In Raply Refer Toi FO-2-i January 25* 1186

Wol tor OO i O M Corporation Attentloni Mt. Cmnle J . 0"er» 740 Tho Mot* Oof *v 1212 Main Street Houston* Texas 77002

GontloMoni

In accordance *1th JO OFF W0.94, revlseu OocoKOor 13. 1979, ond our letter Utwt January 29, 1979. thU M*" U ho roby determined to ho complete And U now holog considered for approval.

Your plon control iHestoer U N-2691 and should ho roforoncod 1n your cosuaunl cation ond corroooondonco concerning this pUn.

bcci Luto OCS-G 9047 (OPS-3-2) (FILE ROOM) IOPS-3-4 w/Publlc Info. Copy of tho plan (PUBLIC RECORDS)

Sincerely yours*

Sgd.) A. Oonald Giroir

5 L 0. J . Bouroools Rogtonal Supervisor Flold Operatluns

MDJ oseph i cck 101/15/861 poecom

C3AI303H

W A L T E R O I L & G A S C O R P O R A T I O N

January 11, 1988

Mr. Daniel Bourgeois Regional Supervisor O f f i c e o f Field Operations U. S. Department of the I n t e r i o r Minerals Management Service New Orleans, Louisiana 70123-2394

A t t e n t i o n : Mr. Mike Joseph Plans Unit

RE: I n i t i a l Plan of Exploration OCS-G 9047, Block 351 Galveston Area, Offshore, Texas

6e' lemon:

In accordance with the provisions of T i t l e 30 CFR 250.34-1, Walter 011 & Gas Corporation, as designated operator, herein submits for your review and u l t imate approval, an I n i t i a l Plan of Explorat ion, Shallow Hazards Survey and Archaeological Report covering proposed operations on lease OCS-G 9047, Block 351, Galveston Area, Offshore, Texas.

Should you have any questions concerning th is submi t ta l , please contact the undersigned at your e a r l i e s t convenience at (713) 659-1222.

Sincerely,

WALTER OIL a GAS CORPORATION

Connie J. Goers Regulatory/Environmental Coordinator

:CJG Enclosures: (5) copies of I n i t i a l Plan of Exploration (Confident ial)

(3) copies of I n i t i a l Plan of Exploration (Public In fo . ) (2) copies of Shallow Hazards Survey (2) copies of Archaeological Report

PUBLIC MfCRMATIOM

240 Tha Main Building. 1212 Main Street. Houston, Texas 77002 (713)659-1221

INITIAL PLAN OF EXPLORATION

BLOCK 351

GALVESTON AREA

OCS-G S047

Walter 011 & Gas Corporation 1212 Main Street, Suite 240

Houston, Texas 77002 (713) 659-1222

January 1988

TABLE OF CONTENTS

SECTION

Proposed Type and Sequence of Activities and Approximate

Location of the Exploratory Wells I

Geological Supplement II

shallow Hazards Analysis I l l

Description of Drilling Vessel IV

Drilling Mud Components and Additives V

Oil Spi l l Contingency Plan VI

Projected Air Emissions VII

Onshore Support Base Facilities VIII

Support Vessels and Frequency of Travel IX

Designated Company Contact X

NOTE: Enclosed In the Plan of Exploration are CONFIDENTIAL papers. These papers have been stamped CONFIDENTIAL and are deleted from the copies being submitted for Public Information.

PROPOSED TYPE AND SEQUENCE OF ACTIVITIES AND APPROXIMATE LOCATION OF THE EXPLORATORY WELLS

Walter Oil & Gas Corporation was awarded Galveston Area Block 351 (OCS-G 9047) lease at the Gulf of Mexico Lease Sale No. 112 held August 12, 1987.

Structural Interpretation has been completed on this block and Is addressed In Section I I of this plan.

Wells "A" through *E" w i l l be dri l led from the following proposed surface locations:

Well "A" - 600' FNL & 500' FWL

Well "B" - 600* FNI & 500* FWL

Well "C" - 600' FNL & 500' FWL

Well "D" - 550' FNL & 600' FEL

Well "E" - 550' FNI & 600' FEL

Approximate time frames for conducting the referenced operations are as fo l lows:

WELL DRILLING COMPLETION ABANDONMENT*

•A" 30 Days 14 Days N/A

"B" 30 Days 14 Days N/A

-c- 30 Days 14 Days N/A

"D" 30 Days 14 Days N/A

"E" 30 Days 14 Days N/A

* Time Included 1n the d r i l l i n g phase.

