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VIII-8 uncendlfity may be considered a major source of potash mining operation risk. The 15 % rate used in the results presented above is reasonable in light of the market uncertainties faced by potash producers. Although the development risk associated witr~ "otash deposits in the WIPP, additional, and combined areas is low, there is market price risk that is faced by operators. A precise discount rate for different fIrms operating in the WIPP area is diffIcult to estimate (particularly in the absence of debt/equity ratio data for said fIrms). So, although pinpointing a discount rate for a 35 year project is quite risky, current levels of activity in the region and market factors point to a 15 % discount rate for Carlsbad area potash operations. REFERENCES Copeland, T., Koller, T., and Murrin, J., 1990, Valuation: Measuring and Managing the Value of Companies: New York, Wiley. Dixit, A. K., and Pindyck, R. S., 1994, Investment Under Uncertainty: Princeton, N.J., Princeton Press. Economic Report of the President to Congress, February, 1994. Karlin, S. and Taylor, H. M., 1975, A First Course in Stochastic Processes: New York, Academic Press, 1975. Levy, H. and Sarnat, M., 1994, Capital Investment and Financial Decisions: Englewood Cliffs, N.J., Prentice-Hall. Searls, J., 1992, "Potash", United States Department of the Interior, Bureau of Mines. Stermole, F. J. and Stermole, J. M., 1993, Economic Evaluation and Investment Decision Methods: GoldeL. Colo., Investment Evaluations Corporation. Value Line Investment Survey, 17 March 1995 Weisner, R. C., Lemons J. F., and Coppa, L. V., 1980, Valuation of Potash Occurrences Within the Nuclear "'aste Isolation Pilot Plant Site in Southeastern New Mexico: United States Departme,)C of the Interior, Bureau of Mines. Information Only
VIII-9 Potash Simulation Example Year Wi' 1_ 1""'1 1m ~ 2lXXl INetlnvest U U U II ODS MIJleo u 1S4.101:l1 1S4L.Olll 1S4L.Olll 1S4LOlSl 1S4L.OllI IToDSt'rod a 3:roxJ [t'nce/I'on Il.O/q" 76.1Wl:1 77.79476 Tnlll B.YI!,}) ;AIIIlI.J 'COSlflon 1).16321 1).19335 16.22057 -15.78458 16.46271 ,Ann COSt a Dlf/Llj!U :iey lax U Depree U U U U u a Koyames a 666433.2 666647.6 6!m04.2 OlllAJ
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FINAL REpORT Evaluation of Mineral
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EXECUTIVE SUMMARY E-l The Waste Iso
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E-3 Resources and reserves of the 1
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£-5 Expected Net Present Values fo
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E-7 Expected revenue present values
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E-9 VOLUME 1 Chapter I POTENTIAL IN
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E-11 VOLUME 1 Chapter II ENVIRONMEN
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E-13 VOLUME 2 Chapter III OVERVIEW
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E-15 VOLUME 2 Chapter IV . FUTURE M
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E-17 VOLUME 2 Chapter VI MINING TEC
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E-19 VOLUME 2 Chapter VII METHOD OF
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Information Only E-21 Figure 28. Th
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E-23 VOLUME 2 Chapter VIII VALUATIO
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E-25 VOLUME 3 Chapter IX REGULATION
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M atnx · aCI'd" IZmg . . . . . . .
