F I LED JUN 1 7 2014

S6CRETARY, BaNI) OF OIl, GAS & MINING

BEFORE THE BOARD OF OIL, GAS AND MINING DEPARTMENT OF NATURAL RESOURCES

STATE OF UTAH

IN THE MATTER OF THE REQEUST FOR AGENCY ACTION OF SUMMIT OPERA TIING, LLC, FOR AN ORDER ESTABLISHING SECTIONAL (640-ACRE OR SUBSTANTIAL EQUIVALENT) DRILLING AND SPACING UNITS FOR THE PRODUCTION OF GAS AND ASSOCIATED HYDROCARBONS FROM THE HONAKER TRAIL FORMATION UNDERLING SECTIONS 1, 10-15, AND 22-26, TOWNSHIP 36 SOUTH, RANGE 24 EAST, SLM, AND SECTIONS 6, 7, 17-20 AND 30, TOWNSHIP 36 SOUTH, RANGE 25 EAST, SLM, SAN JUAN COUNTY, UTAH

SUPPLEMENTAL OPPOSITION TO REQUEST FOR AGENCY ACTION

Docket No. 2014-019

Cause No. 186-18

COMES NOW, Celeste Grynberg ("Grynberg"), acting by and through her attorneys,

respectfully submits this supplemental opposition to Summit Operating, LLC's ("Summit")

Request for Agency Action ("Request") which proposes 640-acre sectional drilling and spacing

unit. Grynberg fully incorporates its' opposition filed on June 10, 2014 into this supplemental

opposition.

SUPPLEMENT AL ARGUMENT

In addition to Summit's failure to specifically articulate why the proposed spacing meets

each of the objectives of the Act: to prevent waste, provide for maximum recovery, and protect

the correlative rights of all owners; the numbers Summit uses in its calculation appear to be

incorrect based on the data from the Horsehead Point 18-44 Well logs.

The Certi tication of Drainage Area ("Certification") by Jack Grynberg, a professional

engineer, submitted herewith as Exhibit A, provides for a calculation of the drainage area based

on correct numbers gleaned from the Horsehead Point 18-44 Well logs presented with

Petitioner's Exhibits. Based on the crossover shown on the Horsehead Point 18-44 Well neutron

and density logs, the net pay is 16 feet instead of 14.Sft as used by Summit. See Exhibit B

attached hereto. Also based on the Horsehead Point 18-44 Well logs, the crossover amount

indicates 15% porosity and not the 13.3% used by Summit. The logs also indicate a formation

temperature of 120°F. The Certification uses the standard petroleum engineering formula which,

based on Mr. Grynberg's experience and expertise, is the proper formula. As illustrated in the

Certification, by using the correct data in the standard petroleum engineering formula, it shows

the calculated drainage area is 316.5 acres, which does not support SW11mit's requested spacing

of 640 acres.

Further, giving Summit the benefit of the doubt, Mr. Grynberg plugged Summit's

numbers, presented in Exhibit H of Petitioner's Exhibits, into the standard petroleum engineering

formula. Specifically, he used 14.5 feet of net pay and porosity of 13.3%, reSUlting in a

calculated drainage area of254.34 acres.

Both results under the standard petroleum engineering formula show that spacing of 640

acres is not dense enough to provide for maximum recovery of the resource without waste.

Further, the Certification states that the structure map in Summit's Exhibits is wrong because the

Horsehead Point structure is not a perfect dome. This too suggests a smaller spacing requirement

is appropriate. Accordingly, Grynberg submits, based on the attached Certification, that spacing

of 320 acres or less will better protect the correlative rights of all owners by preventing waste

and maximizing recovery.

2

CONCLUSION

Therefore, Grynberg respectfully requests that the Board deny Summit's Request, or in

the alternative, provide for a smaller spacing requirement, such as 320 acres or less, which will

achieve the purpose of the Act.

RESPECTFULLY SUBMITTED this 17th day of June, 2014.

