v) all of Assignor's personnel files and records;
(w) the monies held by Assignor for which the Purchase Price was adjusted pursuant
to Section 3.3(b)(vii) of the Purchase Agreement; and
(x) any assets described in Section I (d) or Section I (e) that are not assignable
( collectively, the "Excluded Assets").
TO HA VE AND TO HOLD the Assets to Assignee and its successors and assigns,
forever, subject, however, to the covenants, terms and conditions set forth herein and in the
Purchase Agreement, and subject to the Permitted Encumbrances.
Section 2. Special Warranty of Title.
5
REJ11~~~111m~~m 111111~11J111:~~l1~11~~w~ 11~ l1Jl134 BK# 1212 PG# ~~8
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 5 of 38
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 211 of 309
(a) Subject to the prov1s1ons of the Purchase Agreement, Assignor warrants
Defensible Title, without duplication, to (i) the Wells set forth on Exhibit B-1, Exhibit B-2 and
Exhibit B-3 (subject to the depth restrictions set forth on Exhibit A-1, Exhibit A-2 or Exhibit A-3,
as applicable, and limited to any currently producing formations), and (ii) the Leases set forth on
Exhibit A-1, Exhibit A-2 and Exhibit A-3 (subject to the depth restrictions set forth on Exhibit A­
l, Exhibit A-2 or Exhibit A-3, as applicable, and limited to the Target Formation). unto Assignee
against every Person whomsoever lawfully claiming or to claim the same or any part thereof by,
through or under Assignor or its Affiliates, but not otherwise, subject, however, to the Permitted
Encumbrances. This special warranty of title will continue for the period commencing as of the
Closing Date and ending at 5 p.m. Mountain Time on the one (1) year anniversary thereof (the
"Survival Period"). Except with respect to any liability of Assignor for any claim asserted in
writing by Assignee to Assignor in accordance with Section 11.1 ( c) of the Purchase Agreement
on or before the expiration of the Survival Period for breach of such special warranty, such
special warranty shall cease and terminate at the end of such Survival Period. For all purposes of
this Assignment, Assignee shall be deemed to have waived, and Assignor shall have no further
liability for, any breach of Assignor's special warranty of title set forth in this Section 2 that
Assignee fails to assert by a Title Defect Notice given to Assignor in accordance with Section
11.l(c) of the Purchase Agreement on or before the expiration of the Survival Period. For the
avoidance of doubt, neither Assignee nor any of its Affiliates shall have any right to assert any
breach of Assignor's special warranty of title set forth in this Section 2 to the extent that an
• adjustment to the Purchase Price or the Final Price, as applicable, has been made for such matter.
•
(b) Recovery on Assignor's special warranty of title set forth in this Section 2 shall be
no greater than the Allocated Value of any Lease or Well set forth in Schedule 3.8 to the
Purchase Agreement. Breaches of Assignor's special warranty are not subject to any threshold
or deductible provided in the Purchase Agreement. Assignor shall be entitled to offset any
amount owed by Assignor for a breach of its special warranty of title with respect to an Asset by
the amount of any Title Benefits with respect to such Asset as to which Assignor gives Assignee
gives notice after the Closing Date.
Section 3. Disclaimers of Warranties.
(a) Except as and to the limited extent expressly set forth in Section 2 hereof or
Article IV or Section 11.l(b) of the Purchase Agreement, (i) Assignor makes no
representations or warranties, express, statutory or implied, and (ii) Assignor expressly
disclaims all liability and responsibility for any representation, warranty, statement or
information made or communicated ( orally or in writing) to Assignee or any of its
Affiliates, employees, agents, consultants or representatives (including any opinion,
information, projection or advice that may have been provided to Assignee by any of
Assignor and its affiliates, and all of its and their respective equityholders, partners,
members, directors, officers, managers, employees, agents and representatives) .
6
REJ!~~~r11Jm[~ui1111~11i11m1t1~11~~w~11ij~l134 BK# ,212 PG# ~~9 STEVEN DALE DAVIS, CLERK cl SWEETWATER COUNTY, WY Page 6 cl 38
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 212 of 309
(b) Except as and to the limited extent expressly represented otherwise in Section
2 hereof or Article IV or Section 11.l(b) of the Purchase Agreement, and without limiting
the generality of the foregoing, Assignor expressly disclaims any representation or
warranty, express, statutory or implied, as to (i) title to any of the Assets, (ii) the contents,
character or nature of any report of any petroleum engineering consultant, or any
engineering, geological or seismic data or interpretation relating to the Assets, (iii) the
quantity, quality or recoverability of Hydrocarbons in or from the Assets, (iv) any
estimates of the value of the Assets or future revenues to be generated by the Assets, (v) the
production of or ability to produce Hydrocarbons from the Assets, (vi) the maintenance,
repair, condition, quality, suitability, design or marketability of the Assets, (vii) the content,
character or nature of any information memorandum, reports, brochures, charts or
statements prepared by Assignor or Third Parties with respect to the Assets, (viii) any
other materials or information that may have been made available to Assignee or its
Affiliates, or its or their respective employees, agents, consultants, representatives or
advisors in connection with the transactions contemplated by this Assignment and the
Purchase Agreement or any discussion or presentation relating thereto and (ix) any implied
or express warranty of freedom from patent or trademark infringement. Except as and to
the limited extent expressly represented otherwise in Section 2 hereof or Article IV or
Section 11.l(b) of the Purchase Agreement, Assignor further disclaims any representation
or warranty, express, statutory or implied, of merchantability, freedom from latent vices or •
defects, fitness for a particular purpose or conformity to models or samples of materials of
any of the Assets, rights of a purchaser under appropriate statutes to claim diminution of
consideration or return of the purchase price, it being expressly understood and agreed by
the Parties that Assignee shall be deemed to be obtaining the Assets in their present status,
condition and state of repair, "AS IS" and "WHERE IS" with all faults or defects (known
or unknown, latent, discoverable or undiscoverable), and that Assignee has made or caused
to be made such inspections as Assignee deems appropriate.
(c) Except for the representation in Section 4.16 of the Purchase Agreement,
Assignor has not and will not make any representation or warranty regarding any matter
or circumstance relating to Environmental Laws, the release of materials into the
environment or the protection of human health, safety, natural resources or the
environment, or any other environmental condition of the Assets, and nothing in this
Assignment, the Purchase Agreement or otherwise shall be construed as such a
representation or warranty. Assignee shall be deemed to be taking the Assets "AS IS" and
"WHERE IS" with all faults for purposes of their environmental condition, and Assignee
has made or caused to be made such environmental inspections as Assignee deems
appropriate.
(d) Assignor and Assignee agree that, to the extent required by applicable Law
to be effective, the disclaimers of certain representations and warranties contained in this
Section 3 are "CONSPICUOUS" disclaimers for the purpose of any applicable Law.
7
EJ!~~~IIIJm~~Ullllj~IIJl!lnlll~ll~Wl~llljlijl134 BK# 1212 PG# ~~o
~TEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 7 of 38
•
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 213 of 309
Section 4. Subrogation of Covenants and Warranties. To the extent transferable, Assignee
shall be and is subrogated to all covenants and warranties of title by Assignor's predecessors in
title ( other than Assignor's Affiliates) heretofore given or made to Assignor with respect and to
the extent applicable to the Assets.
Section 5. Assumed Obligations. Subject to the terms of the Purchase Agreement, Assignee
assumes and agrees to fulfill, perform, pay and discharge (or cause to be timely fulfilled,
performed, paid or discharged) (a) all obligations and Liabilities, known or unknown, arising
from, based upon, related to or associated with the Assets, regardless of whether such obligations
or Liabilities arose prior to, on or after the Effective Time, including obligations and Liabilities
relating in any manner to the use, ownership or operation of the Assets, including obligations to
(i) furnish makeup gas and/or settle Imbalances according to the terms of applicable gas sales,
processing, gathering or transportation Contracts, (ii) pay Working Interests, royalties, overriding
royalties and other interest owners' revenues or proceeds attributable to sales of Hydrocarbons,
including those held in suspense (including those amounts for which the Purchase Price was
adjusted pursuant to Section 3.3(b)(viii) of the Purchase Agreement), (iii) Decommission the
Assets, (iv) clean up and/or remediate the Assets in accordance with applicable Contracts and
Laws, (v) perform all obligations applicable to or imposed on the lessee, owner or operator under
the Leases and the Applicable Contracts, or as required by Law, (vi) Environmental Conditions,
Environmental Defects and Assignee's Environmental Liabilities, and (vii) Liabilities arising in
connection with the operation by Assignee (or its Affiliates) of the Assets operated by Assignee,
and (b) all obligations and Liabilities, known or unknown, arising from, based upon, related to or
associated with Assignee's compliance (or failure thereof) with the terms and requirements of
the Bishop Litigation Settlement to the extent relating to the post-Closing operations of the
Assets.
Section 6. Further Assurances. Assignor and Assignee agree to take further actions and to
execute, acknowledge and deliver all further documents as are reasonably requested by the other
Party for carrying out the purposes of this Assignment.
Section 7. Purchase Agreement and Joint Use Agreement. This Assignment is subject to and
delivered under the terms and conditions of the Purchase Agreement and the Joint Use
Agreement. If any provision of this Assignment is construed to conflict with any provision of
the Purchase Agreement or the Joint Use Agreement, the provisions of the Purchase Agreement
or the Joint Use Agreement shall be deemed controlling to the extent of that conflict.
Section 8. Wexpro Stipulation and Agreement. This Assignment, as it relates to certain
interests as noted on the attached Exhibits A-1 and A-2 within the Canyon Creek Unit and Trail
Unit, is subject to the terms of that certain Wexpro Stipulation and Agreement dated October 14,
1981, but effective August 1, 1981, between Mountain Fuel Supply Company, WexproCo, the
Utah Department of Business Regulation, Division of Public Utilities, the Utah Committee of
Consumer Services, and the Staff of the Wyoming Public Service Commission .
8
RECl'!~~w11Jm~~n11,111l,1J1J1nil1~11~~w~11ijm~,34 BK# ,2,2 PG# ~£1 STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 8 of 38
non-CONFIDENTIAL-Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 214 of 309
Section 9. Successors and Assigns. This Assignment shall bind and inure to the benefit of
the Parties and their respective successors, assigns and transferees.
Section 10. Governing Law; Disputes.
(a) Except to the extent that the Laws of the State of Wyoming are mandatorily
applicable to this Assignment, this Assignment and any claim, controversy or dispute arising
under or related to this Assignment or the transactions contemplated hereby or the rights, duties
and relationship of the parties hereto and thereto, shall be governed by and construed and
enforced in accordance with the Laws of the State of Colorado, excluding any conflicts of law,
rule or principle that might refer construction of provisions to the Laws of another jurisdiction.
(b) The Parties agree that the appropriate, exclusive and convenient forum for any
disputes between any of the Parties arising out of this Assignment, the Transaction Documents or
the transactions contemplated hereby or thereby shall be in any state or federal court in Denver,
Colorado, and each of the Parties irrevocably submits to the jurisdiction of these courts solely in
respect of any proceeding arising out of or related to this Assignment. The Parties further agree
that the Parties shall not bring suit with respect to any disputes arising out of this Assignment,
the Transaction Documents or the transactions contemplated hereby or thereby in any court or
jurisdiction other than the above specified courts. The Parties further agree, to the extent
permitted by Law, that a final and nonappealable judgment against a Party in any action or
proceeding contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and amount of that judgment.
(c) To the extent that any Party or any of its Affiliates has acquired, or hereafter may
acquire, any immunity from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, that Party ( on its own behalf and on behalf of its
Affiliates) irrevocably (i) waives that immunity in respect of its obligations with respect to this
Assignment and (ii) submits to the personal jurisdiction of any court described in Section JO(b).
(d) The Parties hereto agree that they hereby knowingly, voluntarily and
intentionally irrevocably waive the right to trial by jury in any action based hereon, or
arising out of, under, or in connection with this Assignment, the Transaction Documents or
the transactions contemplated hereby or thereby.
(e) If any term or other provision of this Assignment is invalid, illegal or incapable of
being enforced by any rule of Law or public policy, all other conditions and provisions of this
Assignment shall nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any adverse manner to any
Party. Upon such determination that any term or other provision is invalid, illegal or incapable
9
REJ1~11~r1111mi~Ullllj~lljl!!Ulll~ll~~~l~ll~JJl134 BK# 1212 PG# ~£2
STEVEN DA~E DAVIS, CLERK of SWEETWATER COUNTY, WY Page 9 of 38
•
•
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 215 of 309
of being enforced, the Parties shall negotiate in good faith to modify this Assignment so as to
effect the original intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
Section 11. Additional Assignments. Separate assignments of the Assets may be executed on
officially approved forms by Assignor to Assignee, in sufficient counterparts to satisfy
applicable statutory and regulatory requirements. Those assignments shall be deemed to contain
all of the exceptions, reservations, warranties, rights, titles, power and privileges set forth herein
as fully as though they were set forth in each such assignment. The interests conveyed by such
separate assignments are the same, and not in addition to, the Assets conveyed herein.
[ Signature and acknowledgement pages follow.]
10
REC111~11~111)m~~w111~11J1J1nil1~11~~~1~ 111J~~~l'll BK# 1212 PG# ~~3
STEVEN DALE DAVIS, CLERK al SWEETWATER COUNTY, WY Page 10 al 38
non-CONFIDENTIAL-Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 216 of 309
Each Party is signing this Assignment on the date stated in the introductory clause, but
effective for purposes as of the Effective Time.
STATE OF COLORADO
COUNTY OF DENVER
§
§
§
ASSIGNOR:
QEP Energy Company,
a Texas corporation
B~
Name: _Michael K. Watanabe
Title: Vice President, Land
This instrument was acknowledged before me on this 15th day of December, 2015, by Michael
K. Watanabe, as Vice President, Land of QEP Energy Company, a Texas corporation, as the act
and deed and on behalf of the corporation.
My Commission Expires: _LJ-L....J--L.__,_..L---­
Commission Number: J o i ·~ L/O ':J 5· 3 . 3'0
LEAH SCHUETZ
NOTARY PUBLIC
STATE OF COLORADO
NOTARY ID 20134025330
MY COMMISSION EXPIRES APRIL 19, 2017
•
~~~Ji~~~~~J!ij~!J.IIIJ~~~)l:{~l~~~,~~~~tl}llJll~Jr~~ vW ~a~~f 11rts.
SIGNATURE AND ACKNOWLEDGMENT PAGE TO
ASSIGNMENT AND BILL OF SALE
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
STATE OF UTAH §
§
COUNTY OF SALT LAKE §
ASSIGNEE:
Wexpro Development Company,
a Utah corporation
By: {S._t / fz fL-..__--
Name: ady B. Rasmussen
Title: ~ecutive Vice President and
Chief Operating Officer
Page 217 of 309
This instrument was acknowledged before me on this 15th day of December, 2015, by Brady B.
Rasmussen, as Executive Vice President and Chief Operating Officer of Wexpro Development
Company, a Utah corporation, as the act and deed and on behalf of the corporation.
My Commission Expires: _.I-I~· '~"~·-l/, _____ _
Commission Number: ~U?~tp~02"'--""'L ... 'J?~3~-----
8183983_1
REC!l!~~~l ll)m~~l!llllj~IIJl!IUlll~ll~~IJI~ IIIJl~ll\lJl BK# 1212 PG# ~£s
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 12 of 38
SIGNATURE AND ACKNOWLEDGMENT PAGE TO
ASSIGNMENT AND BILL OF SALE
non-CONFIDENTIAL -Redacted Version
-
Exhibit A-1
Trail Leases
[See attached.]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 218 of309
•
REJ1~~~'"JJ1t~m~1111~11i111:~~l'~'"!W'~'''m[\'Jl BK# 1212 PG# ~~6 STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 13 of 38
EXHIBIT A-1 TO • ASSIGNMENT AND BILL OF SALE
•
Lease Serial Number/Name
STATE OF WYOMING
ST WY 0-21020*
BUREAU OF LAND MANAGEMENT
WYE EV 023550 {0660235500)*
BUREAU OF LAND MANAGEMENT
WYE EV 023551A (066023551A)*
BUREAU OF LAND MANAGEMENT
WYE EV 023551B {066023551B)*
Exhibit A-1-Trail Leases
• EXHIBIT "A-1"
Trail Leases
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company.
Lease Date I Eff Date Tract Legal Description
8/16/1956 8/16/1956 T13N RlOOW, 6TH PM
SEC 16: ALL
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
4/1/1948 4/1/1948 T13N RlOOW, 6TH PM
SEC 3: LOTS 1(39.12)[AKA NE/4NE/4],2(39.30)[AKA NW/4NE/4],3{39.46)[AKA
NE/4NW/4],4(39.65)[AKA NW/4NW/4], S/2N/2, N/2S/2
SEC 4: LOT 1(39.63)[AKA NE/4NE/4], S/2NE/4, N/2SE/4
T14N RlOOW, 6TH PM
SEC 34: S/2NW/4, SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
4/1/1948 4/1/1948 T13N RlOOW, 6TH PM
4/1/1948
SEC 3: S/2SW/4, SW/4SE/4
SEC 4: S/2SE/4
SEC 9: E/2, E/2W/2, W/2SW/4
SEC 10: NW/4NE/4, W/2
SEC 15: NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
4/1/1948 T13N RlOOW, 6TH PM
SEC 10: SW/4NE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
•
Book-Page
244/132-135
244/136-142
244/153-159
~ 0 ~ n 0 ~ >-< t:J ~ >-j
~
I
~ 0.. p:,
()
~ 0..
< (P
""'I "' .....
0 ~
,.,__ t:J ..0 ~ 0 i::: "Cl () (P
244/1 t;~-~~ S° '"'"tr p:, ..... ""'I ~ p-, Z O ep O O p:,
N~ ;_.en
...... trJ -.:i n
Page 1 of 4
\C) & I Q
0 ..... 5; s
REJ1~~~111Jm~~rn11i~11J1!ln1l1~111w1~11111B1m\11l BK# 1212 PG# ~i ~ ~ i STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 14 of 38
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYE EV 024038 (0660240380)*
BUREAU OF LAND MANAGEMENT
WYE EV 024038A (066024038A)*
BUREAU OF LAND MANAGEMENT
WYW EV 023421C (066023421()*
BUREAU OF LAND MANAGEMENT
WYE EV 024398A (066024398A)*
BUREAU OF LAND MANAGEMENT
WYE EV 024398 (0660243980)*
Exhibit A-1-Trail Leases •
Lease Date I Eff Date Tract Legal Description
6/1/1948 6/1/1948 T13N R100W, 6TH PM
SEC 15: N/2SW/4
T14N RlOOW, 6TH PM
SEC 34: W/2NE/4, SE/4NE/4, NE/4NW/4, SE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
6/1/1948 6/1/1948 T13N RlOOW, 6TH PM
SEC 15: SW/4SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
3/1/1948 3/1/1948 T13N RlOOW, 6TH PM
SEC 17: SE/4SE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
11/1/1948 11/1/1948 T14N RlOOW, 6TH PM
SEC 35 : SW/45W/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
11/1/1948 11/1/1948 T14N RlOOW, 6TH PM
SEC 35: NE/4SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
Book-Page
244/172-178
244/172-178
5 ~ n 0 ~ s ~ ~ r
~ p..
i:,,
(")
~ p..
< (1)
'"1 r:n 5·
~
> t::1,0 "d O I= "d (") (1) :=:@ ~ >-o0,-,..f:;
i:,, ~ z 00 -· 0 (l) g ? e;
N ,_.
NtrJ--i(J
0 & I 0
Page 2 of 4
0 -· S; S
RECl'!~l~lll)J!t~~llllllj~IIJIJ!Ulll~ll~~W~IIIJW~\IJl BK# 1212 PG# i~ ~]
STEVEN DALE DAVIS, CLERK• SWEETWATER COUNTY, WY P,g, • •
•
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYW 40565 (0490405650)
BUREAU OF LAND MANAGEMENT
WYW 80292 (0490802920)*
BUREAU OF LAND MANAGEMENT
EV 023421A
BUREAU OF LAND MANAGEMENT
EV 0235SOA*
Exhibit A-1-Trail Leases
•
Lease Date I Eff Date I Tract Legal Description
11/1/1948 11/1/1948 T13N R100W, 6TH PM
SEC 2: LOTS 3(39.31[NE/4NW/4), 4(39.10[NW/4NW/4], S/2NW/4, SW/4,
W/2SE/4, SW/4NE/4
SEC 11: W/2, W/2NE/4
SEC 14: N/2NW/4, SW/4NW/4, NW/4SW/4
SEC 21: SE/4SE/4
SEC 22: E/2NE/4, SW/4-NE/4, SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T14N RlOOW, 6TH PM
SEC 35: SE/4SW/4, NW/4SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
11/1/1948 11/1/1948 T13N R100W, 6TH PM
SEC 2: LOTS 1(39.73)[AKA NE/4NE/4], 2(39.52)[AKA NW/4NE/4], E/2SE/4,
SE/4NE/4
SEC 11: E/2NE/4
SEC 14: SE/4NW/4, NE/4SW/4, S/2SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
3/1/1948 3/1/1948 T13N RlOOW, 6TH PM
4/1/1948 4/1/1948
SEC 17: W/2SE/4, NE/4SE/4, SW/4NE/4, E/2NE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T14N RlOOW, 6TH PM
SEC 33: SE/4SE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
•
Book-Page
~ 0 ~ I n 0 ~ s ~ >-3 ~
I
~ 0.. p,
(') ..... (1)
0.. < (1)
;;i ..... 0 ~
>-t:i ,.0 '"O O ~ '"O (') (1)
-p, en .,, c=i' ~ it p, p, '"'I
l'JQ r::t. z 0
(1) 0 0 p, N ~ . en
N trJ '.:3 ()
>-' & I Q
0 ..... 5; s
REC~11~~~111;m~~1111111~11J11m1l1~1111w1~1111u~11t BK# 1212 PG# ~i ~ ~ i
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 16 al 38 Page 3 of 4
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
W 40566 (0490405660)*
BUREAU OF LAND MANAGEMENT
W 05237 (0480052370)*
BUREAU OF LAND MANAGEMENT
W 163016*
Lease Date I Eff Date I Tract Legal Description
1/1/1950 1/1/1950 T13N RlOOW, 6TH PM
SEC 11: NW/4SE/4
SEC 22: NW/4SE/4, NE/4SE/4, S/2SE/4
SEC 23: NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
5/1/1951 5/1/1951 T13N RlOOW, 6TH PM
SEC 10: SE/4
SEC 15: E/2, SE/4SW/4
SEC 21: S/2NE/4, NW/4NW/4, S/2NW/4, SW/4, N/2SE/4, SW/4SE/4
SEC 22: NW/4, NW/4NE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
7/1/1996 7/1/1996 T13N RlOOW, 6TH PM
SEC 11: NE/4SE/4, S/2SE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE GROUP
SWEETWATER COUNTY, WY
Book-Page
5 ~ n
0 ~ s ~ ~ r
I
~ (l) g.
(") ..... (1)
0.. * Denotes that the lease is subject to the terms of the Wexpro Agreement and Stipulation dated October 14, 1981, but effective August 1, 1981.
Exhibit A-1-Trail Leases Page 4 of 4 • •
< (1)
'"1 r.n 5· ~
>urO >i::i O i= >i::i (") (1) ...... :,,;--r.n ....... ;:;· ~ pj .., PJ '"1 ~ ::t. Z O
(1) 0 0 i;ii ~ • r.n
~tTJ'.:::;O
N & 1 O
0 ..... 5; 8 Hi O"' >i::i
REC~l!~~~IIIJJ!W~Ullllj~IIJl!(Ulll~ll~~W~IIIJ~!ll!IJl BK# 1212 PG# is~ ; ~ STEVEN DALE DAVIS, CLERK o1 SWEETWATER COUNTY, WY Page 1.8
•
•
•
non-CONFIDENTIAL -Redacted Version
Exhibit A-2
CC Leases
[ See attached.]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 223 of 309
REJ1~m1·11,1m~~1111111~11J111n1l1~11ij1J1J1~11111l~~\IJl BK# 1212 PG# ~~1
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 18 of 38
EXHIBIT A-2 TO
ASSIGNMENT AND BILL OF SALE
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYE-026202
BUREAU OF LAND MANAGEMENT
WYW-023207
BUREAU OF LAND MANAGEMENT
WYE-026204
Exhibit A-2 -CC Leases •
EXHIBIT "A-2"
CC Leases
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company.
Lease Date I Eff Date Tract Legal Description
4/1/1950 4/1/1950 Tl2N RlOOW, 6TH PM
SEC 6: LOT 8(31.63), 9(31.21)[AKA W/2NW/4]
T12N RlOlW, 6TH PM
SEC 21: NE/4
SEC 22: LOTS 3(53.87), 4(54.09), 5(54.31), 6(54.53)[AKA S/2 - 4 LOTS ARE
ALL OF S/2], N/2
SEC 23: NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
10/16/1953 11/1/1953 T12N RlOlW, 6TH PM
SEC 12: W/2, NE/4
SEC 14: W/2, NE/4
SEC 15: ALL
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
4/4/1950 5/1/1950 Tl2N R101W, 6TH PM
SEC 2: ALL
SEC 9: ALL
SEC 10: ALL
SEC 11: ALL
Book-Page
~ 0 ~ n 0 ~ -u ~ :j
~
I
?=! (l) p...
~ (") ..... (l) p...
< (l)
>-i en .....
0 ~
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION ;:> u /0
SWEETWATER COUNTY, WY :g ?; §
t::: ?f ~ >-ti (") .-+ ~ ~ ~ >-i oo o-. z a
(1) 0 0 pi N ~ . en
N trJ ~ () ~ & I Q
0 ..... ~ 8
REJ1~~~1·11)Jmm111111~11111m1l1~11~,J~1~111Jl~~111 BK# 1212 PG# ~ii~ ~ i
Page 1 of 5 STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 19 of 38 • •
•
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYW-023211
MARGARET DICKINSON
MARTHA BUCKLEY
BUREAU OF LAND MANAGEMENT
WYE-023941
Exhibit A-2 -CC Leases
•
Lease Date I Eff Date Tract Legal Description
10/16/1953 11/1/1953 T12N R101W, 6TH PM
SEC 21: LOT 6(55.ll)[AKA W/2SW/4]
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
2/15/1955 2/15/1955 T12N RlOlW, 6TH PM
SEC 21: LOT 5(54.98)[AKA E/2SW/4-SW/4
IS ONLY 2 LOTS], W/2NW/4, SE/4NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
2/15/1955 2/15/1955 T12N RlOlW, 6TH PM
SEC 21: LOT 5(54.98)[AKA E/2SW/4-SW/4
IS ONLY 2 LOTS], W/2NW/4, SE/4NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
10/1/1947 10/1/1947 T12N R101W, 6TH PM
SEC 21: LOTS 3(54.71), 4(54.84)[AKA N/2SE/4
(2 LOTS ALL OF SE/4)), NE/4NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
•
Book-Page
201/357-358
201/359-360
5 ~ n 0 z 'Tl s ~ ~ r'
I
~ (1)
0.. p:,
() ~ 0.. < (1) 1-1 CJ) 5·
~
> t:i ,0 -o o C -0 () (1)
-?',' CJ) ..... • (D rl->-o () ..... p:, p:, p:, 1-1
(fq ;::t. z Q
(1) 0 0 p:, N ~. oo
N trJ :::; 0
Vl & 0 0
REJ1~~~111)m~~u11111~11J1J1~~l1~1111~~1~1111~~~111 BK# 1212 PG# ~i [. ~ i
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 20 o~8~ .....,. '-< Page 2 of 5
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYW-04674
BUREAU OF LAND MANAGEMENT
WYE-026209
BUREAU OF LAND MANAGEMENT
WYE-026208
Exhibit A-2 -CC Leases •
Lease Date I Eff Date Tract Legal Description Book-Page
2/1/1951 2/1/1951 T12N RlOlW, 6TH PM
SEC 1: ALL
T13N RlOlW, 6TH PM
SEC 25: LOTS 1(18.43), 2(23.96), 3(10.56), TRACT 44 CONSISTING OF LOTS
4(16.04), 5(21.57), 6(29.44)[AKA N/2SW/4, SE/4SW/4], SW/4SW/4, SW/4NE/4, S/2NW/4, SE/4
SEC 26: LOTS 1(24.22), 2(34.35), 3(29.47), 4(23.46), 5(18.56), 6(15.82),
7(21.44), 8(21.44), 9(35.12), TRACT 44 CONSISTING OF LOTS 10(5.64),
11(10.49)], TRACT 43 CONSISTING OF A(40.00), B(40.00), C(40.00), D(40.00)
[AKA S/2NW/4, 5/2], S/2NE/4
SEC 27: S/2SE/4
SEC 33: SE/4
SEC 34: N/2
SEC 35: LOTS 1(35.16), TRACT 44 CONSISTING OF LOT 2(4.84)[AKA NE/4NE/4],
NW/4NE/4, S/2NE/4, NW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
4/1/1950 4/1/1950 T12N RlOlW, 6TH PM
SEC 3: ALL
SEC 4: ALL
SEC 16: ALL
Tl3N RlOlW, 6TH PM
SEC 34: S/2
SEC 35: S/2
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
3/22/1950 4/1/1950 T12N RlOlW, 6TH PM
SEC 8: S/2
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
5 l:i n
0 ~ ...... Cl ~ r
I
~ p.. p:,
(')
~ p..
< ~ 00 .....
0 l:i
> Cl ,0 '"O O i:: '"O (') co _. ?," CJ) ~· (D ~ >--oQ-~ ~ :::t. z Q co g ? e;
Page 3 of 5
~trJ:in
0\ & I Q o ..... 5; a
REJ!~~~IWJ!l~~!!IIIIJ~IIJl!!Ulll~ll~~W~lll1li~ll\lJl BK# 1212 PG# ~i ~ ~]
STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Paga 21 • •
•
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYE-026201
STATE OF WYOMING 0-1608
BUREAU OF LAND MANAGEMENT
WYE-026205
BUREAU OF LAND MANAGEMENT
WYE-022765
BUREAU OF LAND MANAGEMENT
WYE-026196
Exhibit A-2 -CC Leases
•
Lease Date I Eff Date Tract Legal Description
4/4/1950 5/1/1950 T12N R101W, 6TH PM
SEC 5: ALL
SEC 8: N/2
T13N R101W, 6TH PM
SEC 32: SE/4
SEC 33: N/2, SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
9/16/1940 9/16/1940 T13N RlOlW, 6TH PM
SEC 36: ALL
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
3/22/1950 4/1/1950 T13N RlOOW, 6TH PM
SEC 30: LOT 5(33.35}, 6(33.05}, 7(32.75), 8(32.45)[AKA W/2W2/J, E/2SW/4
SEC 31: LOT 5(32.18}, 6(31.93), 7(31.69), 8(31.44}[AKA W/2W/2], E/2W/2
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
9/8/1946 10/1/1946 T13N RlOOW, 6TH PM
1/1/1950
SEC 19: LOTS 7(33.72), 8(33.57)[AKA W/2SW/4], E/2SW/4
SEC 30: E/2, E/2NW/4
SEC 31: NE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
1/1/1950 T13N R101W, 6TH PM
SEC 25: N/2N/2, SE/4NE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
•
Book-Page
637 /277-281 g
::::s n ~ s ~ ~ > ~
I
:;d
(1)
0.. p:,
() ~ 0..
< (1) ""I Cf) ......
0 ::::s
>urO 'O O i::: 'O () (1)
...... ~ Cf)
rtj c=;· ~ S-p:, p:, ""I
(Jq :::t. z 0
(1) 0 0 p:, N ::::S. c,,
Page 4 of 5
tvtrJ'.:::;(")
-.J & I Q
0 ...... &; 8
REC~l!~l~IIIJm~~Ullllj~IIJl!\nlll~ll~~~l~IIIJUij\lJl BK# 1212 PG# is~ ~] STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 22 of 38
Lease Serial Number/Name Lease Date
J GEORGE JONES JR 5/2/1955
Eff Date
5/2/1955 T13N R101W, 6TH PM
SEC 27: N/2SE/4
Tract Legal Description
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUN1Y, WY
Book-Page
* All of the leases on this Exhibit A-2 are subject to the terms of Wexpro Stipulation and Agreement dated October 14, 1981, but effective August 1, 1981.
Exhibit A-2 -CC Leases Page 5 of 5 • •
g
~ n ~ s ~ L"
I
~ (0 0.. Pl ()
ep"
0.. < (0 ...,
f!:.
0 ~
>-u ,.0 >-a O ~ >-a () (0 ~[~ >-ci () ..-,. Pl
Pl ~ z..., (IQ-· Q co O O pi
N ~. "'
N l:Tj ::i (;
00 & I Q
o -·~a
RECl11~~~1111mim 111111~11i11tn1l@"~~1J1~ 11t1u~11Jl BK# 1212 PG# i=! ~ i
STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Page 23 ol 38 •
•
•
•
non-CONFIDENTIAL -Redacted Version
Exhibit A-3
WC Leases
[See attached.]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 229 of 309
REC!11~mr11Jm~~w111~11J111n1l1~11~~w~ 111J~111l\lJl BK# 1212 PG# ~£1 STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 24 of 38
EXHIBIT A-3 TO
ASSIGNMENT AND BILL OF SALE
Lease Serial Number/Name
BUREAU OF LAND MANAGEMENT
WYW-163017
BUREAU OF LAND MANAGEMENT
WYW-162043
BUREAU OF LAND MANAGEMENT
WYW-163302
BUREAU OF LAND MANAGEMENT
WYW-014692
BUREAU OF LAND MANAGEMENT
WYW-014600
BUREAU OF LAND MANAGEMENT
WYW-139235
Exhibit A-3 -WC Leases •
I
EXHIBIT "A-3"
WC Leases
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company
Lease Date I Eff Date I
7/1/1996
4/1/1997
8/10/2005 9/1/2005
5/16/1952 6/1/1952
5/16/1952 6/1/1952
6/26/1996 7/1/1996
Tract Legal Description
T13N R101W, 6TH PM
SEC 13: NW/4, E/2SW/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T13N R101W, 6TH PM
SEC 13: E/2
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T13N R101W, 6TH PM
SEC 23: SE/4NE/4, S/2
SEC24: N/2
SEC 26: N/2N/2
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T13N RlOlW, 6TH PM
SEC 24: SW/4, W/2SE/4, NE/4SE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T13N R101W, 6TH PM
SEC 24: SE/4SE/4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
T12N RlOlW, 6TH PM
SEC 17: Lots 2, 3, 4, 5, 6, N/2NE/4, NE/4NW/4
SEC 20: Lots 3, 4
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
I Book-Page
~ 0 ~ I n 0 z >Tj -t:;I
~ >-3 -;:i:,-
t'"-i
I
?=' (1)
0.. Pl () .-+ (1) 0.. < (1)
""'I rn ..... 0 ~
;:i:,-t:;I ,0
'"d O ~ '"d () (1) ,__ ~ rn
>,:j c=;· ~ S-
p) Pl ""'I
00 ~-Z C)
(1) 0 0 Pl
Page 1 of 2
N ~ :..... rn
w m --i n
0 & I Q o ..... 5: a
REJ1~m111)m[~ui1111J11i11m1l1~,1~1Jw~11111w~11Jl BK# 1212 PG#i: ~ i
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Pege 25 of 38 • •
•
Lease Serial Number/Name Lease Date
STATE OF WYOMING -05-00138
Exhibit A-3 -WC Leases
• •
Eff Date Tract Legal Description Book-Pag_e
4/2/2005 T12N RlOlW, 6TH PM
TRACT 37 (FORMERLY ALL OF SEC. 16) RESURVEY
FROM THE SURFACE TO THE BASE OF THE MESAVERDE FORMATION
SWEETWATER COUNTY, WY
:::I 0 7 n 0 ~ s ~ ~
I
~ g.
(') ~ 0... < (1) >-j Cl) .....
0 :::I
>,-utO '"o O I= "d (') (1)
....... ~ Cl)
>i::i o· ~ s-p:, p:, >-j
(JQ i:t. z a
(1) 0 0 p:,
N :::I;_. cn
w trJ --.:i n
>-' & I Q
Page 2 of 2
0 ..... 8; S
REC~l!~~~l ll)l~~Ullll~~ll~IJUll@l l~~IJI~ IIIJl~~\IJl BK# 1212 PG# ij~ ~ ]
STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Page 26 ol 38
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 232 of 309 •.
Exhibit B-1
Trail Wells
[See attached.]
REcll!~~~l ll}J!~~UIIIIJ~IIJl!IUll~ll~IJIJI~ IIIJ~!ll\lJl BK# 1212 PG# ~£0
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 27 of 38
EXHIBITB-1 TO
ASSIGNMENT AND BILL OF SALE
•
•
•
WELL NAME
Trail Unit #10B-21D
Trail Unit #114
Trail Unit #115
Trail Unit #116
Trail Unit #11B-3D
Trail Unit #132
Trail Unit #14D-3W
Trail Unit #15
Trail Unit #16
Trail Unit #16C-3 D
Trail Unit #160-90
Trail Unit #18
Trail Unit #18-210
Trail Unit #10-16W
Trail Unit #21
Trail Unit #22W
Trail Unit #23W
Trail Unit #25W
Trail Unit #26
Trail Unit #27
Trail Unit #28
Trail Unit #29
Trail Unit #32
Trail Unit #35
Trail Unit #37
Trail Unit #38
Trail Unit #3C-10J -Mesa
Trail Unit #3C-150
Trail Unit #40
Trail Unit #43
Trail Unit #44
Trail Unit #45
Trail Unit #46
Trail Unit #47
Exhibit B-1-Trail Wells
EXHIBIT "B-1"
Trail Wells
•
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company.
OPERATOR LEGAL DESCRIPTION
WEXPRO 21-13N-100W-SENE
WEXPRO 15-13N-100W-SWSE
WEXPRO 15-13N-100W-SWSE (SHL) 22-13N-100W-NENE
WEXPRO 15-13N-100W-SWSE (SHL) 22-13N-100W-NWNE
WEXPRO 03-13N-100W-SWSE
WEXPRO 16-13N-100W-NWSE
WEXPRO 03-13N-100W-SWSE
WEXPRO 10-13N-100W-NESW
WEXPRO 3-13N-100W-NWNW
WEXPRO 03-13N-100W-SWSE
WEXPRO 16-13N-100W-NENE
WEXPRO 3-13N-100W-SWSW
WEXPRO 21-13N-100W-SENE
WEXPRO 16-13N-100W-NENE
WEXPRO 10-13N-100W-NENE
WEXPRO SW/4 NE/4 SEC 09-13N-100W
WEXPRO NW/4 NW/4 SEC 10-13N-100W
WEXPRO NW/4 SE/4 SEC 09-13N-100W
WEXPRO 10-13N-100W-SWNE
WEXPRO 10-13N-100W-SWNE
WEXPRO 10-13N-1DOW-SWNE
WEXPRO 10-13N-10DW-SWNE
WEXPRO 13N-100W SEC 10-SWSW BHL/SEC 15-NWNE SHL
WEXPRO 13N-100W SEC 10-SESE BHL/SEC 15-NWNE SHL
WEXPRO 09-13N-100W-SWNE
WEXPRO 09-13N-100W-SWNE
WEXPRO 10-13N-100W-NENW
WEXPRO 16-13N-100W-NENE
WEXPRO 15-13N-100W-NWNE
WEXPRO 15-13N-100W-NWNE
WEXPRO 15-13N-100W-SWSE
WEXPRO 15-13N-100W-SWSE
WEXPRO 16-13N-100W-NWSE
WEXPRO 16-13N-1DOW-NWSE
COUNTY
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
ST
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
•
"'O Pl (JO
(D
N <..,.)
<..,.)
:::I 0 :::I n 0 ~ >-< v ~ ~ r
I
~ g.
(")
rl­(1) p..
< (1)
~ .....
0 :::I
>-v tO '1::l O $:: "1:l (") (1)
:=: ~ ~ ~ rl-~ ~-z Cl § ~ Pl C/) tn:; n & I Q ..... ~ s 8"'. -...l "1:l rl-I p)
Page 1 of 2
0 ~
<..,.)
0
REcll!~~~JIJ)J!W~!lllllJ~IIJJj[Ulll~Jl~WJ~/ll1ll~ij\lJl BK# 1212 PG# ~~1 ~ STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 28 of 38
0 :::I ....... '-<
WELL NAME OPERATOR
Trail Unit #48 WEXPRO
Trail Unit #4C-22D WEXPRO
Trail Unit #50 WEXPRO
Trail Unit #51 WEXPRO
Trail Unit #52 WEXPRO
Trail Unit #55 WEXPRO
Trail Unit #56 WEXPRO
Trail Unit #57 WEXPRO
Trail Unit #5D-22D WEXPRO
Trail Unit #61 WEXPRO
Trail Unit 62 62 WEXPRO
Trail Unit #6-22W WEXPRO
Trail Unit #63 WEXPRO
Trail Unit #64 WEXPRO
Trail Unit #74 WEXPRO
Trail Unit #75 WEXPRO
Trail Unit #7 A-3J WEXPRO
Trail Unit #7B-21D WEXPRO
Trail Unit #7C-10W WEXPRO
Trail Unit #8C-16D WEXPRO
Trail Unit #8C-21 W WEXPRO
Trail Unit #93 WEXPRO
Trail Unit #94 WEXPRO
Trail Unit WELL #1B-9D WEXPRO
Trail Unit WELL #70 WEXPRO
Trail Unit WELL#9D-4D WEXPRO
Trail Unit #33 WEXPRO
Trail Unit #41 WEXPRO
Trail Unit #04D-16W WEXPRO
Trail Unit #20 WEXPRO
Trail Unit #12 WEXPRO
Trail Unit #13 WEXPRO
Trail Unit #17 WEXPRO
Trail Unit #2 WEXPRO
Unit Powers 3 WEXPRO
Govt 4 WEXPRO
Trail Unit #6 WEXPRO
Trail Unit #8 WEXPRO
Exhibit B-1 -Trail Wells •
LEGAL DESCRIPTION COUNTY
16-13N-100W-NWSE Sweetwater
21-13N-100W-SENE Sweetwater
17-13N-100W-NESE SHL 16-13N-100W-NWSW BHL Sweetwater
17-13N-100W-NESE SHL 16-13N-100W-SWSW BHL Sweetwater
16-13N-100W-NWSE Sweetwater
15-13N-100W-SWSE Sweetwater
1S-13N-100W-SWSE Sweetwater
17-13N-100W-NESE SHL 20-13N-100W-NENE BHL Sweetwater
21-13N-100W-SENE Sweetwater
17-13N-100W-NESE Sweetwater
17-13N-100W-NESE Sweetwater
22-13N-100W-SENW Sweetwater
17-13N-100W-NESE Sweetwater
17-13N-100W-NESE Sweetwater
09-13N-100W-SWNE Sweetwater
09-13N-100W-SWNE Sweetwater
03-13N-100W-SWNE Sweetwater
21-13N-100W-SENE Sweetwater
10-13N-100W-SWNE Sweetwater
16-13N-100W-NENE Sweetwater
21-13N-100W-SENE Sweetwater
09-13N-100W-SWNE Sweetwater
09-13N-100W-SWNE Sweetwater
09-13N-100W-NENE Sweetwater
09-13N-100W-NENE Sweetwater
04-13N-100W-NESE BHL/9-13N-100W-NENE SHL Sweetwater
10 & 15-13N-100W SEC 10-SESW BHL/SEC 15-NWNE SHL Sweetwater
15-13N-100W-NWNE Sweetwater
NE/4 NW/4 SEC 16-13N-100W Sweetwater
10-13N-100W-NWSE Sweetwater
16-13N-100W-NWNE Sweetwater
03-13N-100W-NWSE Sweetwater
16-13N-100W-NESW Sweetwater
10-13N-100W-NWSW Sweetwater
03-13N-100W-NWSW Sweetwater
15-13N-100W-NWSW Sweetwater
02-13N-100W-NWSW Sweetwater
ll-13N-100W-NWSW Sweetwater
ST
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
1::::1 0 i=l I n 0 ~ s ~ >-3 > r<
I
~ p... p,
(') ..... (l) p...
< (l)
>-1 Cf) s·
1::::1
> t:1.0 '"d O i:: '"d (') (l)
-~ Cf) "'O c=;· ~ S-p, p, >-1
(JO r::/'. z 0 ep O O pi N i=l. c,:, wrn~n +:>,.&IQ
0 -· ~ E3 ...., O" -J '"d
REJ1~~~111)m~~u11111i111i111n1l@11~~w~111Jl~~11t BK# 1212 PG# ~i ~ s] Page 2 of 2 • STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 29 •
•
•
•
non-CONFIDENTIAL -Redacted Version
Exhibit B-2
CC Wells
[ See attached.]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 235 of 309
REcll!~~~lll)J!t~m111111i1111~!!Ulll~ll~~~l~llij~~~\IJl BK# 1212 PG# ~£3 STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Page 30 of 38
EXHIBITB-2 TO
ASSIGNMENT AND BILL OF SALE
WELL NAME
CANYON CREEK 13-31 MESA
CANYON CREEK 15-11 MESA
CANYON CREEK UNIT 7-10
CANYON CREEK SHALLOW 6-35
CANYON CREEK UNIT 9-25
CANYON CREEK SHALLOW 4-16
CANYON CREEK SHALLOW 12-3
CS Hill 3
CANYON CREEK UNIT 4 MESA
CANYON CREEK UNIT 5 MESA
CANYON CREEK UNIT 5 UP MESA
CANYON CREEK UNIT 6 MESA
CANYON CREEK UNIT7 MESA
CANYON CREEK UNIT 8 MESA
CANYON CREEK UNIT 9 MESA
CANYON CREEK UNIT 10 MESA
CANYON CREEK UNIT 11 MESA
CANYON CREEK UNIT 11 CC/TR
CANYON CREEK UNIT 12 MESA
CANYON CREEK UNIT 12 ALMOND
CANYON CREEK 13 MESA
CANYON CREEK UNIT 14 MESA
CANYON CREEK 14 UPPER MESA
CANYON CREEK UNIT 15 MESA
CANYON CREEK UNIT 16 MESA
CANYON CREEK UNIT 16 UP MESA
CANYON CREEK UNIT 17 MESA
CANYON CREEK UNIT 18 MESA
Exhibit B-2 CC Wells •
EXHIBIT "B-2"
CC Wells
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company.
OPERATOR LEGAL DESCRIPTION
WEXPRO T13N-R100W-31: SWSW
WEXPRO T12N-R101W-11: SWSE
QEP Energy Company T12N-R101W-10: NESW
QEP Energy Company T13N-R101W-35: SWSW
QEP Energy Company T13N-R101W-25: SWNE
QEP Energy Company T12N-R101W-16: NENE
QEP Energy Company T12N-R101W-3:NESW
WEXPRO T12N-R101W-3: NESW
WEXPRO T12N-R101W-9: SENE
WEXPRO T12N-R101W-4: NWSE
WEXPRO T12N-R101W-4: NWSE
WEXPRO T12N-R101W-16: NENW
WEXPRO T12N-R101W-2: SWSW
WEXPRO T13N-R101 W-34: SESE
WEXPRO T13N-R101W-34: SWSW
WEXPRO T13N-R101W-35: SENW
WEXPRO T13N-R101W-25: NWNW
WEXPRO Tl3N-R101W-25: NWNW
WEXPRO T13N-R100W-19:SWSW
WEXPRO Tl3N-R100W-19:SWSW
WEXPRO T13N-R101W-25:SWSW
WEXPRO T13N-R101W-36: NWSW
WEXPRO T13N-R101W-36: NWSW
WEXPRO T12N-R101W-16: NESE
WEXPRO T12N-R101W-10: SWNE
WEXPRO T12N-R101W-10: SWNE
WEXPRO T12N-R101W-3: SWNE
WEXPRO T12N-R101W-21: SWNE
COUNTY
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
Sweetwater
ST
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY ..,
WY c§
WY t-...
WY o -
l::l 0 l::l n 0 ~ -u ~ ~
I
:::0 (l) p.. p,
()
fp"
0..
