Study hydraulic fracturing study inglewood field10102012

1. Hydraulic Fracturing StudyPXP Inglewood Oil FieldOctober 10, 2012Prepared ForPlains Exploration & Production Company

2. Hydraulic Fracturing StudyPXP Inglewood Oil FieldOctober 10, 2012Prepared forPlains Exploration & Production Company5640 South Fairfax Avenue, Los Angeles, CA 90056andLos Angeles County, Department of Regional Planning320 West Temple Street, Los Angeles, CA 90012Prepared byCardno ENTRIX10940 Wilshire Blvd, Suite 1525, Los Angeles, CA 90024Tel 424 832 1303 Fax 424 248 2101 Toll-free 800 368 7511www.cardnoentrix.com

3. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable of ContentsExecutive Summary ..................................................................................................................................................... 1 ES.1 Hydraulic Fracturing Study Objectives ................................................................. 1 ES.2 Summary of Findings............................................................................................. 2 ES.3 Oil Production in the Los Angeles Basin and the Inglewood Oil Field ................. 4 ES.4 Well Drilling and Completion ............................................................................... 6 ES.5 Summary of Past and Future Hydraulic Fracturing and High-Rate Gravel Packing at the Inglewood Oil Field ....................................................................... 9 ES.6 Monitoring Conducted During Hydraulic Fracturing and High-Rate Gravel Packing at Inglewood Oil Field ............................................................... 13 ES.7 Regulatory Perspective on the Inglewood Oil Field ............................................ 22Chapter 1 Introduction................................................................................................................................... 1-1Chapter 2 Oil Production in the Los Angeles Basin and at the Inglewood Oil Field ............................... 2-1 2.1 Introduction......................................................................................................... 2-1 2.2 Petroleum Geology of the Los Angeles Basin .................................................... 2-5 2.3 Petroleum Production in the Los Angeles Basin ................................................ 2-6 2.4 Petroleum Geology and Production at the Inglewood Oil Field ......................... 2-7 2.4.1 Inglewood Oil Field Geology ................................................................ 2-8 2.4.2 Petroleum Producing Zones ................................................................. 2-21 2.5 Future of Oil and Gas Development in the Los Angeles Basin ........................ 2-23Chapter 3 Hydraulic Fracturing at Inglewood Oil Field: Past, Present, and Future ................................. 3-1 3.1 Oil and Gas Well Drilling, Including Hydraulic Fracturing Completions .......... 3-1 3.1.1 Drilling, Casing, and Cementing ........................................................... 3-2 3.1.2 Hydraulic Fracturing as a Completion Technique ................................. 3-4 3.2 Hydraulic Fracturing at the Inglewood Oil Field................................................ 3-9 3.2.1 Conventional Hydraulic Fracturing ....................................................... 3-9 3.2.2 High-Volume Hydraulic Fracturing..................................................... 3-12 3.2.3 Images from January 2012 Completion Operations ............................ 3-20 3.3 Gravel Packs at the Inglewood Oil Field .......................................................... 3-24 3.3.1 Past Gravel Packs ................................................................................ 3-25 3.3.2 Recent High-Rate Gravel Pack Completions....................................... 3-29 3.4 Anticipated Future Use of Hydraulic Fracturing and Gravel Packing at the Inglewood Oil Field .......................................................................................... 3-31October 2012 Cardno ENTRIX Table of Contents iHydraulic Fracturing Study_Inglewood Field_10102012.docx

4. Hydraulic Fracturing Study PXP Inglewood Oil FieldChapter 4 Environmental Effects Monitored in Conjunction with Hydraulic Fracturing Tests ...............4-1 4.1 Introduction......................................................................................................... 4-1 4.2 Hydrogeology, Water Quantity and Quality ....................................................... 4-1 4.2.1 Geologic Control on the Distribution of Groundwater-Bearing Zones...................................................................................................... 4-1 4.2.2 Hydrogeology ........................................................................................ 4-8 4.2.3 Water Quality....................................................................................... 4-10 4.2.4 Groundwater Monitoring Associated with High-Volume Hydraulic Fracturing ............................................................................ 4-13 4.2.5 Surface Water ...................................................................................... 4-17 4.2.6 Sources of Drinking Water to the Local Community .......................... 4-17 4.2.7 Water Supply Concerns Related to Shale Gas Development Elsewhere in the United States ............................................................ 4-19 4.3 Containment of Hydraulic Fractures to the Desired Zone ................................ 4-24 4.4 Well Integrity .................................................................................................... 4-26 4.5 Slope Stability, Subsidence, Ground Movement, Seismicity ........................... 4-28 4.5.1 Slope Stability...................................................................................... 4-28 4.5.2 Subsidence ........................................................................................... 4-29 4.5.3 Monitoring of Ground Movement ....................................................... 4-29 4.5.4 Vibration and Seismicity During Hydraulic Fracturing....................... 4-30 4.5.5 Induced Seismicity and Additional Seismic Monitoring During Hydraulic Fracturing ............................................................................ 4-30 4.5.6 Potential for Induced Seismicity at Other Areas in the United States .................................................................................................... 4-32 4.6 Methane ............................................................................................................ 4-36 4.6.1 Subsurface Occurrence of Methane ..................................................... 4-36 4.6.2 Regulatory Framework for Methane.................................................... 4-37 4.6.3 Gas Monitoring Prior to Hydraulic Fracturing at the Inglewood Oil Field ............................................................................................... 4-40 4.6.4 Gas Monitoring After High-Volume Hydraulic Fracturing ................. 4-40 4.6.5 Groundwater Monitoring for Methane after Hydraulic Fracturing...... 4-42 4.6.6 Methane Emissions and Climate Change ............................................ 4-43 4.7 Other Emissions to Air ..................................................................................... 4-44 4.8 Noise and Vibration .......................................................................................... 4-50 4.9 Los Angeles County Department of Public Health Study ................................ 4-54 4.9.1 Mortality .............................................................................................. 4-55 4.9.2 Low Birth Weight ................................................................................ 4-55ii Table of Contents Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

5. Hydraulic Fracturing StudyPXP Inglewood Oil Field 4.9.3 Birth Defects ........................................................................................ 4-56 4.9.4 Cancer .................................................................................................. 4-56 4.9.5 Community Survey .............................................................................. 4-56 4.9.6 Health Assessment Limitations and Recommendations ...................... 4-57Chapter 5 Regulatory Framework................................................................................................................. 5-1 5.1 Introduction: Local Source of Energy in the Context of Community Concerns ............................................................................................................. 5-1 5.2 Regulatory Framework and Government-Sponsored Reviews of Hydraulic Fracturing ........................................................................................... 5-2 5.3 California Regulations ........................................................................................ 5-3 5.3.1 DOGGR Regulations ............................................................................. 5-3 5.3.2 Baldwin Hills Community Standards District ....................................... 5-4 5.3.3 Proposed California Regulations ........................................................... 5-4 5.4 Federal Regulations and Studies ......................................................................... 5-5 5.4.1 Federal Regulations ............................................................................... 5-5 5.4.2 Federal Studies....................................................................................... 5-7 5.5 State Regulations and Studies ............................................................................. 5-9 5.5.1 State-Specific Regulations ..................................................................... 5-9 5.6 Inglewood Oil Field in State and National Regulatory Perspective ................. 5-21Chapter 6 Qualifications of Preparers.......................................................................................................... 6-1Chapter 7 Supporting Material and References .......................................................................................... 7-1 7.1 Supporting Material ............................................................................................ 7-1 7.2 References........................................................................................................... 7-2AppendicesAppendix A Peer Reviewer Comment LetterAppendix B Chemical Additives Used and FracFocus ReportsOctober 2012 Cardno ENTRIX Table of Contents iiiHydraulic Fracturing Study_Inglewood Field_10102012.docx

6. Hydraulic Fracturing Study PXP Inglewood Oil FieldTablesTable 2-1 Los Angeles Basin Oil and Gas Field .................................................................. 2-3Table 2-2 Stratigraphy of the Inglewood Oil Field ............................................................ 2-10Table 2-3 Geologic Time Scale .......................................................................................... 2-11Table 2-4 Summary of Active and Idle Wells within Each Oil and Gas-bearing Formation on the Inglewood Oil Field............................................................... 2-21Table 3-1 Volumes of Water Used During High-Volume Hydraulic Fracturing Operations at the Inglewood Oil Field .............................................................. 3-19Table 3-2 List of Additives Used During High-Volume Hydraulic Fracture Operations at the Inglewood Oil Field ............................................................... 3-19Table 3-3 Comparison of High-Rate Gravel Packs to Conventional Hydraulic Fracturing ........................................................................................................... 3-26Table 3-4 Comparison of Sand and Fluid Volumes between High-Rate Gravel Pack and High-Volume Hydraulic Fracturing at the Inglewood Oil Field ................. 3-26Table 3-5 Volumes of Water Used During High-Rate Gravel Pack Hydraulic Fracturing Operations at the Inglewood Oil Field ............................................. 3-30Table 3-6 List of Additives at Used During High-Rate Gravel Pack Operations at the Inglewood Oil Field ........................................................................................... 3-30Table 4-1 Comparison of Vibration Levels Recorded During Baseline Monitoring and Hydraulic Fracturing Operations................................................................. 4-30Table 4-2 Emissions Thresholds – South Coast AQMD.................................................... 4-49Table 4-3 Estimated Emissions of Criteria Pollutants........................................................ 4-49Table 4-4 Estimated Emissions of Greenhouse Gases ....................................................... 4-49Table 4-5 Noise Sources and Their Effects ........................................................................ 4-51Table 5-1 Examination of Water Use During Hydraulic Fracturing .................................... 5-9Table 5-2 Summary of State Chemical Disclosure Regulations ........................................ 5-10Table 5-3 Summary of Findings of the SGEIS and Comparison with Baldwin Hills CSD .................................................................................................................... 5-13Table 5-4 Summary of State STRONGER Reviews of Hydraulic Fracturing ................... 5-18iv Table of Contents Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

7. Hydraulic Fracturing StudyPXP Inglewood Oil FieldFiguresFigure ES-1 Regional Location Map............................................................................................1Figure ES-2 Location of Los Angeles Basin Oil Fields ...............................................................5Figure ES-3 Depiction of Casing Strings .....................................................................................7Figure ES-4 Locations of Hydraulic Fracture Operations at Inglewood Oil Field ....................10Figure 1-1 Regional Location Map........................................................................................ 1-1Figure 2-1 Location of Los Angeles Basin Oil Fields ........................................................... 2-2Figure 2-2 Cumulative Oil Production in the Los Angeles Basin ......................................... 2-6Figure 2-3 California Oil Production Since 2000 .................................................................. 2-7Figure 2-4 Cross Section of Structure and Geological Formation ........................................ 2-9Figure 2-5 Chronology of Major Cenozoic Events in the Los Angeles Region .................. 2-12Figure 2-6 Geologic Formations Present at the Inglewood Oil Field and Vicinity ............. 2-13Figure 2-7 Cross Section of the Inglewood Oil Field Earth Model ..................................... 2-14Figure 2-8A Sentous Surface .................................................................................................. 2-15Figure 2-8B Nodular Surface on Top ..................................................................................... 2-15Figure 2-8C Bradna Surface on Top ...................................................................................... 2-16Figure 2-8D Bradna Surface with Faults ................................................................................ 2-16Figure 2-8E Moynier Surface on Top .................................................................................... 2-17Figure 2-8F Moynier Surface with Faults.............................................................................. 2-17Figure 2-8G Rubel Surface on Top ........................................................................................ 2-17Figure 2-8H Rubel Surface with Faults .................................................................................. 2-17Figure 2-8I Rindge Surface on Top ...................................................................................... 2-18Figure 2-8J Rindge Surface with Faults ................................................................................ 2-18Figure 2-8K Vickers H-Sand Surface on Top ........................................................................ 2-18Figure 2-8L H-Sand Surface with Faults ............................................................................... 2-18Figure 2-8M Vickers Surface on Top ..................................................................................... 2-19Figure 2-8N Vickers Surface with Faults ............................................................................... 2-19Figure 2-8O UIHZ Surface on Top ........................................................................................ 2-19Figure 2-8P UIHZ Surface with Faults .................................................................................. 2-19Figure 2-8Q Vickers Reservoir Hydrocarbon Seal with Faults .............................................. 2-20Figure 2-8R PICO Surface on Top ......................................................................................... 2-20Figure 2-8S PICO Surface with Faults .................................................................................. 2-20October 2012 Cardno ENTRIX Table of Contents vHydraulic Fracturing Study_Inglewood Field_10102012.docx

8. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 2-8T PICO Surface w/ Discontinuous Water Bodies & Faults .................................. 2-20Figure 2-8U Ground Surface & Aerial Photo on Top ............................................................ 2-21Figure 2-9 2011 and 2012 Reported Hydraulic Fracturing Operations in Southern California ........................................................................................................... 2-24Figure 3-1 Depiction of Casing Strings ................................................................................. 3-3Figure 3-2 Perforation Process .............................................................................................. 3-5Figure 3-3 Composition of a Typical Fracturing Fluid ......................................................... 3-6Figure 3-4 Locations of Hydraulic Fracturing Operations at Inglewood Oil Field ............. 3-10Figure 3-5A Side View of the Sentous Zone Modeled Fracture Geometries ......................... 3-11Figure 3-5B Side View Showing Modeled Fracture Geometries for Study Well in the Sentous Zone Together with Structural Features (Faults) ................................. 3-11Figure 3-6 High-Volume Hydraulic Fracturing Operations with Microseismic Monitoring Locations......................................................................................... 3-13Figure 3-7 Graphical Representation of Seismic Events as Recorded on the Richter Scale ................................................................................................................... 3-14Figure 3-8A Microseismic Events Detected During the Hydraulic Treatments in the Sentous Zone in Wells VIC1-330 and VIC1-635 .............................................. 3-15Figure 3-8B Earth Model Visualization Showing the Microseismic Events Recorded during Hydraulic Fracture Treatment in the Nodular Shale Zone in Wells VIC1-330 and VIC1-635 ................................................................................... 3-16Figure 3-9 Detailed Zoomed in Side View Visualization of the Microseismic Events Recorded during Fracture Treatment in the Sentous Zone in Well VIC1-330 ........................................................................................................... 3-17Figure 3-10 Microseismic Events Detected during Mainstage Fracture Treatment, Top View ........................................................................................................... 3-17Figure 3-11 2D VIC1-635, VIC1-735 and VIC1-935 Surface Locations with Events Mapped .............................................................................................................. 3-18Figure 3-12 High-Rate Gravel Pack Completions at the Inglewood Oil Field...................... 3-27Figure 3-13A Side View Showing Modeled Fracture Geometries in the Vickers Zone .......... 3-28Figure 3-13B Side View Showing Modeled Fracture Geometries in the Vickers Zone and Structure (Faults) ......................................................................................... 3-29Figure 4-1 Groundwater Basins in the Vicinity of the Inglewood Oil Field ......................... 4-3Figure 4-2 Location of Inglewood Oil Field in Relation to Known Fault Lines ................... 4-4Figure 4-3A Cross Section Location ........................................................................................ 4-5Figure 4-3B Monitoring and Drinking Water Wells in the Vicinity of the Inglewood Oil Field ............................................................................................................... 4-6vi Table of Contents Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

9. Hydraulic Fracturing StudyPXP Inglewood Oil FieldFigure 4-3C Groundwater Beneath the Oil Field ..................................................................... 4-7Figure 4-4 Groundwater Production in the Los Angeles Basin in 2000................................ 4-9Figure 4-5 Comparison of Baseline to Post-Hydraulic Fracturing Operation Water Quality ..................................................................................................... 4-16Figure 4-6 Barnett Mapped Frac Treatments/TVD ............................................................. 4-25Figure 4-7 Methane Zone Map ............................................................................................ 4-38Figure 4-8 Soil Gas Survey Sample Locations .................................................................... 4-41Figure 4-9 Methane Isotopic Results ................................................................................... 4-42Figure 4-10A Ground Vibration Level Measurements from High-Volume Hydraulic Fracture at VIC1-330 ......................................................................................... 4-52Figure 4-10B Ground Vibration Level Measurements from High-Volume Hydraulic Fracture at VIC1-635 ......................................................................................... 4-52Figure 4-10C Ground Vibration Level Measurements from Gravel Pack Operations at TVIC-221 and TVIC-3254 ................................................................................ 4-53Figure 4-11 Vibration Sensitivity Chart ................................................................................ 4-54October 2012 Cardno ENTRIX Table of Contents viiHydraulic Fracturing Study_Inglewood Field_10102012.docx

10. Hydraulic Fracturing Study PXP Inglewood Oil FieldAcronyms and Abbreviationsµg/L micrograms per literµS/cm microSiemens per centimeterAML acute myelogenous leukemiaAOR area of reviewAPI American Petroleum Institutebgs below ground surfaceBOD biological oxygen demandBOD5 nitrate, nitrite, metals and biological oxygen demandBOGM Bureau of Oil and Gas ManagementBTEX benzene, toluene, ethylbenzenes and xylenesBWPM barrels of water per monthCal-Tech California Institute of TechnologyCARB California Air Resources BoardCAP Community Advisory PanelCBM coalbed methaneCCAR California Climate Action RegistryCCR California Code of RegulationsCDMG California Department of Conservation, Division of Mines and GeologyCEQA California Environmental Quality ActCFR Code of Federal RegulationsCH4 methaneCML chronic myelogenous leukemiaCO carbon monoxideCO2 carbon dioxideCO2e carbon dioxide equivalentsCOGA Colorado Oil & Gas AssociationC-PM10 dust particles 10 microns or less in sizeC-PM2.5 dust particles 2.5 microns or less in sizeCSD Community Standards DistrictdB decibelsdBA A-weighted decibelsDEP Department of Environmental Protectionviii Table of Contents Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

11. Hydraulic Fracturing StudyPXP Inglewood Oil FieldDMRM Divisions of Mineral Resource ManagementDOGGR California Department of Conservation, Division of Oil, Gas and Geothermal ResourcesDTSC California Department of Toxic Substance ControlDWR California Department of Water ResourcesEIR Environmental Impact ReportEQAP Environmental Quality Assurance ProgramFRAC Act Fracturing Responsibility and Awareness of Chemicals ActGEIS Generic Environmental Impact StatementGHG greenhouse gassesGPS global positioning systemGWP Global Warming PotentialGWPC Ground Water Protection CouncilH2S hydrogen sulfideHBO® Home Box OfficeHz hertzIEA International Energy Associationin/sec inches per secondIOGCC Interstate Oil and Gas Compact CommissionIPCC Intergovernmental Panel on Climate ChangeLAC DPH Los Angeles County Department of Public HealthLARWQCB Los Angeles Regional Water Quality Control Boardlbs poundsLNG liquefied natural gasMCL California maximum contaminant levelMg/L milligrams per literMIT mechanical integrity testMRRP monitoring, recordkeeping and reporting protocolMTBE methyl tert-butyl etherMUN municipal supplyN2O nitrogen dioxideNESHAP National Emissions Standards for Hazardous Air PollutantsNGO non-governmental organizationOctober 2012 Cardno ENTRIX Table of Contents ixHydraulic Fracturing Study_Inglewood Field_10102012.docx

12. Hydraulic Fracturing Study PXP Inglewood Oil FieldNOx nitrogen oxidesNPDES National Pollutant Discharge Elimination SystemNRC National Research CouncilNSPS new source pollutant standardsNYCDEP New York City Department of Environmental ProtectionODNR Ohio Department of Natural ResourcesOGCD Oil and Gas Conservation DivisionPAW Petroleum Association of Wyomingppb parts per billionppm parts per millionppmv parts per million by volumepsi pounds per square inchPXP Plains Exploration and Production CompanyRWQCB Regional Water Quality Control BoardSCAQMD South Coast Air Quality Management DistrictSDWA Safe Drinking Water ActSGEIS Supplemental Generic Environmental Impact StatementSOX sulfur oxidesSPCC Spill Prevention, Control, and CountermeasuresSTRONGER State Review of Oil and Natural Gas Environmental RegulationsTDS Total Dissolved SolidsTOC toxic organic compoundTPH Total Petroleum HydrocarbonsTPH-DRO Total Petroleum Hydrocarbons – Diesel Range OrganicsTRPH Total Recoverable Petroleum HydrocarbonsUIC underground injection controlUSDOE U.S. Department of EnergyUSEPA U.S. Environmental Protection AgencyUSGS U.S. Geological SurveyUSDW underground sources of drinking waterVOC volatile organic compoundsx Table of Contents Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

13. Executive SummaryES.1 Hydraulic Fracturing Study ObjectivesThe Inglewood Oil Field was discovered in 1924 by Standard Oil, and encompasses anapproximate 1,000-acre area of the Baldwin Hills of Los Angeles County (Figure ES-1). PlainsExploration & Production Company (PXP) has operated the oil field since December 2002. Figure ES-1 Regional Location MapOctober 2012 Cardno ENTRIX Executive Summary 1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

14. Hydraulic Fracturing Study PXP Inglewood Oil FieldIn October 2008, the County of Los Angeles (County) approved the Baldwin Hills CommunityStandards District (CSD), creating a supplemental district to improve the compatibility of oilproduction with adjacent urban land use. A lawsuit was filed in late 2008 against the County andPXP challenging the validity of the CSD. The lawsuit was settled July 15, 2011. This HydraulicFracturing Study is the direct result of Term 13 of the Settlement, which states: PXP shall pay for an independent consultant to conduct a study of the feasibility and potential impacts (including impacts to groundwater and subsidence) of the types of fracturing operations PXP may conduct in the Oil Field. The study will also consider PXP’s historic and current use of gravel packing. Such study will be completed within twelve (12) months of the date of this Agreement. Such study and all the back-up information for such study shall be provided to a qualified peer reviewer selected by the County and PXP, who shall review the study, back- up materials, and conclusions for completeness and accuracy. PXP must provide the independent expert with all materials requested and reasonably necessary for an accurate and verifiable study. The peer reviewer will be provided with access to all the data and materials provided to the independent expert. The peer reviewer shall agree to keep all proprietary information confidential. If the peer reviewer determines that the study is materially inadequate, incomplete or inaccurate, it shall so advise PXP’s consultant who will complete the study as reasonably recommended by the peer reviewer and provide the revised study to the peer reviewer within 90 days. Upon acceptance by the peer reviewer, the study and all supporting material, including comments by the peer reviewer, shall be forwarded to the County, DOGGR, the Regional Water Quality Control Board (“RWQCB”), CAP and Petitioners and be available to the public, with any proprietary information redacted.This study draws on several sources, including sources in the peer-reviewed literature, theInglewood Oil Field CSD, the 2008 Environmental Impact Report (EIR) conducted for the CSD,data and analyses provided by the contractor who conducted the recent hydraulic fracturing andhigh-rate gravel packing operations at the field, and from numerous contractors performingmonitoring studies before, during, and after the recent hydraulic fracturing and high-rate gravelpacking operations at the field.In accordance with the Settlement Agreement, this study was reviewed by peer reviewers, jointlyselected by the County and PXP. The peer reviewers, John Martin, Ph.D. and Peter Muller,Ph.D., C.P.G., were provided with the draft study and all reference materials. The peerreviewer’s comments on the study, and their statement indicating that the revised studyaddressed all comments adequately and completely, thereby determining the study compete, isprovided in Appendix A.ES.2 Summary of FindingsThe following are the primary findings of the Hydraulic Fracturing Study:1. Microseismic Monitoring: The microseismic monitoring of high-volume hydraulic fracturing indicated that proppant-filled fractures were confined within the deep shale formations beneath the Inglewood Oil Field. Microseismic monitoring showed all fractures2 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

15. Hydraulic Fracturing StudyPXP Inglewood Oil Field were separated from the designated base of fresh water by 7,700 feet (1.5 miles) or more. Monitoring also showed all high-rate gravel packs stayed within their target zones.2. Groundwater: Groundwater beneath the Inglewood Oil Field is not a source of drinking water, although the water quality must meet the standards for such a source. Groundwater beneath the Baldwin Hills is geologically isolated from the surrounding Los Angeles Basin and any water supply wells. Routine tests by the water purveyor show the community’s water supply meets drinking water standards, including the period of high-rate gravel packs and conventional hydraulic fracturing, as well as the first high-volume hydraulic fracture in September 2011. In addition, the Inglewood Oil Field has an array of groundwater monitoring wells to measure water quality. Apart from arsenic, which is naturally high in groundwater of the Los Angeles Basin, the analyzed constituents meet drinking water standards. Before-and-after monitoring of groundwater quality in monitor wells did not show impacts from high-volume hydraulic fracturing and high-rate gravel packing.3. Well Integrity: Tests conducted before, during and after the use of hydraulic fracturing and high-rate gravel packing showed no effects on the integrity of the steel and cement casings that enclose oil wells. There is also an ongoing program of well integrity tests at the Inglewood Oil Field.4. Methane: Methane analyzed in soil gas and groundwater, as well as carbon and hydrogen isotopic rations in methane, at the Inglewood Oil Field did not show levels of concern. There was no indication of impacts from high-volume hydraulic fracturing or high-rate gravel packing.5. Ground Movement and Subsidence: Before-and-after studies of high-volume hydraulic fracturing and high-rate gravel packing at the Inglewood Oil Field showed no detectable effect on ground movement or subsidence.6. Induced Earthquakes: Before-during-and-after measurements of vibration and seismicity, including analysis of data from the permanently installed California Institute of Technology accelerometer at the Baldwin Hills, indicates that the high-volume hydraulic fracturing and high-rate gravel packs had no detectable effects on vibration, and did not induce seismicity (earthquakes).7. Noise and Vibration: Noise and vibration associated with high-volume hydraulic fracturing and high-rate gravel packing operations at the Inglewood Oil Field were within the limits set forth in the CSD.8. Air Emissions: Emissions associated with high-volume hydraulic fracturing were within standards set by the regional air quality regulations of the South Coast Air Quality Management District.9. Community Health: The Los Angeles County Department of Public Health conducted a community health assessment that found no statistical difference of the health of the local community compared to Los Angeles County as a whole. Conventional hydraulic fracturing and high-rate gravel packs operations took place at the oil field, within the period addressed by the health assessment. Given the fact that public health trends in the area surrounding theOctober 2012 Cardno ENTRIX Executive Summary 3Hydraulic Fracturing Study_Inglewood Field_10102012.docx

16. Hydraulic Fracturing Study PXP Inglewood Oil Field field were consistent with public health trends throughout the L.A. Basin it is reasonable to conclude that the conduct of hydraulic fracturing during the analyzed period did not contribute or create abnormal health risksThe Baldwin Hills CSD, and the associated Environmental Impact Report (EIR), togetheraddresses the issues that are part of a hydraulic fracturing operation, such as truck traffic, wateruse, community compatibility (noise, light and glare, etc.), air emissions from vehicles andequipment used during the well development process, and other environmental resourcecategories. In addition, the EIR evaluates cumulative impacts, and environmental justice. Thesetwo documents support this Hydraulic Fracturing Study, which evaluates the effects measuredand monitored during the high-volume hydraulic hydraulic fracturing and high rate gravelpacking operations conducted in 2011 and 2012, as well as past activities of this type. TheHydraulic Fracturing Study did not identify a new impact not analyzed in the EIR, nor did itidentify impacts greater in significance than those analyzed in the EIR.Exacting protective measures and close monitoring are required by the Baldwin Hills CSD andby county, regional and federal agencies. These field-specific reviews and public and agencyinteractions compel PXP to enforce real-time compliance with all environmental standards in theInglewood Oil Field. The long history of oil production in the area provides operators with anexcellent understanding of the local subsurface conditions and reduces standard risks anduncertainties that would be present in new operations.ES.3 Oil Production in the Los Angeles Basin and the Inglewood Oil FieldCalifornia is the fourth largest oil producing state in the U.S. (U.S. Energy Information Agency2012), and the Los Angeles Basin is the richest oil basin in the world based on the volume ofhydrocarbons per volume of sedimentary fill (Biddle 1991). Oil was first discovered in the area atthe Brea-Olinda Oil Field in 1880, followed by numerous fields, including the Inglewood Oil Fieldin 1924 (Figure ES-2). As of this writing, there are 42 active fields in the Los Angeles Basin.The Los Angeles Basin represents, from a global perspective, the ideal conditions for thegeneration and accumulation of hydrocarbons (Barbat 1958, Gardett 1971, Wright 1987a). Therelatively recent geologic, tectonic, and structural history of the region has provided a thermalhistory that brings the organic-rich material into the “oil window”; the thermal regime that isoptimum for development of oil and gas from organic precursors.Discovery and development of the Los Angeles Basin oil fields accompanied rapid urbanization.Many oil fields were later covered by residential or commercial development, sometimes withcontinuing oil production. Chilingar and Endres (2005) evaluated urban encroachment on activeand inactive oil fields, primarily in the Southern California area. They conclude that “a clear case ismade for the urgent need for closer coordination and education by the petroleum industry of thelocal government planning departments…and in establishing mitigation measures for dealing withlong-term environmental hazards.” The Inglewood Oil Field CSD, the associated EIR, and thisHydraulic Fracturing Study are coordinated processes that are meant to address such concerns.4 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

17. 6 55 62 Pomona Culver City 11 § ¦ ¨10 51 26 34 7 37 V U V U 71 V U 27 60 72 66 Santa Monica East Los 65 22 64 Inglewood Angeles 3 35 61 49 63 42 43 Whittier 52 18 V U 42 54 21 Downey 16 46 V U 57 8 12 § ¦ ¨ 105 Norwalk 30 14 Brea 28 47 § ¦ ¨710 36 13 38 44 1 48 V U 19 26 10 46 56 17 24 9 Fullerton § ¦ ¨ 15 110 V U 23 § 25 ¦ ¨ 60 605 91 2 41 Torrance 31 V U 39 Anaheim V U 32 V U 241 47 Orange 18 67 V U Garden Grove 22 Long Beach 56 Santa Ana 4 56 § ¦ ¨ 405 V U 55 20 Huntington Beach 59 § ¦ ¨ 5 40 Coast Mesa 5 39 V U 133 V U 1 ´ PLAINS EXPLORATION & PRODUCTION COMPANY Legend Figure ES-2 Oil Field Location of Los Angeles0 2.5 5 10 Miles Basin Oil Fields 09 | 21 | 12

18. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe approximately 1,000-acre Inglewood Oil Field is one of the largest contiguous urban oilfields in the United States, with an estimated recovery of 400 million barrels of oil. Oil andnatural gas produced from the field is sold and used entirely in California. The oil field isadjacent to the County of Los Angeles communities of Baldwin Hills, View Park, Windsor Hills,Blair Hills and Ladera Heights, as well as the City of Culver City.The Baldwin Hills consist of rolling hills up to 511 feet above sea level, cut by canyons andgullies, and form part of a chain of low hills along the Newport-Inglewood Fault Zone. TheBaldwin Hills have been uplifted above the Los Angeles basin by folding and faulting of theunderlying geological formations.The petroleum producing zones in the Inglewood Oil Field comprise nine strata that range indepth from approximately 900 to 10,000 feet below the ground surface. In order of increasingdepth and geologic age, the producing formations are: Investment, Vickers, Rindge, Rubel,Upper and Lower Moynier, Bradna, City of Inglewood, Nodular Shale, and Sentous. Water thatis recovered along with the oil and gas, known as produced water, can make up to 90 percent ormore of the total fluids pumped. The produced water has been reinjected in to the shallowdepressurized Vickers and Rindge zones (known as a waterflood for enhanced oil recovery)since 1954, with much lesser amounts injected into the deeper Rubel and Moynier zones.A total of 1,475 wells have been drilled over the life of the oil field; currently these are active,idle, or plugged. Many have been directionally drilled and are non-vertical. As of this writing,there are approximately 469 active production wells and 168 active waterflood injection wellsoperating at the Inglewood Oil Field.ES.4 Well Drilling and CompletionWell drilling is the process of drilling a hole in the ground for the purposes of extracting anatural substance (e.g., water, oil, or gas). Oil wells are drilled using a drill string which consistsof a drill bit, drill collars (heavy weight pipes that put weight on the bit), and a drill pipe. As thewell is drilled and drilling fluid (i.e. mud, water and soil) is removed by the cementing process, aseries of steel pipes known as casings are inserted and cemented to prevent the boring fromclosing in on itself (Figure ES-3). Cemented casing also serves to isolate the well from thesurrounding formation. Each length of casing along the well is commonly referred to as a casingstring. Cemented steel casing strings are a key part of a well design and are essential to isolatingthe formation zones and ensuring integrity of the well. Cemented casing strings protect againstmigration of methane, fugitive gas, and any formation fluid and protect potential groundwaterresources by isolating these shallow resources from the oil, gas, and produced water inside of thewell.When initial drilling extends just below the base of fresh water, which is typically isolated fromdeeper saline formation water with an impermeable confining layer below it, the casing is placedinto the drilled hole. The casing used in wells at the Inglewood Oil Field meets the State ofCalifornia Department of Conservation, Division of Oil, Gas and Geothermal Resources(DOGGR) regulations and American Petroleum Institute (API) standards, which includerequirements for compression, tension, collapse and burst resistance, quality, and consistency sothat it is able to withstand the anticipated pressure from completing and producing the well(API 2009).6 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

19. Hydraulic Fracturing StudyPXP Inglewood Oil Field Source: Halliburton 2012 Figure ES-3 Depiction of Casing StringsOctober 2012 Cardno ENTRIX Executive Summary 7Hydraulic Fracturing Study_Inglewood Field_10102012.docx

20. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe space between this casing and the drilled hole (wellbore) is called the annulus. The annulus isfilled with cement, permanently holding the casing in place and further sealing off the interior ofthe well from the surrounding formation. Cement serves two purposes: (1) it protects andstructurally supports the well; and (2) it provides zonal isolation between different formations,including full isolation of the groundwater. Cement is fundamental in maintaining integritythroughout the life of the well, and after the well is idled and abandoned. It also protects the casingfrom corrosion. This bonding and the absence of voids stops the development of migration pathsand isolates the production zone (Halliburton 2012, API 2009).The final steps to install an oil-producing well are collectively known as well completion. Wellcompletion includes the application of techniques such as sand control and well stimulation,including hydraulic fracturing, and installation of the production tubing and other downhole tools.Well completions are not a part of the drilling process, but are applied after the well is drilled,sealed, and the drilling equipment has been removed. The first step to complete a well is toperforate the casing to allow the fluid from the producing formation to enter the well.Perforations are simply holes that are made through the casing. Once the casing is perforated, thewell stimulation or sand control process is then initiated, depending on which technique isrequired. There are four types of well completion techniques described in this study that haveoccurred or may occur at the Inglewood Oil Field: conventional hydraulic fracturing and high-volume hydraulic fracturing, to stimulate and enhance production; and high-rate gravel packingand gravel packing, for sand control.ES.4.1 Hydraulic FracturingIn general, the process of hydraulic fracturing consists of injecting water, sand, and chemicaladditives into the well over a short period of time (typically less than one hour) at pressuressufficient to fracture the rocks to enhance fluid movement through the perforations and into thewellbore. Water and small granular solids such as sands and ceramic beads, called proppants,make up approximately 99.5 percent of the fluid used in hydraulic fracturing (Halliburton 2012).The flow of water acts as a delivery mechanism for the sand, which enters the newly-createdfractures and props them open. These proppant-filled fractures allow oil and gas to be producedfrom reservoir formations that are otherwise too tight to allow flow. If proppant does not enter anew fracture, then the pressure of the overlying rocks forces the fracture closed once theoverpressure is stopped, typically in less than one hour.The chemical additives consist of a blend of common chemicals that increase water viscosity andhelp the sand and water mixture be carried further out into the fracture network. Additivesinclude gels, foams, and other compounds. Additives have two primary functions: (1) to openand extend the fracture; and (2) to transport the proppant down the length of the fracture tomaintain the permeability. Additives also perform critical safety functions such as controllingbacterial growth and inhibiting corrosion to help maintain the integrity of the well, which in turnprotects groundwater. Most of the additives are recovered in the water that flows back after thehydraulic fracture (15 to 80 percent depending on the completion), and the remainder isrecovered once the oil well is brought on to production and begins pumping fluids from the zonethat was fractured (Halliburton 2012, USEPA 2010).8 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