Christopher A. Jones (#9772) caj@princeyeates.com Erin M. Stone (#10107) ems@princeyeates.com PRINCE, YEATES & GELDZAHLER A Professional Corporation 15 W. South Temple, Suite 1700 Salt Lake City, UT 84101 Telephone: (801) 524-1000

Attorneys for Grynberg

3

Exhibit A

CCG. LLC

3600 SOUTH YOSEMITE, SUITE 900 • DENVER, COLORADO 80237-1830, USA. PHONE 303-850-7490

E-MAIL: grynpetro@grynberg.com FAX: 303-850-7498

CERTIFICATION OF DRAINAGE AREA OF HORSEHEAD POINT 18·44 WELL LOCATED IN THE

SESE OF SEC 18, T36S, R25E, SAN JUAN COUNTY, UTAH

I, Jack J. G ryn berg , hereby certify that I am a Registered Professional Engineer in good standing, and I have attached my Resume showing my self-explanatory credentials.

I have used most of Summit Operating LLC's ("Summit") information with the exception of a few corrections based on the data from the Horsehead Point 18-44 Well logs in order to calculate the drainage area.

Based on the Horsehead Point 18-44 Well logs, I used 16 ft. of net pay instead of 14.5 ft. of net pay. This is based on the crossover shown on the Horsehead Point 18-44 Well neutron and density logs.

Based on the Horsehead Point 18-44 Well logs, I used a porosity of 15% which is the crossover amount and not 13.3%.

I used 76.6% hydrocarbon saturation which is the same as what Summit used.

Based on the Horsehead Point 18-44 Well logs, I have used a formation temperature of 120°F.

I have used an initial formation pressure of 1997 psi and an abandonment pressure of 200 psi. I also estimated the atmospheric pressure at an elevation of 5996 ft. to be 12 psi.

Based on my expertise, I used a compressibility factor of 0.87 and the recoverable reserves established by Summit of 3.68 billion cu. ft. of gas.

I used the standard petroleum engineering formula, which is:

CUI/1 Vol = 43,500 x h x SH x @

x (Pr - Pa) x 520 x 1 x A Palm Tf Z

Using the above parameters and formula, I calculated a drainage area of 316,5 acres. However, since the Horsehead Point 18-44 Well produced 2.026 billion cu. ft. of gas. Based

... - .... ~--,,-- --.~---

on the decline rate, it is very likely that the balance of production will not reach a cumulative 3.68 billion cu. ft. of gas thus making a drainage area of less than 316.5 acres. But even if we use Summit's figures of 14.5 ft. of net pay and 13.3% porosity In the standard petroleum engineering formula stated above, the drainage area Is 254.34 acres.

The Desert Creek and the Ismay formations could very well be productive In the Horsehead Point structure If the wells are properly located on 160 acre spacing. The structure map as part of the Summit technical report Is wrong. It is not a perfect dome and I have the seismic information which I am willing to release to the Commission but not to Summit.

Dated: June 16, 2014

Registered Professional Engineer In Good Standing: Colorado Registration No. 29586 Oklahoma Registration No. 3663 South Dakota Registration No. 5582 Texas Registration No. 14578

RESUME OF JACK J. GRYNBERG

(January 2014)

EDUCATION Colorado School of Mines Professional Degrees:

1/1950-5/1952 Master of Engilleering* (Petroleum Refining (Chemical) Engineer) 811952-511 953 Completed Graduate Studies for a Doctor of Science in

Geophysical Engineering except thesis 111959-5/1959 I\1aster of Engineering* (Professional Degree as Petroleum

(Prod-Llction) Engineer) 5/1976 Honorary Degree and Distinguished Achievement Medal in the

Field of Mineral Engineering 311976-311981 Member Board of Trustees, Colorado School of Mines, Golden,

Colorado

*Formeriy Professional Engineer's Degree

REGISTERED PROFESSIONAL ENGINEER Active and in Good S1anding:

Colorado Registration No. 29586 Registration No. 3663 Registration No. 5582 Registration No. 14578

Oklahoma South Dakota Texas

PROFESSIONAL EXPERIENCE

2007-Present 2007-Present l006-Present 2006-Present 2005-Present 1996-Present 1990-Prcsent I 990-Present