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E-29 PROJECTED FUTURE OIL AND GAS P
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E-31 Figure 27. Casing program of t
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Information Only E-33 Figure 58. Ty
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E-35 Table 15E. Los Medanos Bone Sp
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E-37 Table 5. Expected Net Present
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Evaluation of Mineral Resources at
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I-I POTENTIAL INDUSTRIAL MINERAL RE
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The report, authored by C. M. Nethe
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With full access to the surface, th
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occurrences in the WIPP site for th
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depth of 1000 ft. Rustler gypsum un
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is 320 acres, (3) drilling restrict
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1120 acres. Based on hydrocarbon re
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ls of the crude oil (43%), 211 BCF
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obtained by use of a planimeter. Th
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1-19 Keesey, 1.1., 1979. (See Sipes
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Sipes, Williamson, and Aycock, 1977
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Table I. Evaluation of mineral reso
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Table I. (conL) Quantity present Pr
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1-27 Table 3. Effect of allowing th
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II-i TABLE OF CONTENTS ENVIRONMENTA
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II-ii New Mexicp Water Quality Act
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the Federal Register, National Arch
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II-4 U.S. Environmental Protection
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II-6 U.S. Environmental Protection
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• • • • Filing and other ad
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0-10 • Transfers (43 CFR 3106)
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Operations that involve subsurface
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Pennits. special reports. and fees
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RCRA Subtitle D - Solid Waste RCRA
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• National secondary drinking wat
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the withdrawal area that are leased
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• Notification requirements when
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New Mexico Naroral Resources Depamn
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Permits, special repons, and fees I
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II-28 Permits. special reports. and
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II-30 Operations that extract oil a
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industrial, commercial, mining, and
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• Prohibition on disposing of any
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References New Mexico Game and Fish
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Clean Air Act TABLE 1 hnpact level
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TABLE 1 hnpact level of statutes an
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TABLE 2 Impact level of statutes an
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FINAL REPORT Evaluation of Mineral
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Table 2. K 2 0 equivalent wt. % of
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The United States ranked fourth in
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have extensive sections of laminate
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poor potash deposits probably preci
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followed by froth flotation (Fig. 6
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Information Only III-ll Hayes P. T.
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III-13 Fig.!. Location of the Carls
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III-IS Figure 3. Diagrammatic north
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Fig. 5. Vertical cyclic sequences i
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Fig. 7. Simplified potash crystalli
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1lI-21 Table 2. KzO Equivalent wt.
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llI-23 Table 4. Potash Statistics f
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m-25 Table 6. General Mineralogy an
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IV-l FUTURE MI~lNG TECHNOLOGY Georg
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Along with the improvements listed
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Saskatchewan and in thick but highl
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V-i TABLE OF CONTENTS Introduction
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Flotation chemistry Recently, non-e
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tures resulting in high salt solubi
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VI-ii Table 8. Case 1 - 4th ore zon
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Vl-2 of these three chemicals plus
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shows barrier pillars, but their us
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maintenance, and periodic replaceme
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Therefore, the engineering economic
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_J"L LJ::L.J DO DO ~ LJ L '"-':-:1.
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II IK'~II II Ṇ ... , ~ > . VI '-
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Vl-14 Table 1. Carlsbad Potash Prod
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Table 3. Salient potash l statistic
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Table 5. Case 1 - 4th ORE ZONE CASH
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u j u ~ uu iTIm!.g!c!~y•. ( j ~,t
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Table 13. Case 3 - 4th ORE ZONE CAS
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Table 15. Case 3 • 10th ORE ZONE
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_------._._ Table 17. Summary of En
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Table 19. Mining Life Versus Cut-of
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VII-i TABLE OF CONTENTS FORMULATION
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Information Only VII-iii Figure 32.
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VII-l MEmOD OF POTASH RESERVE EVALU
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Information Only VII-3 As mentioned
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VII-5 DEFINITIONS OF ORE RESERVES V
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Vll-7 hole records. That method can
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VII-9 tonnage factor equal to 14.8
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VlI-ll consistent with the known st
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VII-13 REFERENCES John, C. B., Chee
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VII-15 Table 2 Resources and reserv
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Table 4. In-ulace resources for oth
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Vll-19 2 6 5 4 3 2 ~..\d..J-.·· :
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VII-21 2 1 6 5 4 3 2 1 1 ·····
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0 -l: 0.0-0.5 0.5-1.0 1.0-1.5 1.5-2
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~ :::r ~o _. a. (1) .... C:::N ~o _
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Information Only :e =r »Q Q.CD --
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Information Only _. ~-:T >Q c.co cN
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Information Only 0.0-0.5 0.5-1.0 1.