< ~ en 5·
l::l
;i:,.urO "O O i::: "O () (l) ...... I:>;"' en o· ~ s-p, ""1 c . z a § ~ g;
trJ :; n & I Q ..... 8: 8 >-+, g: -.J "O
REcll!~~~lll}Jmm11111J~IIJl!l~~ll~llllJW~lllll!ll\lJl BK# 1212 PG#~£~ ~ 8 ~ STEVEN DALE DAVIS, CLERK cl SWEETWATER COUNTY, WY Page 31 o •
Page 1 of 4 •
•
WELL NAME OPERATOR
CANYON CREEK UNIT 19 MESA WEXPRO
CANYON CREEK 19 UPPER MESA WEXPRO
CANYON CREEK UNIT 22 MESA WEXPRO
CANYON CREEK UNIT 23 MESA WEXPRO
CANYON CREEK UNIT 24 MESA WEXPRO
CANYON CREEK UNIT 25 MESA WEXPRO
CANYON CREEK 25 UPPER MESA WEXPRO
VW Hill 26 WEXPRO
CANYON CREEK UNIT 26 UPR MESA WEXPRO
Unit Hill E-02620927 WEXPRO
CANYON CREEK UNIT 28 MESA WEXPRO
CANYON CREEK UNIT 29 MESA WEXPRO
Unit Bobby W-02320730 WEXPRO
CS Hill Unit 31 WEXPRO
CANYON CREEK UNIT 33 MESA WEXPRO
CANYON CREEK 33 UPPER MESA WEXPRO
CANYON CREEK UNIT 32 MESA WEXPRO
CANYON CREEK UNIT 37 MESA WEXPRO
CANYON CREEK UNIT 35 MESA WEXPRO
CANYON CREEK UNIT 36 MESA WEXPRO
CANYON CREEK UNIT 38 MESA WEXPRO
CANYON CREEK UNIT 39 MESA WEXPRO
CANYON CREEK 39 UPPER MESA WEXPRO
CANYON CREEK UNIT 40 W MESA WEXPRO
CANYON CREEK UNIT 44 W MESA WEXPRO
CANYON CREEK UNIT 46 MESA WEXPRO
CANYON CREEK 49 MESA WEXPRO
CANYON CREEK UNIT 63 MESA WEXPRO
CANYON CREEK UNIT 16C-09J MESA WEXPRO
CANYON CREEK UNIT 05B-03W MESA WEXPRO
CANYON CREEK UNIT 06A-09W MESA WEXPRO
CANYON CREEK UNIT 10C-35J MESA WEXPRO
CANYON CREEK UNIT 11C-34W MESA WEXPRO
Exhibit B-2 CC Wells
•
LEGAL DESCRIPTION COUNTY
T12N-R101W-8: NESE Sweetwater
T12N-R101W-8: NESE Sweetwater
T12N-R101W-9: NWSE Sweetwater
T12N-R101W-15 : NWNW Sweetwater
T12N-R101 W -16: NWSW Sweetwater
T12N-R101W-2: NWNE Sweetwater
T12N-R101W-2: NWNE Sweetwater
T13N-R101W-34: NENE Sweetwater
T13N-R101W-34: NENE Sweetwater
T12N-R101W-16: NENE Sweetwater
T12N-R101W-9: NESW Sweetwater
T12N-R101W-16: NESW Sweetwater
T12N-R101W-15 : SWSW Sweetwater
T12N-R101W-4: SESW Sweetwater
T13N-R101W-36: NWNE Sweetwater
T13N-R101W-36: NWNE Sweetwater
T12N-R101W-9: NENW Sweetwater
T12N-R101W-10: NWNW Sweetwater
T12N-R101W-10: NWSW Sweetwater
T12N-R101W-21: NENW Sweetwater
T12N-R101W-2: NWSW Sweetwater
T13N-R101W-26: SWSE Sweetwater
T13N-R101W-26: SWSE Sweetwater
T12N-R101W-3: NWSE Sweetwater
T12N-R101 W-3:NENW Sweetwater
T13N-R101W-35: NWSW BHL; 34:NESE SHL Sweetwater
T13N-R101W-34: SWNE BHL; NESE SHL Sweetwater
T13N-R101W-36: NWNW Sweetwater
T12N-R101W-9: SESE Sweetwater
T12N-R101W-3: SWNW BHL; 4 SENE SHL Sweetwater
T12N-R101W-9: SENW Sweetwater
T13N-R101W-35: NWSE SHL; NESW BHL Sweetwater
T13N-R101W-34: NESW Sweetwater
•
ST
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY ,..,
WY~
WY ~
WY ::p
c;.
I::! 0 I::! n ~ >Tj ....... u ~ ~
I
?O (1) g.
() ~ 0-
< (1) >-t [/) 5·
I::!
:i>uD '"O O ~ '"O () (1) ...... ::,,;-' [/) a·~ s-p:, >-t ::r. Z O § ? 1;;
trJ ::; n & I Q .... 5; 8 Hi cr' -......) '"O
REJ1~11~r11)Jmm111111~11J111n1l1~1111~w~111Jli'lt'Jl BK# 1212 PG#~~~ ~ s ~ STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 32 of 38
Page 2 of 4
WELL NAME OPERATOR
CANYON CREEK UNIT 13C-15W MESA WEXPRO
CANYON CREEK UNIT 14A-04W MESA WEXPRO
CANYON CREEK UNIT 71 MESA WEXPRO
CANYON CREEK UNIT 68 MESA WEXPRO
CANYON CREEK UNIT 69 MESA WEXPRO
CANYON CREEK UNIT 70 MESA WEXPRO
CANYON CREEK 2D-4W MESA WEXPRO
CANYON CREEK UNIT 45 MESA WEXPRO
CANYON CREEK 13B-4D MESA WEXPRO
CANYON CREEK 2A-9D MESA WEXPRO
CANYON CREEK 11B-4D MESA WEXPRO
CANYON CREEK UNIT 42 MESA WEXPRO
CANYON CREEK 2A-25D MESA WEXPRO
CANYON CREEK UNIT 51 MESA WEXPRO
CANYON CREEK UNIT 43 MESA WEXPRO
CANYON CREEK 11D-25D MESA WEXPRO
CANYON CREEK 8C-25D MESA WEXPRO
CANYON CREEK 7B-25W MESA WEXPRO
CANYON CREEK 50 MESA WEXPRO
CANYON CREEK UNIT 48 MESA WEXPRO
CANYON CREEK 3A-25D MESA WEXPRO
CANYON CREEK UNIT 72 MESA WEXPRO
CANYON CREEK UNIT 73 MESA WEXPRO
CANYON CREEK UNIT 118 MESA WEXPRO
CANYON CREEK UNIT 119 MESA WEXPRO
CANYON CREEK UNIT 162 MESA WEXPRO
CANYON CREEK UNIT 163 MESA WEXPRO
CANYON CREEK UNIT 115 MESA WEXPRO
CANYON CREEK UNIT 112 MESA WEXPRO
CANYON CREEK UNIT 113 MESA WEXPRO
CANYON CREEK UNIT 114 MESA WEXPRO
CANYON CREEK UNIT 116 MESA WEXPRO
CANYON CREEK UNIT 117 MESA WEXPRO
Exhibit B-2 CC Wells •
LEGAL DESCRIPTION COUNTY
T12N-R101W-15: SWSW Sweetwater
T12N-R101W-4: SESW Sweetwater
T12N-R101W-2: NWNW BHL; 3: NENE SHL Sweetwater
T12N-R101W-3: NENE Sweetwater
T12N-R101W-3: NWNE BHL; 3: NENE SHL Sweetwater
T12N-R101W-3: SENE BHL; NENE SHL Sweetwater
T12N-R101W-4 NWNE BHL; SENE SHL Sweetwater
T12N-R101W-4: NESE BHL; SENE SHL Sweetwater
T12N-R101W-4: SESW SHL; SWSW BHL Sweetwater
T12N-R101W-4: SESW; SHL; 9:NWNE BHL Sweetwater
T12N-R101W-4: SESW; SHL; NESW BHL Sweetwater
T13N-R101W-34: NESE Sweetwater
T13N-R101W-25: NWNE BHL; SWNE SHL Sweetwater
T13N-R101W-34: SWSE BHL; NESE SHL Sweetwater
T13N-R101W-35: NWSW BHL; 34:NESE SHL Sweetwater
T13N-R101W-25: NESW BHL; SWNE SHL Sweetwater
T13N-R101W-25: SENE BHL; SWNE SHL Sweetwater
T13N-R101W-25: SWNE Sweetwater
T13N-R101W-34: SWNE BHL; NESE SHL Sweetwater
T13N-R101W-35: SWNW BHL; 34: NESE SHL Sweetwater
T13N-R101W-25: NENW BHL; SWNE SHL Sweetwater
T13N-R101W-35: SWNE Sweetwater
T13N-R101W-35: NENE BHL; SWNE SHL Sweetwater
T13N-R101W-35: SENE BHL; SWNE SHL Sweetwater
T13N-R101W-35: NWNE BHL; SWNE SHL Sweetwater
Tl2N-R101W-16: SENE Sweetwater
T12N-R101W-16: SWNE BHL; SENE SHL Sweetwater
T13N-R101W-36: NESW Sweetwater
T13N-R101W-36: SWNE BHL; NESW SHL Sweetwater
T13N-R101W-36: SENW BHL; NESW SHL Sweetwater
T13N-R101W-36: NWSE BHL; NESW SHL Sweetwater
T13N-R101W-36: SESW BHL; NESW SHL Sweetwater
T13N-R101W-36: SESW BHL; NESW SHL Sweetwater
ST
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY '"" WY d!
WY :~ WY
()
i:::l 0 i:::l n ~ s ~ ~ r-1
I
~ (l) 0.. p:,
(')
co" 0..
< (l) ...,
r:n o· i:::l
> t::::J,O '"O O i:: '"O (') (l)
-::,<;"" r:n """"'" (D ~ (') ..... p:, p:, ...,
:;:t. z 0 § ~ g;
trJ ~ n & I Q .... 5; a >-+, cr' '"O
REC!l!~~~lll)m~~Ullllj~IIJl!\nlll~ll~~~l~llm~\IJl BK# 1212 PG# ie~ ~ ~ STEVl:N DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 33 •
Page 3 of 4 •
•
WELL NAME OPERATOR
CANYON CREEK UNIT 124 MESA WEXPRO
CANYON CREEK UNIT 125 MESA WEXPRO
CANYON CREEK UNIT 129 MESA WEXPRO
CANYON CREEK UNIT 130 MESA WEXPRO
CANYON CREEK UNIT 84 MESA WEXPRO
CANYON CREEK UNIT 95 MESA WEXPRO
CANYON CREEK UNIT 96 MESA WEXPRO
CANYON CREEK UNIT 97 MESA WEXPRO
CANYON CREEK UNIT 197 MESA WEXPRO
CANYON CREEK UNIT 110 MESA WEXPRO
CANYON CREEK UNIT 80 MESA WEXPRO
CANYON CREEK UNIT 126 MESA WEXPRO
CANYON CREEK UNIT 216 MESA WEXPRO
CANYON CREEK UNIT 75 MESA WEXPRO
CANYON CREEK UNIT 122 MESA WEXPRO
CANYON CREEK UNIT 98 MESA WEXPRO
CANYON CREEK UNIT 99 MESA WEXPRO
CANYON CREEK UNIT 107 MESA WEXPRO
CANYON CREEK UNIT 108 MESA WEXPRO
CANYON CREEK UNIT 121 MESA WEXPRO
CANYON CREEK UNIT 123 MESA WEXPRO
CANYON CREEK UNIT 219 MESA WEXPRO
CANYON CREEK UNIT 218 MESA WEXPRO
CANYON CREEK UNIT 101 MESA WEXPRO
CANYON CREEK UNIT 146 MESA WEXPRO
Exhibit B-2 CC Wells
•
LEGAL DESCRIPTION COUNTY
T13N-R100W-30: NENW BHL; 19: SWSW SHL Sweetwater
T13N-R100W-30: NWNW BHL; 19: SWSW SHL Sweetwater
T13N-R100W-19: NESW BHL; SWSW SHL Sweetwater
T13N-R100W-19: SESW BHL; SWSW SHL Sweetwater
T12N-R101W-10: NENE BHL; 3: SESE SHL Sweetwater
T12N-R101W-3: NESE BHL; SESE SHL Sweetwater
T12N-R101W-3: SESE Sweetwater
T12N-R101W-3: SWSE BHL; SESE SHL Sweetwater
T12N-R101W-11: NWNW BHL; 3: SESE SHL Sweetwater
T13N-R101W-36: NENW BHL; NESW SHL Sweetwater
T13N-R101W-25 : NESE BHL; 13N-100W-19: SWSW Sweetwater
T13N-R100W-30:SENW BHL; 19: SWSW SHL Sweetwater
T13N-R100W-19: NWSW BHL; SWSW SHL Sweetwater
T13N-R101W-35: NWSE BHL; SWNE SHL Sweetwater
T13N-R101W-35: SWSEBHL; 12N-1012-S: NENE SHL Sweetwater
T12N-R101W-2: NENE Sweetwater
T12N-R101W-2: SENE BHL; NENE SHL Sweetwater
T12N-R101W-1: NWNW BHL; 2: NENE SHL Sweetwater
T12N-R101W-1: SWNW BHL; 2: NENE SHL Sweetwater
T13N-R101W-35: SESE BHL; 12N-101W-2: NENE SHL Sweetwater
T13N-R101W-35: SESW BHL; 12N-101W-2: NENE SHL Sweetwater
T12N-R101W-1: SWNW BHL; 2: NENE SHL Sweetwater
T13N-R101W-35: SWSW BHL; 12N-101W-3: NENE SHL Sweetwater
T12N-R101W-2: SWNW BHL; 3: NENE SHL Sweetwater
T13N-R101W-34: SWSE BHL; 12N-1012-3: NENE SHL Sweetwater
ST
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
WY
•
g
:::i n 0 ;i -tj
~ ....,
> r<
I
:;d
(1) 0.. p,
(")
fo" 0..
< (1)
;;i .....
0 :::i
> tj ,.0
'"d o C '"d (") (1) ,.... ::,:;-" en ,...... (D ~
1i:j (") ..... p, p, p, ""1
OQ c-. z C')
(1) 0 0 p, N :::i . en
Page 4 of 4
w trJ :::; n
\C) & I Q
0 ..... 5; 8
REJmm1wm~~ui1111~11111m1l1~,1~w1~11ij~111111Jl BK# 1212 PG# ~i ~ ~ i
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 34 of 38
non-CONFIDENTIAL -Redacted Version
Exhibit B-3
WC Wells
[ See attached]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 240 of 309
•
~y~Jif l~!~IJ~IJ11~~!J1Wlf !!~tl\~ijijl~'. vW'~,::ar, ~1;, e
EXHIBITB-3 TO
ASSIGNMENT AND BILL OF SALE
•
WELL NAME
WHISKEY CANYON UNIT 9-23
WHISKEY CANYON UNIT 4-26
WHISKEY CANYON UNIT 16-13
WHISKEY CANYON UNIT 3
•
EXHIBIT "B-3"
WC Wells
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company.
OPERATOR LEGAL DESCRIPTION
QEP T13N-R101W-23: NESE(SHL); SESE {BHL)
QEP T13N-R101W-26: NWNW
QEP T13N-R101W-13: SESE
QEP T13N-R101W-24: SWNE{SHL); NWSE{BHL)
COUNTY
Sweetwater
Sweetwater
Sweetwater
Sweetwater
ST
WY
WY
WY
WY
•
J:j 0 J:j n 0
;i
>-< u ~ >-3 ~
I
:::0 (1)
0.. p.:, u (1)
0.. < (1) >-t Cl'.l 5·
J:j
> u ,.0 'ij O i= 'ij (") (1)
-::,:;-Cl'.l """"'" (0 ~ >,j (") ..... p.:, p.:, p.:, >-t
(Jq ;:t. z 0
(1) 0 0 p.:, N J:j. en
-i:,. tr:i ::; n
1---l & I 0
0 ..... 5; s
REJ1~~~r1111m~~w111~11111m1l1~11!~W~ 11ijl~~\'Jl BK# 1212 PG# ~i ~ ~ i STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 36 of 38 Page 1 of 1
non-CONFIDENTIAL-Redacted Version
Exhibit C
Excluded Assets
[ See attached.]
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K •
Page 242 of 309
•
REJ!tl~~1·11Jm~~!lllllJl~IIJIJl~~ll~lll~lll~llij~m\lJl BK# 1212 PG# ~~o • STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page37 of 38
EXHIBITCTO
ASSIGNMENT AND BILL OF SALE
•
•
•
Well Name
non-CONFIDENTIAL-Redacted Version
EXHIBIT"C"
Excluded Assets
Attached to the Assignment and Bill of Sale dated December 15, 2015,
between QEP Energy Company and Wexpro Development Company
Location
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 243 of 309
Trail Unit 1 Water Disposal Well T13N-R100W-Sec. 16: NWSE
Other
Canyon Creek 3D Seismic Survey acquired in 2004 covering approximately 51 square miles within Townships
12-13N and Ranges 100-101W in Sweetwater County, Wyoming
Vermillion 3D Seismic Survey acquired in 1996 covering approximately 100 square miles within Townships
12-14N and Ranges 99-101W in Sweetwater County, Wyoming and Moffat County, Colorado.
Sugarloaf 3D Seismic Survey acquired in 1999 covering approximately 33 square miles within Townships 11-
12N and Ranges 101-102W in Moffat County, Colorado .
RECJ'!~m111Jm~~rn1111~11J111n111~,1~~w~1,l1w~11t BK# 1212 PG# ~~1
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 38 of 38
Page 1 of 1
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Exhibit K Pages 244-299 are REDACTED
•
•
•
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
REJl~~~ll~illJm~11i~1111~~ll~~lll~~~ljll\lJl1571 BK# ~::9e :G~i:1309
STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Page 1 ol 10
ASSIGNMENT AND BILL OF SALE
STATE OF WYOMING §
§
COUNTY OF SWEETWATER §
THIS ASSIGNMENT AfU) BILL OF SALE (this "Assignment") is by and between
NORTH SHORE EXPLORATION AND PRODUCTION, LLC, a Delaware limited liability
company ("Assignor"), whose mailing address is 370 17th Street, Suite 5625, Denver, Colorado
80202, and WEXPRO COMP ANY, a Utah corporation ("Assignee"), whose mailing address is
P.O. Box 45003, Salt Lake City, Utah, 81845-0003, and is dated April 16, 2015, but effective as
of7:00 a.m. (Mountain Time) on November 1, 2014 (the "Effective Time").
ARTICLE I
ASSIGNMENT
Section 1.1 Assignment Assignor, for Ten Dollars ($10.00) and other good and
valuable consideration in hand paid by Assignee, the receipt and sufficiency of which are
acknowledged, hereby bargains, sells, assigns and delivers to Assignee all of Assignor's right,
title and interest in and to the following assets (the "Assets"):
(a) the oil and gas and interests in leases and other lands or interests
associated therewith or pooled, unitized or cornrnunitized therewith, including, without
limitation, all working interests, operating rights, record title interests, royalty interests, net
profits interests, production payments, mineral interests, forced pooled interests, and interests
acquired under contracts or otherwise in the lands covered by the leases, and any other lands or
interests pooled, unitized or cornrnunitized therewith as described in attached Exhibit A;
(b) the oil and gas wells identified in attached Exhibit B, whether producing,
plugged or unplugged, shut-in or permanently or temporarily abandoned along with the surface
and subsurface equipment connected thereto or used in connection therewith, appurtenances
thereto, facilities thereon and the oil, gas and other hydrocarbon substances produced therefrom
as of the Effective Time;
(c) all of the personal property, equipment, fixtures, appurtenances, and
improvements and facilities, equipment, pipelines, pipeline laterals, well pads, tank batteries,
wellheads, platforms, treating equipment, compressors, power lines, casing, tubing, pumps,
motors, gauges, valves, heaters and treaters appurtenant to the leases or wells or used in
connection therewith;
RECEIVED
MAY O 5 2015
WEXPRO COMPANY
BRADY B. RASMUSSEN
I
non-CONFIDENTIALt-Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 301 of309
(d) all oil, natural gas, conden ate, casing head gas, sulfur dioxide or other
minerals attributable or allocable to the leases o wells from and after the Effective Time or
which are in storage above the pipeline connection as of the Effective Time;
(e) all rights-of-way, easemehts, permits, licenses, approvals used in
connection with operations for the exploration an1 production of oil, gas or other minerals on or
from the leases or interests or otherwise connected 1o the wells;
(f) all presently existing contra6ts, agreements and instruments including unit
agreements, operating agreements, unitization I agreements, communitization and pooling
agreements, agreements for the purchase and bil, casinghead gas or CO2, transportation
agreements, gathering and processing agreements ijnd all applicable amendments; and
l
(g) all other real and personal ptoperty, fixtures, appurtenances, files, records,
title reports, division orders, prospect informatibn, production records, operational records,
producing and processing records and all related m;aterials in Assignor's possession.
EXCEPTING AND RESERVING to Assf gnor, however, all Excluded Assets.
TO HA VE AND TO HOLD the Asse~ unto Assignee, its successors and assigns
forever, subject, however, to the terms and conditi{ns set forth herein.
Section 1.2 Asset Exchange Agreement This Assignment is delivered subject to the
terms and conditions of that Asset Exchange Agre ment dated April 16, 2015, but effective as of
the Effective Time, by and between Assignor an Assignee (the "Exchange Agreement"). In
the event of a conflict between this Assignmeip.t and the Exchange Agreement, the terms,
provisions and conditions of the Exchange Agree,ent shall control.
I
Section 1.3 Excluded Assets. The Assets do not include, and there is excepted,
reserved and excluded from this Assignment, Jthe following (collectively, the "Excluded
Assets"): (a) all of Assignor's corporate minute !:looks and other business records that relate to
Assignor's business generally, (b) all accounts, t~ceivables and all other proceeds or income
attributable to the Assets with respect to any peribd of time prior to the Effective Time; ( c) all
rights and interests relating to the Assets under ~y existing insurance policy, bond or to any
insurance or condemnation proceeds or awards arising from acts or events causing the
destruction of property; ( d) all hydrocarbons prod~ed and sold from the Assets with respect to
all periods prior to the Effective Time; (e) all cl · s of Assignor for tax refunds or loss carry
forwards attributable to any period prior to the Effi ctive Time, (f) income taxes paid by Assignor
or any taxes attributable to the other Excluded 17:ssets; (g) all personal computers, radios and
telephone equipment, (h) all of Assignor's propri9tary computer software, patents, trade secrets,
copyrights, names, trademarks, logos and otherl intellectual property, (i) all documents and
instruments of Assignor that may be protected br an attorney-client privilege; G) all data that
REJ!~m11ww~u1~111~11111 llll~~jl]ll\1Jl1571 BK# 1209 PGP~7 STEVEN DALE DAVIS, CLERK EETWATER COUNTY, WY Page 2 ol 10
•
•
•
•
•
•
non-CONFIDENTIAL-Redacted Version Questar Gas Company
DocketNo.17-057-01
Application Exhibit K
Page 302 of 309
cannot be disclosed to Assignee as a result of confidentiality arrangements under agreements
with third parties; (k) all audit rights arising under any of the (i) Applicable Contracts or
otherwise with respect to any period prior to the Effective Time or (ii) other Excluded Assets,
except for any Imbalances; (1) all geophysical and other seismic and related technical data and
information relating to the Assets to the extent that such geophysical and other seismic and
related technical data and information is not transferable without payment of a fee or other
penalty to any third party under any Contract and which Assignee has not separately agreed in
writing to pay; and (rn) any offices, office leases and any office furniture or office supplies
located in or on such offices or office leases.
Section 1.4 Special Warranty of Title. EXCEPT AS EXPRESSLY PROVIDED IN
THE EXCHANGE AGREEMENT, ASSIGNOR BINDS ITSELF, ITS SUCCESSORS AND
ASSIGNS, TO WARRANT AND FOREVER DEFEND THE INTEREST DESCRIBED ON
EXHIBIT A TO ASSINGEE, ITS SUCCESSORS AND ASSIGNS FOREVER, AGAINST
EVERY PERSON LAWFULLY CLAIMING THIS INTEREST OR ANY PART OF IT, BY,
THOUGH, OR UNDER ASSIGNOR, BUT NOT OTHERWISE. HOWEVER, ALL
EQUIPMENT, WELLS, AND PERSONAL PROPERTY ARE SOLD AS IS AND WHERE IS,
AND WITHOUT WARRANTY OF MERCHANTABILITY, CONDITION, OR FITNESS FOR
AP ARTICULAR PURPOSE, EITHER EXPRESS OR IMPLIED.
ARTICLE II
DISCLAIMERS; ASSUMPTION
Section 2.1 Disclaimers.
(a) OTHER THAN THOSE REPRESENTATIONS SET FORTH IN THE
EXCHANGE AGREEMENT, ASSIGNOR HAS NOT AND WILL NOT MAKE ANY
REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR
CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, THE RELEASE OF
MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH,
SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER
ENVIRONMENTAL CONDITION OF THE ASSETS, AND NOTHING IN THIS
ASSIGNMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A
REPRESENTATION OR WARRANTY, AND SUBJECT TO ASSIGNEE'S LIMITED
RIGHTS UNDER THE EXCHANGE AGREEMENT, ASSIGNEE SHALL BE DEEMED TO
BE TAKING THE ASSETS "AS IS" AND "WHERE IS" WITH ALL FAULTS FOR
PURPOSES OF THEIR ENVIRONMENTAL CONDITION AND THAT ASSIGNEE HAS
MADE OR CAUSED TO BE MADE SUCH ENVIRONMENTAL INSPECTIONS AS
ASSIGNEE DEEMS APPROPRIATE.
(b) ASSIGNOR AND ASSIGNEE AGREE THAT, TO THE EXTENT
REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF
RECJ1mm11~j1Jmw~111~111m11~~111~~~1JllljlJ~1571 BK# 1209 PGP~a
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, Wf Page 3 of 1 O
non-CONFIDENTIAL-Redacted Version Questar Gas Company
DocketNo.17-057-01
Application Exhibit K
Page 303 of 309
CERTAIN REPRESENTATIONS AND WARRANTIES CONTAINED IN TIDS SECTION 2.1
ARE "CONSPICUOUS" DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE
LAW.
Section 2.2 Assumption. ASSIGNEE AGREES TO (I) ASSUME SOLE
RESPONSIBILITY FOR AND AGREES TO PAY ALL COSTS AND EXPENSES
ASSOCIATED WITH PLUGGING AND ABANDONMENT OF ALL WELLS,
DECOMMISSIONING OF ALL FACILITIES, AND CLEARING AND RESTORATION OF
ALL SITES, IN EACH CASE INCLUDED IN, OR ASSOCIATED WITH, THE ASSETS,
AND ASSIGNEE MAY NOT CLAIM THE FACT THAT PLUGGING AND
ABANDONMENT, DECO:MMISSIONING, SITE CLEARANCE OR RESTORATION
OPERATIONS ARE NON-COMPLETE OR THAT ADDITIONAL COSTS AND EXPENSES
ARE REQUIRED TO COMPLETE ANY SUCH OPERATIONS AS A BREACH OF
ASSINGOR'S REPRESENTATIONS OR WARRANTIES MADE HEREUNDER OR IN THE
EXCHANGE AGREEMENT OR THE BASIS FOR ANY OTHER REDRESS AGAINST
ASSIGNOR; AND ASSIGNEE AGREES TO (II) ASSUME SOLE RESPONSIBILITY FOR
AND AGREES TO PAY ANY AND ALL COSTS AND EXPENSES ARISING OUT OF
ENVIRONMENTAL LAWS (INCLUDING WITHOUT LIMITATION, ANY COMPLIANCE
OR NON-COMPLIANCE THEREWITH, ANY ADVERSE ENVIRONMENTAL
CONDITIONS AND THE DISPOSAL RELEASE, DISCHARGE OR EMISSION OF
HYDROCARBONS, HAZARDOUS SUBSTANCES, HAZARDOUS WASTES,
HAZARDOUS MATERIALS, SOLID WASTES OR POLLUTANTS INTO THE
ENVIRONMENT), KNOWN OF UNKNOWN, WITH RESPECT TO THE ASSETS,
REGARDLESS OF WHETHER SUCH OBLIGATIONS OR LIABILITIES AROSE PRIOR
TO, ON, OR AFTER THE EFFECTIVE TIME. ASSIGNEE EXPRESSLY AGREES TO
ASSUME THE RISK THAT THE ASSETS MAY CONTAIN WASTE MATERIALS,
INCLUDING, WITHOUT LIMITATION, NORM, HAZARDOUS SUBSTANCES,
HAZARDOUS WASTES, HAZARDOUS MATERIALS, SOLID WASTES, OR OTHER
POLLUTANTS.
ARTICLE III
MISCELLANEOUS
Section 3.1 Additional Agreements. Assignor covenants and agrees to execute and
deliver, or shall cause to be executed and delivered, from time to time such further instruments of
conveyance and transfer, and shall take such other actions as Assignee may reasonably request,
to convey and deliver the Assets to Assignee.
Section 3.2 Successors and Assigns. This Assignment shall be binding upon and inure
to the benefit of the Assignor, Assignee, and their respective successors and permitted assigns.
REC~11~~~11~u1Jmui~1 1~~1111~1~l1~w11~~~111111t571 BK# 1209 PG'°~9 STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page4 of 10
•
•
•
•
•
•
non-CONFIDENTIAL -Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 304 of309
Section 3.3 Governing Law. The laws of the State of Wyoming, without giving effect
to principles of conflicts of laws, govern all matters arising out of this Assignment and the
parties submit to the jurisdiction of the courts of the State of Wyoming and agree to file any
actions in said courts for any disputes arising under this agreement.
Section 3.4 Exhibits. All Exhibits attached hereto are hereby made part hereof and
incorporated herein by this reference. References in such Exhibits to instruments on file in the
public records are notice of such instruments for all purposes. Unless provided otherwise, all
recording references in such exhibits are to the appropriate records of the counties in which the
Assets are located.
Section 3.5 Separate Assigrunents. Where separate assignments of the Assets have
been or will be executed for filing with, and approval by, applicable Governmental Authorities,
any such separate assignments (a) shall evidence this Assignment and assignment of the
applicable Assets herein made and shall not constitute any additional Assignment or assignment
of such properties, (b) are not intended to modify, and shall not modify, any of the terms,
covenants and conditions or limitations on warranties set forth in this Assignment and are not
intended to create, and shall not create, any representations, warranties or additional covenants of
or by Assignor to Assignee and ( c) shall be deemed to contain all of the terms and provisions of
this Assignment, as fully and to all intents and purposes as though the same were set forth at
length in such separate assignments.
Section 3.6 Counterparts. This Assignment may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but
all of such counterparts shall constitute for all purposes one agreement.
[Signature Page Follows.]
REJ!~!l~llijJ!~f~UIH~IIIJ~l~Willl~~~IJlll\lt571 BK# 1209 PGP~o
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Poge 5 of 10
non-CONFIDENTIAL-Redacted Version Questar Gas Company
DocketNo. 17-057-01
Application Exhibit K
IN WITNESS WHEREOF, the parties hereto have executed this Assignment 6J!ffiJ91tgf309
first written above, to be effective, however, for all purposes as of the Effective Time.
ASSIGNOR:
Vice-President of Operations
ACKNOWLEDGMENT
STATE OF COLORADO §
§
COUNTY OF DENVER §
This instrument was acknowledged before me on the 16th day of April, 2~J.~1,1br,,Diir,
Bermingham, Vice-President of Operations of North Shore Exploration and Prod~~'t1~1,J,,A-!flf>-:
Delaware limited liability company, on behalf of said limited liability company. /'1§'}·· ::... ···,.fZ(\
1 ....... "' lP"'" r::, ~ l.,..\ ·~·
Notmy , FJ\.e,{8~1
__________ .;:;_·"'-·';..,·"·• .. ,· -·
LORI MOORE
NOTARY PUBLIC
STATE OF COLORADO
NOTARY ID 20004029871
MY COMMISSION EXPIRES 02/DS/2017
REC~~~~~11~i~mu~11~~11im~1l1~!111~~j1J1111t571 BK# 1209 PG,o~,
STEVEN DALE DAVIS, CLERK ot SWEETWATER COUNTY, WY Poge 6 ol 10
•
•
•
•
•
•
non-CONFIDENTIAL-Redacted Version Questar Gas Company
Docket No. 17-057-01
Application Exhibit K
Page 306 of309
ASSIGNEE:
WEXPRO COMPANY
By: ~<L,J_~
J~
Executive Vice-President and
Chief Operating Officer
ACKNOWLEDGMENT
STATE OF UTAH §
§
COUNTY OF SALT LAKE §
This instrument was acknowledged before me on the 16th day of April, 2015, by James
R. Livsey, the Executive Vice-President and Chief Operating Officer of Wexpro Company, a
Utah corporation, on behalf of said corporation .
REJ1~~~,1~i1J~u~111~111m1n1~i111~~j11111111571 BK# 1209 PGP~2
STEVEN DALE DAVIS, CLERK ol SWEETWATER COUNTY, WY Page 7 ol 10
LEASES:
LESSOR LESSEE
USA WYW-016211 SUZY LANSDALE
USA WYW-016692 CARL A. PETERSON
USA WYW-014729 R D MACDONALD EST
USA WYW-138911 ELDA M BUTIERWICK
USA WYW-014726 ELDA M BUTIERWICK
USA WYW-014725 ELDA M. BUTIERWICK
USA WYE-0 0238128 ELDA M. BUTIERWICK
USA WYE-0 0240608 MARY P FOREMAN
USA WYE-0 0240600 MARY P FOREMAN
USA WYE-0 0240578 JOHN J. FOREMAN
USA WYE-0 024060A MARY P FOREMAN
USA WYE-0 024060E MARY P FOREMAN
USA WYE-0 024061 JANE KLEEMAN
USA WYE-0 024061 B JANE KLEEMAN
USA WYE-0 024060F MARY P FOREMAN
•
EXHIBIT A
(to that Assignment and Bill of Sale dated April 16, 2015 from
North Shore Exploration and Production, LLC to Wexpro Company)
LEASE DATE COUNTY STATE
1/1/1969 SWEETWATER WYOMING
2/1/1969 SWEETWATER WYOMING
5/1/1948 SWEETWATER WYOMING
611/1948 SWEETWATER WYOMING
6/1/1948 SWEETWATER WYOMING
6/1/1948 SWEETWATER WYOMING
6/1/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
911/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
9/1/1948 SWEETWATER WYOMING
Page 1 of 2
•
LEGAL DESCRIPTION
T013N -R100W:
SEC 001 S2 NW4, NZ SW4, SW4 SW4, LOT 3, LOT 4
T013N -R099W:
SEC 007 SW4 SE4
T013N -R100W:
SEC 013 NE4 SE4, E2 NE4
T013N -R099W:
SEC 018 NW4 NE4
T013N -R099W:
SEC 018 SW4 NE4, NW4
T013N -R099W:
SEC 018 LOT 3, NW4 SE4, NE4 SW4
T013N -R099W:
SEC 018 NE4 NE4, SE4 NE4, NW4 NE4
T013N -R100W:
SEC 012 W2 SE4, NE4
T013N -R099W:
SEC 007 SE4 SW4
T013N -R100W:
SEC 001 S2 NE4, SE4, LOT 1, LOT 2
T013N -R099W:
SEC 007 NE4 SW4, N2 SE4, LOT 3, LOT 4
T013N -R100W:
SEC 012 E2 SE4
T013N -R099W:
SEC 007 NE4, E2 NW4, LOT 2
T013N -R099W:
SEC 006 LOT 3, LOT 4, LOT 5, LOT 6, LOT 7
SEC 008 NE4
T013N -R099W:
SEC 006 E2 SW4; SE4 NW4, S2 NE4, SE4, LOT 1, LOT 2
T013N -R099W:
SEC007 LOT 1
T013N -R100W:
SEC 012 W2
::,
0 ::,
0 ~ 8 ~ ;;
i:-<
:::ti ct> 0. po
("")
Cb 0. < ct> ;;i o· ::,
;i> tJ ,0 'O O ~ 'O ("") ct> -:,,;-en ~ o· ~ S-p, po ....,
(JQ o. Z o ct> 0 0 i:,, v-l~. en
0 trl ~ (') -.J;x,o
o e:s:a
REJ!~~~llijJ!IJmu1~111ijllll~~lllJtlll~~~l!lll\lJlm1 BK# 1209 PGj! ~]
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page 8 of 10
•
•
EASEMENT·
GRANTOR GRANTEE
USA WYW-139919 MARATHON OIL COMPANY
• •
EXHIBIT A
(to that Assignment and Bill of Sale dated April 16, 2015 from
North Shore Exploration and Production, LLC to Wexpro Company)
AGMT DATE COUNTY STATE LEGAL DESCRIPTION
01/23/1997 SWEETWATER WYOMING T013N -R 1 OOW: ACCESS ROAD TO USA WYE-0240608
SEC 004 W2 SW/4
SEC 005 SE4 NW4, N2 SE4, SW4 NE4
SEC 009 N2 NW4, SE4 NW4, NZ SE4, SW4 NE4
SEC 010 N2 SW4, SE4 SW4, SW4 SE4
SEC 011 SE4 SW4, S2 SE4
SEC 012 S2 SW4
SEC 014 NZ NW4
SEC 015 NZ NE4
REC!l!~~~ll~J!~l~Ul~lll~IIIJ~l~ll~~lll~~~ljll\t571 BK# 1209 PG,0~4
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY, WY Page Q of 10
Page 2 of2
::I 0 ::I 0 0 ~ 8 ~ > r
:;d (1) 0. p,
()
0 0.
< (1)
;;i o·
::I
;:.,. tJ ,0 'd O i:: 'd () (1)
-;,;-U> ~ ~-~ ~ ~ =-· z Q C1> 0 0 p, l>J::J :_.ti)
0 tTi --.J (")
00 & O 0 g, cr' V, .g
t..,.J ~-~ ~ ~ ~ 8~
API #
4903705138
4903721161
4903720796
4903705136
4903705151
4903720796
4903728767
4903724085
4903723781
•
EXHIBIT B
(to that Asset Exchange Agreement dated April 16, 2015 between
Wexpro Company and North Shore Exploration and Production, LLC)
WELL NAME COUNTY
KINNEY UNIT #2 SWEETWATER
KINNEY UNIT 5 SWEETWATER
KINNEY UNIT 4 (DAKOTA) SWEETWATER
KINNEY-PIONEER UNIT #3 AKA SWEETWATER
PIONEER UNIT
KINNEY-PIONEER UNIT #4 SWEETWATER
KINNEY UNIT 4 (FRONTIER) SWEETWATER
KINNEY UNIT WELL #18 SWEETWATER
KINNEY UNIT 13-1 SWEETWATER
VERMILLION CREEK DEEP 1 SWEETWATER
Page 1 of 1
•
STATE DESCRIPTION
WYOMING SEC 18-13N-99W
WYOMING SEC 12-13N-100W
WYOMING SEC 12-13N-100W
WYOMING SEC 18-13N-99W
WYOMING SEC 12-13N-100W
WYOMING SEC 12-13N-100W
WYOMING SEC 18-13N-99W
WYOMING SEC 13-13N-100W
WYOMING SEC 12-13N-100W
::l 0 ::l 0 ~ 8 ~ ;;'. r<
::,::
8. Pl r,
f,"
0. < (1) cil o·
::l
>-v ,0 'O O ~ 'O r, (1)
-:>I""' ....... Cb r-t, ~ £ ~ ~
OQ o. Z o
(1) 0 0 p, w::S. en
REJ!~~~ll~J!IJ~UIH~IIIRl,l~ll~~lll~~~ljlll1IJij(IR1 BK# 1209 PGP!5[ ~ ~
STEVEN DALE DAVIS, CLERK of SWEETWATER COUNTY. WY Page 10 ol'"tO cr" '.:'.) 'O W ::;.: I P, ~ ~ 8~
•
•
--< ~ ~
"O ~ ..... ~ C.J
0 --< '-' -= ..... e V'l = • 0 . ..... ..... -C.J ...... ~
~ ......
i.. 0
Ea< i.. ~
~ C.J ...... c ~
1J1 ~ 0 I .....
Cl}
0 u
~ > ...... ..... ~ -= 8 = u
•
0
LI.J
I-u
<C
0
LI.J
~
NON-CONFIDENTIAL REDACTED VERSION
Questar Gas Company
Docket No. 17-057-01
Application Exhibit l-1
Page 1 of 16
1
2
3
4
5
6
7
8
9
10
11
12
•
Trail
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
2 0 2 n 0
2 :!:! 0 n,
2 --t
:l>o.O~ 'U O C ;o ~ R-~ m n m r+ 0 OJ ,-+ CJ ::x> §"·zG)~ -u ::, 9 OJ m rum.....,.v,O ~~~ti< N5'03~ Q.. ;:;: ~~ ~ .....,. r;-6:, o
O)t,-i,i,-..i,-<Z
•
•
13
14
15
16
17
18
19
20
21
22
23
24
•
Trail
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z 21
0 m z ~
)> o O ~ 9C O C :::0 ~R-~ rn n ro .-+ 0 QJ ,-+ QJ ::t> g-zG)Q -u:,~wrn a.irnl-'v,O ~ ~ --;-J ~ < ""6'039d g,;:;:~~~
I-' r;-6 :, 0 0)1-'l-'-<Z
25
26
27
28
29
30
31
32
33
34
35
36
•
Trail
Cumulative Cost-of-Service Projection $1Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z ,.,
0 m z -I
>oo~ "'O O C ::0 ~R-~ m n ro ,..... O OJ ...... OJ l> g-zG)Cl
-u:J?OJm
OJmi,-.i.V'IO ~ ~ ~ ~ < .;, c' 0 3 ::;;
g,;:;:~~~
t,--i, r;-6::::, 0 O"I j,--1, t,--i, '< z
•
• •
Trail
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z ,.,
0 rn z -I
)> o O ~ 'U O C :;::o ~ R-~ rn n m .-+ 0 CJ,-+CJ~ §"·z2ic:::i
"'0=1~0Jrn °'m ..... tno ~ ~ ~ ~ <
~§:~3~ ~ ~ b~ 0 CJ) .......... -< z
37
38
39
40
41
42
43
44
45
46
47
48
•
Trail
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
"TI 0 m z -i
)>o.O~ U Q C ::,::, ~nrt>m
~j" [ ~ ~ g. z ~ Cl
-o::::,~wm wmt,-,-\v,O ~ ~ "-;J ~ < O'> -· o 3 m g,g:~"'C ~
.-r;--6 ~ 0 O'lt-~-<Z
•
•
49
50
51
52
53
54
55
56
57
58
59
60
• Trail
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z 8 z
:!:!
0 m z --I
:i, 0 ,0 ~
"'O O C :::0 ~ n ro m ~r[£"~ 5· z ~ Q ""'Cl:::, ~ Q.l m Q.lm~v,o ~ ~ ~ g <
-.J -· o 3 m
0 2': Ul "'O ~ ;:~6~o 0'\1-...\~<2
61
62
63
64
65
66
67
68
69
70
71
72
•
Trail
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!!
0 ,,, z -I
)> o O ~
"'O O C :::C ~ ~ ~ rn n ro ,.... 0 ~-; ~ ~
\Jg?~~
ru rni--i,vi o ~ ~ ";'-' ~ < 00 -· 0 3 ,,, o~v,-c~ :~6 ~o
O') 1--'-1--'-< z
•
• •
Trail
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
cos $/Dth
•
Production /Dth
z
0 z n 0 z
"TI 0 rn z --i
:J>o.O~ ""C O C ::::0 ~R-~rn n n:, ,..,. O QJ ,..,. QJ ::t>
5·:zG)Q -o::,~QJrn ru rn ~vio ~ ~ ~ ~ < l.05'03~ S,;:..·~-g~
t-\ r;-6::, 0 m~~-<:Z
73
74
75
76
77
78
79
80
81
82
83
84
•
Trail
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z
0 z n 0 z .,,
0 rn z -i
)>o,O~
"'O O C ;::o ~ ~ B! m n m ,.... 0 CJ,-t-0.l)>
-u5·~~Cl CJ:,. Wm ~m~~o ~ ~ ";-" 0 < o -· o 3 rn o[u,-o~
;:-'7"" 6 ~ 0 m~~-<Z
•
85
86
87
88
89
90
91
92
93
94
95
96
• •
Trail
Annual Cost-of-Service Projection $1Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!!
0 rn z -I
J> o O ~ "O O C :::0
~R-;d
Q.I !!!. QJ ::t:,,
\Jg-~G)Q aJ::J . w m ~~ ...... ;o .....,. ::r ~ 0 < i-eyo3~ 8-i~~-g~
i-r;-6 ::Jo O"l ............ -< z
97
98
99
100
101
102
103
104
105
106
107
108
•
Trail
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z
0 z n 0 z ::!::i 0 m z -I
J> o O ~ "C O C ;::o ~ R-ffi m n m .-+ 0 ~ ...... ~ :t> -oci'~G>Cl cu:,. o,m ~ m I-'~ 0
I-'~~ 0 < N -· 0 3 m o[vi-c~ ~ r;-6 ~ 6
C') I-' I-'-< z
•
•
--< o?j c., -~ .... = ~ s ~ "" <:.I = e,
-= .... • e .,,
= -0 .....
~ ..... .... "" <:.I ~ ~ .....
0 "" ~
~ <:.I ..... c ~ 00. ~ 0 I .... r,;,
0 u -~ = = = <
•
0
UJ
I-u
<(
0
UJ
0:::
NON-CONFIDENTIAL REDACTED VERSION
Questar Gas Company
Docket No. 17-057-01
Application Exhibit L-1
Page 13 of 16
109
110
111
112
113
114
115
116
117
11 8
119
120
•
Trail
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z "Tl 6 rn z -I
)>o.O~
"'O O C :;:o ~~~m n ro .-+ 0 ~ ,-+ ~ l>
-c 5· tf-Gl C)
Q.1=3,. Wm
~mt-,i,~O
t-,i, ~ ~ 0 < .i:,.c'o3~ ~ ;:;: ~"fil ~
.-r;-C)=,0
O"l 1--1-i,--i,-< z
•
121
122
123
124
125
126
127
128
129
130
131
132
• •
Trail
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
"TI
0 rn z -i
)> o O ~
"O O C ::::0 ~~~m n ro ,..... O ~ ..+ ~ ::t>
" o· 15 Gl ~ aJ =>. aJ m
~~.-~o .-::r --;-,JO < v,c:;:03g:;
S,;:;.·~~~
.-r;-"C)=,0 m.-.--<Z
133
134
135
136
137
138
139
140
141
142
143
144
•
Trail
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z
"Tl 0 rn z -;
J>o.O~ "'O O C ;o ~R--~ rn n m ,.... a OJrt-CJ)>
-u5·~G)c: a,::,. OJm ~ ~ ~ ~ 0
f-l, :,-~ 0 < 01 -· O 3 rn o[ui-o~ ~ r;-6 ~ 6
0) ~ i,-..i, '"< z
•
• •
Whiskey Canyon
Cumulative Cost-of-Service Projection $illth (Allocated G&A)
REDACTED
•
z
0 z n 0 z -n
0 n, z -I
)>o,O~
"U O C :::o ~R-~ rn n ro r1-O QJ..-,.CJ)> g-z~Cl
iJ:J~QJrr, rurni--i,v,O
~~--;.Jti< l-'-·03rn og:u,-oG;
;:::-r;-6 ~ 6 er, NI-'-< Z
2
3
4
5
6
7
8
9
10
11
12
•
Whiskey Canyon
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z
0 z n 0 z :!:! 0 m z --i
)>o.O~ "'O O C ;:c ~R-~ rn n rn .-+ O CJ ,-+ QJ :t> g. 2; 0
'"'O:,~a,rn
CJrn ....... V'I O ~ ~ --;-J ~ < Ncr03~
Q,;:;.·~~~
....... ~6:,0
O)Ni,...<Z
•
13
14
15
16
17
18
19
20
21
22
23
24
• •
Whiskey Canyon
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
:!:! 0 m z -i
:i>o.O~ "'O O C ;o "'O n ro m ~ A :a. 0
QJ~OJ::r> g. z ~ ~
°'O::l~CUm OJrn.-v.O ~~"";-JS>< w -· o 3 m
0 g: lJ1 "'C ~ ....., ......i ru -.-r;-6::, 0 O)Ni,-..i,-<Z
25
26
27
28
29
30
31
32
33
34
35
36
•
Whiskey Canyon
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
::!)