21. Hydraulic Fracturing StudyPXP Inglewood Oil FieldHydraulic fracturing applied in oil and gas completions typically takes one of two forms,although some hybrid approaches are also in use. As indicated in the descriptions below, theprocess of fracturing in both forms are the same; the difference generally lies in the type ofreservoir where the fracturing is occurring.ES.4.1.1 Conventional Hydraulic FracturingThis completion approach uses water, sand, and additives to fracture and stimulate the producingformation itself to a distance of up to several hundred feet from the well. This method is intendedto affect the formation surrounding the perforated zone of the well, and enhance the permeabilityof the target producing zone itself. It is typically applied in sandstone, limestone, or dolomiteformations.ES.4.1.2 High-Volume Hydraulic FracturingThis higher energy completion approach is generally applied to shales rather than sandstones thattypically require a greater pressure to fracture. Sand and additives are used in the process, similarto conventional hydraulic fracturing; however, the primary distinguishing factor is the amount offluid used in the process.ES.4.2 High-Rate Gravel PackingThis completion approach uses water, gravel, and additives to place sand and gravel near thewell itself with the objective of limiting entry of formation sands and fine-grained material intothe wellbore, i.e., sand control. In this process, the space between the formation and the outercasing of the well is packed, at a high-rate, with gravel that is small enough to prevent formationgrains (sand) and fine particles from mixing and entering the wellbore with the produced fluids,but large enough to be held in place by the well perforations. This relatively low-energycompletion approach creates a fracture using water, sand, and additives that improve the properplacement of the gravel filter. This process is not intended to increase the permeability of theproducing formation, and it only affects the area near the well itself.Gravel packing, in contrast to high-rate gravel packing, does not exceed the local geologicalfracture pressure. In gravel packing operations, a steel screen is placed in the wellbore and thesurrounding annulus packed with prepared gravel of a specific size designed to prevent thepassage of formation sand. The primary objective is to stabilize the formation while causingminimal impairment to well productivity (Schlumberger 2012a). The gravel is circulated intoplace rather than pumped in under high pressure.ES.5 Summary of Past and Future Hydraulic Fracturing and High-Rate Gravel Packing at the Inglewood Oil FieldBoth conventional and high-volume hydraulic fracturing have been used at the Inglewood OilField. Figure ES-4 shows the location of Inglewood Oil Field wells that have either beencompleted by high-volume hydraulic fracturing or conventional hydraulic fracturing since 2003when PXP began operating the field. All of the hydraulic fracturing has been completed onproducing wells, that is, on pumping wells rather than injection wells. After the completion,flowback water brings back most of the additives used during the hydraulic fracturing operation tothe surface. After the stimulation operation is completed, the well is brought on line and beginspumping, and any residual hydraulic fracturing fluids are drawn towards the well during pumping.October 2012 Cardno ENTRIX Executive Summary 9Hydraulic Fracturing Study_Inglewood Field_10102012.docx

22. INGLEWOOD OIL FIELD A ! A ! A ! AA !! A ! A ! A ! VIC1-330 A ! AA ! ! A ! A ! A ! VIC1-635 A ! A ! A ! A ! A ! A ! A ! A! A ! PLAINS EXPLORATION & PRODUCTION COMPANY0 500 1,000 ´ 2,000 Feet LEGEND A Conventional Hydraulic Fracture ! A ! High Volume Hydraulic Fracture Inglewood Oil Field Boundary Fi gure ES-4 Locations of Hydraulic Fracturing Operations at Inglewood Oil Field 10 | 01 | 12

23. Hydraulic Fracturing StudyPXP Inglewood Oil FieldIn conjunction with this Hydraulic Fracturing Study, PXP conducted high-volume hydraulicfracturing tests at two wells at the Inglewood Oil Field (VIC1-330 and VIC1-635). Only one stagewas conducted as part of each of these tests. These are the only two high-volume hydraulic fracturejobs known to have been performed on the Inglewood Oil Field. The stages are representative ofanticipated future hydraulic fracturing in terms of pressure, water use, and other factors.Conventional hydraulic fracturing has been conducted on 21 wells in the deep Sentous, Rubel,Moynier, Bradna, City of Inglewood, and/or the Nodular Shale formations. Combined, a total ofapproximately 65 stages of conventional hydraulic fracturing have occurred at the Inglewood OilField since 2003.PXP expects that, in the future, high-volume hydraulic fracturing and conventional hydraulicfracturing may be conducted in the deeper Rubel, Bradna, Moynier, City of Inglewood, Nodular,and Sentous zones (all located greater than 6,000 feet below ground surface).PXP expects that, in the future, high-volume hydraulic fracturing and conventional hydraulicfracturing may be conducted in the deeper Bradna, City of Inglewood, Nodular, and Sentouszones (all located greater than 6,000 feet below ground surface).PXP has operated the Inglewood Oil Filed since December 2002, and since that time, hasconducted high-rate gravel pack completions on approximately 166 wells, in the Vickers and theRindge formations, and one completion in the Investment Zone. Each high-rate gravel packincluded an average of 5 stages per well. Approximately 830 stages of high-rate gravel packshave been completed at the Inglewood Oil Field since PXP began operating the field.It is anticipated that high-rate gravel packing operations may be conducted on as many as90 percent of all future production wells drilled within sandstones on the Inglewood Oil Field.This procedure results in less sand being drawn into the well during pumping, and reduces theamount of formation sand that must be managed at the surface. High-rate gravel pack operationsuse less water (~1,000 barrels vs. ~3,000 barrels) and lower pressures (~1,900 psi vs. ~9,000 psi)than hydraulic fracturing operations.ES.5.1 Recent Hydraulic Fracturing CompletionsPXP conducted two high-volume hydraulic fracture jobs at separate wells on the Inglewood OilField for the purposes of this study. The first hydraulic fracture completion was conducted onSeptember 15 and 16, 2011, at the VIC1-330 well. The second completion was conducted onJanuary 5 and 6, 2012, at the VIC1-635 well. Only one stage was completed during each operation.Both of these operations were conducted in the Nodular Shale, a subunit of the Monterey Shale,approximately 8,000 to 9,000 feet below ground surface. The hydraulic fracture completions wereconducted by Halliburton Energy Services with PXP oversight. Microseismic monitoring andfracture mapping was conducted by Schlumberger on the VIC1-330 and by Pinnacle (a HalliburtonCompany) on the VIC1-635. Halliburton (2012) contains a full report of both operations.The applied pressure, water use, and monitored effects are expected to be similar between thesetwo high-volume hydraulic fracture jobs and any future high-volume hydraulic fracture jobs tobe conducted at the field. However, future high-volume hydraulic fracturing completions wouldOctober 2012 Cardno ENTRIX Executive Summary 11Hydraulic Fracturing Study_Inglewood Field_10102012.docx

24. Hydraulic Fracturing Study PXP Inglewood Oil Fieldlikely utilize more than one fracturing stage each. In hydraulic fracture jobs that consist of morethan one stage, each stage is conducted one after the other, never simultaneously. Therefore anyone stage will be similar to those described in this section. The amount of water and chemicalsused would be proportional to the number of stages.Although both VIC1-330 and VIC1-635 are vertical wells, in the future, hydraulic fracturing maybe conducted using horizontal wells, and with more stages. The high-volume hydraulic hydraulicfracturing job itself and the monitored effects would be the same in each stage as those measuredduring this study. The intent of the two high-volume hydraulic fracture jobs was to bound thepotential effects of this process on the field. In the future, the only difference between these twojobs could be the construction of the well, including the number of stages applied. Each stagewould be an isolated event, and each stage would be similar to the two analyzed in this Study.Although a horizontal well can be much longer than a vertical well in the same formation, thehydraulic fracture completion targets an individual zone, and so the amount of water, sand, andadditives used would be the same, stage for stage. Horizontal wells, by drilling along the producingzone itself at depth, significantly reduce the number of wells needed to produce the sameformation. As such, horizontal wells minimize the surface footprint of the oil production operation.Water for the hydraulic fracturing operations at the Inglewood Oil Field is provided either fromproduced water at the field or, if a potassium-chloride gel is used, fresh water provided byCalifornia American Water Company, the provider of all fresh water used at the Inglewood OilField. For both of the high-volume hydraulic fracturing operations on the field, PXP used freshwater. Water produced from the target reservoirs during hydraulic fracturing operations, knownas flowback water or flush water, is transported by pipeline to the field water treatment plantwhere it is mixed with other produced water generated on the field and processed. The treatedwater is then reinjected into the oil and gas producing formations as part of the waterfloodprocess. This operation is in accordance with CSD Condition E.2(i), which requires that allproduced water and oil associated with production, processing, and storage be contained withinclosed systems at all times. This process substantially reduced air emissions from the fluids. Thetotal volume of additives is small and is diluted in the fluids of the producing zone.ES.5.2 Recent High-Rate Gravel Pack CompletionsPXP also conducted high-rate gravel pack jobs at two wells on the Inglewood Oil Field to collectdata for this study. The first high-rate gravel pack was a five-stage completion performed onJanuary 9, 2012, at the TVIC-221 well. The second high-rate gravel pack was a six-stagecompletion performed on the same day at a different well, TVIC-3254. Both of these operationswere conducted in the Vickers and Rindge formations. The high-rate gravel pack operations wereconducted by Halliburton with PXP oversight. The conditions of the high-rate gravel packs arerepresentative of other high-rate gravel packs previously conducted across the field, and are alsorepresentative of future high-rate gravel pack jobs that could be expected to be conducted at theoil field.The maximum applied pressure during both high-rate gravel packs was 1,900 pounds per squareinch (psi). In comparison the high-volume hydraulic fracturing projects described in ES.6.1, hadan average treatment pressure of 2,971 psi (VIC1-330) and 6,914 psi (VIC1- 635). The high-rategravel pack influenced the zone within 125 feet of the well within the target oil-producing zone;12 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

25. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldwhereas, the high-volume hydraulic hydraulic fractures affected areas up to 1,100 horizontal feetfrom the subject wells (2,200 feet in length tip to tip, Halliburton 2012).ES.6 Monitoring Conducted During Hydraulic Fracturing and High-Rate Gravel Packing at Inglewood Oil FieldES.6.1 Hydrogeology, Water Quantity and QualityIn all parts of the world, fresh (not salty) groundwater lies at relatively shallow depths. At greaterdepths the water is saline, not drinkable, and is sometimes called formation water. The UnitedStates Environmental Protection Agency (USEPA) recognizes this distinction in the Safe DrinkingWater Act which requires that the shallow, fresh water is protected from contamination by deeper,saline formation water. In most of the Los Angeles Basin, the base of the fresh water zone, belowwhich saline formation water is found, is defined by the top of a marine geological unit called thePico Formation. The zone at the Baldwin Hills considered to potentially contain fresh groundwateris from the ground surface to a depth of approximately 500 feet. Below approximately 500 feet, a“hydrocarbon seal” (or a nearly impermeable geologic formation) separates the fresh water zonefrom the oil producing zones and saline water containing formations below.Nineteen groundwater borings have been drilled on the Inglewood Oil Field since 1992, onlyeleven of which encountered any water. Where water is encountered, it can range from 30 to500 feet below ground surface, in zones less than 10 feet thick. The four deepest wells wereinstalled to reach the “base of the fresh water zone,” that is, the top of the Pico Formation. As such,current understanding of groundwater hydrogeology and water quality at the Inglewood Oil Fieldis based on a well-documented investigation of the entire zone beneath the surface that has anypotential to contain fresh water. Although many borings for wells did not encounter any water,those that did were found to pump dry rapidly at low flow rates and recharge slowly. These dataindicate that the water bearing zone from which they draw is limited in extent and not suitable for awater supply that could serve the oil field or the surrounding community.None of these thin, discontinuous water-bearing zones within the Inglewood Oil Field connect tothe aquifers of the Los Angeles Basin (USGS 2003, DWR 1961, this Study). The observed zonesare perched within the folded and faulted confines of the field. In groundwater models offreshwater flow in the Los Angeles Basin aquifer systems prepared by the U.S. Geological Survey(USGS 2003), the Baldwin Hills are modeled as a “no flow” zone since the sediments beneath theBaldwin Hills are disconnected from the regional aquifers and groundwater flow is discontinuousacross the Baldwin Hills. The California Department of Water Resources (DWR 1961) states “theBaldwin Hills form a complete barrier to groundwater movement, where the essentially non-waterbearing Pico Formation crops out” (DWR 1961). The findings of the studies and ongoinggroundwater monitoring of the Baldwin Hills commissioned by PXP and summarized in this studyare in complete agreement with the findings of the USGS and DWR. Due to this lack of water inthe geological formations beneath the Baldwin Hills, groundwater in the area is not suitable as awater supply (DWR 1961, USGS 2003, County of Los Angeles 2008).The local community does not receive water from any formations beneath the Baldwin Hills, orfrom any well within 1.5 miles of the Baldwin Hills. Rather, approximately two-thirds of thecommunity’s water is delivered from sources in northern California (the Sacramento - San JoaquinRiver Delta) or sources such as the Colorado River. The nearest groundwater supplies outside theOctober 2012 Cardno ENTRIX Executive Summary 13Hydraulic Fracturing Study_Inglewood Field_10102012.docx

26. Hydraulic Fracturing Study PXP Inglewood Oil FieldBaldwin Hills are all very limited in supply and are geologically separated from the subsurfacegeologic formations of the Inglewood Oil Field. Therefore, activities associated with oil and gasdevelopment in the Baldwin Hills do not affect the community’s drinking water supply.All of the water service providers to the communities surrounding the Baldwin Hills must testtheir water from local wells at least four times a year and report the results to the water users.These reports indicate that the community receives water that meets USEPA’s drinking waterstandards. Ongoing (four times per year) monitoring corroborates that this portion of the watersupply meets these standards. The most recent data posted by the water purveyor covers thehigh-volume hydraulic fracturing that occurred in September 2011, as well as earlierconventional hydraulic fracturing and high-rate gravel packs. All public water supplies inCalifornia must also meet these requirements.ES.6.1.1 Groundwater Monitoring Before and After Hydraulic Fracturing and High-Rate Gravel PackingThe Los Angeles Regional Water Quality Control Board (LARWQCB) Water Quality ControlPlan, or Basin Plan, establishes beneficial uses of surface and groundwater in the Los AngelesBasin. Based on the State Board Resolution No. 88-63, “Sources of Drinking Water Policy”, allgroundwater in the state must be considered a potential source of drinking water, and carry abeneficial use designation of Municipal Supply (or MUN). This designation does not imply thatthe groundwater has sufficient capacity to support a municipal supply, presently or in the future.The designation addresses requirements to maintain groundwater quality in the sense of meetingdrinking water standards.As such, any water that may be encountered beneath the Inglewood Oil Field, regardless of itsability to actually supply water, must carry the beneficial use designation of MUN. Groundwateris collected from monitoring wells within the oil field, and is analyzed on a quarterly basis. Areview of quarterly groundwater monitoring reports for 2010 and 2011 indicates that the perched,isolated groundwater meets the water quality requirements for MUN waters with the exceptionof arsenic, the concentrations of which are likely due to the high background level that naturallyoccurs in Southern California (Chernoff et al. 2008, Welch et al. 2000). As documented byUSEPA, when “compared to the rest of the United States, western states have more systems witharsenic levels greater than USEPA’s standard of 10 parts per billion (ppb)” (USEPA 2012a).Arsenic delineation maps produced by the USGS in 2011 have documented increased levels ofarsenic in both the County of Los Angeles and Southern California as a whole (Gronberg 2011).These data are also consistent with soils data from the 2008 California Department of ToxicSubstance Control (DTSC) memo “Determination of a Southern California Regional BackgroundArsenic Concentration in Soil” (Chernoff et al. 2008). Areas in Southern California have beenshown to have higher than average levels of arsenic present in soil and thus, through the releaseof naturally occurring arsenic in sediments, levels can be inferred to also be higher than averagein groundwater resources throughout Southern California.Monitoring was also conducted in April and August, three months and seven months after high-volume hydraulic fracturing and high-rate gravel packs conducted in January. The water wasanalyzed for the following constituents: pH, total petroleum hydrocarbons (TPH), benzene,toluene, ethylbenzene, total xylenes, methyl tertiary butyl ether (MTBE), total recoverable14 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

27. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldpetroleum hydrocarbons (TRPH), total dissolved solids (TDS), nitrate, nitrite, metals, andbiological oxygen demand (BOD5). These compounds include those used in hydraulicfracturing. The results of this monitoring were consistent with past groundwater monitoring andresults. Groundwater will continue to be collected, analyzed, and reported consistent with theCSD and irrespective of when hydraulic fracturing and high rate gravel pack operations areconducted in the future.Based on comparison of two sampling rounds after the high-volume hydraulic fracturingoperations and high-rate gravel pack operations with the quarterly sampling rounds conductedprior to the operations, none of the analytical results indicated constituents above the statedrinking water standard, with the exception of arsenic, which occurs naturally in soil and rockformations in Southern California. For the compounds detected, the concentrations afterhydraulic fracturing were within the range of concentrations detected during the baseline periodbefore hydraulic fracturing. The only exception was a minor increase in chromium from onewell, MW-7 (2.7 to 3.0 µg/L, both results were well below the 50 µg/L state standard).Chromium is not associated with hydraulic fracturing additives.Several new groundwater monitoring wells were installed after high-volume hydraulic hydraulicfracturing and high-rate gravel packing operations were conducted. Accordingly, the pre andpost-hydraulic fracturing and high-rate gravel packing data in these specific wells cannot becompared. However, we can compare the results in the new wells with the pre- and post-hydraulic fracturing and high-rate gravel packing results from the pre-existing wells. Incomparing the results of groundwater collected from new wells installed after hydraulicfracturing and high-rate gravel packing with the existing wells, the results were also consistent.No compounds violated the drinking water standard except for arsenic, as was the case with thepre-existing wells. The new wells were within the ranges of values detected in the pre-existingwells, with the new wells ranging to slightly higher total dissolved solids, zinc, and biologicaloxygen demand. The total dissolved solids and zinc may be due to conditions at depth, closer tothe saline formation water. The biological oxygen demand is not associated with hydraulicfracturing additives.Groundwater monitoring shows similar groundwater quality results before and after high-volume hydraulic fracturing and high-rate gravel packing. The Inglewood Oil Field’sgroundwater is not a source of drinking water. The groundwater bearing water bodies of theBaldwin Hills are geologically isolated from the nearest groundwater wells used for themunicipal supply; and, two-thirds of the community water supply is from Northern California(the Sacramento-San Joaquin Delta) or the Colorado River. The local community does notreceive water from closer than 1.5 miles to the Baldwin Hills. Community water supply istested on a quarterly basis by the water purveyor, meets drinking water standards, and theresults are publicly available.ES.6.2 Well IntegrityDuring each stage of the hydraulic fracturing and high-rate gravel pack operations, the well casingof the subject well is tested in order to ensure integrity prior to injection of fracturing fluids(Halliburton 2012). Information about the well integrity tests is described in the post job reports.Well integrity testing is done by pressure testing the well up to 70 percent of the strength of thecasing, in conformance with field rules established by the DOGGR. Offset wells, production wells,October 2012 Cardno ENTRIX Executive Summary 15Hydraulic Fracturing Study_Inglewood Field_10102012.docx

28. Hydraulic Fracturing Study PXP Inglewood Oil Fieldand injection wells are also tested for proper zonal isolation (i.e., annular cement) prior to anyhydraulic fracturing operations. All measurements of well integrity during the hydraulic fractureand high-rate gravel pack operations conducted for this study indicated that there were no losses inpressure. The offset wells easily withstood the pressures of high-volume hydraulic fracturing; andno evidence of damage to the offset well was demonstrated by the pressure testing. The appliedenergy of the high-volume hydraulic fracturing rapidly decreases away from the completed well,and as such surrounding wells would not be adversely affected by the operation.In addition to the well-integrity tests conducted for the high-volume hydraulic fracturing andhigh-rate gravel pack operations, active injection wells at the Inglewood Oil Field are surveyedannually (and pressure tested after each well work) per DOGGR requirements pursuant to CCR,Chapter 4, Article 3, §1724.10(j)3. PXP also monitors active injection wells weekly for injectionrates and pressures (what also indicates the integrity of the wellbore and confinement of fluids tothe injection zone) and reports to DOGGR on a monthly basis, pursuant to CCR Chapter 4,Article 3, §1724.10(c).Tests conducted before, during and after the use of high-volume hydraulic hydraulicfracturing and high-rate gravel packing showed no impacts on the integrity of the steel andcement casings that enclose oil and gas wells.ES.6.3 Containment of High-Rate Gravel Packs and High-Volume Hydraulic Fractures to the Target ZonesThe measured distribution of fractures caused by the high-rate gravel pack completions were allless than 250 feet from the well, and were confined to the perforated zone within the Vickers andRindge formations. The measured distribution of fractures from the high-volume hydraulicfracture completions were less than 1,100 feet in length from the well, and, with minorexceptions, were contained within the target zone (Halliburton 2012). For the few fractures thatwere outside the Nodular Shale target zone, they were deeper (with the oil-bearing SentousShale) and not filled with proppant. They therefore would reseal after the cessation of theincreased pressure of hydraulic fracturing. Fractures grew either horizontally from the well or atangles less than 20 degrees depending on the local angle of the geological formations. Verticalfracture growth was very limited. The high-volume hydraulic fracture completions wereconducted between 8,000 and 9,000 feet below the ground surface, and fractures did not form atshallower depths than approximately 8,000 feet below the ground surface. By comparison, thedeepest groundwater encountered that had relatively low salinity was at a depth of 500 feetbelow the ground surface, corresponding to the base of fresh water beneath the Inglewood OilField, 1.5 miles above the hydraulic fracturing.The results of microseismic monitoring indicate that fractures created during the high-volumehydraulic hydraulic fracturing operations were contained to the deep Nodular Shale with theexception of a minor few that were not filled with proppant. The fractures were all greaterthan 7,500 feet below the designated base of fresh water. The fractures created during allhigh-rate gravel packs were confined to the target zones.16 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

29. Hydraulic Fracturing StudyPXP Inglewood Oil FieldES.6.4 Subsurface Occurrence of MethaneMost of the oil and natural gas in the Los Angeles Basin lies trapped beneath both shales andfaults, allowing it to accumulate at depth. However, some surface seeps do occur, as at the LaBrea Tar Pits, and were the initial targets in the development of the Los Angeles Basin fields. Inaccordance with the CSD, field-wide methane monitoring is conducted at the Inglewood OilField on an annual basis to gauge for shallow occurrences of methane, and detections areinvestigated to determine the cause and remediate it.Due to the potential of methane gas migration from the naturally occurring, prolific oil and gasprovince underlying the entire Los Angeles Basin, the City of Los Angeles has established azoning ordinance identifying two zones, a Methane Zone and a Methane Buffer Zone, withspecial requirements for new construction, existing construction, and methane monitoring. TheBaldwin Hills are outside the City of Los Angeles, and therefore are not classified on themethane map; however, they are adjacent to such zones. Although past methane detections haveeither been low or associated with a well to be re-abandoned, methane concentrations beneathportions of the field would reflect the relatively high background levels of methane in the LosAngeles Basin. All shallow detections of methane associated with the monitoring have beenbiogenic, based either on the composition (almost pure methane) or isotopic composition.Monitoring of shallow methane after high-volume hydraulic fracturing and high-rate gravelpacking did not detect increases in soil gas methane concentrations.Groundwater was not measured for methane prior to high-volume hydraulic fracturing or high-rate gravel packing. Samples collected after high-volume hydraulic fracturing detected dissolvedmethane in all but one well (MW-7), with concentrations up to 9.7 mg/L methane; all but two ofthe detections were less than 0.2 mg/L. Methane is not toxic and so there is not a drinking waterstandard established for it in water. There are few standards that have been promulgated for thenuisance effects of methane; the most widely applied are those of the U.S. Office of SurfaceMining and the U.S. Bureau of Land Management. The highest value measured in groundwaterat the Inglewood Oil Field is within the levels considered safe (10 mg/L), and well within levelsthat would actually trigger contingency actions (28 mg/L). The City of Los Angeles methanezoning ordinance does not address methane in groundwater; the ordinance only addresses levelsin soil gas and applies construction standards as contingencies. Based on isotopic analysis of thedissolved methane in groundwater, it is thermogenic (from the oil-bearing formations) in origin,whereas detections in shallow soil gas are biogenic in origin. There are shallow occurrences ofoil in the Investment Zone, within the Pico Formation. Since these zones are in closest proximityto the water bearing zones, and the occurrence of methane is pervasive in the monitoring results,it does not appear to be related to oil and gas production activity but to the natural occurrence ofthe underlying oil and gas. The occurrence is also not correlated to the locations of high-volumehydraulic fracturing or high-rate gravel packing.The results of methane testing in soil and groundwater showed no influence from high-volume hydraulic fracturing or high-rate gravel packing.ES.6.5 Slope Stability, Subsidence, Vibration, and Induced SeismicitySlope stability is a primary geologic concern in the Baldwin Hills, and is addressed by conditionsin the CSD that require ongoing monitoring. The California Department of Conservation,October 2012 Cardno ENTRIX Executive Summary 17Hydraulic Fracturing Study_Inglewood Field_10102012.docx

30. Hydraulic Fracturing Study PXP Inglewood Oil FieldDivision of Mines and Geology (CDMG), has studied the occurrence of slope instabilities andrelated geological issues of the Baldwin Hills (CDMG 1982). The study notes widespreaddamage from slope failures caused by rains in 1969, 1978, and 1980, and less widespreaddamage in other years. The study concludes that slope stability is a substantial problem in theBaldwin Hills because the terrain that has been developed for residential use consists mostly ofsteep natural slopes underlain by soft sedimentary rocks that are prone to land sliding anderosion. In addition, many of the communities in the Baldwin Hills were developed prior to theenactment of strict grading codes by local government, and therefore lack adequate protectionsagainst these natural geological conditions. The CDMG study notes that the InglewoodFormation is particularly susceptible to slope instability because the surficial soils developed onthe formation are clay-rich. The study also notes that the Culver Sands are particularlysusceptible to erosion. Monitoring for vibration and subsidence did not detect a change due tohydraulic fracturing or high-rate gravel packing. As such, hydraulic fracturing and high-rategravel packing would not affect surface slope stability.Subsidence is another geological concern in the Baldwin Hills. As described in the Baldwin HillsCSD EIR, prior to 1971, the maximum cumulative subsidence of any of the areas along theNewport-Inglewood fault zone was centered over the Inglewood Oil Field. Injection of producedwater into the active producing zones began in 1957 to counteract this subsidence, and since1971, water injection into the shallow production horizons has effectively eliminated subsidenceassociated with oil and gas production. The oil field has an ongoing program of annualsubsidence monitoring that is reported in the framework of the CSD. To date, no changes inground surface are attributed to oil and gas production activities. In evaluating pre- and post-hydraulic fracturing and high-rate gravel packing subsidence, none were attributed to thehydraulic fracturing or high-rate gravel packing.ES.6.5.1 Subsidence and Ground Movement Monitoring during Hydraulic FracturingThe CSD requires an annual ground movement survey at the Inglewood Oil Field. Surveying forboth vertical and horizontal ground movement is accomplished using satellite-based GPStechnology. Accumulated subsidence or uplift is measured using repeat pass DifferentiallyInterferometric Synthetic Aperture Radar technology. The data are then evaluated to determinewhether oil field operations (oil production and/or produced water injection volumes) are relatedto any detected ground motions or subsidence. Baseline survey points were collected in 2010 andthen resurveyed in January 2011 and February 2012 (following the hydraulic fracturingoperations of VIC1-330 and VIC1-635 and the high-rate gravel packing operations of TVIC 221and TVIC 3254) to calculate annual subsidence or uplift at each point (Fugro NPA 2011, Psomas2012). Based on a comparison of the ground movement survey results in 2011 and 2012 tooperations production and injection records over the same time periods, there is no correlationbetween measured elevation changes and field activities.The high-volume hydraulic fracturing and high-rate gravel packing had no detectable effecton ground movement, vibration, seismicity or subsidence, based on the results of studiesconducted before and after the activities. As such, there would also be no detectable effect onslope stability.18 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

31. Hydraulic Fracturing StudyPXP Inglewood Oil FieldES.6.5.2 Vibration and Induced SeismicityPXP retained Matheson Mining Consultants, Inc. to conduct vibration and ground surfacemonitoring during the high-volume hydraulic fracturing operations at the VIC1-330 and VIC1-635 wells, and at TVIC-221 and TVIC-3254 for the high-rate gravel pack jobs.Vibration records for the VIC1-330 and VIC1-635 wells were collected using four and eightseismographs, respectively, installed at different locations in relation to the high-volume hydraulicfracture operations. The TVIC-221 and TVIC-3254 wells are directly adjacent to one another;therefore, the same seismographs were used to monitor the high-rate gravel packs on these wells.Based on analysis of the seismograph data, Matheson Mining Consultants, Inc. concluded that noseismic activity was produced by any of the high-volume hydraulic fracturing or high-rate gravelpack operations. In addition to the seismic monitoring conducted by Matheson MiningConsultants, Inc., seismic data collected by the permanently installed California Institute ofTechnology (Cal-Tech) accelerometer (seismometer) at the Baldwin Hills was reviewed for thetime periods before and during the high-volume hydraulic fracturing and high-rate gravel packoperations. Background levels range from 0.0003 to 0.0006 inch per second (ips); however,random spikes occur in the record approximately every two to three hours. These spikes are likelyrelated to local traffic or some other passing noise source, and are common in urban areas. Thedata collected from the seismograph during the VIC1-635 operation showed two minor spikesduring the time period reviewed (the largest measuring 0.0012 ips). Analysis of the data by Dr.Hauksson, a Senior Research Associate in Geophysics with the Cal-Tech SeismologicalLaboratory, concludes that these spikes are not indicative of any seismic events above backgroundlevels were recorded (Matheson Mining Consultants, Inc. 2012a). The data collected from theseismograph during the TVIC high-rate gravel pack operations showed some spikes during thetime period reviewed but no significant signals above the background levels. No data abovebackground levels were recorded on the Cal-Tech seismograph during the VIC1-330 operation.Petersen and Wesnousky (1994) evaluated all seismic events greater than Magnitude 2 on theNewport-Inglewood Fault zone, and determined that most epicenters are located at depthsbetween 3.5 miles and 12 miles deep (Petersen and Wesnousky 1994, Hauksson 1987). Incomparison, the waterflood operation at the Inglewood Oil Field extends to depths of up to3,000 feet (0.57 mile) and the deepest hydraulic fracturing occurs at less than 10,000 feet depth(1.9 miles). Therefore, oil field operations are much shallower than the zones typically associatedwith earthquake epicenters along the Newport-Inglewood Fault zone.Results of studies conducted before and after high-volume hydraulic fracturing and high-rategravel packing operations indicate that the operations had no detectable effect on vibration, anddid not induce seismicity at the surface.ES.6.6 Noise and VibrationTo address concerns regarding perceptible vibration and noise during high-volume hydraulicfracturing operations, PXP commissioned Behrens and Associates, Inc., a firm specializing innoise and vibration studies, to measure produced vibration during the VIC1-330 and VIC1-635high-volume hydraulic fractures and the TVIC-221 and TVIC-3254 high-rate gravel pack events.The ground-borne vibration survey for each event was completed while all equipment wasoperated under normal loads and conditions.October 2012 Cardno ENTRIX Executive Summary 19Hydraulic Fracturing Study_Inglewood Field_10102012.docx

32. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe high-volume hydraulic fracturing treatment on September 16, 2011, was completed on theVIC1-330 well, located in the northwestern portion of the field. Measured levels indicate that themaximum ground-borne vibration produced during the operation was 0.006 inch per second, asmeasured 40 feet from the operation. At 160 feet from the operation, measured vibration was0.001 inch per second. Both of these levels are imperceptible to humans (Behrens andAssociates, Inc. 2011).In addition to ground-borne vibration measurements, Behrens and Associates, Inc. also tooksound level measurements during the high-volume hydraulic fracturing operation at VIC1-635and the high-rate gravel pack operations at TVIC-221 and TVIC-3254 using a calibrated soundlevel meter. The microphone was set at 5 feet above ground surface. The measured noise level at100 and 200 feet from the operation at VIC1-635 was 68.9 and 68.4 decibels (dBA), respectively(Behrens and Associates, Inc. 2012a), The measured noise level at 100 and 200 feet from theTVIC-221 and TVIC-3254 operations was 68.1 dBA and 63.5 dBA, respectively (Behrens andAssociates, Inc. 2012b). These measured noise levels are all in compliance with CSD limits.The noise and vibration associated with the high-volume hydraulic fracturing and high-rategravel pack operations did not exceed CSD limits.ES.6.7 Air EmissionsAir emissions on the Inglewood Oil Field are monitored as described in an Air Monitoring Planin accordance with Section E.2(d) of the Baldwin Hills CSD. This plan requires monitoring forhydrogen sulfide and total hydrocarbon vapors. It also requires that drilling or completionsoperations shut down if monitoring detects concentrations of hydrogen sulfide greater than10 ppm or hydrocarbon concentration of 1,000 ppm or greater. Vehicle use for on-road and off-road vehicles and construction equipment is also regulated by the CSD under Sections E.2(j)through E.2(n).Mass emissions of criteria pollutants and greenhouse gases (GHG) for off-road equipment andon-road vehicles were calculated using emission factors published by the South Coast AirQuality Management District (SCAQMD 2008) and USEPA (2011a, 2011b). The projectschedule and equipment/vehicle list provided by PXP and Halliburton served as the basis for theanalysis. The results of the analysis are presented in the emissions summary tables contained insection 4.7 of this study. These levels are consistent with those considered in the CSD.Air emissions associated with high-volume hydraulic fracturing and high-rate gravel packingwere compliant with the regulations of the South Coast Air Quality Management District andthe CSD.ES.6.8 County of Los Angeles Department of Public Health StudyThe County of Los Angeles Department of Public Health (LAC DPH) conducted a communityhealth assessment on the population living in communities surrounding the Inglewood Oil Field in2011. The assessment was designed to determine if health concerns in the communitiessurrounding the Inglewood Oil Field reflect a higher than expected rate or an unusual pattern ofdisease. The report was sent to three external peer reviewers who found it to be technically sound.20 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

33. Hydraulic Fracturing StudyPXP Inglewood Oil FieldThe conclusions of the health assessment indicate that the health of the community adjacent tothe Baldwin Hills is not statistically different from that of Los Angeles County as a whole,including cancer rates in the community. The report acknowledges that the data cannot determineadverse health effect below its detection limit, nor can the data address the contribution of other,non-quantifiable health-related issues such as smoking, lack of exercise, and social determinantsof health.Conventional hydraulic fracturing and high-rate gravel packing have occurred at the field since2003, along with other oil and gas development activity. Based on the results of the healthassessment, these activities had no detectable adverse effect on the health of the local community.The health assessment recommends careful monitoring of the oil field operations to ensurecompliance with regulations and standards to protect community health and safety. Incompliance with the CSD, such monitoring occurs via Environmental Compliance Coordinatorweekly inspections and an annual Environmental Quality Assurance Program (EQAP) audit.The Los Angeles County Health Study found no detectable health consequences to the localcommunity from oil and gas development (including hydraulic fracturing and high-rate gravelpacking) at the Inglewood Oil Field. The study recommends careful monitoring of the oil fieldoperations to ensure compliance with regulations and standards to protect community healthand safety.ES.6.9 Issues Associated with Hydraulic Fracturing in Shale Gas and Relevance of Inglewood Oil Field Hydraulic Fracturing Study ResultsSince high-volume hydraulic fracturing has been used for shale gas development in thenortheastern United States, there has been extensive media coverage of controversiessurrounding its use. Although most of the news has been about the development of shale gas,tight sands and coalbed methane deposits rather than the type of oil and natural gas developmentthat occurs at the Inglewood Oil Field, community outreach conducted as part of this study hasindicated that many of the concerns surrounding shale gas development are shared by the localcommunity and applied to oil development. The primary environmental and health issues ofconcern associated with hydraulic fracturing operations include: Potential for contamination of groundwater, including drinking water supplies, and gas migration; Environmental hazards associated with the chemical additives used during hydraulic fracturing operations; Potential for hydraulic fracturing operations to cause earthquakes; Issues related to well integrity; and, Air emissions and greenhouse gas emissions of hydraulic fracturing operations in comparison to regular oil field operations.A description of each of these issues as they relate to hydraulic fracturing operations is providedin the study, along with the direct measurements taken at the Inglewood Oil Field to determinetheir relevance.October 2012 Cardno ENTRIX Executive Summary 21Hydraulic Fracturing Study_Inglewood Field_10102012.docx

