MWSS Diatomite 21S Weekly UpdateChevron

Reporting Period: 6/29/2015 – 7/5/2015

Above of Reservoir Tilt Events in MWSS Diatomite 21S area from 6/29/2015 to 7/5/2015

Map as per DOGGR’s letter

Tilt event

Activity Summary

Offset Operator (TRC):• No above reservoir tilt events in TRC property

during the reporting period.• There have been 6 tilt events in the same

location (East of the lease line and North east of the chevron well 20 sump expression ) since April 1st and corresponding Chevron Well 20 sump increased flow events.

Chevron:• 1 above reservoir tilt event (#06/29A, depth at

255 ft, south west of the sump expression) in Chevron property during the reporting period.

• Chevron is not steaming within 800’ of the Well 20 Sump Expression at this time.

Event # 06/29A

Well 20 Sump Volumes(1/1/2014 – 7/5/2015)

6/29/15– 7/5/15

Date15 day Avg.

Volume pulled (bbls)

Daily Volume pulled (bbls)

6/29/2015 159 1076/30/2015 154 176

7/1/2015 157 2867/2/2015 166 3377/3/2015 155 1307/4/2015 175 3987/5/2015 182 252

Start/End of EO1016 Phase 3 TRC steam injection test Estimated start of TRC steaming as per EO1068 - TRC steaming per area of investigation map

TRC Steaming during Phase 3 – Emergency Order 1016

TRC Steaming – Emergency Order 1068

* Chevron is not steaming within 800’ of the Well 20 Sump Expression at this time .

Well 20 Sump area(7/1/2015)

Visual Observations: No new seep locations on Chevron property.

* Chevron is not steaming within 800’ of the Well 20 Sump Expression at this time .

Chevron

TRC

Chevron MWSS 21S Property Line and Well 20 Sump “21S Restricted Entry Area” Do not enter red outlined area without approved safety plan

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Outline of restricted area

22S TRC

21S CVX

Photo 2 March 2015

Red outlined area should not be entered without approval of the Chevron 21S Diatomite OS. Site specific safe work plans must be developed and approved prior to entry.

Well 20 Sump Expression Area

21S Property Line (dashed line) & Unstable Bank Area

Due to the instability of the embankment between Chevron and TRC properties, Chevron has extended the Do Not Enter Area (“21S Restricted Area”) to include the area from the embankment to the flow lines that run west of Chevron wells H225 and 204R. The K-rails no longer define the Do Not Enter Area and will be removed.

This area is outlined in red on the aerial photo.

Chevron requests that no one enters the red outlined area without contacting the Chevron Operations Supervisor and developing a written safe work plan prior to entry. The Chevron Supervisor can be contacted at 661-768-8032.

Chevron will work with the DOGGR to safely obtain photos or other data in this area if access to this area is required.

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The Embankment Can be Stabilized

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Concern for TRC Recent and Future Stabilization Efforts

• No communication by TRC with Chevron regarding excavation plans

• April 12, 2015 TRC report has drawings of a sheet piling system to be built on Chevron property without seeking Chevron’s permission or consultation

• June 22-26, 2015 TRC backfilled the embankment, created a shear wall, undercut the embankment without regard for proper engineering, and without DOGGR approval

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Concerns Over Recent TRC Embankment “Fill” Efforts

June 20, 2015 June 24, 2015

• TRC conducted excavation work between June 23 and 26, 2015 at the TRC Bull 31R expression

• Removed wet soil, added a rock base• Pushed dirt up the embankment and wheel rolled for compaction with a front

end loader and excavator• Expression on the south side of TRC’s embankment increased and there is

new pooling• Further illustration of TRC trespass and improper excavation creating unstable

conditions and increasing the flow of surrounding expressions

June 26, 2015

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TRC Embankment Work June 26, 2015

Note proximity of Well H225 to failing edge of the TRC embankment

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TRC Embankment Work June 29, 2015

June 29, 2015 1200 hrs

June 29, 2015

Issues of Concern• Excavated a vertical wall • Created areas of undercut with respect to the top of the embankment• Illustrates further destabilization of the embankment by TRC• TRC’s make shift retaining wall anticipates further collapse

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Impact on Chevron

• Impedes resolution of DOGGR emergency orders

• Cannot access 2 operating wells due to TRC created safety concerns

• TRC excavation trespassed onto Chevron property