BACKGROUND INFORMATION ON GAS WELL PERMIT GW09-19

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1 BACKGROUND INFORMATION ON GAS WELL PERMIT GW09-19 Permit Chronology The Railroad Commission of Texas (RRC), Oil and Gas Division, on March 16, 2009, issued Amended Permit Number for Eden Southwest Unit #1H. The drill site is located at 101 George Finger Road and the permits state this well site shall be completed and produced in compliance with all applicable RRC rules and regulations. Copies of the approved permits to drill and survey plans were provided as required in the City of Arlington s Gas Drilling and Production Ordinance. Gas Drilling and Production Ordinance Components Proximity to Residential/School Structures and Park The closest residential structure is approximately 403 feet to the northeast of the nearest wellhead. The closest school is approximately 2,947 feet southwest and the nearest park is approximately 1,859 feet northeast of the nearest wellhead. It shall be unlawful to drill any well, the center of which, at the surface of the ground, is located within 600 feet from a park or within 600 feet from a protected use for which a building permit has been issued on or before the date of the application for a drilling permit; within 25 feet from any outer boundary line of the drill well site; within 25 feet from any storage tank, or source of ignition; within 75 feet of any public street, road, highway, or future street, right-of-way, or property line; within 100 feet of any building accessory to, but not necessary to the operation of the well; or within 200 feet to any fresh water well. The distance shall be calculated from the well bore, in a straight line, without regard to intervening structures or objects, to the primary structure of the protected use or park boundary. The submitted site plan illustrates that the calculated distance from the center of the well bore does not meet the minimum setback requirements for protected uses. XTO Energy, Inc. submitted a request for City Council s consideration to reduce the setback distance for the Eden Southwest Unit 1H gas well to a distance of 403 feet. XTO indicated they obtained written consent from 60 percent of the surface property owners within a radius between 300 and 600 feet around this well. Well Setbacks for Gas Well Permit The location of all proposed improvements and equipment, including the location of the proposed well, tanks, pipelines, compressors, separators, storage shed and trailers are depicted on the site plan and are in compliance with the setback regulations. Tank batteries, well facilities, and equipment shall be located at least 100 feet from an existing protected use or a protected use for which a building permit has been issued on the date of the application for a drilling permit is filed. The position of the well-bores, separators, meters, tanks, flow lines, and security fencing are shown in the submitted site plan and meet all distance requirements. The top of the tanks shall be no higher than eight feet above the terrain surrounding the tanks and shall be setback pursuant to the standards of the Railroad Commission and the National Fire Protection Association, but in all cases, shall be at least 25 feet from any public right-of-way or property line.

2 Page 2 of 4 Pipeline Route Proposed pipeline access to this site could be via the anticipated 24-inch Kennedale to Sunbelt West pipeline that City Staff is discussing with the pipeline company. Fencing Fences shall not be required on drill sites during initial drilling, completion or re-working operations as long as 24-hour on-site supervision is provided. A secured entrance gate containing a Knox-Box keybox or pad lock or equivalent shall be required. All gates are to be kept locked when the Operator or his employees are not within the enclosure. Within 30 days after completion of the final well, all operation sites shall be completely enclosed by a solid masonry wall and vegetation. An alternative fence with vegetation may be approved by the City Council as a condition of the gas well permit. Landscaping Landscaping and irrigation shall be provided as identified in the approved specific use permit. It shall be the responsibility of the Operator to comply with the City's landscaping ordinance including tree preservation/mitigation and maintenance. Landscaping must blend with the environment and existing surrounding area. Landscaping must be installed within 30 days from the completion of the permitted gas well. Proposed trees will be native or well adapted for the North Central Texas area. All new plant material shall conform to the minimum guidelines established for nursery stock published by the American Association of Nurseryman, Inc. The proposed landscaping schedule consists of Live Oaks, Cedar Elm, Texas Red Oak, Eastern Red Cedar, and Western Soapberry plantings. Vehicle Routes Vehicles associated with drilling and/or production in excess of three tons associated with drilling and/or production shall be restricted to such streets designated as either truck routes or commercial delivery routes by the City Code wherever capable of being used. The vehicles shall be operated on a truck route wherever capable of being used. The vehicles shall be operated on a commercial delivery route only when it is not possible to use a truck route to fulfill the purpose for which such vehicle is then being operated. Commercial delivery route means any street or highway so designated by the City Council for the use by any commercial motor vehicle, truck-tractor, trailer, semi-trailer, or any combination thereof. The City Council may restrict the hours of operation of vehicles associated with drilling and/or production when the proposed vehicle route passes through a designated school zone. The Department of Public Works and Transportation shall review the vehicle routes to determine if a proposed route includes a designated school zone. The applicant indicated the route traveled to the Eden Southwest Unit 1H gas well will commence at Interstate 20 Highway (I-20). From Interstate 20 Highway (I-20), exit South Cooper Street and after passing through the traffic signal, travel south along South Cooper Street approximately 1.4 miles to Eden Road. Turn east at the signalized intersection and travel Eden Road approximately 1.3 miles to the proposed drill site. Entrance to the access road is on south of East Eden Road, past the Eden Road and Matlock Road intersection. The transportation route utilizes South Cooper Street (F.M. 157), an approved City of Arlington truck route, and Eden Road. Eden Road is designated as a Major Arterial with a 120-foot Right-of-Way. Traffic driving this route will pass through a designated school zone for K. Davis Elementary School and several signalized intersections along South Cooper Street as well as the Eden/Matlock Road intersection.