34. Hydraulic Fracturing Study PXP Inglewood Oil FieldES.7 Regulatory Perspective on the Inglewood Oil FieldThe federal, state, and local laws, ordinances, regulations, and standards that govern oil fielddevelopment throughout the United States require protections against the potential environmentalimpacts of the entire development process. These protections range from provisions in the CleanAir Act, Clean Water Act, Safe Drinking Water Act, Endangered Species Act, and throughextensive California regulation addressing air quality, water resources, biological resources, andcultural resources, and at the local level. The Inglewood Oil Field is unusual in that it has muchgreater regulation and oversight of its operations than most other onshore oil fields as a result ofthe County of Los Angeles CSD.The current national regulatory framework and government-sponsored studies of hydraulicfracturing are summarized in Section 5 of this Study to provide a national perspective to thisHydraulic Fracturing Study. Most of these studies address hydraulic fracturing associated withthe development of shale gas, which is different than oil and gas development. Although theInglewood Oil Field is not a shale gas field, and many of the concerns associated with thedevelopment of shale gas do not apply to the Inglewood Oil Field, the findings presented inSection 5 are intended to place concerns commonly seen in the news media in the local contextof the Inglewood Oil Field.The Baldwin Hills CSD, and the associated EIR, together address most of the issues that are partof a hydraulic fracturing operation, such as truck traffic, water use, community compatibility(noise, light and glare, etc.), air quality, and other environmental resource categories. In addition,the EIR evaluates cumulative impacts, and environmental justice. These two documents supportthis Hydraulic Fracturing Study, which evaluates the effects measured and monitored during thehigh-volume hydraulic hydraulic fracturing and high rate gravel packing operations conducted in2011 and 2012, as well as past activities of this type. The Hydraulic Fracturing Study did notidentify a new impact not analyzed in the EIR, nor did it identify impacts greater in significancethan those analyzed in the EIR.Exacting protective measures and close monitoring are required by the Baldwin Hills CSD andby county, regional and federal agencies. These field-specific reviews and public and agencyinteractions compel PXP to enforce real-time compliance with all environmental standards in theInglewood Oil Field. The long history of oil production in the area provides operators with anexcellent understanding of the local subsurface conditions and reduces standard risks anduncertainties that would be present in new operations.22 Executive Summary Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

35. Chapter 1IntroductionPlains Exploration & Production Company (PXP) operates the Inglewood Oil Field, anapproximately 1,000 acre area of the Baldwin Hills in Los Angeles County (Figure 1-1). Oil wasdiscovered in the Baldwin Hills in 1924 by Standard Oil, and the oil field was operated byChevron (successor company to Standard Oil), followed in 1990 by Stocker Resources, Inc.,which was then acquired by Plains Resources, Inc. in 1992. PXP was incorporated in September2002, and acquired all of Plains Resources, Inc.’s California operations, including the InglewoodOil Field, in December 2002. PXP has operated the oil field since late 2002. Figure 1-1 Regional Location MapOctober 2012 Cardno ENTRIX Introduction 1-1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

36. Hydraulic Fracturing Study PXP Inglewood Oil FieldIn October 2008, the County of Los Angeles (County) approved the Baldwin Hills CommunityStandards District (CSD), which created a supplemental district within the County to address thecompatibility of oil production with adjacent urban land use. The CSD established permanentdevelopment standards, operating requirements, and procedures for the Los Angeles Countyportion of the Inglewood Oil Field. The northernmost areas of the field are within the city limitsof Culver City, and PXP has voluntarily complied with the provisions of the CSD in that portionof the oil field as well.Following adoption of the CSD, a lawsuit was filed against the County and PXP in late 2008,challenging the validity of the ordinance. The lawsuit was resolved through a SettlementAgreement that was signed on July 15, 2011 by the City of Culver City, Natural ResourcesDefense Council, Concerned Citizens of South Los Angeles, Citizens Coalition for a SafeCommunity, Community Health Council, the California Attorney General’s Office, PXP, and theCounty of Los Angeles. The Settlement Agreement augments the protections contained in theCSD with 15 additional terms. This Hydraulic Fracturing Study is the direct result of Term 13,which states: PXP shall pay for an independent consultant to conduct a study of the feasibility and potential impacts (including impacts to groundwater and subsidence) of the types of fracturing operations PXP may conduct in the Oil Field. The study will also consider PXP’s historic and current use of gravel packing. Such study will be completed within twelve (12) months of the date of this Agreement. Such study and all the back-up information for such study shall be provided to a qualified peer reviewer selected by the County and PXP, who shall review the study, back- up materials, and conclusions for completeness and accuracy. PXP must provide the independent expert with all materials requested and reasonably necessary for an accurate and verifiable study. The peer reviewer will be provided with access to all the data and materials provided to the independent expert. The peer reviewer shall agree to keep all proprietary information confidential. If the peer reviewer determines that the study is materially inadequate, incomplete or inaccurate, it shall so advise PXP’s consultant who will complete the study as reasonably recommended by the peer reviewer and provide the revised study to the peer reviewer within 90 days. Upon acceptance by the peer reviewer, the study and all supporting material, including comments by the peer reviewer, shall be forwarded to the County, DOGGR, the Regional Water Quality Control Board (“RWQCB”), CAP and Petitioners and be available to the public, with any proprietary information redacted.The Settlement Agreement Term 13 requires that the practice of high-rate gravel packing beincluded in this Hydraulic Fracturing Study. The process of high-rate gravel packing does notserve the same purpose as hydraulic fracturing and is a different process. Nonetheless, thepractice is fully discussed in this study, in compliance with the agreement.This study draws on several sources, including peer-reviewed literature, the Inglewood Oil FieldCSD, the 2008 Environmental Impact Report (EIR) conducted for the CSD, data and analysesprovided by Halliburton, who conducted the recent hydraulic fracturing operations at the field,1-2 Introduction Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

37. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldand from numerous contractors performing monitoring studies before, during, and after therecent hydraulic fracturing and high-rate gravel pack test operations at the field.In accordance with the Settlement Agreement, this study was reviewed by peer reviewers, jointlyselected by the County and PXP. The peer reviewers, John Martin, Ph.D. andPeter Muller, Ph.D., C.P.G., were provided with the draft study and all reference materials. Thepeer reviewer’s comments on the study, and their statement indicating that the revised studyaddressed all comments adequately and completely, thereby determining the study complete, isprovided in Appendix A.This Hydraulic Fracturing Study is organized as follows: Chapter 1 presents the Study objectives. Chapter 2 presents a brief summary of the distribution of oil production in the Los Angeles Basin providing regional perspective for the Hydraulic Fracturing Study. Chapter 2 also describes the geological setting at the Inglewood Oil Field, including the results of a 3-D depiction of the subsurface geology. Chapter 3 describes oil and gas well drilling and completion methods. Hydraulic fracturing is a completion method and is described in the context of the overall well drilling and completion process. This Chapter describes hydraulic fracturing jobs performed at the Inglewood Oil Field by PXP, including a discussion of past, current, and potential future methods of hydraulic fracturing that have occurred, or may occur, at the field, and the two high-volume hydraulic fracture tests and two high-rate gravel pack tests conducted in 2011 and 2012. Chapter 4 describes the setting, methods and results of extensive environmental monitoring conducted in conjunction with the hydraulic fracturing and high-rate gravel pack tests. Chapter 4 also includes a discussion of each environmental issue as raised in regulatory proceedings, agency studies, university studies, and in the media regarding high-volume hydraulic fracturing as applied in shale gas and tight sands reservoirs, principally in the northeastern United States, Texas, New Mexico and Colorado. Although exploration and development of shale gas differs from oil and gas production at the Inglewood Oil Field, the issues and concerns in states like Pennsylvania have helped shape public perceptions in the local community surrounding the oil field. The relevance of these issues to the Inglewood Oil Field is addressed in the context of the environmental monitoring conducted at the Inglewood Oil Field. Chapter 5 describes the regulatory framework that governs hydraulic fracturing, drawing on information from across the country. This chapter also summarizes recent and ongoing studies by federal and state agencies on the environmental effects of hydraulic fracturing. Chapter 6 provides the qualifications of the preparers of this document. Chapter 7 provides supporting material and references, with complete citations and internet addresses for all sources used in this study.October 2012 Cardno ENTRIX Introduction 1-3Hydraulic Fracturing Study_Inglewood Field_10102012.docx

38. Hydraulic Fracturing Study PXP Inglewood Oil Field This Page Intentionally Left Blank1-4 Introduction Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

39. Chapter 2Oil Production in the Los Angeles Basin andat the Inglewood Oil Field2.1 IntroductionCalifornia is the fourth largest oil producing state in the U.S. (U.S. Energy Information Agency2012), and the Los Angeles Basin is the richest oil basin in the world based on the volume ofhydrocarbons per volume of sedimentary fill (Biddle 1991). Oil was first discovered in the areaat the Brea-Olinda Oil Field in 1880, followed by the development of the Los Angeles City OilField in 1893, the Beverly Hills Oil Field in 1900, the Salt Lake Oil Field in 1902, the LongBeach Oil Field in 1921, the Inglewood Oil Field in 1924, the Wilmington Oil Field in 1932, andmany others. Figure 2-1 shows the distribution of major oil fields in the Los Angeles Basin (referto Table 2-1 for the names of each oil field corresponding to the numbers on the figure). The sizeof this province, and its continuing potential for new discoveries and technologies, ensure itscontinued development into the future.The Los Angeles Basin represents, from a global perspective, the optimum conditions for thegeneration and entrapment of hydrocarbons (Barbat 1958, Gardett 1971, Wright 1987a). Barbat,in particular, considered eight major controls on the occurrence and amount of oil in differentbasins around the world. He concluded that, “no matter how the Los Angeles Basin may differfrom other oil-producing areas, the differences favor the Los Angeles Basin” (Barbat 1958).The unique abundance of oil in the Los Angeles Basin derives from a thick section of layeredsediments and organic-rich materials. The relatively recent geologic, tectonic, and structuralhistory of the region has provided an optimal thermal history to bring the organic-rich materialinto the “oil window,” the thermal regime that is ideal for oil production. This means that as thesediments and organic materials were buried, these source rocks reached high enough pressuresand temperatures that they transformed to oil and natural gas.The oil and natural gas migrated then from the source rocks, typically the Monterey shaleformation, into overlying sandstones. The sandstones acted as reservoir rocks, accumulating andholding the oil and natural gas underground. The Los Angeles Basin is folded and faulted, and asa result, after migrating into the sandstone reservoir rocks, the oil and gas deposits becometrapped by the folds and faults which are impermeable (do not allow for the passage of fluid), aswell as relatively impermeable shale rocks which are also present. Therefore, the traps allow oilin the reservoir rocks to continue to accumulate at depth and not continue to migrate up to thesurface. These traps are not ubiquitous, and in some locations oil continued to rise to the surfaceas seeps. The most famous local surface seep of oil is the La Brea Tar Pits.October 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

40. 6 55 Culver City 51 62 Pomona 11 § ¦ ¨10 26 34 7 37 27 60 V U 71 V U 72 V U Santa Monica East Los 65 66 64 Angeles 3 22 Inglewood 61 35 49 63 42 43 Whittier 52 18 42 V U 54 Downey 21 8 12 46 57 Brea 16 V U 28 § ¦ ¨ 105 Norwalk 30 14 38 47 36 13 1 48 § ¦ ¨710 26 56 17 44 19 V U 46 24 Fullerton 10 9 15 60 § ¦ ¨ 110 91 V U 25 23 Torrance § ¦ ¨605 2 41 31 39 V U Anaheim 32 241 V U 47 V U Orange 18 U Garden Grove Long Beach 22 V 67 56 Santa Ana 4 56 55 V U § ¦ ¨ 405 Huntington Beach 59 § ¦ ¨ 5 20 40 Coast Mesa 5 39 133 V U 1 V U PLAINS EXPLORATION & PRODUCTION COMPANY0 2.5 5 ´ 10 Miles Legend Oil Field Fi gure 2- 1 Location of Los Angeles Basin Oil Fields 09 | 21 | 12

41. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable 2-1 Los Angeles Basin Oil and Gas Field Estimated Ultimate Recovery Number as Oil-equivalent shown on Discovery Oil1 Gas1 barrels Figure 2-1 Field Name Year (kbbl mcf) (mcf) (kbbl) 1 Alondra 1946 2,154 1,408 2,406 2 Anaheim (abd) 1951 4 -- 4 3 Bandni 1953 5,969 15,469 8,738 4 Belmont Offshore 1948 68,500 41,931 76,006 5 Beta 1976 214,272 21,866 218,186 6 Beverly Hills 1900 164,131 215,163 202,645 7 Boyle Heights (abd) 1955 273 113 293 8 Brea-Olinda 1880 439,691 481,986 524,967 9 Buena Park, East (abd) 1942 197 20 201 10 Buena Park, West (abd) 1944 50 17 53 11 Cheviot Hills 1958 26,180 142,492 51,686 12 Chino-Soquel 1950 324 349 387 13 Coyote, East 1909 121,829 60,804 132,713 14 Coyote, West 1909 257,522 271,005 306,032 15 Dominguez 1923 276,846 387,394 346,190 16 El Segundo 1935 14,744 34,725 20,960 17 Esperanza 1956 1,331 699 1,456 18 Gaffey (abd) 1955 10 -- 10 19 Howard Townsite 1947 6,162 27,810 11,140 20 Huntington Beach 1920 1,138,034 861,117 1,291,805 21 Hyperion 1944 798 209 835 22 Inglewood 1924 400,048 285,002 451,063 23 Kraemer 1918 3,925 1,078 4,118 24 Kraemer, Northeast (abd) 1953 unknown -- -- 25 Kraemer, West (abd) 1956 10 -- 10 26 La Mirada (abd) 1946 25 10 27 27 Lapworth 1935 55 -- 55 28 Las Cienegas 1960 36,349 55,550 75,293 29 Lawndale 1928 3,747 6,729 4,958 30 Leffingwell (abd) 1946 763 2,460 1,203 31 Long Beach 1921 927,428 1,087,440 1,121,773 32 Long Beach Airport 1954 11,572 35,003 17,838 33 Los Angeles City 1892 23,575 -- 23,575 34 Los Angeles Downtown 1964 15,233 22,922 19,336 35 Los Angeles, East 1946 6,936 12,401 9,156 36 Mahala 1920 4,077 1,586 4,361October 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-3Hydraulic Fracturing Study_Inglewood Field_10102012.docx

42. Hydraulic Fracturing Study PXP Inglewood Oil FieldTable 2-1 Los Angeles Basin Oil and Gas Field Estimated Ultimate Recovery Number as Oil-equivalent shown on Discovery Oil1 Gas1 barrels Figure 2-1 Field Name Year (kbbl mcf) (mcf) (kbbl) 37 Montebello 1917 202,004 234,712 243,917 38 Newgate 1956 296 370 362 39 Newport 1922 187 259 233 40 Newport, west 1923 77,647 8,371 79,145 41 Olive 1953 3,020 1,209 3,236 42 Playa del Rey 1929 63,008 62,061 74,118 43 Portrero 1928 15,672 72,967 28,733 44 Prado-Corona 1966 1,632 5,192 2,561 45 Richfield 1919 217,340 173,067 248,319 46 Rosecrans 1924 83,339 166,330 113,112 47 Rosecrans, East 1959 202 234 243 48 Rosecrans, South 1940 8,835 20,661 12,533 49 Rowland (abd) 1931 2 -- 2 50 Salt Lake 1902 53,683 211,894 91,612 51 Salt Lake, South 1970 10,091 4,503 10,897 52 Sansinena 1898 60,840 74,661 74,204 53 San Vicente 1968 21,043 19,433 24,522 54 Santa Fe Springs 1919 622,254 836,512 771,990 55 Sawtelle 1965 15,274 13,100 17,619 56 Seal Beach 1924 217,236 219,786 256,484 57 Sherman (abd) 1965 93 50 102 58 Sunset Beach 1954 6,910 9,591 8,627 59 Talbert (abd) 1947 126 4 127 60 Torrance 1922 247,562 162,573 276,593 61 Turnbell (abd) 1941 766 582 870 62 Union Station 1967 1,895 5,298 2,843 63 Venice Beach 1966 4,030 2,678 4,508 64 Walnut 1948 131 25 135 65 Whittier 1898 55,731 52,193 65,074 66 Whittier Heights, North (abd) 1944 85 84 235 67 Wilmington 1932 2,788,158 1,192,802 3,001,670 68 Yorba Linda 1930 94,781 2,174 95,170 Totals 9,074,637 7,628,134 10,439,275SOURCE: Biddle 19911EUR = estimated ultimate recovery kbbl = thousand barrels mcf = million cubic feet abd = abandoned2-4 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

43. Hydraulic Fracturing StudyPXP Inglewood Oil Field2.2 Petroleum Geology of the Los Angeles BasinThe Los Angeles Basin is approximately 70 miles long and 10 miles wide. It is a coastalsediment-filled trough located between the Peninsular Mountain Ranges and the TransverseMountain Ranges in southern California. The Los Angeles Basin contains the central part of thecity of Los Angeles as well as its southern and southeastern suburbs (both in Los Angeles andOrange counties).The Los Angeles Basin was formed in a strike-slip tectonic setting (crust generally sliding side-to-side along faults). Two different phases of motion were involved: early extension overlain on thestrike-slip motion, followed by more recent compression overlain on a weakening strike-slipsystem. These phases of evolution are in part illustrated by the number of faults that cut other faultsin the subsurface (Biddle 1991). The following paragraphs describe this history in greater detail.The Los Angeles Basin originated as a depositional basin caused by crustal extensionoverlapping with the regional, right-lateral strike-slip movement. Prior to five million years agothe Los Angeles Basin was submerged approximately 5,000 feet under the waters of the PacificOcean. During this period the marine basin collected sand, silt, and clay sediment from thesurrounding upland areas. As surrounding mountain ranges (including the San Gabriel and SantaMonica mountains) rotated clockwise, the crust cracked, extended, and released molten rockfrom below. Over time the crust thinned and formed a basin, or bowl, with boundaries formed bythe San Gabriel Mountains, Santa Monica Mountains, Santa Ana Mountains, and the PalosVerdes Peninsula. Sand, silt and clay from the sea and ancient rivers poured into the bowl-shapeddepression. The sedimentary formations resulting from this deposition extend more than30,000 feet downward before reaching bedrock.The more recent history of faulting represents shortening of the basin caused by compression(counteracting the earlier extension), and a reduction in the amount of strike-slip motion,beginning approximately five million years ago. Compression of the basin created thrust faults.A thrust fault is a type of a break in the earth’s crust in which older rock is uplifted over youngerrock material. In the Los Angeles Basin, faults of this type uplifted the sediments and rock thathad once lain at the ocean floor and brought them to the surface. This rock from the ocean floorconsisted of alternating layers of sandstones and shales that had also previously folded andfaulted. As it rose above sea level, this pile of sediment began forming the Los Angeles Basin.Each of these phases of activity affected the oil producing characteristics of the basin. Theextensional phases created a container into which sediments poured: both the Monterey shale,which is the source of the hydrocarbons, and the overlying sedimentary rocks that acted as thereservoir rocks once the oil formed and rose towards the surface. The more recent shortening ofthe basin has changed the overall shape of the basin, and modified the traps that allowed oil toaccumulate in the reservoir sediments. The rapidly-subsiding, deep, Los Angeles Basin formed atthe right time, and in the right place, with an appropriate geometry and thermal history, to formthis uniquely rich oil province (Biddle 1991).October 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-5Hydraulic Fracturing Study_Inglewood Field_10102012.docx

44. Hydraulic Fracturing Study PXP Inglewood Oil Field2.3 Petroleum Production in the Los Angeles BasinThe Los Angeles Basin is one of California’s most prolific crude oil and natural gas regions.Figure 2-2 shows the amount of oil produced from Southern California oil fields since thediscovery of the first field, Brea Olinda. Table 2-1, taken from Biddle (1991), summarizes theoilfields of the area, including the year of discovery and amount of oil and gas produced. Figure 2-2 Cumulative Oil Production in the Los Angeles BasinAs of 2011, there are currently 42 active fields in the Los Angeles Basin. In 2011, the combinedonshore and offshore oil production in California totaled approximately 197 million barrels, ofwhich the Los Angeles Basin accounted for approximately 18 percent. Since 2007, an average of2,700 wells has been drilled statewide annually (DOGGR 2011). Figure 2-3 shows the number ofbarrels of oil produced annually in California over the past decade (DOGGR 2007, 2011).2-6 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

45. Hydraulic Fracturing StudyPXP Inglewood Oil Field 350 300 250 barrels (millions) 200 Onshore Production 150 Total Oil Production 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Figure 2-3 California Oil Production Since 20002.4 Petroleum Geology and Production at the Inglewood Oil FieldThe approximately 1,000-acre Inglewood Oil Field is one of the largest contiguous urban oil fieldsin the United States. The Inglewood Field was discovered in 1924 and has produced an estimatedcumulative production of 400 million barrels of oil. Oil and natural gas produced from the field issold and used entirely in California. The oil field is adjacent to Culver City and the Los AngelesCounty communities of Baldwin Hills, View Park, Windsor Hills, Blair Hills and Ladera Heights.As of 2010, the U.S. Census Bureau estimated Los Angeles County’s population to be 9.8 million.The area surrounding the field had a population of 65,892 in 2000. The population of this area hassince remained relatively stable in comparison to the 2000 census data (U.S. Census Bureau 2010).The Inglewood Oil Field was first commercially produced by Standard Oil in 1924, whenlivestock grazing (primarily by sheep) was the prevailing economic use of the land. Thecultivated croplands had been reclaimed from the low-lying swampy terrain (cienegas) in thegently sloping portions of the Los Angeles Basin that surrounded the Baldwin Hills. Many ofthese lands were gradually converted to residential suburbs. With the incorporation of the City ofInglewood, residential development was spurred by transportation improvements, including thegrowth of highway network that transformed farmlands and displaced brick making industrialareas to the south of the Baldwin Hills.In Culver City, both residential development and the foundation of movie studios and theirassociated supporting industries encroached upon the foothill slopes of the Baldwin Hills fromthe west and northwest. The northeastern and eastern sides of the Baldwin Hills were encroachedupon by the westerly spread of the suburban growth of the City of Los Angeles (County of LosOctober 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-7Hydraulic Fracturing Study_Inglewood Field_10102012.docx

46. Hydraulic Fracturing Study PXP Inglewood Oil FieldAngeles 2008). Chilingar and Endres (2005) evaluate urban encroachment on active and inactiveoil fields, primarily in the Southern California area. They conclude that “a clear case is made forthe urgent need for closer coordination and education by the petroleum industry of the localgovernment planning departments…and in establishing mitigation measures for dealing withlong-term environmental hazards”. The Baldwin Hills CSD, the associated EIR, and thisHydraulic Fracturing Study are examples of this advice put into practice.2.4.1 Inglewood Oil Field GeologyOverviewThe Baldwin Hills form part of a chain of low hills along the Newport-Inglewood Fault Zone. TheBaldwin Hills are the highest of these hills, reaching an elevation of 511 feet above mean sea level.The hills are in sharp relief against the relatively flat Los Angeles Basin, and include rolling hillscut by canyons and gullies. The northern flank of the Baldwin Hills has been deeply incised byerosion while the southern flank slopes gently to the Torrance Plain and Rosecrans Hills.Figure 2-4 provides three geologic cross sections illustrating the sub-surface geology(cross section locations shown in Figure 2-6), while Table 2-2 provides details regarding thethickness of each formation. The southernmost cross section in Figure 2-4 shows the Newport-Inglewood Fault as cutting all the petroleum-producing units at the field. Moving north to thecentral part of the field, the cross section depicts the dissipation of the Newport-Inglewood Faultas it approaches the relatively east-west Santa Monica fault further to the north. At depth, theNewport-Inglewood Fault transitions to the series of folds and thrust faults at depth. Moving tothe northernmost cross section, the Newport-Inglewood Fault is no longer present, and themovement here and further to the north is likely accommodated by a combination of folds andthrust faults. This depiction of the geology is based on the data collected by well drilling and byseismic surveys, and is described in Wright (1991).The Baldwin Hills have been uplifted by folding and faulting of the underlying geologicalformations. A northwest-trending anticline (upward-directed fold) is developed in sediments ofTertiary and Pleistocene age (23 million to 1.8 million years ago–see Table 2-3) beneath theBaldwin Hills. Two principal northwesterly trending, nearly parallel faults offset the centralportion of the hills, developing a down-dropped trench, or graben, across the crest of the anticline.The more easterly of the two structures is the Newport-Inglewood Fault; the other fault isunnamed. Both faults are offset by secondary cross faults which trend northeast. The block east ofthe Newport-Inglewood Fault is composed of sediments of Pliocene age (approximately 5 millionyears ago) and older and is cut by several small unnamed faults. The modified geological timescale(Figure 2-5) summarizes the intensity of tectonic activity with time, as well as the major units thatformed during each phase and the principal biological markers used to identify the units.2-8 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

47. Schematic cross section of Inglewood Field, southern portion (Elliot 2009) Schematic cross section of Inglewood Field, northern portion (Elliot 2009) Schematic cross section of Inglewood Field, central portion (Elliott 2009)Source: Wright, 1991 PLAINS EXPLORATION & PRODUCTION COMPANY Fi gure 2- 4 Cross Section of Structure and Geologic Formation 09 | 28 | 12

48. Hydraulic Fracturing Study PXP Inglewood Oil FieldTable 2-2 Stratigraphy of the Inglewood Oil FieldEpoch Formation Reservoir Thickness San Pedro 0 - 200Pleistocene Inglewood 150 - 300 Upper 150 - 300 Investment 200 - 600 Pico MiddleUpper Pliocene Lower Vickers 1500 - 1700 Upper Rindge 900 - 1000 Upper Rubel 250 - 300 RepettoLower Pliocene Middle Lower Rubel 600 - 700 Upper Moynier 300 - 400 Lower Lower Moynier 600 - 700Upper Miocene Bradna 700 - 1800 Puente City of Inglewood 0 - 250 Nodular Shale 150 - 175 Sentous 200 - 1000Middle Miocene Topanga Topanga 15002-10 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

49. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable 2-3 Geologic Time ScaleEra Period Epoch Years Before Present Holocene 10 thousand Quaternary Pleistocene 1.8 million Pliocene 5 millionCenozoic Miocene 23.5 million Tertiary Oligocene 39 million Eocene 53.5 million Paleocene 65 million Cretaceous 144 millionMesozoic Jurassic 208 million Triassic 245 million Permian 286 million Pennsylvanian 320 million Mississippian 360 million Devonian 408 millionPaleozoic Silurian 438 million Ordovician 505 million Cambrian 570 million Ediacarian 700 millionOctober 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-11Hydraulic Fracturing Study_Inglewood Field_10102012.docx

50. Hydraulic Fracturing Study PXP Inglewood Oil Field Source: Wright 1991 Figure 2-5 Chronology of Major Cenozoic Events in the Los Angeles RegionFigure 2-6 depicts the surface geology. Compared to the surrounding Los Angeles Basin, thegeology of the Baldwin Hills exposes older and deeper geological formations. In addition, theNewport-Inglewood Fault and other related faults are shown as they are interpreted to occur nearthe surface. This structural discontinuity between the Baldwin Hills and the surrounding basin inpart explains the occurrence of oil and gas at this location, and the discontinuity of shallowgroundwater with deeper groundwater formations in the Los Angeles Basin (USGS 2003).2-12 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

51. Qls af Qfu Qi Late Holocene Qfu Qi Qoa af (Aritificial Fill) - Deposits of fill resulting from human construction, mining or quarrying activities; af includes engineered and non engineered fill. Qsp Qi Qfu Qi Qi Some large deposits are mapped, but in some areas on deposits are shown. Qop Qa (Alluvial flood plain deposits) - Active and recently active alluvial deposits along canyon floors. Consists of unconsolidated sandy, silty, or clay-bearing alluvium. Qfu Qoa NEW Shallow Marine Sediments Qi PO Qsp - San Pedro Sand: light gray to light brown sand, fine to coarse grained, pebbly; locally Qsp af RT- contains shell fragments. af ING Qi - Inglewood Formation: light gray, friable; fine grained sandstone and interbedded soft grayQa Qoa LEW siltstone. Qi Qfu - Upper Fernando formation; soft gray massive OO silty claystone, base not exposed. Qoa DF Qls - Landslide Rubble AUL Older Surficial Sediments Qop T Qop - paleosoil in Baldwin Hills, gray to rusty brown, sandy, locally pebbly, moderately indurated Qsp Qop "hardpan" on Qoa Qi Qoa - older alluvium of gray to light brown pebble- af gravel, sandand silt-clay derived from Santa Monica Qop Mountains; slightly consolidated; in Baldwin Hills af Qop designated Baldwin Hills sandy gravel, where it is af much dissected and eroded. Qop Source Qop Geologic Map of the Vince and Inglewood Quadrangle, af T. W. Dibblee 2007 Qoa Qi Geologic Map of the Beverly Hills and Burbank Quadrangle, Qi T.W. Dibblee 1991 Qoa Qi af Qoa af Qi Qop Qi af Qls Qi Qop Qoa Qa Qop af Qi ´ PLAINS EXPLORATION & PRODUCTION COMPANY LEGEND Fi gure 2- 6 Fault Line Approximate location of cross sections Geologic Formations Present0 500 1,000 2,000 Feet displayed in Figure 2-4 Inglewood Oil Field Boundary at the Inglewood Oil Field and Vicinity 10 | 01 | 12

52. Hydraulic Fracturing Study PXP Inglewood Oil Field3-D Depiction of Inglewood Oil Field GeologyAs part of the development of this study, Halliburton was retained to develop a three-dimensional(3-D) geological depiction of the subsurface of the Baldwin Hills, from the depth of the Sentous,the lowest known formation (10,000 feet below ground surface), up to the surface. The 3-Ddepiction is based on geological and structural data from drilling oil wells. The objective was toassist in the interpretation of the results of the high-volume hydraulic fracturing operation, and tobetter understand the relationship between the deep oil-producing formations and the shallowsubsurface including the occurrence and distribution of shallow groundwater. The followingdiscussion describes each formation, ending in the present-day land surface. The final 3-D model isused to depict the results of hydraulic fracturing, and of the discontinuous, fragmented water-bearing zones at shallow depths beneath the field, and the units that constitute the hydrocarbon sealthat traps oil and gas in the deep subsurface (Figure 2-7). Figure 2-7 Cross Section of the Inglewood Oil Field Earth ModelIn the following, each figure shows the progressive development of the field, starting with thedeepest, oldest unit evaluated, the Sentous Sandstone. This presentation is used to show thegrowth of the formations and the folding and faulting specific to the area beneath the InglewoodOil Field, as it is currently understood. Once constructed, this 3-D depiction is used to illustratesome of the study results later in the study.Also shown for reference are the two wells that had high-volume hydraulic fracturing (VIC1-330and VIC1-635), four wells that had conventional hydraulic fracturing in the past in the Sentous2-14 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

53. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldformation, and the two wells that had high-rate gravel packs (TVIC-221 and TVIC-3254). Theyellow marker is the surface location of the well, and the red line is the length of the well. Eachlayer represents the top of one of the formations described above, and the space in betweenwould be filled with that particular geologic formation (shale or sandstone). The fault planes areshown as colored layers cross-cutting the geologic formations. All the depictions are constrainedby geological and structural data for the oil field.Figure 2-8A Sentous Surface Figure 2-8B Nodular Surface on TopThe top of the Sentous sandstone is shown in Figure 2-8A. The Sentous is also known as theTopanga Formation elsewhere in the Los Angeles Basin. This was a period of active volcanicactivity; the basin was under an extensional regime and a strike-slip regime, forming a pull-apartbasin that was actively subsiding. The volcanic intrusions into the sediments filled from thebottom, and at the same time erosion from distant land areas fed sandy sediments to form theSentous sandstone. The microfauna indicate a depth of 3,000 to 4,000 feet below the ocean surfaceduring this time. There are similar microfauna now in the Gulf of California, indicating that watertemperatures were higher than today. All of the volcanic deposits are found below this layer.The base of the Nodular Shale is also the top of the Sentous (Figure 2-8B). The Nodular Shalegrades directly from the Sentous sandstone. This organic rich shale that is the source rock formuch of the oil found here, and is approximately 150 feet thick; at the time of deposition, it mayhave been as much as 400 feet thick but has since been compressed. The mineralogy of the shaleincludes plagioclase derived from the volcanic rocks, and clay from the distant landmassdepositing in the basin. The grain size became finer because of a decrease in the land-basedsediment, leading to dominantly marine shale deposit. The Nodular Shale was deposited acrossthe Los Angeles Basin. The subsidence of the Los Angeles Basin ceased approximately 2 millionyears ago.October 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-15Hydraulic Fracturing Study_Inglewood Field_10102012.docx

54. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 2-8C Bradna Surface on Top Figure 2-8D Bradna Surface with FaultsThe Pasadenan Orogeny (mountain building) began about 2 million years ago. The activity led touplift and rotation of plates, and a transition from a strike slip and extensional regime to a strikeslip and compressive regime. Compaction and uplift forms the Baldwin Hills at this time, and isongoing today. During this time period, the traps started to form; the folds and faults act asimpermeable zones that allow oil to accumulate beneath them. It is believed that the Newport-Inglewood Fault may have originated as a normal fault giving it a steep angle, andaccommodated the strike-slip motion. The two grey faults in Figure 2-8D are thrust faultsaccommodating the compression. This block was likely oriented NW-SE, but has rotated to E-W.The Newport-Inglewood Fault is also shown in Figure 2-8D. The Newport-Inglewood Faultterminates in the northern portion of the field, as depicted in Figure 2-4, and Figure 2-8Dexpands on that termination. The fault likely transitions to folds or thrust faults as it approachesthe Santa Monica Fault to the north.The interval above the Nodular Shale at Inglewood includes the Bradna Shale. In other LosAngeles Basin fields, such as Long Beach and Beverly Hills, sands were deposited instead of theBradna Shales. It is thought that the Inglewood area at the time formed a topographic high, suchas a submarine knoll.2-16 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

55. Hydraulic Fracturing StudyPXP Inglewood Oil FieldFigure 2-8E Moynier Surface on Top Figure 2-8F Moynier Surface with FaultsThe Moynier formation is shale, likely reflecting the submarine knoll that is more or less uniqueto the Inglewood Oil Field compared to other parts of the Los Angeles Basin. Some sandchannels begin to appear in Moynier time, but they are minor.Figure 2-8G Rubel Surface on Top Figure 2-8H Rubel Surface with FaultsThe Rubel marks the return of sand after the Sentous sandstone. It is the first major sand unit, andis the first major petroliferous zone at Inglewood. Approximately 90 percent of oil production isfrom the sandy submarine debris flow deposits (turbidities), first represented by the Rubelformation. These are deep-sea fans that funnel land-derived sands down to the deep ocean area.These formations are overlapping fans, and are currently active offshore of Southern California.October 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-17Hydraulic Fracturing Study_Inglewood Field_10102012.docx

56. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 2-8I Rindge Surface on Top Figure 2-8J Rindge Surface with FaultsThe Rindge Formation is another productive sandstone for oil development. New structures arerepresented here in Figure 2-8J. These are interpreted as normal faults. The area was stilldominantly strike slip with compression, but we interpret these as relatively shallow normalfaults. These form the graben structure in the southeastern portion of the field. These could alsobe dominantly strike-slip faults with a normal component.Figure 2-8K Vickers H-Sand Surface on Top Figure 2-8L H-Sand Surface with Faults2-18 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

57. Hydraulic Fracturing StudyPXP Inglewood Oil FieldThe Vickers unit is another productive sandstone, similar to the description for the Rindge.Figure 2-8M Vickers Surface on Top Figure 2-8N Vickers Surface with FaultsFigure 2-8O UIHZ Surface on Top Figure 2-8P UIHZ Surface with FaultsOctober 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-19Hydraulic Fracturing Study_Inglewood Field_10102012.docx

58. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 2-8Q Vickers Reservoir Hydrocarbon Seal Figure 2-8R PICO Surface on Top with FaultsThere is a prominent, relatively impermeable layer at the top of the Vickers, within the upperportion of the Pico Formation. The impermeable layer is more shale-rich than the underlyingsandstones and forms a seal, inhibiting further upward migration of oil and gas. There are limitedoil and gas deposits in the lowermost portion of the hydrocarbon seal; these are known as theInvestment Zone. The folded and faulted units below act as traps beneath this seal. Thedepositional environment is still similar to that of the sandstones: submarine turbidite fans.However, this time may have been relatively less active, so the deposits are finer grained andformed a relatively impermeable shale instead of a sandstone.Figure 2-8S PICO Surface with Faults Figure 2-8T PICO Surface w/ Discontinuous Water Bodies & Faults2-20 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