1988-Presen1

I 985-Present 1980-Present 1962-Presellt

1954-Prescnl

President and CEO, Pangee Production and Development Founder, President and CEO, MOST Ethanol Company, LLC President and CEO, CentrAm Petroleum Ltd. Chainnan, President and CEO, Superior Energy Company, Inc. President and CEO, GADECO, LLC Chairman, President and CEO, RSM Production COl]Joration President and CEO, Pricaspian Development Corporation Founder of a number of oil & gas and gold ventures exploration and development in the fanner Soviet Union Active in international oil and natural gas and gold in the former Soviet Union, Middle East, Africa, Far East and Latin America President and CEO, Glynberg Production CODJoration Chaimlan and CEO, Transv.'orld Resources COl]Joration Independent Oil, Gas, and Mineral Operator, U.S.A. Domestic operations within the continental Uniled States with oil and gas production and exploration in California, Colorado, Louisiana, Michigan, Mississippi, South Dakota, Montana, New Mexico, North Dakota, Oklahoma, Texas, Utah and Wyoming President. Grynberg Petroleum Company and its predecessor, Jack Grynberg and Associates

1976-1982

1974-1981

1974-198 I 1973-J974

J 969-1976

1954-1962

1954-1962

1953-1954

President and CEO, Olympic Uranium COlll1,2alW, Uranium exploration and development, U.S,A. Founder._Chainllun rmd CEO, Universal Drilling CnnU1(lnv all~ Universal Drillinlr Services, Inc" a 6-rig drilling contractor with 10,000 to 22,000 fool rigs, Companies sold in 198 I President and CEO, Universal Drilling S,A., Panama President. Hess Exploration Companv (affiliate of Amerada Hess) , beneficiary of 20% credited interest r(IUnu<.:r und Principal tockhold~r (76%). hairmfm, Prc!'ident and EC . Oceanic Exploration Company, a public company engaged in off-shore and onshore oil, gas and mineral exploration and production in the following areas outside the continental United States: British North Sea, Dutch North Sea, Cameroon, Greece, Madagascar, Malaysia, Nicaragn<l, Pem, Timor Ilnd Taiwan, A public company whose stock was traded over the counter. Company sold in 1981, Partner (60%-0"'l1er), Pirsoll-Glynberg Associates Through this partnership with Dr. Sylvain J. Pirson, jointly conducted 2-week intensive well log interpretation and 4-week advanced reservoir engineering courses ill the U.S.A. (Austin, Texas and Denver, Colorado), Canada, Venezuela, England, France, haly and the Middle Eflst. Owner. Jack Grvnberg and Associates, Consulting petroleum, petrophysical, geological and geophysical engineers Resemch EIll!illeer, Research and Devd ppm Ilt Department. Continental Oil Company, Ponca City, Oklahoma

PROFESSIONAL ATTAINMENTS, APPOINTMENTS AND MEMBERSHIPS Patent Holder:

Appointments:

United States Patent #4,492,862 - January 8, 1985 "Method and Apparatus for Analyzing Components of Hydro car bOll Gases Recovered from Oil, Natural Gas and Coal Drilling Operations" Invented by: Jack J. Grynberg, Leonard Y. Nelson and Stephen E. Moody

Appointed by Colorado Govemor Richard Lamm to the Board of Trustees, Colorado School of Mines, March 1975 to March 1981

Appointed to the International Board of Advisors, Gubkin State Oil illJd Gas Universily, Moscow, Russia-1992

Appointed to the Presidelltial Council, Colorado School of to.1ines, 1989-Preseul

Committee on NllCleal' and Altemativc Energy Systems of the National Academy of Sciences and National Academy of Engineering -­Presidential Appointments by President Gerald Ford (1974-1976) and President Jimmy Carter (1976-1980)

Appointed by President Bill Clinton to panel consisting of chief executives of American oil and gas companies (0 represent the American oil and gas indLlstlY in the Russian Republic in order (0 enhance American-Russian oil and gas joillt ventures, 1994.