3 Page 3 of 4 Water Demand The applicant proposes to enter into an Agreement with the City to lease a water meter, hook it up to a nearby fire hydrant, and purchase approximately four million gallons of water per well. The approved water site plan limits the rate of withdrawal to a maximum of 500 gallons per minute. Road Damage Assessment Study A Road Damage Assessment Study was calculated as required, based on the submitted transportation route. The result of the calculation determined the Operator s responsibility is $796.48, which shall be paid prior to permit issuance. Work Hours Site development, other than drilling shall be conducted only between the hours of 6:00 a.m. and 7:00 p.m., unless otherwise stipulated by City Council during the public hearing. Noise Restrictions No well shall be drilled, redrilled or any equipment operated so as to create any noise which causes the exterior noise level, when measured at the well setback required by the Gas Drilling and Production Ordinance, to exceed the ambient noise level by more than five decibels (db) during daytime hours and more than three db during nighttime hours. Fracture stimulation (fracing) operations shall not exceed the ambient noise level by more than seven db. Backflow operations shall not exceed the ambient noise level by more than five db during nighttime hours. Production operations shall not exceed the established predrilling ambient noise level. The Operator shall be responsible for establishing and reporting to the City the pre-drilling ambient noise level prior to the issuance of a gas well permit. Once the drilling is complete, the Operator shall be required to establish a new ambient noise level prior to the installation of any new noise generation equipment. The exterior noise level generated by the drilling, redrilling, or other operations of all gas wells located within 600 feet of a protected use shall be continuously monitored to ensure compliance. The cost of such monitoring shall be borne by the Operator. Acoustical blankets, sound walls, mufflers, or other alternative methods may be used to ensure compliance. All soundproofing shall comply with accepted industry standards and subject to approval by the Inspector. The sound level meter used in conducting noise evaluations shall meet the American National Standards Institute's standard for sound meters. On-site noise monitors recorded the ambient noise level at the Eden Southwest Drill Site. The meter was placed out Tuesday, March 17, 2009 and retrieved on Thursday, March 19, The average noise level during the period is 55 dba. During drilling, the allowable daytime sound level is 60 dba and the allowable nighttime sound level is 58 dba. Fracing operations shall not exceed a 62 db noise level. All noise levels shall be measured at the well setback distance, which the applicant requests to be reduced to 403 feet. Signage A sign shall be immediately and prominently displayed at the gate on the fencing. Such sign shall be durable material, maintained in good condition and, unless otherwise required by the Railroad Commission, shall have a surface area of not less than two square feet nor more than four square feet. The required sign shall display the well name and number, the name of Operator, the emergency 911 number, and the telephone numbers of two persons responsible for the well who may be contacted in case of emergency. Permanent weatherproof signs reading DANGER NO SMOKING OR OPEN FLAME ALLOWED, PELIGRO NO FUMAR 0 INICIAR LLAMA EN ESTA AREA shall be posted immediately upon