59. Hydraulic Fracturing StudyPXP Inglewood Oil FieldThe top of the Pico Formation is also consideredthe Base of Fresh Water across much of the LosAngeles Basin. The Pico is a marine formationsimilar to the underlying units, and the formationwater is salty. At shallower depths, above the Pico(Figure 2-8T), water is relatively fresh, but occursin isolated, discontinuous water bearing zones thatdo not provide a sufficient yield for water supply,and are separated from the water-bearing zoneselsewhere in the Los Angeles Basin. The aerialphotograph of the Inglewood Oil Field is overlainon the geologic strata to provide reference(Figure 2-8U).2.4.2 Petroleum Producing ZonesThe field produces oil, natural gas, and saline waterfrom interbedded sandstone and shale sediments Figure 2-8U Ground Surface & Aerial Photo on Topranging from Miocene Upper Topanga Formation(approximately 15 million years in age) to late Pliocene Upper Pico Formation (approximately2 million years in age). See Table 2-3 for Geologic Time Scale. Production within the field isfrom nine zones that range in depth from about 900 to 10,000 feet. In order of increasing depthand increasing geologic age, the producing horizons are: Upper Investment-Investment, Vickers,Rindge, Rubel, Upper and Lower Moynier, Bradna, City of Inglewood, Nodular Shale, and theSentous (refer to Figure 2-4, which illustrates the geology of the Baldwin Hills). The shallowreservoir zones (Vickers and Rindge zones) have been undergoing waterflood treatment since1954. Each of the producing formations, along with the active wells completed in each zone, issummarized in Table 2-4.Table 2-4 Summary of Active and Idle Wells within Each Oil and Gas-bearing Formation on the Inglewood Oil Field Average Depth Number of Active Wells Number of Idle WellsSeries Formation Below Ground Surface Producer Injector Producer Injector Upper Investment-Investment 1,000 feet 5 9Upper Pico Vickers 2,000 feet 188 83 45 28 Vickers-Rindge1 2,000 – 3,000 feet 167 67 27 33 Rindge 3,000 feet 10 3 5 1 Rubel 4,000 feet 8 4 6 3Lower Repetto Rubel-Moynier2 4,000 – 5,000 feet 16 5 5 Upper Moynier 5,000 feet 22 4 28 4 Lower Moynier 5,500 feet Bradna 6,000 feet 1Upper Puente City of Inglewood 7,000 feet 1 2 1 Nodular Shale 8,000 feetUpper Topanga Sentous 8,500 feet 12Wells drilled within other transition areas between formations 39 2 14 1 Total 469 168 141 73 1These wells are completed in both the Vickers and Rindge formationsSource: Fugro Consultants 2011, PXP 2012 2These wells are completed in both the Rubel and Moynier formationsOctober 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-21Hydraulic Fracturing Study_Inglewood Field_10102012.docx

60. Hydraulic Fracturing Study PXP Inglewood Oil FieldA total of 1,475 oil wells have been drilled on the Inglewood Oil Field; these are active, idle, orplugged. Many have been directionally drilled and are non-vertical (i.e., drilled on a slant orangle). There were 469 active production wells and 168 active waterflood injection wellsoperating as of the writing of this study. Table 2-4 identifies the number of producing (pumping)well and injection wells in each zone, divided between active and idle wells. Plugged andabandoned wells are not included in Table 2-4.Vickers and Rindge FormationsThe Vickers and Rindge zones accounted for more than 74 percent of the total cumulativeproduction at the Inglewood Oil Field in 2011 and 2012 (to date). Overall, the shallow andextensive Vickers and Rindge zones have produced more than half of all the oil produced overthe life of the Inglewood Oil Field. In the context of this study, all of the high-rate gravel packshave been completed in these two zones.The primary development focus in the Vickers and Rindge zones occurs between 2,000 and4,000 feet below the ground surface; limited production from the Investment Zone occurs atapproximately 1,000 feet. The formations are cut by faults, which act as barriers to fluid flowbecause they cut off permeable sand formations.Nodular Shale FormationThe Nodular Shale is the name given to that portion of the Upper and Middle Miocene rocks of theWestern part of the Los Angeles Basin that carry large phosphatic nodules. It is a subunit of theMonterey Formation. The Nodular Shale is known to underlie several oil fields of the Los AngelesBasin including Playa Del Rey (Hoots 1931, Wissler 1943), El Segundo (Porter 1938, Wissler1943), Inglewood (Wissler 1943), Torrance (Wissler 1943), and Wilmington (Wissler 1943). It isalso suspected to underlie the Beverly Oil Field (Hoots 1931) and the Lawndale Oil Field. In thecontext of this Hydraulic Fracturing Study, the only two high-volume hydraulic fracturecompletions that have occurred at the Inglewood Oil Field have been done within this formation.The Nodular Shale is a highly organic, dark brown to black shale, and has produced smallamounts of oil in several wells at Inglewood. This distinctive unit was deposited on deeplysubmerged offshore ridges and slopes through the slow accumulation of biological debris,diluted by clay particles carried in suspension by circulating ocean currents. The high organiccontent of the Nodular Shale indicates the presence of anaerobic conditions seen in the northernarea of the Nodular deposition.Sentous FormationThe Sentous Formation is the deepest unit produced at the Inglewood Oil Field, and is below theNodular Formation at greater than 9,000 feet below the ground surface. The Sentous is thegeologically oldest producing zone in the Inglewood Oil Field and also along the Newport-Inglewood Fault trend. Since the early 1990s, the exploration and development focus in theInglewood Oil Field has been on the Lower Pliocene and Upper and Middle Miocene,particularly the Sentous. Sentous sands were deposited in approximately 1,000 feet water depthduring the opening of the rifted basins of the Southern California continental borderland. Oilaccumulated in the Sentous sands down the northwest plunge of the Inglewood anticline;however, the sands become impermeable higher up on the anticlinal crest due to filling of the2-22 Oil Production in the LA Basin/Inglewood Oil Field Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

61. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldpore spaces with calcite cement. This loss of permeability has created a stratigraphic trap forthis reservoir (Halliburton 2012). In the context of the Hydraulic Fracturing Study, theconventional hydraulic fracture completions have been conducted either solely in the Sentouszone or combined in the Sentous and either the Moynier or the Bradna.2.5 Future of Oil and Gas Development in the Los Angeles BasinThe Monterey Shale is the primary source of oil and natural gas found in Southern California.The organic-rich shale was heated and compressed during tectonic activity, producing oil andgas. Some of the oil and natural gas migrated upwards into the overlying, more permeable,sandstone layers, where the hydrocarbons were then trapped by overlying impermeable shalesand faults. Across Southern California, the deep source rocks, approximately 2 miles below theground surface, of the Monterey Formation are now an exploration objective. High-volumehydraulic fracturing is being explored as a possible well completion method to allow theextraction of oil and natural gas from this geologic formation.At a 2012 meeting of the American Association of Petroleum Geologists, the U.S. GeologicalSurvey presented an assessment of the amount of oil remaining in the Los Angeles Basin. Theynote that, during much of the twentieth century, discovery and development of the Los AngelesBasin oil fields went hand in hand with rapid urbanization, which impacted field developmentfrom the first day of drilling. In spite of one of the world’s greatest concentrations of oil per unitarea, the oil recovery efficiency in the major fields continues to decrease (Gautier et al. 2012).Many small fields have been covered by residential or commercial development while still inprimary production. For example, along the Wilmington Anticline and Newport-Inglewood FaultZone, at least six fields have estimated original oil volumes in excess of one billion barrels.These fields have been in production for about 90 years. However, future recovery in such majorfields could reasonably be expected to almost equal the total amount of oil recovered so far. It ispredicted that oil volumes well in excess of one billion barrels could be recovered going forwardfrom existing fields in the Los Angeles Basin through widespread application of current bestpractice industry technology such as improved imaging, advanced directional drilling, and othertechniques (Gautier et al. 2012).Along with continued oil and gas development in the Los Angeles Basin, hydraulic fracturinghas been occurring to explore the resource potential of the Monterey Shale throughout Californiaand in the Los Angeles Basin. Hydraulic fracturing is likely to continue to be utilized duringrecovery of the remaining petroleum resources. Figure 2-9 displays the location of wells in thesouthern California where hydraulic fracturing was reported in either 2011 or 2012 (as reportedon www.fracfocus.org).October 2012 Cardno ENTRIX Oil Production in the LA Basin/Inglewood Oil Field 2-23Hydraulic Fracturing Study_Inglewood Field_10102012.docx

62. 27 5 103 20 ( ! ( ! 3 14 ( ! 5 ( ! ( ! 20 ( ! 66-242 66-245 ( ! ( ! ( !( ! ( ! (( !! ( ! 362-36R ( ( ! ! 5 ( ! ( ! 3-32A-36R 535-20B 3-48-26R 511-29B 17 512-28B 521A-70 521-1C 520-7D dryden 29 dryden 27 ( ! VIC1-330 ( ! ( ! grubb 477 VIC1-635 mcgonagle 55 c-245a ( ! c344 DOM-1 ( ! ( ! c-349 c-649 Los Angeles c-651 Basin LEGEND PLAINS EXPLORATION & PRODUCTION COMPANY0 7.5 15 30 Miles ´ ( ! XXX XX Well Completed by Hydraulic Fracturing Well Name Multiple Wells Completed by Hydraulic Fracturing Fi gure 2- 9 2011 and 2012 Reported Hydraulic Fracturing Operations in Southern California 09 | 12 | 12

63. Chapter 3Hydraulic Fracturing at Inglewood Oil Field:Past, Present, and Future3.1 Oil and Gas Well Drilling, Including Hydraulic Fracturing CompletionsWell drilling is the process of drilling a hole in the ground for the purposes of extracting anatural substance (e.g., water, oil, or natural gas). Drilling and completing a well consists ofseveral sequential activities, which are listed below in order (note that these activities may beconducted multiple times during the drilling of a well, or be already completed and not neededfor a particular well): Building the well pad and installing fluid handling equipment; Setting up the drilling rig and ancillary equipment and testing all equipment; Drilling the hole; Running formation evaluation logs and other instruments down the well; Running casing (steel pipe) to line the wellbore; Cementing the casing; Removing the drilling rig and ancillary equipment; Logging the casing to ensure bonding of cement to the formation and casing; Perforating the casing; Stimulating the well; Installing surface production equipment; Beginning production of the well; Monitoring well performance and integrity; and Reclaiming the parts of the drilling location that are no longer needed and removing equipment no longer used.In the exploration and development of oil and natural gas fields, wells must be designed to carrythe extracted fluids directly from the producing zone at depth to the surface completely withinthe well, without allowing fluid to escape into surrounding formations. Wells are designed andconstructed to prevent any communication (migration and/or transport of fluids) between thesesubsurface layers, which have acted as a barrier for millions of years (API 2009).In most parts of the Los Angeles Basin, including the Inglewood Oil Field, there areimpermeable rock formations that lie between the hydrocarbon producing formations andshallow zones including groundwater-bearing formations and the land surface. These formationsprovide additional, natural protection against migration of oil and gas to the shallowerOctober 2012 Cardno ENTRIX Hydraulic Fracturing 3-1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

64. Hydraulic Fracturing Study PXP Inglewood Oil Fieldformations. These impermeable formations and confining faults at the Inglewood Oil Fieldisolate, or trap, the hydrocarbons from the near surface formations. If these impermeableformations did not exist, the naturally buoyant oil would continue rising until reaching thesurface, similar to areas such as the La Brea Tar Pits.3.1.1 Drilling, Casing, and CementingThis section describes the methods used during drilling to ensure oil, natural gas, and water that arepumped from the deeper formations are brought to the surface without loss to shallower zones.Wells are drilled using a drilling rig equipped with a drill string. The drill string consists of adrill bit, drill collars (heavy weight pipes that put weight on the bit so that it cuts through theformation), and a drill pipe. The drill string is assembled and suspended at the surface on adrilling derrick and run into the hole in the ground. It is then rotated using a turntable, or motor,in order to cause the drill bit to advance downward through the formations and thereby extendthe hole deeper into the ground.While the hole is drilled, fluid (drilling mud) is circulated down the drill string and up the spacebetween the drill string and the hole. This drilling fluid serves to lubricate the drilling assembly,remove the sediments that are drilled, maintain pressure control of the well and stabilize the holebeing drilled (prevent collapse of sediments back into the hole). Drilling fluid is generally amixture of water, clays, and additives that prevent fluid loss, control density, and suspend thedrilled cuttings. The first hole drilled is for installation of the surface protection casing. This isfollowed by sequentially deeper holes so that the well can be completed (API 2009).The first step in completing a well is to case the hole (Figure 3-1). As the well is drilled anddrilling fluid is removed, a series of steel pipes known as casings are inserted to prevent theboring from closing in on itself. Cemented casing also serves to isolate the well from thesurrounding formation. Each length of casing along the well is often referred to as a casingstring. The steel casing strings are a key part of well design and essential to isolating theformation zones and ensuring integrity of the well. Cemented casing strings protect againstmethane migration and protect groundwater resources (if present) by isolating these shallowresources from the oil, natural gas, and produced water (water produced during operation of awell) inside of the well. It is important to note that the shallow portions of the well have multiplestrings of steel casing installed (Halliburton 2012, API 2009).When drilling nears the base of fresh water, typically sealed naturally from deeper saline waterby an impermeable confining layer, as at the Inglewood Oil Field, the casing is placed into thedrilled hole. The design and selection of the casing is important since the casing has to be able towithstand various forces (for example compression by surrounding formation), as well as anypressure it might be subjected to during the well’s life. The casing is threaded on each end thatallows it to join to the next pipe. When several joints of casing are screwed together, they form acontinuous string that isolates the hole.3-2 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

65. Hydraulic Fracturing StudyPXP Inglewood Oil Field Source: Halliburton 2012 Figure 3-1 Depiction of Casing StringsOctober 2012 Cardno ENTRIX Hydraulic Fracturing 3-3Hydraulic Fracturing Study_Inglewood Field_10102012.docx

66. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe casing used in wells at the Inglewood Oil Field meet the American Petroleum Institute (API)standards. API standards entail strict requirements for compression, tension, collapse, burstresistance, quality, and consistency so that casing is able to withstand the anticipated pressurefrom well completion, fracturing and production, as well as environmental conditions that couldcause corrosion (API 2009).The space between the casing and the drilled hole (wellbore), called the annulus, is filled withcement, permanently holding the casing in place and further sealing off the interior of the wellfrom the surrounding formation. Cementing is accomplished by pumping the cement (commonlyknown as slurry) down the inside of the casing into the well to displace the existing drilling fluidsand to fill in the space between the casing and the actual sides of the drilled well. Once the cementhas set, drilling continues to the next depth. This process is repeated, using smaller steel casingeach time, until the targeted oil and gas-bearing reservoir is reached and cement is no longer used.Oilfield cements are carefully designed products, formulated to meet the requirements ofindividual well designs. Cementing serves two purposes ― it provides protection and structuralsupport to the well while also providing zonal isolation between different formations, includingfull isolation of the groundwater. Cement is fundamental in maintaining integrity throughout thelife of the well and protecting the casing from corrosion. Placement of the cement completelyaround the casing and at the proper height above the bottom of the drilled hole are two of theprimary factors in achieving successful zone isolation and integrity. Proper isolation requirescomplete filling of the annulus and tight cement bonding to both the casing and the surroundinggeologic formation. This bonding and the absence of voids prevents the development ofmigration pathways and isolates the production zone (Halliburton 2012, API 2009).3.1.2 Hydraulic Fracturing as a Completion TechniqueThe final steps to a producing well are known as “well completion.” Well completion includesperforations and any sort of well stimulation techniques, including hydraulic fracturing, sandcontrol measures, installing the production tubing, and other downhole tools.PerforatingOnce the well is drilled to the target producing zone, cased and cemented in place, the areasoutside the well are sealed off by the casing and cement. At this point in the process, there is asolid steel casing across the target producing zone. In order to pump out oil, natural gas, andwater from this zone, a mesh of open space must be made in the casing. The process of creatingthe open holes within the target producing zone is called perforating; perforations are simplyholes that are made through the casing. Perforating uses a series of small, specially designedshaped charges, which are lowered to the desired depth in the well and activated (Figure 3-2).These shaped charges create the holes in the steel casing that connect the inside of the productioncasing to the geological formation.The perforations are isolated by the cement. Additionally, the producing zone itself is isolatedoutside the production casing by the cement above and below the zone. This isolation ensuresthat hydrocarbons and other fluids are unable to migrate anywhere except between theperforations and the wellbore.3-4 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

67. Hydraulic Fracturing StudyPXP Inglewood Oil Field Source: Halliburton 2012 Figure 3-2 Perforation ProcessHydraulic Fracturing ProcessHydraulic fracturing is not part of the drilling process, but is a completion technique applied afterthe well is drilled, sealed, and perforated and the drilling rig has moved to another site. It is a wellcompletion technology that results in the creation of fractures in rocks that allows oil and gas in thesource rock to move more freely through the rock into the well. Hydraulic fracturing is a wellstimulation process used to maximize the extraction of underground resources. Hydraulicfracturing is sometimes referred to as “fracking.”Hydraulic fracturing for stimulation of oil and natural gas wells was first tested in the UnitedStates in 1947. It was first used commercially in 1949, and was rapidly adopted because ofincreased well performance and increased yields of oil and gas from relatively impermeable rockunits. It is now used worldwide in tens of thousands of oil and natural gas wells annually. Themethod has also been used at more shallow depths to assist in cleanup of contaminated industrialsites that have relatively impermeable zones.In general, the process of hydraulic fracturing consists of injecting water, sand, and additives intothe well over a short period of time (typically less than an hour) at pressures sufficient to fracturethe rocks of a formation. Water and small granular solids such as sands and ceramic beads, calledproppants, make up approximately 99 percent or more of the fluid used in a typical hydraulicOctober 2012 Cardno ENTRIX Hydraulic Fracturing 3-5Hydraulic Fracturing Study_Inglewood Field_10102012.docx

68. Hydraulic Fracturing Study PXP Inglewood Oil Fieldfracturing operation (Halliburton 2012). This is consistent for both conventional and high-volumehydraulic fracturing. The flow of water acts as a delivery mechanism for the sand, which enters thenewly-created fractures and props them open. If proppant does not enter a new fracture, then thepressure of the overlying rocks forces the fracture closed. These proppant-filled fractures allow oiland gas to be produced from reservoir formations that are otherwise too tight to allow flow.The additives in the water help the sand to be carried farther into the fracture network. Suchadditives used to increase the viscosity of the water include gelling materials and/or foamingagents. Other liquid and solid additives that may be incorporated in the fracturing fluid aresurfactants, a soap-like product designed to enhance water recovery, friction reducers, biocidesto prevent microorganism growth, oxygen scavengers and other stabilizers to prevent corrosionof metal pipes, and acids to remove drilling mud damage. Figure 3-3 illustrates the compositionof a typical fluid used in high-volume hydraulic fracturing. The specific products used atInglewood Oil Field are described in Section 3.2. Figure 3-3 Composition of a Typical Fracturing FluidThere are several steps during the hydraulic fracturing process. Taken together, these stepsconstitute one stage. Horizontal wells that are completed by hydraulic fracturing typically haveseveral stages. Stages are not completed simultaneously. After the first stage is complete, thepressure is reduced, and the downhole equipment is moved to setup the second stage. Whenready, the pressure is increased for the second stage. The following describes the steps that canbe conducted during a hydraulic fracturing stage. Step 1. This optional step places water mixed with a dilute acid such as hydrochloric or muriatic acid into the sealed well. The volume of acid used is low and it is spent (used up) within inches of the fracture entry point and yields calcium chloride, water and small amount of CO2. No acid is returned to the surface (King 2012). This step serves to clear cement debris in the wellbore and provide an open conduit for other hydraulic fracturing fluids by3-6 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

69. Hydraulic Fracturing StudyPXP Inglewood Oil Field dissolving carbonate minerals and opening fractures near the wellbore. This step is not always performed, depending on the characteristics of the well and the formation. Step 2. The hydraulic fracturing fluid pad step (water with friction reducing additives) helps initiate and then propagate the fracture and assist in the placement of proppant material. Step 3. A proppant concentration step consists of several steps of adding water combined with proppant material (sand) to the well. This step may collectively use several hundred thousand gallons or more of water. Proppant material may vary from a finer particle size to a coarser particle size throughout this sequence and the proppant concentrations will vary during the treatment – starting with a lower concentration and then ramping to a higher concentration. Step 4. A flush step consists of a volume of fresh water or brine sufficient to flush the excess proppant from the wellbore. Step 5. Most of the fluid used for hydraulic fracturing is heated in the deep formation, becomes less viscous, flows more readily, and is recovered as it comes back up the well to the surface; this fluid is known as flowback. The amount recovered depends on the characteristics of the formation, and of the fluid used for hydraulic fracturing. The fluid that does not flow out of the well as flowback remains in the formation until the well is brought on production to pump and recover oil and gas. Any remaining fracturing fluids are also pumped out of the ground. Therefore, any remaining hydraulic fracturing fluid that does not return as flowback is captured by the pumping of the well. The only period of elevated pressure is during the brief (typically less than an hour) hydraulic fracturing operation itself (Halliburton 2012).Uses of Hydraulic FracturingWithin the last decade, the combination of horizontal wells installed with GPS-mounted drillheads to precisely guide the drill bit through relatively thin reservoir formations, and high-volume hydraulic fracturing completions has allowed the production of natural gas and oil fromdeep shale and tight sands deposits. Previously, the oil and gas-bearing shales were thought of asthe source rocks of petroleum, from which oil and gas could not be economically produceddirectly. With the advent of new technology, companies now have the ability to precisely drill ahorizontal well to be entirely within a relatively thin shale and tight sand bed using GPStechnology, and then to precisely fracture that shale and prop open the fractures with sand toproduce hydrocarbons from formations that previously were not economical.This ability to capture hydrocarbon resources from zones that previously could not be producedis one form of development of “unconventional sources of oil and gas”. As applied to shale gas,this technique has completely changed the estimate of economic natural gas reserves. U.S.natural gas reserves had previously been thought to be in decline. To supply the nation’s energyneeds, numerous plans to import gas from overseas as liquefied natural gas (LNG) wereproposed between 2000 and 2005. Now, however, development of shale gas has led to the U.S.becoming the world’s largest producer of natural gas, surpassing Russia in 2009. The abundanceof this relatively clean-burning fuel is beginning to displace the use of coal in U.S. generatingstations, thus reducing greenhouse gas emissions.October 2012 Cardno ENTRIX Hydraulic Fracturing 3-7Hydraulic Fracturing Study_Inglewood Field_10102012.docx

70. Hydraulic Fracturing Study PXP Inglewood Oil FieldAt the Inglewood Oil Field, the uses of hydraulic fracturing are to create a permeable channel(propped fracture) within the shale and sandstone units so that the oil can be producedeconomically from these deeper formations. All activity occurs on an active, closely monitoredoil and gas field using existing cleared areas for new wells whenever feasible. The activitydiffers from other parts of the country where areas not located in active oil and gas developmentsare converted to this use, and where the principal target is natural gas.Types of Hydraulic Fracturing and Gravel PackingHydraulic FracturingHydraulic fracturing as applied in oil and natural gas completions can take one of two forms,although some hybrid approaches are also in use. The process of fracturing in both forms is thesame; the difference generally lies in the type of reservoir in which the fracturing is occurring,either tight sandstone or shale. The two forms are as follows: Conventional Hydraulic Fracturing. This completion approach uses water, sand, and additives to fracture and stimulate the producing formation to a distance of up to several hundred feet from the well. This method is intended to enhance the permeability of the target producing zone itself, and stimulate the reservoir. It is typically applied in tight sandstone formations and some shales. High-Volume Hydraulic Fracturing. This higher energy completion approach is generally applied to shales rather than sandstones. Sand and additives are used in the process similar to how they are used in conventional hydraulic fracturing; however, the primary distinguishing factor is the amount of fluid and pressure used in the process. Since shales have extremely low permeability, it is essential to increase the formation surface area contact with a permeable fracture channel. The high-volume hydraulic hydraulic fracturing process accomplishes this by increased treatment rates and material volumes.Gravel PackingIn addition to hydraulic fracturing, the Settlement Agreement requires that gravel packing also bedescribed and evaluated in this study. Gravel packing differs from hydraulic fracturing in that itis not intended to create fractures in the producing formation in order to pump out more water,oil, and gas. Rather, it is intended to place sand and gravel outside and adjacent to the well itself,with the intention of limiting the amount of fine-grained material that is pumped from theformation along with the fluids. As such, the purpose and techniques of gravel packing aredistinctly different from hydraulic fracturing. Although the objective and techniques of gravelpacking are very different from hydraulic fracturing, they are described in this study inaccordance with the Settlement Agreement: High-Rate Gravel Pack. Since 2003, high-rate gravel packing has been conducted above the fracture pressure to improve well production performance through sand control. This operation uses much lower pressures than conventional and high-volume hydraulic fracturing. This completion approach, which is sometimes referred to as a “frack pack,” uses water, gravel, and additives to place sand and gravel near the well itself with the objective of limiting entry of formation sands and fine-grained material into the wellbore. In this process, the space between the formation and the outer casing of the well is packed, at a high-rate, with gravel that is small enough to prevent formation grains (sand) and fine particles from3-8 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

71. Hydraulic Fracturing StudyPXP Inglewood Oil Field mixing and entering the wellbore with the produced fluids, but large enough to be held in place by the well perforations. This relatively low-energy completion approach can create limited fractures, using water, sand, and additives that improve the proper placement of the gravel filter. This process is not intended to increase the permeability of the producing formation, and it only affects the area near the well itself. Sand and finer particles that are entrained from the formation by pumping reduce the life of surface equipment such as valves, pipelines, and separators. In addition, produced sand can reduce oil production and impair the performance of injection wells. Gravel Pack. Prior to 2003, gravel packing was done at lower rates and lower applied pressures. The objective was the same as high-rate gravel packing, and the methods were also very similar, but the gravel packing process was always conducted at pressures less than the fracture pressure. In the past, some gravel packing was conducted using produced crude oil as part of the fluid mixture (a total of 11 completions); this oil was injected into the oil-producing formations themselves and not into shallow formations. Although PXP does not use oil as a fluid in gravel packing any more, it is noteworthy that such activity would not require an Underground Injection Control (UIC) permit since the operation did not use diesel fuel.3.2 Hydraulic Fracturing at the Inglewood Oil FieldConventional hydraulic fracturing has been conducted on 21 wells in the past at the InglewoodOil Field. These completions were conducted in the Sentous Moynier, , Bradna ,City ofInglewood, Rubel, and Nodular shale formations. Combined, a total of approximately 65 stagesof conventional hydraulic fracturing have occurred at the Inglewood Oil Field since 2003 whenPXP began operating the field.In conjunction with this Hydraulic Fracturing Study, PXP conducted high-volume hydraulicfracturing tests at two wells at the Inglewood Oil Field (VIC1-330 and VIC1-635). These are theonly two high-volume hydraulic fracture jobs that have been performed on the Inglewood OilField.Figure 3-4 shows the location of Inglewood Oil Field wells that have either been completed byhigh-volume hydraulic fracturing or conventional hydraulic fracturing since PXP took over fieldoperations. All of the hydraulic fracturing has been completed on producing wells, that is, onpumping wells rather than injection wells.3.2.1 Conventional Hydraulic FracturingHalliburton (2012) analyzed data from the past conventional hydraulic fracturing in the Sentousformation at the Inglewood Oil Field. The results of this analysis are summarized in this chapterto provide an indication of the feasibility and effectiveness of this technique at the Inglewood OilField.Conventional hydraulic fracturing uses water, sand, and additives to fracture and stimulate theproducing formation to a distance of up to several hundred feet from the well. This method isintended to affect the formation surrounding the perforated zone of the well, and enhance thehydrocarbon production of the target zone. It is typically applied in sandstone and some shaleformations.October 2012 Cardno ENTRIX Hydraulic Fracturing 3-9Hydraulic Fracturing Study_Inglewood Field_10102012.docx

72. INGLEWOOD OIL FIELD A ! A ! A ! AA !! A ! A ! A ! VIC1-330 A ! AA ! ! A ! A ! A ! VIC1-635 A ! A ! A ! A ! A ! A ! A ! A! A ! PLAINS EXPLORATION & PRODUCTION COMPANY0 500 1,000 ´ 2,000 Feet LEGEND A Conventional Hydraulic Fracture ! A ! High Volume Hydraulic Fracture Inglewood Oil Field Boundary Fi gure 3- 4 Locations of Hydraulic Fracturing Operations at Inglewood Oil Field 10 | 01 | 12

73. Hydraulic Fracturing StudyPXP Inglewood Oil FieldIn this type of treatment, water is mixed with a polymer to increase the viscosity to the range of10 to 40 centipoise (cp); for comparison, water viscosity is 1 cp. When ready to pump into thewell, the water and polymer blend referred to as the “base gel” is blended further with a liquidadditive that binds the polymer chains in the base gel increasing the viscosity to several thousandcp which aids in the suspension of the solids. This process is referred to as “cross-linking” thebase gel. The cross-linked gel is mixed with the proppant and pumped into the well as slurry.The proppant, either natural (sand) or manmade (ceramic beads), is pumped along with the fluidand remains in the created fractures to hold it open. Additives designed to delay the degradationof the cross-linked gel are pumped along with the cross-linked gel and, in combination with theelevated temperature in the formation, return the cross-linked gel to a viscosity approaching thatof water so that it can be recovered, or “flowed back” from the formation.Conventional hydraulic fracturing has been used for every producing formation deeper than theVickers and the Rindge at the Inglewood Oil Field. Most conventional hydraulic fracturing jobswere completed in the Sentous, the deepest producing formation at approximately 10,000 feetbeneath the ground surface. Halliburton (2012) contains an analysis of the outcomes of hydraulicfracturing in the Sentous zone based on detailed analysis of two wells: TVIC-1033 and VIC2-1133. Figures 3-5A and 3-5B present different visualizations of the fracture geometriesdetermined from the hydraulic fracturing treatments. The small rectangular area at the base of thediagram represents the calculated volume that received proppant. The figures include therelevant formation surfaces, ground surface, geologic structure, including major faults; water-bearing bodies near the surface are also depicted. The area affected by the conventionalhydraulic fracturing remained in the Sentous formation, greater than 9,000 feet below the groundsurface.Figure 3-5A Side View of the Sentous Zone Modeled Figure 3-5B Side View Showing Modeled Fracture Fracture Geometries Geometries for Study Well in the Sentous Zone Together with Structural Features (Faults)October 2012 Cardno ENTRIX Hydraulic Fracturing 3-11Hydraulic Fracturing Study_Inglewood Field_10102012.docx

74. Hydraulic Fracturing Study PXP Inglewood Oil Field3.2.2 High-Volume Hydraulic FracturingPXP contracted Halliburton Energy Services to conduct two high-volume hydraulic fracture jobsat separate wells on the Inglewood Oil Field for the purposes of addressing feasibility andpotential impacts of hydraulic fracturing. The first hydraulic fracture completion was conductedon September 15 and 16, 2011, at the VIC1-330 well. The second completion was conducted onJanuary 5 and 6, 2012, at the VIC1-635 well.Only one hydraulically fractured stage was completed on each well during the operations. Bothof these operations were conducted in the Nodular Shale, a subunit of the Monterey Shale,approximately 8,000 to 9,000 feet below ground surface. Halliburton (2012) contains a fullreport of these operations.The conditions of the hydraulic fracture jobs are the same as those expected for any other futurehigh-volume hydraulic fracturing to be conducted at the field. Therefore, the applied pressure,water use, and monitored effects are expected to be similar between these two stages of high-volume hydraulic fracture jobs and any future stages of high-volume hydraulic fracture jobs.Future high-volume hydraulic fracturing completions would likely utilize more than one stage perwell in the future. That is, any single hydraulic fracture job in the future could consist of more thanone individual fracturing event. In hydraulic fracture jobs that consist of more than one stage, eachstage would be conducted one after the other, never simultaneously. Therefore, any one stage willbe similar to those stages described in this section. Cumulatively, the amount of water andchemicals used would be greater for a multi-stage completion than for a single-stage completion.However, the volumes required are still much less than the overall water usage at the field.Although VIC1-330 and VIC1-635 are both vertical wells, PXP reports that in the future, high-volume hydraulic fracturing may be conducted via horizontal wells. This difference would notlead to any variation in the hydraulic fracture stage, or to the monitored effects; the onlydifference would be the construction of the well itself. Although a horizontal well can be muchlonger than a vertical well in the same formation, the hydraulic fracture completion targets anindividual zone, and so the amount of water, sand, and additives used would be the same, stagefor stage. A longer, horizontal well would also result in more than one stage, which as describedabove, would result in the use of greater volumes of water and chemicals.This section describes the conditions and results of high-volume hydraulic fracturing of theVIC1-330 and VIC1-635 wells. Both hydraulic fracturing events were in the Nodular shale, atdepths in excess of 8,000 feet below ground surface. Microseismic data are fist used to describethe hydraulic fracturing. Next, water demand, water reuse, and chemical use are described forboth jobs.Microseismic Monitoring MethodsA hydraulic fracture job generates microseismic events when the rock develops cracks. Duringthe hydraulic fracturing treatment, these microseismic events are measured with seismicreceivers or geophones placed at depth within a nearby well or wells. The events are soimperceptible, even by this sensitive equipment, that it must be placed at or near the depth offracturing to detect them. Figure 3-6 shows the locations of the four wells, and the nearby wellsused for microseismic monitoring of VIC1-330 and VIC1-635.3-12 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

75. TVIC-221 TVIC-3254 A A ! ! VIC1-330 VIC1-934 A ! ( ! VIC1-735 ! VIC1-935 ( ! ( VIC1-635 INGLEWOOD OIL FIELD A ! PLAINS EXPLORATION & PRODUCTION COMPANY0 500 1,000 2,000 Feet ´ LEGEND A ! A ! High Rate Gravel Pack High Volume Hydraulic Fracture ( ! Monitoring Location Inglewood Oil Field Boundary Fi gure 3- 6 High-Volume Hydraulic Fracturing Operations with Microseismic Monitoring Locations 10 | 01 | 12

76. Hydraulic Fracturing Study PXP Inglewood Oil FieldEarthquakes and other seismic events are commonly measured using the Richter scale(Figure 3-7). The Richter scale is based on Magnitude; that is, an earthquake of Magnitude 6 isten times stronger than an earthquake of Magnitude 5, as a result of the amplification of groundmovements (e.g., soft soils overlying bedrock will strengthen the intensity of the groundmovement). Events of Magnitude 3 to 4 are similar to vibrations caused by heavy traffic. Eventsof Magnitude 2 to 3 are typically not noticed by people. Events of Magnitude 1 to 2 are onlydetectable by seismographs and are not felt by people. For context, the Northridge earthquake of1994 was Magnitude 6.4, and the San Fernando earthquake of 1970 was Magnitude 6.9.During hydraulic fracturing, the microseismic events are generally less than Magnitude -2 or -3on the Richter scale (Halliburton 2012). That is, they are about 1,000,000 times weaker thanevents that are typically felt by people. Although the pressures used in hydraulic fracturing are,by definition, high enough to fracture rock, the effects are very localized and do not inducefurther seismic effects. As discussed further in Section 4.5.6, recent studies by the U.S.Geological Survey and other organizations have consistently concluded that the forces generatedby hydraulic fracturing do not cause earthquakes. These studies have shown that, under someconditions, injection of water or other fluids associated with wastewater disposal can, however,induce small tremors less than Richter Magnitude 3 or 4. Source: South Dakota Geologic Survey 2012 Figure 3-7 Graphical Representation of Seismic Events as Recorded on the Richter Scale3-14 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

77. Hydraulic Fracturing StudyPXP Inglewood Oil FieldMicroseismic monitoring was conducted during hydraulic fracturing treatments for bothVIC1-330 and VIC1-635. The results are used to determine the extent of fractured rock resultingfrom the treatment by mapping the locations of induced microseismic events. Figure 3-8Apresents a detailed earth model side view visualization showing the locations of microseismicevents detected during the mainstage fracture treatment. Each dot shown is a microseismic event,corresponding to a fracture. The rectangular area within the microseismic events represents thecalculated volume that received proppant. The color of the microseismic events represents thetime that they occurred. Taken together, the area affected by the microfractures is the zoneaffected by high-volume hydraulic fracturing. As depicted in Figure 3-8A, a few microseismicevents occurred in the underlying Sentous Formation. However, the rectangular areas indicatethat the proppant remained in the Nodular Shale, so the deeper fractures would seal after thehigh-volume hydraulic fracturing. Descriptions of fracture height and fracture length refer to theoverall zone affected by fracturing; these are not the heights and lengths of individual fractures.Figure 3-8A Microseismic Events Detected During the Hydraulic Treatments in the Sentous Zone in Wells VIC1-330 and VIC1-635Figure 3-8B presents the 3-D model visualization of the microseismic events recorded duringhydraulic fracture treatments in the Nodular Shale zone in wells VIC1-330 and VIC1-635. Thedistance between the top of the created fracture and the near-surface water bodies isapproximately 7,700 feet. As shown in Figure 3-8B and described in the following sections, thefracture treatment stayed predominantly within the zone, and all proppant applied stayed withinthe zone (Halliburton 2012).October 2012 Cardno ENTRIX Hydraulic Fracturing 3-15Hydraulic Fracturing Study_Inglewood Field_10102012.docx

78. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 3-8B Earth Model Visualization Showing the Microseismic Events Recorded during Hydraulic Fracture Treatment in the Nodular Shale Zone in Wells VIC1-330 and VIC1-635Well VIC1-330 Hydraulic Fracturing and Microseismic MonitoringVIC1-330 well was hydraulically fractured between the depths of 8,030 to 8,050 feet below groundsurface. The target formation was the Nodular Shale. The microseismic monitoring of VIC1-330well was done from the VIC1-934 well using an array of geophones spaced 100 feet apart. Thedistance from the center of the geophone array to the perforations in the VIC1-330 treatment wellis approximately 700 feet.A total of 47 microseismic events were located during the hydraulic fracturing (Figure 3-9)operation. Based on the microseismic monitoring, the fractures are not radially distributed aroundthe well, but follow three primary directions corresponding to the structure of the reservoir. Somefractures occur outside of the Nodular Shale, although most lie within the target unit(Schlumberger 2012b). Halliburton (2012) also models the distribution of proppant applied to thefractures in the target zone. Based on this model, all of the proppant stayed within the target zoneof the Nodular Shale. The minor fractures that occurred outside the Nodular Shale did not receiveproppant, and as such the minor fractures sealed based on the overburden pressure.3-16 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

79. Hydraulic Fracturing StudyPXP Inglewood Oil FieldFigure 3-9 Detailed Zoomed in Side View Visualization of the Microseismic Events Recorded during Fracture Treatment in the Sentous Zone in Well VIC1-330Well VIC1-635 Hydraulic Fracturing and Microseismic MonitoringVIC1-635 well was hydraulically fractured between the depths of 8,430 to 8,450 feet belowground surface. The target formation was the Nodular Shale. The microseismic monitoring ofVIC1-635 well was done from wells VIC1-735 and VIC1-935 using an array of geophonesspaced 100 feet apart. Figure 3-10 depicts the microseismic events that were observed during thehydraulic fracturing treatment. Figure 3-10 Microseismic Events Detected during Mainstage Fracture Treatment, Top ViewOctober 2012 Cardno ENTRIX Hydraulic Fracturing 3-17Hydraulic Fracturing Study_Inglewood Field_10102012.docx

80. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 3-11 shows the map view (left) and 2D Depth view (right) of the Mainstage high-volumehydraulic fracture treatment along with the microseismic events for the hydraulic fracture in wellVIC1-635.Figure 3-11 2D VIC1-635, VIC1-735 and VIC1-935 Surface Locations with Events MappedEarlier geologic control from well logs and structural mapping in the area indicated the NodularShale has dipping beds (~20°) from the northeast to the southwest. Based on the microseismicmonitoring, the primary fracture network direction is considered east-west for the single stagemapped in the VIC1-635 well with a secondary fracture direction of N45°E. The microseismicmapping results indicate that the target zone of the Nodular Shale was effectively stimulated andfracture growth occurred along the formation dip of approximately 20 degrees. Growth appearsto be asymmetric to the west based on the geophone array locations. The fracture network half-length was measured to be 750 feet. Fracture height was approximately 230 feet.Almost all of the microseismic events occurred in the Nodular Shale; however, somemicroseismic events occurred outside the Nodular Shale and affected the Sentous Shale,underlying the Nodular. This appears to be related to pre-existing structure. Halliburton (2012)also models the distribution of proppant applied to the fractures in the target zone. Based on thismodel, all of the proppant stayed within the target zone of the Nodular Shale. Therefore theminor events (corresponding to microfractures) that occurred outside the Nodular Shale did notreceive proppant, and as such they sealed based on the overburden pressure.3-18 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

81. Hydraulic Fracturing StudyPXP Inglewood Oil FieldWater and Chemical Use during High-Volume Hydraulic FracturingWater Use and SourceWater for the hydraulic fracturing operations at the Inglewood Oil Field is provided from eitherproduced water the field or, if a potassium chloride gel is used, fresh water provided byCalifornia American Water Company, the provider of all fresh water used at the Inglewood OilField. For both of the high-volume operations on the field, PXP used fresh water. Table 3-1provides the volumes of water used during the high-volume hydraulic fracturing at theInglewood Oil Field.Table 3-1 Volumes of Water Used During High-Volume Hydraulic Fracturing Operations at the Inglewood Oil Field Volume Water UsedOperation Type Date Well (gallons) Water SourceHigh Volume September 15-16, 2011 VIC1-330 123,354 Fresh WaterHigh Volume January 5-6, 2012 VIC1-635 94,248 Fresh WaterWater DisposalWater produced during hydraulic fracturing operations, known as flowback water and flushwater, is transported by pipeline to the field water treatment plant where it is mixed with otherproduced water generated on the field. The treated water is then reinjected into the oil and gasproducing formations as part of the waterflood process. This operation is in accordance withCSD Condition E.2.(i), which requires that all produced water and oil associated withproduction, processing, and storage be contained within closed systems at all times. The volumeof water in the oil and gas producing zones is much greater than the volumes used for hydraulicfracturing and as such any residual additives are greatly diluted. In addition, many of thechemicals are soluble in oil and would be removed from the subsurface when the oil is sold.Chemical ListingTable 3-2 lists the additives that were mixed with the water and sand and injected into theformation during the two high-volume hydraulic fracture operations at the Inglewood Oil Field.Please refer to Appendix B for more detailed information regarding these additives, includingvolume injected and concentration.Table 3-2 List of Additives Used During High-Volume Hydraulic Fracture Operations at the Inglewood Oil Field Typical Main Compound ListedAdditive Type Trade Name on Material Safety Data Sheet Purpose Base fluid carries proppant, also can be present in someWater Water additives Prevents or limits growth of bacteria which can causeBiocide BE-3S Propionamide formation of hydrogen sulfide and physically plug flow or oil and gas into the well Guar GumGel LGC-38 UC Thickens the water in order to suspend the sand Naptha hydrotreated heavyBreaker SP Breaker Sodium Persulfate Allows for a delayed breakdown of the gelCrosslinker BC-140 Borate Maintains fluid viscosity as a temperature increasesOctober 2012 Cardno ENTRIX Hydraulic Fracturing 3-19Hydraulic Fracturing Study_Inglewood Field_10102012.docx

82. Hydraulic Fracturing Study PXP Inglewood Oil FieldTable 3-2 List of Additives Used During High-Volume Hydraulic Fracture Operations at the Inglewood Oil Field Typical Main Compound ListedAdditive Type Trade Name on Material Safety Data Sheet Purpose Adjusts pH to proper range for fluid to maintain thepH Adjusting Agent MO-67 Sodium Hydroxide effectiveness of other fluid components Aids in recovery of water used during fracturing operation bySurfactant Losurf-300M Ethanol reducing surface tension Alkylated quaternary chloride Clay-stabilization additive which helps prevent fluidClay control Clayfix II Plus Potassium chloride interaction with formation claysProppant Silica Holds open fracture to allow oil and gas to flow to well3.2.3 Images from January 2012 Completion OperationsThis section presents photographs taken during high-rate gravel packing and high-volumehydraulic fracturing operations conducted at the Inglewood Oil Field in January 2012. The firstphoto above shows the overall requirements for a high-rate gravel pack completion; they aresetting up near the wellhead.3-20 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

83. Hydraulic Fracturing StudyPXP Inglewood Oil FieldAfter bringing the vehicles and equipment to the wellhead, hoses and pipes are connected to thevarious components of the test. The hydraulic fracturing is conducted at elevated pressure, so allcomponents that bear pressure are steep pipes with wall thickness that provides a margin ofsafety. Hoses are used to connect water, sand, and chemicals prior to mixing and injection.The blender unit is located behind the trailers in this image. The blender mixes the water, sand,and additives prior to introduction into the well for the completion process.October 2012 Cardno ENTRIX Hydraulic Fracturing 3-21Hydraulic Fracturing Study_Inglewood Field_10102012.docx

84. Hydraulic Fracturing Study PXP Inglewood Oil FieldThis is an image of the mixture of water, sand and additives used for the high-volume hydraulicfracturing at VIC1-635. This sample of the proppant/gelled water mixture is used to test forconsistency with project specifications; samples are taken frequently during the course of thehydraulic fracture treatment for quality control purposes. Note that the food-grade gelling agentshold the sand in suspension, allowing the sand to be introduced into the fractures away from thewell. Without the gel, the sand would settle out and not prop open the fractures formed by thecompletion process. The compound that causes this thickening, guar gum, is an additive used tothicken ice creams for human consumption (Halliburton 2012).This image shows the VIC1-635 wellhead with a device for isolating the wellhead from thehydraulic fracturing equipment, set up to begin hydraulic fracturing. The green vertical pipe isthe wellhead, and the two red pipes attached to the wellhead deliver the water-sand-additive fluidmixture down the well under pressure.3-22 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

85. Hydraulic Fracturing StudyPXP Inglewood Oil FieldThis image shows the VIC1-635 wellhead set up to begin hydraulic fracturing, looking the otherdirection from the previous image. The water-sand-additive fluid mixture is delivered down thewell through the red pipes connected to the top of the well. The image shows the above-groundpumping unit to be connected after the well completion process (hydraulic fracturing), and theamount of equipment needed at the wellhead for hydraulic fracturing job.A mobile Control Room is placed on site adjacent to the well to be hydraulically fractured at theInglewood Oil Field. The control room has connections to all of the monitoring, allowing real-time adjustment of the hydraulic fracturing conditions as the job progresses. This control ensuresthat well integrity, pressures, proppant delivery, and all other attributes of the process can beadjusted to meet downhole conditions. The control room also has a small lab for testing thesamples of gelled water and proppant material that are collected for quality control.October 2012 Cardno ENTRIX Hydraulic Fracturing 3-23Hydraulic Fracturing Study_Inglewood Field_10102012.docx

86. Hydraulic Fracturing Study PXP Inglewood Oil FieldThis image depicts a screen in the on-site mobile control room, monitoring downholecharacteristics of the early stages of the VIC1-635 hydraulic fracture job in progress.This image shows a graphical display of part of the VIC1-635 hydraulic fracture job in themobile control room. The image on the screen shows the progress of adding the water-sand-additive mixture; the real-time monitoring using both numerical and graphical displays allowsfor modification or cessation of the hydraulic fracturing job if the performance does not meet theproject design specifications.3.3 Gravel Packs at the Inglewood Oil FieldIn addition to hydraulic fracturing, the Settlement Agreement requires that gravel packing also bedescribed and evaluated in this study. High-rate gravel packing uses water, gravel, and additivesto limit entry of formation particles and sand into the wellbore. High-rate gravel packing is atechnique that is used for sand control. High-rate gravel packing is ideal in formations that are3-24 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

87. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldalready permeable. The gravel pack method uses a metal screen placed in the wellbore. Thesurrounding annulus, or the space between the well and the outer casing, is packed with gravel,water, and additives to limit entry of formation fines and sand into the wellbore. In this process,the space between the formation and the outer casing is packed, at a high-rate, with gravel that issized small enough to prevent formation grains and fine particles from mixing and entering thewellbore with the produced fluids, but large enough to be held in place by screens. Sand andfiner particles reduce the life of surface equipment such as valves, pipelines, and separators. Inaddition, produced sand can reduce oil production and impair the performance of injection wells.3.3.1 Past Gravel PacksGravel packing is a completion approach that is specifically designed to prevent non-consolidatedformation sands from flowing into the wellbore and preventing hydrocarbon production. In gravelpacking operations, a steel screen is placed in the wellbore and the surrounding annulus packedwith prepared gravel of a specific size designed to prevent the passage of formation sand. Theprimary objective is to stabilize the formation while causing minimal impairment to wellproductivity (Schlumberger 2012a). The gravel is circulated into place rather than pumped in underhigh pressure. Gravel packing does not exceed the fracture gradient.The process of introducing a gravel pack has gone through several changes over time at the field.Prior to 2003, all of the gravel packs were conducted at pressures below the fracture gradient ofthe formation. Open hole gravel packs were used until 2003 in the Vickers-Rindge formation andwere never installed above the fracture gradient of the surrounding formation. From the mid-1990s to 2003 in the Vickers-Rindge, the technique was modified to a cased-hole gravel pack;this improvement allowed the completion to target the specific producing zone. This had theeffect of isolating high saline water producing zones so that the more oil-rich zones could betargeted. This method was also used in the Vickers-Rindge, and was never installed above thefracture gradient of the surrounding formation.High-rate gravel packs were first used in 2003. At that time, this technique used the cased hole asbefore, and was limited to a 200-foot target interval as before. This method, however, was thefirst to exceed the fracture gradient in the surrounding formation, as well as introducing thegravel pack. The fractures would typically be less than 250 feet from the well. Eleven of theinitial completions in 2004 used produced crude oil in the fluids in order to be more consistentwith the oil in the formation, and potentially yield better well performance; however, analysis ofwell performance indicated that this was not the case and the use of oil was subsequentlystopped. The crude oil had been previously pumped from the formation, and was only used forhigh-rate gravel packs targeting the oil producing zones. That is, crude oil was never used above,or near, the base of fresh water, but only in oil-bearing formations.Table 3-3 lists the primary differences between high-rate gravel packs and conventional andhigh-volume hydraulic fracturing.October 2012 Cardno ENTRIX Hydraulic Fracturing 3-25Hydraulic Fracturing Study_Inglewood Field_10102012.docx

88. Hydraulic Fracturing Study PXP Inglewood Oil FieldTable 3-3 Comparison of High-Rate Gravel Packs to Conventional Hydraulic FracturingHigh-Rate Gravel Packs Hydraulic FracturingWire wrapped screen is installed in the well No wire wrapped screen in the wellGoal is not to pump entire sand / proppant volume in the formation Goal is to pump entire sand / proppant volume into the formationbut to prevent the entrance of sand into the wellboreSand and water mixture is placed within a short radius of the wellbore Sand and water mixture can be pushed out well in excess of 500 feet(normally 10-50 feet but can reach 250 feet) from the wellboreSource: Halliburton 2012In addition, high-rate gravel pack treatments are usually smaller in terms of sand and fluidvolumes and require less time to pump than an average conventional hydraulic fracturingtreatment. To illustrate this difference, Table 3-4 provides a comparison of actual sand and fluidvolumes pumped in the Inglewood Oil Field during a high-rate gravel pack treatment and thehigh-volume hydraulic fracturing treatments that were the subject of this study.Table 3-4 Comparison of Sand and Fluid Volumes between High-Rate Gravel Pack and High-Volume Hydraulic Fracturing at the Inglewood Oil FieldParameters High-Rate Gravel Pack Hydraulic FracturingPump Time (minutes) 27.68 141.87Clean Volume (bbl) 418.45 2992.18Slurry Volume (bbl) 458.89 3210.35Average Treating Pressure (psi) 768 6914Max Treating Pressure (psi) 1343 8,818Proppant Mass (100* lb) 373.79 2013.48Source: Halliburton 2012Since 2003, PXP has conducted high-rate gravel pack completions on approximately 166 wells inthe Inglewood Oil Field, all in the Vickers and the Rindge formation, with a single completion inthe Investment Zone (Figure 3-12). Each high-rate gravel pack includes an average of five stagesper well; therefore, approximately 830 stages have been completed at the Inglewood Oil Fieldsince 2003.Halliburton (2012) studied four recent high-rate gravel pack completions in the Vickers andRindge formations to assess applicability and feasibility: VRU-4243, TVIC-274, Stocker 461,and BC-285. The wells were selected because of their location within the field, includingpresence on both sides of the Newport-Inglewood Fault. Twenty-one independent high-rategravel pack treatments from the four wells selected in the Vickers and Rindge zones wereanalyzed (Halliburton 2012).3-26 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

89. INGLEWOOD OIL FIELD A ! A ! A TVIC-221 ! ! A! A TVIC-3254 A A ! ! ! A ! A ! A ! A ! ! A AA !! ! A A !! A ! A ! A ! ! ! AA A ! A ! A A ! ! A ! A ! A ! A ! A ! A! A ! ! A ! A ! A ! A ! A ! A ! A ! ! ! A ! A ! A ! A A A ! A ! A ! A! A ! A ! A ! A ! A ! A ! A ! A! A ! A ! ! A ! A! ! A ! A A ! ! A ! A ! A! A !! A ! A ! A !A !! A ! AA ! A ! ! ! A ! A A ! ! A ! A ! A ! A ! A A ! ! AA A !!! A ! A ! AA ! ! A ! A ! ! A ! A ! A ! A ! A ! A ! A A ! A A !! ! A ! A ! A ! A ! A ! A! ! A A ! A ! A ! A ! A ! A ! A ! PLAINS EXPLORATION & PRODUCTION COMPANY0 500 1,000 ´ 2,000 Feet LEGEND A High-rate Gravel Pack ! Inglewood Oil Field Boundary Fi gure 3- 12 High-Rate Gravel Pack Completions at the Inglewood Oil Field 10 | 01 | 12

90. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe results of the analysis showed the following: The fracture height created by the high-rate gravel packs in the Vickers and Rindge formations was, on average, in the range of 100 to 170 feet for the majority of the stages. The fracture height in several stages was around 200 to 240 feet. Fracture height is very small in relation to the depth of the fracture. The top of the created fracture is at least 1,000 feet below the bottom of the deepest perched water zones in the area that includes the Inglewood Oil Field.Figures 3-13A and 3-13B present different visualizations of the fracture geometries produced bythe high-rate gravel packs. The figures also show the relevant formation surfaces, ground surface,geologic structure including major faults, and groundwater-bearing bodies near the surface. Figure 3-13A Side View Showing Modeled Fracture Geometries in the Vickers Zone3-28 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

91. Hydraulic Fracturing StudyPXP Inglewood Oil FieldFigure 3-13B Side View Showing Modeled Fracture Geometries in the Vickers Zone and Structure (Faults)3.3.2 Recent High-Rate Gravel Pack CompletionsPXP also conducted high-rate gravel pack jobs at two wells on the Inglewood Oil Field to assessfeasibility and potential impacts. The first high-rate gravel pack involving a five-stagecompletion was conducted on January 9, 2012, at the TVIC-221 well. The second high-rategravel pack involved a six-stage completion and was conducted on the same day at a differentwell, TVIC-3254. Both of these operations were conducted in the Vickers and Rindgeformations. The high-rate gravel pack operations were conducted by Halliburton with PXPoversight. The conditions of the high-rate gravel packs are similar to the well completionspreviously conducted across the field, and are also similar for any future high-rate gravel packjobs that would be expected to be conducted at the oil field.The maximum applied pressure during both high-rate gravel packs was 1,900 psi. In comparisonthe high-volume hydraulic fracturing projects had an average treatment pressure of 2,971 psi(VIC1-330) and 6,914 psi (VIC1-635). The high-rate gravel pack fracturing influences the zonewithin 100 to 250 feet of the well within the target oil-producing zone, compared to in excess of500 feet for hydraulic fracturing.Water and Chemical Use during High-Rate Gravel PackWater Demand/SourceWater for high-rate gravel packs at the Inglewood Oil Field has been provided either fromproduced water at the field or, if a potassium-chloride gel is used, fresh water provided byCalifornia American Water Company (the water service provider for all fresh water on the oilfield). The majority of the high-rate gravel pack operations that have occurred since April 2011October 2012 Cardno ENTRIX Hydraulic Fracturing 3-29Hydraulic Fracturing Study_Inglewood Field_10102012.docx

92. Hydraulic Fracturing Study PXP Inglewood Oil Fieldhave used produced water from the lease, including the two high-rate gravel pack examined inthis study. Table 3-5 provides the volumes of water used during the two high-rate gravel packfracture jobs at the Inglewood Oil Field.Table 3-5 Volumes of Water Used During High-Rate Gravel Pack Hydraulic Fracturing Operations at the Inglewood Oil FieldOperation Volume Water Used WaterType Date Well (gallons) SourceHigh-rate gravel pack January 5-6, 2012 TVIC 3254 33,357 Produced WaterHigh-rate gravel pack January 5-6, 2012 TVIC 221 55,247 Produced WaterChemical ListingTable 3-6 below, lists the materials that have been injected into the formation during the high-rate gravel pack operations at the Inglewood Oil Field.Table 3-6 List of Additives at Used During High-Rate Gravel Pack Operations at the Inglewood Oil FieldAdditive Type Trade Name Typical Main Compound PurposeWater  Water Base fluid carries proppant, also can be present in some additivesBuffering Agent BA-40L  Potassium carbonate pH bufferGel LGC-36 UC  Guar Gum Thickens the water in order to suspend the sand  Naphtha hydrotreated heavyBreaker SP Breaker  Sodium Persulfate Allows for a delayed breakdown of the gelCrosslinker K-38  Disodium octoborate Maintains fluid viscosity as a temperature increases tetrahydratepH Adjusting Agent MO-67  Sodium Hydroxide Adjusts pH to proper range for fluid to maintain the effectiveness of other fluid componentsActivator CAT-3  Copper chelate Reduces viscositySurfactant Losurf-300M  Ethanol Aids in recovery of water used during fracturing operation by reducing surface tensionClay control Clayfix II Plus  Alkylated quaternary chloride Clay-stabilization additive which helps prevent fluid  Potassium chloride interaction with formation claysProppant  Silica Holds open fracture to allow oil and gas to flow to wellWater ReuseAs described for the high-volume hydraulic fracture operations, water produced during high-rategravel pack operations is transported by pipeline to the field water treatment plant where it ismixed with other produced water generated on the field. The treated water is then reinjected intothe oil and natural gas producing formations as part of the waterflood process. This operation is inaccordance with CSD Condition E.2.(i) which requires that all produced water and oil associatedwith production, processing, and storage are contained within closed systems at all times. Thevolume of water in the oil and gas producing zones is much greater than the volumes used for3-30 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

93. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldhydraulic fracturing and as such any residual additives would be greatly diluted. In addition, manyof the chemicals are soluble in oil and would be removed from the subsurface when the oil is sold.3.4 Anticipated Future Use of Hydraulic Fracturing and Gravel Packing at the Inglewood Oil FieldPXP expects that, in the future, high-volume hydraulic fracturing and conventional hydraulicfracturing may be conducted in the relatively deep Rubel, Moynier, Bradna, City of Inglewood,Nodular, and Sentous zones (all located deeper than 4,000 feet below ground surface).It is anticipated that high-rate gravel packing operations may be conducted on as many as90 percent of all future production wells drilled in the Vickers and Rindge formations on theInglewood Oil Field, as well as other permeable sandstone completions. This procedure results inless formation sand being drawn into the well during pumping, thus, the amount of formationsand that requires management at the surface is reduced and the procedure provides a longer lifeto the well.October 2012 Cardno ENTRIX Hydraulic Fracturing 3-31Hydraulic Fracturing Study_Inglewood Field_10102012.docx

94. Hydraulic Fracturing Study PXP Inglewood Oil Field This Page Intentionally Left Blank3-32 Hydraulic Fracturing Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

95. Chapter 4Environmental Effects Monitored inConjunction with Hydraulic Fracturing Tests4.1 IntroductionAs described in Chapter 4, the Inglewood Oil Field has an ongoing program of environmentalmonitoring and reporting for environmental factors such as water quality, air quality, and others.As part of this Hydraulic Fracturing Study, these ongoing monitoring programs were augmentedto include other monitoring of environmental factors of importance. This chapter summarizes theresults of this comprehensive environmental monitoring, as follows: Hydrogeology, Water Quantity and Quality Containment of Fractures to the Desired Zone Well Integrity Slope Stability, Subsidence, Ground Movement, Induced Seismicity Methane Other Emissions to Air Noise and Vibration Los Angeles County Department of Public Health StudyIn addition, since high-volume hydraulic fracturing was first used for shale gas development inthe northeastern United States and tight sands development in the Intermountain West, there hasbeen extensive coverage of controversies surrounding its use. Although most of the news hasbeen about the development of shale gas, tight sands and coalbed methane deposits rather thanthe type of oil and natural gas development that occurs at the Inglewood Oil Field, communityoutreach conducted as part of this study indicated that many of the concerns surrounding shalegas development are shared by the local community. Therefore, in this chapter we present themethods and results of environmental monitoring conducted at the Inglewood Oil Field, and weprovide context by describing how these issues have been described as they relate to shale gasdevelopment. Although the focus of this chapter is the Inglewood Oil Field, the issues have beenframed by the national attention given to shale gas development elsewhere in the country; thus,the context is relevant to the Inglewood Oil Field.4.2 Hydrogeology, Water Quantity and Quality4.2.1 Geologic Control on the Distribution of Groundwater-Bearing ZonesThe geology of the Baldwin Hills constrains the occurrence and movement of groundwater, asdescribed in the USGS groundwater model of the Los Angeles Basin (USGS 2003), theCalifornia Department of Water Resources groundwater assessment of the Los Angeles BasinOctober 2012 Cardno ENTRIX Environmental Effects 4-1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

96. Hydraulic Fracturing Study PXP Inglewood Oil Field(DWR 1961), and studies specific to the Inglewood Oil Field summarized in this study. TheUSGS excludes the Baldwin Hills from the model domain, separating it by a no-flow boundary.The no-flow boundary condition means that groundwater neither flows in to or out of theBaldwin Hills; it is isolated from the remainder of the Los Angeles groundwater basin(Figure 4-1). In the definitive account of the groundwater geology of the Los Angeles Basin, theDepartment of Water Resources concludes that “the Baldwin Hills form a complete barrier togroundwater movement, where the essentially non-water bearing Pico Formation crops out”(DWR 1961). The results of the extensive site-specific study of the Baldwin Hills, including agroundwater monitoring array that traverses the entire zone of potential fresh water, summarizedin this section, are in complete agreement with the findings of the USGS and DWR.Figure 4-2 presents the standard model of the geology of the Baldwin Hills (Wright 1991), fromthe surface to a depth in excess of two miles. The center of the figure has a small area labeled“See Figure 4-3C” which represents the uppermost 500 feet at the Baldwin Hills; this area willbe magnified in stages from Figure 4-3B to 4-3C.Figure 4-3A shows the locations of all of the groundwater monitoring wells installed on theInglewood Oil Field. All the oil producing formations, from the Investment Zone downwards,contain water too saline for direct use at the surface. Only the upper 500 feet, above the top ofthe Pico Formation, has any fresh water, albeit limited in extent and yield. For this reason, thetop of the Pico Formation is known as the base of fresh water.Figure 4-3B is the first level of magnification and shows the freshwater zones. In all parts of theworld, fresh (not salty) groundwater lies at relatively shallow depths. At greater depths the water issaline, not drinkable, and is sometimes called formation water. The USEPA makes this distinctionin the Safe Drinking Water Act by protecting the shallow, fresh water from contamination bydeeper, saline formation water. In most of the Los Angeles Basin, the base of the fresh water zone,below which saline formation water is found, is defined by a geological unit called the PicoFormation, a marine unit shown in Figure 4-3B (developed from USGS 2003). Overlying the PicoFormation are the aquifer systems in the Los Angeles Basin located away from the Baldwin Hills:the Inglewood Formation, the Silverado Formation, and the Lakewood Formation. In many parts ofthe Los Angeles Basin, these formations are aquifers for water supply wells. The box labeled “SeeFigure 4-3C” depicts how these formations became folded and faulted in the geological uplift ofthe Baldwin Hills (within the labeled box). As a result of this uplift, these formations are not water-bearing beneath the Baldwin Hills, and are in fact exposed at the surface. Their disruption by theuplift of the Baldwin Hills has disconnected them from the groundwater-bearing formations of theLos Angeles Basin (USGS 2003, DWR 1961).Finally, Figure 4-3C shows the uppermost 500 feet beneath the Baldwin Hills. The groundsurface is shown as the undulatory line at the top of the figure. The vertical black lines representgroundwater wells drilled at the Inglewood Oil Field from 1993 to present. Although they areshown along a single line in the figure, the wells are distributed across the oil field; theirlocations have been projected to a single line to aid in the presentation of the results. The lengthof the line shows the depth of drilling. If any groundwater was detected, the depth is shown withan upside-down triangle and the estimated extent of the groundwater is shown with the bluecolor surrounding the well (black line). If no groundwater was detected, that observation is notedwith an upside-down triangle with a red circle around it, and a red cross-out.4-2 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

97. Inglewood Oil Field" . . . the Baldwin Hills [we]re modeled asa no-flow cell." (USGS 2003)"The Baldwin Hills form a complete barrierto groundwater movement where theessentially nonwater-bearing Picoformation crops out." (DWR 1961) PLAINS EXPLORATION & PRODUCTION COMPANY Fi gure 4- 1 Groundwater Basins in the Vicinity of the Inglewood Oil Field 09 | 12 | 12

98. Hydraulic Fracturing Study PXP Inglewood Oil Field Figure 4-2 Location of Inglewood Oil Field in Relation to Known Fault Lines4-4 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

99. PLAINS EXPLORATION & PRODUCTION COMPANYLEGEND Fi gure 4- 3A ! ( (MW) Monitoring Well Location Active Surface Field Boundary Cross Section Location ! ( PXP Dry Borehole Cross-Section 09 | 12 | 12

100. See Figure 4-3C for close-up PLAINS EXPLORATION & PRODUCTION COMPANY Fi gure 4- 3B Monitoring and Drinking Water Wells in the Vicinity of the Inglewood Oil Field 10 | 01 | 12

101. PLAINS EXPLORATION & PRODUCTION COMPANYLEGEND Fi gure 4- 3C No Groundwater Found Static Groundwater Level (feet msl) Groundwater Beneath the Oil Field Groundwater + + _ Pico Geologic Formation _ 10 | 01 | 12

102. Hydraulic Fracturing Study PXP Inglewood Oil FieldFigure 4-3C is based on measured conditions beneath the field, with 15 groundwater monitoringwells and four deep supply wells that were attempted by PXP, but that did not encounter waterand were abandoned. Note that the same characteristics shown in Figure 4-3C are also shown inmore detail by the 3-D model prepared by Halliburton in Figure 2-8H. The data show that thewater bearing zones are not continuous across the field because they occur at different depths, ordo not occur at all.All of the wells have very low yield; the shallow wells and all but two of the deeper wells pumpdry in less than 30 minutes at low pumping rates. The two that can sustain higher initial pumpingrates show declining yields when pumped for more than a day, indicating that the water bearingzone from which they draw is limited in extent. None of the units show evidence of a connectionto the aquifers of the Los Angeles Basin (shown in Figure 4-3C).4.2.2 HydrogeologyThe description of conditions beneath the Inglewood Oil Field depicted in Figure 4-3C anddescribed in the previous section is based on data collected from 15 groundwater monitoringwells installed to test for the presence and quality of groundwater beneath the site, ranging indepth from 30 feet to 500 feet beneath the ground surface. The four deepest wells were installedto reach the “base of the fresh water zone”, that is, the top of the Pico Formation. As such, theunderstanding of groundwater hydrogeology and water quality is based on investigation of theentire zone beneath the surface that has any potential to contain fresh water.The Baldwin Hills are generally comprised of non-water-bearing rock layers that straddle theWest Coast, Central, and Santa Monica groundwater basins (Figure 4-4). As shown in this figure,where groundwater is pumped for groundwater supply, it is principally in areas to the east of theBaldwin Hills. The data used by the USGS to construct this figure were based on water year2000; currently, the only wells in the vicinity of the Inglewood Oil Field are either no longeractive (Environmental Data Resources, Inc. 2012) or located greater than 1.5 miles from the fieldboundary.Studies of the Baldwin Hills have concluded that the tectonic uplift of the Baldwin Hills byfolding and faulting has disconnected water-bearing sediments from groundwater supplies in theLos Angeles Basin (USGS 2003, DWR 1961). The geological formations that may produceusable quantities of groundwater from aquifers elsewhere in the Los Angeles Basin are folded,faulted, and either dry or have practically no water supply potential beneath the Baldwin Hills.Because of a lack of water, the geological formations beneath the Baldwin Hills are not suitablefor water supply (DWR 1961, USGS 2003, County of Los Angeles 2008).For example, the prominent aquifers in some portions of the Los Angeles Basin, which lie greaterthan 100 feet below the surface in the flat portion of the Los Angeles Basin (refer to Figure 4-1,Figure 4-3B), have been brought to the surface by folding and faulting of the Baldwin Hills. Theunits are exposed at the surface, do not contain water, and are not connected to the surroundingbasin. In groundwater models of freshwater flow in the Los Angeles Basin aquifer systems recentlyprepared by the U.S. Geological Survey (USGS 2003), the Baldwin Hills is modeled as a “noflow” zone; that is, since the sediments beneath the Baldwin Hills are disconnected from theregional aquifers, groundwater flow is discontinuous across the Baldwin Hills.4-8 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

103. Inglewood Oil FieldData is for water year 2000.Some wells near the InglewoodOil Field are no longer active.Source: USGS 2003 PLAINS EXPLORATION & PRODUCTION COMPANY Fi gure 4- 4 Groundwater Production in the Los Angeles Basin in 2000 10 | 01 | 12

104. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe five water wells (MW-10, MW-11A, MW-11B, MW-12, and MW-13) drilled down to thebase of fresh water in 2012 are intended to provide data for the deepest freshwater zones in theBaldwin Hills. Only two encountered water at the deepest levels, and were completed in the onlyzones containing water. Maps showing the top of the Pico used for oil exploration defined thetop of the Pico Formation, and drilling progressed to that depth, in some places up to 500 feetbelow the ground surface. In addition, geophysical logs were run after drilling to thoroughlysearch for water. Two of the locations had only a single thin water-bearing zone, and the wellsquickly pumped dry at low flow rates. One location had water near the top of the Pico Formationand was initially capable of sustaining pumping rates of eight gallons per minute. Over threedays of pumping the yield diminished significantly, indicating a limited areal extent of the water-bearing zone. The fourth location of the deep water wells identified two thin water-bearingzones. One pumped dry readily, while the other well initially sustained pumping rates of onegallon per minute. Over three days of pumping the yield diminished significantly indicating alimited areal extent of the water-bearing zone.At the Inglewood Oil Field perched groundwater (groundwater that is discontinuous and occursin small pores within the rock layers) has been measured at depths ranging from approximately45 to 500 feet below ground surface (Figure 4-3C). Groundwater monitoring on the fieldsuggests that rainfall and irrigation water from nearby residences appear to be the only source ofthis groundwater because water levels respond to the presence of water in catch basins.4.2.3 Water QualityRegulatory LimitsThe LARWQCB Water Quality Control Plan, or Basin Plan, establishes beneficial uses ofsurface and groundwater in the Los Angeles Basin. Based on the State Board ResolutionNo. 88-63, “Sources of Drinking Water Policy”, all groundwater in the state must be considereda potential source of drinking water, and carry a beneficial use designation of Municipal Supply(or MUN). The only exceptions are as follows: Total Dissolved Solids (TDS) exceeds 3,000 mg/l (5,000 µS/cm electrical conductivity); Contamination exists, that cannot reasonably be treated for domestic use; and The source is not sufficient to supply an average sustained yield of 200 gallons per day.The LARWQCB would also require that, for any groundwater to have the MUN designationremoved that there be a formal process to de-designate the aquifer. There are only two de-designated areas in the LARWQCB jurisdiction: limited coastal areas beneath the Port of LosAngeles and the Port of Long Beach, and a limited area of El Segundo seaward of a series ofinjection wells to limit saltwater intrusion. Because the Inglewood Oil Field has not gonethrough a de-designation process, any water that may be encountered beneath the field has thebeneficial use designation of MUN, and the drinking water standards are applied regardless ofthe low yield.4-10 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