2

Speaking lllvitations: Speaker at 6th African United Nations Oil & Gas, Trade & Fin<lllCe Conference in Douala, Cameroon, October 2002

Represented the U.S. Depilrtment of Energy and U.S. Depmtment of Commerce at 7th African United Niltions Oil & Gas, Tr"de & Finance Conference in Luanda, Angola, and mude a presentation on behalf of the U.S. Govemment, May 2003

Speaker at African Petroleum Forum in London, E1lgland, March 2004

Speaker ill 8th Ati'lcan United Nations Oil & Gas, Trade & Finance Conference ill Marrakech, Morocco, April 2004

Speaker at lath Annual Latin Oil & Gas 2004 Conference in Rio de Janeiro, Brazil, June 2004

Speaker at African Petroleum Forum in Houston, Texas, April 14-15, 2005

Speaker at Africa Energy Forum 2005 in Barcelona, Spain, June 22-24, 2005

Speaker at Upstream Oil & Gas Summit at Amelia, Island, Florida, February 5-7,2006; topic "Effective Strategies to Deal with the Top Challenges of Remote Supply Markets"

Speaker and Chaimlan of a Gas2] Session at Africa Energy Forum 2006 in Lille, France, June 28-30, 2006; topic "The Gas Potential of Africa"

Speaker at Tribal (American Indian) Energy in the Southwest Conference in Albuquerque, New Mexico, December 11-12, 2006

Speaker at a Gas21 Session al the Africa Energy Forulll 2007 in Hamburg, Germany, June 27-29,2007

Member of Market Watch Panel and Speaker on "Afi'ican Bio-Fucls Potential" at Africa Energy Forum 2008 in Nice, France, Ju\y 2-4, 2008

Principal speaker at National Association of Royalty Owners (NARO) 28 th Annual COllvention on "MismeasUl'ement and Shortchanging of Royalty Owners by Gas Pipeline Companies and Oil COll1pill1ies" in Little Rock, Arkansas_ September 18-20, 2008

Speaker at Energy Freedom SlI1T1mit on "13iofllCls: Ethanol, Biodiesel, Metllanol, Compressed Natural Gas (CNG) and Gas to Liquids (GTL)" in Chicago, Illinois, October 24-25, 2008

Chairman and Speaker on aGas Vallie" and Chail'lllall and Speaker on "Trading Ali-iean Biofuels" at the Ali'ica Energy Forum 2009 ill Bordeaux, France, ,TUIlC 30-July 2, 2009

Chairman of "]nvestment Opportunities and Risks" Session at AfricaGAS at the ALi-iea Energy Porum 2010 in Basel, Switzerland, June 29-July 1) 2010

3

Memberships:

Speaker at Atl'ica Energy Forum 2011 in Paris, France. on "Natural Gas Potential of Africa," June 13-15,2011

Speaker at Platts I SI Annual Biofuels Conference in Amsterdam, The Netherlands, 011

"Advances ill Biofucl Feedstocks for African Development," June 28-29, 2012

Speaker at Merrick & Company 2nd Alllltlal Bioprocessing Conference in Denver, Colorado. all "Cassava and Plantail1s-Biofuels Feedstocks for Mi'iea," Sept. 1 0,2012

National Society of Professional Engineers Society of Exploralion Geophysicists (SEG) American Association ofPetroleul11 Geologists (AAPG) American Institute of Mining and Engineers (AIME) Society ofPetroleul11 Engineers (SPE) - Legion of HOllor Member Association of International Petroleum Negotiators Emopean Society of Exploration Geophysicists (ESEG)* Rocky Mountain Association of Geologists (RMAG) American Petroleum Institute (API)* Member Board of Trustees, Colorado Energy Research Institute, March 1975 to March 1981 Honorary Consul, Republic of Panama, 1974-1986 Member, Uranium SUbpanel of Supply and Delivery Panel

*Mcmbcl' Emeritus

PURLICA nONS "Induction Log Departure Curves for No Invasion" (Oil Base Mud or Air)

By: Jack 1. GrYllberg - 1953

"The Microlog - Its Application and Interpretation" By: Jack 1. Grynberg and Leendcli de Witte - 1954

"Quantitative Electric Log Interpretation of "D" and ".I" Sands-Denver Basin" By: Jack J. Grynberg - 1956

""The Continuous Dipmeter" Articles in April I and 22, 1957, The Oil,mq Gas ]ouma\ By: Jack J. GrYllberg and Morris 1. Ettinger

