Abandonment Program for Paramount Fort Liard F 36

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5 Abandonment Program for Paramount Fort Liard F 36 Well Name: Paramount et al Liard F 36 Area: N, W Location: Latitude: Longitude: UWI: 300F WID: 1841 Spud Date: March 3, 1998 Rig Release Date: Well Status: March 28, 1998 (Suspended drilling for break up) Dually completed as a Mattson/Fantasque gas producer. Currently shut in Last Workover March 2006 KB Elevation: Ground Elevation: PBTD: TD: m m 2092 mkb 2110 mkb Casing & Cementing Surface Hole: Surface Casing: Intermediate Hole: Intermediate Casing: Main Hole: Liner: 311 mm to 502 mkb mm, kg/m, H 40, ST&C set at 502 mkb. Cemented with 30 t class 'G' cement plus 2% CaCl2. 3m3 cement returns to surface. 222 mm to 1494 mkb mm, 34.2 kg/m, J 55, LT&C set at 1494 mkb. Cemented with 20t 1:1:2 and 19 t Expandomix+ 0.15% CFL % LTR. 2 m3 cement returns to surface 156mm to 2110 mkb 114.3mm, 17.26kg/m,L 80, LT&C, set at mKB. Cemented with 15.8t 0:1:0 G + 0.4% D 24 salt gel Liner m

6 Operational Program: Note: Preparation, road construction and rig up will be handled by a separate document incorporating the requirements of the Operations Authorization and supporting documents (Safety Plan, Environmental Protection Plan, and Emergency Response Plan which are already on file with OROGO). These documents well be onsite for reference by the site supervisor, along with site specific extracts, emergency contact numbers etc. This document focuses on the describing the operations planned for the well. Overview: The Fort Liard F 36 well was drilled in It was initially completed as a Mattson gas producer (after an unsuccessful test of the Golata). The Fantasque was subsequently perforated and the well recompleted as a dual producer (tubing and annulus) both zones were sweet gas. Gas production up the annulus from the Fantasque was insufficient to overcome associated water production and in 2005 the well was recompleted again using a dual tubing configuration. Gas production has declined and the well was shut in in The field is shut in with some of the facilities decommissioned. The purpose of this program is to permanently abandon the depleted Mattson and Fantasque zones, and the cut and cap the well. A wireline plug was dropped on top of the 1383mKB in 2005 and it appears to have fallen beside the slick joint. Attempts to retrieve it or to connect to the packer were not successful at that time. Thus it is not possible to latch onto the connector and retrieve the packer. Similarly, the presence of the loose plug on top of the packer makes it impractical to mill around the outside of the packer (a difficult operation with a permanent packer in any case). For this reason, neither the liner top at 1387mKB nor the lower perforations are accessible to be isolated with bridge plugs and cement. Paramount therefore proposes the abandon the lower zone (Mattson top perforation 1582) by removing the current tubing strings, setting a permanent bridge plug immediately above the existing packer at 1383 and capping this with cement. While this is significantly above the existing perforations at 1582m, previous logs have indicated that there are no productive zones between the current perforations and the Fantasque zone (perforations mKB). Because the subject packer is so close to the Fantasque perforations, Paramount proposes to use one extended cement plug to cap the bridge plug and to cover and isolate the Fantasque. The wellbore will be left filled with inhibited fresh water. An air space will be left at the top of the wellbore to prevent freeze back of the wellbore fluid (water). There is no observed history of permafrost in this well. In addition, the NRCAN permafrost Map indicates Sporadic Discontinuous Permafrost in the area, and none of the boreholes in the area ( km) indicated any permafrost, the air space is considered prudent. The steps of the operation are listed below. Paramount believes that this is an acceptable abandonment procedure for the Fantasque zone, given the current state of the well. As the guidelines for suspension and abandonment of wells in the NWT are currently not finalized, the Alberta Energy Regulator (AER) Directive 20 has been used as a guideline for this operation.

7 Proposed Operations: 1. Check for surface casing vent flow. 2. Kill well with fresh water. Produced water is not readily available and fresh water is sufficient to kill both zones. Additionally, this will avoid the need to circulate the well to fresh water after plugging operations. 3. Rig up service rig and install and test BOPs. Ensure service rig is positioned to allow BOP doors to be opened to change rams, and ram cavities are oriented to allow ram change. The alignment pin (typ. Hex key) on the tubing spool should be at the 12 o clock position and the rig at 6 o clock. The 60mm tubing string should be on the left (9 o clock) and the 50mm string on the right. 4. Pull 52mm tubing from the well and lay down. (Note: 52mm offset rams are required. Offset will be 1.86 or 47mm from center) 5. Pull 60mm tubing from the well with Baker FH 1383m KB. (Note: A ram change to 60mm rams is required. Offset rams will not be used as soon as the tubing hanger is pulled the tubing will be essentially centered in the wellbore.) 6. Set a 178mm permanent bridge plug as close as possible on top of the packer at 1383m. 7. Run in hole with a 178mm retrievable packer and set below the Fantasque perforations at Pressure test the bridge plug to 7000kPa for 10 minutes (ref. AER Directive Option 1). Release and retrieve the packer. 8. Run in hole with 60mm tubing and set just above the bridge plug at approximately 1381mKB. Circulate a balanced 1.2 m3 Class G cement plug (final plug top will be 1324m 20 meters above top of Fantasque perforations). 9. Pullout of plug and backwash tubing. Wait on cement to set. 10. Pressure test plug to 14,000 kpa for 10 minutes. (Ref: AER Directive Option 4) 11. Confirm plug top with tubing (minimum weight is 1800 dan). (Ref. AER Directive Method 1) Plug top must be at least 1325m (9 meters above the top Fantasque perforation). 12. Pull out all tubing. Do not fill the hole. This will leave approximately 50 meters of air filled borehole. 13. Dump 1% water dispersible inhibitor down well (Corinox or equivalent). 14. Cut and remove rathole/mouse hole 1m below ground if present. Backfill hole with 1 m cement plug if required. 15. Excavate around wellbore approximately 1.5 meters below ground level). Slope sides 1:1 or shallower.