Walter proposes to commence dr i l l ing act iv i ty on this lease on approximately February 15, 1988. Continuous operations on this lease are contingent upon the results of Well No. 1; however, operations wi l l be conducted within a prudent and workmanlike time frame.

Subsequent to d r i l l i n g , 1f welljs) are de ta ined capable of producing in paying quantit ies; the well(s) w i l l either be mudline suspended or a protective structure, such as a caisson, wi l l be set and maintained as a future platform si te contingent upon lease evaluation.

BLOCK 351

!

PUBLIC INFORMATION OCS-G 9047

WALTER OIL A GAS CORPORATION

INITIAL PLAN OF EXPLORATION BLOCK 351

GALVESTON AREA

DATED: 01-11-88 l-=2000'

PROPOSED WELL LOCATION

WELL LOCATION A" 600' FNL fc 500' FWL

WELL LOCATION "B" 600' FNL fc 500' FWL

CL LOCATION "C" 600' FNL fc 500' FWL

WELL LOCATION "D" 550' FNL & 600' FEL <

WELL LOCATION "E" 550' FNL & 600' FEL

SHALLOW HAZARDS ANALYSIS

In October, 1987, Oceanonics, Inc. completed a shallow hazards survey of Galveston Island Block 351. The entire block was surveyed, resul t ing in t h i r t y - t h r e e (33) pa ra l l e l l ines surveyed 150 meters apart In a nor th-south direction and s ix (6) t i e l ines surveyed at 900 meter I n t e r v a l s in an east-west d i rect ion. A survey boat u t i l i z i n g an IDS Navigat ion System obtained d ig i ta l side scan sonar*, magnetometer; high reso lu t i on subbottom p r o f i l e r ; and analog sparker data. A description of the survey Instrumentation u t i l i zed 1s found In Appendix B of the Shallow Hazards Survey Report.

In add i t ion to f i e l d data acquist ion, Oceanonics, Inc. furnished annotated f i e l d sections and completed certain data In terpreta t ion and mapping, I nc l ud i ng : (1) Navigation Map, (2) Bathmetry Map, (3) Anomaly Map, (4) S t ruc tu re Map, (5) Isopach Map, and (6) Archaeological Report.

Based upon the results of th is survey, Walter 011 & Gas Corporation proposes to d r i l l f i v e (5) exploratory wel ls u t i l i z i n g two (2) common sur face locations:

Well Location "A" 600' FNL & 500' FWL

Well Location MD" 550' FNL & 600' FEL

A review of the avai lable data over and proximal to the proposed surface l oca t i ons reveals numerous small growth f a u l t s , ancient channels, u n i d e n t i f i e d magnetic anomalies, and Indications o f shallow gas; however, the proposed surface locat ions selected are an adequate distance from these sources, and proper precautions w i l l be taken by the engineering department during actual d r i l l i n g and production operations.

DCSCRIPTION OF DRILLING VESSEL WITH SPECIAL ATTENTION TO SAFETY FEATURES, POLLUTION PREVENTION

J . Storm XVII meets a l l the requirements necessary by a d r i l l i n g uni t f o r offshore d r i l l i n g operations and po l lu t ion control as set fo r th by the Minerals Management Service (MMS).

Al l piping and drip pans have been Insta l led to protect against p o l l u t i o n by accidental sp i l lage.

The blowout prevention equipment 1s Inspected and tested to the requirements of the MMS and kept in good working order.

The actual d r i l l i n g operations w i l l be monitored by a qua l i f i ed mud logg ing unit and Included monitoring devices for detection of gas, flow r a t e Increases, and a l l associated alarms.

Al l waste, human or Indust r ia l , are handled by a 5000 gal/day Marine type uni t approved by the U. S. Coast Guard.

J . Storm XVII has on board at a l l times l i f e jackets as required by the U. S. Coast Guard f o r the maximum number of people aboard the d r i l l i n g u n i t . First aid equipment and breathing aparatus for emergency use In maintained and Inspected at a l l times. One Escape Capsule wi th a f u l l complement of supplies f o r a l l personnel 1s checked and Inspected at a l l t i m e s . One lo t of portable f i r e extinguishers to meet U. S. Coast Guard approval along with s a l t water f i r e f i gh t i ng equipment 1s kept on board at a l l times. Al l Nav-Aid l ights and fog horns are kept in good working o r d e r .

The d r i l l i n g operations to be carr ied out by the J . Storm XVII w i l l be supervised by a q u a l i f i e d Walter 011 & Gas representative on the r i g at a l l t imes. This representative w i l l operate the r i g and the contractor 's personnel in a manner to guard against possible po l lu t ion , blowout, and d isas te rs at a l l t imes.