"Log Interpretation Charts" By: Sylvain J. Pirsoll and Jack J. Grynberg - 1958

"Selected Well Logging Problems for Geologists and Petroleum Engineers" By: Sylvain J. Pil'son and .Tack J. Grynberg -1958

"DST - Success or Failure?" ArLicle ill June 22, \959, The on and Gas J01ll11al By: Jack 1. Grynberg

4

"Log Interpretation Manual NllInber 2" Supplemellt-A-Ri-Rt Conversion Charts

..... ,~-..,-

Based on Lectures by Jack J. Grynberg [md Sylvain 1. Pirson - 1960

"H,llldbook of Well Log Analysis" McGraw-Hill - 1964 Based on Lectlll'cs by Sylvain J. Pirson and Jack.1. Grynberg

"Applic8tion of Water Resistivity Data" By: Jack J. Grynberg and B.L. Cmlberg - 1974

Study of Nuclear and Alternative Energy Systems Supporting Paper 1 - 1978 ;'Problems of US. Uranium Resources and Supply to the Year 2010"

By: The National Research Council, The National Academy of Science By: Leon T. Silver, Jack J. Glynberg, David S. Robetison, Joseph B. Rosenbaum

and Arnold J. Silverman Study of Nuclem and Alternative Energy Systems ;'US. Energy Supply Prospects to 2010" - 1979

By: The National Research Council, National Academy of Science By: .lack 1. Glynberg ancl others.

LANGUAGES English, French, Genl1an, Polish, Russian and Hebrew

LEGISLA nON H.R. 501 - Sections 80 I and 802, "Study of Actions to Improve the Accuracy of Collection of

Federal Oi I, Condensate, and Natural Gas Royalties Act of 20 11" H.R. 3534 titled "Study of Actions to Improve the Accuracy of Collection of Royalties" H.R. 2152 titled "Foreign Business Bribery Prohibition Act of 2009" GAO-J 0-313 Report issued March 2010, "Interior's Oil and Gas Production VerificMion Effolis do not Provide Reasonable Assurance of Accurate Measurement of Production Volumes"

l\llLITARY SERVICE Resistance against Nazis, 1943-1944 U.S. Army Corps of Engineers; U.S. All11Y Research and Development Command, Soviet Radionclive WarJ:1re Section, and worked as a scientific spy 1956-1957 Honorable Discharge

PERSONAL U.S. Citizen, born JanualY 21, 1932, Brest, Poland Married June 1959 to Celeste C. Bachove Three (3) children and three (3) grandchildren

lI.I'el'.I' 011 'gpdaw' (5':) /Ol'CI1 el'rl')'(I1)('/f.lG·s lIeslI"'c - .iOIl YO} ~ doc

5

Exhibit B

-_ .. _._._. -- .. ------

- 1-'=1 f.:t:: =t-~ .. ~ ,-j

;:::f= L-+:i= -1-= . . ~

r::~ t=:::::c r-~

~== r~~ 1..--,.--

1-- -'-'-'-

l=:::: Bt - -~ T I

I= ~~':'-- --=:t=1 I i

H-i--I-=: '.i:

-1-1- '(; J .... - 0-1--

~--,.....~

=r-r=' I-l--!-

~ - -~~ --. 1=. -- '-:c

I~- ,.-.-,

~ '~

=t=::: 2,- " 1--_

~"" ~

~,' : 'C _. .=t::.===~ ~-== . '-. -.... . -.~ ... -~ ="=:':c-~--

-.. ,-+-

~

-\-±:t-

" ~

~~

- 1-- " I-'-f-"f·

:::r -.=: ,- '- --'t:-~

-. -,c --t-

-=:=t=

-I-i-'~ ;::=i=' , ..... =1= I=P:: -

1-1- .... l..::J~ ,- -~ =------... --~=-. • =t-J.JC -~

. :.-:-~~ ·I . . I=!~ r.::-1-:=.:--'--t-t'-"---:; -~ --<- .~ .. ~.'-- ~~ - .-.1-:.