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Information Only :e :::r ;x>° cN .
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Information Only 0.0-0.5 0.5-1.0 1.
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Figure 20 4th Ore Zone Equivalent L
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- L_' ••__1 ---' ~ .....__ I 16
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- I.-... __J __J k. _ 14 12 --- ---
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VTI-43 2 6 5 4 3 2 ,, , 2 M..,..---
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Vll-45 2 6 5 4 3 2 , 3 35 '36 •
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VII-47 2 6 5 4 3 2 , 4 25 -374 ~"1
Page 249 and 250: Information Only 6v-IlA o- ..... »
Page 251 and 252: Information Only o- ..... »::r .£
Page 253 and 254: 0 - I\:l >< )( )( - - 0 0 0- CAl 0
Page 255 and 256: Information Only .... 9 >::T' .9:0
Page 257 and 258: Information Only -'" o »~ -enCl) .
Page 259 and 260: Information Only ~ a »st .9:0 -c:
Page 261 and 262: Information Only -L o »:T .Q;o c::
Page 263 and 264: Information Only ..... o »g. .9:0
Page 265 and 266: L.... I _ - , .. __J _....... -~ 25
Page 267 and 268: L . . ----.. - ___~J ~. J I ....,--
Page 269 and 270: Vll-69 2 6 5 4 3 2 • '34 .·--·
Page 271 and 272: Vll-71 2 6 5 4 3 2 '_'_,~L::~--L·~
Page 273 and 274: Vll-73 2 6 5 4 3 2 ~ l ----- ~~.~~~
Page 275 and 276: Vll·75 2 6 5 4 3 2 - --~';~_:~~~'"
Page 277 and 278: o Tons of Ore ~ N Co) ~ C1l en 0 0
Page 279 and 280: Information Only ~ =so CD ~ _'::J O
Page 281 and 282: Information Only (0-:T o.... CD _N
Page 283 and 284: Information Only
Page 285 and 286: Information Only ~ =r o.., co N o ~
Page 287 and 288: Information Only to-:T ọ .... CD
Page 289 and 290: L... ..- .. .J , ---' , ...-.. 30 2
Page 291 and 292: Evaluation of Mineral Resources at
Page 293 and 294: VIII-I VIII VALUATION OF POTASH RES
Page 295 and 296: VIII-3 With respect to actual explo
Page 297 and 298: VIII-5 the simulation include: All
Page 299: Information Only VIII-7 data were u
Page 303 and 304: Table 2. Expected revenue present v
Page 305 and 306: VIII-13 APPENDIX This Appendix cont
Page 307 and 308: VIII-IS Scenario 2, 15 % discount r
Page 309 and 310: VIII-17 Lang WIPP Site Data, Case 1
Page 311 and 312: VIII-19 Lang WIPP Site Data. Case 2
Page 315 and 316: VIII-23 Lang WIPP Site Dala, Case 1
Page 321 and 322: VIII-29 Sylvite WIPP Site Data, Sce
Page 323 and 324: VIII-31 Sylvite WIPP Site Data, Sce
Page 325 and 326: VIII-33 Lang Combined Area Data, Ca
Page 327 and 328: vm·35 Lang Combined Area Data, Cas
Page 333 and 334: VIII-41 Lang Combined Data, Case 1,
Page 343 and 344: VIII-51 Sylvite Combined Area Data,
Page 345 and 346: VIII-53 Sylv~e Combined Area Data,
Page 347 and 348: VIII-55 Sylvite Combined Area Data,
Page 349 and 350: VIII-57 Lang Additional Area Data,
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VIII-59 Lang Addnional Area Data, C
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VIlI-61 Lang Additional Area Data,
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VIII-63 Lang Addition Data, Case 1,
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VIlI-69 Sylvite Additional Area Dat
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VIII-71 Sylvite Additional Area Dat
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Certificatioll _ We certify under p
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IX-i TABLE OF CONTENTS REGULATIONS
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egulations for drilling oil and gas
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IX-4 characteristics must be favora
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IX-6 ENERGY, STATE OF NEW MEX ICO M
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IX-8 -3- Case No. 9316 Order No. R-
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IX-lO -seaseNo. 931 6 Order No. R-I
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IX-12 -7- ea s e No. 9316 O~de~ No.