0 m z -;
)>o.P~ "'O O C :,:, ~R-~ m n ro ,.... c:,
QJ r-+a.l )>
g-zG)~
-0::J~Wm wm~V'O ~ ~ ~ f;> <
-I> i:i' 0 3 ;) ~;;:~~~ .-r;-6 ::J 0 O"IN~<Z
•
•
..-< ~ c., -~ ... = Q,j
8 Q,j i.. c:, = .... ---= ... =e • 0 GI':) ...... = = 0 ~ .... u~ ....... ~
Q,j 0 ~ i..
r,} ~ .... -= Q,j ~ .~ c Q,j
1JJ c.!.
0 I ... r,}
0 u
Q,j ;, .... ... ~ -= 8 = u
•
0
UJ
I-u
<(
0
UJ a::
NON-CONFIDENTIAL REDACTED VERSION
Questar Gas Company
Docket No. 17-057-01
Application Exhibit L-2
Page 5 of 16
37
38
39
40
41
42
43
44
45
46
47
48
•
Whiskey Canyon
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
J::!
0 m z -I
:l> 0 .0 ~
"'O O C :;:o ~R-~ rn nro,..,.O Q.) ,..,. OJ )> g-z ;;CJ
-c::,~curn
a,mi-VIO ~~~h'< <Tl5'03~
0 ;:;: V, "'O V'I
; r;-6 ~ 6
O'lNl--<Z
•
49
so
51
52
53
54
55
56
57
58
59
60
• • Whiskey Canyon
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!J
0 m z -I
:i, 0 .0 ~ "C O C :::0 ~R-~ m n ro .-+ 0 CJr-1-CJ)> 5· z ~ ~
"'O~~CJm a,m~v,O ~ ~ --;.i g <
-.J -· o 3 m
o[Vl-o~ ~ r;-6 ~ 0 O"'IN~<Z
61
62
63
64
65
66
67
68
69
70
71
72
•
Whiskey Canyon
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z -n 0 rn z --;
:i>o.o~ "'O O C :;:u ~R-~ rn n m ...+ 0 ~ ,-+ ~ :t> -u~r~~~
QJrnt-,i,viO ~ ~ ~ s < oo -· o 3 rn o[uiu~ 2:r;-6~o
CJ'I N 1--1--< 2
•
• •
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
cos $/Dth
•
Production /Dth
z 0 z n 0 z :!:! 0 rn z -l
:t> 0 .0 ~ ""C O C ;::o ~R-~ rn nror+D OJ r+ QJ )> 5·z2iCJ -o :, ~ OJ m OJ m i,-..i, v, O ~;--;,Jti<
lD -· o 3 rn o[v,-u~
; r;-6 ~ 0
O)Ni,-..i,-<Z
73
74
75
76
77
78
79
80
81
82
83
84
•
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
:!! 0 rn z -i
)> o O ~ "'C O C :,::, ~R-~ rn n ro ,.... 0 QJ ,-+OJ :t>
-u6·~G)~ a,::,. DJ rn ~ ~ i-~ 0 ~~~o< o -· o 3 rn o[u,-o~ ;;~6~o 0"1 Nt--<Z
•
85
86
87
88
89
90
91
92
93
94
95
96
• •
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z A 0 z
:!J 0 m z -l
)> o O ~ "'C O C ;::o ~ R-~ m n ro " 0 ~ .--t-~ )> .,, o· t G) Cl OJ ::J • w m ~~~~o l-'::r1 o< ..... rr O 3 g:i
9..;:;:~~~
I-' r;-6::, o mNi-i.-,<Z
97
98
99
100
101
102
103
104
105
106
107
108
•
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!)
0 rn z --{
)>o.0~
""C O C :;:u ~ R-~ m ("')rt) ..... 0 cu ,-+ QJ )>
-o6·~~Cl ru ::, • Ill rn ~ m ~ ~ 0 ~ ~ ~ 0 < N -· 0 3 rn
o~ln-o~
: r;--6 ~ 0 O'I N 1--l-< 2
•
• •
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z
A 0 z :!J 0 rn z -I
:x>o.o~ "C O C :,:, ~ R-;g_ 0
QJ !!?. QJ ::t>
-rJ g. t ~ Q
Q.I :::, • QJ rn
O'Q rr, j,,--1, V'I 0 :~~~< w -· o 3 rn o~u,-c~ ;:::-~ 6 ~ 0
O'I N i,..-i,-< 2
109
110
111
112
113
114
115
116
117
118
119
120
•
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z
(")
0 z ,.,
0 rn z -;
)>o.O~ "'O O C ;r, ~ R-~ m n ro ,..,. 0 a,,..,.OJ)>
-ug·~~Q OJ::::,.a,m ~~,_;;o
i-Jo::T"'~O< ... -·0 3"'
0 g: lJ1 "'C ~
: r;-6 ~ 0 cnNl-'-<Z
•
121
122
123
124
125
126
127
128
129
130
131
132
• •
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z :!! 0 rn z ..,
:i, o O ~
"'O O C ;::o ~~~m n ro ..-+ O ~ ,-+ ~ )>
-,:, 5· 5" G) C1 lll:l. wrn ~ ~ .-~ 0 .--:r~o< v, -· o 3 rn
o~Vl-o~ ;::~b~o O'l N .-"< Z
133
134
135
136
137
138
139
140
141
142
143
144
•
Whiskey Canyon
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!!
0 m z -I
:t> 0 .0 ~ -aoc:::o ~ R-~ m n ro ,...,. O QJ,...,.OJ)> -06·~~~ OJ:::J . rum ~ m .._. ~ 0
I-'~~ 0 < en -· 0 3 m o~u,-c~ ~~6~o O'l N t-><Z
•
• •
Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
::!J 0 m z -j
:i>o.O~ "Ooc:::o ~~~m n ro n-0 OJ r+OJ;:t> g-zG)Cl -a :::, 9 cu m °'rn,-..i,V'IO ~~~~<
l-'i5'03~ ~ ;:;: ~~ ~
.-r;--6:::, 0 01Wl-'-<Z
2
3
4
5
6
7
8
9
10
11
12
•
Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
"TI
0 n, z -I
)> o O ~ "O O C ;::o ~ R-ffi m n m .-+ 0 QJ ,-+ QJ )>
g-zG)~
'""'O::::J~CJn, w mi,...i,v,O ~ ~ --;.J s <
N a,: 0 3 ~ ~ ;::.: ~~ ~
i,...i, r;-6 :J 0
CJ) w i,...i,-< z
•
13
14
15
16
17
18
19
20
21
22
23
24
• •
Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z ::!:}
0 m z -I
)> o O ~ "O O C :,::, ~R-~ rn n ro """" O ~-i ~ ~ -og~~~ wrn~vio ~~~ti< "'6'03~ 0 ;:;: u, "O l/) : ~ 6 ~ 0 O'IW~-<Z
25
26
27
28
29
30
31
32
33
34
35
36
•
Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
:!:!
0 m z -;
:l> 0 .0 ~ ~g ~~ n· ~ ~ o QJ l"'f'QJ}> g. z ~ Q
iJ :J?DJm ru m .-V'I O o;g ~ --;.J ~ <
.I>, c' 0 3 !:,g s_.;:;:~~~ .-r;-6 ::1 O O'll.01-lt<Z
•
• •
Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z "T1 0 m z -I
)>o.O~
-0 0 C ;::;c ~ R-~ m nror-+O CJ ...... CJ ::t> g. z ~ Q -u ::::, ~ CJ m
OJmi--i.VlO ~ ~ ~ ~ < l/1 -· O 3 m o[v,uG; ~~b~o
C') w 1--1.-< z
37
38
39
40
41
42
43
44
45
46
47
48
•
Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!' 0 rn z ...,
)>o.O~ 'U O C :;::o ~ R-~ m n ro ,..,. 0 ru ...... OJ );> g. z ~ Q
""O~~OJm rum._.vi o ~ ~ ~ ~ < a, -· o 3 rn o[:ui-oG; ~ r;--6 ~ 0
O)W1->-<Z
•
49
50
51
52
53
54
55
56
57
58
59
60
• • Canyon Creek OP A
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z 8 z "T1 i5 m z -,
l>o.O~
"'O O C :,::, ~ R-; 8
Q.) m. Q.) l> g-zG)Q
-c::,~cum cu m 1-1-V'l 0 ~~~ti<
-..J -· o 3 m
0 g: l.n '"O ~
;:-r;-6 ~ 6
CJ"\ w 1--"< z
61
62
63
64
65
66
67
68
69
70
71
72
•
Canyon Creek OP A
Cumulative Cost-of-Service Projection $1Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z :!:!
0 rr, z -I
)>c::,,O~ "O O C :::O "E!_ n ro m
~· [ ~ ~
5· z;;; C1 "'O:,~wm
Q.I m ..... VI 0 ~ ~ ~ ~ < 00c'03~
g,;:;:~~ ~
..... r;--6:::, 0
O) l>J ..... "< z
•
• •
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
cos $/Dth
•
Production /Dth
z 0 z n 0 z
"T1
0 m z ~
)>o.O~ "O O C ;:o ~R-~ m n ro ...+ 0 DJr,-CU)> g-z2iCJ
-C:J~DJm rumi,..-i,vio ~ ~ ~ s < <D -· o 3 m o[Ln-c~ ;:~b~o
CJ) (J.J .... -< z
73
74
75
76
77
78
79
80
81
82
83
84
•
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!!
0 rn z -I
l> o O ~ "'C O C :::O ~ ~ ~ rn nroM"O ru,......w)> ,:, 5· ~; ~ OJ::,. Cl.Im ~ ~ ..... ~ 0
..... :::J"' ';-JO < O -· o 3 rn
g,[~"fil ~ ..... r;-6 ::so
O"I w t-·'"< z
•
85
86
87
88
89
90
91
92
93
94
95
96
• •
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z 8 z
:!:!
C) rn z -I
)>o,O~
"'O O C :::0 ~ R-~ m n m r-+ O
~,-+~)>
-c a· t ci Cl OJ::,.OJm ~~~~o
1--'-:::,-~ 0 < ~~03~ S, ;:;: ~ -g ~
~r;-Q=30
O)W l--l-<Z
97
98
99
100
101
102
103
104
105
106
107
108
•
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z
0 z n 0 z :!! 0 rn z -I
)>o,O~
"'O O C ::c, ~ R-~ m n ro,.... 0 QJ ...... OJ :t> \J6·s~q ru:::s . cum
~~.-~o .-:,--';--1 0 < N-·03rn o[u,-o~ ~~6~o O>Wl-'-<:Z
•
• •
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!:!
0 m z -I
)>o.O~ 'U O C ;::o ~ R-~ m n ro ,...... 0 QJ,-+Ol)>
\Jg.~~Q
OJ::J. ru m
~~i-~O
.-=1"' ~ 0 < w -· O 3 m o~v,-c~ ;:~b~o
O"IWi--<2
109
110
111
112
113
114
115
116
117
118
119
120
•
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z -n 0 m z -I
J>o.D~ U Q C ::0 ~ R-~ m n ro r+ 0
~r+~)>
""tJ a· ~ G) Cl
Ill ::J • OJ m
~m.-~O .-~~o< .i:>5'03~ 8., ;:;: ~ "fil ~
1--1. r;-6 ::J 0
O"IWl-l.-<Z
•
.----------------------------------------------------------------------------
121
122
123
124
125
126
127
128
129
130
131
132
• •
Canyon Creek OP A
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z -n 0 rn z -j
)> o O ~ "O O C: ::0 ~ R-~ m n ro ,...... 0 ~ ...... ~ l>
-o o· ~ G) Cl CJ::,, CJm
~~i-~O t-::J""~o< v, -· o 3 rn o[vi-c~ ;:~6~o C"IWt-1.-<Z
133
134
135
136
137
138
139
140
141
142
143
144
•
Canyon Creek OP A
Annual Cost-of-Service Projection $1Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z ::!J 0 rn z -I ~ 0 ,0 ~ '"'O O C: :x, "'O n ro m ~A~ 0 QJ~W)>
-u6·~2,Cl OJ:,. OJm
~~i-~O
1-l ::r-~ 0 <
CJ) -· o 3 rn og:u,-o~
: r;-6 ~ 0
O"\Wl-l-<Z
•
•
:? ~ 0
"c:l Cl,l -co: c:.i 0 ---< '-'
.::I -e V'; • = 0 .... ..... 't Cl,l Cl,l = ._, = 0 .... "" ~ Po.
Cl,l
c:.i .... > "" Cl,l
00. c.!. 0 I -"' 0 u
Cl,l > .... -co: -= 6 = u
•
0
UJ
t-u
<(
0
UJ
C!:
NON-CONFIDENTIAL REDACTED VERSION
Questar Gas Company
Docket No. 17-057-01
Application Exhibit L-4
Page 1 of 16
2
3
4
5
6
7
8
9
10
11
12
•
Kinney
Cumulative Cost-of-Service Projection $1Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
:!J 0 rn z -i
:i>o.o~ 'U O C :,::, ~ ~ ~ rn nro,.....O ll.l ..... OJ )> 5·zG)q
"'U:J~Wn,
Cl.lrni,--i,vio ~~~ti< "-'o'o3~ ~;+~~~ """""~ 6 ::s O cn.i::,..._.-<Z
•
13
14
15
16
17
18
19
20
21
22
23
24
• •
Kinney
Cumulative Cost-of-Service Projection $1Dth (Allocated G&A)
REDACTED
•
z
0 z n 0 z "Tl 0 rn z -;
:i>o.O~ "'C O C ;o ~ R-~ m n ro ,.... O ~-;; ~ ~ -cg~~~ rurn1--1-v,O ~ ~ ~ ~ < wo'o3~ o;:::..·v,'UVl
; r;-6 ~ 6 m~~-<2
25
26
27
28
29
30
31
32
33
34
35
36
•
Kinney
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!:! 0 rn z -i
l>o.O~ ""C O C ;::o ~R--~ m n rt> ,.... 0 CJ,....CJ)> g. 2 ~ Q
""Cl ::::, ~ CJ m ru m t,-,i, v-, 0
o;g ~ ~ ~ <
~5'03~ Q, ;:;: ¥J "fil ~ ~ '7"" o::::, 0 O"l~f-'-<2
•
• •
Kinney
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!!
0 m z -l
J>o.O~ "'C O C :,:::i ~ R-~ m n ro ,-+ 0 Ql ,-+ QJ :t> g. z; Cl
-o::::,~wrn rurn...,..vio ~ ~ ~ ~ < v,-·03m o[v,-o~ ;:~6~o CTI.P.>-'-<2
37
38
39
40
41
42
43
44
45
46
47
48
•
Kinney
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z ::!J 0 rn z -I
J>o.O~ ""C O C :::0 ~R-~ m n ro .-+ 0 cu ..... OJ )> g. z;;; Cl
'"'C ::::, ~ OJ m rum~V'IO ~ ~ ~ ~ <
CJ) -· O 3 rn
0 ~ V, ""C c; ~ r:-6 ~ 6 m-1>,...-<Z
•
49
50
51
52
53
54
55
56
57
58
59
60
• • Kinney
Cumulative Cost-of-Service Projection $!Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z ,.,
0 rn z -I
l> o O ~ "O O C :,::, ~ R-~ m n ro .-+ 0 Wr+OJ :;t::,, g. 2 ~ Q
"'Cl ::::, ~ w m C.J m~Vl o ~~~G>< .._, -· o 3 rn o[vi-o~ ~ f7'" 6 ~ 0 en .i,. ,_.-< z
61
62
63
64
65
66
67
68
69
70
71
72
•
Kinney
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
"TI 6 m z -I
l>o.O~ "O O C :x, ~R-~ rn nror+O QJ r+ QJ )> g. z ~ ~
-o:::i!='rum
a,m),-\vi o ~ ~ ~ Q < oo-·03m o[v,-c~ ~ r;-6 ~ 0 Cl)~,_.< z
•
• •
Kinney
Annual Cost-of-Service Projection $illth (Allocated G&A)
REDACTED
COS $/Dth
•
Production /Dth
z 0 z n 0 z ::!J 0 rn z -I
l>o.O~ "C O C ::::0 } R-; 8
QJ~W)> 5·2 2iCl "O:J~wm
QJ m .,_i. VI 0 ~ ~ ~ ~ <
l05'03~ ~ ;::;: ~~ ~ ....,. r;-6 :, O
CJ) .f:,, ...... < z
--< ~ C,
""O ~ -e-= CJ 0 --< '-' -= -e V't = ~~ = CJ = -~ ~ e ~
~ CJ .... c
~ rJJ. ..,!.
0 I -"' 0 u -e-= = = = <
0
UJ
I-u
<(
0
UJ a::
NON-CONFIDENTIAL REDACTED VERSION
Questar Gas Company
Docket No.17-057-01
Application Exhibit L-4
Page 10 of 16 •
•
•
85
86
87
88
89
90
91
92
93
94
95
96
• •
Kinney
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
::!:!
0 m z -I
)> o O ~ "0 0 C :,::, ~R-~ rn n ro .-+ O ~ ...... ~ ::t>
-u 5· 5" G) CJ QJ ::::, • ll.l rn ~~~;;o ~ ~ ~ 0 < l-'6'03~ Q,;:;·~~~
f-J, r;-6::::, o
O"I .J::i. ~-< z
97
98
99
100
101
102
103
104
105
106
107
108
•
Kinney
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z
0 z n 0 z ::!:! 0 m z --t
:i>o.o~ ""C O C :;:;o ~~~m n ro ..... 0 CJ,.....W)> lJg-~;q
CJ ::, • OJ rr,
~~s-~O S-::J"'~o< N -· 0 3 m o[u,u~ "'"h ......i cu -s-r;-6::, o o,.i,.,-.-<Z
•
• •
Kinney
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z ;-,
0 z
::!J
0 m z -;
)> o O ~
"O O C ::o ~R--~ m n ro l""'t" 0 ~ r-1-~ )> .,, a· ~ G) Q QJ:::,_ CJm ~ ~ ~ ~ 0
i,....i, ::::,-I Q < w -· o 3 m o~vi-o~ ~ r;-6 ~ 0 C"l~!--1.-<2
109
110
111
112
113
114
115
116
117
118
119
120
•
Kinney
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z (')
0 z
"Tl
0 n, z -I
)>o.O~
"'O O C ::0 "'O n m rn [[~~
9Ug-~2,Cl w::,. wrn ~~.-;;o .-~"74o< .i:,.c'o3~
S,;:;:~~~
.-r;--6::, O cn.+:::,,.-<Z
•
121
122
123
124
125
126
127
128
129
130
131
132
• •
Kinney
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z ,,
0 rn z -I
:i, o O ~ "'O O C ::::0 ~R--~ rn n ro,..... O QJ ...... QJ )>
-c6·~G)~ w ::, . w rn ~~~;;o
}->, '=r ~ 0 < U1i5'03; S?,;;:~-g~
}->, r;-6::, 0 C))+>>-'-<Z
133
134
135
136
137
138
139
140
141
142
143
144
•
Kinney
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z .,,
0 m z ~
)> o O ~
"'O O C: :::0 ~ R-~ ITI n m ..... 0 ~ ..... ~ )> -uo·~G)Cl OJ::,. OJrn ~ ~ ...... ~ 0
I-I::,-~ 0 <
°'6'03~ ~ ;:,: ~~ ~ ...... ~ 6 ::J 0 O"'I .i::,. ...... "< z
•
• •
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z ~ 0 m z -;
:i>o.o~ "O O C :;:o ~ ~ ~ rn n ro,.... 0 OJ.-t-OJ)> g-zG)Q
"'tl':::J9QJrn
OJrni--,.i,V'IO ~ ~ ~ f;> < ,_. -· o 3 m o[l.n-o~ ;:r;-b~o en v, ,-. < z
2
3
4
5
6
7
8
9
10
]]
12
•
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!:! 0 rn z -i
)> o O ~ 'U O C ::0 i~;d OJm.OJ~ g. z ~ ~
-a:::,?rurn
OJ rT1 )--l, VI 0 ~ ~ ";--' g <
N (5! 0 3 ~
Q,;:;·~~~ ~ r;-"" 6:::, o
0) t.n i,-..i,-< z
•
13
14
15
16
17
18
19
20
21
22
23
24
• •
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!:!
0 rn z -I
)>o.O~
'U O C :,::, ~ R-~ m
Q ~ c1" ~
6·zG)Q
\J:J~aJm rum~vio ~~~t?< ""5'03;ti a~·~~~ ~r;-6:JO C"IVl~<Z
25
26
27
28
29
30
31
32
33
34
35
36
•
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z .,,
0 rn z -I
)>o,O~
"C O C ::;o ~ ~ ~ m n ro ..... 0 OJr+OJ)>
5·zG)~ -u::::,~wm cu m )-1, Vl o ~~~ti< .i,.-·03rn
0 g: l/1,:, ~
: r;-6 ~ 0 m l/1 ,_.-< z
•
• •
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z ~ 0 rn z -I
l> o O ~ ""C O C ::0 ~R-~ rn n ro .-+ 0 QJ ,-+ QJ )> g-z~ct
-u::::,~a,m
rumt->-vio ~ ~ ~ ~ < v, -· o 3 rn o[ui-o~ ;:;r;-6~0 en u, 1--1. < 2
37
38
39
40
41
42
43
44
45
46
47
48
•
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z ~ 0 rn z -I
:i, 0 .0 ~ "'O O C :::0 ~R-~ m n ro ,..... O QJr9-aJ)> g. z ~ Cl
"'O::J~a.Jm OJ m t-"' v, O ~ ~ ~ ~ < a, -· o 3 rn
og:vi -o~ -+, '-J QJ -
t-"' r;-6 ::J 0 O"I V'll-'-<2
•
49
50
51
52
53
54
55
56
57
58
59
60
• • Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z
:!:!
0 m z -;
:i>o,O~ ""O O C ;::o ~ R-~ 8 ru~W )> g. 2 ~ ~
-o::::,~w m Q)m~Vl o ~~~ti< -..J -· o 3 m o[vi-o~ ;:-~ 6 ~ 0 O)V,~-<2
61
62
63
64
65
66
67
68
69
70
71
72
•
Combined Properties
Cumulative Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z "T1 0 m z -I
)>o,O~
"C O C :::O "C n ro m [[~~ g. z ~ Cl -,:,:,?wm
Q.I m 1--'-V'I c:, ~ ~ --;-J ~ <
006'03~ S,;:;·~~~
..... r;-6 ::J 0 O"ILJi ..... -<2
•
• •
Combined Properties
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
cos $/0th
•
Production /0th
z 0 z n 0 z
:!:!
CJ m z -i
:i>o.O~ "'O O C :,:::i ~ R-~ rno @ ~ a!' )> g. z ~ Q
-o::::,~OJrn rurn..._.V'lo ~ ~ ~ s < u:, -· o 3 m o[u,-c~
;:' r;-6 ~ 0 mui ..... -<Z
73
74
75
76
77
78
79
80
81
82
83
84
•
Combined Properties
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z
"Tl
0 m z --I
:I> o O ~ "'C O C :::0 ~R-~ rn (") (D ...... 0
QJ ...... OJ :t:,, ,,g-~G)~
OJ=,. rurn ~ ~ i,-..i, ~ 0 ~ :::r ~ 0 < o-·03m o~ui-oG; ;:~6~o
O"l u, i,-..i, < 2
•
85
86
87
88
89
90
91
92
93
94
95
96
• •
Combined Properties
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z ;-,
0 z ::!J 0 rn z -I
:i, 0 .0 ~
"'C O C :;::o
} R-~ 0 ~ ~ ~ )>
-c, 6' ~ G) C1 CJ::J . wrn ~ ~ ~ ~ 0
i,.-..i, ::::r 1 0 < l-'5'03~ o;:;:v,"'CVl
;:: r;-6 ~ 0
O'tVlt--i.-<Z
97
98
99
100
101
102
103
104
105
106
107
108
•
Combined Properties
Annual Cost-of-Service Projection $/Dth (Allocated G&A)
REDACTED
•
z 0 z n 0 z :!}
0 m z --i
:x, 0 .0 ~
""C O C ::0 ~ ~ ~ m n ro ,.... 0 OJ.-..OJ)>
~6·~~Q W:J. aJm ~ ~ 1-\ ~ 0
I-\~~ 0 < N5'03;;J 0 ;:;: v, "'O Vl ~ r:-6 ~ 6
O"ll/11--1.-<:Z
•
• •
Combined Properties
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z
0 z n 0 z :!!
0 m z ---j
l> o O ~ ""O O C: :::0 ~R-~ rn n m ,..,. 0 OJ ,..,. OJ )'>
-u5·~~~ OJ:,. OJm
~m.-~O
.-~ ~ 0 < wo'o3s:J s_;:;:~~~
.-r;-6:::, 0 O"lVl.--<Z
109
110
111
112
113
114
115
116
117
118
119
120
•
Combined Properties
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z
:!:! 0 m z -I
J>o.O~ "O O C ::0 ~R-~ rn n ro ,..... 0 ~ l'"T ~ )>
" o· tf G) Cl W::J. wrn ~ ~ ~ ~ 0 ~ =1"' --;-.JO < ..S5'03~ 9., ;:;· ~ ~ ~ ~ '7'" 6::, 0 CT'lU'l~-<Z
•
•
121
122
123
124
125
126
127
128
129
130
131
132
•
Combined Properties
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z "T1 0 n, z -l
l>o.O~ "U Q C ::::C
} R-fil 8 ~ ~ ~ )>
-u o· ~ G) C1 CJ::J . CJrn ~ ~ ~ ~ 0 ~ ::T ~ 0 < u, -· 0 3 rr,
02°:Ln'"C~ :~6~o 0'1Ult---,i,-<2
133
134
135
136
137
138
139
140
141
142
143
144
•
Combined Properties
Annual Cost-of-Service Projection $/Dth (Incremental G&A)
REDACTED
•
z 0 z n 0 z :!! 0 m z -I
:t> 0 ,0 ~ "'O O C ;:::o ~ R-m m n m ,.... 0
QJ M' QJ )> -u6·~G)q CJ::,. OJm ~~~~o ~ ::r ";JO < CT>i5'03~ ~ ;:t: ~~ ~ ~ r;--6 ::J 0 O')l/1~-<2
•
•
•
•
Cl
LU
J­u
<(
Cl
LU a::
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Appl ication Exhibit M
•
non-Co1dential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N •
•
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N •
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
DocketNo. 17-057-01
Application Exhibit N
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N •
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit N •
•
•
•
•
•
1
2
3
4
5
6
Future Development Plan
non-Confidential -Redacted Version
(A) (B) (C) (D) (E)
REDACTED
Questar Gas Company
Docket No. 17-057-01
Application Exhibit 0
(F) (G)
•
•
•
non-Confidential -Redacted Version
Questar Gas Company
Docket No. 17-057-01
Application Exhibit P
Exhibit P is the confidential electronic model filed
electronically .
•
•
•
BEFORE THE PUBLIC SERVICE COMMISSION OF UTAH
IN THE MATTER OF THE APPLICATION
OF QUESTAR GAS COMPANY FOR
APPROVAL OF THE VERMILLION
ACQUISITION AS A WEXPRO II
PROPERTY
Docket No. 17-057-01
DIRECT TESTIMONY OF BARRIE L. McKAY
FOR QUESTAR GAS COMPANY
QGC Exhibit 2.0
DIRECT TESTIMONY OF
BARRIE L. McKAY
TABLE OF CONTENTS
QGC EXHIBIT 2.0
DOCKETNO. 17-057-01
PAGE ii
I. INTRODUCTION ........................................................................................................... 1
II. VERMILLION ACQUISITION .................................................................................... 2
III. PUBLIC INTEREST ...................................................................................................... 4
•
•
•
•
DIRECT TESTIMONY OF
BARRIE L. McKAY
QGC EXHIBIT 2.0
DOCKETNO. 17-057-01
PAGE 1
I. INTRODUCTION
Q. Please state your name and business address.
2 A.
3
4 Q.
5 A.
6
7
8 Q.
9 A.
10 Q.
13 Q.
14 A.
15
16
17
18
19
20 Q.
21 A.
22
23 •
My name is Barrie L. McKay. My business address is 333 South State Street, Salt Lake
City, Utah.
By whom are you employed and what is your position?
I am employed by Dominion Questar Corporation (Company) as Director of Customer
Rates and Regulations for Questar Gas. I am responsible for state regulatory matters in
Utah, Idaho, and Wyoming.
What are your qualifications to testify in this proceeding?
I have listed my qualifications in QGC Exhibit 2.1 .
Attached to your written testimony are QGC Exhibits 2.1 through 2.2. Were these
prepared by you or under your direction?
Yes.
What is the purpose of your testimony in this Docket?
The purpose of my testimony is to: 1) describe Wexpro's recent acquisition of natural gas
producing properties in and around the Wexpro I Development Drilling area known as
the Vermillion Acquisition Area and explain why Questar Gas is required to bring this
property to the Utah and Wyoming Commissions for approval as a Wexpro II property;
and 2) explain why including the Vermillion Acquisition as a Wexpro II property is in the
public interest and should be approved by this Commission.
Are there others who will provide testimony in this proceeding?
Yes, Mr. Brady B. Rasmussen, Vice President and General Manager of Wexpro
Company, will also provide an overview of the Vermillion Acquisition and explain how
the proposed properties improve the overall cost-of-service.
DIRECT TESTIMONY OF
BARRIE L. McKAY
QGC EXHIBIT 2.0
DoCKETNO. 17-057-01
PAGE2
24 Q.
25
26 A.
27
28
29
30
31 Q.
32 A.
33
34
35
36
37
38
39
40
41
42
43
44 Q.
45
46 A.
47
48
49
II. VERMILLION ACQUISITION
Please describe the recent purchases by Wexpro of natural-gas producing properties
in the Vermillion Acquisition Area.
During the past 12 to 18 months Wexpro Development Company (Wexpro Development
or WDC) has acquired four different properties. First, the Kinney Unit was acquired in
April of 2015 for approximately $350,000. This interest consists of seven producing
wells and one future well. Wexpro Development owns approximately 15% interest in all
current and future wells of the Kinney property.
What was the next purchase?
In December 2015, Wexpro Development closed on its purchase of the Trail, Whiskey
Canyon and Canyon Creek properties for approximately
(Note: If approved as Wexpro II properties, these amounts would be
adjusted to reflect the volumes Wexpro has sold since acquiring the properties. See QGC
Exhibit 3.2). The Trail Unit purchase consists of approximately an additional 3% interest
in 73 producing wells and approximately 73 future wells. The Whiskey Canyon purchase
consists of approximately 75% interest in four producing wells and 15 future wells. The
Canyon Creek purchase consists of 100% interest in seven producing wells, and
overriding royalty interests in 105 existing wells within the Canyon Creek Mesaverde
Participating Area, one future well outside of the Canyon Creek Mesaverde Participating
Area, and 27 overriding royalty interests in future wells within the Canyon Creek
Mesaverde Participating Area.
Does the Wexpro II Agreement require the Company to bring these properties to
the Utah and Wyoming Public Service Commissions for approval?
The Trail and Kinney properties both are within the Wexpro I Development Drilling
Areas, and under the terms of the Wexpro II Agreement, the Company is required to
apply for the Utah and Wyoming Commissions' approval for inclusion as a Wexpro II
Property. Additionally, the overriding royalty interest within the Canyon Creek
•
•
•
• 50
51
52
53
54
55
56
57
58
59
60
61
62
.3
64
65
66
67
68
69
70
71
72
73
74
75
.6
DIRECT TESTIMONY OF
BARRIE L. McKAY
QGC EXHIBIT 2.0
DOCKETNO. 17-057-01
PAGE3
Q.
A.
Q.
A.
Q.
A.
Mesaverde Participating Area are related to wells within the Development Drilling Area
and must be brought to the Utah and Wyoming Commissions' for an option to be
included as a Wexpro II Property. The Whiskey Canyon and Canyon Creek properties
are outside the Development Drilling Area and are not required to be brought before this
Commission. However, The Company believes the properties outside the Development
Drilling area are beneficial to Questar Gas customers and is therefore offering these
properties as Wexpro II Properties.
Does Questar Gas support the Vermillion Acquisition?
Yes. As explained in Mr. Rasmussen's testimony, the Vermillion Acquisition is in an
area where Wexpro operates and already has significant experience. Wexpro has had a
significant interest in wells in this area. These wells were drilled by Mountain Fuel and
Wexpro over the last 60 years. Wexpro understands the geology, engineering and
production of these wells. These properties are currently some of the higher-producing
and the lowest-cost properties in the Wexpro I Development Drilling areas. The Wexpro
II concept was conceived to accommodate adding these types of acquisitions to Questar
Gas' supply portfolio.
If the Vermillion Acquisition is approved as a Wexpro II Property, would Wexpro
be able to develop the property in today's gas market?
Yes, as more fully explained by Mr. Rasmussen, if today's natural gas prices continue as
forecasted, then based on Wexpro' s current model Wexpro would drill new wells
according to the plan submitted in this Application.
Does Questar Gas want Wexpro to develop gas reserves at or below today's current
5-Year Forward Curve?
Yes, for at least two reasons. Recognizing that the long-term history of natural gas prices
is volatile and given the likelihood of some future inflation, it is good for customers
anytime Wexpro can develop natural gas that will produce for 20 to 30 years at today's
low prices. Second, as more fully explained by Mr. Rasmussen, an ongoing drilling
DIRECT TESTIMONY OF
BARRIE L. McKAY
QGC EXHIBIT 2.0
DOCKETNO. 17-057-01
PAGE4
77
78
79 Q.
80
81
82 A.
83
84
85
86
87
88
89
90 Q.
91 A.
92
93
94
95 Q.
96 A.
97
98
99
100
101
program helps lower the per-unit cost of cost-of-service production and preserves
Wexpro' s expertise and efficiencies in developing these properties.
III. PUBLIC INTEREST
Why should the Company secure this supply at a time when market prices are low
and the forward curves indicate that those prices may remain low for the next few
years?
There are several important reasons. The Trail and Canyon Creek areas are among the
best performing properties in our cost-of-service portfolio due to the low finding costs
and low operating expenses. Whiskey Canyon is adjacent to the Canyon Creek property,
has similar economics to Canyon Creek and, as a result of this acquisition, Wexpro owns
the gathering rights for this property. Kinney will offer predictable cost-of-service
volumes. To be able to add to the best producing area is a great opportunity. These
properties will produce gas at prices that are competitive in today's low-market-price
environment, and will continue to be competitive for the next 20 to 30 years.
Have you prepared an Exhibit that illustrates this point?
Yes. On Exhibit 2.2, the blue line shows the average of the current EIA and CERA 22
year forecast for natural gas prices. The green line is the forecasted combined (Trail,
Whiskey Canyon, Canyon Creek, and Kinney) per decatherm price for new wells for the
next 22 years.
Should this property be approved as a Wexpro II property?
Yes, both the Utah and Wyoming Commissions should approve the Vermillion
Acquisition as a Wexpro II property and find that it is in the public interest. The
production from Wexpro I wells comes from a defined set of properties that are clearly
set forth in the Wexpro I Agreement. Because of technological improvements in drilling,
completion, and production methods, these properties have produced longer and at
greater levels than the original parties to the Wexpro I Agreement anticipated. However,
•
•
•
•• 102
103
DIRECT TESTIMONY OF
BARRIE L. McKAY
QGC EXHIBIT 2.0
DOCKETNO. 17-057-01
PAGES
Wexpro production is finite and limited to defined areas. The Company and Wexpro
believe that these properties will benefit Questar Gas' customers and Wexpro.
104 Q. Does this conclude your testimony?
Yes. 105 A.
• '
( State of Utah )
) ss.
County of Salt Lake )
I, Barrie L. McKay, being frrst duly sworn on oath, state that the answers in the foregoing
written testimony are true and correct to the best of my knowledge, information and belief.
Except as stated in the testimony, the exhibits attached to the testimony were prepared by me or
under my direction and supervision, and they are true and correct to the best of my knowledge,
information and belief. Any exhibits not prepared by me or under my direction and supervision
are true and correct copies of the documents they purport to be.
'*
SUBSCRIBED AND SWORN TO this 9J_ day of January, 2017.
Notary PuifiG
••
•
•
•
•
•
Qualifications of Barrie L. McKay
Current Responsibilities
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 2.1
As Director of Customer Rates and Regulation, I am responsible for managing the state
regulatory matters of Questar Gas. I supervise the regulatory activities in Utah,
Wyoming, and Idaho. I am responsible for the preparation and filing of general rate
cases, pass-through cases and other general tariff and compliance filings. I have appeared
as an expert witness on numerous occasions before the Utah and Wyoming Commissions.
Prior Responsibilities and Experience
I was first employed by Mountain Fuel Supply (now Questar Gas) in 1993 as a Senior
Analyst in the Rate Department.
From 1983 -1993, I worked for UP&L/PacifiCorp in the Rate Accounting and Economic
Regulation Departments in various positions. I was responsible for the preparation of the
results of operations and the development and continued evolution of the allocation
modeling. I have previously presented testimony before the Utah Public Service
Commission and the FERC.
Educational Background
I received a Bachelor of Science degree in accounting from Brigham Young University in
1983. I received a Master of Business Administration from Brigham Young University in
1986. I am a Certified Public Accountant (CPA) in the State of Utah and belong to the
Utah Association of Certified Public Accountants (UACP A). I am a member of the AGA
Rate Committee and have participated in numerous seminars and conferences on rate and
regulatory matters including AGA, PCGA, EEi, WEI and NARUC.
•
•
•
REDACTED
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 2.2
•
•
•
BEFORE THE PUBLIC SERVICE COMMISSION OF UTAH
IN THE MATTER OF THE APPLICATION
OF QUESTAR GAS COMPANY FOR
APPROVAL OF THE VERMILLION
ACQUISITION AS A WEXPRO II
PROPERTY
Docket No. 17-057-01
DIRECT TESTIMONY OF BRADY B. RASMUSSEN
FOR QUESTAR GAS COMP ANY
QGC Exhibit 3.0
DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
TABLE OF CONTENTS
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE ii
I. INTRODUCTION .............................................................................................................. 3
II. VERMILLION ACQUISITION ....................................................................................... 4
III. WEXPRO'S DRILLING PROGRAM ............................................................................. 9
IV. MANAGEMENT OF VERMILLION ACQUISITION PRODUCTION .................. 11
V. APPLICABLE GUIDELINE LETTERS ...................................................................... 12
•
•
•
•
1
2
3
4
5
6
7
8
9
10
• 12
13
14
15
16
17
18
19
20
21
•
DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE 1
Q.
A.
Q.
A.
Q.
A.
Q.
A.
Q.
A.
I. INTRODUCTION
Please state your name and business address.
My name is Brady B. Rasmussen. My business address is 333 South State Street, Salt
Lake City, Utah.
By whom are you employed and what is your position?
I am employed by Wexpro Company (Wexpro) as Vice President and General Manager.
I oversee and am responsible for managing drilling, development, and operations
associated with Wexpro's cost-of-service properties. I am also responsible for
compliance associated with oil and gas operations and compliance with the Wexpro I and
Wexpro II Agreements.
What are your qualifications to testify in this proceeding?
I have listed my qualifications in QGC Exhibit 3 .1.
Attached to your written testimony are QGC Exhibits 3.1 through 3.8. Were these
prepared by you or under your direction?
Yes.
What is the purpose of your testimony in this Docket?
The purpose of my testimony is to: 1) provide an overview of the Vermillion acquisition;
2) explain how Wexpro determines its annual drilling program; 3) explain how Wexpro
can continue to drill at or below the 5-Year Forward Curve; 4) explain what Wexpro is
doing and will continue to do to help reduce the overall price of cost-of-service gas; and
5) identify the guideline letters that will apply to the Vermillion Acquisition if it is
included as a Wexpro II property.
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
DIRECT TESTIMONY OF
BRADY B . RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE2
Q.
A.
Q.
A.
Are you familiar with the Application and its exhibits filed in this Docket?
Yes. Many of the exhibits were prepared under my supervision and direction.
II. VERMILLION ACQUISITION
What led to Wexpro's purchase of the Vermillion Acquisition?
W expro also purchased working interests and
assumed operations in an additional Vermillion Basin field, Whiskey Canyon, which
borders Canyon Creek and shares similar geologic features and production trends. In a
separate transaction, Wexpro was able to obtain the Kinney property from North Shore
•
Exploration and Production, LLC (North Shore). Application Exhibit B shows the •
Q.
A.
locations of each of these properties.
Why would these properties be valuable for Questar Gas' customers?
Each of the assets, Trail, Whiskey Canyon, Canyon Creek, and Kinney, offer many low
risk and low-finding-cost drilling opportunities and they are within or directly adjacent to
Wexpro's current operating footprint. Wexpro felt confident that the properties would
receive Commission approval but was willing to purchase them at its own risk, regardless
of whether these properties are included as Wexpro II properties. Wexpro believes these
properties would be equally beneficial to shareholders if developed outside the Wexpro II
Agreement.
•
•
44
45
46
47
48
49
50
51
52
53
54
55
• 57
58
59
60
61
62
63
64
65
66
67
68
69
•
DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE3
Q.
A.
Q.
A.
Please describe the acquisition of Trail, Whiskey Canyon and Canyon Creek.
In December 2015, Wexpro
purchased QEP's remaining working interests and overriding royalty interests in the Trail
Unit, a working interest in the Whiskey Canyon Unit, overriding royalty interests in the
Canyon Creek Mesaverde Participating Area from the surface to the base of the
Mesaverde formation, as well as a working interest in the Mesaverde formation outside of
the Canyon Creek Mesaverde Participating Area within the Canyon Creek Unit. A copy
of the Purchase and Sale Agreement between QEP, Wexpro Development, and Wexpro
(as operator) is attached to the Application as Confidential Exhibit K. Trail, Whiskey
Canyon, Canyon Creek, and Kinney are repeatable low-risk and low-cost development
locations. They are ideal for supplementing Wexpro production at a low cost-of-service
price for customers.
Please describe the Kinney acquisition.
The transaction, which involved a small working interest in the Kinney Unit, closed in
The $350,000 associated with the was credited to Questar Gas
customers via the Wexpro Operator Service Fee in April 2015. A copy of the Agreement
between North Shore and Wexpro is attached to this Application as Confidential Exhibit
. The Kinney recompletions are in
DIRECT TESTIMONY OF
BRADY B . RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE 4
70
71
72
73
74 Q.
75
76 A.
77
78
79 Q.
80
81
82
83
A.
84 Q.
85
86 A.
their infancy stage and, therefore, the benefits have not been included in the analysis that
accompanies the Application in this Docket.
Who bears the risk of the property acquisition until the Utah and Wyoming
Commissions either approve or reject the new properties as Wexpro II Properties?
Wexpro bears the burden and risk of purchasing these properties and producing the gas
until the Commissions decide whether they should be approved as Wexpro II properties.
Currently, Wexpro is selling production from this acquisition on the open market.
If the Vermillion Acquisition is approved as a Wexpro II Property, will the
acquisition cost be adjusted for the gas that Wexpro has sold?
Yes. Attached as QGC Exhibit 3.2 is an estimate of the acquisition cost adjusted for the
gas that has been or will be sold by Wexpro up to the estimated time of Commission
approval.
If the Vermillion Acquisition is not included as a Wexpro II Property, does Wexpro
plan to produce this property for other potential customers?
Yes. Wexpro would produce the natural gas from the Vermillion Acquisition for other
87 customers. The price at which the Vermillion Acquisition was purchased will allow
88 Wexpro to effectively market this production.
89 Q.
90
91 A.
92
93
•
•
•
•
94
95
96
97
98
99
100
101
102
103
104
105 • 107
108
109
110
111
112
113
114
115
116
117
118
119 •
DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
Q.
A.
Q. Please explain.
A.
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGES
QGC EXHIBIT 3.0
DIRECT TESTIMONY OF DOCKETNO. 17-057-01 • BRADY B. RASMUSSEN PAGE6
120
121
122
123
124
125
126
127 Q.
128 -129 A.
130
131
132 • 133
134
135
136
137
138
139
140 Q.
141 A.
142
143
144
•
• DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE7
145 Q.
146 A.
147
148
149
150
151 Q.
152 A.
153
154
155
Q.
157
158 A.
159
160
161
162
163
164 Q.
165
166 A.
167
168
•
I
III. WEXPRO'S DRILLING PROGRAM
Please explain how Wexpro determines its annual drilling program?
Throughout the year, Wexpro reviews its inventory of potential future wells to determine
an efficient mix of low-cost wells, leasehold obligation wells, and wells that must be
drilled in accordance with Bureau of Land Management mandates governing well
development (e.g., Pinedale).
How does Wexpro help ensure that development drilling properties are cost
effective?
Wexpro will only contract for a drilling rig once Wexpro has developed a drilling
program, the Hydrocarbon Monitor has reviewed the program, and the wells can provide
cost-of-service production that is, on average, at or below the 5-Year Forward Curve.
Contracting for drilling and completion services typically occurs six months before the
first well in the program is spud. Wexpro works with service vendors to minimize the
planning time required between the contracts and the first well in the program.
Given today's natural gas prices, can Wexpro continue a drilling program and
provide cost-of-service gas at or below the 5-Year Forward Curve?
Yes, for a number of reasons. First, the Canyon Creek Stipulation lowered the return
Wexpro earns from newly drilled wells. Second, Wexpro has significantly lowered
general and administrative (G&A) and operating expenses (O&M) in recent years and
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE 8
Q.
A.
will continue to decrease these costs into 2017 which, in tum, decreases forecasted cost-
of-service gas (see attached Exhibit 3.4). Third, Wexpro's reduction of
drilling/completion costs and positive production results in this area all contribute to
Wexpro delivering gas from new wells drilled under the Wexpro Agreement below the
current 5-Year Curve (see attached Exhibit 3.5). Finally, Wexpro recently entered into a
field-wide compression agreement that will deliver incremental gross field volumes 1111
Trail Unit.
How does having an ongoing drilling program benefit Questar Gas customers?
Attached as QGC Exhibit 3.6 is a chart representing the typical cumulative production of
a well. About half of the production from a typical well is produced during the first five
years of its 20 to 30-year life. If these volumes are not replaced with volumes from new
wells, then fixed costs of producing wells will be spread over fewer and fewer volumes
•
thus causing the cost per-unit to go up. A drilling program helps to keep costs per-•
Q.
A.
decatherm lower.
Are there other benefits of having an ongoing drilling program?
Yes, having a continuous drilling program ensures Wexpro can continue to provide
customers cost-efficient operations. Starting and stopping a drilling program by
erratically adding and removing drilling and completions personnel can be very costly
and inefficient. Also, in times of industry growth, Wexpro struggles to find and retain
qualified personnel, which it has experienced many times over the decades. Consistently
adding wells to the portfolio keeps costs lower and avoids the "boom and bust" approach
that is often associated with this industry. The key is being able to add wells at or below
the current 5-Year Forward Curve.
•
• DIRECT T ESTIMONY OF
BRADY B. RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE9
192 Q.
193
194 A.
195
196
197
198
199 Q.
200
201 A.
202
• 204
205 Q.
206
207 A.
208
209
210
211 Q.
212
213
214 A.
215 •
Has Wexpro taken steps in the last year to reduce the price of cost-of-service
production?
Yes. As shown in Exhibit 3.7, Column B, the reduced G&A and O&M expenses,
decreased drilling and completion costs, increased production results, and the Trail
Compression agreement have all contributed in decreasing overall forecasted cost-of­
service gas even beyond what was previously shown in FDR 1.01 in the Canyon Creek
proceeding, Docket No. 15-057-10. (Exhibit 3.7, Column A).
If the Commissions approve the Vermillion Acquisition to be included as a Wexpro
II property, will it reduce the overall cost-of-service?
Yes. Column C of Exhibit 3.7 shows the cost-of-service from the Vermillion
Acquisition. Column D shows the overall impact of including the Vermillion Acquisition
as a W ex pro II property .
IV. MANAGEMENT OF VERMILLION ACQUISITION PRODUCTION
How will Wexpro manage the Vermillion Acquisition if it is approved as a Wexpro
II property?
Wexpro and Questar Gas will continue to coordinate to manage cost-of-service
production to ensure that customers have a long-term reliable supply of low-cost gas now
and in the future. Wexpro understands the dynamics surrounding Questar Gas' current
gas supply.
Can Wexpro continue to comply with the supply limitations (65% through 2019 and
55% thereafter) if the Commissions approve the inclusion of the Vermillion
Acquisition as a Wexpro II property?