A complete Inventory for J.Storm XVII 1s attached that includes a l l blowout equipment and safety devices.

DIMENSIONS

J STORM XVII Length of hull (including heliport) 217' Length of hull 157' Width of hull 132' Depth of hull 18' Drilling slot length Cantilever Drilling slot width Cantilever Length of mat 220' Width of mat. 185' Depth of mat 12' Mat slot length 59'S" ' ' i t slot widfs 110'

neter of Ie». * 11' \*»d water dept. non hurricane 200'

u^Q'i -vater depth hurricane 173' Minimum water depth 22' Rated drilling capacity 204300'

ABS CLASS

• A-1 Self-elevating -Yi'Iing unit

QUARTERS Air conditioned facilities for 46 men plus three-man examination room HELICOPTER DECK 60' x 70'

Accommodates Sikorsky S-61

VARIABLE DECK LOADS Drilllng-non hurricane 4500 kips Drilling-hurricane 3500 kips Moving 3149 kips Jacking 2500 kips

STORAGE Drilling water 5S92 bbls Saltwater 1074 bbls Potable water 1063 bbls Fuel oil 2068 bbls Dirtv lube oil tank 3000 gals. Lube oil 660 gals. Bulk mud 4450 cu.ft. Bulk cement 4C50 cu.ft. Active mud 1500 bbls Sack storage 3000 sacks

DRAWWORKb National 1320 M double drum with 15,000' of 5/8" sandline. Baylor model "032 auxiliaiy electric brake, powered by two Caterpillar mode! D-399 turbocharged diesel engines.

MUD PUMPS Two National 12-P-160 triplex single acting slush pumps powered independently by-EVD 16-567 diesel engines.

DERRICK Continental EMSCO 20 RD, standard, height 147', nominal rating capacity 1,400,000 lbs.

SUBSTRUCTURE Bethlehem design with skid base, transverse and longitudinal skidders; 2*' high, 64' wide and 42' long for use with a derrick having nominal capacity of 1,400,000 lbs.; 500.000 Ibs. maximum pine setback ca^ecity; 750.C00 Ibs. maximum . y table supporting capac­ity irrespective cf setback load. 2'0 from base of substructure to underside of beams. Skid­ding capability: Trantvorseiy 20'. Longitudi­nally 45'.

CROWN BLOCK National, 500 ton capacity.

TRAVELING HOOK/BLOCK ASSEMBLY National 650-G-500 rated at 500 tons with block guidance system.

SWIVEL National P-500 ton capacity.

ROTARY TABLE National C375,375' drawworks power.

minimum bore driven by

WELL CONTROL EQUIPMENT One 20" 2000 psi wp Hydril annular blowout preventer bored to 211A"; one 13 s/ e" 5000 psi wp Hydril annular preventer; one 135/e" NL Shaffer single 10,000 psi wp, H2S treated; one 13'/," NL Shaffer double 10,000 psi wp, H2S treated; one 1C s / t" NL Shaffer single 10,000 psi wp shear ram, H2S treated; complete diverter system; 10,000 psi wp choke and kill manifold, Koomey blowout preventer controi closing accumulator unit with remote control station.

MUO CONDITIONING EQUIPMENT Brandt dual shale shaker ? 2" ccne Demco desander 2-4 - cone Demco desilter

Swaco degasser 12-4" cone Fluid Dynamics mud dcane-Two 6" X 8" 1800 GPM 100 psi cent -fugal

mud mixing pumps powered by 75 hp motors.

Two 6" X 8" 1800 GPM 100 psi c ̂ ttrifrja-* mud charging pumps powered by .75 . n...vOrs.

Three 6* X 8" 1800 GPM 100 psi centrifugal mud processing pumps powered by 75 hp motors.

ELECTRIC. U. SYSTEM Two 700 KW 480 voit ac genr.ators, each driven iiy EK'D 12-567 d ' : .« ! engines: one 200 kw 480 volt ac e ..ergLncy generator driven by 3406T Catert illar d'3sel engine.

Or e 1 x iei. ABS " -!B rsed at 50 ton eapaott.'. One l i r * ^ . . i <»5o 138 atec at <55 ton

MOORING EQUlPiVEf.T One 10,000 Ib. Stockiest bow anchc with 143 fathoms of 2Vm" wire Ine.

- fHER EQUIPMENT MO model CA-50 50-man Whittaker survival cans'ii*;. Firefighting and safety equipment to :o r.oly with Coast Guard regulations, RF c jrnnu:ication "single side band" radio, VHF •n.i-i.ie telephone, shir to-shore radio, inter-rig communication system.