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IX-14 -9- Case No. 9316 Order No. R
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IX-16 -11 - Case No. 9316 Order No.
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IX-I8 -13- Ca s e No. 9316 Order No
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In attempting to accomplish. this,
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IX-22 provided by applicable laws a
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IX-24 the depth of the ore plus ten
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IX-26 IV. LQcation Qf Wells· and N
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IX-28 C. In the event the increased
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IX-30 -2- EXHIBIT "A" con'd Section
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IX-32 -u- EXHIBIT "A" eon'd LEA COU
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IX-34 -6- EXHIBIT "A" eon'd T~VNSHI
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IX-36 -7- EXHIBIT "A" eon"d EDDY CO
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J ' , IX-38 ( Friday November 18. 1
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- IX-40 . , '. Of: .m~la c ,.lha O.
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-_...:-- IX-42 Federal Regisler I V
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_-- -_.. ----_ ..-- ----- IX-44 , .
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- ( ( Fedenl ltagistu / Vol. s.1. N
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IX-48 Federal R~ster " Vol. 53, No,
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IX-50 i 1 I ""'""", Federal Ret-ste
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I IX-52 Federal Register I Vol. 53.
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•• .w :"-=~},~0\;!!'.I&4 ••
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IX-56 CHECKLIST for ADMINISTRATIVE
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IX-58 Chapter IX REGULATIONS PERTAI
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'" IX-60 2 ehe U.S. !DVlro~t&l lro
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IX-62 Chapter IX REGULATIONS PERTAI
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IX-64 TABLE OF CONTENrS STATEMENT O
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IX-66 C. Wildlife The BLM shall: 1.
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IX-68 of the DOE (the contributing
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~ ". ~ ~. ._ f - IX-70 ,. ,. If 9-
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IX-72 MEMORANDUM OF UNDERSTANDING B
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IX-74 c. Use avoidance as the prima
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IX-76 and oilleasts adjacent to the
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IX-78 2. The DOr ail"ee3 to: a. For
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THE PAST-DECADE DEVELOPJ.\ilENTS At
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The POC bits and POC cutter blank m
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X-5 Other applications are explorat
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X-7 optimum production, completion,
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Cement additives Research during th
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1994). The productivity of a fractu
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Hydraulic fracturing - acidizing Th
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X-IS Concluding remarks Technology
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X-17 PennWell Books, Tulsa, OK, p.
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low-friction gauge PDC bits: Societ
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XI-i TABLE OF COl'iiENTS SUMMARY OF
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XI-iii Figure 14 Designated oil poo
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Xl·v and boundaries of designated
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Information Only XI-vii TABLES Tabl
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XI-2 will be produced from the deep
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Definitions Several basic definitio
Page 481 and 482:
CCcJ.. From these projections. esti
Page 483 and 484:
ea"ons often do not yield a product
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Information Only XI-IO made it poss
Page 487 and 488:
XI-12 Canyon production is in the T
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Information Only XI-14 the east. In
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Information Only XI-16 (Fig. 25). U
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discovery wells . Developmentdrilli
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the middle part of the Cherry Canyo
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Information Only XI-22 of approxima
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The sucker rods move vertic;i"y up
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Information Only XI-26 The authigen
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XI-28 fore, stratigraphic traps str
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interbedded with dark basinal shale
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(Fig. 51, Table 2) with probable re
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XI-34 Two wells have drilled throug
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Xl-36 that no such structure, and h
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XI-38 REFERENCES Anderson, R., 1977
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Xl-40 Guidebook 44, pp. 175-184. Kl
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Worthington, R. E., 1994, East Shug
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Figure 12. Annual number of oil and
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XI-46 response of oil production to
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XI-48 additional study area. Separa
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XI-50 Producing provi~ce. "'" Nonpr
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XI-52 'f!'