8 16. Cut and remove conductor pipe. Support casing bowl with picker or similar. Cut three 60 degree windows in surface casing just below the bowl and then cut production casing. Production casing may drop. Cut surface and production casing at least 1meter below ground level. Stitch weld a 6mm steel plate over the casing stubs (do not seal). 17. Weld pipe signpost to surface casing and install the permanent well sign. 18. Backfill the hole with a 0.3m crown to allow for possible subsidence. 19. Rigdown and remove all equipment and material used in the operations from the lease. Haul any remain fluid to an approved waste disposal location. END R Heenan PEAM~'~~IT-"-T"O'..p....,'". '.",,,'". ~ti"... ~...,~t~i::. I HEENAN ENERGY SERViCES LTD. Signature ~ / ~--z...,., :;; Date "L (/ 1':,/ I (/' v 7:5 PERMIT NUMBER: P 827 NT/NU.AssOciation of Professional Engineers and Geoscientists

9 PARAMOUNT ET AL FT. LIARD F-36 Proposed Abandonment Non-sealing steel plate 1 m below ground Inhibited water +/- 50m 502m 244mm Surface casing Cement Top Fantasque Perforations m 1325 m MIMIMUM (feel with tubing) NEW Cement plug 1380 approx NEW bridge plug On-Off connector 47.6mm profile FSG Plug dropped Hydraulic Set Packer stuck on & blocking on/off con. Packer is not retrievable mm liner top mm Intermediate csg shoe Sliding Sleeve 8 jts 60mm tbg F nipple 3.07m 60mm pup On-Off connector 47.6mm profile Packer mKB Mattson Perforations 1740 Baker WL Packer Numerous Mattson Perforations Above & below the BP mKB Bridge plug mm line shoe

10 Liard F-36 Current Configuration ( ) Downhole Well Profile WELL NAME Paramount et al Fort Liard F-36 DATE March 21,2006 ELEVATIONS (meters) KB ELEV GL ELEV KB TO THF KB TO SCF KB TO GL PBTD mkb CASING DESCRIPTION OD (mm) LANDED DEPTHWEIGHT (kg/m) TOP OF (mkb) Surface Casing mkb Surface Intermediate Casing mkb 34.2 Surface Liner mkb Perf Date Zones Top Shot Bottom Shot Status Gun Data 17 Mattson Open Mattson Open Mattson Open 16 Fantasque Open 15 DOWNHOLE DESCRIPTION FROM BOTTOM UP (Tubing String) ITEM # DESCRIPTION LENGTH TOP OF (mkb) mm On/Off not latched, no seals mm, L-80 tubing pup joint mm x mm 'F' profile mm x 73.0 mm x-over x 73.0 mm 'FH' 10K Hydraulic set packer mm x 60.3 mm x-over mm L-10 On/Off c/w mm profile mm, L-80 tubing pup joint mm x mm 'F' profile mm, L-80 tubing nipple jts 60.3 mm, 6.99 kg/m, L-80 tubing Fantasque Int mm blast joints (78.0 mm x 50.6 mm) mkb Baker 'CD' SSL 60.3 mm x mm 'F' profile jts 60.3 mm, 6.99 kg/m, L-80 tubing mm, L-80 tubing pup joints (1-6', 2-10') jt 60.3mm, 6.99 kg/m, L-80 tubing Dual Hanger Assemby mm re-entry mkb mm x 3.00 m pup x 39.67mm 'R' no/go mkb mm, 4.84 kg/m jt mkb x 39.67mm mkb mm x 3.00 m pup mm, 4.84 kg/m, 134 jts mkb - 5 WEIGHT OF TUBING STRING (dan 8000 TOTAL STRING LENGTH TENSION/COMPRESSION (+/- dan STRETCH/SLACKOFF (+/- m) LANDED STRING WEIGHT (dan) 3000 TUBING BOTTOM (mkb) DOWNHOLE DESCRIPTION FROM BOTTOM UP (Rod String) 2 AMOUNT DESCRIPTION LENGTH TOTAL (m) Model 'L' On/Off 1 - No Seals, not - latched Plug on top of Pkr - - Center Element mkb PUMP DESCRIPTION PUMPJACK DESCRIPTION On/Off Tool c/w LANDED DEPTH (mkb) mm profile WELL HEAD DESCRIPTION Baker 'FLH' Pkr mkb ITEM # DESCRIPTION SERIAL # MWP SIZE mkb Baker 'L' SSL Mattson Int mkb mkb Blast Joints Baker 'WL' Pkr mkb Baker 'R' profile c/w mkb REMARKS Bridge Plug Baker 'FH' packer set at mkb to center element in 5000 dan compression. Mattson Int Pup joints at top mkb Recorders & wire left in 1592m - see daily reports March 2006

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