Yes. Application Exhibit M shows that the addition of the Vermillion Acquisition as a
Wexpro II property will enable Wexpro to produce volumes up to the supply limit.
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
DIRECT TESTIMONY OF
BRADY B. RASMUSSEN
QGC EXHIBIT 3.0
DOCKETNO. 17-057-01
PAGE10
Q.
A.
Q.
A.
Q.
A.
Doing so will maximize the benefit of allocating fixed costs over the greater number of
volumes. This helps to reduce the cost of service.
V. APPLICABLE GUIDELINE LETTERS
If the Vermillion Acquisition is approved as a Wexpro II property, are there
Guideline Letters that will apply to the property?
Yes, attached as QGC Exhibit 3 .8 are copies of all the Guideline Letters that will apply to
the Canyon Creek Acquisition.
In summary, what are your recommendations regarding the Vermillion
Acquisition?
This is a logical time to acquire this property because acquisition prices for natural gas
reserves are low. The Vermillion Acquisition Area is our best performing property.
Wexpro believes it can manage the Vermillion Acquisition properties as part of the
Questar Gas portfolio for the benefit of Questar Gas's customers for years to come.
Does this conclude your testimony?
Yes.
•
•
•
•
•
•
State of Utah )
) ss.
County of Salt Lake )
I, Brady B. Rasmussen, being first duly sworn on oath, state that the answers in the
foregoing written testimony are true and correct to the best of my knowledge, information and
belief. Except as stated in the testimony, the exhibits attached to the testimony were prepared by
me or under my direction and supervision, and they are true and correct to the best of my
knowledge, information and belief. Any exhibits not prepared by me or under my direction and
supervision are true and correct copies of the documents they purport to be.
SUBSCRIBED AND SWORN TO this .9__ day of January, 2017 .
•
•
•
Qualifications of Brady B. Rasmussen
Current Responsibilities
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3 .1
As Vice President and General Manager of Wexpro Company, I am responsible for
Wexpro' s drilling program, production operations, property acquisitions, and compliance.
I supervise the engineering and geoscience, operations, accounting, land, marketing,
permitting and regulatory, and business development departments. I am also responsible
for SEC Oil and Gas disclosures.
Prior Responsibilities and Experience
I was employed by Wexpro in 1994 as a Revenue Accountant. I have fulfilled my
responsibilities in several capacities, including revenue accounting, overseeing multiple
departments including accounting, administration, land, marketing, and business
development as Vice President and General Manager.
Educational Background
I received a Bachelor of Arts degree in Accounting from Utah State University in 1993 .
•
I
u
"'
•
0
UJ
1-u
<(
0
UJ
ci::
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3.2
•
1
2
3
4
5
6
7
8
9
•
•
Impact of Canyon Creek, Mesaverde Participating Area Expansion
(A)
REDACTED
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3.3
(B)
•
•
•
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3 .4
Wexpro General & Administrative/ Operating Expenses
$0.96/Mcfe
$60.0M
2014A
(31%) red . llchon in
$0.99/Mcfe
$54.9M
2015 A
cost
$0.88/Mcfe
$48.0M
2016A
$0.76/Mcfe
$41.0M
2017 F
•
•
•
Wexpro Forecast Vs. Results
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3.5
REDACTED
Questar Gas Company
Docket No. 17-057-01 • QGC Exhibit 3.6
0 rn
:r~ .,.lo-··-
.. __..,_ --..... , ,,,,_,
,_
-.
-· -· . U') N
.-
--
I
I .. -
,, , .. , .. ·~ 0 N
,. .. -·
a, s
II)
ta
C, II) I ,._ • +" U') ta .c ,. ,...;
ti.() ~ i= '" --..
II) ,. a,
:i ,·.· u 0 0:::
ta " 0 ,...; u
C. "
~ " ·' ....
'if:.
LI"! " U')
LI) s:t
, .. -
·~·-. -,
0
'if:. 'if:. 'if:. 'if:. 'if:. 'if:. 'if:. 'if:. 'if:. 'if:. 'if:. 0 0 0 0 0 0 0 0 0 0 0 0 er, 00 I' lD LI) s:t m "' rl
rl • (%) uo!t:>npoJd a/\ne1nwnJ
•
•
•
Forecasted Cost of Service -Vermillion
A B C
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3.7
D
REDACTED
•
•
•
Date
7/20/2016
7/26/2004
2/20/2004
4/27/1999
5/29/1992
11/21/1989
10/27/1988
12/14/1983
Title
Index of Wexpro II Agreement Canyon Creek Acquisition
Guideline Letters
Questar Gas Company
Docket No. 17-057-01
QGC Exhibit 3.8
Page 1 of 68
Guideline Letter Governing Commercial Well Designations Under Section 1-20 of the
Wexpro Agreement and Section 1-11 of the Wexpro II Agreement
Pre-participation approval by Hydrocarbon Monitor to participate in the 3rd Seismic
program over Canyon Creek Unit
Guideline Letter Governing the Adoption of Financial Accounting Standards Board
Statement #143, Accounting for Asset Retirement Obligations under the Wexpro
Agreement
Paragraph 1-47 Product Allocation Ratio
Refund of Excess Deferred Taxes Whole-Well Approach for Determining Commercially in
the Church Buttes Unit and Replacement Index Method for Determining Base Rate of
Return.
Joint Account Overhead Fees Guideline Letter
Wexpro Agreement Guideline for Expanding Participating Areas Inside Federal Units
Delivery Point at Butcher Knife and Church Buttes fields, Sweetwater County, Wyoming
OUEST~R
Chris Parker
Utah Division of Public Utilities
Heber Wells Building
160 East 300 South
Salt Lake City, UT 84145
John Burbridge
Wyoming Public Service Commission
Hansen Building, Suite 300
2515 Warren Avenue
Cheyenne,WY 82002
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit '.3 a
Wellpro Comr>any Page 2 of 68
July 20, 2016
333 South State Street
PO Box 45003
Salt Lake City, UT 84145-0003
Tel [phone]
Bryce Freeman
Wyoming Office of Consumer Advocate
Hansen Building, Suite 304
2515 Warren Avenue
Cheyenne,WY 82002
Craig C. Wagstaff
Questar Gas Company
333 South State Street
Salt Lake City, UT 84145
Re: Guideline Letter Governing Commercial Well Designations Under Section 1-20
of the Wexpro Agreement and Section 1-11 of the Wexpro II Agreement
The Utah and Wyoming Public Service Commissions approved the Wexpro I
Agreement in 1981, the Wexpro II Agreement in 2013, the Trail Unit Settlement Stipulation
in 2014 and the Canyon Creek Settlement Stipulation in 2015 (collectively the "Wexpro
Agreement").
The Wexpro Agreement defines the procedure for classification of a "Commercial
Weff' in Section I-20 of the Wexpro I Agreement and Section I-llofthe Wexpro II Agreement
(the "Commercial Well Test"). A Commercial Well is one that "(i) clearly produces sufficient
quantities to pay at market prices for the products, all costs of drilling, development and
operation of the well, or (ii) requires further determination for classification as a: commercial
well or a dry hole." Modern drilling and completion techniques, such as hydraulic fracturing
and horizontal drilling have become pervasive in the industry and have enabled completion
in previously uneconomical formations. These newer techniques are reasonably necessary
to efficiently and more fully produce the hydrocarbons in the properties subject to the
Wexpro Agreement. However, the Commercial Well Test guidelines as set out in the Wexpro
Agreement are not compatible with the newer completion techniques. Longer testing times
are often necessary to evaluate new completions, which usually have multiple zones each
requiring individual fracture treatment. Sufficient production time after completion is
necessary to unload fracture fluids, remediate wet zones, install compression, and address
other issues that may occur before reliable decline trends can be established to evaluate the
well.
•
•
•
•
•
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 3 of 68
During the current Hydrocarbon Monitor's tenure, which began in 1999, procedures
for classifying a well under the Wexpro I Agreement, Section 1-20 (i) as "clearly" commercial
included using a minimum 10 percent discount rate and oil and gas prices based on the
NYMEX 12-month forward strip, adjusted to the location of the well. This process was used
because Section 1-20 only specified the use of"market prices" without further definition. The
same procedures were used for classifying a well that requires "further determination"
under 1-20 (ii), but this Section has a 30-day testing limit after stimulation, with only the last
10 days of production to be used to evaluate the well.
The parties to the Wexpro Agreement will benefit from specifying procedures and
timing to be used for performing a Commercial Well designation which comply with all
aspects of the Wexpro Agreement. The following procedures will be utilized during the
Commercial Well Test, on a well by well basis, for wells that are clearly commercial and for
wells that require further determination for classification as a commercial well, a non­
commercial well or dry hole:
Discount Rate: A before-tax industry-standardl discount rate (currently 10 percent)
will be required under the Commercial Well Test.
Pricing: The price to be used for the Commercial Well Test will be the Rockies
Adjusted Price, as of the date production begins then held flat thereafter. Rockies Adjusted
Price is defined in the Canyon Creek Settlement Stipulation, paragraph 14. However, for the
Commercial Well Test, the Rockies Adjusted Price will use a NYMEX 12-month forward curve
instead of the NYMEX 5-year forward curve that is used to determine future drilling plans.
All other calculations and terms will remain the same for the Commercial Well Test as they
are defined in paragraph 14 of the Canyon Creek Settlement Stipulation.z
Production Testing: Beginning upon the date a well is first ready to produce
hydrocarbons; each well will be produced for 90 days prior to analysis for classification
under the Commercial Well Test. If a well is not "clearly commercial" and requires remedial
work, Wexpro will notify the Hydrocarbon Monitor prior to the end of the 90-day initial
production period and request one additional 90-day production period. Wexpro will
describe its plans for remediation and increasing production. The Wexpro remediation plan
will include anticipated costs and time duration. If the Hydrocarbon Monitor agrees to an
additional 90-day production period, Wexpro will be granted a maximum of 30 days for
remedial work ("Remediation Period") before the second 90-day production period begins.
If a permit(s) for additional work is required, Wexpro will notify the Hydrocarbon Monitor
and the start of the 30-day Remediation Period will not begin until the day after Wexpro
receives the permit(s). The second 90-day production period will begin no later than 30
days after the beginning of the Remediation Period.
1 FASB Statement of Standards, FAS69-8 .
2 This Guideline Letter does not change the Cost-of-Service-Test required prior to drilling investment as defined in
paragraph 14 of the Canyon Creek Stipulation.
ZjP age
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 4 of68
Adoption of this Guideline Letter will provide for application of a Commercial Well
Test in a manner and time frame most likely to result in an accurate analysis of a well's
pot"ential performance.
The guidelines contained herein will be in effect and binding upon the parties who
sign this letter until such time as they are either modified or terminated. However, the
guideline would still be in effect for all actions taken prior to any modification or termination.
Please indicate your acceptance of this Guideline Letter as an appropriate means to
perform Commercial Well determinations in the future on all Wexpro Agreement properties.
APPROVED:
WEXPRO COMPANY
Brady . Rasmussen
Execu ve Vice President &
Chief Operating Officer
UTAH DIVISION OF PUBLIC UTILITIES
Chris Parker
Director
WYOMING OFFICE OF CONSUMER ADVOCATE
3j Page
Date: --'-/='~:,....;o __ / .,_,,I G""'----, I
Date: __ g~-'-(__,_/_t_t __ _
1 I
Date: ~111
•
•
•
•
•
•
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 5 of 68
WYOMING PUBLIC SERVICE COMMISSION STAFF
By:~~}~
Attorney Supervi:
QUESTAR GAS COMPANY
By:_b__, ... ___ \. l~~-
Craig C. w)ista~
Executive Vice President &
President, Questar Gas Company
4 1Page
Date: _--z..__,_/--=--z-i.+ij--L-"/& __
QUEST~R
---~al
Evans Consulting Company
2002 Cimarron Court
Mission, TX 78572-7432
Attn: David Evans
Re: 3.D Seismic, Canyon Creek Unit
Dear David:
July 26, 2004
_ Questar Gas Company
Docket No. 30010-162-GA-17 oese Exliibit 3.8
'JVexpro Company
180 :=asi 100 South
?.O. Box 45601
Salt Lake City, UT 8'1145-0601
Page 6 of 68
Tel 801 32:l '2.600 · Fa, 2.01 324 2637
......... ., _ .. _ -.
Wexpro requests pre-participation approval by the hydrocarbon monitor to participate in a 3D seismic program over Canyon
Creek Unit as discussed below. This request is based on the guideline letter of October 17, 1994 which requires Wexpro to
get pre-participation review and approval by the hydrocarbon monitor for future 3D seisinic programs.
Overview
Canyon Creek Unit has production from shallow Wasatch and Fort Union Fonnations, intermediate depth Mesaverde
Formation, and deep Frontier and Dakota Fonnations. Because of the multiple stratigraphic horizons that are productive and
the diverse ownership, the unit is horizontally segregated into different participating areas. Wexpro operates the Canyon
Creek Unit (approximately T12N-13N, RlOl W, Sweetwater, Wyoming), but has designated QEP as sub-operator for the
shallower Fort Uniqn and Wasatch prod,ucing zones_ in which Wexpro has no ownership. W expro' s primary ownership is
only within the Mesa~erde Formation, with liinited additional ownership in other formations within 1980' circles. QEP in
addition to ownership in the shallow fo~ations, also has rights to zones deeper than the Mesaverde, but not in the
Mesaverde:· Neither We~pro nor QEP has 100% ownership in any zone, but rather is a partner with other companies.
W expro has been cautiously, but successfully developing additional Mesaverde reserves by infill drilling in Canyon Creek. It
appears that if all potential locations can be drilled, there may be approximately 40 additional infill and step out locations
available. The infill drilling is based on completing different sandstones than are completed in the existing offset wells. These
additional sandstones have more limited drainage areas than higher quality sandstones completed in the original wells. These
additional sandstones are not "blanket" type sandstones and part of the success of infill wells is the ability to predict the
presence of individual sandstones at a given location. Seisinic may provide some additional insight into presence or absence
of individual sandstones, especially in step out well locations. Additionally, because Canyon Creek Unit is located a large
struc.;lura1 antidi.ac, il likely has a system oi'fauhs and .fractures sim.i1ar to mose.founci on nearby saucrures. Tnese fauhs and
:fractures are not recognized based on the limited well control currently ·available. Seismic may provide insight as to the
location and trend of fractures and faults which may allow better interpretation of compartmentalization of the reservoir as
well as any directionality of drainage, rather than the simple drainage circles we now use. This knowledge will enable better
placement of future wells to maximize reserves and perhaps lessen the risk of drilling poor performing wells.
3D Seismic Program
QEP and its partners have decided to condi::ct a 51 square mile 3D seismic survey over the Canyon Creek area to image all
the known productive reservoirs and have invited W ex pro to participate. The seismic survey is designed to enable mapping
of individual Mesaverde ·sandstone bodies if they are thicker than 15 feet, map major packages of Mesaverde sandstones,
predict reservoir quality, ~p '.faults with throw greater than 25 feet and accurately map depth between existing control
points. Additionally, it will provide ·detailed imaging of the Frontier, Dakota, and Baxter formations in which Wexpro has
ownership within selected 1980 foot circles.
Geophysicists believe that there is little risk of getting unusable data because similar surveys with similar geology and
topography nearby have had good results.
•
•
•
. Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 7 of 68 •--..-. . -· .· Pa<>e 2
1 3D.:, Seismic, Canyon Creek Unit
July 26, 2004
••
•
The total survey cost, including processing, is projected to be $1,264,800. Based on thickness of interval to be imaged and
ownership within the interval, it is determined that Wexpro should have 21 % of the total cost or $265,608. This was
calculated using the depth to the base of the Wexpro ownership (base Mesaverde) at approximately 7,000' in Canyon Creek
Unit 34. Modeling of the seismic indicates that the deepest depth which can be imaged is 17,500', thus 60% of the beneficial
seismic is at depths greater than Wexpro ownership (17500-7000)/17500 = 60%). Of the remaining 40%, the very shallow
derives little benefit from the seismic data and is allocated 10%.ofthe cost with 30% remaining for the Mesaverde interval.
With approximately 70% working interest ownership in this interval, W expro total share of the seismic would then be 21 %.
This methodology assigns no share of the cost of the deep seismic to Wexpro, but Wexpro does have some limited ownership
in the deep intervals.
Recommendation
Wexpro should participate for its calculated share ($265,608) of the Canyon Creek seismic program. This participation is in
order that W expro might lower its risk in future development wells and might be able to better predict directional drainage
patterns and sand tenninations. ·
Please indicate your approval ofWexpro's participation in the above discussed 3D seismic program by signing in the
signature box below. If you wish to discuss this further, please let me know .
Respectfully Yours, i ~,::~
Vice President
cc: Darrell Hanson, Utah Division of Public Utilities
OUEST~R
Darrell S. Hanson
Utah Division of Public Utilities
Heber M. Wells Building
160 East 300 South
P.O. Box 45802
Salt Lake City, Utah 84145
Dear Mr. Hanson:
February 20, 2004
_ Questar Gas Company
Docket No. 30010-162-GA-17
Wexpro Company
180 East 100 Soulh
P.O. Box <:5601
Q~C Exhibit 3.8
Page 8 of68
Salt Lake City, UT 84145-0601
Tel [phone] • Fax ao1 324 2637
Re: Guideline Letter Governing the Adoption of Financial Accounting Standards
Board Statement No. 143, Accounting for Asset Retirement Obligations,
under the Wexpro Agreement
INTRODUCTION. The operational and legal necessity of conducting physical recla­
mation activities at and near oil or gas well-site locations and. related facilities generally
requires expenditures after production is terminated. This reclamation activity can
include dismantling or removing facilities, plugging and abandoning wells, and recondi­
tioning and restoring terrain. These obligations are referred to as asset retirement obliga-
tions or "AR Os." ·
In particular, the Bureau of Land Management, as well as other federal and state
regulatory agencies, has established specific reclamation requirements associated with
leasing and operating oil and gas properties. The costs associated with these reclamation
activities are reasonable and necessary "common business expenses" as that term is used
in paragraph 1 in each of Exhibit A and Exhibit E of the Wexpro Agreement ("the
Agreement").
SFAS 143 REQUIREMENTS. Wexpro Company ("Wexpro") has historically billed
ARO costs through the Agreement when actual costs in excess of salvage value received
are paid during asset-retirement operations. However, Wexpro is now required to adopt
procedures consistent with Statement of Financial Accounting Standards No. 143,
Accounting for Asset Retirement Obligations ("SFAS 143"), to comply with Generally
Accepted Accounting Principles. Under SFAS 143, effective for fiscal years beginning
after June 15, 2002, entities are required to recognize and account for certain AROs, as
defined by SF AS 143, on a basis different from that used historically by Wexpro.
Specifically, if a legally enforceable ARO is deemed to exist, a company must
determine and record the value of the liability for the ARO in its accounting records.
Also, under SFAS 143, at the time the liability is recorded, a corresponding and
equivalent ARO asset will be recorded on the company's books as part of the cost of the
associated tangible asset. The ARO asset is then depreciated together with the associated
tangible asset over the life of that asset.
•
•
•
•
• / I
•
Darrell S. Hanson
February 20, 2004
Page2
_ Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 9 of 68
An annual "accretion" expense is also added to the ARO liability to account for
the risk adjusted time value of money. This is necessary so that, at the time of the asset's
future retirement, the total recorded ARO liability will equal the cash required to meet
the legal obligation.1
In addition to the forward-looking requirements of SFAS 143 outlined above,
companies are required to recognize the "cumulative effect" on their financial statements
resulting from the implementation of SF AS 143 on a retrospective basis. Thus, under
· SFAS 143, it is necessary to reconstruct over past years the effects that would have
resulted if the requirements of SFAS 143 had always been followed. This cumulative
effect requires a one-time transition entry on Wexpro's books as ofJanuary 1, 2003, so
that future financial statements will properly reflect the ARO cost effects.
SF AS 143 UNDER THE WEXPRO AGREEMENT. In order to coordinate SF AS 143
compliance with contractual requirements under the Wexpro Agreement, Wexpro pro­
poses to:
.:> Incorporate ARO costs as ongoing, necessary operating expenses under the
terms, conditions and procedures of the Agreement, as described below;
3 Collect ARO costs attributable to historical periods up to January 1, 2003
("transition costs");
3 Set up a trust account for the deposit of all funds (net of taxes) related to ARO
costs collected from Questar Gas Company and Wexpro (funding of the trust
account to be borne in the same proportion as ARO costs); and
3 Pay the ARO costs when they come due with accumulated trust account
funds.
In addition to providing guidance on adopting SFAS 143 for the Wexpro
Agreement AROs, this Guideline Letter provides for establishing a secure source of
funds to retire the Wexpro Agreement Properties (Article II and Article III assets) and a
procedure to account for and true-up the ARO funding for each individual asset as may
be necessary to reflect changes in economic factors, applicable tax rates and estimated
cleanup costs.
The initial ARO accretion rate shall be 6.6%; the initial ARO rate of inflation
1For example, assuming a discount rate of fr.6%, an ARO valued at $10,000 in 2003, but which
will not be paid until 2005, will cost $11,364 when actually paid. The accretion required in this example
would be $660 the first year and $704 the second.
Darrell S. Hanson
February 20, 2004
Page 3
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 10 of68
shall be 2.3%. The accretion rate represents the estimated rate at which Wexpro could
borrow to fund future ARO obligations. The ARO rate of inflation represents Wexpro's
best estimate of current pricing inflation associated with future ARO obligations. Strictly
for purposes of this Guideline Letter, Wexpro 's collection of funds in the trust account to
provide for future ARO costs will be net of applicable estimated salvage values.
Accretion and Depreciation, Future Charges. SFAS 143 accounting requires the
following monthly expense entries related to AROs: (i) the monthly increase in the ARO
,liability from the accretion charge; (ii) the monthly depreciation of the associated ARO
asset over its remaining life; and changes in estimates affecting items (i) and (ii). The
treatment and allocation of ARO depreciation and accretion expenses shall follow
established accounting practices historically used by Wexpro except as set forth below.
The Wexpro oil properties have been highly profitable resulting in over $88
million of oil sharing under Exhibit E of the Wexpro Agreement (the Operator Service
Fee, "OSF.") The $88 million of cumulative oil sharing to date represents approximately
94% of the estimated total oil sharing. However, due to the discounting treatment under
SF AS 143 (which "loads" the ARO expense toward the end of an asset's life), approxi­
mately 5 0% of the ARO expense is yet to be recouped from the remaining 6% of the
estimated total oil sharing. Even though Questar Gas's share (54%) of the estimated
future AROs will amount only to an estimated $0.9 million (net of salvage), this may
cause "negative sharing"2 in the later years of oil revenue sharing. These necessary
expenses should be absorbed by the revenue stream generated over the life of the
Wexpro oil properties. Therefore, to the extent of any negative sharing directly attribute­
able to ARO expenses, 54 % of the ARO costs will be a direct increase to the OSF.
Transition Costs. For assets in use as of the adoption of SF AS 14 3, Wexpro has
calculated the cumulative effect of past ARO costs through December 31, 2002, to be
$7,458,129 (net of salvage). This was determined by conducting a well-by-well
engineering analysis and applying an accretion rate of 6.6% and an inflation rate of 2.3%
over the expected life of all the properties subject to the Agreement.
This amount will be recovered as follows:
(a) $5,734,966 (net of salvage) in equal monthly charges over an 18-year
period as a part of the OSF. This amount is related to (i) all gas produced from Article
2 "Negative sharing" occurs when 54/46 revenues are not sufficient to effect a payout to the sharing
parties.
•
••
•
••
•• \
Darrell S. Hanson
February 20, 2004
Page4
•. Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 11 of 68
III properties (Productive Gas Reservoirs), and (ii) gas produced from Article II proper­
ties (Productive Oil Reservoirs) subject to the cost-of-service treatment of§ II-5 of the
Agreement. Notwithstanding the foregoing, for an asset retired prior to the 18-year
period, Wexpro will accelerate the collection of the proportionate share of the above
amortized amount pertaining to that asset. Any accelerated collections will reduce the
total of the monthly collections for transition costs for the remaining time periods by an
amount equal to the accelerated collections.
(b) The remaining $1,723,163 (net of salvage) in ARO transition costs is
related to (i) oil produced from Productive Oil Reservoirs subject to the 54-46 formula
and (ii) "new oil" produced from Productive Gas Reservoirs subject to the 54-46
formula. Of this amount, 54% is to be charged to Questar Gas ($930,508) and 46% to
Wexpro ($792,655). Questar Gas's 54% obligation will be reflected _and charged as an
operating expense llllder the OSF.
. The 18-year straight-line amortization and the one-time charge and allocation for
the cumulative effect are consistent with the prior treatment of excess deferred-tax
refunds under the Agreement when the U.S. corporate tax rate changed from 46% to
34% in 1986, as agreed to by the parties:in a guideline-letter dated May-29; 1992.
Tntst Account. As funds are received from Questar Gas by Wexpro~ both from
the charges for the cumulative effect and the annual depreciation and accretion expenses
(net of salvage), such funds, net of income taxes as described in paragraph ( a) below,
will be deposited in an interest-bearing trust account established by Wexpro. Wexpro
will also fund its share of the ARO costs, as detennined in paragraph (b) above and by
application of the "54-46 formula," by making corresponding deposits to the dedicated
trust account.
This trust account will be maintained with a reputable financial institution solely
for the purpose of accumulating and dispensing funds related to Wexpro's AROs under
the Wexpro Agreement. The funds in this account will be spedfically dedicated to
W expro 's SF AS 143 AR Os and will not be commingled with any other funds of Wexpro
or any other entity in order that these funds are not subject to creditor claims. The trust
account will be funded and drawn down under the following procedures:
(a) From the payments collected from Questar Gas for the cumulative-effect
charges (net of salvage) and ongoing depreciation and accretion charges (net of salvage),
Wexpro will deposit and accumulate such funds in the trust account, except Wexpro will
• retain such amounts as are required for Wexpro to pay its current income-tax obligation
( Darrell S. Hanson
February 20, 2004
Page 5
• Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 12 of68
related to those payments. 3 The initial tax rate will be the current marginal composite
income tax rate (MCTR), as determined pursuant to§ I-38 of the Wexpro Agreement,
and shall be adjusted annually.
(b) The balance in the trust account will be credited with interest at the cus­
tomary rate paid on such an account by the financial institution where the account is
located. Periodically, but not less than annually, interest accumulated in the trust
account shall be disbursed and paid to the OSF or Wexpro, as earned by their relative
, contributions to the account balance.
( c) When a facility is retired (such as plugging and abandoning a well), the ARO
costs will be funded by an appropriate withdrawal from the trust account, and an amount
contributed by Wexpro representing the gross up for taxes at the MCTR, regardless of
Wexpro's actual tax treatment. If the amounts needed to fund any actual ARO costs are
less than or exceed the allocated current trust account balance, Wexpro :will determine
.. the allocation of such deficiency or excess amount and will charge or refund the
difference to the OSF, with Wexpro to bear oi receive its corresponding share,if
· applicable .
. ( d) Any salvage value (net of taxes calculated at the MCTR) shall be credited to
. the OSF when the useable equipment is sold or transferred, with Wexpro to receive its
corresponding share, if applicable.
(e) As necessary from time to time to remain in compliance with SFAS 143 and _
with audited financial reporting requirements (but not more often than annually),
Wexpro will review and redetermine:
(i) The engineering estimates ofWexpro's AROs and related salvage
values. If there are material changes in the values so determined, Wexpro will
implement the necessary changes to the accounting and billing under the Agreement.
(ii) The inflation rates used in determining the accretion expense. If there
is a material change in the ARO costs due to changes in expected economic conditions,
Wexpro will implement the necessary changes to the accounting and billing under the
Agreement.
3 Because actual ARO expenses are not tax-deductible until paid, the collection of ARO-related
expenses in years before the expense is incurred will create a current tax obligation. The tax will be calculated
based on the MCTR allowed for under the Wexpro Agreement. Accordingly, all fund increases or decreases
will be adjusted for taxes at the then current MCTR, to achieve the intended result of keeping W expro neutral
on income tax.es while passing any future benefit ( or determent) of tax rate changes back through the OSF.
•
•
•
••• ~-
•
Darrell S. Hanson
February 20, 2004
Page6
_ Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 13 of68
(f) An example of the accounting and funding treatment (including income tax
gross up) pursuant to this Guideline Letter is attached as Schedule A.
CONCLUSION. Adoption of this Guideline Letter will provide an ongoing method­
ology that will recognize the costs associated with :fimding end-of-asset retirement
obligations over the life of the properties. Funding based on implementation of SF AS
143 will allow the costs to be spread over the period of time that oil and gas are
produced, thus mitigating their one-time impacts. As these funds will be accounted for in
, a separate, non-commingled interest-bearing account, the principal amounts will have no
effect on Wexpro's investment base, and it will not be necessary to adjust Wexpro's
investment base in connection with this treatment. It is understood that, under the
current requirements imposed on Wexpro by SFAS 143, the treatment of AROs, salvage
values and.abandonment costs in this Guideline Letter is not contrary to §§ II-7 and III-
10 of the W expro Agreement.
Please indicate your acceptance of this guideline letter as an appropriate means to
· respond to the requirements of SF AS 143 as applied to the terms of the Wexp:rn
Agreement.
Approved:
UT AH DIVISION OF PUBLIC UTILITIES
By~,&,,~.e~
Irene Rees,Dirclor
Staff of Wyoming Public Service Commission
By: ---------------
_EyANS CONSULTING COMPANY
(Hydr~~
By: ·µ -~
avid Eivansiresident
WEXPRO COMP ANY
~£-~
James R. Livsey
Vice President
Date: ---------
Wexpro Company
Schedule A
ARO example wllh actual P&A Costs equal lo ARO llablllty, 2.5,Y, Inflation,
6.25% accretion and UOP depreciation
January 1, 2003
AROAsse(
ARO liability
31,417
To record ARO fair value
December 31, 2003. 2012
31,417
ARO Depreclallon Exp. Per Example Schedule
ARO Accum. Oepr. Per Example Schedule
To record unils-or-p1oducUon depr. on ARO per year (Talat $31,417)
Acc,etion Expense Per Example Schedule
ARO Uab.-Accretion Per E.ample Schedule
To recotd accretion expense (Total $26,188)
December 31, 2012
ARO Liability
P&A Payable
57,605
57,605
To record selllemenl of lhe ARO liability
ARO cost calculation:
Expected clean-up costs
lnnallon factor assuming 2.5 percent rate for 1 o years
Expected cash flows adjusted for Inflation
Present value using credit-adjusted risk-free rate
of 6.25 percent for 1 O years
•
Expected
Cash flows
.1L11ill1
$ 45,000
1.2801
l J;J,605
31,417
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Beg.
Fund
Balance
6,193
10.490
14,428
18,077
21.499
24,749
27,873
30,914
33,907
·-·
ARO Depr&
ARO Deer, Accretion Accretion
7,697 1,964 9,661
4,618 2,086 6,704
3,926 2,217 6,143
3,337 2,355 5,692
2,836 2,502 5,338
2,411 2,659 5,070
2,049 2,825 4,874
1,742 3,002 4,744
1,461 3,189 4,670
1 321 3 389 4 710
31,417 __ 26,188 _57~605
Units of Production lnlormalion (Mcie)
Reserve
Year Balance Production
2003 1,645,857 403,235
2004 1,242,622 241,941
2005 1,000,681 205,650
2006 795,031 174,802
2007 620,229 148,582
2006 471,647 126,295
2009 345,352 107,390
2010 238,002 91,248
2011 146,754 77,561
2Q.12 69 193 69,193
•
Tax Nelfund Interest• Interest Ne!
35.9'/, Addition 3'Y, Returned Interest
3,468 6,193 93 (93)
2,407 4,297 250 (250)
2,205 3,938 374 (374)
2,043 3,649 488 (488)
1,916 3,422 594 (594)
1,820 3,250 694 (694)
1,750 3,124 789 (789)
1,703 3,041 882 (882)
1,676 2,994 972 (972)
1 691 3 019 1,062 (1,062)
20,67.!! 36,926 6,198 {6,198)
• Assumes mid-year additions.
To sellle ARO Fund:
Fund balance
Net plugging costs
Gross $ 57,605
Tax (20,679)
Fund Balance
To reconcile cash paid
ARO Depreciation
ARO Accretion
Total ARO amounts
Gross plUAQlnA costs
Refund
End
fund
Balance
6,193
f0,490
14,428
18,077
21,499
24,749
27,873
30,914
33,907
36,926
$ 36,926
36,926
$ 0
$ 31,417
26186
$ 57,605
57 605
$ 0
OSF
Billed
9,568
6,454
5,769
5,204
4,745
4,376
4,085
3,862
3,697
3 647
51,407
Cost per
Mcfe
0.024
0.027
0.028
0.030
0.032
0.035
0.038
0.042
0.048
0.053
__ 0.031
0 O, (")
" CD -o Zc !=) CD
(;)~ 08~
-oG)~G) ~ () ~ ~
CD m o,0
....l. ~ r;-, 0
.i,.crG)3 0 ;c;: )>TI
a'; ~ ~ ~
COCO-..i'<
•
• r-
\
0UES7§.R
Darrell S. Hanson
Utah Division of Public Utilities
Heber M. Wells Building
160 East 300 South
P.O. Box 45802
Salt Lake City, Utah 84145
RE: I-4 7 Product Allocation Ratio
Dear Mr. Hanson:
-----------------------------
.. ::_·, -.
Questar Gas Company .
~~Neo.<$8~i ~62-~
;vexpra Ccmoanv QGC Exhi .. '
·-50 Ees: o~G Sec,;, Page 1~
.. .. ,--. . . ..... . ' ..... --~! 801 32~ 250-J
April 27, 1999
The Utah Division of Public Utilities (Division) as well as Wexpro have recently had discussions
regarding the intent of Paragraph 1-47 in the Wexpro Agreement (Agreement). As a result of these
discussions the Division and Wexpro have agreed to the following methodology effective January
1, 1999 forward. The parties further agree that the methodology used prior to January 1, 1999 will
not be subject to change. It is proposed that effective January 1, 1999 Wexpro will calculate a new
equivalent ratio to be used for that year. This ratio will be determined by dividing the actual
weighted average price per barrel received for oil, condensate and natural gas liquids for the twelve
financial months ending December 31st of the previous year by the weighted average wellhead
royalty valuation per Mcf of gas produced by Wexpro in the twelve financial months ended
December 31st of the previous year. This ratio will then be recalculated each subsequent year in the
same manner ( see Attachment "A" for the 1999 Product Allocation calculation based on 12-31-98
data). The calculation will be subject to verification by the Accounting Monitor as part ofits annual
review of Wexpro's compliance with the terms of the Agreement.
Please indicate your approval of the proposed guidelines in the signature area.
Very respectful~
G~
President and CEO
Approved:
Utah Division of Public Utilities
(
4/23/99 11 :21 AM
1999 Product Allocation Ratio
Based on 12-31-98 Results
1/ Weighted average oil, condensate and natural gas
liquid price received by Wexpro for twelve months
ended 1 2-31-98
21 Weighted average price used for royalty wellhead
gas valuation per Md for twelve months
ended 12-31-98
S12.64 / $2.06 = 6.14
Round to 6.1 to 1 Equivalent Ratio
Questar Gas Company
oo·cket No. 30010-162-GA-17
At tach~~ibit 3.8
2age l dt'agEi 16 of68
$12.64
S2.06
1/ From year end Wexpro financial statements page containing operating statistics for the
total average liquid price. (See page 2 of Attachment A)
2/ Represents Wexpro/Questar Gas net worl<:ing interest volumes and
royalty value reflected in the 410.210, 410.220 and 410.230 general
ledger accounts plus any clearing well eliminations associated with the above
accounts for the 12 months ended 12-31-98. (See Note below)
Net working interest volume per month x royalty price per month
Net working interest volume
Note:
Net Working Interest (Accounts 410.210 -410.230)
(See pages 3 -4 of Attachment A)
Clearing Well Eliminations
(See pages 5 -6 of Attachment A)
RA TI098.xls 1998
= S76, 176.759
36,986,602
Value
$100.250
$76,076,509
$76,176,759
= $2.06
Volume (MCF)
29,742
36,956,860
36,986,602
•
•
•
•
Current Monlh
Increase
1990 1997 (Decrease) Percent
$384,056 $714,571 ($330,515) -46%
40,441 30,259 10,182 34%
$9.50 $23.62 ($14 .12) -60'/o
$130,740 ($40,305) $107,045 307%
16,415 (1,611) 16,026 1 I 19%
$(1.45 $29.96 (S21.53) -72%
$522,796 $666,266 ($ I 43,470) ·22%
56,656 20,648 28,206 90'/,
$9.20 S23.26 ($14.06) -60%
•
WEXPRO COMPANY
OPERATING STATISTICS
December 1990 vs Occomber 1997
QPERATING STATISTICS 1998
illL
Revenue $6,207,325
Production 459,305
Price $13 .51
l:iliL
Revenue SOOJ, 100
Producllon 05,202
Price $0.43
lill8LlJOl!IQ5.
Revenue $7,010,513
Producllon 554,567
Price $12.64
Year lo D11lo
Increase
1997 (Decrease)
$9,403.187 ($3,195,862)
443,659 15,646
$21 .19 ($7.68)
$2,060,000 lS 1,265,620)
116,BH ('21,592)
$17.70 ($U.27)
$11,471.995 ($4,461,402)
560,533 (5,946)
$20.47 ($7.03)
-, •
Percent
-34%
4%
-36%
-G1%
-10%
-52%
-39%
-1'!.
-30%
0 0
'd )" ~
Al ('I ~
LO rt 2 0 Cl> P, 0 C n . m N::r~w :J) 0 ~ O,:flG) ~ G) H,ru;:o '? ru '°rm ~ u, O'l(l) X Ol 0
-",;:J" l}l 0 --t'cf G) 3 0 ;:.: )>-0 ;~~~ 00 00 -.J'<
I
; "5: Questar Gas Company ;.;sA?RO c:~?~'-1"{ Docket No. 30010-162-GA-17 ?AGE 21
GE,l'c:R.'G :.swe..;a ;..;:::::-.rz.7"! ~'.::?0?.'!:' :'~CM 1.2/01/98 TE':<U 12/ll/53 Q@'e<~f,ioit: 3.:&! Apr 1999
NET WORKING INTEREST YEAR ::'.ND BALA.NCE WORKSHEET
HOD POSTED r.< JRL c:JST
f"-. DATE TY? SRC VOUCHZR ?ROl?!:RT'l =r:£R O!:SCl.!?T!ON (
I
.H0 .210 GS GAS SALES WI ra.>.NSACTION HISTORY FILE
/98 01/04/99 M RV 12-RV-19 242109 2Ul09 BR.l\DY ON!T -SC:?T 1998
/9a 01/04/99 AA RV 12-RV-19 242409 2424 09 3RADY UNIT -Si::PT 1998
/58 01/04/99 AA RV 12-RV-19 415933 4l:i933 SR.ADY ONIT -SEl?T 1998
/98 01/04./99 AA RV 12-RV-19 4374)3 4.37433 BRADY ONIT -SEPT 1998
/98 01/04/99 AA RV 12-RV-19 710001 710001 BRADY UNIT -SEl?T 1998
/98 Ol/04/99 AA RI/ 12-RV-20 239602 2]9602 SR.>.DY UNIT -NOV 98 GAS
/9B Ol/04/99 AA RV 12-RV-20 239902 239902 BRADY UNIT -NOV 98 GAS
/98 01/04/99 AA RV 12-Rlf-20 240033 2~0033 .9RADY UNIT -NOV 98 GAS
/98 01/04/99 AA RV 12-RV-20 240312. 2403l2 BRADY UNIT -NOi/ 99 GAS
/99 01/04/99 AA RV 12-RV-20 240333 240333 BRADY ONIT -NOV 98 GAS
/98 Ol/04/99 AA RV 12-RV-20 240509 240S09 BRADY ONIT -NOV 98 GAS
/98 Ol/04./99 AA RV 12-RV-20 240702 240702 3RADY UNIT -NOV 98 GAS
./98 Ol/04/99 M RV 12-RV-20 240802 240802 BRAflY UNIT -NOV 98 GAS
./98 Ol/04/99 M RV 12-RV-20 211309 241309 BRADY UNIT -NOV 98 GAS
:/98 01/04/99 AA P.V 12-RV-20 241409 24l409 llRADY UNIT -NOV 98 GAS
:/98 Ol/04/99 AA RV 12-R.V-20 241702 241702 SRJ\DY UNIT -NOV 98 Gl\S
:/98 Ol/04/99 AA RV 12-RV-20 242009 242009 BRADY ONIT -NOV 98 OAS
!/98 Ol/04/99 AA RV 12-RV-20 242109 242109 BRADY UNIT -NOV 98 GAS
!/9B 01/04/99 M RV 12-RV-20 H2409 242409 BRADY UNIT -NOV 98 GAS
!/9B Ol/04/S9 AA RV 12-RV-20 41593) US933 BRJ\DY UNIT -NOV 98 GAS
!/98 Ol/04/99 AA RV 12-RV-20 437433 437433 BRADY UNIT -NOV 98 GAS
!/98 Ol/04/39 AA RV 12-RV-20 710001 710001 BRADY UNIT -NOV 98 Cli\S
l/9B 02/17/99 M GJ !'&.I. !' & L CLOSING ENTRY
ACTIVITY TOTAL
expro Net Working Interest Royalty Value "Dollars" in
eneral ledger accounts 410.210, 410 .220 and 410.230
expro Net Working Interest "Volumes" in general
eager accounts 410.210, 410-220 and 410.230
AttachrneffffleA.B of68
Page. 3 of 6 • DE3rt CREDIT 3ALANCE
-G.\ lJ ,122 .89
-GA 3,-486.79
-GA 73,083.35
-GA 67,399.3)
-GA · 46],l3B.38-
EST 10,288 .75-
EST 16,656.95-
EST 100,637.84-
EST 162,819.00-
EST 14,209.30-
.EST S,703 .77-
EST l,-473.54-
EST 9,261.33-
EST 3,995.07-
EST 118,701 .70-
EST 9 , 395.57-
EST 7,732.59-
EST 21,223 .52-
EST S,159 ,29-
EST 14S,6J9.7a-
EST 68,378.02-
EST 701, 977_02 I 100,2so.24 j • 8,648,969.28-89,901.75
12/31/98 ~CCOONT BJ\!J\NCE o.oo
\]9,742]
•
Sr.. ..,.--• -•
ALE'S
N.ZS
"CT!ON ?L.),N1' SAL.ES
• !tr~
, SA!.ZS
• IIOI.u?-iES -----
• MCF
• i!BI.
Jc:TICN PLAN!.' SALES
l FLCVSNUE:
•PRICING-----'
'-GE !'RIC:: !?Ea MG
'GE P!!IG: ;?ER BBL
!'-GE: ?:UC. n .. •,NT PRODUCTS
!',GE :OR OT:-r::R PRODocrs
•
~2/JL/n
NET WORKING INTERES'r YEAR END BALANCE WORKSHEET
• .\C:G • SC:? • OCT • NOV
SH· l ,U9 15,713-ll,086 75,H2
503,)46 429,BO 5aJ,25S 465,298 527,9H
<l8, B1a 59,073 59, Ql) 121,322 4 7, 40)
4H <\aO 23,008 597 l , Ol!.
-""·--------------·-·--
........ _____ ----------------------
552,lJJ 490, B!.9 649,563 598,30) 65 l. H9
2,850 47,802 SJ7-l ,609 22,640
44,645 H. 789 U,176 Jl.. 321 4], 7'1]
8,l.54 a,579 7, l4J 20,789 6, 7ll
0 .LS· O.OJ 2.9. 23 s . s·9 J. )]
ll .27 12.)6 H .17 H .as l2 .07
S .99 o.39 a .2.: 5.84 7.0li
Questar Gas Company
Docket'Nb. 3boi~16~~A-11'AG;;: 3
QGC Exhibit 3.8
• OE:C
tO,J4a
)a'\, 055
llB,740
l,lH
--··=-------5J4,46a
2, 3JL
39,702
lo,HS
q . 4'\
9.67
8.45
PPililt_1jc>fi~n t A
Page 4 of 6
-1100,zso) 52,609,092
5,207,325 2S,lll,0 6l
eoJ. ua 5,110,794
29,712 )7, os .. ,. __________
....................
7,HO,HS as,asa,001.
In 742} 20,978,260
459,358 l, 479,380
95,280 407,)82
3 .:17 2.51
ll .51 l L OO
8 .43 12. 55
Wexpro Net Working Interest Royalty , ...------' Value "Dollars" in general ledger ' ·'
, .
accounts 410.210, 410.220 and 410.230
Wexpro Net Working Interest "Volumes " ,. in general ledger accounts 410.210, ,
410.220 and 410.230
1S -,1zx?R.O C'Si"!?~.tr: ,1;:r..r.. SL.-a~.:::::-~::1 !~I Ll : J3 :~O A?: 22 1.,~;,3
ri3cal Ol/Jl/9S --u/l:/;,
~ ,' l
~on.:.h Nee Vol Net: Col CLEARING Wc:LL ELIMINATIONS WORKSHEET
l : 710001 DUMMY REVENUE ONLY!!! 'II'!
t;.-'-:count:: 410. 210 GS GAS SALES WI
( 24aa2s4 .a3. a1630J9 .64
252Ua6 .86-5187U0 .44
0]/98 2405823. 71. 53H207.5l
04/98 2205770 . 69-)926570 . 71
05/98 2130822 . 54-4364 719. l]
06/98 25'19087 .04-52.18293.86
07/98 2153416. 70-4582342.47
08/98 2oa4250. sa. 3610704,89
09/98 2102628 .27-3745686 .)6
10/98 24660!H . 26. 4400133 . 28
ll/98 261605.1 .00-4278927. 88
12/98 25)2409 .10-4647450.25
Tot:al 8306027.58-57491486 .42
;L Accow,t:: 410 . 220 GS GAS SALES RI
01/98 0. 00 17279 .SJ
02/98 0 .00 9859 .57
o3/9a o.oa 10018.79
04/98 0 .00 7217.53
06/98 0.00 14960. 93
Total 0.00 59336.35
;L Account:: 410.230 GS GAS SALES OR
01/98
02/98
03/98
04/98
06/98
07/98
l., c,8
0.00
0.00
o.oo
o.oo
0.00
o.oo
o.oo
0.00
o.oo
~5062 .81
30.193.63
)0046.48
22674 . 02
46122.75
5878 .62
)6504 .0l
10891. )7
16912. 92
O~eraco~: 75 ;rc:JC?RO COMPANY
Questar Gas Company
Docket No. 30010-162-GA-17
At t'3_~Q Exhibit 3.8 P~8k8Rl'otha Page 5 of 6
12/98 o.oo 23969 ,99
Total o.oa 268456.60
roc:al '@8306027.58-=\/[_781n79 . J 7 l
Total "Volumes" and Royalty Value "Dollars" for
general ledger accounts 410.210, 410.220 and ~ 410.230 for Wyoming
Ll: 710101 Du'MM'! REVENUE ONLY!!(! CO
jL Accounc: 410.210 GS GAS SALES WI
01/98 87ll93 .Jl. 2751642 .38
02/98 875248. 52-1832871.35
03/98 946365.45-1997477 .45
04/98 1060071.38 -1905469.27
~5/98 932556.76-1874335 .22
06/98 810036, 13. 1544041. 39
07/98 204967. 92-349821.01
08/98 266250 . 77-457215.96
09/98 22524 .25-24122 .80
10/98 120106 .26 l56364 .69-
ll/98 38666.85-21106 . 76
12/98 403824.18-707045 .31
Tot:al 6311599. 26-13308784. 2l
Operacor: 75 WEXPRO COMPANY
Total "Volumesa and Royalty Value "Dotlars" for GL i>,ccount:: 410. 220 GS GAS SALES
GL .ikcounc: 410.230 GS GAS SALES RI general ledger accounts 410.210, 410.220 and
0~ 410.230 for Colorado Tot:al \6311599 .2§3~])08784 .211
ll: ~l.0201 00?-IMY R.."VENUE ONLY ! ! ! ! UT
GT ~ccount:: 41.0 .210 GS GAS SALES WI
Operacor: 75 WEX?RO COMPANY
•
•
•
, .. 2 .~
•. ·· . 9
( '93
3
. :18
05/98
06/98
07/98
08/98
09/98
10/98
ll/98
75 ~~X?R.0 CCM?A ... \f'{ :.t?:~Z.. 5~"'3L.E:C!3. ~"' :.l :)a :40 Apr 22 !.9;s
~iscal 01/)1/33 .-s;::;/;:;;3
CLEARING WELLS ELHHNATIONS WORKSHEET (cont'd)
Nee. 'fol Net Do l
Ja2oss .05. 1111s99,11
27]106.57-541062 .62
267676 . 58 •
232750. 77-
]08485.06·
410887 .06-
200639 .81-
124632 .oo-
l2:U77 .SJ-
2715. 75 -
J082,75•
567)00 .26
]99143 .S6
593832 .17
803302.]6
408276 .54
229953. 7J
198626 .97
4620 .23
4796.08
Questar Gas Company
Do"tket No. 30010-162-GA-17
QGC Exhibit 3.8
Attachlrhl!lA~1 p,.f68
Page 6 of 6
l2/98 120211. 64 -usn. ss Total "Volumes 11
Tot.al 2339233 .57· 49'.8445 57 Ll and Royalty Value "Dollars" for general
410.210, 410.220 and 410.230 for Utah · ledger accounts GL Accounc.: 410,220 GS GAS SALES RI . ·
GL Accoun~: 410.230 GS GAS SALES OR
Toe.al ll!3]9233.S7-) (4'348445 57!