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1 '
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XI-56 A I I ,I . J- ~ 1 o eo 111Unt
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XI-58 A no"" mIl o 0 Tubb t marl -
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!I r--;-----;---"/"--:;--A;r:-;,...
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300 "C CD 1i) 0.200 E o U tn 1.00 .
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.... XI-64 ~45' 104·45' ·r·--·-
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XI-66 t t t t slope into basin FEED
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XI-68 ~'r-~·'--,-----,--,--,4-r--"
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XI-70 · · . ! ! i =:! .. , I .. ,
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XI-n • + o ", .- .:.... • • .
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XI-74 ~r_-':'-- " ,---.,.--.,...--r
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'D tō-:>< Oil: Los Medanos-8and Du
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XI-78 --'~r--'--"T--..,..--r--'i'--
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XI-80 o 133/8" @ 600 fl 2,000 ! .c:
Page 557 and 558:
Paduca (Delaware) Field Annual Oil
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~._- XI-84 Delaware Basin Northwest
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XI-86 .,' . . 1-; ~. ~. / ./ 'jl .
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XI-88 23 11 8 o o I .5 1ml ! ---- I
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XI-90 • ft. _.. iJ ~ -t .... l..1
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Cabin Lake Strawn; Phillips Petrole
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XI-94 - I · · - . I · · · · "
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XI..96 o 13·/.'@650ft 2,000 4,000
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Los Medanos Atoka (Gas); Bass Enter
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Los Medanos Morrow (Gas); Conoco, I
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XI-102 . · . -, , .. 01''' I I " "
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Los Medanos-Sand Dunes-Ingle Wells
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Quahada Ridge Southeast (Lower Brus
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Strawn Projected Future Annual Gas
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Morrow Projected Future Annual Gas
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TABLE 6. Surface and bottom-hole lo
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Table 15A. Livingston Ridge Delawar
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Table 15C. Cabin Lake Delaware pool
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Table 15E. Los Medanos Bone Spring
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TABLE 15F. (Continued) XI-131 Year
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~ TABLE 15G. (Continued) XI~133 Yea
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Table 16. Projected future annual o
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XII-i TABLE OF CONTENTS SUMMARY RES
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XII-2 additional area gas reserves
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Key assumptions and features associ
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contribute te alterations in the se
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XII-8 160 Combined Area Oil Revenue
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XII-IO 120 Combined Area Oil Revenu
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XII-12 Combined Area Oil Cash Flow
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XII-14 160 I 140 --r- I Combined Ar
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Oil Simulation Example XII-16 Year
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XII-18 Table 6. Expected revenue pr
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XII-20 WIPP Site Gas. 10% discount
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XII-22 WIPP Area Gas, 12.5% Royalti
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XII-24 Additional Area Gas, 12.5% R
Page 627 and 628:
XIl-26 Combined Area Gas. 12.5% Roy
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XII-28 WIPP Area Gas, 12.5% Royalti
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XII-30 Additional Area Gas, 12.5% R
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XII-32 Combined Area Gas. 12.5% Roy
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XII-34 W1PP Site Gas Data, discount
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XIl-36 Additional Area Gas Data, di
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XII-38 Combined Area Gas Data, disc
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XII-40 W1PP Site Gas Data. discount
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XII-42 Additional Area Gas Data, di
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XII-44 Combined Area Gas Data. disc
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Information Only XII-46
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