DRILL PIPE 10,000' of 4Va" CO. < irade E 5.0C0' of 4%" CD. : i : Je G

MAT COMPARTMENTATION

' t t l .SPluL CONTINGENCY PLAN

Pursuar to ihe provisions of OCS Order No 7, Waiter 011 & Gas has an .»pp.-ove«2 011 Spil l Contingency Plan approved by the Minerals Management Serv ice . Th!? plan designates an Oil Spi l l Response Team consisting of Walter 011 & Geo personnel and contract personnel. This t m ' ! duties are to e l im ina te the tssret o f ar. o i l s p i l l , remove a l l sources et possible I g n i t i o n , deploy the most real iable means of avai lable transpcrtlon to monitor the movement of a s l i c k , and contain and remove the s l ' ck 1f poss ib le . Walter 011 & Gas Is a member of Clea** Gulf Associate. (.* SA;. The CGA has five (5) permanent equipment storage si tes 1n Lou-'sia-a at Grand I s U , Wnlce, Int rpcoasta ' Ci ty, Cameron and Houma, and four s i tes in Texas i t Lalveston, Texas C U ' , Rockport and Fulton. Fast Response Systems are located in Grur.d I s l e , Venice, Intracoastal City and Cameron, Lou is iana , aid in Galveston and Port Aransas, Texas. Also, thsre is a barge mountec !«iyh volume open sea skimmer (HOSS Barge) based a*. G>*and I s l e , Louisiana. In add i t ion to providing equipment, CGA also suppMes advisors or clean-up ( .pirat ic Response time for a s p i l l in Block 351, Galveston Area could vary fro..i 8 to 12 hours depending upon the 1-.cation of company operated worhboats or workboats available fo r charter.

WALTER OIL & CAS CORPORATION

January i ) , '988

PROJECTED AIR EMISSION SCHEDULE FOR DEVLEOPntNT/PRlUiTION PROJECT

GENERAL INFORMATION

Locat ion of Fac i l i ty : Distance Offshore: Name o f Rij /Platform: Operator:

Contact Pirson: To ta l Well Footage to be D r i l l e d : Date D r i l l i n g Will Begin:

Galveston Are* Slock 351 25 miles J . Storm XVII/Jack-Up Walter C l l * Sas Corporation 1212 Main Street, Suite 240 Houston, Texas 77002 Connie J . Goers 40,300' February 15, 1988

MAJOR SOURCES (OFFSHORE)

Power used abotrd d r i l l i n g vessel ; approximate fc .age d r i l l e d • 40,300'*

PROJECTED EMISSIONS* EMITTF'; Tons/Year

SUBSTANLE 1988

—co— os S02 NOX 42.Cc VOC 3.74 TSP ' .50

(*) Based or. oU hphr/ f t . from Table 4-3. "Atmospheric Emissions from Offshore 011 & Gas Development and Production", EPA No. 450/3-77-026

Emission factors from Table 3 .3 .3 -1 , "Compilation of Air Pollutant EBrfuslow Factors", Third Ed i t ion , EPA Report AP-42, August, 1977.

240 The Main Build ng. 12! 2 Main Street. Houston. Texas/T 002 (713)669-1221

Minerals Management Service Projected A1r Emission Schedule Galveston Area Block 351

Page Two

MINOR SOURCES (OFFSHORE)

Including helicopter landing and take-off (6 trips/week); one (1) f ie ld boat making an average of ten (10) trips per week and one (1) f ie ld boat making an average of six (6) trips per week during dr i l l ing act iv i t ies; and Incineration of waste paper (average 750 pounds of waste per month).

Projected Emissions Emitted Substance (tons/year)

CO 4.50 S02 .21 NOX .96 VOC .53 TSP .22

(*) Tables 3.2.1-3, 3.2.3-1 and 2.1-1, "Compilation of A1r Pollutant Emission Factors", Third Edition, EPA Report AP-42, August, 1977.

ONSHORE SOURCES

These should be about the same as minor sources unless new fac i l i t ies are Instal led at the onshore base. No additional fac i l i t ies are required or planned at this time.

EMISSION EXEMPTION DETERMINATION 273 2/3

For CO: E • 3400 - 3400(25) - 28,570 tons/year For NOX, VOC, TSP & S02: e - 33.30-33.3(25)- 830 tons/year

As per DOI/MMS regulations, this fac i l i ty 1s exempt from further air qual i ty review as i t has been determined that i ts operations wi l l not have a s igni f icant adverse environmental Impact on air quality.

ONSHORE BASE FACILITIES

Galveston Area Block 351 1s located approximately twenty five (25) miles south of Freeport, Texas.