,cal ! )6956860 .4 l ·)\76076509 . 15 I Sum of Wexpro/Questar Gas Net Working Interest Royalty
Value "Dollars" in general ledger accounts 410.210~
410.220 and 410.230 for Wyoming, Colorado and Utah
•
Sum of Wexpro/Questar Gas Net Working Interest
-------------1'Volumes" in general ledger accounts 410. 210,
410.220 and 410.230 for Wyoming, Colorado and Utah
/
Mr . Darrell s. Hanson
Manager, Gas & Water
Division of Public Utilities
Heber Wells Building
160 East 300 South
Salt Lake City, UT 84111
May 29, 1992
Re: Refund of Excess Deferred Taxes
Whole-Well Approach for Detennining
Commerciality in the Churc~ Buttes Unit
Replacement Index Method for
Determining Base Rate of Return
Dear Mr. Hanson:
Questar·&is Company
Docket No. 30010-162'.GA-17
QGC Exhibit 3.8
Page 22 of 68
This guideline letter confirms the agreement between the Utah
Division of Public Utilities (Division) and Wexpro Company
(Wexpro) regarding the above referenced items. These guidelines
are part of a combined settlement of these issues agreed to in
principle on February s, 1992. The items agreed to are as
follows:
Refund of Excess Deferred Taxes
The 1986 Federal Income Tax Reform Act resulted in a reduction
in corporate tax rates from 46% to 34%. As a result, deferred
tax balances which Wexpro had been carrying for future tax
obligations were overstated. This ·resulted in a potential
refund to Mountain Fuel Supply·Company (Mountain Fuel¥. Wexpro
agrees to·refund to Mountain. Fuel that portion which relates to
cost~of-service gas (development gas, prio~ company, and
casinghead gas from development oil investment) on a straight­
line basis over 15 years (180 months) effective January 1, 1987.
That portion which results from the 11 54-46 formula" (prior
Wexpro, development oil, enhanced recovery, and "new oil" from
development gas investment) will be refunded irnmediate:y
(retroactive to January 1, 1987) 54% to Mountain Fuel and 46% to
Wexpro.
Wexpro will recognize an increase to investment base
commensurate with effecting the refund for both the cost-of­
service gas and the 54-46 formula. As a result, Wexpro will
also earn a return on the increased investment base. The refund
to Mountain Fuel relating to the 54-46 formula will be reduced
by that portion of excess deferred taxes created in months when
•
•
•
• ;·· -·:'.
\
c
•
•
. .-:/.
Mr. Darrell s. Hanson
May 29, 1992
Page 2
--··-·---·Questar Gas Company
Docket No. 30010-162--GA-17
QGC Exhibit 3.8
Page 23 of 68
(but only to the extent of) negative sharing occurred (i.e., 54-
46 formula revenues were not sufficient to effect a payout to
the sharing parties when the excess accrued). This reduced
portion of Mountain Fuel Is refund shall be distributed to
Wexpro. other than provided above, there shall be no
recalculation of Wexpro's return or the sharing amounts.
Future changes in corporate tax rates (up or down) will be
handled in a like manner. Deferred tax balance adjustments
required for cost-of-service gas will be effected over a 15-year
,period from the effective date of the change in tax rates.
Mountain Fuel shall receive any refund·and bear the expense of
over/under accrual for cost-of-service gas. Deferred tax
balance adjustments required for the 54-46 formula will be
handled via immediate recognition. Future adjustments to the
deferred tax balances for the 54-46 formula will account for
negative sharing positions as previously mentioned (i.e., to the
extent of negative sharing during a prior month of over/under
accrual, Wexpro shall, to the extent of the negative amount,
receive the refund or bear the expense of the adjustment, as the
case may be). For prior months of positive sharing in which
there was an over/under accrual, Mountain Fuel shall r~ceive the
refund or bear the expense of _54% of the adjustment.
Upon a change in tax rates, the deferred tax balances for the
two categories listed above will be compared to what they should
be as a result of the new tax rates and any under/over accrual
will be recovered/refunded as indicated above. Other than
determining the amount of negative sharing for prior months of
over/under accruals, the related recovery/refund will be outside
the calculation and not dependent upon past or current 54-46
sharing· revenues or operations. For example, if there has been
an under·accrual in a prior positive sharing month due to a tax
rate change, Mountain Fuel will bear 54% of the adjustment
regardless of whether the 9urrent month is in negative sharing.
Moreover, there will be no recalculation of the prior month's
return to Wexpro or sharing for the parties. If the prior month
is a negative sharing month, Wexpro will bear the bu~den and
benefit of the adjustment, but only to the extent of the
negative sharing and thereafter 46% .
.Mountain Fuel and Wexpro Company waive adjustments to the return
calculation for the pre tax-rate change period only as it
applies to this deferred tax issue.
Wexpro is currently studying the correctness of reducing
Wexpro' s investment base· for calculating the 54-46 formula as
set forth in Exhibit B.of the Wexpro Agreement. This guideline
letter shall not be construed as precluding or prejudicing any
(
Mr, Darrell S. Hanson
May 29, l.992
Page 3
Questar Gas Cq):11par]y
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 24 of 68
rights or claims which Wexpro may have, if any; from asserting
that deferred taxes should not reduce Wexpro's investment base
for the 54-46 formula calculation.
Wexpro also agrees to reverse out the effects of any 1990 year­
end adjustments pertaining to the deferred tax issue.
Whole Well Approach for Determining Commerciality in the Church
Buttes Unit
The Frontier and Dakota Formations are·present throughout the
Church Buttes Unit as well as other locations in the Moxa Arch
area of southwestern Wyoming. The Church Buttes Unit, for
purposes of this guideline, shall include the Church Buttes Unit
and any lands outside t..~e unit which are conununitized with unit.
lands. Both of these formations are ide_ntified as "productive
gas reservoirs II in Schedule 3 ( a) of the Wexpro Agreement for the
Church Buttes Unit. Prudent operators in this area generally
consider the Fro~tier and Dakota Formations as a single
objective when drilling a well.
An operator will typically drill to the Dakota Formation, but
may perforate and produce from ·either the Dakota or the Frontier
Formation or sometimes both. The incremental drilling costs
incurred to drill below the Frontier and obtain the additional
reserves in the Dakota Formation are modest as compared to
drilling a separate well to the Dakota, and the benefit to
Mountain Fuel has been substantial. Through the 3rd quarter of
1991., the estimated finding costs related to new Dakota reserves
is estimated to be less than $0. 25 per Mcf of gas. The
prob~bility for commercial production from the Dakota Formation
for any given well is low. Consequently, Wexpro lacks the
necessary "economic incentive" to routinely drill to the Dakota
if the colllJTterciality test of the Wexpro Agreement were applied
separately to the Frontier and Dakota Formations rather than to
the 9evelopment well as a whole.
Wexpro and the Division agree that the whole well approach for
Church Buttes has been beneficial .for both Mountain Fuel as well
as Wexpro and is consistent with industry practice. Therefore,
in the Church Buttes Unit and all cornmunitized border lands, if
production from the Dakota or Frontier Formations or combination
of these formations is sufficient to meet cornmerciality for the
entire well investment, as defined by I-20 of the Wexpro
Agreement, then Wexpro will be entitled to earn on its entire
investment in that well. If the well is not commercial, it will
be treated as a dry hole and Wexpro will bear all the risk and
•
•
••
•
(
•
•
Mr. Darrell s. Hanson
May 29, 1992
Page 4
Questar Gas Company
Docket No. 30010-162-dA-17
QGC Exhibit 3.8
Page 25 of 68
costs of the well unless Mountain Fuel elects t:o take the well
under the provisions of I-20(d).
Wexpro agrees to perform an annual update Of cumulative
estimated incremental Dakota finding costs according to the
methodology indicated in attachment #1. If the estimated
cumulative incremental Dakota finding costs reach $.75 Mcf then
Wexpro and the Division will agree to review future incremen'tal
Dakota drilling in the church Buttes Unit. Wexpro's estimated
cumulative finding cost will include all activity coll\lilencing
·from January 1, 1989, and will thereafter revert to a five-year
rolling average for years effective aft'er 1993.
This guideline is based upon the assumption that there will be
no future drilling .of Church Buttes Unit wells to the Morgan
Formation, which is also recognized as a "productive gas
reservoir" in Schedule 3 (a) of the Wexpro Agreement for the
Church Buttes Unit. Therefore, the "whole well approach" in
this guideline would not be applicable to a future Church Buttes
Unit well if the well were drilled to the Morgan Formation.
Furthermore, both Wexpro and the Division specifically agree
that this guideline will not be considered either a limitation
or precedent to investments and/or commerciality determinations
for wells outside the Church Buttes Unit.
Replacement Index Methodology for Determining Base Rate of
Return
A_s background, Sch_edule l (Base Rate of Return Indel( Companies)
of the Wexpro Agreement lists 2 0 regulated companies. The
percentage return on equity ("ROE") from these companies is used
to calculate the base rate .of return index. In recent years, a
reduced number of these original index companies still have
stated ROE's. Those without stated ROE's have received
composite dollar settlements or the applicable PSC/FERC Rate
Order states an overall cost of capital. Wexpro is desirous to
restore the 20-point index as originally intended in the
agreement. Accordingly, a ";replacement index methodology" has
been designed to allow for a 20-point index. If an original
Schedule l company is not available for use in the calculation,
for any . reason including lack of a stated ROE, then a
replacement index, by category, will be used in lieu of the
company. This replacement index will be used to the extent
required to bring the total number of companies up to twenty
(i.e., if three gas distribution companies are unable to be
used, the replacement index for gas distribution companies will
be used three times). The gas distribution and gas transmission
(_
· ···· ····· ······-·-·····-······· ··Questar·Gas Company
· Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 26 of 68
Mr. Darrell s . Hanson
May 29, 1992
Page 5
index shall be combined into a single index to be used for both
categories.
The replacement indices shall be derived by using all utilities
in 17 western states (original eight Schedule 1 states plus a
one-state stepout of contiguous states) which had stated returns
on common equity as of May 31, 1981, as well as May 31, 1990.
On May 31, 1990, this consisted of 78 utilities in the three
basi c categories (gas, electric, and telephone). Na .Questar
affiliated companies or original Schedule 1 companies are used
in the replacemeDt indices .
The sources used to compile the replacement index were
threefold:
NARUC Annual Report on Utility and· Carrier
Regulation.
Public Utilities Fortnightly.
Texas Eastern Transmission Corporation
Capitalization -Rate of Return Study.
Future changes to the repiacement index will be based
exclusively upon these sources. If these sources no l onger are
available, Wexpro and the Division will sel ect alternative
sources as required. For local gas, electric, and telephone
utilities, precedence will be gi ven to the NARUC report first
and Public Utilities Fortnightly second. For FERC pipelines,
precedence will be -given to the Texas Eastern Transmission
Corporation capitalization Rate of Return Study first and the
NARUC report second. For purposes of this agreement, the
parties agree that the appropriate return to use for U. s. West
Colorado for the 1991-1992 period will be 13·. 00%, which
represents a halfway point between 12. 5% and 13. 5% incentive
rate structure . This inc en ti ve rate methodology will not
necessarily be used for all situations in the future.
An additional 29 utilities had stated returns an equity as of
May 31 , 1981, but not as of May 31, 1990. If any of these 29
companies receive stated returns on common equity in the future,
they will be added on a prospective basis to the respective
index categories. Likewise, if the companies making up the
index lose a stated return then they will be deleted from the
index calculation until they once again receive a stated return
on common equity. These. 107 companies are the finite population
from which future replacement index calculations will he
derived. It is not contemplated that additional companies will
be added later. These companies were compiled without regard to
•
•
•
•
(
•
•
Mr. Darrell s. Hanson
May 29, 1992
Page 6
·· ·· ... ·· · · Questar Gas Cq~pany
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 27 of 68
any factor other than they had a stated return ·on equity as of
May 31, 1981. Updates were made to the indices as needed to
calculate the 1991-1992 index.
Adoption of this new methodology is expressly conditioned upon
the understanding that if either Wexpro or the Division of
Public Utilities is no longer satisfied with this method of
index calculation then the proposed index calculation method
will end and the parties will negotiate an alternative solution
for future periods. Wexpro and the Division agree that based
·Upon the above procedures, the base rate of return for 1990-1991
shall be 14.92% and for 1991-1992 "14.70% (see schedules
attached) , These return numbers shall be considered fully
agreed to by . bo.th parties for the applicable years and not
subject to subsequent revision. for any reason.
Wexpro and the Division also reaffirm that the base rate of
return for the periods 1989-1990 was 15.23%.
Interest
The parties agree that in resolution of the above matters a nine
percent, compounded annually, time value of money reimbursement
will be applied to all cash flows related to these items. This
time value of money reimbursement will not be considered a
precedent for other Wexpro Agreement related matters.
Please indicate your approval of the items discussed above in
the signature boxes below.
JRL/smw
APPROVED:
WEXPRO COMPANY
Very truly yours, r~ rf-,~~
James R. Livsey U
Coordinator, Wexpro Agreement
By: __ L);,:=·\ ).....,......l,.,._~' ~'i.:~. k~~ ~---·-t:1f: Nordloh,
President and CEO
5/29/92
(Date)
Mr. Darrell s. Hanson
( •, 29, 1992
; 7
APPROVED:
UTAH DIVISION OF PUBLIC UTILITIES
By:~~-
~ (Date)
APPROVED:
NA.PP .W WYOMING PUBLIC SERVICE COMMISSION
.-,.,ROVED:
(. ~E WATERHOUSE
APPROVED:
ROBERT L. MAGNIE AND ASSOCIATES, INC.
,/J
By: --1.~_.;..f--.' t .. // / I ./
· (Date)
/(Date)
·· Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 28 of 68 •
••
•
•
•
ATTACHMENT 1
METHODOLOGY FOR ESTIMATING
INCREMENTAL DAKOTA FINDING COST
AT WORKING INTEREST
CUMULATIVE FOR ALL COSTS
FROM JANUARY 1, 1989 FORWARD
Well #1 Estimated Incremental Drilling Cost
No Test/No Completion
Well #2 Estimated Incremental Drilling Cost
Test and Complete
Well #3 Estimated Incremental Drilling Cost
Test/No Completion
Total Costs
Booked Reserves (Mcf)
(Includes New Reserves and
Revisions)
Estimated Incremental Finding costs
Estimated Incremental .. Estimated Incremental
Questar Gas C<;>mpany
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 29 of 68
$ J.5,500
63,500
63,500
$142,500
850,000
$.16 Mcf
Drilling CQ~t Includes TestinglCom2letion Inc1.lides
Drilling Rig charges casing Wireline
Cement Tubing Perforation
Hud Stimulation Rig
water Packers Rental Equipment
Rental Equipment Nitrogen Pressure Buildup
Supervision Completion Fluids Zone Abandonment
Supervision
These items represent only expenses incurred to drill, test, and
complete below the Frontier Formation.
?!· ;: ;.!'1·~
We: 'O Agreement
8-f...:go through ,7-31-91 Base rate of return calculation using replacement index companies
Com Nimi•
Ari.:tina l'ubric s«,.,ice Co.
lc!dio l'OWl!f Compony
Monw,o. Power Comp:u,y
N-,!a Power Company
Pubtk, Sor,,;c9 Co. ol N .. w Moxico
Replacem'ent-8ectic
Utah Power & Light Co. (V,ah)
Inb2tmoun!:>in Gas Company
Ma,t,,n,,.-04ko!:, Ulirrtios Co.
G., Comp,,ny cf N..w Mexic::o
Pubf,c:S.-..:o Co. of Cclc:rodo
Repla""'1'1..ii-Gos ~-= Rap!acement-G.,
Nortt,wo,st Pipel'me Ccrp.
Roplecement-Gos Tren:smlosia,
Fleplac.m..rt-G=s Transmt<>ion
Aepl<,c....,.r:t-GosTr=m­
US We,t (Colcrodo)
US West (lkh)
;_:~ . ·:; ..
Soctric Services
8edric5""1ices
Sectric Services
Electric-
8ectic: Serw:e«
Sectic Ser.-ic:es
8ectic Secviee«
Gas Oi:,t-ibutien
G,.s 0"1nbution
Go.s 0"'1ribution
Gos Qi,1ributicn
Gos Dislribution
Gas !l istnbution
Gas Qi,;:ribution
Geis Transmi.szion
Gas Tre.m,mis:s:ion
Ga.s. Transmis~ion
Gas Transmin:ion
T e!ecommunic:z,.tion:s
Tofocommunic:r.ticns
ki= COC"l)cntion Commission
Idaho Public S..-.ic:a Commission
Mon!aM. Public: Snee Conimis~ion
N<>'md« Pubr,c Sorvic:a CommlssxJn
New Maxico Pubrie Servic" Commission
Repl,icement
Ub!h Public s«-.ic& Cornm\soion
lcaho Public s....;.:e Comm:sslon
Montane. Pubfic s..-viea Commmicn
New Mexico Public Ser,k:a Comminion
Co{Q-ado Public Strvice Cammis3ori
Replac,,ment
R,,placement
Replacement
Fed«aJ Eno<gy Rogulat,:ry Commission
Replacement
Roplaeement ·
Aepl:1cnment
Colorado Public: S<n'ic:e Ccmmis:!ion
Ulloh ?ubnc: S""""" Commi,s;on
Au1hc,i2:.,d Return as of
M,,y 31 May3l
1981 1990
15.00% 12,50%
14.50% 12.25'l(,
13.45% 12.50%
15.oo% 14.75%
15.50% 12.52%
14.35% 13.13%
16.80% 12. jO'l(,
14.50% 14.8'>~
13.50% 12.~
15.50% 12.74%
15.45% 14.40%
13.48% 13.36%
13.48% 13.$%
13.48% 13.:16%
13.75')(, 13.llO')\
13.48% 13,36')(,
13.48% 13.3G'JC,
13.48% 13.36%
11.90% 13.70%
14.50% 11,80%
M¥-¥.1~'4-23-ii ~3-4s,:,~
Original Wex.pro Agreement Companies Without a Current Authorized Return on Equity
Cola,,do l~!e Ccrp.
T~~rineeo.
K,,n;,m Nebtaskzt Nah.ral Go.• Co.
Sou1hw.st = Corp.
~=ec,p.
N<rthom Utlilia Inc.
Pacif>c Pow,,r & Light
•
Gz.3 Tcan:smts::s.ion
GuTfl!IJ'lSmis::KJn
G,.s Tr,,n:,mis'5ion
Gos Din-ibuticn
Gos Diotribution
Gt: Di>1rlbu1ion
B~ic:Servic~
Fed«al Energy Regulalay Commission
Fedon,J Energy f',agulalcry Commis,ion
Fodwal Ene<gy Rogublcry Comm:ssion
Aclzone Capamion Commission
N""'da Public s..,.,jc:e Commi<.sion
Wygming Public: StrVica, Comminicn
Wyoming Public: s..vice Commission
13.25%
12.00%.
13.00%
15.00%
15.20%
13,50%
14.64%
•
Frint~:
Let Known Order o,.i,,
May31 May31
1981 1990
05/24/BO 04/01/88
03/2S/80 12/12/86
02/09/81 08/14/BS
08/10/80 09/29/87
05/29/81 04/12/90
NIA NIA
04/21/81 CZ/09~
10/31/80 12/05/85
04/27/81 12/C8/8S
Agrocmont 08/CB/!IB
12/10/80 05/22184
N/A N/A
NIA NIA
, N{A NIA
05/15/80 10/19/89
NIA N/A
NIA .: N/A
NIA NIA.
09116/!IO 05/23/86
Agre,ement 10/18/89'
··-
04/1S/92
Change in
l'laun
811o90
-2.50')(,
-2.25%
-0.95')(,
-0..25')(,
-2.!)8%
-1.22%
-4.7Cl'l(,
.0.35%
-1.00%
-2.76%
-1.05%
-0.12%
-0.12'%
-0.12'%
-0.75%,
-0.12%' l -0.12')(,
-0,12%
1.80%
-2.70%
25'..fto'ra
( ·,
\ ~.~ .. ;){
·:\
... i·\ ... .. /::,. \<:.;
.~
.,
O • o , (').
"" ro -o Zc o ro
~5!?.
0 0 0, a~ -uG)~G) ~ 02:~ ro rno,o w~~o 0 o=·G) 3
0 ;=;: ~'O ;~~~
0:, 0:, -.J '<
•
• •
Wexpro Agreement-RepJacerr·-· t Index for 8-1-90 through 7-31-91 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States
:;, ;~: Authaized Return ..s cf
~ May31 M"}'31
Com Ncme Aciivitv 1981 1990
Cenlr8J Po....... & Light Boctric~ T= Pubrie VbTrly Commission 15.50% 14.90'.I',
Citizem Utilifie:s Cc. Qdo.ho) Bec1ric Secvices Jd,ha Pubf,c Service Commission 14.11% 12.42%
D!llm Pool« & Light Co. B8dnc s.,,.ic:es T exM Public UtiJity Commission 1G.Cl0% 15.lll)')(,
. 8 Pzeso Bodrlc: Eloctri<:-s..-.ices T=,o. Pubf,c Utility Commission 14.23% 12.40%
8 P=a 8a,;nc (New Me>oeo) 8eciric Ser,;ees New Mmi:o Pubr,e Servtc:e Commiss:ion 14.75% 12.60%
GuHSlzde$1Jt,liti"" Elecirk: Services To= Publlc Ubllty Commission 16.!0% 13.00%
Houslon Lighting & Pow.r BeclricServic:os T exos Pubfic Utility Commission 15.80% 14.44%
lo-Pubic s.n,;c;;, ComF't"Y SaciTie s.,,,,;ces Sa,th Dekol!l Public Util. Comm~on tt.50% 13.25')(,
~ City Power & Light Bedric s«v;ces Kansas St,19 Capcralion Commission 14.00% 12.00%
Kan.es G.s & Sec:!rie Electric s«,,;c..., 'l<:insas Sbl9 Cctpara1ion Comm'r=ion 1:.l.!l3% 12.03'%
~ r>a-& Light Co. Sadric Secvices J<..r=s Sam Capa,,1ion Commission 13.71% 12..98';1.
Monfant Dek~ Utilities Sectrie So<Vices North Dakot,, Public Service Commission ! 1.9,;% 12.71'l(.
N«thom SIZ!!a:s Power EJ<>drie s..c,,;c..,, Nath Dakob. Public Senrica Comrn~ion 13.39% 11.2~'%
Nc<thom si..tes Power Co. Eledrie Services Soutll Dakota Public Ubl. Commb,,ion 13.00% 12.00%
N~ Public S<r<ice 8ec!rlc $«';ices Sou1h D""'*1 Pubr., UbTriies Commission 13.10% 13.00%
Okie,n:,ma G.s & 8edric Compony Sedric Secvicocs Old,,horni, Corporation Commission 14.DO% 13.50%
Ott« Tai Pow..-Compony El&e!ric Somces North Odc:cra: Public Service Commission 11.60% M.50%
Paci!ic:Gcs&Secvic 8ec1ric Services c:..r.rornia Pubr,c Ubli1ie:, Cbmmission 13,9C'J(, 12.90%
P,,cific -& Light Bedrie S~ces Oregon ?ubr,c Utility Cc:mm1"sion 1625% 12.73%
F',,cific-&Light El=n: S..,-vices Washinglon Ubl. & T,..,...p. Commission 13.75$ 1:3.25%
Poci5: ~ & Light (Mcmom) .... . EJecti: s.r,ices !.\onl,,r,,, Pubr,c S""""9 Commis$ion 13.75% 12.30'J.
Pcr1lo:,d General Boct-ie Co. ·· Sec:1ric Ser,icoos Cragan ?ub!ic Ublity Ccmmissoion 16.25% 12.73':b
Pubic s.r.ice Co. cf Colen.do Bedric Serv,ces Colm,do Pubr,c &r,ice Commis,i'on 15.45% 14.40%
Pubf'oc: Sernce Company cf'Oklohoma Seciric Sennc:oo; Okb.homtl Ccx-pao.tion Comm~ion 15.00% 13.50'%
Puget Sound Pciwer & Light Secric S..-vicez Woshington Util. & Tr>1nsp. Commission 15.25% 12.60%
San o;.go Ga:, & Eledric Seciric 5""'"""' c:..rdomia Pubf,c Ublities Commisoion H..50% ·12.90%
Sou!lwn Califtrni,, Edison Sedrie Serkes Caftfi:mia Pubf,c Utirriies Commission 14.95% 13.00')(,
~n 8oc1ric Sel'i<= Co. Seci:ic S~c:es Texe Public: Utility Commis3ion 15.00'X, 12.50%
~ Pubr"' s.,,,;., •• , 8edric:~ Nc,rMoxica Pubri<: Service Commi3sion 16.33')(. 14.50'%
T"""" El9C1'ie Seivica Compony Electric s«llic ... To= Publict/tifrty Commio,sion 15.50% 15.56%
Ulch p,,_. & Light Co. (Wycming) Sec!ric~ Wyaning Pubroc Sor.ice Commission 12..90';(, 12.85%
W~nWmt ~ComP'flY Elec!ric s.,..,icQS Wclingtcn Util. & Tramp. Commission 12.75% 12.90%
W~nWatec ~ Co. !ld..ho) EJecto:: Se<",ices ld:ihc Pubric S«vic:v Ccmmluion 14.00'J(. 12.90%
W=t T"""" UliJities Comp<>r.y 8oe1ricSG<'lices '"""" Pubric Utility Commis,ion 15.35% 12.00%
l>.~:.i'.3's.,;~#.\sffaJ3%~·
Printed:
Last Known Order Dais
May3!
1981
D1/Z3/80
03/09/&J
02/26/81
t1/09/T8
06f08/79
10/16/80
09/15/80
D4/D7f7B
03/13/79
09/24(1'9
OS('Z3(7'i1
04(26{77
12/31/80
11/19/80
01/Zl/81
1:z/31/79
04{Z2lTT
1?/19/79
05/07/81
11/05/80
05/27/61
OSJ07/81
12/10/80. •
05/rr7/60
01/09/81
12/30/80
12/30/80
01/21/60.
08/18/80
10/03/8D
10/'Zl/7B
03/24/76
05/04/eO
. 12/09/80
\.~.
M<ty31
1990
ro/07/86
01/DS/89
01/16/8-;
05/05/eS
OS,'01/SO
OS/16/83
11/14/56
03/01/84
rrrmm
02/13/SO
rJ'T/31/T,7
01/27/87
03/24/88
01/01/89
11/!5/BS
D6/2~
04/19/83
12/'Z.0/89
02/01/88
09/19/86
a?/09/86
10/H/87
. 05(Z21P,',
00/ZS%{
D3{3()/SO
111"22/89
12/1~@11
C3/a7/SO
12/2.1/87
12/15/83
10/IZ/89
02/24/67
12/00/66
11/3()/ffT
04/16/92
I
Changa in
Relurn
·ar to 90
-0.60%
-1.6:9\1,
-o.~
-1.83%
-2.15%
-3.10%
-1.36%
1.75%
-2.00'J!',
-1.90%
-OJ:!%
0.77%
-2.15%
-1.00'JI',
-0.10%
-0.50%
2.70%
-1.00%.
-3.52%
-0.50'%
-1.~5%
-3.5:z.%
··!.05%
-1..sa,r,
-2.45%
-1.60%
-1.95%
-2..50%
-1.8..'\%
0.06')(,
-0.05%
0.15%
-1.10%
-~.:mi',
z
•
:t.
{..
0 0 ()
" (1) -o Zc
0 ffi w-
0 0 0) a ~
-oGJ~G) ~ () ~ ~ ro rn CJ) o w~~o ~o'Gl3
0 ""l>" ;; ~ ~ §
0:, 0:, -.J '<
Wexpro Agreement-Replacem: ·.Index for 8-1-90 through 7-31-91 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States Primed: C4/16/9Z
·;f, ; : ,. Autt,o-i,:o d Renn, as cf ust Known Order Date Chi.nge Jn
·; M...y 31 Me.y :11 Mey 31 May 31 Return
Com Name
·C=ade Nall.ral Gao:s Ccrp. ~$ Distribution Dragon Pubroc Utility Commis35ion
==i.~ G= Ccrp. G::o Distribution W~hinglon Util. & Tran.p.Comm~ion
Clli,:..,. lJti!itio,, Co. [Colo-ado) Ges Dis!ribUtion Colorado Public s.....;ce Canmissloti
G-se!yG.s Co. Ga• Dtrtibution Colcnido Public Servica Commission
lowu Pubf,c Service Comp,ny G::• Di:s1ribtllicn So<.Jlh Cr,Jco1,, Public Util. Commioson
Kansas Go,, Scpp ply GasDm-,1,ution J<,,ns..3 Sb.ht Coc:pao.1ion Comm:ssion
Ka= Power & light Co. G:,s Dis1ribution K,.i= Sb.1,, Capcr,,1ion Commi:::oion
Lonesi.r = Co. Gas Distribu!ion T .u= Ralu=d Comm!ulan
Minneg= G::• Distribution South Doko!:t Publk: Lltirrti..s Commisolon
Monbu,,t Mola. Utlf(lies Gc3 Distribution Na1h Dakola Publics,..,,.,.. Cocnm;..,ian
Mont,,na Do.katz, Utlities Gas Dlslribution South Daktrla Pt,blic Ubl. Commis,ion'
Montan. p.,_-Comp,,ny Go.:s Dis~ibution Monlana Pubric Sll<Vice Commisslon
M~-Dnkata Ublities Co. Gas Dislributian Wyoming Public S«,nco Commi:s.acn
Ncrthem Slzti..s ?ower ComP4"Y G= Dis1nbution Nc:r!li Dakota Public S..-vic:o Commiuion
NorthwestNattnl Gas Gas Distribution W""hk1glt>n Ubl. & Tn=,p. Commiulon
NO'lhwtrt Natu-al Ga:; Gos Disvibution Oregon Public Lltili!y Commr..=ion
N~n Pub/le S,r,,ice Geis Distnblrtion South Dakola Pubf,c Util'llie• Commission
Oklaho!n<, Nallnl Gcs Co. Gos Dis1nbution OklahornQ Corpa.,!ion Commi:ssion
Peoples Nati..n,J Goo CcmP4"'Y G,,; Dirtibution l<an=,c Slats Caporation Commi:,,,ion
Rocky Mourmin Ntttural Gas Co. G,.:, Dis1nbution Colorado Public s.....;c• Commi:sion
San Deigo Gas & Bedric Gos Olrt;J,ution ~,lcmi,,. Pubf,c: UtiJilieo Comm;..;on
SO!.l!hern Col!!ania Gas Co. Gu Distribution C<ubnio. Public l.11,lilies Commis,;on
Southern Union = Gos Dis1ribution Tex= F.ailrood Commi:ssicm
Southern Union Gas Cc. Gos Dls1ribution Oklahoma Ccrporation Commission
Union Gao Syslem Gas Dis1rib1J1icn l<ar=is Stole Capcntiion Commi:ssion
Wo.sl,;ngtcn N,,11.ral Gas Cap. G:i:s Dinibuwn Washingt:,n Ubl. & Tr.,n,p. Commi:nicn
W~n W<>ter Power G5!: Dist"ibution ld:,l,o Pubfoc s..,,;c. Commi:sslcn
ANR Pipefme Co. t'.;a:i; Tran:smt3:sion Federal Energy Reguhto:y Comm"!"ian
M~i:.:,;ppi P,.,... T,"""'1ils""'n Ge.: Transmbion F,od«al Energy Rogub lory Comm;,.,,ion
Nc:r.homN.,.ltr~ G= C:d.s Trar.:,:misskm Fodettll Energy Regubttty Commission
Panhandr. w!um G:isT=missian Fed ... al Energy ~la~ Commis,ion
Te= Easton, Gu Piperrne Ca.
,, Gss Tran:sminion Fadw~I 5-gy Regula lay Commission
Trun!<r'°" Gao. Co. Gas. Transmissjon Fed..-.. 1 Energy Regubto:y Commission
•
1981 t!l90 1981 1990 a1 tc so
14.B5'lG 12.25%
H...!5% 13.25%
11.91% 13.2ll"I'..
14.10% 15.00%
12.50% 13.!)(!%.
11.2B% 14.50%
14.t!l'l& 12.40%
13.70% 13.2(;%
t3.stl% 12..50'}'.
12.58% 12.71%
13.!Cl'll', 14.25%
13.45% 12.50'%
13.64')(, 14.26%
11.~ 14.00%
13.50%. 13.25%
15,!!0'J(, 13.25%
13.lCl'll', 13.00%
14.50% 13.50')(,
14.50'\I,, 1-4.65%
H.40% 14.<0%
14.50% 12.90%
T4.50% 13.om'..
t4.50%. 15.50%
14.50% 12.(l()'l;.
13.50% 13,152%
13.50% 16,ZS$
13-25% 12.75%
12.BS'lb 12.75%
13.2;5% 10.49'% .
12.50% 13.23'):.
13.25% 13.00%
T2.50'l(. T3.oo%
12.25% 1:l.25%
~~13;.o\8~~~
•
11/19/llO
04/2.B/B1
05/05/llO
01/08/Bl
04Jre(79
00/20/80
06f20iso
02/11/80
11/26/80
05/23/79
11/14/80
.• rmo9(81
04/2!!/81
04/18/78
1111cm
04/01/81
01/23/lll
02/11/Bl
04/Z.6/00
02/Z~/81
06/r)S/79
12/05/80
10/11/79
04/27/81
11/21ll9
Tr/19/00
10/01/79
rI7/17/80
04/09/81
rJ2J20/81
/11/'Z]~
04tll4/SO
I f(Z2!7B
I ,_
0<./12)90 -2.80%
11/29/89 -f.00')(,
06/3,J%7 .1.29%
OS/09/BS 0.90')(,
CIS/01/86 0.50%
06/06/84 3.22%
OSJ/2f;/ga -1.79%
10/20/89 -0.50%
11/07/89 -1.C0':1',
01/21/67 0.13%
11/08(83 1.15%
DB/1-4/1!9 -0.95%
D4/17/B4 D.64%-.'
10/01/B,4 2.srx;
09/15{a6 -0.25%
11/01(89 -2.05%
10/06/86 -0.10%
06/30(87 -1.00%
04/17/86 0.15%
09/18/llS 0.00%
l1(22/B9 -1.50')o
01/09/90 -1.GO%
05/2</M 1.00%
11/23/Sll -2..50%
O!!n5/1l'J 0.12%
12!ZB/84 2.75%
!1/08/t!S -0.50%
11nZJS1 -0.13%
04/08/fJS -2.76%
12./29/89 O,T,l'j(,
01/Q81i!l -0.25%
"08/2S/89 . 0.50'%
1Z/21/ll9 1.00%
:-;·
0 0 . C, ;,;-CD -o Zc 0 CD ~!:!?.
0 0 OJ a~
-uGl~GJ ~ 02:~
CD mmo
W X N 0 N~G)3 0 ;:. )>,:, ;; ~ ~ ~ ex, ex, -..J '<
•
• •
Wexpro Agreement-Replaceme 'index for 8-1-90 through 7-31-91 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States Primed: 04/15/92
·1.,l~ .... ~:::;:;==~~~~
Com Name
Aulhorlzed Return o.s of ~ Known Ord..-Dal.a Ch,m;efn
M..ty 31 May31 lk.y 31 May31 Relurn
1981 1990 1981 1990 81 le 90
Con!il'\en10.lTol Co.of Colifc:mia
Con!inent,,i T elephona/NorthWe:'1
GTE c..ritaru.
GTE.S""1hwe:l lr,c.
Mc:i<Jniur Bell-~ (US West)
Ncrthwes!am 8e!I
Paclfie Nc:rit"'8St Bell
Padnc N<rl>wust Bell
~Bell
~Bell ~ &JI Telephone Co.
Talacommunica~ons
TelOCQmmlJnic::zrlion:s
Tefeeommunk:zstions
Te!ecommunicalion:s
Telecomm:miczi.tions
Teloccmmunio,ticns
Ta!ocommuniarlions
T elec:ommunicolion,,
Talecommunb,tior.s
TeTec:ommuniea.tions
Te!eccmmunk::ltions
~ifcmia Public Utilities Commis>ion
Wi,shingtcn Util. &. Tr=p. Cc:lmmission
Califanii> Pub lie tJtilitie$ Commis:ion
T"""" Public Ubllty Commission
lc!oho Ptt:ilic Ser.ico Commes ion
Nebrmlca Pubfc ~ Ccmm""'°n
Washinglon Uti!. & Tramp. Canm~ion
On,gcn Public U!JTc!y Canmiu.,;or,
!Cot= si.10 C<:rpa11tion Comm~lon
T c:ats Public Ublity Comml$$lon
Okbhom<I Corpor111ion Commb,i,on .
11.70% 15.50%
14.40% 11.90%
14.10% 11.50%
14.()()% 11.99%
12.50% t4.00'l(,
11.81% 13.7ll'll',
13.S9% 11.90')(,
13.20'\1<'. 12.35%
13,6:Z')(, 14.50%
H.10% 1~.20%
12.02% 13.50%
01/05/77 03/2!J/85 3.80%
12/12/l!O 10(Z!S/87 -2..SO'JG
10/22fil0 01/01/90 -2.60%
Cl!/05/80 02/'Z3/59 -2.01%
12/11/80 05/18/84 1.50%
05/06/80 12}Zl/86 1..98%
08/00/00 05/16/86 -1.79%
08(,!9/alJ 05/01/f!7 -0.859:,
OZ/2-4/81 01/07/85 o.sa,;
01/29/81 D6/26/86 0.10%
07/01/&J 09(20/BSJ 1.48%
. ~'
l-~-,, C
•
,:1,
o .
0 o. ;,;-·
CD -o Zc o CD
. "' w-o oCll 0--,
-uG)~G) ~ 0 ~ ~
CD rnmc,
vJ ~ t;v 0 wo'G)3 s. ::+ ~--g
0) ~ -1. ::J co 0:, -..J '<
Wexpro Agreement-Replaceme _lndex for 8-1-90 through 7-31-91 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States ?rinted: 04/16/92
'I:• ; ·:,, I l Au!hcrized Return c,s at Lost Known Order Da"iu Ch.>nge in
Company Name
Comptmie,,. wi1h a S-31-61 fu.te of Rebzn but no authaizad re1!Jrn = of 5-31-90
These will be U:ed if 1hoyrecoiv,, sla!ed roh.m:s on c,qulty in-!he fufu-e
lcbho Power C:,.
Cenlral ~ PoWe< Co.
M~-Do.kcr.,,. Ubl?ti<>< Co.
Siooa Pr!c:il're Pow..-(We,;tpac)
Emp~e Om. Beet. Co.
Bia.ck Hilo Power & Ligr:t
Morr!>lno! O..ko!e Utilitie,,
Community Public Service Co.
G:ts $«vb, Co.
c..Jifcrnn Paeilic Utifily
CP NalinrJ Cap.
Ch")'enr,& Light. Fuel &. Elce.
Natural Gas Pipeline Co:
B P=o Natura.I~-Ca,,.
Wi!r= Natural Gos Co.
T= G,$ Tr=n,i:,,:ior, Cap.
Tr~entzr.l Gos Pipe line
1Jni!sd Gos Pip,,line Co.
Mourrt,,.;,, Stzr.!a> Telephona­
Genaral T elo,phone Co.JNcrthwost
UnitodTol. of l<An=s
Nortfnwotorn Telephone Systems
Mcunlain Stz:te:s Telephone
Linco1t, Tel.&. Tel.
Urubod Tel. Co./Ncrthwa,;t
Cen!raJ Toi. o!Texa,:
Continental Tel. Co,
Mouni,,., Sta!os Tel. &. Tel.
· Mounlain Bell (US West)
·, ... _ .. ·
•
Elocfric Services
Electric. Services
Elsdrie Services
Electric Services
EJac:1Ji,:: Services
B~Services
Bectric: Sarvieas
8acrie S«'hC<>S
Gu Dist-ibution
G:o Dislribulion
Gos Disfribution
Gas O~ihtmon
Gas Trttl'l$'.m'ission
Ga~Tran:smi:!esion
C?ia.:,.Trammis:.ion
Get• Tnsmmi:::ion
Gets Transmission
~:s Transmi:ssion
Ta.f acommu11ta1.ti ens
Telecommuniaitions
T~ecommunic=n Ol1:$
Terecommuniai.tion3
Tefeeommunbtions
Tclecommunia:ttions­
Tefecoi-nmunica.tiOM
Telecommunic:ntion:s
Tol..::ommUOicaJion,s
Te:lecommunk::ations
Talecommunia!tiom
ldcho Pubrrc Service Commi:,3ion
Kansas S~t& Capaa.tion Commi:s::ion
Morrt,u,.a Publics.,..,,.;.,. Comm,s,,;lon
New,da Public s..-vica Commission
Ok!z,homa Ca,,a-«tioo Commissicn
South D,,Jcota Public Util. Commis,,on
Sovth D..!rcia Pub!<= U1>l. Commis3ion
T-= Pubic Utirrty Commio.s;o,,
Okl,hom« Ccrpcn,tion Commi:,sion
Oregon Public: Utifrty Commiszon
Oregon Public Utlity Commisssicn
Wyoming PubrlC Sa-vice Commission
Feden,J E°n«gy F\egui,.tay Commission
Fedet"8! Energy Regui,.tcry Comm~on
Foderol Enocgy Reguata-y Commission
F..>derol Energy Regul,ot::ry Commission
Federel Enorgy Regub.t::ry Commmion
Fed=! E'n<r<gy Regulot::ry Commlo>ion
Idaho Pubrre s«vieu Commis:tion
Idaho Pubric Ser.ic9 Commasion
Ka= Sb.I& Caporolion Commission
Moni.m.. PubrJe Service Commission
Momana Pubrc Servi,;,. Commission
Nebresla, Pubre Service Commi,,sion
Oregon Pubre Utility Commisssicn
T.icos Pubroc U:.Trty Comm~
Tex= Public: Utr1ity Cornmis,slon
Te= Public: Utility Commission
Wyoming Pubr1e ~~• Commi:,son
,_
May 31 Maly 31 May 31 May 31 Retum
1981 1990 1981 1990 81 ID 90
14.50% 03/26/80
20.00% 12/21(79
12.00% 05/ZBfOO
15.00% 10/2!3/80
14.00% O.f./le/79
13.10% 11/19/80
11.82')(, f2/213/TB
15.80% 12/18/00
12.00% . ·"08/25{77
13.SO'li, 06/1Jm , I • I 14.IJ7% 09/30/JlO
13.50% !1/26iao
13.25% 10/04{79
14.00% 07(20/79
12.33% 09/11/80
13Jl0% 10/11/79
14.50% 10/11{19
'12.50% 10/10/80
12.50% 04/13/79
13.03% CS/19/&l
16.36% OS/19/!1
12.52% 04/04(18
12.60% '17/16{80
11.59% 10/07/80
14.05% 09/08/80
13.92% 04f.?O}ll1
12.89% ~
13.40% 11/05/80
13.00% 01/28/81
( ·,_. \. __
•
0 0 () ~ ~D Zc ~ (1)
(;)~
D O Q) o~ -uG)~G) ru o?ru r.c ~ en ro mo,c, w~~o ~o'G):3
•
8. ~ ~~
0) ~ ....Ir,. ::J 00 00 ---J '<
•
!.1• iWfj·;
•
Wex:pro Agreement
8-1-91 through 7-31-92 base rate of return calculation using replacement index companies
,, .
Com Name Aclivl
Original Wexprc Agreement Companies Wrth a Current Authorized Return on Equity
hizona Public s«vi,eQ Co.
ldoho ?owsr Ccmpony
Montana Power Comp,,,y
Pubfic ~Co.of New Mexico
Ro;,lacement-Bectic
Roplacoment-8oc\ic
uw, Power· & Ugh! Co. (Uld,)
SC><Jthw=t. = cap. .
Pubf,c Soriieo Co. cf Colorado
lnterm~ =ea-npany
Mcntam-D.,J,;ota, Ut:rioo::s Co.
Gas ComP""'f cl Now M<,xico
Replacement-Gos Disnbution
Replacement-Gos Dirtibution
Tr~ Pipefine Co.
Northwest Pipe!ino Corp.
Replacement-Ga:~ Transmission
Replacement-Gu Transmission
US Welt! {Ccla,,do)
US W•.t (Utah)
Eledric Services
aec1ricsen,;c.,.
Seen: Servic""
8ec:1rlc Service,:
8ec:1ric Servico,;
8ec:tricS..--.ices
Secirlc Services
Go.•Dirtib~
Gn Dlstibulion
Gos Distnb<mon
Go, Di:ilribution
Gos DQi!Mion
Go• Dmribution
Ga, O'*ibu!ion
Gos Transmission
Go.s Transmission
Gas Tra~issfon
Go.s Transmission
T aleccmmun;.,,,t;ons
Talecommunia,tiom
~~it.git:~~;;~~~ ~~i:.;r_~
Arizo= Ca-pora!ion Commission
ldziho Pubr,c Se<vice Commi:ssion
Moman,,. Pubf,c s..rvica Commission
New Me,lco Public Service Commission
Repbc:emont
Repbe,,r.,ent
U\nh Public S«viea Commission
Aro:on,, Capor,,6on Commi=ion
Colc,-arlo Public s..-,..;c .. Comm­
Idaho Pubflc: Se,w:e Ccmmi,,,;ion
Monbnci Public: s....;c. Commission
New Maxico Public So<vica Commi:ision
Repbcement
Rop!acament
Federal Energy R-gulo.to(y Commission
Feden,I Energy Rogub. irry Commi:,sion
Raplaeement
R,,placamont
Color.,do·Public Sor,ica Ccmmis,;ic,n
Ulnl, Public Sonnee Commlssion
Original Wexpro Agreement Companies Wrt:hout a Current Authorized Return on Equity
N-~Comp,my Bec:tric Servic:«5: 1,....,,do Pubf,c S,r,iee Ccmmission
Pacific Powv & L.igli! 8e<*le Ser.ices Wyoming Public S<XVfca Commission
Northern U1ilmes Inc. Gos Distribution Wyoming Public Sin,ics Commission
~~Ccrp Go.s Di:stribution Nev,ida Publlc: Serviet1 Comme.sion
Colontdo lmero1ala Corp. Gts Trtm:smission Fedond Energy Regue.iay Commission
Ka= Neb<asloo Natural Go.s Co. Gas Tri,.nsmission Federal Energy Regui>tcry Commission
Autha-lzed Re11n, as of
Mayst May31
1981 1991
15.00% 12.50%
14.50% 12.25%
13.45% 12.511%
15.50% 12.52%
14.35% 13.07%
14.35% 13.07%
16.!W% 12. lo,\
\S.00% 1250%
15.45% 14.40%
14.50% 14.a.5'£
13.50% 12.50%.