4 Page 4 of 4 completion of the well site fencing at the entrance of each well site and tank battery or in any other location approved or designated by the Fire Chief of the City. No other signs shall be permitted on the site except as required by the Railroad Commission. Bond, Letters of Credit, Indemnity, Insurance Prior to the issuance of a Gas Well Permit the Operator shall provide the Inspector with a security instrument in the form of a bond or an irrevocable letter of credit. In addition to the bond or letter of credit, the Operator shall carry a policy of insurance. Insurance and security documents have been provided by the applicant as required. In the event such insurance policy is cancelled, the Gas Well Permit shall be suspended and Operator s right to operate under such Gas Well Permit shall immediately cease until the Operator files additional insurance. All insurance must be current prior to the Building Official issuing a Gas Well permit. Periodic Reports The Operator will be responsible for notifying the City s consulting Gas Well Inspector of any change to the name, address, and 24-hour phone number of the persons with supervisory authority over drilling operations. The Operator will also be responsible for providing a copy of any incident report or written complaints submitted to the Railroad Commission. The City s Gas Well Inspector may conduct periodic inspections to determine that the well(s) are operating in accordance within proper safety parameters as set out in the Gas Drilling and Production Ordinance. Clean up and Maintenance After the well has been completed or plugged and abandoned, the Operator shall clean the drill site or operation site, complete restoration activities, and repair all property damage caused by such operations to be completed within 60 days. After any spill, leak, or malfunction; the Operator shall remove or cause to be removed, to the satisfaction of the City Fire Chief and the Inspector, all waste materials from any public or private property affected by such spill, leak, or malfunction. Clean-up operations must begin immediately. Termination of Permit A Gas Well Permit shall automatically terminate, unless extended, if drilling is not commenced within 180 days from the date of the issuance of the Gas Well Permit. A Gas Well Permit may be extended by the Inspector for an additional 180 days upon request by the Operator and proof that the classification of the requested Gas Well Permit for such location has not changed.

5 R MENLO PARK DR TOKALON LN MIRAMAR DR R TABOR DR WICKLOW ST OLDGATE LN KISSIMMEE DR PICKFORD CT PONSELLE EDEN RD DR 718 Copyright NCTCOG and City of Arlington, TX B P05-15 MATLOCK RD CS A LOCATION MAP GW09-18 GAS WELL PERMIT ACRES SUP AMBER RIDGE DR P97-01 E EDEN RD PD EDMUNDSON DR SHADY BROOK DR / NS GEORGE GLENSHIRE DR 301 FINGER RD ^_ 301 KATYDID LN R Prepared: DARREN GROTH

6 OLDGATE LN MENLO PARK DR KA TO CRYSTAL CREEK LN MIRAMAR DR N LO LN WIND BROOKE DR TABOR DR KISSIMMEE DR TREVOR WAY EDEN RD SUP08-32 GEORGE FINGER RD ER GLENSHIRE DR B AM R ED G D RI EDMUNDSON DR DR E L EL KATYDID LN MATLOCK RD E EDEN RD PICKFORDCT NS PO WICKLOW ST CASTLEVIEW DR SHADY BROOK DR Copyright NCTCOG and City of Arlington, TX AERIAL MAP GW09-18 GAS WELL PERMIT ACRES Prepared: DARREN GROTH / _ ^

7 ROAD DAMAGE FEE CALCULATION GAS WELL DRILLING AND PRODUCTION Operator XTO Energy Site Address 101 George Finger Road Number of Wells 1 Water Source Piped Well Number Well Name Access Route Pavement Type Lane Miles Fee per Lane Mile Fee GW09-18 Eden SW Unit 1H Cooper Street Exempt 1.39 $ - $ - Eden Road Type $ $ $ - $ - $ - $ - $ - Fee per Well $ Total Fee $ Notes 1. The road damage fee is calculated based on the access lane miles for the appropriate road type, the assessment per lane mile, and the number of lane miles included in the gas well permit application 2. The fee per lane mile depends on whether the water source is piped to the site or hauled in by truck or other vehicle. 3. State-owned roadways should not be included in the calculation of the fee. A list of state-owned roadways is included on page Pavement types should be verified through Public Works & Transportation Department GW09-18 Exhibit B Page 1

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