Supplies and personnel w i l l be transported to and from an existing service base to be ut i l ized located in Freeport, Texas. Various service f a c i l i t i e s such as mud companies, dock space, warehouses, and helipads are found at Freeport. Existing faci l i t ies are judged adequate for the proposed operations.

SUPPORT VESSELS AND FREQUENCY OF TRAVEL

Travel routes w i l l be the most direct route feasible, originating from an existing support base located in Freeport, Texas.

During dr i l l ing operations, two (2) f ie ld boats wi l l be ut i l ized; with one boat making approximately U.A (10) t r ips per week and one (1) boat making approximately six (6) trips pet week. Helicopter f l ights wi l l average approximately six (6) t r ips per week during dr i l l i ng operations.

MUD COMPONENTS

COMPARABLE MUD PRODUCTS

I . ITEMS USED ON A ROUTINE BASIS

IMCO CHROMALLOY MILCHEM MAGCOBAR DESCRIPTION

Imco Bar Barite Barite/Milbar Barite/Magcobar Barlte

Imco Gel Bentonite Mil gel Magcogel Bentonite

Imco Lig Lignite Li geo Tannathin Lignite

RD-111 Cl-CLS Uni Cal Spercene Blended Lignosulfonate

Caustic Soda Caustic Soda Caustic Soda Caustic Soda Sodium Hydroxide

Lime Lime Lime Lime Calcium Hydroxide

Imco Thin Ligcon XP-20 Modified L igni te

Soda Ash Soda Ash Soda Ash Soda Ash Sodium Carbonate

Bicarb Bicarb Bicarb Bicarb Bicarbonate of Soda

ImcoMD Detergent M.D. D-D Detergent

DHV - 61 - Hydroxyl-Propyl Guar (Non-Damaging Polymer)

DF-4 - Defoamer (Tri-Butyl Phosphate)

I I . ITEMS USED LESS FREQUENTLY

IMCO

DMS

Imco Lold

CMC

Cypan

Permaloid

Drispac

Gyp

HME/Superdril

Imco Myca

Imco Plug

Ironite

Separan

Salt

SAPP

CHROMALLOY

DMS

Starch

Drioscos Reg.

Cypan

Starlose

Drispac

Gypsum

Mica

Nut Plug

Ironite

Separan

Salt

SAPP

MILCHEM

DMS

Mil starch

CMC

Cypan

Perma-Lose

Drispac

Gyp

HME/Superdril HME/Superdril

Mil-Mica

M11 Plug

Ironite

Zinc Carbonate Mil Gard

Separan

Salt

SAPP

Shale Trol

MAGCOBAR

DMS

My Lo Gel

CMC

Cypan

Poly Sal

Drispac

Gyp

HME/Superdril

Mago-Mica

Nut Plug

Ironite

Separan

Salt

SAPP

DESCRIPTION

Nonionic Mud Surfactant

Pregelantinized Starch

Sodium Carboxy Methyl Cellulose

Sodium Polyacrylate

Organic Polymer

Polyanionin Cellulose

Gypsum (Plaster of Paris)

Gilsonite (Treated Natural Hydrocarbons + Wetting Agent)

Mica Flak-;,

Ground Walnut or other nut hulls

Synthetic Iron Oxide, H2S Scavenger

H2S Scavenger (Zinc Carbonate)

Polyccry1 amide Polymer

Sodium Chloride

Sodium Acid Pryophosphate

Ograno/Aluminum Compound

I I I . OIL BASE MUD

IMCO

Imco Spot

Kenol-S

Ken-Gel

Ken-Cal-L

VR

CHROMALLOY

Clean Spot Concentrate

Del-Vert

PE-11

SE-22

DFT

Del ton

Del-K Wa-33

HTS Del G Del G I I

MILCHEM

Mil-Free

Carbo-Tec

Carbo-Gel

Carbo-Mul

Carbo-Trol

MAGCOBAR

Pipe Lax

Oil faze & Verto i l

VG-69

DV-33

DV-22

DESCRIPTION

Emulsifiers for Spotting Fluid

Emulsifiers, gelling agents & fluid loss agents for oil muds

Organiphilic clays for viscosifying

Asphaltic Viscosifier

Organic wetting agent

Fluid loss agents

/ TT

/*^tiuf—L I < / J ' T—r—I- I ' / • r™fr* ' n / /r——4 L / / J :——1

DESIGf A* ED COMPA.\v CONTACT

Connie J.Goers 1212 Main Street, Suite 240

Houston, Texas 77002 (713) 659-1222