15.50% 12.38%
13.4<1% 13.36%
13.48% 13.36%
12.00')(, 13.!m',
13.75% 13.~
13.48% 13.36%
13.48% 13.36%
11.90% 13.°""
14.50% It.BO%
w$%1
15.00%
14.64%
13.50\I,
1S.20'J(,
13.25')(,
.13.00%
Prfn1ed: 04(20/92
last Known Ord..-Cate Change in
May31 M..y31 Return
1S81 1991 81 lo 91
05/24/80 04/01/88 -2..50%
ro/2fj/&J I 2/12/86 -2.25%
OZ,00/81 08/14/89 -0.95%
05(;S/81 04/12/90 -2.98%
N/A N/A -1.2B%
NIA· N/A -1.28%
04/21/81 02/09/90 -4.70%
Ag,-eement 08/31/90 -3.50%
12/10/&l OS/22184 -1.05%
10/31/80 1"ZJD5/85 0.35%
04,JZT/81 12/08/SS -1.00%
Agr-,i&nt 08/03/90 -3.12%
NIA. NIA .:/ -0.12'%
NIA N/A -0.12%
rIT/[]9/79 06/"22100 1.00%
C5/!5/80 10/19/89 -0.75%
N/A NIA -0.12%
NIA N/A -0.12%
09/16/&l 04/11/91 1.tO\'(.
Agroomont 10/18/89 -2.70%
~~
I '· ...
•
•f.
0 0 ()
~ -o Zc 0 Cl)
(.,.)~
D o ru a~ -uGl~Gl ~ 0 ~ ~
ro m °' o W; ";J 0
UlfrGl3 0 "")>-0 ~~~~ 0000-.J'<
Wexpro Agreement-Replacem ·· index for 8-1-91 through 7-31 -92 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States
'ft,,;:, Authorized Aelurn as of
May31 Mi,y 31
Com Nam~ A 1981 1991
souihom ~ilcrnia E:lison Sectrir:: Services California Pubroc: Ull1ifias Commission 14.!15% 13.00%
San o;.go = & EJectic Seciric S..-vices Calilc:mio. Pubfic Utirrlie:s Commls,:;o:, 14.50% 1290%
Paci!ir:: G!:s & Soclric J:1edric S«vices Califania Public UbTrlie:s Ccmmission 13.90% 12.90%
Public Se,;vica Co. of Colc:rado Bectric ser,;c..,, Cola,,do ?ubfc S..vice Commission 15.45% 14.40%
Citiz,,n:, \Jblroa:, Co. (Idaho) B<><=tric Services Idaho Pubrie SONlca Commission 14.11% 12.~2%
W..shing1on Walor Pow« Co. Qdaho) s.ctrir:: Se<Vices I~ Pubf,c: Se<Vicn Commission 14.00% 1290%
Kamm City Po--& Light S<>ciricS~ Kansas ~ta Ccrpcralion Commission 14.00% 12.00% .
~ Go, & 8oc:1ric: Elecir"ie $«vices Kosisas Sato Ccrpaa!ion Commi,slon 13.93% 12..o:J'l(.
~~&Li;,h!Co. Boctric s..-.nc.,.. ~ Slot!> Corpcn,tion Comm~ior, 13.71% 12.98'.);
P,,ci!;e p.,.,,., & light [),tonl!lna) 6eciricS..-,;ir::es Montar,,. Pubrie ~. Commission 13.75% 12.30%·
Soulh-1am Public Sorvic:9 Bociric Services NAw Maxico Pobtic S1!i\f\Ca Commbsion 16.33% 14..5o%
El Pmo Bectric (New M.:cico) EJect,ic s..-vice,s New Me:6co Public SEW'Vlee Comm~i~n H.75% 1260%
M""'1ano. ~clet Ubliti"" Electric Servic~ North o..J(otz, Public Service Commis•ion 11.94% 12.71%
OU..-T..a PoWOi Comp,,ny Boctric-... Ncrth Oi:ucotn.Public: Servic:o CommL:Uion 11.80% 14.50'!'
North«n Sbm,; Power Electric Ser.ice,: Ncrth"o..J<c:a Pubr,c Senice Commis•k>n 13.39'l(, 11.24%
Olcl!h<xna = & Boeve Comper:y E!odric S<,r.,ico,s Oklz:homa Corl?""alion Comm~ion 14.00':L 13.50%
Publ"w:: Scv,c:e Company cf Oklo.oome Elociric Services Oklo.homa Ccrpor.,lion Commission 15.00% 13.50%
p"~ific-&ughl Boc:rir:: Ser,,,ices Oregon Pubrrc Ublity Commwsion 16..25% 12.73%
Pcx,!and c;.r,wel Electric: Co. Eec1rk: Sernc.es Oregon Pubfoc:: Ublity Commisssion 16.2.5% 12.SO'J(,
N~Publlc:S....;ca 8oc1rir:: Sorvicos Soul!, Dakota Pubnc Ufi!"dies Commissoo 13.10% 13.00%
I°""' Public s.r,ica Com pony Bactric~ South Dakota P\Jblic Ul,1. Commiss.,n 11.50% 13.25%
Nalhem S1at,,s Pt,wer Co. Beciric s.rvic= SoU1h D<lkota Public Util. Commis:sion • 13.C(]';(, 12.00%
Gullsto:!ooL.'!11ttia, Elac!ric~ Ta= Public Utility Ccmmission 16.10% 13.BS'J(.
Houslon Ugh1ing _& Powor EJeciric Socvice: Ta= Pubr<: Utilily Comml=;.,n 15.80% 12.92%
c.rm,I -& Light Seciric Services Te= Public Utility Commission 1S.SO% 13.00%
Tex.:s 8ec1ric &nice Comp,ny Electric~ Te>= Pub roe U1i1ity Commi=ion 15.50% ·1s.so""%
El !'mo Sectric EJeettic s«vicDS T"""" Pubr,c Utif,ty Commb:,lon 14.23% 13.10%
WastT-=s UbTiti-sCompe.ny Sociric S,rnc:es T= Public ut,Trty Commission 15.35% 12.DJ'J(.
Sou!hwest,,rn EJocirie 5..-.icas Co. Sadric Ser-vie:"" Te>= Publlc: Utirrty Commis•ion 1S.OO'lb 12.50%
De.Lbs Pew« & Light Co. . 8ecirir::Services Ta= Public: lJ1mty Commission 16.00';I'. 15.80%
Piocific ~ & Light Elec:!ric S«vic:a,, Washinglon Uti!.. & Tll!ll$p. Commission 13.75% 13.25%
W=tir,g1cn Waler Powe Ccmp,,ny Sociric Sorvicas Wa:hingtbn Uti!. l. Tn,nsp. Commission 12.7S%. 12.~
Puget S<lund Power & Light Stctrk: ser-v;eas: Washing1on Util. & Tr..n:sp. Commission 15.2.S't. 12.00'l(.
UW, Pcwa-& Light Co. (Wyan~) Bac!ric Ser,,icos Wyoming Public S<rvic• Commis,;lon 12.90% "1285%
;o,~·ros%1:::.~:ii3.o7%'~
• •
Printed:
\Ast Known Order Daw
May31 May31
1sa1 1991
1mtl/&J 12/19/88
12/30/80 11fl2/89
12/19/79 12/20/89
• 12/10/80 05/Z2J84
03/09/BO 01/09/89
06/04/BO 12/03/o6
03/13/79 07/07/87
09/24/79 02/13/90
oa~/79 07/31/87
05/'0/1l1 07/09{86
08/1a/80 12/21/87
06/f]8{79 05/01/90
04(?.${77 01/V/87
04/20/77 04/19/83
1Zf.l1/80 03/2.4/88
IZ/.31779 06/24/87
0Sjr17/BO 09/2B{fl7
05/f!T/BI 02,/01/88
OS/W/61 Oz,o5/91
01JZllB1 11/15/56
04/07/78 03/01/84
11/19/80 01/01/91
10/16/80 roraJ91
00/15/&l 06/20/90
01/ZJ/OO 12/19/90
1Q/03/&J 12/15~
11/fEJ/lB 08/'ZZ)90
12/09/00 11/30/87
01/21/00 03/07/90
02/26/81 01/'l6/84
i 1/05/80 09/19/86
IJ3(24{Ta 02/2~/87
01/09/81 03/30/90
1orarra 10/12/89
'--
O'l/16/S2
Cha:,ge in
Rel:Jrn
B11o 91
-1.95%
-1.50%
-1.00%
-1.05%
-1.69%
-1.10%
-200%
-1..90%
-0.73%
-1.45%
-1./!3'X.
-215%
0.77%
2.70%
-2.1s,r,.'
-0.50'%
-1.SO,,
-3.52%
-3,75%
-0.10';'!,
1.75%
-1.00%
-US%
-2.88%
-2..SO'l(.
0.00%
-1.13%
-3.35%
-2.5'J'lf,
-0-20%
-0.50%
0.15%
-2.45%
-0.05%
i c __
:t·
0 0 ()
;><"· co -o Zc 0 co
w~
0 o ru a~
-uG)~G) ~ () ~ ~
cornmo
W ~ f}) 0 °'crG13
•
S, ~ ~~ 0) . -1,, ::J 00 0:, -.....J '<
• •
We:x:pro Agreement-Replacem °' lndex for 8-1-91 through 7-31-92 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States
·.rt. ~~ ~ .·'·.···
l .·::... I j
Authorlteci Re1!Jm as c,f
M,oy31 May31
Compony Name Acfivity Regulalcry Agency 1981 1991
So.n Ogjgo Ga,, &. 8ect'ic G:!s Distribution c:aJiforna,Public Utirdies Commiosion 14.5o'J(. 12.90%
South<nl Caflfcrnic, = Co. Gu Dirti"bul\on c.,fdcrni<l Pubfc Lllifrties Commls:ion 14-60'% 13.00';(,
<heiyG=Co, G.s Distribution ColC<'..dO ?ubflC s,n;c,o Co,nmidor, 14.10% 15.00')i
Citl:zeM \Jli!",ti,,s Co. (Colc:r"'do) Ga.o Ois'ln"bulion Colcrado Pubf,: S<r,;ca Comma:.ion 11.91% 13.20%
Flocky Mo=t,,;,, N,,~ Gcs Co. G.: Distribution Colcn:,do Pubf,c: Set'llice Commi,r.;ion 14.40% H.40%
WaslungtonWo!ar Power G:,s Distribution ld,,ho Public Service Commizion 13.25':l', 12.75%
~ ... Nahr81 Gu Company G,s Dis1rl>ution !<a:= Slota C:rpa-a!ion Cornmw:ion 14.50% 14.65%
Unior, Gcs Sy,,tom G,s Dirtibution ~ Slot.. C:rpa-a6on Commiscslon 13..SO';ls 1:l.6';1%
K,,nsas ~ & Liglrt Co. Gas Diotribution ~ Sbb!'CQ'pa-mn Commio:sion 14 .. 19% 12.40%
Kan=. G,z Suppply C..s Dmril>uti= Ka= si.i. Cotpaation Comm .... \cn 11.28'JG 1~.50%
M"""'"" Pow,,,-Ccmp,ny GuD~u!ion M,,,,_ Pubric Service Comm...sicn , 13.45% 12.50%
Nafuocn Slzl:bts Power Comper,y I?= Dmn"bution North Dctkob,, Put>r,c Se<vico Commis!:ion 11.43% 14.00%
Monllsn<l C..kota Ut,lities Go, Dis1ribUtion Ncrth O..Xola Pubr>e s.,,,..;.,., Comrnisslon 12.58% 12.71%
Southom Union c.a.. Co. Go.s Dinlbu!ion Olclo.homa ~ Commission 14.50% 12.00%
Oki.homA N!!hz..J Gcs Co. G!s Dis!ribuSon Okl,homa Cc:,;pcn,fion Commission 14.50% 13.5/J'X.
North-.! Natu:,.J Gas G.s Dirtibution Oragon Public U!ility Commis=.:>n 15.30% 13.25%
Ca.sc:,da N!!ttnl Gas Corp. Gu Dis!ribution Oregon Public Utility Commiss>ion 14.85% 12.25%
N~n fublic Sa-,,ico G,s Dirti"bu!ion South O'Okot. Pubric Ut.Trtios Com mis:sNOn 13.10% 13.00%
Minnc,ga.sco Gos Distribution SClJ1h DIOO>t!t Pubrc UbTrtios Commission 13.50';16 12..50';(,
love Pubroc s..--.;ca Comp,ny Gu Dos!ributSon Sou1l-r a~ Public Ulil. Commisoion 12.50% 13.00%
~ o.Ji:ota lhiT~ Gu Distribution Sc>uth Dokot.i Public Util. Comm~ 13..10% 14.25%
Scull-,, Union c.a.. Gos Diolribution T~ Railroad Commission 14.50% TS.SQ%
~Go,Co •. Gos O..tibUtion T=s AaJlrco.d Comm~ 13.70';(, 13.20%
c..sa.do Na!ual Gas Cc:rp. Gss Di:rtibu!ion W""hing!on U1il. & Transp. Commission 14.25% 13.25%
Northwest Ncllnl Gt,:s. Gas Oi:mbution W=hinglon Ulil. &. Tr=p. Commission 13.50'lr, 13.25%
W..sl,;nglon Naltrat Gas Cc:rp, = Dislribulion W~nlJtl.&Tn,nsp.~ion 13.50% 15..25%
M~-D,!lctfa Ut,li5a:t Ce. Gas Di:m"bution Wyoming Public s.r.ica Commi:dcn 13..64% 14.28%
T.,... E,,,,wn Gas Pipeline Co. Ge.sT~mis.sion · Federal Enorw RegubtayCommissicn 12.50':(, 13.IXJ')(,
T~GasCo. c....·Ti=mio=ion Fod..-.,J Energy Roogul:ltory Commlc.sion 12.25% 13.25%
~eEasl,,cn = Tnmsmission Fodin:I energy Regu1'1ay Commission 13.25')(, 1J.Cl()%
M~pj Rivor Ttammis,;on Gtu;Tl'l!n:S,:misster\ Fed..-8! 5-gy Rc,g,,lo lay Comm .... iot, 13.25% 1D.49'l(.
ANA Pipe!''"" Co. G:t:s Trm,:sm~tOn Fedon,J Ene,gy f'Aoulslay Commission 12.aa% 12.75%
Na1h«n Nctizo! Gas c.., T1an,;mi:ssion Fad..-al Energy Re,jubtay Commission t.2..50% 13.23'l(.
~Jgl',;,ilil\i§.~fa~13~
Printed:
I Last Kno...n Order Oats I Mo.y31 May31
1981 1991
00/05/79 11/Z2189
12/0S/llO 01/09/90
01/08/81 05/09/85
05/05/80 06/30(1!:T
02/t~/81 09/18/85
10,t:11/73 11,'C3ic9
04/ZB/80 04/17/86
11/21/79 09/15/89
OeaJ/80 09/2(,/88
00/20/80 06/CG/84
0'2/09/B1 08h4/89
D4/18(TB "f0/01/84
05(23/79 01/21/87
04/Zl/81 11/23188
02/1.1/81 06/J(J/87
04/111/81 11/01/89
11/19/M 02/12/90
01/23/ll1 10/00/BS
t1/2S/80 11/rIT/89
C4/06[l9 00/01/86
11/1-1/80 11/08/83
10/T1fl9 •• CS/21/8-4
-~1/80 10/20/89
04(28/81 11/Z'J/89
1inom 09/15/86
11/19/50 1Z/21l/84
04/'WBl D4/17/84
04,/04/BO 08/29/8'3
11/22/7l! 12/21/89
01/Zl/81 01,oa/87
OW'J/81 C).l/08/89
CfT/11/alJ 11/1'2.187
omo/81 l'Zm/89
°'· .....
04/16/92
Change in
Aetu-n
81 lo 91
-1.SG'l(,
-1.60%
0.90%
1.29%
0,00';(,
-0.50%
0.15%
0.12%
-1.79%
3.22%
-0.95%
2.57%
0.13%
-2.50%,
-1.00%
-2.C15')(,
-2.60%
-0.10'1.
-1.00%
0.50%
1.15%
-1.00';(,
-0.50%
-t.00';(,
-0.25%
275%
0.64%
a.SO%
1.00%
-0.25%
-2.76'.i(,
-0.!3%
0_;,:3%
(_
•
'"1"
0 0 ("")
"'" CD -o Zc 0 CD
w~
0 o ru a~ -uGl~Gl
OJ () '? OJ (Q ~ U)
CD rTI Ol (") w xNo
-.J ~ (j) 3
0 ;,,;:)>"O ;; ~ ~ ~
0,0,-.J'<
Wexpro,Agreement-Replacem, ·. Index for 8-1-91 through 7-31-92 Period
Includes Both Within Existing and One State Step Out Outside Existing Agreement States
:,t, ; : 1, ,.,: ~
Compony Name
GTE. Cafifcrni<l
~To!Cc.ofu,lijania
Mountain Be!l-l<Wlo (US Wast)
Sou1hwes!«n Bell
Ncrt"-*m Bell
Soutt,.....,.tsm 8"11 Telophone Co.
Pacme Nonhwost Bell
GTE Sou1h-t Irie.
Southw<Mlwnooll
ee,,tinenlal Tolephone/Ncrliwe<t
~i!ie Northwest Sell
•
Telecommunications
Telecommunio<tiO!l"
T elecornmuniodiom
Teleeommunications
T2laccmmunic,,tion:t
Telocommunic,,1ion:s
Tal4'Comrnunic::ntiOt".s
T<tlocommunic..ti=
T9lecommunice..1fcr.::s
Teleccmmunic:=tion-s
Telecommunb:ttons
c.Jnan;., Publie U1J1itia,: Commission
earm::m;,, Pubr,c: U1i1itieo Commission
lcbho Public S«vice Commiuion
l<ans...sS"ile Ccrpora!lon Commisoion
NebrMl<a Pl.!bfic Sernce Commi.sion
Okhhoma Cctpa .. tion Commbsion
Oregon Public U111ityCommiu:,;on T•= Public U1ill:y Commmion
T~ Pubroe Utility Comm""'""'
Washingtcn Ubl. &. Tramp. Comm=K>l'1
W=hing1on Ufil. & Tramp. Comm=ion
\~
Authori:z:ed Return cs ol
Moy 31 May 31
1981 1991
14,1 0'll', 11.50%
11.70% 15.50%
12.50% 14.00%
13,62'1, 14.50%
11.81% 13.79%
1202')!. 13.50%
13.20')(, 12.35%
14.0C'l(. 11.99%
1-4.10% 14.20%
14.40% 11.90%
13,69'l(, 11.90%
~~13'19%~
•
Printed:
LJ,st Known Ord.,,. Octa
May31
1981
10/22/80
01/QS/T7
12/11/!lO
02/2~/81
05/00/!lO
07/01/80
08/29/80
08/05/80
01/29/!!1
12/12(<!0
OS/06/30
' ..._.
Mcy31
1991
0,/01/90
03/'ZfJ/85'
05/18/84
01/07/85
1'l/'23/86
O'J/-;;a/89
05/01/87
02/'Z3{8!;1
06/26/86
10/25/87
05/16/BS
04/1S/9Z
Chcnge in
P.etun
81 to91
-2.60'% .
3.80%
1.50%
0.88%
1.98%
1.48%
-0.85%
-2.01%
0.1(7;1;
-2.50%
-t.79%
, ,
0 0 (') "" CD -o Zc 0 CD
~!:!?.
0 0 OJ a~
-oG)~G') ~ 0~ ~
CD ma,0 W X I\J 0
•
(X)g:Gl3 s.;::.: :pi,~
O)~.....i..::, ex, ex, -..f '<
• •
Wexpro Agreement-Replacem, : Index for 8-1-91 through 7-31-92 Period
Includes Both Within Existing and One State Step Out Outside Existlng Agreement States Printed: 04/16/92
~ I f • _: ~ Attfn0"0;9d Return a:!: of Lost Known Ordet O~le CM.nge in
May 31 M,,y 31 Mey 31 May 31 Reb.Jm
1S81 1991 1931 1991 B1 ID 91 Com Name A
C-Ompo.nies wtth a S-31-81 P,,ra of Reh.rn bu! no authcri:i:9d r•1'-rn as ci S-31-91
The,aWiJ! be l-""'<i if1heyree•iY• mh,d re1L.ms on equity In the future
ldeha Power Co. 8..:ftie Servic= Id.oho Public Sl!<'<iee Commission 14.50% 03/26/&l
c..ntn,J lw= Powe< C-0. 8ectr'.c Serncas Ki,= Slate Cccp<refior. Ccmmcs>ion 20.00% 12121m
Monlano.-D<!l<o!i, Ub1i1ies Co. 8ectric Services Mont:wt Publk: Ser,ica Comm:,s.:.',on 12.00% 05(28/80
Sisro. ?acific Power (Westp,,c) 8ectric Servic8" NG"'1da Pubr,c S<!r,ica Ccmmmlon 15.00';'(, 10/'Z9/81J
Empc• Dist. 6ect.. Co, Sec!tic Ser.-ic<>s Qkl:,homa Co:pcx-:fon Comm.,,.lon , 4.00')i. 04/16[79
91.clc Hills Power & light Eactric~e3: South Do.kola Public Util. Ccmmls>ion 13.10'll, 11/.19/SO
M<:>nlen> Oc,kota l.16rr5es E«:!ricS.,,..;c= SOIJ!h 0"1<ota l"ubr1<: l..h,'1. C<,mmis,;,on 11.8:!% t2/28{78
Ccmmw,i!y Public Serllico Co. Bociric S.....ces Te= Pubfic!Jtilily Commi>sion 15.80% 12/18/80
G:ts S<,rne,. Co. Qs.s O~tribution Olchhomc Cc:rporation Commission 12.00% .· oorzsm
Caliromio. l'!tcific Utility G,o: Dls!ributicn Oregon Public UbTrty Cammassion 13..50'% 06/1:Jffl /• CP N,,iu-al Corp. G,s D~lributioo Oregon Publie-Utility Commiss:,x,o 14.~ 09{3(J/81J
c~ U.,h!. Fuel & El«:. Gs, Dis!ribution Wyoming Pub/~ S..-,jco Commis:oon 13.50% 11/26/80
Nal!.n!.l = Pipeline Co. ~s Transmission Federal En..-gy R..gul:,1ti<y Commi,:,ion 13.25% 10/04{79
8 P= Ndi,rcJ Gos. Ct<p. G:ts Tran:smf:ss:ion Feder8! Energy Rcgua!o(y Commis,,jon 14.00% 07~{79
WiU"""' NatLri,J = Co. Ge.z Transmission Fed..-"1 Ener.gy i'ieguatuy Commiss!,:,n 12..:l:3% 09/11/BO
Texas Gos Tra.,,;rni:,:sion Cc,?, Qzs Trffl1:!mtt5ion Fedora! Energy P..,gul:,!ocy Comm~n 13.cm:', 10/11/19
Tro.n.corninentcl G=. Pipe Un• Gos Transmission Fed..-"1 Energy R.gubby Commission 14.SO'l(, 10/11/19
Uniloo Ge:< Pipeline Cc. Gl:t Tro.m:mis:km Federal Energy flogublr:,y Cornmis>:ion · 12.50% 10/10/&J
Moumain S~!ao: T oJ.,phona TgJecommunicl!:6ons lchlio Pubfic s.rn::a Comm~ 12.50% 04/13/79
G4"!o!r.1l To!<1phot,e Co./Nc<ll,we•1 Telec:ommun\c:,~o= ldoho Public: Sorvice Ccmmisslcn , 3,C3'J(, 09/19/80
UniledTol.of Km=· Tolocanmunlc:ttiom K..ns4.:, Slot.. ~alien Cccnmission 16.36')(. OS/19~
N~ T<>lephone System• T el.eommunictttiom Morrlarw. Public Serw::a Comm!<sicn 12.52% 04ft)WB
M~ Slat,,,,Telephone T a!ecommunicatiorn: Mont,,n,. Public Stnica Commission 12.6Cl"i!, OT/16/00
Lincoln Toi. & Tel. TeleecmmlJrueations Neb=.lo, Pubrc Service Cemm&ion 11.59% 10/07fil0
Un/1.d Tel. Co.jNa"thwest Tel...:=,·unu=tion,, Oregon l'tJbfte Utility Comm~ H.OS% . 09/Cll/80
c;...,,.,,JT4l.cfTox= Telei:::cmmunic:r:'fhjns Ta= Pubf,c: U1ility_ Ccmmbion 13.92% 04/"ZJ/81
~/Tel.Co. Tel-=mmunic,.tion: Te>m:s Public: Utlity Commc:sion 12.89% OSt''JO(TS
Mounli,;n Slate,s T al. & Tel. Tol..:,om,nunia,.ti"'1:1 T exa,, Publlc l..h,Trty Ccmmiss;cn 13 . .u)'), 11/0S/llO
Moumain Boll (US Wes!) . T elec.ommunic,tion,, Wyoming Publfc S«vice Commission 1::I.OO'l6 01/28/af .
( __ _
•
0 0 C) ;><' (D -o Zc 0 (D
(,.) ~
0 0 0) o~ -oGl~G) ru o'?ru (0 ~ (J) co m m o w;~o '°6'Gl3 8,~:f>-g
0) ~ ....Ir,. ::J COCO--...J'<
: "". -·-.~:
(
------i \ I i
I !
Questar Gas Company Ir-
Docket No. 30010-162-GA-17 , '....,
QGC Exhibit 3.8
Page 40 of 68
WEXPRO COMPANY
79 SOUTH STATE STREET • P. 0 . BOX 11 070 • SALT LAKE CITY. UT AH 8414 7 • PHONE [phone]
October 27, 1988
Mr. Robert Lake
Mr. Gary Myers
Price Waterhouse
175 East 400 South Suite 700
Salt Lake City, UT 84111
Gentlemen:
· Re: Wexpro Agreement Guideline for Expanding
Participating Areas lnside Federal Units
The Division has requested a clarification of the ·participating Area
Guideline letter which was approved by the Accounting and Hydrocarbon Moni­
tors on June 15, 1983.
The· only portion of that letter. which was· intended by Wexpro as a
guideline is found on page 5 ·entitled the 11Wexpro Proposed·Solution.". All
other portions .of the guideline letter should be considered as background .
material only and not an integral part of the ·guideline. The relevant .·
portion of the guideline. for which ·we request Division approval · is found on
page --5 and reads as follows:
-
To properly account between Mountain Fuel and.' Wexpro· and solely for
allocation of. investment adjustments .(whether debits or credits)
· and for allocation of oil,· natural gas 1 iquids and natural gas from
drilling .which results· in. .expand.jng· any ·participating area for
royalty purposes· or fo. ·expanding pooled areas (or similar expansion
of multi-party i.ndividual ownership areas --each 9f ·which orig-.
inally qualifies as a development ~rilling · area under· the Wexpro
Agreement) after· July 31, 1981, then as · between the. company ·. and
Wexpro/Celsius: ··,
1. The 101/.105 .arfd transferred lease ho 1 ds within the parti ci­
pati ng area or pooled (or similar) area as it existed on July
31, 1981, shall be considered as 11 company leaseholds11 and the
101/105 or transferred leaseholds outside of such areas shall
be owned by Wexpro or Celsius as provided in the Wexpro
2.
Agreement. ·
Wexpro will fund or cause to be funded all capital investment
additions or debit investment adjustments on such "company
leaseholds" required by such expansion and earn the base rate
of return (r) plus the applicable risk premium of 8% for gas
and 5% for oil wells.
•
•
•
• (
----.... I
\ l
Mr. Robert Lake
Mr. Gary Myers
October 27, 1988
Page 2
Questar Gas Company : ,.
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 41 of68
3. Credit investment adjustments attributable to pre-July 31,
1981 capitalization and Post-July 31, 1981 Facilities and
Development Gas or Oil Drilling will be paid to Wexpro.
4. As far as the Unit Operator is concerned, the allocation of
production to MFS/Wexpro is consistent with allocations to
other interest owners. After this allocation is made, an
inhouse division of revenues between Wexpro and Mountain Fuel
occurs in compliance with the Wexpro Agreement.
We hope this removes any confusion created by using the Henry Unit as an
example of how federal unit participating areas are created and expand.
Please deliver a copy of this letter to Jon Strawn of the Division at your
earliest convenience. Your cooperation will be appreciated.
pf
cc: M.A. Howerton
M. R. Jensen
J. W. King
R. M. Kirsch
Ruland J. G 1, Jr.
Managing Attorney
APPROVED THIS day of , 1988. -------
UTAH DIVISION OF PUBLIC UTILITIES
By: --------------
Date: -------------
STAFF OF WYOMING PUBLIC SERVICE
COMMISSION
By: --------------
Date:
C
WEXPRO AGREEMENT MONITORING
·June 23, 1983
Expanding Participating Areas
Inside Federal Units
The Henry Unit Example
PROBLEM: Wexpro Company hereby requests monitor approval of a method
of accounting for production and for certain drilling costs (called
investment adjustments) resulting from part1cipating area expansions
inside "Federal Exploratory Units."
. FACTS:
What is a Federal Unit.
A "Federal Exploratory Unit" is a creature of Federal laws and
regulations. A Unit Agreement is authori.zed by 30 U.S.C. §226(j)
(attached as Exhibit 1) aod the exact words of the Unit Agreement are
promulgated in Regulation in 30 CFR §226.12 (attached as Exhibit 2).
Unit Agreements embracing Federally supervised leases including all
or part of an oil and/or gas pool, field or like area may be clas­
sified as_ exploratory or ·developmental in nature. The request of
Wexpro only applies to exploratory units and does not apply to
developmental and secondary recovery units . These latter units are
usually tailor made after considerable drilling and developrilent.,has
occurred. · ·
The objective of unitization, per se, is to provide for the unified
development and operation. of an entire structure or field area so
that drilling and production can proceed in the rnos,t efficient and
economical manner. Establishment of Cooperative and Unit Plans or
Operations under the Mineral Leasing Act of February 25, 19-20, as
amended, is governed by the regulations set forth in 30 CFR §226.
The s t andard Federal Competitive Oil and Gas Lease (Form 3120-7) in
Section 2 requires the lessee:
Within thirty (30) days of demand, ... to subscribe to and
operate under such reasonable cooperative or unit plan for
the development and oper:ation of the area, field, or pool,
or part thereof, embracin~· the lands included herein as the
Secretary of the Interior may then determine to be practi­
cable and necessary or advisable, which plan shall ade­
quately protect the rights of all parties in interest
including the United-States.
Other Federal leases have similar or identical language. BLM Regu­
lations found in 43 CFR, Part 3100 contain several sections relative
to unitization.
To initiate the formation of a Federal exploratory unit, ~he pro­
ponent of the unit .files an application with the appropriate office
of the BLM (previously supervised by the U. S. Geological Survey and
the Minera 1 s Management Service) fonna lly reque;ting the State BLM
Director to (1) designate the proposed area as logically subject t~
development under a .unit .pla,n o.f .. opera-ttans·t· {2)-approvl!"the·tnaximurl\
depth and objective formation proposed for the initial test well(s)
and/or development obligations (if the area contains a discovery but
is not fully developed}; and (3) approve the text of the proposed
fonn of agreement. The request for designation must be accompanied
by a map or diagram showing the area sought to be designated and
indicating the type of land~ The app11cation 1s usually accompanied
by a report giving all available geological and geophysical informa­
tion.
_ Questar Gas Company
2o ;Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 42 of68 •
•
•
•
•
''-
- 2 -
After consi~eration of the application by the BLM, the. applicant will
be advised of the decision reached with respect to the designation of
the area, the specific form of agreement, and the initial wells
required.
What is a Participating Area.
After a well capable of producing unitized substances (i.e. oil
and/or gas) in paying quantities is completed, a "participating area"
must be established in accordance · with the "Participating After
Discovery" section of the Unit A~reement (Section 11-of the model
form, 30 CFR 226.12, See Exhibit 2). The only land to· be included' in
a participating area is that land reasonably proven capable of
producing unitized substances in paying quantities, or, if so provid­
ed in the Unit Agreemeht, that additional land necessary for· unit
operations (most older units, i.e., prior to 1968, do not so provide
for additional lands). The initial participating area causes th~
unit to convert to a producing status and all subsequent unit wells
and operations are to be conducted under a "Plan of Operations."
Under the· Wexpro Settlement Agreement, Section l-26(a)(ii}, the
participating area as it existed on July 31, 1981 is a "development
drilling area" and is determined as follows:
{a) For each prior Wexpro or prior Company .well in a pool,
: .. and all additional surface· area covered by: (ii)
The U. S. Geological Survey-approved participating
area determined for royalty purposes for that pool, if·-·
the well i s in a Federal unit,
Revision of Participa~ing Areas ..
A participating area will be revised~ in accordance with Sections 11
and 12 of the Unit Agreement, when ":dditional paying wells are
completed in the formation or pool for which the participating area
has been established. Although additional geological and engineering
information · obtained by the completion of each such well is used, the
amount of acreage that is brought into the p_articipating area by a
revision is dependent on the same criteria used in determining the
initial participating ·area. Likewise, land included in a partici­
pating area which is reasonably proven to be nonproductive in paying
quantities by the subsequent completion of a dry hole on the land is
eliminated from the participating area.
Separate participating areas may be established for each ~eparate
productive reservoir, pool or formation covered by a Unit Agreement.
In some instances, separi!te participating areas may be established
for the same producing horizon when there is uncertainty as to
whether the production is continuous between the two areas.
Allocation of Production.
Oil and/or gas produced.under unitized operations is allocated to the
working interest owners of the unitized 1 ands on the basis of the
factors and formu 1 as prescribed in the "Unit Operating Agreement. 11
Normally, a standard preprinted form of Unit Operating Agreement
prepared by the Rocky Mountain Minera l Law Foundation is used.
Production under an exploratory unit agreement is normally allocated
to each tract of unitized land within the controlling participating
areas on the basis of the number of tract surface acres included
within the participating area as compa'reclto the total number ,of
unitized surface acres within the participating area, Therefore,
allocation of unitized substances 1s made on a sutface acrea e basis
wit out re ar to art1cu ar we owever, t e ..
_ Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 43 of68
(
(
.........
-3
The use of a "development drilling area" in the Wexpro Settlement
Agreement was a means to differentiate between deve 1 opmenta l and
wildcat {exploratory) drilling; The "development drilling area," in
turn, is used to further define the various ·benefits which results
from the various types of Wexpro's developmental or exploratory
drilling activity. To avoid a difficult subjective analysis on every
"prior well," the parties selected a distance around prior wells
which would be considered "development" d"rilling. In the case of
each pool within Federal units, this included the 1,980 feet around
the prior well plus the participat-ing area for royalty purposes for
that pool. This method works well for all ·participating areas which
are never enlarged and which contained a prior well, because all
production is allocated to all lands inside.the "development drilling
area", i.e. participating area for roya·lty purposes within the
federal unit. However, if the participating area is enlarged after
Jul 31, 1981, art of the reduction from · r:ior wells is al located
to other ands SUbJect to exf oratory ri ing Under the. Wexpro
Settlement A reement and ossib sub ·ect to interests of other third
arties. 1 ew1se, some reduction from ex orator n is
a ocated to ands inside o the.participating area.
Therein lies the problem in which Wexpro seeks monitor assistance.
The Wexpro Settlement Agreement allocat~s production on a well basis
but in Federal unit pa~ticipating area expansions, the allocatio~ of
production is based on an acreage basis. ·
Identical problems could be created when third parties or state
government agencies request or _require expansion of pooling agree­
ments or state approved unit or spacing areas in which producticrn is
shared on an acreage basis. It is entire]¥ gossible· that a partic-
i atin area ex ansion ma inc1ude on) th,r art acrea e and not
e s1us acrea e. n t at ro-
Investment Adjustments; a Hypothetical Example
Between the working interest owners under the unit operating agree­
ment, there is an investment adjustment so that each working interest
owner pays a fair proportion of the cost of al 1 wells in which it
receives an allocated share of production. Attached as Exhibit 3 is
an example of the typical language in a unit operating agreement.
The following example illustrates how an investment adjustment would
be accounted for between Celsius {Wexpro) and Mountain Fuel ("MFS")
or Cel sius/Wexpro and any other third party (such as Exxon in the
hypothetical):
ORIGINAL PARTICIPATING AREA -MFS ACRES
1. Acres= 1,000
2. Investment (1 well)= $1,000,000 (depreciated t% per month for 60 months)
3. Production= 500 BBLS/Oay
4. MFS Original Share= 100%
EXPANSION CELSIUS/EXXON ACRES
1. Acres added= 1,000
2. Investment (1 well)= $2,000,000
3. Production= 350 BBLS/Day
4. Celsius/Exxon Interest= 100%
EXPANDED PARTICIPATING AREA
1. Acres= 2,000
_ Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 44 of68 •
•
•
•
2. Investment-· Net total at time of expansion
(Assume Depr· .. 10 mos. @ .5% monthly per unit
agreement) .
,95 X 1,000,QQQ
Celsius
Total
= $ 950,000
2,000,000
= $_2,950,000
3. Production 850 BBLS/Day
4. Interest. MF.S (1,000 acres)
(2,000 acres)
Celsius/Exxon=
5. Investment =
MFS Share
Credit for
1st well
INVESTMENT ADJ.
Celsius/Exxon Share=
: Credit for
2nd well
INVESTMENT ADJ.
6. Production Allocation
. (1,000 acres)
(2,000 acres)
$2,950,000
$1,475,000 .
950,000
$ 525,000*
$1,475,000
2,000,000
$ {525,000)
MFS 50% = 425 BBLS/Oav
Celsius 50% = 425 BBLS/Day
50%
50%
*Wexpro picks up MFS investment · adjust~cnt (because the Wexprn
Settlement Agreement requires Wexpro to make all future investments,
See Section III-4) of $525,000 and capitalizes it in an account
subject to the dev~lopmental gas (24%) or oil drilling (211) rate of
return. Amortization based upon uniti of production .-MFS ~hare of
production and reserves.
No "pro vision of the Wexpro Settl enient Agreement squarely addresses
these problems.
The Henry Unit Example
The Henry Unit Agreement, Uinta County, Wyoming was approved by the
U. S. Geological Survey-on April 30, 1980 and included approximately
13,415.89 gross acres. The agreement has been designated No.
14-08-0001-18150, and was effective the date of approval. To drill
the initial test we11 called for under the provisions of the Unit
Agreement, MFS entered a fannout agreement dated July 14, 1980 with
Forest -Oil Company ("Forest") and a pooling agreement dated July 14,
19BO with Forest and other companies. ·The pooling agreement pooled
four sections around the initial test well. Such pooling was on a
surface acre undivided basis. MFS's interest within the four
sections was 21.16111%. MFS viewed the initial test well as an
extremely high risk venture. Therefore, MFS farmed-out to Forest.
Forest earned one-half of MFS's interest within the four section
pooled area by paying all MFS's share of cost in that well. MFS
retained a small overriding royalty interest in the initial test well
until Forest had recovered its costs of drilling, completing, equip­
ping and operating the initial test well. On October 7, 1980, the
initial test well, Henry Unit No. 1, was completed as a gas well in
the Dakota formation. The Henry Unit Well No.l is not shown as a
prior company well in the schedules to the Wexpro Settlement
Agreement. Wexpro proposes to deem it so for ·purposes of the partic-
ipating area expansion. ·
On October 5, 1981, the USGS approved an initial Dakota Participating
Area "A" embracing 637 .81 acres based upon the completion of the
Henry Un it Well Ho. 1. In Apri 1 , 1982 the Un 1 t Well l'la, l had
reached its payout with Forest Jnd MFS's retain~d o~erriding royalty
intPrPct w~c rnnvP~~PA tn ~ 10 ~R05ht ornss work1no interest.
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 45 of 68
(
(
·.._,
- 5 -
The Henry Unit Well Nos. 2 and 3 were dril led as dry holes. The Unit
Well No. 4A was completed as a ga~ condensate well from the Dakota
formation in March 1982. On September 9, 1982, the MMS (formerly
USGS) approved the first revision pf the Dakota Participating Area
"A", enlarging the participating area from 637.81 acres to 1429.38
acres based upon completion of Unit Well No. 4A.-MFS's interest in
the first revised participating area was decreased from 10.8056% to
4.7210% gross working interest {also called a "participating inter­
est" under the pooling agreement).
As a result of the· first revision and under the Wexpro proposa 1
herein, MFS would change from a 10.8056% interest in only the Henry
Unit Well No. 1 to a 4.7210% interest in both ·the No. 1 and 4A wells.
Depending on whether one or the other weT!is a ·larger producer at
any given period of time, the dollar receipts by MFS from both wells
in the Henry Unit could increase or decrease as compared with MFS's
share in only the Henry Unit No. 1 We 11 . Wexpro' s proposa 1 woul q
result in t~e same accounting treatment in all similar federal unit
or pooled area situations without regard to the benefits attributable
to MFS or Wexpro or third parties.
WEXPRO PROPOSED SOLUTION:
To properly account between Mountain Fuel and Wexpro and solel¥ for
allocation of investment adjustments (whether debits or credits) and
for allocation of oil, natural gas liquids and natu ral gas ·from
drilling which results in expanding any participating area· for
royalty purposes or in expanding pooled areas (or similar expansion
of multiparty individual ownership areas--each . of which originally
qua 1 ifi es as a development dril 1 i ng area under ·the Wexpro Settlement
Agreement) after July 31, 1981, then as between the Company and
Wexpro/Celsius:
1. The 101/105 and transferred leaseholds within the participating
area or pooled for similar area) as it existed on July 31, 1981
shall be considered as "Company leaseholds" and the 101/105 oi:­
transferred leaseholds outside of such areas shall be owned by
Wexpro or Celsius as provided in the Wexpro Settlement
Agreement.
2. Wexpro will fund or cause to be funded a 11 capita 1 investment
additions and debit investment adjustments on such "company
leaseholds" required by such expansion and earn the base rate of
return (r) plus the applicable risk premium of 8% for gas and 5%
for oil wells.
3. Credit investment adjustments attributable to pre-July 31, 1981
capitalization and Post-July 31, 1981 Facilities and Development
Gas or Oil Drilling will be paid to Wexpro.
4. As far as the Unit Operator is concerned, the allocation of
production to MFS/Wexpro is consistent with allocations to other
interest owners. After this allocation is made, an in-house
division of revenues between Wexpro and Mountain Fuel occurs in
compliance with the Wexpro Settlement Agreement
This would result in the same fair treatment of production allocation
as if Exxon or some independent producer owned an interest in the ·
prior Company well ct prior Wexpro well. Stated another way,
Wexpro's proposal in this situation would follow standard industry
practice and treat Mountain Fuel's interest in a prior Company or
prior Wexpro well the same as independent third parties. The only
difference would be the ameunt Wexpro could earn under the Wexpro
Agreement on investment adjustments.
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 46 of68 •
•
•
• i
•
)
_ Questar Gas Company
Docket No. 30010-162-GA-17
q.G_Q EJQli.bit 3.8 C?age 141 Sf 6B
645. l. 2A
fxcerpted from: Mineral Leasing Act of 1920 {As Amended)
S.ection 17.
"(j) For the purp-ose of more properly conserving the natural ·
resources of any oil or gas pool. field, or like area, or any part
thereof {whether or not any part of said oil or gas pool, field, or
like area. is then subject to any cooperative or unit plan of
development or operation), lessees thereof and their representatives
may unite with each other, or jointly or separately with others, in
coll~ctively ~dopting and operating under a cooperative or unit plan
of development or ·operatiori of such, poo1, field, or like area, or
any part thereof. whenever determined and certified by the Secretary.
of the Interior to be necessary or advisable in the public inte rest.
The Secretary is thereunto authorized, in his discretion, with the
consent .of the holders of leases involved, to es tablish, .alter, ch ange,
or revoke dri11ing, producing , rental, minimum royalty, and .royalty _
requirements of such leases and to make such regulations with reference
to such leases, with -like consent on the.part .of the .lessees, in
connection with the institution arid operation of any such cooperative
or unit plan as he may deem necessary or proper to secure the proper .
protection of the public interest . The Secretary may provide that
oil and gas leases hereafter issued under this Act shall contain a
provision requiring the lessee to operate under such a reasonable
cooperative or unit plan, and he may prescribe such a plan under which
such lessee shall operate, which shall adequately protect th~ rights
of all parties in interest, including the United States_ ·
"Any plan authorized by the .preceding paragraph which includes
lands. owned by the United States may, in the discretion of the
Se~retary, contain a provision whereby authority is vested in the
Secre tary of the Interior, or any such person, committee, or State or
Federal officer or agency as may be designa t ed in the plan, to alter
or ·~odify from time to time the rate of prospecting and development
and·the quantity and rat~ of production under such plan. All 1eases
operated under any such''.plan approved or prescribed by the Secretary
shall be excepte1 -in determining holdings or control under the
provisions of any section of this Act.
"Any lease i-ssued for a tenn of twenty years, or any renewal
thereof, or any portion of such lease that has become the subject of
a cooperative or unit plan of development or operation of a pool,
field, or like area, which plan has the approval of th~ Secretary of
the Interior, shall continue in force until the termination of such
plan. Any other lease issued under any section of this Ac t which has
heretofore or may hereafter be committed to any such plan that contains
a general provision for allocation of oil or gas shall continue in
force and effect as to the land committed so long as the lease remains
subject to the plan : Provided, That production is had in paying
2-26-76 (Rcl~as~ No. 29) -38-
i '
(
)
Questar Gas Company
.. , Docket No. 30010-162-GA-17 j QGC Exhibit 3.8
Exhihi t I (c8it~•ii)of68
64S.l .2A .
quantities under ·the plan prior to the expiration date of the·tenn
of such lease. Any lease heretofore or hereafter co1M1itted to any
such plan embracing lands that are in part within and in part outside
of the area covered by any such pl an sha 11 be segregated into
separate leases as to the lands committed and the lands not corrmitted
as of the effective date of unitization: Provided, however, That any
such lease as to the nonunitized portion shall continue in force and
effect for the tenn thereof but for not 1.ess than two years from the
date of such segregation and so long thereafter as oil or gas is
produced in paying quantiti~s. The minimum royalty or discovery
rental under any lease that has become .subject to any cooperatjve or
unit plan of deve1opme.nt or operatfon, or other plan that contains a
g.eneral provision for allocation of oil or gas, shall be payable only
with respect to the lands subject to such lease to whi.ch oil or gas.
s~all be allocate& under such plan. Any lease which shall be
eliminated from any such approved or prescdoed plan, or from ahy
corrmunitization or drilling agreement authorized by ·this·section, and
any lease which shall be in effect at the termin_ation of ~ny such
approved or prescribed plan, or at th.e termination of any such
corrmunitization or drilling agreement, unless r;-e.linquished, shall
continue in effect for the original· term -thereof, but' for not less than
two years, and so long thereafter as oil or gas is produced .in paying
quantities."·
Pursuant to the Mineral leasing Act for Acquired\ands (August 7,.1947)
and the regulations promulgated thereunder, acquired land may be
leased under the same tenns and conditions as are contained in the
Mineral leasing Act, The regulations prescribed under the Mineral
Leasing laws pertaining to unitization are applicable to acq·uired
1 ands.
2-26-76 (Release No. 29) · -39-
•
•
•
_) )
Questar Gas Company
Docket·No. 30010-162-GA-17
QGC Exhibit 3.8
Page 49 of 68 ~·
·" Fit<i9ral Re-glaler. / Vol 4..7, No. 112 / ~day, Jun.e 10. 198..2 / Proposed Ru.fes 25255
(b) Wb= lndian Lm.d.s are Included.
ioodificatiOII of the nnlt ~ will
be required by the D.MM. Appc-ova.1 of e.n
,greemen! conhming Indian lands by
the Bureau of .b::!!_iian Affairs rnu1tt he
obtained prior to aubmin£an to the
DMM for final ~pproval.
f m.s ~·I of IX'lft ~t.
A unit -sreement will~ approved by
the DMM upon a detumi..aation th.a{
5uch agreement I.a neceuary or
advisable !.n the pubHc 1nt.erest and i..
for the pn.rpose of more prnperly
con$erv1ng natural re,iources. Such
approval will be incorporated in l!­
Certiflca tion-Dctermina tion document
.appended to the egreemerrt {r::xllmple ln
§ 2.26.12~ No such agreement will be
approved unle.ss the parties signatory to
the agreement h.ald sufficient int.erests in
I.he unit erea to provide rea.1:onably . ·
rf(ectivc control of operationa. Any
modlfication of an approval Q:gI"eement ·
will require the prior approved of the
DMM.
f 2.20 Fl11ng ~ ~ .a:n,cl ~ cd
counterparts..