~ .. --' -.• :.=-- :=:=-. .. - -

HOO

4800

4900

. ~J;:-= ''''''''-f-+'~'~ " ~....,-j, .~

';/t"'~~,~ _

~ , - · l · - - .., -.-' - -t: - ..;r---i_"" - 1-.-- .. t:

...: -

.;..

~ ~=~.:;;

-.--=.....~~. ,.~~~ • .4-

.c~:r~

I- " _____

.==

'K.

---;>-~

.~

--r-T ' '- ~,y. .. ~ ~ ~. ~

~-'-

--- r-.r - :-r--

.::=

,~

=-~-I. -ex - 1- -.

- --= .=:: - ."';' ~ ~ - --'--1-_ __ -- ___ '> __ " C~~..;

-= " ~ ·z.· _-:-':=._. ==--==~!..~. "" .. ;S • ::==.C _._ ._ --.. --- - .. ~ .. . -~ .. . . ---

--

.. -~ ... -

CERTIFICATE OF MAILING

I hereby certify that I caused a true and correct copy of the foregoing

SUPPLEMENTAL OPPOSITION TO REQUEST FOR AGENCY ACTION to be mailed

the ~ of June 2014 to:

Relma M. Miller MACDoNALD & MILLER MINERAL LEGAL SERVICES, PLLC 7090 S. Union Park Ave., Suite 400 Salt Lake City, Utah 84047 relma({J).lllacmi I Jerlega I.com Attorneys for Petitioner Summit Operating, LLC

Julie Ann Carter Board Secretary UTAH BOARD OF OIL, GAS AND MINING 1594 West North Temple Salt Lake City, Utah 84116 jujiecarll:rlt 1'111 a 11 .gl)\

UNITED STATES OF AMERICA BUREAU OF LAND MANAGEMENT Utah State Office Attn: Roger L. Bankert 440 West 200 South, Suite 500 Salt Lake City, Utah 84101

UNITED STATES OF AMERICA BUREAU OF LAND MANAGEMENT Utah State Office Attn: Mickey Coulthard 440 West 200 South, Suite 500 Salt Lake City, Utah 84101

UNITED STATES OF AMERICA BUREAU OF LAND MANAGEMENT Moab Field Office Attn: Eric Jones 82 East Dogwood Moab, Utah 84532

BILL BARRETT CORPORATION 1099 18th Street, #2300 Denver, Colorado 80202

4

--~-

CROWN FINANCIAL OIL & GAS, LLC 16420 Park Ten Place, Suite 125 Houston, Texas 77084

DALTON F AMIL Y LIVING TRUST Monte Dalton & Virginia Tracy, Trustees PO Box 371 Monticello, Utah 84535

Bonnie Dalton PO Box 576 Monticello, Utah 84535

William Monte Dalton PO Box 371 Monticello, Utah 84535

DJ SIMMONS, INC. 1009 Ridgeway Place, Suite 200 Farmington, NM 87401

DJ SIMMONS COMPANY LIMITED Partnership 1009 Ridgeway Place, Suite 200 Farmington, NM 87401

EVERGREEN ENERGY, INC. 2802 Ferndale Houston, TX 77098

Celeste C. Grynberg c/o GRYNBERG PETROLEUM COMPANY 3600 S. Yosemite Street, Suite 900 Denver, CO 80237

GRYNBERG PETROLEUM COMPANY 3600 S. Yosemite Street, Suite 900 Denver, CO 80237

Paul Hendershott 2724 Ferndale Houston, TX 77098

KIMMERIDGE FOUR CORNERS, LLC 400 Mad ison A venue, Room 14C New York, NY 10017-1937

- ...

5

Gary Kornegay 5005 Woodway, Suite 300 Houston, TX 77056

HaoLi 20310 Stone Moss Spring, TX 77379

PEAK ROYALTY HOLDINGS 1245 Brickyard Road, Suite 210 Salt Lake City, Utah 84106

RESOURCE INVESTMENT GROUP, LLC 1582 West 2600 South Woods Cross, Utah 84087

SEP - MONTEZUMA CREEK, LLC 1245 Brickyard Road, Suite 210 Salt Lake City, Utah 84106

Guy & Virginia Tracy PO Box371 Monticello, Utah 84535

6