{a) All papen, !Il!!tro:ment,.
documents.. and proposals rubmitted
mder this part should be fi.Jed in the
•· office .of the DMM for the· reg.i~n in
Nh.ich the unit area is situa led.·
(b) An application foc deaignation of•
proposed nnit = and determination of
the required depth oftest well shall be
filed in doplicate. A like number of"
counterparts ahou1d be filed of any
geologic data and any other information
submitted in aupport of such application.
{c) Where a duly executed agreement
.. is aubmitt.e~ foe final approval. a
minimum of four signed ~~tapartB
should be Sled. The n.umber of .
counterparts to be filed for·
supplementing. modifying, ex-amending
an e:ci3ting agreement, inc~uding change
of operator. de:signation of new
operator. designation of a participating
area. and t.e.nnination ,hail be
prescribed by. the DMM.. ·
{d) Two COWlterparts of a
sub 1tanlia ting geologic report. including
structure-contour map. cross ll<!!ctione.
. and pertinent data. shail accompimy
each application fur approval of a
participating area ·or rn"ision thereof
under an approved agreement.
{e) Three co·uo'terparu. of all plani of
development and opcratiott shaH be
•
ubmitted for approval imder lll1
,;:,µroved agreemenL
\ .. · (!) One approved count~art of each
istrument or document sabrrritted for
dpproval will be rnarned to the
operator by the DM:M: or his
representative. together wi.tb s.uch
addJtJona..l·c.oun!~ a. may have
bee:i fumub.ed !« ~l ~ae.
f 22a;!l-1 .Retro.M:ttv9 appn:>val of a
c:ommunlt1r:a11oo ~
(a) G=cc11.Uy, llO ~tl=tion
agre==1 •ha.II. be gfven an elf ecti v e
date rl.at Is prloc to the date of lu filing
wi.th the Deputy Minen l, Manager
(DMM). HmTe?er. tmder drco:m&'tancea
of good faftlt mistake or error by Lenee
or operator. and In the absence of
intervening thiro FRrtY right.a. the
eff.ectl ve wile of a COIIltnuni tiz.a ti o c
agreemeol ~y be fixed u f~ back aa
the date ol exc:cutioa of the agreement
between the le&aeea or operaton.
(b) No retroacti'lff: approval of•
commun.ltlz,,tio11 agreement may be
made where the lea&e expired prior to
. execotlcm of'the 11greement. The .
egreement need not be in a form
re'qulred for approval by the .Minerals
Mao.ageroent Service to qu.alify fo, this
equitable relief. b{!t may be any ,
agreement between le11see:a OT: operators.
such aa 11:J:1 opocaling agreement
evidencing the intent of the parties 'to
combine, and h11vln~ the effect of . .
combiiting. the& lease, ct' i:ri.teres t:s for
operational parpMes. IIthe agreement
that cumbined· such·lea:ses or' interes-tJ. is.
other then.· f~ar'commuciti:z.ation
ag;eemei:rt acu:ptableior'riliog and ·
app,oval as such., the DlvfM may require
the parties to ~bmit such 8.ll agreement
in proper focm.. which. if submitted and
approved. aball be deemed effective as
of the date of the earlier agreement
between the parties that combined their
leases or interest.5. ·
§ 225..10 Booda.
In lieu of sepacate bonds required for
each F'eder.al leue committed to a unit
agreemCflL the unit operator may furnish
and mai.n:tain a..collectivc coq>orate
surety bond Of I personal bond
. conditioned upon.faithful performimce
·of the duties imd obligations of the
· agreement iind the terms of the Federal
leases subject thereto. Persona.I bonds
shall be accompanied by a depoait of
nego~ Federal sccuritie11 l:n a Sil.Ill
equal at their pE!r va.lue to ~ amount of
the bon<ll.. and by a propet" CCtrVeyance
t O the Se:= lcry of fa.fl all tho city to B eJl
such securities in c:.a.,e of default in the
performerrce of the obligations assumed.
The liability under the band shall be for
such amount as the DMM shall
deten:nioe to be 11de.quale to protect the
intereru q{ the United States.. and ·
ad di t io DJ> l bond I'M y be rc.-qu.ired
wh=vtcr deemed necca.sary. TI1e bond
shall be filed wilh the St!rte Director of
the Bureau of Land Managemem having
jurfacfictioo r,va the Federal leases [n
the unil Evidence ni..mt be fi.inllihed to
the DMM that nch bond baa been
accepted by the Bureau of Land
Management before operations will be
au.l.b.orized. A form of corporate rorely
bond Is eet forth in i 228.15. I.n case of
change of unit operator, a new bond
.must be filed or consent of surety to
11uch change of opera.tor mu,t be
furnished.
§22~.11 Appeal-.
A technical and procedural review
may be requested pursuant lo 30 CFR
2Z1.az and/or e.n appeal may be taken
as.provided ln 30 CFR Part Z90 of this
. chapter from any order or decision
. issued under 11?,,e regula tioru in thiJ; p art.
~ 226.12 Model on.shof'e emit aor~rrl
fo< unP'"oven are....._
Introd=lory Section.
Sectian 1--Enabling Act_ and regula lions.
· Section 2-Uolt ..rca.
Sectfqn ~nhiz:ed lan4 e.nd unrt.ized
cub<rtaDCCs.
Section 4-Urut Operator.
Section &-Resignation or removal" of Unit
Operatc,r.-
Sectioll 6-Su=uor Unit Operator.
Section 7-Accounting provi1io11.1 and unit
opera ting agn,eme~L . .
· Section 8--Risht.. i!nd obligation, of Unit
Operator. . .
· Sec:&n ~ to di~covery.
·• • SectiOll 9.l-Multipk "'ell rcqu:ittmen t3.
Secd0ti 10-Pl.ui of furtkr devcloi=cnt
and operation.
&ction 11-Putidpation after diecovery.
Section 1z.-..,.Allocation of production.
Section tJ-Deve!opment or opera lion of
nonparticipating lanLI or formatioiu.
Section 14-'-Royalty •enlemenL
Section ls-Rental &e!llemenL
Sect.ion l~rucrvatioo.
Sectio'n 17-Duinage. .
Section 18--Leaaes and contrach-
confonned ~od extended.
Section l~Yen.anh run with land.
Section 20-Eff.cctive date and term.
. Sc:dioa n...:..R.at..: af prospecting.
dcvalopmelll a.nd production.
Section z:2---..App<: /U'Bn.ce1.
Section 2;3--N<, tlce1.
Section U-No w11ivc:-of a:rtaln rights.
Section 2S-Onavoidable delay.
Section ZS-Nondi1crimination.
Section Z7-Lou of title .
Section 28-Nonjolnder and subsequent
Joinder.
Section ~unterperts.
• Section 30-Su.rreoder.
'Section 31-Taxe,.
'Sactio,, 32-No p.artnenh.ip.
Concluding Section-in witnen wbcreoL
Genen!I Caidclioe,.
Ccrtifrcction-Oct.ermination.
-· l'a.-.gTfpb mc.lud.,d whe,, m~ rh•n on,:
obligortioa weU Ml k> be ~.
• Optional ....:tiocu (in •ddlti""'. ~.apb [hi of
,cction lS u op(io11A1l-
·,. ·.';
,·
·'
!.
(:
il
J'
I,
I'
'1'
C
I'.
I!
c.;
'I
J )
. Questar Gas Company ····· --------··
Docket No. 30010-162-GA-17
QGC Exhibit 3:a
Page 50 of 68
25256 Federal Register / Vol. 47, No. 112 / Thursday. June 10, 1982 / Proposed Rules
Uc.It Agn,c1neat foe-~ ~vclopaw,al ~
Op<,n,tioa of the .
Unit •re•
County of------------­
State of---------------
No------------..:....----
Tius agreement. entered inlo u of the
--dayof---, 11>-, by and ~tweca
the parties aubs,;rlblng, ratifying. or
consenting hereto. and herein referred lo aa
the ·parti e• hereto,• ·
Witnes ... th
Wberea•. the parties hereto are the ownen
of worldng. royalty, or other oil and gas
interest. In the urul area 1ubject lo th!s
agreement and
Wbere,u the Mlnersl Leasing Act of
February ZS. 1820.. 41 Stat. ~37, u amended. .
3.() U.S.C. Sec.. 1 Bl et aeQ~ autbori:tea Federal
baseea and their representatives lo unit with
each other, or jointly or aeparalely with ·
othen, in collectively adopting and operating
11 unit plan of development or operation• ·of .
any oil and gas pool. field. or like area. or any
part thueof for the purpo3e.of more properly
conserving lhe natural re,o=• thereof
whenevc~ det<!nnined and certified by the
Secretary of the lnlerior to be necessary or
ad°visable in the public lnl<;r"cst and
Whereas the partiea-hen:to hold sufficient
Interests in the Uni I Area
covering the land hereinafter desoibed io
give reasonably diecti_ve control of
o~rations therein; and .
Whereas. it ls the purpose of the parties ·
he;_,,to to conserve natural resciw-ces; prevent
wasle, and secure oLl-ier benefit.,, obtainable
through .development and operation of the
area ,ubject to. this agn:ernenl under the ·
le.rm,·. conditions.. arid limitations herein &et
forth: ..
Now, therefore, in consideration of the
premise.sand the promises herein contain'ec!,
the parties hereto commit to tiiia sgreement
their respective interests in·the below­
defined unit area, and agn,e aeveraliy aroong
them.selves as follows:
1. Enabling Act and regulations. The ·
Mineral Lea,ing Act of f'ebruary ZS. 1920, as
amended. supra, and all valid pertinent
regulations including operating and unit plan
regulations, heretofore issued tiier'eunder or
valid, pertinent. and reasonable regula lions
hereafter iHued thereunder are accepted and
made a part of lhi, agreement u to Federal
land.1, provided auch regulation• are not
lnconaistent with the tenn, of thia 'agreement:
and a, to non-Federal land•. the oil and gas
operating regulations in efi'ect a• of the
eITective date hereof governing drilling end
producing operations, not inconsistent with
the lerrns hereof or I.he law• of tiie Slate In
which the non-Federal land is located. are
hereby accepted end made a part of this
agree men I.
2. Unil area. The area specified on the map
attached he.reto marked Exhibit A is hereby
designated and recognh:ed aa con•tituting the
unit area, conlaining--acres. more or leas.
Exhibit A ahows, in eddition lo lhe
'>oundary of the unit area, the boundaries and
:lentitY, of tracl~ and lease• in ,aid area lo
.he exlent known lo the Unit Operalor.
Exhibit B attached hereto la a schedule
,howi.ng lo the extent hown to lhe Unit
Operator, th .. ,creage.. percentage. and ldnd
0( owncnhlp of oil and gaa inle.resl• !n all
land• In the wtll area. However. noth!ng
be.rein or In Exhlblta A or B ,ha II ~
conatrued u • repreoenlatfon by any party
he.re!o u to the owncs-ahJp of any lnte.reat
other than auch lnte.rea I or Interetl• u ue
,hewn In the Exhlb1t1 u owned by euch
party.Exhibit• A and B ,ball k .revbed by
the Unit Operator wbenever change• In the
unit area or In the owne,..hJp Interest of the
lndlvidual trac~ rendec such revision
nccesaary. or wben reque1led by lhe Deputy
Mineral, Manage!'-Oi.l and Cu,• herdnafter
referred to u ~oMM.-•nd not leu than four
cople• of the rcvlaed E.xh.lblt. ahall ~ filed
with the DMM-
The sbove-<leaaibed wtlt area ,ball wben
practicable~ expa.cded to include therein
any additional IIIJ'lda or shall ~ conlraded to
exclude Janda whenever ,uch expansion or
contraction I• deemed lo be necess.ary Ct'
advisable to conform with the purposes of
thls agreement." Such expansion or
contraction ahal! be effected in the following
manner:
(a) Unit Operator, on (ta own motion_(afler
preliminary concurrence by the DMM}. or on
demand of the DMM. ahall pn:piµe a ootice
of proposed expansion or contraction
deooib[ng lhe contemplated 'change'• i.ri the
bound:uies of Lhe unit area. the rea,ons
therefore. any Nans for adwtional drUl[ng.
and the proposed efiectivc date of the
expansion or contraction. preferably the fint
day·of a month su~ae~ent to the date -of
ootice. · ·
(b} Said notice shall be delivered to the
DMM. and copies thereof mi a led to the last ·
·. -known addres• of each working !nterest 0owner. lessee. and lessor wbose interest, are
affected. advi,i.n.g !hat 30 days will ~
allowed for submission to the Unit Operator
of any objections.
. (c:)Upon expiration of the JO-day period
provided in the preceding Item (b) hereof,
Unit Operator shall file with the D!-.{M
evidence of mailing of the notice of .
expanlion or contractiim ~nd a copy of any
objections thereto wh.ich have been filed with
Uni! Operator,logether with sn application in
trip!icale, forapprovsl of auch exparulon or
contraction and with appropriate joindera.
(dJ Aft.er due consideration-of aU pertinent
information. the expansion or contraction
1ha1L upon approval by the DMM. become
effectiYe as of lb·e date presaibed tn the
notice thereof or aucb other appropriate date.
(cl AU legal ,ubdiviaion, of land• (i.e, 40
acre, by Government survey or iu neareat lot
or tract equivalent; in ln•taoces of irregular
1urvey•. unueuaUy lsr-ge lets or tracts shall be
considered in'multiple, of 40 acrea or the
nearest aliquot equivalent thereol). no part•
of which are in or enti lled to be in a
participating area on or before the !iflh
anniveniary of the effective date of the fint
initi al participating area eslabli,hed under
this unit agreement. ,hall be eliminated
automatically from th!a agreement. effective
u of ,aid fifth annivenllI)'. and auch lands
1 In the E .. tcm Reg!oo and IJ,o Al .. i.. R<iion. tha
rt,lpon•lbtc offidal I, the Deputy Minoralo
)..lan~cr--On•bor,: Mincrwla. .
ahall no longer be • part of the unit area and
ahaU no longer be subject lo thia agreement..
unlen dlligent dri!ling operation! arc in
progn,u oa unitized land, not entitled to
partJdp,iUon on ·,a[d fifth anniversary. !n
which event all such lands ,hall remain
,ubfcd hen:to for 10 long as ,uch drilling
operatlons are continued ruligently. with not
more than oo-daya time.elap,ing between the
completloa of one .uch w~IJ and the
coaunencement of the next ,uch well. All
legal aubdivislona of lands nol entitled to be
In a participating area within JO yean after
the effective de te of lhe fit'BI initial
p.artidpating ~• approved l!Jlder thia
agreement shall be aulomatically eliminated
from thi• a~ement 81 of aald tenth
annivenary. The Unit Operator shall. within
00 daya after the effective dale of any
eUro.ination her-eunder, de,cribe .I.he -erea 10
e!iml.nated· lo the satisfaction of the m .. f}.{
and promptly notify all parties in interesl. All
landa prpv.ed productive of unilized
aubstan=• in paying quantities by di!igenl
drilling ope,:eti_ons. after the aforesaid 5-year
period ,hall become participating in the 1a01e
manner·u during aaid first 5-year period.
However. when such wligent drilling .
opera.tfona ~~•e. all nonparticipating !anc4\
shall be automatically eliminated effective· es
the Slst day thcr:esfter.
· Any expansion of the unit area pursuant to
this aection which embraces lands ·
theretofore eliminated punuant to lhis
aubsectio_n 2{e) ahaU oat be considered
eutomati c comIWtment or recommitment of
auch lands .•
3. Unitized land and unitized substances. ·
All land now or hereafter commitled to this
a·greement ahaU conatitute-land referred lo
herein as -unitized land~ or "land subject to
thb agre~mcnL ~ All oil and gas in any and ell
fonn.ation:s of the unitized land are unitized
under !he terms of !his agreement and herein
are called -unitized substances."
4. Unit Operslor. · · is hereby
designated es Unit Operator and.by signalure
herelo u Unit Operator agrees and consents
to accept the duties and obligations of Unit
Operator for the discovery. development. and
produciion of unitized substances as herein
provided. Whenever reference is made herein
to thoe Unit Operator. auch'referencc means
the Unit Operator acting ln that c:apacily and
not as an owner of interest in unitized
,ub ala nee a, and the term ~working interest
owner~ when 115ed herein ·,hall include or
refer to Unit Operalor as the owner of a .
wor'ldns lnterest only-when auch an inte'rest
la owned by IL .
5. Resignation or removal of Uni( Operator.
Unit Operator ahall have the right to resign at
any time priorio the establishmenl'of a · · ·
participating area or areas hereunder, but
auch resignalion shall not become effective
so as 10 r-cleaae Unit Operator from the duties
and obligation• of Unit Operator and
terminate Unit Operator·e right, u such for a
period ofB months after notice of intention to
r-csign has been served by Unit Opera tor on
all working interest owners and the DMM,
and unlil all wells then drilled hereunder are
placed in a aati,Cactory condition for
auapenaion or abandorunent. whichever is
required by the DMM. unleo• a new Unil
)
Questar Gas Company
Docket No. 30010-1 62-GA-17 :)·,~~~~~~---,99E~~:~g~~ex~;~~~ho~'r~~~:~ ...... -----
• Federal Register / Vol 47, No_ 112 / Thursday, June 10. 1982 / Proposed Rules 25257
raloc ahall have been aclec\ed and
-droved and ahaU have taken over and
,stumed the dutie1 and obligation• cif Unit
Operator prlor lo the e;,,;plr11tion of .aid
P"riod.. .
Unit Operator ,hall qave the right lo resign
In lilce manner and subject to lilcc limltal!ona
u above provided at any time after a
participating area established hereunder 11 In
txistence. but In all ln:rtanccs of resignation
or removal. until a 1u=eaaor Unlt Operaloc la
u:lect~ and approved at hereinafter
provided.. tbe working lnteneat owners ahall
be jointly responaible for performance of the
du lie, of Unit Operator. and 1hall not later
lhan 30 daya before auch rea{gna lion or
removal become• effective "Pp<>int a common
,gent to represent them In any action to be
c..kcn hereunder_
The resignation of Unit Opera lor shall not
release Unit Operator from _any liability for
any default by It hereunder occurring prior to
the eCfective date of its teaignation-
Thc Unit Operator may. upon default or
failure in tbe perfonnance o{ ila duties or
obligation• hereunder. be subject to removal
· by the 1ame percentage vote of the owneo of
working !ntereals ea herein ·provided for the ·
,election of a new Urut Operator. Such
removal shall be effective upon notice thereof
to the DMM.
•
e resi"gnetion or removal o( Unit
ralor under thia agreement ,ball not
( inale iu right. title. or interest es the
, er oC working interest or other lnten:st [n
· ·.ed substances. but upon the re3ignation
.nova! of Unit Opeutor becoming
el!ective. 1uch Unit Operator shall deliver
po,aenio_n of ell wells, cqulpment. materials.
and appurtenance, U3ed in conducting "thc
unit ~pcrationa to thc new duly qualified
,uccessor Unit Operator or to the co=on
agenL if no such new Unit Operator h
elected. lo be u,ed for the purpose of
conducting unit operation• hereunder.
Nothing herein 1ball be construed aa
authoriring removal of any material.
equipment. and appurtenances ~eded for the
preservation of any wells_ ,' •.'·
6. Succe,sor Unit Operator. Whenever the
Unit Operator ,ball tender his of its
reaignatiorf u Unit C!perelor or 1ball Ile
removed ac bereinabove provided. or a
change 0£ Unit Operator ia negotiated by
worlc.lng Interest owners. the owners of the
working interest. 11c:cording to their
respective a"cruge lntereati [n all unitized
land 1hall punuant to the Approval oC
Parties requirement• of the unH operating
egre,ecnenL ,elect a aucceseor Unit Operator.
Such aelection •hall not become ,effective
until:
(a) a Unit Operator so aelected shall accept
in writing the duliea and responsibilities of
Unit Operator. and
(b) tbe selection shall have been approved
by the DMM.
•
o succeuor Unit Operator is selected
ualified Bl herein provided. the DMM at '
· ection may declare !hi• unit agreement ·. ,sled. • .ccounling provision• and unit operating'.
agreement.Uthe Uni! Operator la not tbe 1ole
owner of working inlcrea!J1. cost.a and
expense• incurred by Unit Operator in
conductin8 U.'llt operaUon.a hereunder ahall be
paid and apportioned among an~ borne by
lhe owner, of won:lng lntercah. all In
accordance with the 11grcement or
agreements entered Into by 1rnd between the
Unit Operator and the ownera ofworldng
Interest•. whether one or more. 1eparately or
collecllvely. Any agreement or agreement•
entered l.qto between !.he working Interest
ownen and thc Unit Operator as provided in
thla ,ection. whether one or more. are berein
rderred to u the ~unit operatlng agreemenL ~
Such unit operating agreement shall also
provide the manner In which the woning
lnlere3t owner-s sh11ll be entitled lo receive
their re,pectlve proportionate and elloca led
ahare of the benefits securing hereto· in
conforming with their underlying operating
agrecmcnb. lea,e,. or other independent
contracts. and such other rights and
obligation• as between Unit Operator and the
working Interest owners as ·may be agreed
upon by Unii Operator and"tbe working
lntere,t owners; however. no ,uch unit
operating agreement shall be deemed either
to modify any of the tenn, and conditions of
thfa unit agreement or to relieve the Unit
Operator of any righi or obligation ·
estab!ubed under·this (!nit agreement. and in
ca3e·of any inconsistency or conflict between
thi1 agreement and.the un!t operating
agreement. this agreement ahaU govern.. Two
copies of any unit operating agreement
executed pursuant to this section shall.be
filed with the DMM" prior lo approval of this
unit agreemenL
8. Rights and obligation~ of Unlt Operator.
Except as otherwise specifically provided
herein. the exchulve right. privilege. and duty
· of exercising any and aU rights of the parties
here lo which e.re necessary or convenlenl for
prospecting for, producing. 1!oring. allocating.
and distributing the unitized substaoces are
hereby delegated to and ,hall be exercised by
the Unll Op"ralor 1.1 berein provided..
Acceptable evidence of title to ,aid rights
,hall be depoalted with uld Ucit Open.tor
and. together with lh!s agreement ahall
!:on1titule an.d.defu,e the righls. privilege•,
and obligations of Unlt Operator. Nothing
herein. however. sbill be construed to
transfer title to any land or lo "i1ny !ease: or
opcra.fu\g agreemcnt.11 being undeI11tood that
under thia agreemeril the Uolt Operator. !.n It.a
capacity as Uo.lt Operator, ,hall exerdse the
rlghtJ of poSles"slon aod use ve,ted In the
parties ber,,to only for the purpo1es herein
,pecified..
9. Drilling to dI,covery. Within O months ·
after-the effective date hereof. the Unlt
Operator 1hall.begln lo· drill an adequate: tes·t
well at a location approved by the DMM.
unles1 on such effective dale a well h being
drilled in conformity with the terms hereof.
and°ther-eafter continue ,·uch drilling
diligently until the --formation baa been
penetrated or until al a le,aer depth unitized
subslances ,hell be discovered which can bc
produced in paying quanlitic1 (to wit:
quantities aufficien! to repay tbe coats or
drilling. completing. and producing
operation•. with a reuonable profit} or the
Unit Operator shall at any timc es!abli•h to
the satisfaction of the DMM that further
dril!ing of said weU would be unwarranted or
l.mpracticable. provided, however, thal Unit
Operator ahall not In any event be required to
drill said well to II depth In exec .. of-­
feeL Until di,covi,ry oC unitized aub,tance•
capable of being p~uced In paying ·
quantities. the Unit Operator shall continue
drilling one well at a time. allowing not more
than 6 month·a belwei,n the completion of one
well and the conunencement (•pudding] of
the next well. until a well capable of ·
produdng unitized substances In paying
quantitie~ Is completed to tbe satisfaction of
the DMM or until It ls reasonably proved tha l
the unltized land b lncapable of producing
unltiz.ed aub•tance1 !n paying quanlilies In
tlie. Cqrmations d.J:illed hereunder. Nothing in
this 1ectio"n shall be deemed to limit the right
of the Unit Operator lo re3ign as provided in
Section 5. hereof, or aa requiring Unit
Operator to co=ence or continue any
drilling during the period pending su\:h
re,ignetion becoming effective in order to
comply with the requirements of this &~ction.
The DMM may modify the drilling
requirements of this 1ection u follows:
(a) for the initial obligation well or wells, a
single exte!laion u provided"in Section 25.
Unavoidable delay; may be granied; and
(b) For all other wells. a single extension.
not to exceed 6 montlu. may be granted. in
· addition to any extension granted under
!;;ection 25. . .
• • 9a. Multiple well requirements.·
Notwithstanding anything in this unit
agreement lo the contrary •. except Section 25,
· Unavoidable delay. --wells shall be
-drilled with nol more than 6-months time
elapsing between the completion of the first
weU and co=encement-of the second we!!
and with not more than 6-month"a time
elapsing between completion of the •econd
well and the commeocemeot of the third well.
.•• regardlen of whether a discovery has
been made In any well drilled under•thi3
provisioo.. Both the initial well and the
second well must be drilled in compliance
...,;-th the above specified fonnation or depth
requirement3 in order the meet the dictates of
this sectio·n: and the second ·well must be
located a minimum 0£--miles from the
initial well in order to be accepted by tbe
DMM aa the ,econd unit lest well, within the
meanlng of this section_ The third tc1t-well
,h11U be diligenUy drilled. at II location· ·
approved by the DMM. to penetrate the
---format.ion· or to a depth of--feet
and muat be located a minimum of--mile.s
· from elther the Initial or 1econd test well
Nevertheless, i..n the event of the discovery of.
unitized 1ubstances ln paying qu-s:nlilies by
llllY welt the unit agreement 1hall not
terminate for failure lo complele the --­
well program. but the unit area shell be
contracted automatically. effective the first
day of the month folio.wing the defaulL to
eliminate by subdivisions (a& de!iried in
Section 2(e) hereo() all !ands not then entitled
lo participation.··
Upon failure to commence any we!I a,
pro\;ded for in this (these} section(,) within
the time allowed, prior to the establishment
• "Pt.>vi•ion h Included when r:n~ltlple welt• •re lo
be drilled_ · ·
:i
>.
C
)
\
:I
I(
a t:
ti
·f
. l
•r . ·,
.i.
C
·,c.
?f
I:
n
0
a
C
f
:-i
:I
h
C
t.
(
(
\
) )
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 52 of 68
25250 FedeC"al Registe-r / Vol. 47, No. 112 / Thursday, June 10. 1982 / Proposed Rules
of a pertldpa Lins •re.a. k;,dD<fia& ou,y
e,dec.Son of time gr<lll~ I>,. th. BMM. thla
egi-cemcnl will aut.om.alk.aUy le-rmu,.ala_ Upo<1
failun: lo continue dnl.llne d.!Ug.,otly ay well
commenced here-undel'. the DMM may, idler
15-day, notice lo the Un.It Opcni!.o.r_ declare
thi• wtl( agrttme.c.t le=!aated. 1he p.art!a.a to
thi1 agreement m.ay J>ot Lnltiale • roqucat to
voluntarily tcrntln..tc during the fint ye.ar o{
Ito term unles.a al kut one obUgatioo weU
h11• been drilled ln a=rd.anc.c with the
provioioru ol thh (tbeu:) 1ectloo{1).. •
m. Plan of furthu de~elopinent IS.Cd
op,,ratioa. With.in 6 inontla alter comp!..ition
of a well capable of producing unitized
,ulutancc• in P""~ qua.ntilie, the Unlt
Opi,ra tor ,ball aub.-iit Ioc the approval or the
DMM ao a=eptablc plao of developm=t a.nd
operation for the unitized land which. when
approved by the DMM. ahall conotitute the
further drilling .II.lid developmen{ obligation.a
of the Unit Operator tinder lhl, agre=ient for ·.
the p,eriod specified therein. Thereafter, from ·
time to ti.me before the u:piraUon o! any
existing plan. tbe Unlt Operator ,hall ,ubmlt
for the opproval of the DMM a plan for B.Il
additional 1pedfied )X:rlod for the
development and ope-ration and 1ub.,equent
plal\3 llhould norm.ally be filed on a calender
year baals not later than March l ·each year.
Aiiy propo&ed modificatlon or addition to the
existing plan •h=ld be fikd as a aupplement
lo the plan..
Any plan submitted pursuant ta this
u;ctioa ihaU provide for the timely ·
e,;ploration of the.unitized ares, and For the
diligent drilling nece:n,ary for dciennlnatlon
of the area of areu O!pablee of producing
unitized sub:.tance,i In p,iying qu11.ntitiec In
each and every pn,at!ctive formation. shall be
n complete, a.od a<lequale 11• the DMM m11y
delermlne to be necessary fo'r timely · ·
developcnent and proper oo-noervatlon or the
oil and g a.a re-so<.t.-ces of the uni tued area and
ahaU:
(a) Specify the numk 11n.d iocation1 of any
wdl.-to be drill..d and~ l)T'0?03ed order
and time for al!C.h drilling: and
(bl Providc II oua.mny of operatlona 1tn.d
, production foe the ~otia year.
· Plan, shall be modified or 1upplecoenled
when nec.eo:&11ry lo meet clianged condition,
or to protect the totereat& of all partiea to lhJ..a
agreement. Reuonabk d.i.ligcnca 1'1all be
exercised I.a com pl ytn,,J w1 th tls.e oblig a tiaxu
of the apprand plan of &-rdop,nent and
operation.. Tbe DMN ls allthorn:,xi to grtnl a
r-euonable ext,n.,,lon of Iha ~moutla period
herei.o prescribed for aubm!ulon of an Initial
plan of development !I-Cd open,tio11 where
auch action ia j,uti.Iled ~u&c aI unu,,ual ·
conditi oru, or c:ircum.. btnces.
After completion of. "l""u cap.able or
producing unitized ,ubstances i.n p«)'Ulg
quanlitiea., no furtheT wi,Ua. except abcli •·•
may be neceu,.ry.to aITord.!)("otCCtioB 11.gainAt
opera lion• not l!llder !.ha o.g.rcemcnt and ouch
a• cne y be • pecifica.lly I pproved by the DMM.
shall be drilled excepl in accordanec with a.n
approl'ed plan or dcv,elopmenl a<>d opcrdion.
u . Participation aft~ diacovery. Upon
con,pl(tion or a wdl oipab-le a! producing
. 'tf m.utip_lc well provia<00 (~) Lo ?>Of Included,
fhi, paragnph, ,hall l>e the, lul p.arognph of S.Ctlon
II.
wutu:Qd 1ubct.o.nce, Ul I>"~ qu.a.ot.ltle ... or
u 1000 th..,._ftar aa requ:ttd by thc DMM.
the Unit Opera toe ahall ,ub.oit for approval
by the DMM a achedul~ baaed oo
1u~x!hialOOA of the pubUc-J.and 1urvcy or
allguo.l parts thereoL of 4li lAod theQ
ri:&""(kd u r-E>44ona bl y proved to be
productive o( uo.ltiud what.nee.a lo p-a.y{ng
quantilie._ Tbe•e land• ..ba.Il con. titute •
partklpating •ru oo approv,d o{ Iha DMM..
effective u of the date of co01pletion o( •uch
weU or the e!Ioc.t.lve dale o! !hi.I u.nlt
agre,e=nl whlchevcr La i-'l!cr. Tb.e ·~•
of both Federal and oon-P'edera.l la.ad, aba.ll
be bued UflOll appropriate computation,
from the cour&e1 a.ad dlat.a.nc.ea shoWD oo th.e
)a,! approved publlo-la.nd survey•• of the
cffectlve date of each fnitia.J participating
src11. The achcdulc ahall ilio 1et forth the
_p<:rccntege of un.itlud ..uhatance1 to be
al.located. u provided In Section 11. to e.acb
tr,, ct ln the p.arlid pa ting area Io c I la bl! ahe-d..
ond ,ball govern the allocation o( production
commencing with the &ectivc date or the
participating area, A different participating
.u« ,hall be e4t.1bluhed !or e.ach separate
pool or del?O"it of unitiud aubat.ao~• or for
any group thueor wh.ich i.s produ.ccd ae ii
a!ngle pool or :toce. and l!..DY two or more.
. partlcip,ating area& ao eatablishcd may be
combined loto one. on approval of the DMN_
When productioo from two or morr
participating e.rea1 I.a 1ubaequently fo=d to
be from a eo<nmon pool or dcpruil the
. p4!ticip.ating ait:e, shall be combioe,cflota'
enc. effective -as or such appropriate date 1u
may be approved or preJ.Cribed by Cb.e DMM.
Tbe pllrtidpating area or areas ao ealablished
,hall be revised from time lo ti.en-,, subject to
tbe appro"al aI the DMM. to include
1.dditional land& then regarded u rea&anably
· proved ·to be productive or unlti:ted
rnbstacc.,. In p•ying quantltie.-or which are
neoes,ary for unit operation.A. or lo exclude
land then regarded aa reuonably proved not
to be productive ofuniti1:ed aub,,Lancea lo
payi.ag quantitiea .. and the ichedule of
alloca Uoa perccn!Jl8e • a hall be r-evis.ed
accordingly. The effectlvc date or any
revialoa ahail be the fir..t" of the month i.a
which the laiowledge or l.aformation is · ·
obt,dned on .,.,hich aoch revulon i1
predica ted;·~rovided. however. that a more
appropriate e!f&etivc date may be u3ed if .
J111tified by Unll OperalDr and approved by
the m.oJ.. N.o land be excluded from a
partidpat:iJ>g area oa account of depletion of .
Ila unJti:tcd aubatances. except that any ·
participating u,,• ut.abliahed Wlder the
pn;,visfon1 of th.ia unit agreement 1ha.ll
!er.min.ate automatically whenever all
c:ompletioru in the formation on which the
partidpatl!l,ll area la b.ased ar,,, abandoned.
It Li the in(ent of thia ,ection that a
participating a.rea-shall repreaenl the area
lcnowu or ree.a.onably c•tima !ed. to be
productive lo·paylog quanlltLea: but.
regarc!Jeu of aoy revi•ion of tha participating
area, nothlng herein contalned aball be
c,iriol.nled aa requiring e.ny retroactive
adjustrncnt for production obtained prior to
the effective date or the reviaioo of the
participating area. ·
lo the • b1ence of e.gn,en,ent o.! any time
between the UnH Operator-811d the DMM ••
tq the proper d~tlon or rcdettnJtlon of e
putldpatl.ng area, or until• participatlng
ar-ea bu. or areu h•ve. be-ea e1!abl11bed. the
portJoa 0£ all payment. •lrected thereby
,hall except royalty due che United State1,.
be Impounded 1n • manner mutually
ao::ept•ble lo the ownera of committed
worxlng lnlel'C1b.. ~yaltie• due the United
State, aball be detcnni.ned by thc DMM and
the amount thcreof &hall be depoaited. · ..
d!n,cted by the DMM. until a participating ·
. ~ I• fi.n.ally approved and then adjuded lzi
accordance with• delenninatlon of the aum
due u Feder.al royslty on the baai• of 1uch
•pproved ~potting area.
When=er It la determined. ,ubjcct ta the
approval of th., DMM. th.at a well drilled
UOOCT th1a -sreeinent ia not cap'!ble of
prooaction lo paying qoantitic1 and loclUAioa
of the land on which ii la 1ituated in a
partidpating ar-ea ia tmwam,ntcd. production
from such. weU shall. fo:-the purposes of
settlc:men t amoc:g all parties otha than , .
working i.olerest owncn, ~ alloc,,ted to th,:
land on which thc weU ia located..unleu s.uch
land ia alreacy with.in the partic:i pa ting area
c•lobliahcd for the pool or deposit from
whlch such prodoction i1 obtained.
Settl.emcnt for worlcing inte~si beric"fiu from
1uch a naopaylng unit well 1h.aU be made as
pro-ridcd In th-: mtl! opaating agnemenL ;_ I
12.. Alloca tioo of production. All unifued
1ub1tance1 prod.coed from each p.articip;,tins
e.rea ui..bliabed tr.Oder thi• .agrecmcnL
except any part then:oC uaed in c.onformlty
w1 th good operating pns ctia:a wi lhin the
unltu.e<i ana for drilling. opera ting. and other
productioo.or dev,el•pment purposcs; for
ri:prenuri.ng Ol' nocycllns fa accordance with
• plan o( development 1.J>d opera tiona fu-s t .
.. approved by the DMM. or unavoid~bly loal
,hall be d<:em&d to be produced &qually on
llll "~"8" bu!e from the s=eral tract• of
unitized l,rnd of~ pe.rucipating area
eotablis.hed for a11ch production. For the
purpose of determlning ,my benefits acx:ruing
under thl• agr,:emcnt. each auch tract of
unitized land ,hall have allocated lo it .,.;ch
pc,f1?CctllgC of said ~uctiof! "" the !)umber
of aC"es of such tract includcrl-in uid
participalin:g are,, bears to the total acre,s of
unitized land !n "a!d participating area,
except tha l alloo,tion of prod action
hi:r,,under for pu:rpcnea other thao for
settlement of the royalty, overriding royalty,
or pe:ymr:n! out ofprodoctlon obligaUona of
the respectfre worlcing !ntere~t owner,. ahall
be on tbc·bui1 pttacribed In the unit
operating agteemenl whether In conformity
with the bas la of allocation herein ·set forth or:
otherwuc. It Is hereby agre.cti" that production or unitl:r.cd substance. from a participating
area ahall be alloca led as provided herein
r,,garrll~s or whetheT any wells •re d.riUed
on any par1icular part or tract or lhc
pe.rticipeling area. lf any gas produced frocn
one participating area lo u,ed for
repre,suring or recycling purposes In another
participating area. the fint gas withdrawn
from the latter particip11ting area for sale
du.ring the life of thb agreement shall be
coruidered-to be the gaa so tran,fem:d. until
e.n amount equal to that transrem:d ,hall be
.o produced for ealc and &uch ga1 ahall be
allocated lo the pa'rtidpating area from which
. inltially p-roduced as such uea was defined
•
) )
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 53 of 68
Federal Register / Vol. 47, No. 112 / Thursday, June 10, 1982 / Proposed Rules 25ZS9
(
. ·1t the time that •uch t?-,uufarrcd go i.. finally
oouced a.nd aold.
JJ. Developcne:1Jt or opera tloa of
oonpartldpating la.nd_ or formatioru.. Any
par1y h.ereto own!ng or controlling the
worldng lnlere•I In any un.ltiz.ed I.and ha Ying
thc~ll • regular. well location roay with thi,
approval of the DMM. at ,uch p,uty"• aole
rislc. co,ta, B..lld· ex:peiue. drill a well to te,t
.any fonnatlon provided the well la out.Ide
any partldpatlng area e&tablisbed for the
Cormatlon. un1caiwithic QO day, olrecdpt of
notice from ,aid party of bia ln!entlon to drlll
the well the Unit Operator elect. and
commence• to drill the well In a like manner
u other well•_,.,.,. drilJed by the Unlt
Operator under thla agreement.
II any well drilled und~r lhl, section by •
worlcing lnlere,t owner re,ulte in productlO!l
ouch that the la!ld upon which It la aituated
rnay properly be included In • participating
aria, such participating are• abaU be
eslablisbed or enlarged u provided ln lhls
agreement and the well ,hall thereafter be
op!'rated by the. Unit Operator iil accord!l.(Jce
with the· terms of thi1 agreement anc! the unit
operating agreement. .
. lf any well drilled under lhla section by a
worl:.ing interest owner that obtains
production In quantities in•uffic:icnl to Justify
. the Inclusion of the land upon which aucb
well !a 1ituated in a partidpating area, such
well may be operated and produced by the ·.
•
rty drilli.ng the umc. subject lo the
servation n:quirement.o of this agreement.
e·royalLie, in amount or value of
( ·duc~on from any .such ;"eU:oball be paid
}ecified In the underl)'Ulg-Iease and
. ~· cementa affected.
H. Royalty settlement. The United State•
an~ uiy State end any royalty owner who !1
en tilled to take in lcind a abare of the
sub:stance., now unitized hereunder ohall
hereafter be entitled to the right to take in
kind it, ,bare of the unitized aub,tances, and
Unil O~rator. or the working Interest owner
in c.i ~-of the operation of a well by a
working interest owner as berein provided
for in special cue~. shall make deliveries o!
guch royalty share taken in lti,rtd~.
confonnity with the applicable contrads.
laws. and regula1ions: Settlemen(forroyalty
in!eresl no! taken in kind shall be made by
working interest ownen re,ponsible therefor
under exi,ting contracts, law• a.nd
regulations, or by the Unit Operator on or .
before' the Jut day of each month for urutized
aub,tano:• produced-during the preceding
calendar month; provided. however. that
nothing in thl• aection ahaU operate to relieve
the lesGecs of any land froaftheir re.pective
lease obligation• for the payment ofruiy
roya !ties due under their leases; · '
If gas obtained from lands no! aubject !o
thi, agreement ia·introduced intd any
·participating area hereunder. for use In:
rcpressuring. atimula !ion of production. or
increasing ultimate recovery, in conformity
with a plan of development and operation
•
".,oroved by the DMM. a Ii.Ice amount of gas,
r settlement aa herein provided for any
•ransfen;ed from any other participatiil8
ind with appropriate deduction for Jou
• any cause. may be withdrawn from the
formation into which the ga• la Introduced.
royalty free as_ fo dry gas, but not u to any
product. whlch may be extracted therefrom;
provided that ,uch withdrawal ,hall be 111
such time u may be provided In the
approved pla.n of developmeot and opcratloo
or u may olherw!Je be con,enled to by the
DMM u con!ormm;i to good petroleum
engineering practi~ 1.nd provided further.
that auch right ofw!thdra.wa[ ,!,all t=inale
oo the termlne tion of lh11 unlt agrcemenL
Royalty due the Unlted Statc-s ,hall be
computed aa provided In 30a:R P&.rt 221 and
paid In value o. delivered In lclnd aa to all
unitized 1uba1Ance1 on the b ... la of the
amotm!s thereof allocated to unlt!zcd Federal
land u provided In &ction 12 at the rate•
apecified i.n the respective Feder~ lease,. or
Ill 1uch other rate or rate, u may be
· 11uthoru:ed by law or regulation and approved
by the DMM; provided. that for leases on
which the royally rate de-pend. on the daily
average production per welL aald average
productloo oball be determined !.n accordance
with the operating ri:-gu.lation.a a. tboush each
participating area were a oingle cowolidated
leaae-.
1S. Rectal •ettlemecl Rental or minimum
royaltie1 d~e on leasea committed bere!o
•hall be paid by approp~a!c·worklng lnt¢rest
owner, under exj•tlng contracts, laws. and
regulations. provided that oothln.g herein
contained shall opi,,ra le lo relieve the lessees
of any land from their respective lease
obligations for thi: payment o! any rental or
mi.n..irnum royalty due under their leases .
Rental or minimum ~y11lty for lmd.s of th~
United Stales aubject to thi, .. greemcnt shall
be paid at the rate specified µi \he re,pectiv.e
lea,e, from the United States unles, such
.rental or tnlnlmum royalty is waived. .
suspended. or reduced by law or by approval
of the &cre!acy or his duly authorized
representative.
With respect lo any lea,e on non-Federal
land containing provisions which w:ould
termina !e such lease un)css drilling
opera tiom arc COIIl!Denced upon the land
covered thereby with.In the time therein
1pecilied or rentals are paid for the privilege
of deferring 1uch drilling operations. the
. rental,· required thereby shall.
notwithstanding any other provision of thi3
agreeme~L be deemed to accrue and become
payable during the-term thereof as extended
by this agreement and uotil the required
drilling-operatioru arc commenced upon !.he
land coverc,I thereby, or until so·me portion of-
1uch [and [s Included witbtn 8 participating
area.
16. Con1ervation. Opera t.io;a hereunder
and production of unitized 1ub,tance1 ahall
be conducted lo provide for the most
econollli~ and efficie11l recovery of said
,ub~tances without waste, a1 defined by or
punman! fo State or Federa[ law or
_regulation.
17. Drainage. The Unit Operator shall take
such meaaure1 as the DM:M deems
appropriate and adequate to prevent
drainage of unitized 1ubstances from unitized
land by weUs on land not ~ubject to thi•
agreemenL
16. Leue1 and contracb conformed and
extended.. The term,, a:mclitions, and
provhion• of all leiuea. sublease•. and other ·
contract. relating lo exploration. drilling.
developroect. or c~rationfor oil or ga, on
land. committed to lhJa agreement are hereby
<!X:preuly modified and 1.mended to the
extent nece .. ary to make the aame conform
· to the provialom hereof. but·otherwl:.e lo
. remain In full force and effect.and the parties
hereto hereby consent that the Se-cretary
•ba.ll and by hl, approval hereat or by the
approval hereof by hr. duly authorized
n:pn:aentatlvc, d<>i:a hereby establi,h. alter,
ch,.nsc. or revoke the drilling. producing.
rental. m!nimwn royalty, and royalty
requ!reme.-ita o! Federal lease, co11Unitted
_hereto and the r,,gulatJons In re,pecl thereto.
to confon:n aald requittmenb to the
provf1lon1 of this agreement. and. without l.im.ltfns the generality of the foregoing. all
leases. aubleasea, IUld conlracb are
particularly modified In ao:ordanc:e with the
following:
(a) Tbe development and operation of
land.a ,ubject lo. this agreement under the
term• hereof ,ball be deemed full
performance of all obligation, for
development and operation with respect lo ···
each and every aeparateiy owned ·tract
aubject to !hi,.agreement. regardless of
w/lether there is any development of ~ny
particular tract of the unlt area.
lb) Drilling e.nd producing operations .
perfon:.:ied hereund~r upon any at that ti.me.
such lea,e shall be extended for-2 years. and ·
ao tract'o_funiti.zed lands will be accepted
and deemed to be performed upon and for the
benefit of each and every tract of unitized
la.cd. and no lease shall be deemed lo expire ,
by rea,on offailure to drill or.produce wells
,ituated on the land therein embraced.
(c) Su•pension of drilling or producing
operations on all unitized lands pursuant to .
direction or consent of the DMM ,hall be
d~erned to constitute aucli ;uspension
pursuant to rnch direction or consent as lo
· each e.nd every tract of unitized laad. A
au,peosion of drilling or producms operations
• limited to ap,,cified lands shall be applicable .
only to 1uch la:od,.
{d) Each lea,e. 1ublea,e. orconl~act
relating !o the exploration. drilling,
development, or operation for oil or gas of
lands other than tho,e of the United States
comm.ltted to this agreemenr which. by ils
.. terms might expire prior to the termination of
this agreement. Is hereby extended beyond
any auch term so provided therein so that it
shall be continued In full force and effect for
and during the term of thi3 agreement.
(e) Any Federal lease committed hereto
,ball continue in fon::e beyond the term so
provided therein or by law ·as to the !and
commltted so long as such lease remains
· subject hereto. provided that production is
bad in paying quantitie, under this unit
agreement prior to the expiration date of the
term of ,uth lease. or in the event actual
diill.ing operations are commenced ·o·n
wuti:z:ed land. in accordance witl, ihe
provisions of this agreement. prior to the end
of the primary term of &uch lease and are
being diligently prosecuted long thereafter es
oil or sa1 is producad in paying quantities in
accordance with the provisions of the
Mineral ~asll\'l AcL as amended.
(fl u ·ch-aubleaae or contract relating to th,:_
operation and dcvelopmenl of unitized .
subs.lances from lands of the United States
'{
(
1
I,
~
e
1.
!l
e
I.
j:
II
(,
p
e.
II
t·
b
• k r,
I(
c ~·
..
g
IC
'(
ll
C
r. ,.
i.
:l
ll
~
e
-c
Ir
t
k Ii
!(
I
'.h
n
~
n
p
y
a
I'
('
,:
g
n
I.
g
·(
")
Questar Gas Company
· Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 54 of 68
2SZ60 Federal Register / Vol. 47, No_ 112 / Thursday, Jtme 10, 1982 / Propose<l Rules
commlued lo thl.e o.gr-c=iant., wh.!ch by Jt•
t<erm1 would explrc: prior In the t!rne at which
the underlyi.Qg le ... e, u Clct"1lded by the
ln;mediately preceding pa:ragnpb. will expi~
Is hereby extended beyond any auch term ro
provided then:!n to that It sbaU be oontlnced
in ruu Corea 11nd dfect for a-nd dnri:ng the term
of the underlying_ lea oe u rod, k:Tm la hen:lo
extended.
[g) The itegregatlOQ or any l'e<kral Jette
committed ta th!• •gre,,=c-n~ uo governed by
the following provioion la the !.ourth
paragraph of~ 17(JI of th., Mineral Le:.uing
Acl as emended by the A.ct of September z.
1960 (74 StaL 71n-7BA.J (30 U.S.C. Z28{j]):
Any [FedeNl] lc.aoc h~tofore or heneafter
committed to any roch [unit] plan embracing
land. tha l are ln part within and ln part·
out.,ide or tt.e e:-ea ca"ered by any 1UCh plan
shall be ..:;;re~Ale<! into _1<epaI11te le.aac• u ta
lands coin.ruilled •nd the lll!ld• not cottunittad
a, of the effective d~ le a! nnitiz.atlon::
Provided. howr1ver. That a.ny sod! le:ue a.a to
the nonunitiud portion ah.all coptiaue in
force and effect for the lerm !hueof but for
not less than lwo year-, from the date of 1uch
•cgrega lion end so loil8 thereafter a, oil or
.gas b produced in paying quantities.
• (hJ Any leeoe. other thao a Federal leai.e.
having only a portion of lu lao~• cmrunitted
hereto shall be aegregaled ea to the portioo. -
committed and the portion not committed_
and tbe provision.a of auch lea~ ahaU apply
separately to snch segregated portions
commencing aa of the effective date hereof.
l.n the event any sucb l~a-?e pr-o,vides for a
lump--oum rental pe)'.llknl such payment .
shall be prorated between the portion• •o
segregated in proportion to the acreage of the
re,pecti'1e tracts. ·
19. Ccvenaols run with land_ The
covenants berdn •hall be conatrued to be •
c:ovenanta running with the land with reap,:ct
lo the inlcrea t of the parties hereto and their
sua::e,soo in interest until this agraco,cot
terrnioa tea. and any gre.nt. tranafer-. or
conveyance of interest in land ar lea""•
subject hereto ,ball be and bereby i.s
coo.ditioned upon the a.uumptioo. of all
privilege• and obl~aqon. hereunder by the
grantee, transferee; cr,;,ther 1ucceuor in
int.cre1L No a1Signment or !raa,fer of any
worlda.g inhere.at. royally, or other intere•I
subject hereto ahall be binding upon Unit
Operator' until !lie fu,t day of the calendar
month afler Unit Operator ia fumiahed with
th.e original photoata tic. or certilied copy of.
the instrument of transfer_
20. EIT~ctive date·aod term.. Tiu1 agreement
ahall become e.tfect!ve upon approval by the
DMM and ehAII automaticaUy terminate 5
yur-, from aa !d effective date ttnleu:
f~J Upon applic.iition by the_ Unit Operator,
,uch date of expiration is extended by \he
DMM. or ·
· fbJ Ir ia reasonably determined prior to the
·expirallcm of the fixed tern, or any extco,ion
lhereof that the unith:ed land ie incapable c;,f
·produclion of unitized ,ubatan~s in paying
quantities in lhe formation• teated hereunder,
and after nolice of inlenlion lo terminate this
agreement on aud, groond i• given by the ·
Uni! Operator lo all parties in inten,st at their
lut known addreuea. thi, agree~nl II
lenninated with the approv.al of the DMM.. or
'·0p1ional 1u~mn..
(c) A vahu.ble duo.cov,:ry of tmfti:z:ed
aubllana:a ha• beai m9dc or a=pted on
unJtiud land durlng •aid Initial term OT any
e.x taulon thcn,o{_ In wbk:h evro! thla
llgreellt:nl ,hall remain In effect for such
term 1U1d oo long therea!1er 81 unltiu:d
aubatancn can be produced [n quantities
auffidrnt lo pay for the cost of producing
same from well• on nnlth:ed land within Any
participating sn:a e-atab!lab<:<i h-en:under.
Sh0t1ld production OC8&e and diligent drilling
operation• lo reatore production or-new
pr-oductlon are not In~• durlng the
period of nonpr-odaction. and prodaction I•
not realortd or ,holikl new prod action not be
obtained Ln paying quant!tie-a on com.mltted
land, wl th1o thi I unlt ano«. th.lo a greetnen I
will automatically terminate effective the last
day of IA<: month in whlch th.: laet unitiu:d
prpduction occurred. or
(d) It I• 'l'olunlerily l~"ted u provided
ln thb agreement_ lrua agr-eemenl may be
terminated at IIIIY time prior to the d.iocovery
of UJtidzed 1ubotancc1 which can be
produced in p'aying quantities by nol leu than
75 per c,,otum. on 1W acr,:agc buie o( the
working inter-e•t owner. signatory herelo,
with the approve.I of the DMM. The J.Jnit
Operator ohaiJ giv'.c notice of a.oy such
approval lo all parties hereto. Voluntary
tennina tioo may not occur duriag the first
year of !hi, llg?"Celneot u.a.le,a at Je.asi one
obli,gatioo well li....-been drilled in
accordance with Section 9.
21. R"te of. pro,pec!ing. developrnenl and
prodnctioa.. The DMM io hereby vested with·
authority lo alter or modify frota time to time,
in hi~ dacretion, the quantity and rate of
production under tbi1 a.g:reeineat when ;uch
quaotily and role 1B not fixed punu"-rlt tci .
Federal or Stale law. or doe, not comform to
aoy Statewide voluntary cori,ervatioa cir.
allocation progra.m which j,; e;tablish.
recognizerl. and generally adhered to by the
majority of opera Ion, i.o •uch St.ate. The
above authority L, hereby limited to
alteration or modification• which are in the
public interest and lhe purpose thereof. a.nd
the public interest lo be ecrved must be
atated in the order of alteration or
modification. Witho.ut regard lo the foregoing.
the DMM_ia al,o bereby 'l'e,lted with authority
to a lier or modify from time to lune. in bis
discretion. the rate of prospecting and
development and the quantity and rate of
production under thu agreement when auch
altera tioo or modi!ica tioo. ia in the later-est of
attaining th; .conservation objectives slated
in this agreement and is not in violation of
, any applicable Federal or State law_
Pa.wen ia thl• aectioo. vested In th.e DMM
•hall only be exercised after ootice to Unit
O~rator and opportunity for hearing to be
held not fc.ss than 15 day• from notice.
~ Appearance•-Unit Operator shall, afrer
notice to other parties affected, have the right
to appear for snd on behalf of any and all
interesla affectied hcreby before the
Department of the Interior and lo appeal from
order, issued undCT the regulation, 'of said
Department. or lo apply for relief fr-om any of
,aid regulations, or in any proceeding,
relali'1e lo opaationa before _the Departmenl
or any other legally constituted authority:
provided, however, that any other irrleruted
par1y ,t...11 al&o have the right al hh own
expense lo be hcord In any such proceeding.·
23. Noticec. All notlCM. demand,, or
1lalement• required hereunder lo be gf'1en or
rendered lo the parties hereto shall be in
wrltlng and eheD be penonally ddiverecl to
the par1y or parties, or acnl by po1tp11td
regisl~ or"certified mail lo the 111,t-knawn
addreu or the par1y or partie •. z~. No waiver of czrtain right•. Nothing
contained In this agre=ent •hall be
conalrued as a wirlver by any par1y hereto of
tlie right to uaer1 any legal or con•titulional
right or defense a, lo the validity or Invalidity
of any law of the Stale where the unitized
lands are located, or or the Unlted States, or
regulation• Iuued thereunder In any way
a.ffecling 1uch party. or u • waiver by any 1
such party of any right beyond hi• or it•
authority lo walve. !
ZS. Un11voidablc delay. A1J obligaiion•
under thla llgrl>e.<llent requiring the Uoll i
Operalor to ccmmcm:e o,-continue drWlng. or
10· operate on or produc:,: unitized 1ub.tance,
from ao.y o{ the b.nd, covered by this
agreemenl ..ball be ~u~pended while the Uni!
Operator_ de1pite the exerci .. e of due care
aod ~iligence. i• prevented froco complying
with ""ch obligaliollJI, in whole or i:n p.art. by 1
•trike.<, act. of God. Federal. SL.o.le. or -!
municipal-law oc agea~es., unavoidable,
· accidenta. w,cootrollab!e delay, in
lran,portation. inability lo ob lain nec.euary
materials or eqwpment in the open markeL or •
other matte~ beyond the reaoooable control
o[ the Unit Operator whether ,imilar to .
matters herein enumerated or not.
26. Nondi,saimi.netion. lo. connection with
the p,;rformance of work under this
agreement.. the Unil Operator agrees to
comply with .all the proviaions bf 11ection '1fJZ
(1) to (7) loclu,ivc. of Executive Order 11.246
(30 FR 12319).. 'a.! amended. which Are hereby
incorporated by reference in !h.i, a.greemeol
27. Lo-sG of title. Io. the evenl title lo any
tract of unitized land ahaU fail and the true
owner c:a,nnot be induced to join in this uni!
agreement. •uch tract ohaU be automatically
regarded ~snot committed hereto. and there
ahall be such readjuatment of future costs
and benefits as may be required on a·ccount
of the foae of 1uch title. In the event of a
dispate as la title lo any royally, working
inlere!lt. Cll" other interest. ,ubject thereto.
payment or deli"ery ~n account thereof may
be withheld without liability for inter-e1t until
the· di8pule is finally oettled: provided, that.,
a.< to Federal land• or lease•. no payments of
funds due the United States shall be
withl)e!d. but 1uch fund, ,hall be deposited
as directed by the DMM to beheld ai
unearned money pending final .settlement of
the title dispute. and then applied as earned
or returned in accordance with ,uch final
aettlemenL
Unit Operator as ouch i, relieved from any
responsibility for any de reel or failure of any
ti tie hercunder.
28. Nonfoinder and sub,equenl join_der. If
the owner of any substantial inlere,1 in a •
tract within the unil ares fails or refuse, lo
•ubscribe or consent to this agreement. the
owner of the working inleresl in Ilia! tracl
may withdraw the trect from thi• agreement
by written notice delivered to the DMM and
the Unit Optt-alor prior lo the approval of lh1s
agreement by the DMM. Any oil or gas
Questar Gas Company
Docket No. 30010-162-GA-17
·,'\ QGC Exhibit 3.8
· , . ) . ., Page 55 of 68
federal R~ter-/ Vol. 47, No. 112 / Thursday. fune 10, 1982 / Proposed Rules 25261 . ===========~::=:::==::::::=~~~ ( !ntere•t. La land• wtlhln the un.11 area not
commll~d hereto prior to fio..a.l •pprov .. l may
thereafter be committed hero to by the owner
ot owner-a thereof •ubocibtng or coraeoti.ng
lo thi• agreement. and. II the !nlerest La •
work.lag interest. by the owoer of •uch
Interest a!ao oubac:ribtng to the un.lt opera Ung
agreem.enl After operation, a.re commenced
hereunder, the right of aub,equeot /o!ndcr. u
provided in thi• aection. by• working intereat
owner i• aubject to auch requirement• or
approval{s]. iI any, pertaining lo auch Joinder,
as may be provided for In the unit operating
agreement After final approval hereof,
joinder by a nonworkln.g interest owner must
be consented to in writlf18 by the worlcing
inu:rc•t-ownc-r commilted,hereto 11.nd
responsible for the payn;enl of a.ny benefit•
that may accrue hereunder in behalf of auch
nonworking inlere•t. A nonworkifl8 inlere,t
may not be committed lo this unit agre:ement
unless the corresponding working interest is
commilted hereto. foinder to the unit
agreement by a working interest owner, et
any time, must be accompanied by
appropriate joinder to the unit operating
agreement. in order for the lnterest to be
regarrled u committed lo this agreement.
Except ,u may otherwise hereln be provided.
•ubsequenl joinders to this agreement ehell
~ effective a, of the date of the filing with
•
e DMM of duly executed counterparts of sU
r any papen necessary to establish effective
1 ommil!llent o( any tract to this agreement
l' · 29. Counterparts. This agreement may be
oxecuted in any number of counlerpart.1. co
.me of which needs to be executed by ell
parties or may be ratified or cocuented to by
~psra_te imtrurnent in writing specifically
referrul8 hereto snd 1hsU be binding upon all
those pa.rue• who have executed such a
counterpart. ratification, or coruent hereto
with the aame for,:;e and effect es tr all .uch
parties had signed the same document. a..,d
r-egardlesa of whether or not it i• executed by
all other pa.rtiea owning or claiming an
Interest fn the land. within the above-
described unit area. ,
• Surrender. Nothlng in cbis agreement
1hall prohibit the exercise by _any workifl8
Interest owner of the right to eurrender
vested in such party by sny lea•e. sublease,
or operating agre'ement a, to aU or any part
of the lands covered there by, provided that
each party who will or might acquire 1ucb
working interest by such surrender or by·
forfeiture aa hereafter set forth. 11 bound by
the term, of this agreement
U as a re1Ult of any ouch rnrrender, the
working interest right11 aa to 1uch lands
become vested in any party other than the fee
owner of the unitized aubstances, oaid party
may forfeit such righta and further benefits
!rom operation hereunder as to 68id land to
the party next in the chain of Lille who shall
be and become the owner of such working
Interest.
•
U u the result of any such surrender of
'.rfeiture working intereat right• become
. \Bled in the fee owner of the unitized
bot,nces. auch owner may:
"Optional occliona uid ,ub.ection. [~men!•
1ubmitle<l for fu,aJ approve! 1hould 1>01 ldcnlify any
pron.ion .. -opti=l-J
(lJ Accept tho-,, worldng Interest rights
•ubfect to thla agreement and the unit
operating agreement or
(2} Leue the portion of aucb land aa !a
lndudcd ill• participating an:a e,tablished
-hereunder aub/ect to th!e agreement and the
unit operating ag:re,ement: or
{3) Provide for the Independent op,,ratioa
of any pan of auch lend that la not then
Included within a partldpating area
eatebliahed hereunder.
If the fee owner of the unJtized aubatancea
does not accept the working inlere•I rights
aubject to thla egreement and the unit
op,,rating agreement or leue ouch lands a•
above provided within O month• after
aw-rendered or forfeited, working Interest
rigbts-become ve•!eci in the fee.owner; the
benefits and obligation, of operation•
accru[ng to 1uch land• under thi1 agreement
and the unit operating agreement aball be
aha.red by the remainins owners of unitized
working interests in accordance with their
reapective working interest ownerships. and
ouch owners or working interests sha!I
compensate the fee owner oC unitized
substances in such land• by paying ~urns to
the reotab. minimwn royalties. and royalties
applicable lo 1uch lands under the lease in
effect when the land~ were unitized..
An appropriate accounting and oettlement
ehal! be made for aU benefiu accruing to or
payment:, and expenditures made or in=d
on behalf of such ,surrendered or forfeikd
working intereal aubsequent to the date of
aw-render or forfeiture, and payment of any
moneys found to be owing by :sucb an
accounting shall be made a, between the
parties within 30 day1.
The exercise of any right ve,ted in a
working interest owner to reassign such
working inlereat to the party from whom
obtained shall be subject lo the same
condition• as set forth in this section in
regard to the exercise or a right to aurrender.
'31. Taxes. The working interest ownera
shaU render end pay for their account and the
account of the royalty owners all valid taxes
on or mea•ured by the unitized aubstanc"3 in
and under or that may be produced.. gathered
and sold from the land covered by this .
agreemeot afier'its effective date, or upon the
proceeds derived therefrom, The work.ins
ioteoest owners on each tract ahall and may
charge the prop<:r proportion of ,aid t,uea to
royalty owner-a having !nterc,ta in 1aid tract.
and may currently relaio and deduct
au!licienl amount of the unitized subatance•
or derivative producu, ,or net proceed.!
thereof from the aliocated ,bare of each
royalty owner lo 1ecure reimbursement for
the taxes ao pa[d. No auch taxes ahall be
charged to the Uni led States or the Sta le of
---or to any leuor who has a contract
with his lessee which requltts the lesaee to
pay such taxes..
• 32. No pertn<ership. It I• expre .. ly agreed
that the relation of the parties hereto l.s that
or independent contractors and nothing
contained in this agreemen!. expreued or
Implied. nor any operation• conducted
hereunder. shall create or be deemed lo have
crcs ted a partnerhip or a saocia tioo be tween
the parties hereto or any of them.
1n witness whereof, the partie• hereto have
c.auaed thia agreement to be executed end
have act opposite their re1pective· names the
date of execution.
Unit Opon,lor; Wond.oi: lalett:51 Owoer,
-Cenero,/ Guideline~
1. Executed agreement to be legally
complete.
Z. Ag.reement aubmltted for approval must
contain Exhibit A and Bin accordance with
model• ,hown ln 11 228.13 and 225.14.
3. Conscota 1bould be Identified (in pencil)
by tract numbers aa listed in Exhibit B and
auemb!ed in that order a, far as practical.
Unit agreement. 1ubmitted (or approval shall
include a list of the overriding royalty interest
owners who have executed ratifications or
the unit agreemenL Subsequent joinders by
overriding royalty lnterest owners shall be
submitted in the ,ame manner, except each
must include or~ accompanied by a
,tatemeot that the corresponding working
interest owner bas cons<ented in writing.
Original ratifications of overriding royalty
owners will be kept on fiJe by the Unit
Operator or his designated agent.
.(. All les•e• held by option should be noted
on Exhibit B with an explanation es to the
type of option. l.e_ whether for operating
rights only. for full leasehold record title, or
for certain interest. to be earned by
performance. In aU instances. optionee
com.milting aucb interests i3 expected lo
exercise option promptly.
5. All owneni of mineral interests must be
invited to join the unit agnemenL and
11talemenl lo that effect must accompany
executed agn,ement. together with summary
of results of such invitations. A wrillen
reason for aU interest owners who have nol
Joined shall be furnished by the unit opera tor.
6. In the event fish and wildlife lands are
included. add the following section:
-wildlife Stipulation. Nothing in this unit
agreement shall modify the special federal
lease atipulatioos applicable to lands under
the jurisdiction of the United States Fish and
Wildlife Service."
7. ln the event National Forest System
land, are included within the unit area. add
the following aeclion:
"forest Land Stipulation. Notwithstanding
any other terms and conditions contained in
thi• agreement. all o( the ,tipula lions and
conditions of the individual leases between
the United State, and its leueea or their
aucceuors or u,igna embracing lands within
the unit area included for the protection of
lands or fucntions under t.he jurisdiction of
the Secret.ary of Agriculture shall remain in
ful1 force and effect the aame aa though this
agreement had not been entered into. and no
modific.a tion thereof ls authoriz.ed except
with the prior consent in writing of the
Regional Forester. United States Forest
Service.----
8. [n the event National Forest Srstem
lands within the Jack.son Hole Area of
Wyoming are included within the unit area.
additional "special" atipulatioos may be
required lo be included in the unit agreemenl
by the U.S. Foreot &rvice. including the
. Jackson Hole Special Stipulation.
Q. 1n the event reclamation lands are
Included. add the following aa a new section:
(
(
) )
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 56 of 68
25262 Federal Register / Vol. 47, No. 112 / Thursday. June 10. 1982 '/ Proposed Rules
"Rec!amalion Lands. Nothing in thia
agreement ahall modify the ,pedal. Fcdenl
lease atipulations applicable lo la1Jda u.oder­
the jurisdiction of the Bureau of
Reclamation.··
10. In !he even! a powersite is embraced In
the proposed area. the following section
1hollld be added:
. "Powersile. Nothing in this agreement •hall
mo<lify the special. Federal le11se' 1tipllhtion•
applicable to lands under the jurisdiction of
the Federal Energy Regulatory Commission.-
11. ln the event special surface •tlpulation,
have been attached lo anv of the Federal oil
and gas leases to be inclu"ded. add the
following section:
"Special surface stipulations. Nothing in
this agreement shall modify the special
Federal lease stipulations attached lo the
individual Federal oil and gas leases.-
12. ln lhe event Srare lands are included in
the proposed area. add the appropriale Stale
L,,nd• Section ea a new aectiorL
(See JO CFR ZUl.7(a)I
IJ. In the event restricted Indian Janda are
lnvolved, coruu!t the OMM regarding
appropr!ate requirement.a under JO CfR
ZZ6.7(b}.
C,,rtillca tioo--Detenninalion
Punuant lo the authority vested in the
Secretary of the Interior, under the act
approved February ZS. 1920. 41 Slal 4J7, as
amended, JO U.S.C. aec. 181, el seq~ and
delegated lo the appropriate Deputy Minerals
Manager cf the Mineral~ Management
Servic<e under the authority of 30 CFR Z2fi. I
do hereby:
A Approve the allached agreement for the
development and operation of the---­
Unil Area. Stale of---.
B. Certify and delennine that the u~it plan
of devd,:,pment and operation contemplated
In the attached agreement.is ncceuery end
advisable in the public interest for the
purpo,e of more properly conserving the
natural resources.
C. Certify and determine that the drilling.
producing. rent al minimum royalty. and
royalty requirements of ell federal lease
commilled to said agreement arc hercbv
eslabli.1hed. altered. changed. or rc\'ok;d to
confonn with the terms and conditions of this
agreement
Dated-----.
Deputy Mineral• Manager-Oil and Gas.·
Mi.oerala M.aoagemeot Service.
·1n Eastern and Alaska Regions, Deputy
Mineral.s Manager-Onshore Minerals.
Con~actNumber·-----
•
~-• ( ·,
'
f
j
~
r , ·; • Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 57 of 68
Federal Register / VoL 47, N~. 112. / Thursday, Iune 10. 1982 / Proposed Rules 25263
§ 226.13 Model ol uhlblt A.
DEER_
6-30-88
16
78-620
FROST
6-30-85
21 0
W-41345
FROST
6-30-85
28 G)
W-41345
DEER et al.
6-30-85
33 ©
W -41679
Companv N~me
Exhibit A
Swan Unit Area
~mpb.ell County. Wyoming
R. 59 W.
FROST FROST
6-30-Bl 6-30-81
15 0 14 CD
W · 8470
FROST
6-30-81
23 0
W -8470
DEER et al. DEER
12-31-85
27 0 26 ®
W -52780
DEER
7-30-81
35 0
W -9123
:
. CD Means trac-t numb.er as lined on Exhibit B
Public Land
Su~ und
HOLDER . I
I 2-28-86 r--
2~©.---I
I ,---
I T. W -53970• 54
OLDE~ N. 2-28-86 6 ---
I
25 ' DEER I
2-31-8=@.---
W • 52780 I
DEER
6-30-88 ,. __
1---
78 -620
D
§
~-Patented Land Sc:a.le • Generally 2""' 1 mile.
Include a,cr.ea!:,'e for ~I irregular ,cctiom and lo:J.
(
(
) )
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 58 of 68
25264 Federal Register / Vol. 47, No. 112 / Thursday, June 10. 1982 / Proposed Rules
§ 22'6. 14 Mod.I of Exhibit B
EXHIEll'T 8.-SWAN UNIT AREA, CAMPBELL Cou,,n'y, WYO.
T,.a
No, Humt,.,c( s-,IJNa,w,d--&.~~-
""'-do .. "'...... ~~.
~ lrt tt-. ., •• o4 TS..~ 1-----1---------+---------1----------i----------t RS&"fV,&nP.loA.
Foo,,,.i t.,.nd S.c. H: M . _____ _ , •• 20.00 W-&,17'0. J..roe lO. tNl_ U.S.: M T. J. Coo>. 100 T, J. Cool. 2 ho•I o;, Co.. 100,
s.c. 15; ""'---·-·--i,----l---------1----------1---------1---------1
S.C. D'. ""·----·--l,----~----------1----------1---~-----1---------1
2 S..:.. 35: ""··---·--­
l S.C. 21: ""-·-------1 6-40,00
1,280.00
W-01Zl, Jvr ::JO. 19al _ u.sa""
W-<1l-4S..~J0.1l>e.5.., U.Sott.JI
S..:. 2'6: ""'---------1----1---------1----------, • Soc. 27: ... .._ ____ _ 1.Z,,0.00 W-tt&7SI.;....... 30., tMS_ u.sa,..
S.C. D: "''·----···---1------1---------,---------1 5 So<:. 26: .... ____ .:,, __ ,_ D<Sl.50 W-S27&CJ U.SaA.O
S.C. ZS: lot$ l.•. SW".WI zse:, ....
5 Sec. 24; Lots 1.2:3.•.WiZ,W/ "6S.oo W-5.J1l70. Foa. 2'9, •--U.So M
Z€12 {AJI).
S.C. 25: Lots 1,2,NW/4,W/ i-----1----------<·-·------­ZNE/<.
Q,1,1,0do,,n100_ 0. 1,1, Odo,,, I 0.-OI Co, 100.
L<&aP...50. M-.cP.,.... ! F""" Oil Co. 100, s.,,. 5--" so Som 5'N,o 1
;.J Pr.-. 100 IJPY_.,2 0-OIi Co. so. °""'°'Co. so. 0... 00 Ca. 100_ J. G, Goc,d;n , 0... o;, Co.. 100.
T.H.-100 T.H.Holoe< 100.
5 J:~.,f tracts. 7.0·H~ eon or M ,71S ~ r;;1' vir1 ..,.__ ·
I -~ I -------------· 7 S..:, Hi: AL._,_,,,, _____ ,_.,.... ··-·"° 11$-674:,Q, N,o. Jl. 19<15_ s .. 10, .... __________ 0-0,, Co. 100 .. ____ , T. T, r.,.., 2-----~ 0.... o;, Co. 100.
. s.c. :l<i: Lo<s 1.2.J.,.w,z.w, ···---·-. • --·----·------.. --------.. ----·1--------ze:,z I"">· p.:~:e:: 1.iao J .a .. a, I yo pa :,1.,... u... ---·-···"·---.. ------.. ____ ,,_,_,,,, ___ _
a s...::. tl: Lot> 1.2.l.,.w1z.w1 &<t.ZO I"""' 1.. ,or. ____ J .C. Srr,;,n: 100 .. ---·-· Doe Oil Co, 100 .. ___ .. ,----------1 o.,., o;, Co. 100_
2Ei2 IA•J
9 S..:. 22: A• .... __ ...... ., ... _, 5-10 00 ~ 1S. 197'6___ T. J. Cool<: 100 ... ----W.W. Smi1,, 100 ___ S.m Spoo., 1 ____ W.W. s,,ve, 100.
10 ~. :l-4: N , ... -... ·-·--·-&,<-0.00 .M'>* I, 1075 A. A. AC>en· 7S ___ ,, Ce.-Cl Co. 1<>0 ___ ,+--------i 0-0,, Co. 100.
------··------·----LP. Cotr. ZS ---------,
::, paieinted tr..c:rs 1.9'i1..20 a.c::r.s °' 1a.1s pct or i.nt uaa...
I Tout 11 .-,cu T.2<9.10 ooi ;,, ..-L.rll .,.._
§ 2.26.15 Mode! collective bond.
Coliectiv1t Corporate Surety Bocd
Know all men by these pre,e11ts. That we.
-----(Name of unit operator}, signing
as Principal, for and on behalf of the record
owner, of unitized &ubsla11ces now or
hereafter covered by lhe unit agreement for
the (Name of unit). approved
---(Date) (Name and addresa
of Surety}. as Surety are jointly and severally
held and firmly bound unto the United States
of America in the sum pf~ (Amount of
bond) Dollars. lawful morrey of lhe Uniied
Stales, for the use and beC1efit of and to be
paid lo the United States and any entryman
or patentee.of any portion of the unitized
land here-lo-fore entered or patented with the
reservation of the oil or gas deposit. to,Lhe
United States. for which payment well and
truly to be made, we bind ounelves, and
each of us, and each of our heirs. executor.,,
administrators. aucces•on. and assigns by
these pre•enh.
The conclition of the foregoing obligation ia
•uch, that whereaa the Secretary of lhe
Interior on --·-(Dale) approyed under the
provi,ions of the Act of February 25, 192:0. 41
Stal. 437. 30 U.S.C. secs. 161, et seq., as
amended by the Act of August B. 194&, 60
Stat. 950. a unit agreeme11l for the
development and operation of the----­
(.Name of unit and Stale): sod
Whereas aaid Principal end record ownen,
of unitized substance,, pur,uanl lo asid unit
agreemenl, have eniered into cert•in
covenants and agreement, ao set forth
therein, unrler which operations are to be
conducted; and
Whereas said Principal as Unit Operator
has assumed the duties and obligations of the
respective owners of uniliz:ed substances as
defined in aaid unit agreement: and
Whereas said Principal and Surety agree lo
remain bound in the full amount of the bond
for failun, to comply with the terms of the
unit agreement and the payment of rentals.
minimum royalties, and royalties due under
the Federal li:aae, committed to aaid unit
agreement; and
Whereas the Su.rely hereby waives any
right of notice of and agrees that this bond
may remain in force and effect
notwithstanding:
(a) Any additions to or change in the
ownership of lhe unitized substances herein
described;
·. (b) Any au.pension of the drilling or
producing requirements or waiver.
1u.spension. or reduction of rental or
· minimum royalty payment• or reduction of
royallie1 pW"Sua11t to applic:aple laws or
regulations thereunder. and
Whereas said Principal and Surety agree lo
the payment of compensatory royally under
the regulation• of the )nlerior Department i,n
lieu of drilling necessary off.set wells in the
event of drainage: and
Whereas nothing herein conta·ined shall
preclude the United Stales [from requiring en
additional bond at any time when deemed
necessary:
No,.,, therefore. if the ,aid Principe.I ,hell
faithfully comply with all of the pro'-'isiona of
the above-indenlified unit agreement and
"ilh the lerma of the leases committed
thereto. then the above obligation io lo be of
no effect otherwise to remain in full force
and virtue.
Signed, sealed. and delivered this --day
of---: 19--. in the pre,ence of:
Witneue,:
(Principal)
(Surely)
§ 22'6. 16 Model for designation of
~ccea.sor unit operator by woti<1n·g
lntere:st owners.
Designation of &ucce,sor Unit Operator
----Unit Area. Cowily of--. Stale
of--. No.--.
This indentw-e. deted es of the -day of
---, 19-. by and between --,
bereiriafter designated as -First Parry:· and
the owne~ of 1,U1itized working interests,
hereinafter designated as "'Second Parties.-
Wjtneoseth: Whereas under the pro.visions .
of the Act of February 25. 1920, 41 Stat. 4l7,
30 U.S.C. secs. 181, et &eq .• as amended by
the Act of August B. 1946. 60 Stal. 950. the
Secretary of the Interior. on Lhe -dsy of
---. 19-. approve a unit agreement for the
-----Unit Area. wherein ---is
designated es Unit Operator; end
Whereas said ---has resigned as ouch
Operator.' and the des ignation of a successor
• Where the de•ignB tlon or a ,ucccsttor Uni1
OperliltOt i• r~q1.1irC"d for eny rea,on other then
resi.grution. •uch rea,on ,halt be 1ubstiluled for the
onie •l•led.
• (
•
. ;. "
_ Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 59 of 68
Re: Expanding Participating Areas Inside Federal Units, The Henry Unit
Example
APPROVED this day of , 1985. ----------
BALL ASSOCIATES, LTD.
By Dat_e ____________ _
UTAH DIVISION OF PUBLIC UTILITIES
By Dat_e ___________ _
PRICE WATERHOUSE
By Dat_e ___________ _
STAFF OF WYOMING PUBLIC SERVICE
COMMISSION
By Dat_e ___________ _
(
(
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 60 of 68
WEXPRO COMPANY
79 5 DUTH STATE STREET· P. 0. BOX 11070 • SALT LAKE CITY, UTAH 641-47 • 601 530-2700
R.M. l<IRSCH
..,.r;s•Ol!:NT
Wexpro Settlement Agreement Monitors
Gentlemen:
December 14, 1983
RE: Delivery Point at the Butcher Knife and Church Buttes Fields
Sweetwater County, Wyoming
Wexpro Company respectfully requests concurrence from the Hydrocarbon
Monitor and Accounting Monitor to Wexpro I s interpretation of the delivery
points in the captioned fields_
FACTS
The Butcher Knife Springs field consists of wells 1, 2, 4,-s and 6 and a
Butcher Knife sweetening plant. Wells 1, 2, 4 and .5-"produce sour gas thus
necessitating sweetening and well No. 6 produces sweet natural gas and oil.
Attached Exhibits 1 and 2 are maps showing the wel 1 faci1 ities and the
related production equipment, plants and laterals_
The Church Buttes field -consists of wells 1, 2, 3, 4, 7, 8, 9, 10, 11,
13, 16, 19, 20, 21, 22, 25, 26, 27, 28, 29 and 30 at the time of the execu­
tion of the Wexpro Settlement Agreement and also the Church Buttes absorption
plant.
Gathering laterals are installed in both fields and a collection lateral
No. 703 . runs from the Butcher Knife sweetening pl ant to the Church Buttes
absorption plant.
PROBLEM
Because of the joint ownership with others of many of the facilities and
the overlapping necessity ·of tw.o . sweetening and absorption· plants, Wexpro
desires ·confihnation from. the Mbnitors of the appropr:iate ·delivery point in
the Butcher Knife and Church Buttes fields. Wexpro also seeks confinnation
of the appropriateness of Wexpro's under.taking of operating responsibilities
and of investment in post-July 1981 facilities· upstream from t!ie delivery
point. ·
•
•
•
• (
Questar Gas Company
Docket No. 30010-162-GA-1 7
QGC Exhibit 3.8
Page 61 of 68
WEXPRO COMPANY
7 9 SOUTH STATE S·TRECT · P.O. BOX 11070 • SALT LAKE CITY, UTAH 64147 • 801 530-2700 , )
/
.RECEIVED December 14~ 1983
D.EC O 91987 , .: ·,, ,, .
: DiVIS!ON ·oF ./,.· ~ '. .. ~·,:,i .~~ ·\c: t ·,~ ·r;'., ·; "" : : ::,~-. -v . ··
} PUBLIC UTJLITJES '. ' .. -' . -,'.· .. ; ' .... ' ... ,; ,.
Wexpro Settlement Agreement Monitors .... :.., , . ; ·. rq. ,... . :
. ,:.~ :t::·:~:~.: .. ;1~ ... / f ;;;::·~-i .. ~i:t:. .:/1fc:f: )·;~--:·1!t\; .·~t~·=·:'"·~·:·.r1 .:.f~-:-·~·t ii'.7:·· ~-~:-:-:r)1~-ft:~::1I.>
Gentlemen: r: :1:-:=·c<~· .. :·:·-: ~?r: -:·7~'=::~r~.,. ..... · .. ~::,.=:-:<;:f,,n·f'lj ... r~·t;:::.:.:~-~-~-L;J,.~ f·~:!·~r.~:-~~f.-:t'{t;..,( __ ... /~-·r:.~--~--· -: -.?·
:· :..._ ,', • ,· ·• : •.: ;_:" .. : • : : "!" r± •• ;!'" ~ • • ..... ;' :~ ••
RE: Delivery Point at the Butcher Knife and Church Buttes Fields
Sweetwater County, Wyoming
.
;. . Wexpro Company respectfully requests concurrence from
1.Monitor and Accounting Monitor to Wexpro's interpretation
points in the capt~oned fields. ·
FACTS
the Hydrocarbon
of the delivery . ·. -·
.: '~f; . -· t~;:.:~ . -~· .-~ .. ,'t.; .... : :.· .. :-···-:,:.:~ ·::.
The Butcher Knife Springs field consists of wells 1~ 2;·4,·5 and 6 and a
Butcher .Knife sweetening p1ant. Wells 1, 2, 4 and 5)>roduce sour gas thus
necessitating sweetening and well No. 6 produces sweet natural gas and oil.
Attached Exhibits 1 and 2 are maps showing the well facilities and the
related production equipment, plants and laterals.
The Church Buttes field -consists of wells l, 2, 3, 4, 7, 8, 9, 10, 11,
13, 16, 19, 20, 21, 22, 25, 26, 27, 28, 29 and 30 at the time of the execu­
tion of the \,/expro Settlement Agreement and also the Church Buttes absorption
pl ant.
Gathering laterals are installed in both fields and a collection lateral
No. 703 runs from the Butcher Knife sweetening plant to the Church Buttes
absorption plant .
PROBLEM
Because of the joint ownership with others of many of the facilities and
the overlapping necessity of two-sweetening and absorption plants, Wexpro _.
desires ·confihnation from. the Monitors of the appropriate delivery poin t in
the Butcher Knife and Church Buttes fields. Wexpro also seeks confirmation
of the appropriateness of We xpro's undertaking of operating responsibilities
and of investment in post-July 1981 facilities · upstream from tne delivery
point.
/ (
(
Questar Gas Company . ,
Docl<et No. 30010-162-GA-17
QGC Exhibit 3.8
Page 62 of 68
Wexpro Settlement Agreement Monitors
December 14, 1983
Page 2
WEXPRO AGREEMENT LANGUAGE
With respect to the production of hydrocarbons from certain natural gas
wells and reservoirs designated "prior Company wells," ]j and "productive gas
reservoirs," 2/ the Wexpro Agreement provides:
Wexpro will own all operating rights and will be the operator of
all facilities related to [Account 101/105] leaseholds. Wexpro
will fund and drill or cause to be funded and drilled all necessary
and appropriate development wells on these properties and provide
the necessary facilities which in its opinion will be reasonably
and prudently necessary to efficiently produce the. hydrocarbons in
the productive .gas reservoirs.
Wexpro Agreement Section III-2{b).
The Agreement further provides:
Although Wexpro will have no ownership in the natural gas, natural
gas liquids or oil produced from productive gas reservoirs, as
operator it will bill the Company for the services it perfolllls and
for the use of the facilities it has installed to produce the
Company's natural gas, natural gas liquids and oil.
Wexpro Agreement Section III-5{a).
The operator service fee provi~ions of the Wexpro Agreement set forth in
Exhibit E provide that Wexpro will be reimbursed for its operating expenses
including:
Reasonable and necessary operating expenses incurred by We xpro and
allocated to the production, gathering, treatment and disposition
of hydrocarbons .
Wexpro Agreement, Exhibit E, Para. 1.
1/"Prior Company we1l 1' is tje_fined as 11A well completed on or before July
31, 1981, and capitalized in the Company's utility accounts on that date .
All prior Company we lls are identified and listed on Schedule 3(b) .. " Wexpro
Agreement, Section 1-22.
Y"Productive gas reservoir" is defined as "A por~ion of a _pool under­
lying an Account 101/105 leasehold or a tra11sferred leasehold into which a
prior Company well was completed on or before July .31, 1981. All productive
gas reservoi rs are identified on Schedule 3(a)." Wexpro Ag·reement, Section I-25. .
•
•
•
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 63 of 68
Wexpro Settlement Agreement Monitors
December 14, 1983
Page 3
Among the wells designated prior Company wells under the terms of the
Wexpro Agreement were Butcher Knife wells numbered 1, 2, 4, 5 and 6 and
Church Buttes wells numbered 1, 2, 3, 4, 7, 8, 9, 10, 11, 13, 16, 19, 20, 21,
22, 25, 26, 27, 28, 29 and 30.
Wexpro Agreement, Schedule 3(b).
The Wexpro Agreement defines "well" as follows:
The well bore and all underground and surface materials and facil­
ities installed in connection with drilling into the earth's
surface for the production __ or injection of hydrocarbons and sub­
stances. The tenn "well" includes all the appurtenant facilities.
Wexpro Agreement, Section 1-14.
The appurtenant facilities referred to above include:
Those facilities, downstream from the well head, ·to and including
the delivery point, that are necessary to make the products accept­
able for delivery including, but not limited to, compression,
transportation, gathering, separation , treating and certain pro­
cessing facilities.
Wexpro Agreement, Section I-15.
The "delivery _ point" is defined as:
That point under standard industry practice, at which a purchaser
of oil or natural gas liquids or natural gas takes delivery from
the producer. This will generally be (i) at the inlet side of the
dehydration unit for gas deliveries and {ii) at the outlet side of
tankage or other storage fac i liti es fo r oil or natural gas liquid
deliveries.
Wexpro Agreement, Section I-16.
Concerning post-July 1981 investments in · productive gas reservoirs or
commercial development gas wells, Section II.I-4 of the Agreement provides:
.Any investment made in ih~ prod~ctive gas reseryotrs aft~r J~ly 31,
1981, .and in corrmercial devel_opment gas wells {including appurte­
nant facilities}, will · not be capitalized in.to the Company's
uti 1 ity accounts but wi 11 be capitalized · by Wexpro and Wexpro wi 11
be compensated for these investments by the Company as provided in
Section III-5. Necessary facilities installed downstream from the
delivery paint will be capitalized in the Company's . utility
account.
('
(
I
Questar Gas Company :,.
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 64 of 68
. Wexpro Settlement Agreement Monitors
December 14, 1983
Page 4
The Wexpro Agreement also states:
The delivery of natural gas and natural gas liquids produced under
the _provisions of this Article III wil1 be at the delivery point
(defined in Section I-16), and all costs of receiving, processing
and gathering the natural gas and natural gas liquids and all the
necessary investment at and downstream from such a point wi 11 be
the responsibility of the Company.
Wexpro Agreement, Section III-7. }/
BUTCHER KNIFE AND CHURCH BUTTES
With respect to the:Butcher Knife sweetening plant, it has been deter­
mined by Wexpro that additional investments are necessary to the gas
treatment facilities. The plant provides treatment of sour gas produced from
five wells including four of the Company's Butcher Knife wells. Through five
separate gathering pipe lines, sour oil and gas production is transported to
the Butcher Knife plant where the liquids and gas are separated and then
metered at five separate inlet meters. These inlet meters are points where
the third part,Y unit participants deliver possession of gas production to
Mountain Fuel {or its designate, Mountain Fuel Resources, Inc., "ResourcesJ')
for processing. The inlet meters are used to allocate production proceeds at
the tail gate of the plant.
Under a typical gas purchase agreement involving sour gas at the Butcher
Knife plant, the following definition for the "delivery point" of purchased
gas is found:
The delivery point of gas deliverable hereunder shall be at a
central delivery point located on the discharge side of buyer's
processing plant and/or at such other point{s) as may be mutually
designated in writing by the parties hereto. The volumes of gas
purchased hereunder will be sellers pro-rata share of the total
3/With respect to na.tural gas produced from prior -Wexpro wells and
productive oil reservoirs, the Wexpro Agreement similarly provides:
The delivery of natural gas produced under the provisions of this
Article 11 wi11 be at the .. delivery point (defined in Section 1-16),
and all costs of rec;eiving the natural ·gas and all the necessary
investment at and downstream from such a point will be t _he respon­
sibility of the Company.
We~pro Agreement, Section II-10.
•
•
•
• (_
••
Questar Gas Company .·_,,
Docl<et No. 30010-162-GA-17
QGC Exhibit 3.8
Page 65 of 68
Wexpro Settlement Agreement Monitors
December 14, 1983
Page 5
volume of gas delivered to the inlet of Buyer's processing plant.
Title to and ownership of such gas shall pass to an absolutely vest
in Buyer at the prescribed point(s) of delivery.~
Aminoil USA, Inc., Morgan-Gas
Purchase Agreement dated March 4,
1980, Section VII-1.
After Resources takes title to the purchased gas and possession of
Mountain Fuel gas at the discharge side of the Butcher Knife plant, the gas
is commingled with gas from Butcher Knife well _No. 6 and from the Henry Unit
and the Hank's Hollow area and transported through lateral No. 703 to Church
Buttes. -·
Butcher Knife Well No. 6 and these two other areas have their own meters
and "delivery points" at the inlet side of the respective dehydration -units.
Gas production from lateral No. 703 is commingled with Church Buttes gas
production and then processed through the Church Buttes absorption plant.
Here additional processing removes some of the heavier hydrocarbons from the
Butcher Knife gas. · The "delivery point" for Church Buttes purchased gas has
been designated at the discharge side of the Church Buttes plant under the
Churc_h Buttes gas purchase agreements. Gas is then transported to Resources'
main transmission lines for further transportation and ultimate distribution.
4/The language of one of the typical gas and condensate processing
contracts states:
The point of delivery of gas and condensate per measurement,
sampling and for allocation of stabilized plant condensate purposes
shall be at the measurement stations installed by Processor on the
overhead gas discharge and bottom condensate, respectively, of each
of the producers' primary separators.
Redelivery of residue gas by Processor to Producer shall be at the
residue gas measurement station installed by Processor at the
discharge side of the plant.
Aminoil USA, Inc., Gas and Condensate
Processing Contract·, dated March 4,
1980~ Section 111-3, 4; Yat~s Petro­
Jeum Corporation~ Gas and Condensate
Processing Contract, dated August 21,
1979, Section III-3, 4.
\tJhi le this language accurately describes the delivery and pro­
cessing responsibil i.ties in a producer/processor relationship, it does not
directly deal with "that point .•.• at which a purchaser of oil or natural
gas liquids or natural gas takes de~ivery from the ·produc_er.11
Wexpro Settlement Agreement Monitors
December 14, 1983
Page 6
Questar Gas Company
Docl<et No. 30010-162-GA-17
QGC Exhibit 3.8
Page 66 of 68
A geographic map of the Church Buttes and Butcher Knife areas has been
prepared and amplified with additional infonnation concerning the physical
facilities which are located in the area showing the wells, separation,
dehydration, sweetening and absorption facilities. The flow of gas, whether
it be Company-owned production or gas purchased from other sources is also
shown. With respect to purchased gas, the delivery points specified in each
of_ the pertinent gas purchase agreements for such gas purchases are shown.
Delivery Point at the Outlet of the Butcher Knife Plant.
The delivery point for Company-owned gas production coincides with the
delivery point for purchased gas pr_oduction . 5/ The line drawn between
Wexpro responsibilities and Mountain Fuel responsibilities is consistent
regardless of the source -of gas. The delivery point also coincides with the
gas purchase agreements for gas purchases from the Butcher Knife field.
Thus, the delivery point determination in the Butcher Knife situation can be
objectively made by looking to the delivery point in co-producer gas purchase
agreements.
CONCLUSION
The Wexpro Agreement assigns Wexpro the operating and investment respon­
sibilities for facilities needed in the production of Company-owned hydro­
carbons from prior Company wells for any appurtenant facilities that lie
upstream from the 11del ivery point." The Agreement defines that "delivery
point" as being the point under standard industry practice at which a pur­
chaser takes delivery of gas production f:rom the producer. The delivery
points which already exist with respect to gas being purchased from co­
producers are the best evidence of where the delivery points defined in the
Wexpro Agreement should be.
As applied to the Butcher Knife/Church Buttes area, this determination
of the "delivery point" would mean that the delivery point for Company-owned
gas processed through the Butcher Knife plant would be at the outlet of that
~The language of a typical gas purchase agreement in the Butcher Knife
area involving sweet gas, not requiring processing or treatment through the
Butcher Kni f e plant, states:
The delivery. point for gas de_liverable hereunder shall be located
on the inlet side of the dehydration unit· installed by-Buyer at the
well head ... ·. ·
Aminoi l, USA, Inc., Dakota-Gas
Purchase Agreement, dated August 29,
·1979, Section VII-1.·
•
•
•
.;.
Wexpro Settlement Agreement Monitors
December 14, 1983
Page 7
Questar Gas Company
Docket No. 30010-162-GA-17
QGC Exhibit 3.8
Page 67 of 68
p1ant. Gas produced in the Church Buttes area would have a delivery point at
the outlet of the Church Buttes plant. The resulting assignment of operating
responsibilities between Wexpro and Mountain Fuel pursuant to the Wexpro
Agreement would mean that Wexpro would assume initial responsibility for the
operation of the Butcher Knife and Church Buttes plants. The responsibility
for new investments in sweeten1ng facilities at the Butcher Knife plant also
falls to Wexpro.
The language used in such gas purchase agreements fits the defini­
tion of "delivery point" as used in the Wexpro Agreement and constitutes one
of the examples used in defining delivery point. ·
-Sincerely,
1!11~
ckb
APPROVED this day of , 1985. ---------
BALL _ASSOCIATES, LTD.
UTAH DIVISION OF PUBLIC UTILITY
PRICE WATERHOUSE
STAFF OF WYOMING PUBLIC SERVICE
COMMISSTION
By Dat-e~~-~~--~-~--
(
·.~· --'.
. •' '+
·:-_::.
( : ,:
. .:, ,,.
_.-!'.-,.
Q1,1estar Gas Company
Docket J\Jo. 30010-162-GA-17
QGC Exhibit 3.8
Page 68 of 68 ••
. COMPANY OWNED GAS
PRODUCTION AND PURCHASED
.GAS PRODUCTION WITH
PURCHASED -GAS DE.LIVERY
POI.NTS •
. ·.:· ... . ...
• • • 1_
•
•