105. Hydraulic Fracturing StudyPXP Inglewood Oil FieldChemical Disclosure and Environmental Effects of Chemical AdditivesWhen new oil and natural gas development using high-volume hydraulic fracturing was initiallyintroduced in the northeastern United States (areas dependent on shallow groundwater resources orwater from relatively pristine watersheds), public concern was initially related to the policy ofoilfield service companies to maintain confidentiality of the precise chemical names andconcentrations used in hydraulic fracturing fluids. The initial lack of full disclosure on the part ofthe oilfield service companies increased public concerns about the chemicals. As a result of theseconcerns, several states initiated independent reviews of the environmental impacts of hydraulicfracturing with an emphasis on water quality and chemical disclosure. In addition, USEPA initiatedtwo ongoing reviews, one focused on the potential effects of hydraulic fracturing on drinking watersupplies, and the other focused on the definition of “diesel fuel” as part of a review of the 2005EPAct provisions (USEPA 2011c, USEPA 2011d). The 2005 EPAct reaffirmed that hydraulicfracturing is a well completion process regulated at the state level, and therefore does not requirean underground injection control permit under the Safe Drinking Water Act. The 2005 EPAct didrequire a UIC permit in cases where diesel fuel is used in hydraulic fracturing fluid.Since the passage of the EPAct, many states have adopted regulations or passed legislationrequiring operators to disclose the composition of the fluids used in the hydraulic fracturingprocess. In California, legislation (AB 591 - Wieckowski) requiring operators to post a completelist of the chemical constituents used in the hydraulic fracturing process was introduced duringthe 2011 – 2012 legislative session but failed to pass. The bill would have required that operatorsinvolved in hydraulic fracturing provide a complete list of the chemical constituents used in thehydraulic fracturing fluid, as well as the following additional information to DOGGR: the source and amount of water used in the exploration or production of the well; data on the use, recovery and disposal of any radiological components or tracers injected into the well; and if hydraulic fracturing is used, disclosure of the chemical information data described above.The chemical additives used in hydraulic fracturing, typically 0.5 percent of the total fluids, arenecessary to ensure that the fracturing job is as effective and efficient as possible. The variouschemicals are used as friction reducers, biocides to prevent microorganism growth, oxygenscavengers and other stabilizers to prevent corrosion of metal pipes, and acids to remove drillingmud damage. The consequences of not using additives in the fluids include higher engineemissions as a result of greater loads, increasing pipe corrosion (and, in turn, compromisedintegrity of the well), increased water use, and decreased hydrocarbon recovery.PXP reported the full chemical listing of the two recent high-volume hydraulic fracture operationson the FracFocus.org website. This website offers the opportunity to comply with the standardchemical disclosure regulations in effect in other parts the country. The level of disclosure used inthis Hydraulic Fracturing Study would comply with the terms of AB 591 as drafted at the time thisstudy was prepared. Diesel fuel is not used as a chemical additive for the hydraulic fracturingconducted at the Inglewood Oil Field; therefore, a UIC permit is not required.October 2012 Cardno ENTRIX Environmental Effects 4-11Hydraulic Fracturing Study_Inglewood Field_10102012.docx

106. Hydraulic Fracturing Study PXP Inglewood Oil FieldQuarterly Water Quality Testing Prior to High-Volume Hydraulic FracturingFifteen groundwater wells to test for the presence and quality of groundwater beneath theInglewood Oil Field have been drilled since 1993. These vary in depth from 30 feet to 500 feetbelow the ground surface. In addition to the 15 groundwater monitoring wells, four wells weredrilled as potential water supply wells for the oil field, but because they were dry, the wells wereabandoned and sealed. Of the fifteen wells, six did not encounter groundwater but the wellsremain in place. Four were installed in 2012 and were drilled to the base of fresh water in orderto characterize the entire fresh water zone. The remaining five all sample the shallowest water onthe field and are monitored on a quarterly basis, in accordance with CSD Condition 19.Quarterly monitoring reports for 2010 and 2011 provide a baseline indication of existinggroundwater quality. Prior to the hydraulic fracturing operations of January 2012, a total of ninemonitoring wells were tested as part of the groundwater monitoring effort that took place onNovember 22, 2011. Specifically, the monitoring effort involved wells MW-2, MW-3, MW-4A,MW-4B, MW-4C, and MW-5, MW-6, MW-7, and MW-8 as part of the monitoring program.The sampling involved the collection of depth-to-water measurements and groundwater samplesfrom monitor wells MW-2, MW-6, MW-7, and MW-8. Monitor wells MW-3, MW-4A, MW-4B,MW-4C and MW-5 were not sampled since they were dry or contained insufficient water at thetime the monitoring was conducted.Groundwater analytical results indicated no results were above the California MaximumContaminant Level (MCL), with the exception of arsenic. Arsenic levels are believed tocorrespond to naturally occurring arsenic found in soil and rock formations throughout the LosAngeles Basin. As documented by USEPA, when “compared to the rest of the United States,western states have more systems with arsenic levels greater than the [US]EPA’s standard of10 parts per billion (ppb)” (USEPA 2012a). Arsenic delineation maps produced by the USGS in2011 have documented increased levels of arsenic in both Los Angeles County and SouthernCalifornia as a whole (Gronberg 2011). These data are also consistent with soils data from the2008 California Department of Toxic Substance Control (DTSC) memo “Determination of aSouthern California Regional Background Arsenic Concentration in Soil” (Chernoff et al. 2008).Areas in Southern California have been shown to have higher than average levels of arsenicpresent in soil and thus, through the release of naturally occurring arsenic in sediments, levelscan be inferred to also be higher than average in groundwater resources throughout SouthernCalifornia.A summary of the baseline groundwater analytical results is as follows: TDS was measured at 590 mg/L in MW-2, 2,000 mg/L in MW-6, 2,500 mg/L in MW-7, and 1,500 mg/L in MW-8. pH was measured at 7.5 in MW-2, 7.0 in MW-6, 7.0 in MW-7, and 7.0 in MW-8. BOD5 was measured at 38.5 mg/L in MW-2, 30.4 mg/L in MW-6, 25.6 mg/L in MW-7, and 15.7 mg/L in MW-8. Low levels of TPH in MW-2, MW-6 and MW-7. The silica gel filtering method, which removes nonpetroleum materials such as fats, was run on all groundwater samples. Results indicate TPH concentration of 0.35 mg/L in MW-2, and below the detectable limit of4-12 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

107. Hydraulic Fracturing StudyPXP Inglewood Oil Field 0.10 mg/L in wells MW-6 and MW-7. These levels are within the range of drinking water standards for taste and odor commonly applied for TPH (between 0.050 and 1 mg/L). TRPH were below the detection limit of 0.50 mg/L in all samples. BTEX and MTBE were below detection limits in all samples. Nitrate was detected at a concentration of 0.34 mg/L in MW-2 and 3.8 mg/L in MW-7, both below the state MCL of 45 mg/L. Barium was detected in MW-6 at a concentration of 56 µg/L, MW-7 at a concentration of 60 µg/L, and in MW-8 at a concentration of 170 µg/L. These levels are all below the state MCL of 1,000 µg/L. Arsenic was detected at a concentration of 37 µg/L in MW-2 and 4.2 µg/L in MW-8. The concentration of arsenic in MW-2 is above the state MCL of 10 µg/L and is likely due to naturally occurring arsenic found in soil and rock formations as described previously in this section.4.2.4 Groundwater Monitoring Associated with High-Volume Hydraulic FracturingThe groundwater monitoring wells have been sampled twice since the high-volume hydraulicfracturing was completed. Results from baseline (pre-hydraulic fracturing) groundwatersampling are compared with results of sampling the same wells after hydraulic fracturing. Sincethe deep wells do not have a baseline, the results of two rounds of sampling the deep wells arecompared to the same two rounds of the pre-existing wells.The Inglewood Oil Field is required to sample and analyze groundwater on a quarterly basis incompliance with CSD Section E.19. This sampling will continue irrespective of whetherhydraulic fracturing operations are conducted in the future, but this study focuses on the samplerounds at the end of 2011 (pre-hydraulic fracturing) compared to the two rounds of samplescollected so far in 2012 (post-hydraulic fracturing).Comparison of Baseline to Post-Hydraulic Fracturing Operation Water QualityThe monitoring wells with sample results prior to 2012 were sampled for the same analytes afterthe occurrence of hydraulic fracturing in January. The water was analyzed for the followingconstituents: pH, TPH, benzene, toluene, ethylbenzene, total xylenes, methyl-tributyl ethylene(MTBE), total recoverable petroleum hydrocarbons (TRPH), total dissolved solids (TDS),nitrate, nitrite, metals, and biological oxygen demand (BOD5). These chemicals includecompounds in the hydraulic fracturing fluids.Analysis of samples taken post-fracturing (April and August 2012) indicated no results above thestate MCL for any constituents, with the exception of arsenic, which is likely due to naturallyoccurring arsenic found in soil and rock formations that was present prior to fracturing. Theseresults are consistent with earlier, pre-hydraulic fracturing sample results from these wells.In most cases there were either no changes in the concentrations of the analytes sampled for, orthere was a decrease in concentration after hydraulic fracturing. One of the wells, MW-7, had anincrease of one compound, chromium, in the samples after the hydraulic fracturing (2.7 µg/L toOctober 2012 Cardno ENTRIX Environmental Effects 4-13Hydraulic Fracturing Study_Inglewood Field_10102012.docx

108. Hydraulic Fracturing Study PXP Inglewood Oil Field3.0 µg/L, both results well below the 50 µg/L state standard). Chromium is not associated withhydraulic fracturing additives.The following analytes showed no major changes in concentration when comparing the data thatwas obtained prior to and after hydraulic fracturing: pH  TRPH  Nitrite TPH-DRO 1  TDS  CobaltThe following analytes were below detection prior to the hydraulic fracturing, and then showedconcentrations above the detection limit in January 2012, with levels returning to belowdetection in April 2012 and remaining below detection in August 2012. All analytes were belowthe state MCL. MW-6 and MW-7 TPH-DRO (with Silica Gel) MW-3 Benzene, Toluene, Ethylbenzene, Total Xylenes, and MW-8 Toluene MW-2 and MW-6 ZincThe following analytes showed an instance where there was a slight concentration increase afterthe hydraulic fracturing: MW-7 Chromium showed an increase from 2.7 to 3.0 µg/L. Both results are well below the 50 µg/L state standard. Chromium is not associated with hydraulic fracturing additives.The following analytes showed a decrease after hydraulic fracturing: MW-2 and MW-6 Nitrate MW-7 Barium MW-8 Arsenic MW-7 Copper showed below detection limit immediately after wells were installed, then had a slight increase in concentration 6 months later, before returning to below the detection limit. MW-8 Lead showed below detection limit immediately after wells were installed, then had a slight increase in concentration 6 months later before returning to below the detection limit.In summary, the hydraulic fracturing did not have a detectable change to groundwater qualitybased on the comparison of baseline results to post-hydraulic fracturing results. Any variationsare within the ranges detected over the course of the monitoring. Figure 4-5 summarizes themonitoring results. The horizontal axis lists any detected compounds. The vertical axis dividesthe amount detected by the drinking water standard for that compound; a value of 1 means thatthe detected amount equaled the drinking water standard. The horizontal line corresponding to1 on the vertical axis divides the chart between detections that meet the drinking water standard1 With the exception of MW-8, which showed below the detection limit after the well was installed in February 2012 then a slight increase to .34 mg/L in April 2012, before returning to below the detection limit in August 2012.4-14 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

109. Hydraulic Fracturing StudyPXP Inglewood Oil Field(all compounds except arsenic) from arsenic, which has a high background in SouthernCalifornia that exceeds the drinking water standard.Comparison of New Wells to Pre-Existing WellsIn addition to the existing monitor well array prior to hydraulic fracturing, five new wells(MW-10, MW-11A, MW-11B, MW-12, MW-13) were installed at the field in order to fullyinvestigate the occurrence and quality of groundwater from the base of fresh water (the top of thePico Formation at approximately 500 feet below ground surface) to the shallowest occurrence ofwater (approximately 30 feet below ground surface).Groundwater sampled from these wells was analyzed for the following constituents: pH, TPH,benzene, toluene, ethylbenzene, total xylenes, MTBE, TRPH, TDS, nitrate, nitrite, metals, andBOD5. A comparison of the sample results from the pre-existing wells to the new deeper wellsshow generally consistent results. In most cases, the results for the new deeper wells were withinthe ranges found at the pre-existing wells. All analytes were below the state MCL for DrinkingWater Standards, with the exception of arsenic, which is likely due to naturally occurring arsenicfound in soil and rock formations as described previously in this section.The following analytes showed no major changes in concentration: pH Benzene, toluene, ethylbenzene, total xylenes, MTBE TRPH Nitrate and nitrite Cobalt Lead Barium Copper, below detection in most cases, but had similar ranges for those analytes that showed above detection.The following analytes showed ranges that were greater in the new deep wells in comparison topre-existing wells; all ranges were below the state MCL: TDS in the shallow wells showed a concentration range of 510 to 2,500 mg/L vs. 1,400 to 3,900 mg/L for deep wells. Zinc in the shallow wells showed a concentration range of 18 to 120 µg/L vs. 20 to 280 µg/L for deep wells. BOD in the shallow wells showed a concentration range of 9.91 to 43.4 mg/L vs. 11.5 to 92.6 mg/L for deep wells.October 2012 Cardno ENTRIX Environmental Effects 4-15Hydraulic Fracturing Study_Inglewood Field_10102012.docx

110. Groundwater Sampling Results for All Monitoring Wells from 4th Quarter 2011-3rd Quarter 2012 Compared to MCL 2 Arsenic is the only constituent that exceeds the MCL. Maximum value relative to MCL is 4.1 mg/L. Southern California has a naturally high background that typically exceeds the MCL, see text for discusion.Constituent Value Relative to the Respective MCL 1.5 1 0.5 0 MCL MW 2 Q4 2011 MW 2 Q1 2012 MW 2 Q2 2012 MW 2 Q3 2012 MW 3 Q1 2012 MW 3 Q2 2012 MW 3 Q3 2012 MW 6 Q4 2011 MW 6 Q1 2012 MW 6 Q2 2012 MW 6 Q3 2012 MW 7 Q4 2011 MW 7 Q1 2012 MW 7 Q2 2012 MW 7 Q3 2012 MW 8 Q4 2011 MW 8 Q1 2012 MW 8 Q2 2012 MW 8 Q3 2012 MW 11a Q2 2012 MW 11a Q3 2012 MW 11b Q2 2012 MW 11b Q3 2012 MW 12 Q2 2012 MW 12 Q3 2012 MW-13 Q3 2012 MW-13 Q2 2013 PLAINS EXPLORATION & PRODUCTION COMPANY Fi gure 4- 5 Comparison of Baseline to Post-Hydraulic Fracturing Operation Water Quality 09 | 14 | 12

111. Hydraulic Fracturing StudyPXP Inglewood Oil FieldThe following chemical concentrations in the new deep wells were lower than the concentrationin the pre-existing wells. As a note, all ranges were below the state MCL with the exception ofarsenic, which is likely due to naturally occurring arsenic found in soil and rock formations: Arsenic in the shallow wells showed a concentration range of up to 37 µg/L vs. 21 µg/L for deep wells. TPH DRO in the shallow wells showed a concentration range of up to 2.1 mg/L vs. 0.77 mg/L for deep wells. Chromium in the shallow wells showed a concentration rage of up to 32 mg/L vs. 12 mg/L for deep wells.In summary, the new wells, intended to investigate the deepest zones of fresh water beneath theBaldwin Hills, had similar groundwater quality results compared to the pre-existing wells that havebeen sampled on a quarterly basis prior to high-volume hydraulic fracturing. Accordingly, the newwells do not show a detectable environmental effect of high-volume hydraulic fracturing. Thevalues are within the ranges detected over the course of the monitoring (Cardno ENTRIX 2012).4.2.5 Surface WaterNo perennial or intermittent streams as defined by the USGS are present at the Inglewood OilField (County of Los Angeles 2008), although Ballona Creek lies to the north and west. Surfacerunoff occurs primarily as sheet flow across the land surface, eventually flowing into ephemeralgullies and drainage ditches to six surface water detention basins. Runoff from these basins isdischarged to the Los Angeles County stormwater system near the boundaries of the field inaccordance with protections, sampling and analysis, and monitoring overseen by the LARWQCB(NPDES No. CA0057827). No discharge of surface water occurred during hydraulic fracturingoperations; thus, there was no effect on surface waters draining from the oil field.4.2.6 Sources of Drinking Water to the Local CommunityWest Basin Water District (District) provides water to the City of Inglewood, Culver City, andthe unincorporated communities of South Ladera Heights, Lennox, Athens, Howard and Ross-Sexon, View Park, Windsor Hills, and others near the Inglewood Oil Field, either itself orthrough sale of water to retail service provides such as California American Water Company,California Water Service Company, and Golden State Water Company, among others.Approximately 66 percent of the District’s water supply is imported from either the ColoradoRiver or from the San Joaquin Delta in Northern California. Approximately 20 percent of theDistrict’s supply is from groundwater; however, the nearest active supply well is 1.5 miles fromthe Inglewood Oil Field, and most of the groundwater supply is from significantly further than1.5 miles from the Inglewood Oil Field (USGS 2003, West Basin Municipal Water District 2011).Among the other communities in the vicinity of the Baldwin Hills, the City of Culver City relieson imported sources of water and does not have a groundwater supply (Culver City 2010). TheCity of Inglewood has four groundwater supply wells in the West Basin, all of which are greaterthan 1.5 miles from the oil field. None of these wells serve the community around the field (Cityof Inglewood 2010). Golden State Water Company has 13 wells within the West Basingroundwater basin with the closest one located 1.5 miles from the Inglewood Oil Field (GoldenOctober 2012 Cardno ENTRIX Environmental Effects 4-17Hydraulic Fracturing Study_Inglewood Field_10102012.docx

112. Hydraulic Fracturing Study PXP Inglewood Oil FieldState Water Company 2011). California American Water Company which services the BaldwinHills provides water purchased from West Basin Water District as well as groundwater pumpedfrom the Central Basin (California American Water 2011b).All of the water service providers to the communities surrounding the Baldwin Hills must testtheir water at least 4 times a year and report the results to the water users. The constituents thatare tested include, but are not limited to, the following: Turbidity  Aluminum  Arsenic Fluoride  Nitrate  Gross Alpha Activity Gross Beta Activity  Uranium  Color Chloride  Odor  Specific Conductance Sulfate  Total Dissolved Solids  N-nitrosodimethylamine Alkalinity  Calcium  Hardness Magnesium  pH  Potassium Sodium  Total Coliform Bacteria  Bromate Chlorine Haloacetic acids  TTHMs  CopperA review of the 2011 Annual Water Quality Reports for the local community (which includestesting in the 4th quarter following the high-volume hydraulic fracture of VIC1-330), indicatethat the community receives water that meets USEPA and California drinking water standards.The continued monitoring four times per year ensures that the water supply will continue to meetthese standards (California American Water 2011a, Golden State Water Company 2012). Thedata for 2012 has not yet been posted as of the time of this study, and is expected to be posted inJanuary 2013.There are no domestic or industrial water supply wells located within the active surface oil fieldboundary. Potable water aquifers nearest to the Baldwin Hills include the Silverado Aquifer,which is located along the north-northwest boundary of the Baldwin Hills and extends to depthsbetween 200 and 450 feet below ground surface, and several aquifers to the east of the Fieldincluding (in descending order) the Exposition, Gage, Lynwood, Silverado, and Sunnysideaquifers that extend to depths of approximately 800 feet. These aquifers are underlain by thenon-water-bearing Pico Formation (see Figure 4-3C, DWR 1961). As described in Section 4.2.1,the USGS (2003), DWR (1961) and this study have determined that because the Baldwin Hillsare uplifted, the formations do not allow groundwater to flow in to or out of the Baldwin Hills; itis isolated from the remainder of the Los Angeles groundwater basin and are considered to forma complete barrier to groundwater movement. The groundwater monitoring and analysis hasshown that hydraulic fracturing did not have a discernible effect on groundwater quality beneaththe Baldwin Hills; the isolated nature of this groundwater further indicates that there would be noeffect on the groundwater in surrounding aquifers of the Los Angeles Basin.In summary, over much of the Baldwin Hills there is limited or no groundwater within thefreshwater interval above the Pico Formation, and where groundwater does occur, it is notconnected to the aquifers of the Los Angeles basin. The groundwater is not used for water supply4-18 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

113. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldof any type, nor is it present in sufficient quantity to provide a water supply. The localcommunity receives most of its water from sources in northern California (the Delta) or theColorado River. Therefore, activities associated with oil and gas development in the BaldwinHills do not affect the community’s drinking water supply. The water supplied to the localcommunity (as well as any community in California) must be sampled on a quarterly basis, withthe results reported to the community.4.2.7 Water Supply Concerns Related to Shale Gas Development Elsewhere in the United StatesNational IssueThere have been several studies published in 2011 and 2012 that examine the potential effects ofhydraulic fracturing and shale gas development on private water wells in their respective studyareas. Specific concerns with regard to groundwater contamination include: risk of migration andcontamination from fracturing fluids; and, risk of migration and contamination from gas, oil, orother compounds (e.g., arsenic, methane).2011 Duke Study: Methane Contamination of Drinking WaterThe first Duke University study was conducted in response to the widespread public concern inPennsylvania about drinking water contamination from drilling and fracturing, and lack ofscientific evidence as to whether these activities posed an actual risk. The study described itselfas the first scientific review of water contamination near hydraulic fracturing operations. Thestudy, which collected and analyzed samples from 68 drinking water wells in the Marcellus andUtica formations in Pennsylvania and New York, aimed to evaluate the potential impacts ofnatural gas drilling and hydraulic fracturing on shallow groundwater quality by comparing areaswith active drilling and fracturing to areas that are not currently being drilled. This study foundthat methane contamination in private drinking wells systematically occurred in areas wherehydraulic fracturing of shale gas takes place (Osborn et al. 2011).The study also indicated that methane was detected in 85 percent of the drinking water wells acrossthe region, regardless of gas industry operations, thus demonstrating a regional background in thisarea of natural gas. The concentration of methane in water collected from the drinking water wellsin areas with active natural gas drilling and extraction were approximately 17 times higher onaverage than those further away. Average and maximum methane concentrations were found to behigher in wells located within approximately 1,000 meters (3,280 feet) of active drilling sites.Although methane gas is known to occur naturally in shallow groundwater aquifers in both of theseregions, the testing determined that the gas found in the wells was consistent with methane gas thatoriginated at depths associated with the reservoirs that were drilled. However, although the testingshowed elevated methane levels in the wells, isotopic analyses conducted on the same wells didnot find any indication that hydraulic fracturing fluids or saline produced water had polluted thegroundwater aquifers (Osborn et al. 2011).Critiques of the study cite the lack of baseline data. While the study finds higher methaneconcentrations near active wells and concludes that these increases are the result of hydraulicfracturing operations, it does not compare its data to wells sampled prior to the occurrence ofhydraulic fracturing. Other criticisms have asserted that the data set is not large enough to drawany definitive conclusions, and that the results are likely to vary regionally. Furthermore,October 2012 Cardno ENTRIX Environmental Effects 4-19Hydraulic Fracturing Study_Inglewood Field_10102012.docx

114. Hydraulic Fracturing Study PXP Inglewood Oil Fieldcritiques point to areas without drilling where methane was detected in wells, suggesting thatclaims that hydraulic fracturing caused methane contamination are not scientifically supportable(Bauers 2011).2012 Duke Study: Natural Migration of BrinesResearchers at Duke University published a second study in response to continued concernsrelated to reports of potential drinking water contamination related to hydraulic fracturing inPennsylvania. The study aimed to examine hydraulic conductivity between shale gas formationsand the shallower drinking water aquifers in Pennsylvania.The study analyzed the chemical content of 426 groundwater samples collected from six countiesin Northeastern Pennsylvania that did not have links to drilling activities. The study thencompared the salts present in the samples to the salts present in brine water from the MarcellusShale. For some samples, they found that the salts in the groundwater had the same chemicalcomposition as the salts in the Marcellus Shale brine, suggesting that there are naturallyoccurring hydrogeological pathways in the Marcellus shale that could allow migration from theshale to shallower aquifers. The authors report that there is no link between the salinity of thesamples and proximity to Marcellus Shale gas wells, stating that “it is unlikely that hydraulicfracturing for shale gas caused this salinization and that it is instead a naturally occurringphenomenon that occurs over longer timescales.” The report speculates that “these areas could beat greater risk of contamination from shale gas development because of a preexisting network ofcross-formational pathways that has enhanced hydraulic connectivity to deeper geologicalformations” (Warner et al. 2012).2011 Pennsylvania Methane StudyCabot Oil and Gas Corporation (Cabot) conducted baseline “pre-drill” groundwater samplingand analysis throughout Susquehanna County, PA for various water quality parameters,including dissolved gases and other water quality parameters related to drinking water standards.The baseline analysis was performed in advance of proposed drilling in accordance withPennsylvania regulations or anticipated regulations. The study concluded that (1) there isconsistent evidence of elevated methane in shallow groundwater, (2) concentrations of methaneseem to correlate with surface topography (i.e. more methane was found in wells that were inlowland valleys than on hilltops), (3) there was no relationship between methane concentrationsin non-productions areas versus historical gas production areas (i.e. higher methaneconcentrations were not related to gas well drilling) (Molofsky et al. 2011).In addition, a smaller subset of wells was sampled to conduct an isotope analysis, which helpsdistinguish between sources of natural gas. This portion of the study was initiated by thePennsylvania Department of Environmental Protection (DEP) and Cabot. The study concludedthat the methane is naturally occurring, unrelated to gas drilling, and not from the shale gas-producing Marcellus shale (Molofsky et al. 2011).Finally, the report criticized the 2011 Duke study of methane contamination, arguing against theconclusion by the Duke researchers that the thermogenic methane identified in their watersamples was consistent with the Marcellus shale. Instead, the isotopic fingerprints of the Dukesamples, and other hydrogeological evidence, suggested that the methane found may have been4-20 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

115. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldfrom shallower sources rather than the deeper Marcellus formation and are not related tohydraulic fracturing activities (Molofsky et al. 2011).2012 Dimock StudyDimock, Pennsylvania was portrayed in the 2010 movie “Gasland,” and included interviews withresidents who feared their water was contaminated by natural gas drilling. In early January 2012,USEPA responded to complaints of drinking water quality in Dimock. Residents complained ofcloudy, foul smelling water since 2009 after Cabot Oil & Gas Corporation began hydraulicfracturing operations to extract natural gas from reserves near the Marcellus Shale. The USEPAsampled waters from 64 homes in Dimock and concluded the set of samples did not indicatelevels of contaminants that would foster further action by USEPA. The USEPA released the finaldata set on May 11, 2012, of 59 homes. Since USEPA sampling began, contaminants were foundin some wells, but USEPA stated the levels of contamination in the wells were considered safeand did not pose a threat to human health. The USEPA also resampled four wells where previousdata showed contamination. At one of those wells, USEPA found elevated levels of manganese(a naturally-occurring substance) in untreated well water, but the two homes serviced by thatwell had water treatment systems the reduced the level of manganese to sage levels. None of theother wells contained levels of contaminants that would require action. The USEPA did find onewell containing hits for methane, but USEPA declined to verify the source of pollution, asmethane is documented to be a naturally occurring gas in the surrounding area. USEPA hasreleased all sampling results to residents in Dimock and has no further plans to conductadditional sampling (USEPA 2012b). Representatives for Cabot have publicly contended thecontaminants found in some of the wells are likely from background levels or other activitiesunrelated to hydraulic fracturing activities (Gardner 2012).2008 Bainbridge Township, Ohio StudyIn December 2007, the Ohio Department of Natural Resource, Division of Mineral ResourcesManagement (DMRM) initiated an investigation after there was an explosion at a house.Responders quickly recognized that natural gas was entering homes through water wells; eitherunvented water wells located in basements, abandoned and unplugged water wells in basements,or wells with indoor well pumps. The Ohio Valley Energy Systems Corp, which had recentlycompleted a nearby oil and gas well, English No. 1, assumed responsibility for the natural gascontamination and resulting explosion.Further investigation by DMRM concluded that three factors were likely to have contributed tothe gas invasion of the shallow aquifers: (1) inadequate cementing of the production casingaround that well, (2) proceeding with hydraulic fracturing without addressing the casingdeficiencies, and (3) the month long period after hydraulic fracturing during which the annularspace between the surface and the production casing was shut in, confining high-pressure gas inthe restricted space. The over-pressurized condition cause the migration of natural gas from thewell annulus into the natural fractures in the bedrock located below the base of the cementedsurface casing. It is believed that the natural gas traveled vertically through the fractures intooverlying aquifers and into local water wells (ODNR 2008).October 2012 Cardno ENTRIX Environmental Effects 4-21Hydraulic Fracturing Study_Inglewood Field_10102012.docx

116. Hydraulic Fracturing Study PXP Inglewood Oil Field2011 Pavilion StudyThe USEPA released a draft report in December 2011 examining the potential of a link betweengroundwater contamination in Pavillion, Wyoming and local hydraulic fracturing operations. TheUSEPA’s draft report found that groundwater samples taken from two deep test wells containedbenzene and at least 10 other compounds known to be used in hydraulic fracturing fluid. Thedraft report theorized that the fluids seeped up from improperly sealed gas wells. Several monthsafter the USEPA issued its draft report, reviews by both critics and proponents of hydraulicfracturing provided additional expert opinion on the draft. The critical reviews contend that thedata collection processes were faulty and accordingly no valid conclusions could be drawn fromUSEPA’s study. Notable criticisms of USEPA’s draft report are as follows: The pollution detected by USEPA that was linked to hydraulic fracturing was found in deep water monitoring wells, not the shallower monitoring wells that are more comparable to the drinking water supply wells. The link between pollution in deep monitoring wells and shallow water wells is uncertain. Contamination in shallow monitoring wells was strongly linked to contamination from waste disposal pits, rather than migration of deeper sources of contamination. USEPA’s monitoring wells were drilled directly into gas bearing zones; approximately 200 to 275 meters bgs (656 to 902 feet); therefore, reviewers suggest that it is not unusual that elevated levels of methane, hydrocarbons, and benzene were detected (Petroleum Association of Wyoming 2011). Along the same line, methane is naturally occurring near the surface of the Wind River Formation and many residents recall the presence of methane in well water prior to the occurrence of energy production activities in Pavillion (EnCana Oil & Gas Inc. 2009) To the extent that drilling chemicals were detected in deep monitoring wells, USEPA acknowledges the possibility of poor wellbore design and integrity, resulting in vertical and lateral movement of contaminants to surrounding groundwater. The study stated that only two gas production wells in the Wind River Formation have surface casings that extend below the depth of domestic wells. Shallow surface casings in conjunction with little or no cement or sporadic bonding of production casings can facilitate upward gas and fluid migration. In addition, poorly sealed domestic water wells are a known concern in Pavillion and an improper seal can create a migration pathway for gas and fluids into domestic wells.Another subsequent study of USEPA’s draft report commissioned by NRDC, the WyomingOutdoor Council, Sierra Club and the Oil and Gas Accountability Project largely supported theagency’s findings. The report, by Nevada-based hydrologic consultant Tom Myers, was carefulto state that more testing is needed, though he said USEPA’s preliminary conclusion thathydraulic fracturing had polluted the area’s groundwater was sound. Myers said hydraulicfracturing fluids could move up a number of ways in the region — from compromised gas wells,past thin layers of sandstone, or through out-of-formation rock fissures. The natural gas wells inthe area, he stated, often lack metal casings or cement, allowing natural gas and fluids to travelup into groundwater. The USEPA, Myers said, also found a number of compounds during testingthat aren’t found naturally, including isopropanol and diethylene glycol. “The [US]EPA iscorrect in its conclusion that there is no acceptable alternative explanation and the most likelysource of these contaminants is fracking fluid,” Myers wrote. Myers also disputed that cementand drilling mud contaminated water samples, stating that neither could raise the pH level to the4-22 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

117. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldrange found — between 11.2 and 12.0. Myers recommended that USEPA should continuecollecting data, including from new and deeper monitoring wells, to try to replicate and verify itsfindings (Myers 2012b).While USEPA’s draft report identified potential links between hydraulic fracturing andcontamination in the Pavillion water wells, the report remains a draft and USEPA is continuingits review. At a hearing before the House Subcommittee on Energy and Environment, inFebruary 2012, USEPA Region 8 administrator Jim Martin stated the following in response tomischaracterizations of the draft report: “We make clear that the causal link [of watercontamination] to hydraulic fracturing has not been demonstrated conclusively,” adding thatUSEPA’s draft report “should not be assumed to apply to fracturing in other geologic settings”(Martin 2012).In March 2012, USEPA agreed that additional testing was needed in the Pavillion before a finalreport could be issued. The USEPA in conjunction with the State of Wyoming is currentlyconducting further sampling of water wells in the area. In a joint statement, USEPAAdministrator Lisa Jackson, Wyoming Governor Matt Mead, and the Northern Arapaho andEastern Shoshone Tribes said: “The USEPA, the State of Wyoming, and the Tribes recognize thatfurther sampling of the deep monitoring wells drilled for the Agency’s groundwater study isimportant to clarify questions about the initial monitoring results” (USEPA 2012c).2012 Myers Model Study of the Marcellus ShaleTom Myers, a Nevada-based hydrologic consultant, published a study in spring 2012, which usesa model to characterize the risks associated with contaminants travelling through natural verticalpathways from fractured shale to shallower drinking water aquifers. The study analyzes twopotential hydrogeological pathways – advective transport through bedrock and preferential flowthrough fractures. Myers assigned various factors to model contaminant flow includinggroundwater flow, conductivity of the substrate, and changes in conductivity of the substratesbased on regional shale hydrogeology, high density fracturing, and faulting; and high-volumeinjection.The study acknowledges that the model simplifies a complex underground system, but the resultssuggest that a combination of the factors described above could decrease transport times from theMarcellus Shale to shallower aquifers from geological times scales to only tens of years, and thatpreferential flow through natural and hydraulic fracturing induced fractures could further reducetransport times to as little as just a few years (Myers 2012a). However, the study is a modelingexercise that is theoretical in nature and specific to contaminant transport in the Marcellus shale.Following publication of this study, Syracuse University hydrogeology Dr. Don Siegel released acritique of its assumptions and conclusions. Myers developed “an implausible model” thatproduced “completely wrong results,” Siegel wrote. According to Siegel, the Myers model isbased on mistaken assumptions about the kind of rock that lies above the Marcellus Shale, theway groundwater moves through sedimentary basins, and the length of the fissures created byhydraulic fracturing (Siegel 2012).Relevance to Inglewood Oil FieldOf the studies noted above, USEPA’s ongoing study of Pavillion, Wyoming has received themost media attention nationally and continues to be the subject of varying interpretations. InOctober 2012 Cardno ENTRIX Environmental Effects 4-23Hydraulic Fracturing Study_Inglewood Field_10102012.docx

118. Hydraulic Fracturing Study PXP Inglewood Oil Fieldevaluating the draft report it is important to note that hydraulic fracturing operations and geologyat the Pavillion Natural Gas Field are distinctly different from those under consideration at theInglewood Oil Field. For comparison purposes, the drinking water aquifer sits directly atop theproduction zone at the Pavillion Natural Gas Field and high-volume hydraulic fracturing is usedto extract gas from as shallow as 372 meters (1,220 feet) bgs, in close range to the domesticwater wells that are screened as deep as 244 meters (800 feet) bgs. Consequently, there is anegligible separation between the hydraulic fracturing operations and groundwater. In contrast,the high-volume hydraulic fracturing jobs PXP conducted occurred over 2,500 meters(8,202 feet) bgs to retrieve shale oil, while the perched water formation is located approximately120 meters (393 feet) bgs, a separation of over one mile.Furthermore, as noted in Section 4.2.1, there is no groundwater that can sustain a water supplybeneath the Baldwin Hills. The supply to the local area is primarily from sources outside ofLos Angeles, whereas in Pavillion groundwater is integral to the community’s water supply. Thewater supply in Los Angeles is subject to quarterly testing and public reporting. Due to uplift in theBaldwin Hills and associated folding and faulting, water tables are sporadic and shallowthroughout the production zone on the oil field itself and there is no sustainable groundwaterresources located within perimeters of the oil field. In groundwater models of freshwater flow inthe Los Angeles Basin aquifer systems (USGS 2003), the Baldwin Hills is modeled as a “no flow”zone; that is, since the sediments beneath the Baldwin Hills are disconnected from the regionalaquifers, groundwater flow is discontinuous across the Baldwin Hills (see Figures 4-1 and 4-3C).4.3 Containment of Hydraulic Fractures to the Desired ZoneA significant amount of discussion has taken place about the vertical growth of hydraulicfractures, particularly in gas shales, tight sands, and shallow reservoirs in regards to whetherthese hydraulic fractures can create pathways for the fracturing fluids or hydrocarbons to migrateupward and contaminate groundwater supplies.The vertical extent that a created fracture can propagate is controlled by the upper confining zoneor formation, and the volume, rate, and pressure of the fluid that is pumped. The confining zonewill limit the vertical growth of a fracture because it either possesses sufficient strength orelasticity to contain the pressure of the injected fluids or an insufficient volume of fluid has beenpumped. This is important to note because the greater the distance between the fracturedformation and the groundwater or water-bearing zones, the more likely it is that multipleformations will possess the qualities necessary to impede the growth of hydraulic fractures.Microseismic and micro-deformation mapping has been conducted on thousands of hydraulicfracturing jobs nationwide (Fisher and Warpinski 2011) and indicate that the growth of fracturesvertically is relatively well-contained. Figure 4-6 is taken from Fisher and Warpinski (2011) anddepicts the depth and vertical height affected by hydraulic fracture jobs conducted in the BarnettShale of Texas (inclined multi-colored lines), compared to the depth of water (blue horizontalline at top of chart). This relationship was validated during observations of microseismic resultsat the Inglewood Oil Field (see Figure 3-11).Fracture lengths of a typical hydraulic fracture operation can sometimes exceed 1,000 feet whencontained within a relatively homogenous layer, but fracture heights, because of the layered4-24 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

119. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldgeological environment and other physical parameters are typically much smaller, usuallymeasured in ten-foot or hundred-foot intervals (Warpinski et al. 2011). Figure 4-6 Barnett Mapped Frac Treatments/TVDSimilar results have been found by Fisher and Warpinski (2011) in their study of the real fracturegrowth data mapped during thousands of fracturing treatments in tight sands and shales. Theysupplemented their data with an in-depth discussion of fracture-growth limited mechanismsaugmented by mine back tests and other studies. They also note that fractures and fracturenetworks tend to be complex; the complexity tends to shorten the network as the energy dissipates.At the Inglewood Oil Field, the measured distribution of fractures caused by the hydraulic fracturecompletions at VIC1-330 and VIC1-635 were less than 1,000 feet horizontally from the well, andwere almost entirely within the target zone with limited vertical fracture growth (less than250 feet). Fractures grew either horizontally from the well or at angles less than 20 degreesdepending on the local dip angle of the geological formations. The high-volume hydraulic fracturecompletions were conducted between 8,000 and 9,000 feet below the ground surface andmicroseismic analysis of the operations indicate that fractures did not form at shallower depthsthan approximately 8,000 feet below the ground surface (see Section 3.2.2). By comparison, thedeepest groundwater encountered that had relatively low salinity was at a depth of 500 feet belowthe ground surface, corresponding to the base of fresh water beneath the Inglewood Oil Field.During hydraulic fracturing, the pressure applied to the rock by the water/sand/additive mixtureexceeds the fracture strength of the rock, and portions of the rock fractures. As measured by themicroseismic data in Section 3.2.2, the induced fractures follow the bedding planes atapproximately 20-degree angles. Halliburton (2012) also models the distribution of proppantapplied to the fractures in the target zone. Based on this model, all of the proppant stayed withinthe target zone of the Nodular Shale. The minor fractures indicated by the microseismic data thatoccurred outside the Nodular Shale were in the underlying, oil-bearing Sentous Formation. Thesefractures did not receive proppant, and as such they sealed based on the overburden pressure.October 2012 Cardno ENTRIX Environmental Effects 4-25Hydraulic Fracturing Study_Inglewood Field_10102012.docx

120. Hydraulic Fracturing Study PXP Inglewood Oil Field4.4 Well IntegrityThe proper construction of active oil wells and the condition of idle, plugged, and abandonedwells ensures that protections to fresh water-bearing zones are intact. As described inSection 4.2.1, the water-bearing zones above the base of fresh water beneath the Baldwin Hillsdo not have sufficient yield to support a water supply, and the local community receives theirwater supply primarily from sources that are distant from the Los Angeles Basin. However, wellintegrity was still investigated as part of this study at the scale of the wells subject to hydraulicfracturing, as well as at the scale of the entire oil field.The term “well integrity” refers to the containment of hydrocarbons within a well from theproducing formation all the way to the surface. The rock formations that lie between thehydrocarbon producing formations and the groundwater have isolated the groundwater overmillions of years. The well construction process uses a combination of steel casing, cementsheaths, and other mechanical isolation devices to prevent the migration and transport of fluidsbetween these subsurface layers. These construction and engineering controls provide multiplelayers of groundwater protection throughout the life of the well. The wells within injection zonesat Inglewood Oil Field are constructed in accordance with API guidelines, ensuring that allFederal and State regulations are met and groundwater is protected (API 2009).DOGGR wellintegrity regulations require a facility to keep records of the size, weight, grade, and condition ofall casings and any equipment attached to the casing, pursuant to California Code of Regulations(CCR), Chapter 4, Article 3, §1724.To supplement more broadly applicable statutory and regulatory requirements, the State Oil andGas Supervisor may establish Field Rules for any oil and gas pool or zone in a field whensufficient geologic and engineering data are available from previous drilling operations, pursuantto CCR Title 14, Division 2, Chapter 4, § 1722 (k). Each Field Rule is specific to a field, and inmany cases, specific to Areas and Zones or Pools within a field. DOGGR has established FieldRules for those fields where geologic and engineering information is available to accuratelydescribe subsurface conditions. These Field Rules identify downhole conditions and wellconstruction information that oil and gas operators should consider when drilling and completingonshore oil and gas wells. Field Rules have been established for the Inglewood Oil Field in twoareas – west of the Newport-Inglewood fault and east of the Newport-Inglewood fault(DOGGR 2007).With regard to abandoned wells, Term 10 of the Settlement Agreement requires PXP to install a150-foot cement plug at the surface of the well, which exceeds DOGGR standards 6-fold(DOGGR requires only installation of a 25-foot plug). This supplemental requirement providesenhanced protection of any surface resources.Based on review of records maintained by PXP, the active wells at the Inglewood Oil Field meetmodern well construction and casing standards, which protect against releases to theenvironment, pursuant to State Regulations and Field Rules. Idle wells are tested annually andreports are submitted to DOGGR, in accordance with CCR, Chapter 4, Article 3, §1723.9.Prior to commencing injection operations, each injection well must pass pressure tests to confirmthe integrity of the casing. A Mechanical Integrity Test (MIT) must be performed on all injectionwells to verify that injected fluid is confined to the approved zone(s). California regulations4-26 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

121. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldmandate that “data shall be maintained to show performance of the project and to establish thatno damage to health, life, property, or natural resources is occurring by reason of the project.Injection shall be stopped if there is evidence of such damage, or loss of hydrocarbons. Allproject data shall be available for periodic inspection by Division personnel” (CCR 1724.10 (h)).Active injection wells at the Inglewood Oil Field are surveyed annually (and pressure tested aftereach well work) per DOGGR requirements pursuant to CCR, Chapter 4, Article 3, §1724.10(j)3.In addition, PXP monitors active injection wells weekly for injection rates and pressures (whatalso indicates the integrity of the wellbore and confinement of fluids to the injection zone) andreports to DOGGR on a monthly basis, pursuant to CCR Chapter 4, Article 3, §1724.10(c).PXP also measures the pressure of the annulus after they idle production or injection at a well andreports this data to DOGGR, as required by Chapter 4, Article 3, §1724.1. Each idle well(production or injection) is subject to DOGGR Idle Wells Testing program according to CaliforniaCode of Regulations. The testing is done in two parts. Initially it is determined if wellbore fluids(i.e. formation fluids) are above or below the designated base of fresh water. If the fluids arebelow, then no further testing is required until the next testing cycle. If the fluid in the wellbore isat or above the designated base of fresh water, thus creating a potential for migrating into thedesignated fresh water formation, then the next part of testing takes place. The integrity of thecasing (steel pipe and cement) at this time is evaluated by one of the following methods: runningstatic temperature and spinner surveys, pressure testing the casing, or a nitrogen fluid leveldepression tests. Both fluid level in the wellbore location determination, and subsequent (ifneeded) integrity testing are subject to DOGGR witnessing. Any problems determined during anannual Idle Wells Testing are addressed by either repairing or abandoning the well.Additional well integrity monitoring is provided through PXP’s active production well monitoring.In accordance with Public Resources Code Division 3, Article 1, Section 3227, PXP providesmonthly production reports that indicate the amount of oil/gas produced from each well,composition of produced water (e.g., salinity), amount of injection fluid, and any other informationrequested by the Division. While reports are only produced on a monthly basis, PXP monitorsactive production wells daily for oil and water production rates and pump behavior. Although PXPreports that this is not intended to be a well integrity monitoring program, PXP notes that thismonitoring allows them to quickly identify, isolate, and correct any potential problems.Well integrity is further monitored prior to and during each stage of the hydraulic fracturingoperations. The well casing of the subject well is tested to ensure integrity prior to injection offracturing fluids (Halliburton 2012). This is accomplished by pressure testing the well up to70 percent of the strength of the casing. Offset wells, production wells, and injection wells are alsotested for proper zonal isolation (i.e., annular cement) prior to any hydraulic fracturing operations.Halliburton’s post-job reports for hydraulic fracturing operations indicate that all measurements ofwell integrity conducted for this study show that there were no losses in pressure. Furthermore, asshown in the microseismic results (see Section 3.6), none of the fractures encroach on nearbywells. The applied energy of the hydraulic fracturing rapidly decreases away from the completedwell, and as such, surrounding wells would not be adversely affected by the operation.Prior to issuing a permit for any new injection well, or converting an existing production well toan injection well, DOGGR conducts an Area of Review (AOR) as required by the UndergroundOctober 2012 Cardno ENTRIX Environmental Effects 4-27Hydraulic Fracturing Study_Inglewood Field_10102012.docx

122. Hydraulic Fracturing Study PXP Inglewood Oil FieldInjection Control Program (see Section 5.4.1 for greater discussion of this program). The AORinvestigates the condition of every well within one-quarter mile radius of the proposed newinjection well. The AOR includes all active, idle, plugged, and abandoned wells and determinesthe casing and cement intervals. The purpose of the review is to ensure that all wells in the areaare completed or abandoned in such a way as to contain injected fluids within the zones that areapproved for injection and isolate freshwater zones from the injected fluids.4.5 Slope Stability, Subsidence, Ground Movement, Seismicity4.5.1 Slope StabilitySlope stability is a primary geologic concern in the Baldwin Hills. The California Department ofConservation, Division of Mines and Geology, has previously reported on slope stability andgeological issues of the Baldwin Hills (CDMG 1982). The purpose of the program was to identifythe nature and cause of slope failures across the state, and to provide the information to localgovernments within whose jurisdictions the failures occurred so that they can plan action tomitigate the problems. The 1982 study was solely focused on the Baldwin Hills and includedinvestigations starting in 1969. The study included detailed mapping of areas with slope instabilityin the Baldwin Hills, investigation into the causes of the failures, and recommended mitigation.The study notes widespread damage from slope failures caused by rains in 1969, 1978, and 1980,and less widespread damage in other years. The study concludes that there are two reasons whyslope stability is a substantial problem in the Baldwin Hills: The terrain that has been developed consists mostly of steep natural slopes underlain by soft sedimentary rocks. This combination will lead to slope instabilities. The result is that graded and natural slopes with slope angles up to 45 degrees or steeper occur without proper drainage devices and retaining walls. Much of the Baldwin Hills were developed prior to the enactment of strict grading codes by local government, and as such lack adequate protections. These protections include lower slope angles, requirements for compaction of fills, and structural requirements.The study notes that the Inglewood Formation is susceptible to slope instability because thesurficial soils developed on the formation are clay-rich, while the Culver Sands are particularlysusceptible to erosion. The study also notes the presence of ancient, apparently large, landslides.Most of the mapped slope failures damaged more than one property.The study also notes that in the three most densely developed portions of the Baldwin Hills,approximately 21 percent of the properties have been damaged by rainfall-induced slope failures.As described in the CDMG report, approximately 93 percent of the residential properties havethe potential for at least minor damage from slopes failure during or after large storms in thefuture (CDMG 1982).Monitoring for vibration and subsidence did not detect a change due to hydraulic fracturing. Assuch, hydraulic fracturing would not affect surface slope stability.4-28 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

123. Hydraulic Fracturing StudyPXP Inglewood Oil Field4.5.2 SubsidenceSubsidence is another geological concern in the Baldwin Hills. As described in the Baldwin HillsCSD EIR, prior to 1971 the maximum cumulative subsidence of any of the areas along theNewport-Inglewood fault zone was centered over the Inglewood Oil Field, where 67,000 acre-feetof oil, water, and sand had been withdrawn from shallow production horizons. Water injection intothe shallow production horizons began in 1957 and as of 1971, effectively eliminated subsidenceassociated with oil and gas production (County of Los Angeles 2008). The Inglewood Oil Field hasan ongoing program of annual subsidence monitoring that is reported in the framework of theCSD. To date, although minor subsidence has been detected, no changes in ground surface areattributed to oil and gas production activities (Fugro Consultants 2012). Measurements ofsubsidence before and after high-volume hydraulic fracturing did not detect a measurable change.Subsidence has also been theorized to be one factor associated with the failure of the former20-acre Baldwin Hills Reservoir in 1963. The north embankment of the Baldwin Hills Reservoirfailed causing property damage and loss of life. One of the leading theories for the reservoir’sfailure is that it was undermined by seepage along a fault which was known prior to constructionof the reservoir, and which is related to the active Inglewood fault system. The dam’s failure hasbeen attributed to different causes: oil-field subsidence (Castle and Yerkes 1969); tectonicfaulting (Hudson and Scott 1965); water injection in the nearby oil field (Hamilton and Meehan1971); and construction related factors (Wright 1987). An innovative design was intended toprevent tectonic subsidence and water injection from jeopardizing the reservoir. In a study of thereservoir failure, Wright (1987b) presents records that document that a field change to the designduring construction undermined most of the features intended to accommodate the originaldesign protections. As such, it has been theorized that the design changes also played a role inthe dam’s eventual collapse (Casagrande et al. 1972).4.5.3 Monitoring of Ground MovementThe CSD requires an annual ground movement survey at the Inglewood Oil Field. Surveying forboth vertical and horizontal ground movement is accomplished using satellite-based GlobalPositioning System (GPS) technology. Accumulated subsidence or uplift is measured using repeatpass Differentially Interferometric Synthetic Aperture Radar (inSAR) technology. The data arethen evaluated to determine whether Inglewood Oil Field operations are related to any detectedground motions or subsidence. According to the ground movement survey covering the 2011/2012monitoring period there is no correlation between measured elevation changes and field activities(Fugro Consultants 2012, Fugro NPA 2012, Psomas 2012). For this period, inSAR imagery wascollected on January 15, 2012, and elevation data at each survey location was collected in February2012. Note that hydraulic fracturing operations occurred in September 2011 and January 5-6, 2012,and were captured in this survey period. Fugro Consultants compiled a list of the Inglewood OilField production and injection wells within a 1,000-foot radius of each survey location and PXPsupplied the annual production and injection volumes from all active wells across the field. Thedatabase included 456 production wells and 213 waterflood injection wells. Some stations recordedsettlement where the injected fluid exceeded the produced volume, some monuments recordedelevation gains where the produced water volume exceeded injected volume, and others showedchanges where no active wells are within a 1,000-foot radius. The majority of movements is lessthan the 0.05 foot measurement threshold and, therefore, at or less than the limit that can beOctober 2012 Cardno ENTRIX Environmental Effects 4-29Hydraulic Fracturing Study_Inglewood Field_10102012.docx

124. Hydraulic Fracturing Study PXP Inglewood Oil Fielddetected (Fugro Consultants 2012, Fugro NPA 2012, Psomas 2012). None of the groundmovement was attributable to high-volume hydraulic fracturing.4.5.4 Vibration and Seismicity During Hydraulic FracturingPXP retained Matheson Mining Consultants, Inc. to conduct vibration and ground surfacemonitoring during the high-volume hydraulic fracturing operations at the VIC1-330 well onSeptember 15 and 16; the VIC1-635 well on January 5 and 6; and at TVIC-221 and TVIC-3254high-rate gravel pack operations on January 7, 9, 10, and 11.Vibration records for the VIC1-330 and VIC1-635 wells were collected using four and eightseismographs, respectively, installed at different locations in relation to the high-volumehydraulic fracture operations. The TVIC-221 and TVIC-3254 wells are directly adjacent to oneanother; therefore, the same seismographs were used to monitor the high-rate gravel packoperations at these wells. Vibration records for these wells were collected using eightseismographs installed at different locations between 218 and 1,000 feet from the wells.Seismographs were placed near the subject wells. All of the seismographs were put in place earlyenough to allow the collection of 24 hours of baseline data prior to recording vibrations of thehydraulic fracturing operation and high-rate gravel pack operation. Each device was set to thelowest trigger level possible (0.005 in/sec) in order to detect all vibrations.Seismic events (imperceptible to humans and below the limit which could cause any structuraldamage) caused by vehicles and other oil field activities at the surface were noted during thebaseline period conducted prior to each hydraulic fracture event. These events were then comparedto events recorded during both the pumping test and hydraulic fracturing time periods. Table 4-1displays the highest level vibration recorded during the baseline period and each hydraulic fractureoperation. Based on this comparison, Matheson Mining concluded that no seismic activity wasproduced by any of the high-volume hydraulic fracturing or high-rate gravel pack operations forwhich seismicity was recorded (Matheson Mining 2012a, b, c).Table 4-1 Comparison of Vibration Levels Recorded During Baseline Monitoring and Hydraulic Fracturing Operations Maximum Vibration Record (in/sec) Subject Well Baseline Monitoring During Hydraulic Fracturing Operation VIC1-330 0.0062 0.0119 VIC1-635 0.0075 0.0162 TVIC-221 and 3254 0.025 0.0194Source: Matheson Mine Consultants 2012 a-c4.5.5 Induced Seismicity and Additional Seismic Monitoring During Hydraulic FracturingMicroseismicity was measured directly during and after the hydraulic fracturing. However, thepublic has expressed concern related to induced seismicity along the Newport-Inglewood Faultpotentially resulting from hydraulic fracturing or water injection. This section addresses this topicusing data from the Newport-Inglewood Fault across southern California, and measurements madeat the field as part of the California Institute of Technology’s monitoring program for the region.4-30 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

125. Hydraulic Fracturing StudyPXP Inglewood Oil FieldThe Newport-Inglewood Fault is discernible at the surface by the chain of low hills extendingfrom Culver City (the Baldwin Hills) to Signal Hill. According to the Southern CaliforniaEarthquake Center (Petersen and Wesnousky 1994), the fault is not marked by a sharp zone, butinstead is marked by a broad zone of seismicity centered on the fault trace. Faults of theNewport-Inglewood zone of deformation are predominantly defined in the subsurface from oil-well data and groundwater data. Petersen and Wesnousky (1994) evaluated all seismic eventsgreater than Magnitude 2 in the Newport-Inglewood Fault zone, and determined that mostepicenters are located at depths between 3.5 miles and 12 miles below ground surface (Petersenand Wesnousky 1994, Hauksson 1987).In comparison, the waterflood operation at the Inglewood Oil Field extends to depths of up to3,000 feet (0.57 mile) and the deepest hydraulic fracturing occurs at less than 10,000 feet depth(1.9 miles). The very small, not discernible, microseismic effects of fracturing are located1.6 miles above the zone where most epicenters are located, and the waterflood is 2.9 milesabove this zone. Based on distHance alone, there would be little or no relationship between thelocation of Inglewood Oil Field activities and the much deeper epicenters of most earthquakesalong the Newport-Inglewood fault zone.In addition to the seismic monitoring conducted by Matheson Mining Consultants, Inc., seismicdata collected by the permanently installed California Institute of Technology (Cal-Tech)accelerometer (seismometer) at the CI.BHP Baldwin Hills location (adjacent to the PXP fieldoffice at 5640 South Fairfax Avenue, approximately 6,300 feet southeast of VIC1-635 and7,806 feet southeast of VIC1-330, and 9,620 feet from the TVIC wells) was reviewed for thetime periods before and during the hydraulic fracturing and high-rate gravel pack operations. Thedata collected from the seismograph during the VIC1-635 operation showed two minor spikesduring the time period reviewed (the largest of which measured 0.0012 inch per second).Analysis of the data by Dr. Hauksson, a Senior Research Associate in Geophysics with the Cal-Tech Seismological Laboratory indicates that no seismic events above background levels(0.0003 to 0.0006 inch per second) were recorded. These spikes tend to occur randomly everytwo or three hours and could be related to local traffic. According to Dr. Hauksson, these spikesare common in urban areas and not considered significant (Matheson Mining Consultants, Inc.2012a). No data above background levels was recorded on the Cal-Tech seismograph during theVIC1-330 operation (Matheson Mining Consultants, Inc. 2012b). The data collected from theseismograph during the TVIC high-rate gravel pack operations showed some spikes during thetime period reviewed but no significant signals above the background levels. As with the VIC1-635 operation, analysis of the data by Dr. Hauksson indicates that the noise recorded on theseismograph during the time period of the hydraulic fracturing operation, even the spikes, did notexceed background levels (Matheson Mining Consultants, Inc. 2012a).The utilization of these data is relevant in addressing public concerns about the potential forground movement triggered through induced seismicity as a result of hydraulic fracturing andhigh-rate gravel pack operations at the Inglewood Oil Field. Based on an analysis of the data, alltests indicate that the hydraulic fracturing analyzed in this study did not induce seismic activity.Any microseismicity as a result of the hydraulic fracturing was imperceptible at the surface. Inaddition, any effects of oil field operations are much shallower than the zones typicallyassociated with earthquake epicenters along the Newport-Inglewood Fault zone. The BaldwinHills CSD includes provisions that address the effects of earthquakes on the field. These includeOctober 2012 Cardno ENTRIX Environmental Effects 4-31Hydraulic Fracturing Study_Inglewood Field_10102012.docx

126. Hydraulic Fracturing Study PXP Inglewood Oil Fieldconstruction provisions, and provisions to cease operations after large earthquakes and conductinspections. For example, the Magnitude 6.4 Coalinga earthquake of 1983, in the San JoaquinValley of California, caused damage to some oilfield facilities. Most of the damage was tosurface facilities, with very minor subsurface damage. Fourteen of 1,725 active wells had somedamage (Hughes et al. 1990). This event led to enhanced safety measures. The Baldwin HillsCSD requires an accelerometer on the field for purposes of monitoring seismic activity andtriggering inspections.4.5.6 Potential for Induced Seismicity at Other Areas in the United StatesNational IssueSeveral earthquakes in Mahoning County, Ohio (an area that is not historically seismicallyactive) prompted Ohio’s Department of Natural Resources to shut down five deep undergroundinjection wells in January 2012, due to concerns that wastewater injected into the wells underpressure triggered the earthquakes. Similarly, a 5.6-Magnitude earthquake shook Oklahoma inNovember 2011, following a series of smaller quakes over the preceding months that may alsohave been attributed to wastewater injection.All agencies that have reviewed the question have determined that hydraulic fracturing itself isnot the cause and is likely not capable of producing an earthquake event of any notable size.Seismologists at the U.S. Geologic Survey have found that hydraulic fracturing “itself probablydoes not put enough energy into the ground to trigger an earthquake” (USGS 2012). Review ofthe source studies for the articles found that many point to energy-related activities other thanhydraulic fracturing (e.g., injection for waste disposal) as the source of induced seismicity.As recently as June 2012, the National Research Council, a division of the National Academiesof Science, released a report titled Induced Seismicity Potential in Energy Technologies. Thereport found that only one felt event in England had been confirmed and attributed to hydraulicfracturing globally. This case, caused by Cuadrilla in England in 2011, recorded two earthquakes(one Magnitude 2.3 and one Magnitude 1.5) that Cuadrilla believes was due to hydraulicfracturing. These are below a level that would be felt. The cause was thought to be injection oflarge volumes of sand and proppant.Of the 35,000 shale gas wells that had been hydraulically fractured, only one case was suspected,but not confirmed, to be attributed to hydraulic fracturing connected to shale gas development.Two other cases connected to conventional oil and gas development were associated with, butnever confirmed to stem from, the application of hydraulic fracturing technologies. The reportfound that, “the very low number of felt events relative to the large number of hydraulicallyfractured wells for shale gas is likely due to the short duration of injection of fluids and thelimited fluid volumes in a small spatial area” (NRC 2012).Seismic activity as a result of energy-related activities is not a new phenomenon. According tothe USDOE Lawrence Berkeley National Laboratory, energy-related activities have been linkedto isolated events of induced seismicity since the 1930s, which marks the start of large-scalefluid extraction (USDOE 2012). USDOE has found that hydraulic fracturing is known to causeslight tremors when fluid is injected into the ground under high pressure, but these are on theorder of Magnitude -3 and -4 and are practically imperceptible.4-32 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

127. Hydraulic Fracturing StudyPXP Inglewood Oil FieldMost of the USDOE research conducted to date however has pointed to the injection of fluids intodeep wells for waste disposal as a cause of induced seismicity, as well as the use of reservoirs forwater supplies, carbon sequestration, and geothermal energy operation. Injection into deep wellscould cause seismic events capable of being felt if fluids migrate into neighboring rock formations.The deep, old rocks that surround injection wells have many faults that have reached equilibriumover hundreds of millions of years, but migrating fluid due to wastewater injection could disruptthis equilibrium and trigger shaking (de Pater and Baisch 2011).Similarly, USGS studies have indicated that hydraulic fracturing did not cause increasedseismicity in the midcontinent United States. As part of an effort to understand the potentialimpacts from U.S. energy production, the USGS has been investigating the recent increase in thenumber of earthquakes in the midcontinent United States with a Magnitude of three or greater onthe Richter scale. Scientists looked carefully at regions where energy production activities havechanged during recent years. The results of the studies suggest that hydraulic fracturing has notcaused the increased frequency of earthquakes; however, in some instances, the increase inseismicity was linked to deep underground injection wells. The USGS indicates that it is stillunclear whether the increased seismic activity is related to changes in production methodologyor the increased rate of oil and gas production. For example, the USGS has previously reportedthat oil and gas extraction can cause earthquakes when removal of large quantities of oil, gas, orwater changes underground stresses. The studies also note that not all underground injectioncauses earthquakes and that there have not been conclusive examples that underground injectionmay trigger large, major earthquakes even if located near a fault (Hayes 2012).The recent National Resource Council study of induced seismicity (NRC 2012) finds that manyfactors are important in the relationship between human activity and induced seismicity: thedepth, rate, and net volume of injected or extracted fluids, bottom-hole pressure, permeability ofthe relevant geologic layers, locations and properties of faults, and crustal stress conditions.Moreover, in a recent survey of earthquake activity and injection wells in Texas, the resultssuggested that injection rates, pressures, geological substrate permeability as well as faultlocation and underlying fault stress could influence the probability of fluid injection creatingearthquakes (Frohlich 2012). In the siting of many injection wells, these factors are not wellknown. At the Inglewood Oil Field however the geological conditions are well known and thereis a long history of successful waterflood operations.Ohio Case StudyAlthough Mahoning County, Ohio, is historically not a seismically active area, nine low-Magnitude earthquakes were observed beginning in early 2011. Initial media coverage followingthe earthquakes pointed to hydraulic fracturing as the cause (Fountain 2011, Palmer 2012).Seismologists later plotted the quakes however and determined that their epicenterscorresponded to Northstar 1, a 9,000-foot deep Class II injection well used to dispose of brineand wastes from natural gas hydraulic fracturing operations. The state shut down four deepdisposal wells in January 2011, after a Magnitude-4 earthquake occurred. The Ohio Departmentof Natural Resources concluded that the earthquakes were caused by deep underground injectionat Northstar 1, not the hydraulic fracturing operations, for the following reasons: injectionoperations began at Northstar 1 shortly before the first seismic events were recorded in the area;seismic events were clustered around the wellbore (the focal depths of the events were 4,000 feetlaterally and 2,500 vertically from the well bore terminus); and there is evidence of fractures andOctober 2012 Cardno ENTRIX Environmental Effects 4-33Hydraulic Fracturing Study_Inglewood Field_10102012.docx

128. Hydraulic Fracturing Study PXP Inglewood Oil Fieldpermeable zones in the surrounding formation. Further modeling and analysis of the Northstar 1well and the surrounding geology are required to establish a better understanding of whathappened. Additional studies are underway by ODNR and cooperating agencies (ODNR 2012).Texas Case StudyIn 2011 and 2012, a retrospective survey was conducted near the Dallas-Fort Worth area inTexas. The study’s intent was to review the relationship between detectable earthquakes and thecharacteristics of nearby injection wells. The study reviewed earthquake activity betweenNovember 2009 and September 2011 over a 70-km area of the Barnett Shale using temporaryseismographs installed under the National Science Foundation’s funded EarthScope U.S. Arrayprogram. It identified that there were a sizable number (67) of earthquakes Magnitudes 1.5 andhigher that could be identified under the U.S. Array program. Only one-eighth of these werereported by the National Earthquake Information Center, however.The earthquakes identified seemed to have varying relationships with the surrounding injectionwells. The rates of injection wells nearest the strongest cluster of earthquakes typically exceeded150,000 barrels of water per month. However, 90 percent of wells that had injection ratesexceeding 150,000 barrels of water per month did not have related earthquakes. The studysuggested that earthquakes may more likely be triggered if the injection reaches a critical rate,but that the rate could depend on localized geologic conditions. The geological substratepermeability as well as fault location and underlying fault stress could influence the probabilityof fluid injection triggering earthquakes (Frohlich 2012).Oklahoma Case StudyIn January 2011, the Oklahoma Geologic Service was contacted with reports of multipleearthquakes observed in the Garvin County area within a 24-hour period. Following the reports,the Oklahoma Geologic Service confirmed that in fact, over 50 earthquakes ranging inMagnitude 1.0 to 2.8 were recorded in this area. A review of activity in the area also confirmedthat a hydraulic fracturing event had taken place that day at the nearby Eola field. This area ofsouth-central Oklahoma has historically been seismically active; therefore, a network of seismicstations was installed in 1977 which allowed for the accurate reporting and determination ofepicenters for this series of quakes. The Eola field is located in an area where several fault blocksare located between major faults (the Eola, Reagan, and Mill Creek faults). The OklahomaGeologic Survey conducted its own study to determine if the reported earthquakes were in factinduced by the hydraulic fracturing that had taken place on the field. The study involved a seriesof model simulations and statistical analyses using the data records by the seismic monitors aswell as data collected from the field operator regarding the hydraulic fracturing event itself. TheOklahoma Geologic Service found that there was a clear correlation between the hydraulicfracturing event and the observed seismicity, and that all of the epicenters of the seismic eventswere within 5 km (3.1 miles) of the Eola field and that some of the earthquakes occurred atsimilar depths as the reservoirs which were fractured (approximately 630 meters or 2,066 feet).However, the service could not confirm that the fluid pressure at the hypocentral location of theearthquakes was enough to generate seismicity and given the extensive seismic history in thearea, the Service could not determine if the hydraulic fracturing had actually induced theearthquakes. The study also noted that the earthquakes observed were extremely low Magnitudein nature and were felt by only one individual (Holland 2011).4-34 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

129. Hydraulic Fracturing StudyPXP Inglewood Oil FieldBasel, Switzerland Case StudyOne of the most publicized instances of induced seismicity that is cited by critiques of hydraulicfracturing occurred at a geothermal project in Basel, Switzerland. In 2006, during the course ofthe development of an enhanced geothermal reservoir at a depth of about 5 km (3.1 miles)underneath the city, a Magnitude 3.4 earthquake was triggered. The earthquake occurred after11,500 cubic meters of liquid (3.03 million gallons) were injected into a 5-km (3.1 miles) deepinjection well. A steady increase in seismicity was detected in response to a gradual increase inflow rate and wellhead pressure. Monitors recorded more than 10,000 seismic events during theinjection phase. After water had been injected for about 16 hours, a Magnitude 2.6 eventoccurred within the reservoir, which exceeded the safety threshold for continued wellstimulation. In response, injection was halted prematurely. Two additional seismic events ofMagnitude-2.7 and 3.4 occurred several hours later. At that point, the well was opened and thewater was allowed to flow back. The seismic activity declined quickly thereafter. The well wasofficially shut down in 2009 (Deichmann and Giardini 2009).A study was commissioned by the Canton of Basel-Stadt and the Swiss federal government toassess the seismic risk resulting from continued development and operation of the geothermalsystem. The study addressed the effect of continued development and operation of thegeothermal facility and its effect on induced seismicity, as well as the effects of operations onnatural seismicity in the Basel Region; i.e., “triggered seismicity.” A 3-D geological model wasused to map eight relevant faults in the vicinity of the Basel geothermal reservoir. The seismicactivity (time intervals when large earthquakes could be expected) of each fault was estimated,and it was determined that the presence of the geothermal reservoir could have a direct impact onthe recurrence time of these natural earthquakes by modifying subsurface stresses but thatvariation would be small. The study also found that there is a possibility that earthquakesexceeding the strength of previous seismic activity would occur during continued developmentand operation of the facility. Based on model simulations, the largest “triggered” seismic eventwas predicted to have a Magnitude 4.5 (Baisch et. al 2009).Rocky Mountain ArsenalOne of the first records of induced seismicity linked to deep underground injection was at theRocky Mountain Arsenal, where a deep injection well constructed in 1961 was used to dispose ofwastes from the U.S. Army’s chemical weapon testing operations. The well was drilled to adepth of 12,045 feet. It was cased and sealed to 11,975 feet, and the remaining 70 feet were leftas an open hole for fluid injection. 165 million gallons of Basin F liquid waste, consisting ofsalty water that includes some metals, chlorides, wastewater and toxic organics was injected intothe well from 1962–1966. During that time period, there were several small earthquakes in thearea, and in 1966 a correlation was noticed between the frequency of earthquakes and the volumeof water being pumped. Pumping was halted in 1966 due to the possibility that the fluid injectionwas triggering the earthquakes in the area. Over the next two years earthquakes continued tooccur as far as 6 km (3.7 miles) from the injection well as the pressure front caused by injectiondissipated (Nicholson and Wesson 1990). The well remained unused for almost twenty yearsuntil the army permanently sealed it in 1985.October 2012 Cardno ENTRIX Environmental Effects 4-35Hydraulic Fracturing Study_Inglewood Field_10102012.docx

130. Hydraulic Fracturing Study PXP Inglewood Oil FieldRelevance to Inglewood Oil FieldThe studies of the potential link between hydraulic fracturing and earthquakes have all concludedthat the hydraulic fracturing produces small, imperceptible microseismic events (like dropping amilk bottle on the floor according to Stanford geophysicist, Mark Zoback [COGA 2012]) as partof the process itself. These microseismic events were recorded by the microseismicitymonitoring conducted during the VIC1-330 and VIC1-635 hydraulic fracturing operationscompleted as a part of this study, and most were restricted to the target oil producing zone. Thesemicroseismic events did not cause any recordable event at the surface, based on two types ofvibration monitoring and the Cal-Tech accelerometer.The Inglewood Oil Field does not inject wastewater in the manner where small (Magnitude 3 or 4)earthquakes have been detected in Ohio and elsewhere. In those cases, the wastewater is injectedinto a formation other than the gas-producing zone. At Inglewood, the waterflood operation injectstreated produced water into the depressurized oil-bearing formation. The waterflood therefore doesnot increase the subsurface pressure. The waterflood has been conducted waterflood operationssince 1954, and since 1971 at a rate to halt subsidence. No earthquakes on the Newport-InglewoodFault zone, or any other fault zone, have been attributed to the waterflood operation. This history isvalidated by the National Research Council study which found, “the potential for felt inducedseismicity due to secondary recovery and EOR is low” (NRC 2012). As part of the CSDconditions, ground motion, vibration, and seismicity are monitored to determine whether there is aconnection. In the two years of monitoring so far, there has been no connection between oil fieldoperations, including the waterflood, high-rate gravel pack, or high-volume hydraulic fracturingoperations, and seismicity, vibration, or ground movement.Petersen and Wesnousky (1994) evaluated all seismic events greater than Magnitude-2 on theNewport-Inglewood Fault zone, and determined that most epicenters are located at depthsbetween 3.5 miles and 12 miles depth (Petersen and Wesnousky 1994, Hauksson 1987). Incomparison, the waterflood operation at the Inglewood Oil Field extends to depths of up to3,000 feet (0.57 mile) and the deepest hydraulic fracturing occurs at less than 10,000 feet depth(1.9 miles). Therefore, any effects of oil field operations are much shallower than the zonestypically associated with earthquake epicenters along the Newport-Inglewood Fault zone.4.6 Methane4.6.1 Subsurface Occurrence of MethaneAs described in Chapter 2, the Los Angeles Basin is the richest oil basin in the world based on thevolume of hydrocarbons per volume of sedimentary fill (Biddle 1991). Most of the oil and gas liestrapped beneath both shales and faults, allowing it to accumulate at depth. However, some surfaceseeps do occur, as at the La Brea Tar Pits, and methane also migrates to the surface.There are three types of gases that may exist within the geological and soil units underlying theactive surface of the Inglewood Oil Field, including biogenic (swamp or sewer) gas, thermogenic(field) gas, and processed natural (or piped) gas.Biogenic gas is primarily methane with carbon dioxide and sulfide gases that result fromdecomposition of organic material, such as from former marshy areas or from sewers. Althoughbiogenic gas contains of mostly methane and carbon dioxide, these gases also consist of lesser4-36 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

131. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldamounts of ethane, propane, and butane, as well as trace amounts of hydrogen sulfide andammonia. In the active surface field area, marshy areas were formerly present immediately northof the Baldwin Hills, in the former floodplain of Ballona Creek (Hsu et al. 1982). In addition, thelarge-diameter (approximately 15-foot) City of Los Angeles North Outfall Replacement Sewerunderlies the active surface field boundary. Both of these features are potential sources ofbiogenic gas.Thermogenic gas is generated at depth when increased temperatures and pressures alter organicmaterial to form gases. Similar to biogenic gas, thermogenic gas contains a broad range of gascomponents including methane, ethane, propane, and butane, as well as trace amounts of toxicgases, including hydrogen sulfide. Activities at the Inglewood Oil Field produce oil andassociated thermogenic gas.Natural gas at the field is processed and sold to the BP Carson refinery, sold to SouthernCalifornia Gas Company, or utilized for field use. Processed natural gas began as thermogenicgas derived from the oil and gas producing zones, and then had most non-methane componentsremoved and reused.These various types of gases exhibit distinct chemical characteristics, which permits “finger-printing” of gases, or differentiation between gas types (California Public Utilities Commission2004).4.6.2 Regulatory Framework for MethaneDue to the probability of methane gas releases from naturally occurring thermogenic andbiogenic sources in this prolific oil and gas province, the City of Los Angeles has established azoning ordinance identifying two zones, a Methane Zone and a Methane Buffer Zone(Figure 4-7). Special requirements for new construction, existing construction, and monitoringfor methane have been established for these zones. The Baldwin Hills are not in the City of LosAngeles, and therefore are not classified on the methane map. However, the field is surroundedby such zones, and there is likelihood that methane conditions beneath the field are consistentwith the relatively high background levels of methane in the Los Angeles Basin.October 2012 Cardno ENTRIX Environmental Effects 4-37Hydraulic Fracturing Study_Inglewood Field_10102012.docx

132. Hydraulic Fracturing Study PXP Inglewood Oil Field Source: City of Los Angeles 2004 Figure 4-7 Methane Zone Map4-38 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

133. Hydraulic Fracturing StudyPXP Inglewood Oil FieldFollowing an explosion at the Ross Department Store in the Wilshire-Fairfax district of LosAngeles, and in an effort to avoid land use conflicts between oil field operations and urbanenvironments, Senate Bill 1458 (Roberti) in 1986 directed the Department of Conservation andDOGGR to identify areas with the greatest potential for gas migration into structures, whichcould cause potential health and safety issues. A Study of Abandoned Oil and Gas Wells andMethane and Other Hazardous Gas Accumulations (Geoscience Analytical, Inc. 1986) identifiedeight high risk areas in the Southern California region that have the potential to cause a healthand safety issue. These areas are categorized based on their locations within urban areas, havinga history of seeps, and history of having plugged and abandoned wells within their boundaries.The Inglewood Oil Field was not identified as a high risk area in the study. The areas identifiedinclude: Salt Lake Oil Field (City of Los Angeles – Fairfax/Wilshire District); Newport Oil Field(City of Newport Beach); Santa Fe Springs Oil Field (City of Santa Fe Springs); the RideoutHeights area of the Whittier Oil Field (City of Whittier); Los Angeles City Oil Field (City of LosAngeles); Brea-Olinda Oil Field (City of Brea); Summerland Oil Field (City of Summerland);and Huntington Beach Oil Field (City of Huntington Beach) (Geoscience 1986).Gas samples were collected at all high risk locations in the DOGGR study and analyzed todetermine the hydrocarbon gas content and the origin of the soil gases. Of all the samples collectedand indicating gas seepage, only two had the potential of originating from old oil and gas wells. Inthese two locations (Newport Beach and Huntington Beach) it was suspected that structures werebuilt over old wells that were not plugged and abandoned to current standards. Although these oldwells could have been the cause of the gas seepage, gas analysis indicated that the gas wasbiogenic in nature (i.e., not related to the oil and gas productive zone in the wells) and therefore thewells may have only been a conduit for the shallow biogenic gas (DOGGR, personalcommunication 2008 reported in CSD EIR).Hamilton and Meehan (1992) also examined the causes of methane migration and the explosionin the Ross Store, as well as another natural gas vent in the Fairfax District near the La Brea TarPits. They reported that the methane was thermogenic in origin (that is, from the underlying oil-producing zone), but proposed that an additional scenario could account for the subsurfacemigration of methane: overpressuring of the oil-producing zone, leading to fracturing of thesurrounding rocks and movement of methane along those newly-formed fractures. Theyrecommended that DOGGR monitor injection operations to ensure that injection above thefracture pressure during produced water injection not exceed the formation fracture stress.Chilingar and Endres (2005) have also evaluated methane migration in oil and gas producingareas, principally the many urban oil fields in Southern California. They conclude that “virtuallyall leaks can be traced to the poor well completion and/or abandonment procedures (i.e., poorcementing practices).” They advocate the evaluation of the integrity of old wells in the urbansetting as a means to reduce this risk.DOGGR reviews all applications for water injection wells under the authority of the UICprogram. Injection wells for oil and gas development are Class 2 wells in this program, andDOGGR must evaluate the proposed injection pressures, the surrounding geology, and the wellintegrity of wells within one-quarter mile of any new proposed injection well. Because the fieldis contiguous and not interspersed with urban and residential development, the active InglewoodOil Field is well positioned to address these issues in the Baldwin Hills. Because the field isOctober 2012 Cardno ENTRIX Environmental Effects 4-39Hydraulic Fracturing Study_Inglewood Field_10102012.docx

134. Hydraulic Fracturing Study PXP Inglewood Oil Fieldactive, it ensures that any unidentified issues will be addressed during field development, incomparison to orphan wells elsewhere in the state for which there is no identified owner.4.6.3 Gas Monitoring Prior to Hydraulic Fracturing at the Inglewood Oil FieldBackground soil gas methane concentrations throughout Southern California are typically50 parts per million volume (ppmv) or less, although in Los Angeles certain areas are known tohave higher background concentrations and have been identified on City Methane Zone Maps.Since 2007, PXP has conducted annual soil gas surveys throughout the Inglewood Oil Field totest for methane concentrations and potential gas leaks from abandoned and idle wells. In 2007,GeoScience Analytical, Inc. sampled 94 locations, probing soil to a depth of four feet. Themajority of these sampling locations were in the vicinity of idled or abandoned wells. Soil gaseswere extracted from each of the soil probes and transported to the laboratory for analyses ofC1 (methane) up to C7 hydrocarbons, and hydrogen sulfide. The same 94 sample locations weretested in 2008 and 2009, with the addition of two other sites (GeoScience Analytical, Inc. 2009).Figure 4-8 depicts the sampling locations.Methane concentrations detected in 2007 ranged from 1.0 ppmv to a high of 981,400 ppmv in thecase of location #7, located near well LAI 1-130, which was an idled well. Given the high value forthis location, additional soil gas vapor testing was done at 12 sites located around well LAI 1-130.The results of this additional sampling indicated that the source of the gas was most likely wellLAI 1-130. The well was subsequently abandoned to the current DOGGR standards.4.6.4 Gas Monitoring After High-Volume Hydraulic FracturingSoil gas testing was conducted again in 2011, following the high-volume hydraulic fractureoperation of VIC1-330 in early September. During this sample event, 31 soil samples were takenand tested for C1 to C7 hydrocarbons and hydrogen sulfide. Of the samples tested, only two hadreadings greater than 500 ppmv (1,346 and 551 ppmv); both of which were well under the levelfor concern (12,500 ppmv) (GeoScience Analytical, Inc. 2011). GeoScience Analytical, Inc.concluded that the soil gases detected on the field were most likely the result of bacterialdecomposition of crude oil in the near surface soils, i.e. biogenic (GeoScience Analytical, Inc.2011). Isotopic analysis of three of the shallow soil gas samples was conducted to validate thisfinding. Carbon and hydrogen isotopic ratios were measured, and the results confirm a biogenicsource for shallow soil gas (Figure 4-9).There was no detected correlation between the hydraulic fracturing operation and the detectedsoil gas on the field.4-40 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

135. " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " " "" " " " " " " " " " " " " " " " "" " " " " "" " " " " " " " " " " " " " " " " " " " " " " "´ LEGEND " Fi gure 4- 8 "

136. Hydraulic Fracturing Study PXP Inglewood Oil Field4.6.5 Groundwater Monitoring for Methane after Hydraulic FracturingMethane in groundwater was tested during the quarterly sampling conducted on the Inglewood OilField (see Section 4.2). Groundwater was never measured for methane prior to high-volumehydraulic fracturing. Samples collected after high-volume hydraulic fracturing detected dissolvedmethane in all but one well (MW-7), at concentrations ranging from 0.01 to 9.7 mg/L. Wells MW-8, MW-11A, MW-11B, and MW-13 are located across the center of the field, and hadconcentrations ranging from 3.5 to 9.7 mg/L methane; all other concentrations were below0.190 mg/L. Methane in water is not toxic and therefore, there is no drinking water standard(MCL) established. The City of Los Angeles methane zoning ordinance does not address methanein groundwater; the ordinance only addresses levels in soil gas and applies construction standards(Ordinance No. 175750). In water supplies, methane volatilizes from water, and at very highconcentrations can displace oxygen. The U.S. Office of Surface Mining considers 28 mg/L in awater supply well as indicative that action be taken to reduce the concentration before use.Concentrations below 10 mg/L are considered safe, and between 10 and 28 mg/L the U.S. Officeof Surface Mining suggests monitoring. The U.S. Bureau of Land Management also lists 10 mg/L as a safe concentration (U.S. Office of Surface Mining 2001). Therefore, all methane detections noted in groundwater samples within the oil field were within the level considered safe for any conditions. None of the water beneath the Baldwin Hills is used as a water supply, nor does it supply water at a yield suitable for a water supply. Based on isotopic analysis of the dissolved methane in groundwater, it is thermogenic (from the oil-bearing formation) in origin, whereas detections in shallow soil gas are biogenic in origin (Figure 4-9).Figure 4-9 Methane Isotopic Results Therefore the methane in water and the methane in soil gas at the Inglewood Oil Field have differentsources and are not in continuity. There are shallow occurrences of oil in the Investment Zone,within the Pico Formation, that are not commercially produced. Since these untapped zones are inclosest proximity to the water-bearing zones, and the occurrence of methane is pervasive in themonitoring results, it does not appear to be related to oil and gas production activity. Theoccurrence is also not correlated to the locations of high-volume hydraulic fracturing. None of thelevels detected are at concentrations that exceed levels considered safe, and none trigger furtheraction under current regulations.4-42 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

137. Hydraulic Fracturing StudyPXP Inglewood Oil Field4.6.6 Methane Emissions and Climate ChangeNational IssueMethane is the simplest hydrocarbon (alkane), consisting of one carbon and four hydrogenatoms. Methane is the main component of natural gas, typically over 90 percent by volume, andis one of the most abundant naturally-occurring organic compounds on earth. Pure methane iscolorless, odorless, and nontoxic, but highly flammable, which makes it an attractive clean-burning fuel with a “carbon footprint” about 50 percent lower than coal when used to generateelectricity. Since methane is 44 percent lighter than air, it dissipates upward when released.However, although nontoxic, methane is a simple asphyxiant and may displace oxygen inenclosed spaces and may also form explosive mixtures with air under certain conditions, thuspresenting hazards. Methane is a greenhouse gas with an IPCC GWP coefficient of 21 relative tocarbon dioxide. This means that methane has 21 times the averaged relative radiative forcingeffect of CO2 (USEPA 2011a, CCAR 2009).A public concern related to hydraulic fracturing deals with methane gas that can escape into theatmosphere as a result of hydraulic fracturing operations and contribute to climate change. It iscommonly recognized that methane gas can potentially escape as fugitive emissions during wellcompletion. Large volumes of water are forced under pressure into the ground to fracture a rockformation and increase gas flow. A large portion of this water returns to the surface as flowbackwater within the first several days to weeks after injection. The flowback water is accompaniedby quantities of methane that exceed the amount that can be dissolved within the flowback fluids.To assist in minimizing fugitive emissions at the Inglewood Oil Field, all flowback wateraccompanied by methane gas is piped to portable 500 bbl tanks connected to a South Coast AirQuality Management District (SCAQMD) permitted vapor control system. This is standardpractice for oil operations throughout the Los Angeles Basin but differs from the air qualitypolicies in shale gas producing states where in most cases, until recently, emissions from theflowback operations were largely unregulated. The rate of methane released with flowback fluidcorresponds to the initial production rate and pressure of a well. Methane is also released during“drill-out,” which is the stage of developing shale gases and oil in which the plugs that are set toseparate fracturing stages are drilled out to release gas and/or oil for production. Fugitivemethane emissions might result from equipment leaks and routine venting from pressure reliefvalves that are designed to purposefully vent gas (Howarth et al. 2011).Untreated raw gas can contain some hydrogen sulfide (H2S) which is highly odorous – the“rotten egg” smell – and the H2S is toxic in high enough concentrations. Other natural sources ofhydrogen sulfide include decaying organic matter under anaerobic (oxygen deprived) conditions.While hydrogen sulfide presents risks to oilfield workers, it is not considered a public safety riskdue to safety zones between drilling activities and the general public which provide adequatedistances for atmospheric dispersion in the event of leaks.Relevance to Inglewood Oil FieldThe Inglewood Oil Field operates in compliance with the requirements of the SCAQMDpursuant to Rules 463, 1148.1, 1173, and 1176 as applicable, which effectively control emissionsof methane and other hydrocarbons into the atmosphere. In this regard emissions regulationsrelevant to the Inglewood Oil Field are significantly advanced compared to most shale gasproducing states where, until recently, emissions from the flowback operations wereOctober 2012 Cardno ENTRIX Environmental Effects 4-43Hydraulic Fracturing Study_Inglewood Field_10102012.docx

138. Hydraulic Fracturing Study PXP Inglewood Oil Fieldpredominantly unregulated. The Inglewood Oil Field is in the development stage rather than theexploration stage, so natural gas and produced water are contained in pipelines or enclosed tanks.Most concerns expressed regarding methane emissions to air and their effect on climate changeare from natural gas fields in the exploration phase, where piping and gas treatment and salefacilities are not yet in place, as it is at Inglewood. As required by SCAQMD, there is an ongoingprogram of monitoring and repairing fugitive sources of hydrocarbon emissions. On a generalcomparative basis, air quality regulations in many oil and gas producing states are lesscomprehensive than the regulations adopted by the SCQAMD and apply to oil and gas activitiesat the Inglewood Oil Field.The “carbon footprint” concern has been minimized at the Inglewood Oil Field as a result of itshistoric, stable long-term operation, and extensive local regulatory compliance framework for airquality including greenhouse gases. Unlike drilling operations in other less-regulated westernstates, current SCAQMD regulations prohibit uncontrolled venting of gas to the atmospherewhich effectively mitigates the effects of hydraulic fracturing during well completion.4.7 Other Emissions to AirIn compliance with SCAQMD Rules 463, 1148.1, 1173 and 1176 as applicable, hydrocarbonemissions at the Inglewood Oil Field are controlled and also monitored as described in an AirMonitoring Plan in accordance with Section E.2(d) of the Baldwin Hills CSD. This plan requiresmonitoring for hydrogen sulfide and total hydrocarbon vapors. It also requires that drilling orcompletion operations shut down if monitoring detects concentrations of hydrogen sulfidegreater than 10 ppmv or hydrocarbon concentration of 1,000 ppmv or greater. Constructionequipment and vehicles used for on-road and off-road purposes are also regulated by the CSDunder Sections E.2(j) through E.2(n).The following analyses focus on how the new USEPA hydraulic fracturing rules mesh withcurrent SCAQMD rules, whether SCAQMD compliance comprises “de facto” USEPAcompliance, or whether additional measures (activities, equipment) will be required to complywith USEPA notwithstanding SCAQMD. Applicable SCAQMD rules which prohibituncontrolled emissions of VOC/GHG (e.g., raw untreated natural gas, tank headspace vapors,fugitive hydrocarbon leaks, etc.) are identified below: Rule 463. Organic Liquid Storage Rule 1148.1. Oil and Gas Production Wells Rule 1173. Control of Volatile Organic Compound Leaks and Releases from Components at Petroleum Facilities and Chemical Plants Rule 1176. VOC Emissions from Wastewater Systems40 CFR Part 63 – New Source Performance Standards (NSPS) for New HydraulicallyFractured Wells (drilled after August 23, 2011)To ensure that smog-forming volatile organic compounds (VOCs) are controlled without slowingnatural gas production, USEPA’s final NSPS for VOCs establishes two phases for reducingVOCs during well completion. This approach will provide industry time to order and4-44 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

139. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldmanufacture enough equipment to capture natural gas using a process called green completions,also known as “reduced emissions completions.”USEPA established the phased approach to address concerns raised in comments related to theavailability of equipment and operators to conduct green completions in time to meet compliancedates in the proposed rule.Phase 1In the first phase (before January 1, 2015), industry must reduce VOC emissions either by flaringusing a completion combustion device or by capturing the gas using green completions with acompletion combustion device (unless combustion is a safety hazard or is prohibited by state orlocal regulations). A completion combustion device burns off the gas that would otherwise escape during the well-completion period (combustion generally would occur through pit flaring). Industry may use completion combustion devices to reduce VOC emissions until January 1, 2015, unless state or local requirements prohibit the practice or require more stringent controls (e.g., SCAQMD Rule 1148.1). USEPA encourages industry to begin using green completions during this time.Phase 2Beginning January 1, 2015, operators must capture the gas and make it available for use or sale,which they can do through the use of green completions. A completion device which captures the gas that would otherwise escape during the wellcompletion period will be required. Industry must use completion devices to reduce VOC emissions beginning January 1, 2015. Captured gas must be sent to economic use, either as fuel gas, sales gas, or reinjection. USEPA estimates that use of green completions for the three- to 10-day flowback period reduces VOC emissions from completions and recompletions of hydraulically fractured wells by 95 percent at each well (USEPA 2012d) Both combustion and green completions will reduce the VOCs that currently escape into the air during well completion. Capturing the gas through a green completion prevents a valuable resource from going to waste and does not generate NOX, which is a byproduct of combustion. Methane, a potent greenhouse gas, and air toxics, which are linked to cancer and other serious health effects, also would be significantly reduced as a co-benefit of reducing VOCs.Exceptions for New WellsGreen completions are not required for: New exploratory (“wildcat”) wells or delineation wells (used to define the borders of a natural gas reservoir), because they are not near a pipeline to bring the gas to market.October 2012 Cardno ENTRIX Environmental Effects 4-45Hydraulic Fracturing Study_Inglewood Field_10102012.docx

140. Hydraulic Fracturing Study PXP Inglewood Oil Field Hydraulically fractured low-pressure wells, where natural gas cannot be routed to the gathering line. Operators may use a simple formula based on well depth and well pressure to determine whether a well is a low-pressure well.Owners/operators must reduce emissions from these wells using combustion during the well-completion process, unless combustion is a safety hazard or is prohibited by state or localregulations.SCAQMD Rule 1148.1 – Oil and Gas Production Wells (relevant excerpts below, see entirerule for details) “(a) The purpose of this rule is to reduce emissions of volatile organic compounds (VOCs) from the wellheads, the well cellars and the handling of produced gas at oil and gas production facilities. (b) This rule applies to onshore oil producing wells, well cellars and produced gas handling activities at onshore facilities where petroleum and processed gas are produced, gathered, separated, processed and stored. Natural gas distribution, transmission and associated storage operations are not subject to the requirements of this rule. (d)(6) Effective January 1, 2006, the operator of an oil and gas production facility shall not allow natural gas or produced gas to be vented into the atmosphere. The emissions of produced gas shall be collected and controlled using one of the following: - A system handling gas for fuel, sale, or underground injection; or - A device, approved by the Executive Officer, with a VOC vapor removal efficiency demonstrated to be at least 95% by weight per test method of paragraph (g)(2) or by demonstrating an outlet VOC concentration of 50 ppm according to the test method in paragraph (g)(1). If the control device uses supplemental natural gas to control VOC, it shall be equipped with a device that automatically shuts off the flow of natural gas in the event of a flame-out or pilot failure. (d (7) Except as Rule 1173 applies to components of produced gas handling equipment located within 100 meters of a sensitive receptor, the operator shall repair any gaseous leaks of 250 ppm TOC or greater by the close of the business day following the leak discovery or take actions to prevent the release of TOC emissions to the atmosphere until repairs have been completed.4-46 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

141. Hydraulic Fracturing StudyPXP Inglewood Oil Field (d (8) Effective March 5, 2004, unless approved in writing by the Executive Officer, CARB, and USEPA as having no significant emissions impacts, no person shall: - Remove or otherwise render ineffective a well cellar at an oil and gas production well except for purposes of abandonment to be certified by the California Department of Conservation, Division of Oil, Gas and Geothermal Resources; or - Drill a new oil and gas production well unless a well cellar is installed for containment of fluids.”AnalysisUntil December 31, 2014, compliance with SCAQMD Rule 1148.1 subparts (d)(6)(A) – capture,or (d)(6)(B) – incineration, constitutes compliance with Phase 1 of the new USEPA rule.Beginning January 1, 2015, only capture pursuant to subpart (d)(6)(A) can be used for so-called“green completions” under Phase 2; incineration pursuant to subpart (d)(6)(B) will no longer beallowed by USEPA. Thus, subpart (d)(6)(B) will be superseded by 40 CFR 63 onJanuary 1, 2015. Since PXP presently complies with Rule 1148.1, PXP is also presently in basiccompliance with 40 CFR 63.Other Equipment - NSPS Requirements for New & Modified Pneumatic ControllersPneumatic controllers are automated instruments used for maintaining a condition such as liquidlevel, pressure, and temperature at wells and natural gas processing plants, among other locationsin the oil and natural gas industry. These controllers often are powered by high-pressure naturalgas and may release gas (including VOCs and methane) with every valve movement, orcontinuously in many cases as part of their normal operations.The final rule affects high-bleed, gas-driven controllers (with a gas bleed rate greater than 6standard cubic feet per hour) that are located between the wellhead and the point where gasenters the transmission pipeline. The rule sets limits for controllers based on location. For controllers used at the well site, the gas bleed limit is 6 cubic feet of gas per hour at an individual controller. The final rule phases in this requirement over one year, to give manufacturers of pneumatic controllers time to test and document that the gas bleed rate of their pneumatic controllers is below 6 cubic feet per hour. Low-bleed controllers used at well sites (with a gas bleed rate less than 6 standard cubic feet per hour) are not subject to this rule.The final rule includes exceptions for applications requiring high-bleed controllers for certainpurposes, including operational requirements and safety. The rule also includes requirements forinitial performance testing, recordkeeping and annual reporting.October 2012 Cardno ENTRIX Environmental Effects 4-47Hydraulic Fracturing Study_Inglewood Field_10102012.docx

142. Hydraulic Fracturing Study PXP Inglewood Oil FieldAnalysisSince PXP presently complies with SCAQMD Rule 1173 (Control of Volatile OrganicCompound Leaks and Releases from Components at Petroleum Facilities and Chemical Plants;and Rule 466.1 – Valves and Flanges) PXP is also presently in basic compliance with thissection of 40 CFR 63, notwithstanding particulars and details. This topic will also requirecoverage in the MRRP discussed above.Other Equipment - NSPS Requirements for Storage Vessels at the Well SiteStorage tanks at natural gas well sites are commonly used to store condensate, crude oil andproduced water. These tanks may be subject to two standards: the NSPS for VOCs and the majorsource air toxics standards (NESHAP) for Oil and Natural Gas Production.NSPS RequirementsNew storage tanks with VOC emissions of 6 tons a year or more must reduce VOC emissions byat least 95 percent. USEPA expects this will generally be accomplished by routing emissions to acombustion device. To ensure enough combustion devices are available, the final rule provides a one-year phase- in for this requirement. After one year, owners/operators of new storage tanks at sites with wells in production must comply. Owners/operators at sites with no wells in production will have 30 days to determine the emissions from a tank; and another 30 days to install controls.Air Toxics RequirementsIn response to public comments, USEPA did not finalize proposed air toxics standards forstorage vessels without the potential for flash emissions, which currently are not regulated underthe NESHAP for Oil and Natural Gas Production. The agency determined that it needs additionaldata in order to establish emission standards for this type of storage vessel. The previousstandards for storage tanks with the potential for flash emissions remain in place. The final rule amends the definition of “associated equipment, “ meaning that emissions from all storage vessels now will be counted toward determining whether a facility is a major source under the NESHAP for Oil and Natural Gas Production.AnalysisSince PXP presently complies with SCAQMD Rule 1176 (VOC Emissions from WastewaterSystems), Rule 463 (Organic Liquid Storage), and Rule 1178 (Further Reductions of VOCEmissions From Storage Tanks at Petroleum Facilities) PXP is also presently in basiccompliance with this section of 40 CFR 63, notwithstanding particulars and details.In particular, during the hydraulic fracturing process, any fluid flowback is captured in a closedsystem diverted to a portable 500 bbl. tank connected to a SCAQMD-permitted hydrocarbonvapor control system (activated carbon canisters). While PXP currently logs and reports theperformance of this system to SCAQMD pursuant to the rule, this topic also requires coverage inthe MRRP discussed above. Also, all aboveground stationary tanks are vapor tight and connectedto existing vapor recovery systems as required by Rule.4-48 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

143. Hydraulic Fracturing StudyPXP Inglewood Oil FieldConstruction Emissions Estimation for Off-road Equipment and On-road VehiclesCardno ENTRIX has estimated mass emissions of criteria pollutants and greenhouse gases(GHG) for off-road equipment and on-road vehicles using emission factors published by theSCAQMD (SCAQMD 2008) and USEPA (USEPA 2011e, 2011f). The project schedule andequipment/vehicle list provided by PXP and Halliburton served as the basis for the analysis. Theresults of the analysis are presented in the emissions thresholds and summary Tables 4-2, 4-3,and 4-4 contained in this section (SCAQMD 2011). As shown in the tables, the estimatedemissions are well below the daily limits set by the SCAQMD.Table 4-2 Emissions Thresholds – South Coast AQMD Temporary Construction Permanent Operation1 Criteria Pollutant lbs/day lbs/dayVolatile Organic Compounds (VOC as CH4) 75 55Carbon Monoxide (CO) 550 550Oxides of Nitrogen (NOX as NO2) 100 55Sulfur Dioxide (SOX as SO2) 150 150Respirable Particulates (PM10) 150 150Fine Particulates (PM2.5) 55 55Source: SCAQMD 20111 Does not apply to this project (not a permanent stationary source)Table 4-3 Estimated Emissions of Criteria Pollutants Maximum Threshold Total Criteria Pollutants lbs/day lbs/day tonsVolatile Organic Compounds (VOC as CH4) 2.0 75 0.007Carbon Monoxide (CO) 13.8 550 0.048Oxides of Nitrogen (NOX as NO2) 13.8 100 0.048Sulfur Dioxide (SOX as SO2) 0.01 150 0.000Combustion Particulates (C-PM10) 0.7 150 0.002Combustion Particulates (C-PM2.5) 0.6 55 0.002Table 4-4 Estimated Emissions of Greenhouse Gases Total Project Daily Greenhouse Gases lbs/day Tons1 Tonnes2Carbon Dioxide (GHG - CO2) 1,320 4.62 4.19Methane (GHG - CH4) 0.03 0.0001 0.0001Nitrous Oxide (GHG - N2O) 0.08 0.0003 0.0002Carbon Dioxide Equivalents (CO2 eqv) 1,344 4.71 4.27Sources: USEPA 2011e, 2011f, CCAR 20091 short ton = 2,000 lbs2 metric tonne = 1,000 kg or 2,204.6 lbsOctober 2012 Cardno ENTRIX Environmental Effects 4-49Hydraulic Fracturing Study_Inglewood Field_10102012.docx

144. Hydraulic Fracturing Study PXP Inglewood Oil FieldMethodologyFor general engine exhaust emissions, the pre-processed SCAQMD factors are outputs from theCalifornia Air Resources Board (CARB) EMFAC and OFFROAD software applications and arethe same conservative factors used in the official statewide URBEMIS and CalEEMod softwareapplications for general land use planning in all 58 counties. For federal relevancy in all50 states, the on-road and off-road factors are consistent with 40 CFR Parts 9, 69, 80, 86, 89, 94,1039, 1048, 1051, 1065, and 1068 as applicable. For diesel off-road equipment with specifiedTiers (1, 2, 3 or 4), engine exhaust emissions are based on applicable standards pursuant to 40CFR 89.112, 13 CCR 2423, and 69 FR 38957-39273.SCAQMD on-road and off-road factors were used for volatile organic compounds (VOC),carbon monoxide (CO), nitrogen oxides (NOX), sulfur oxides (SOX), respirable particulate matter(PM10), carbon dioxide (CO2), and methane (CH4). USEPA factors were used for nitrous oxide(N2O), which are not included in the SCAQMD factors. For specified off-road Tiers, USEPAfactors for VOC, CO, NOX, SOX, PM10, CO2, CH4 and N2O were used. For estimation purposes,fine particulate matter (PM2.5) was quantified as 92 percent of PM10 for consistency with theEMFAC software (SCAQMD 2008). Where applicable, off-road and/or on-road fugitive dustemissions were estimated using USEPA algorithms contained in Chapters 11 and 13 of AP-42(USEPA 2011a, 2011b).Global Warming Potential (GWP) coefficients developed by the Intergovernmental Panel onClimate Change (IPCC) were used to quantify the globally averaged relative radiative forcingeffects of a given GHG, using carbon dioxide as the reference gas. Accordingly, GWPcoefficients of 1 for CO2, 21 for CH4, and 310 for N2O were applied to aggregate GHGs as CO2equivalents (CO2e) (USEPA 2011e, CCAR 2009).4.8 Noise and VibrationNoise attenuation and noise limits for activities occurring on the Inglewood Oil Field areaddressed in Section E.5 of the CSD. This regulation sets hours for quiet drilling on the oil field(as outlined in the associated Quiet Mode Drilling Plan) and time limits for construction anddeliveries to the oil field. Vibration levels are addressed in Section E.6 and must not exceed avelocity of 0.25 mm/second over a range of 1 to 100 hertz (Hz) in any developed area. The CSDrequires that noise and vibration levels be monitored on the oil field to ensure that oil operationsdo not exceed the set thresholds. Table 4-5 lists noise levels for various types of sources forreference (70 dB, which is an annoyingly loud noise level to some individuals is used as anarbitrary base of comparison).4-50 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

145. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable 4-5 Noise Sources and Their Effects DecibelNoise Source Level Human EffectsJet take-off (at 25 meters) 150 Eardrum ruptureAircraft carrier deck 140Military jet aircraft take-off from aircraft carrier with afterburner at 50 feet (130 dB). 130Thunderclap, chain saw. Oxygen torch (121 dB). 120 Painful. 32 times as loud as 70 dB.Steel mill, auto horn at 1 meter. Turbo-fan aircraft at takeoff power at 200 feet 110 Average human pain threshold. 16(118 dB). Riveting machine (110 dB); live rock music (108 - 114 dB). times as loud as 70 dB.Jet take-off (at 305 meters), use of outboard motor, power lawn mower, motorcycle, 100 8 times as loud as 70 dB. Seriousfarm tractor, jackhammer, garbage truck. Boeing 707 or DC-8 aircraft at one nautical damage possible in 8-hr exposuremile (6080 feet) before landing (106 dB); jet flyover at 1000 feet (103 dB); Bell J-2Ahelicopter at 100 feet (100 dB).Boeing 737 or DC-9 aircraft at one nautical mile (6080 feet) before landing (97 dB); 90 4 times as loud as 70 dB. Likelypower mower (96 dB); motorcycle at 25 feet (90 dB). Newspaper press (97 dB). damage 8-hr exposureGarbage disposal, dishwasher, average factory, freight train (at 15 meters). Car wash 80 2 times as loud as 70 dB. Possibleat 20 feet (89 dB); propeller plane flyover at 1000 feet (88 dB); diesel truck 40 mph at damage in 8 hr exposure.50 feet (84 dB); diesel train at 45 mph at 100 feet (83 dB). Food blender (88 dB);milling machine (85 dB); garbage disposal (80 dB).Passenger car at 65 mph at 25 feet (77 dB); freeway at 50 feet from pavement edge 70 Arbitrary base of comparison. Upper10 a.m. (76 dB). Living room music (76 dB); radio or TV-audio, vacuum cleaner 70s are annoyingly loud to some(70 dB). people.Conversation in restaurant, office, background music, Air conditioning unit at 100 feet 60 Half as loud as 70 dB. Fairly quietQuiet suburb, conversation at home. Large electrical transformers at 100 feet 50 One-fourth as loud as 70 dB.Library, bird calls (44 dB); lowest limit of urban ambient sound 40 One-eighth as loud as 70 dB.Quiet rural area 30 One-sixteenth as loud as 70 dB. Very QuietWhisper, rustling leaves 20Breathing 10 Barely audibleSources: Federal Interagency Committee on Noise 1974; 1992 Federal Agency Review of Selected Airport Noise Analysis Issues, Federal Interagency Committee on Noise (August 1992).To address concerns regarding perceptible vibration and noise during high-volume hydraulicfracturing operations, PXP commissioned Behrens and Associates, Inc., a firm specializing innoise and vibration studies, to measure produced vibration during the VIC1-330 and VIC1-635high-volume hydraulic fractures and the TVIC-221 and TVIC-3254 high-rate gravel pack events.The ground-borne vibration survey for each event was completed while all equipment wasoperated under normal loads and conditions.The high-volume hydraulic fracturing treatment on September 16, 2011, was completed on theVIC1-330 well, located in the northwestern portion of the field. Ground-borne vibration levelswere measured in one direction (west) at 10-foot intervals from the high-volume hydraulic fractureoperation (Figure 4-10A). Measured levels indicate that the maximum ground-borne vibrationproduced during the operation was 0.006 inch per second (0.1524 mm/second), as measured 40feet from the operation. At 160 feet from the operation, measured vibration was 0.001 inch persecond (0.0254 mm/second). As shown on the Figure 4-10 below, both of these levels areimperceptible to humans (Behrens and Associates, Inc. 2011). These measurements are also belowthe limit set by the CSD. No noise monitoring was conducted during the VIC1-330 treatment.October 2012 Cardno ENTRIX Environmental Effects 4-51Hydraulic Fracturing Study_Inglewood Field_10102012.docx

146. Hydraulic Fracturing Study PXP Inglewood Oil Field Figure 4-10A Ground Vibration Level Measurements from High-Volume Hydraulic Fracture at VIC1-330The high-volume hydraulic fracture on January 6, 2012, was completed on the VIC1-635 well.Ground-borne vibration levels were measured to the south of the high-volume hydraulic fracturesite at 50, 100, 150, and 200 feet from the well. Measured levels (Figure 4-10B) indicate that themaximum ground-borne vibration was 0.0012 inch per second (0.0305 mm/sec) as measured50 feet from the operation. Similar to the measured level during the prior high-volume hydraulicfracture operation at VIC1-330, at 150 feet from the operation, measured vibration was0.001 inch per second (0.0254 mm/second). These measured levels are imperceptible to humans. Figure 4-10B Ground Vibration Level Measurements from High-Volume Hydraulic Fracture at VIC1-6354-52 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

147. Hydraulic Fracturing StudyPXP Inglewood Oil FieldIn addition to ground-borne vibration measurements, Behrens and Associates, Inc. also tooksound level measurements during the high-volume hydraulic fracturing operation at VIC1-635using a calibrated sound level meter. The microphone was set at five feet above ground surface.The measured noise level at 100 and 200 feet from the operation was 68.9 and 68.4 decibels(dBA), respectively (Behrens and Associates, Inc. 2012a). These are within CSD limits.The high-rate gravel pack treatments were completed on January 7 and 8, 2012, on the TVIC-221 and TVIC-3254 wells, which are located immediately adjacent to one another. The ground-borne vibration levels were measured during the high-rate gravel pack at TVIC-221 and TVIC-3254 at a distance of 50, 100, 200, and 300 feet to the east of the high-rate gravel pack operationsite (Figure 4-10C). Figure 4-10C Ground Vibration Level Measurements from Gravel Pack Operations at TVIC-221 and TVIC-3254Measured levels indicate that the maximum ground-borne vibration produced during the high-rate gravel pack operation was 0.012 inch per second (0.304 mm/second), as measured 50 feetfrom the operation. At 300 feet from the operation, measured vibration was less than 0.004 inchper second (0.102 mm/second). While 0.01 inch per second is the low threshold of vibration thatmay be perceptible to humans (see Figure 4-11), levels measured further from the site areimperceptible. Further, while the vibration level near the well is greater than the 0.25 mm/secondCSD limit, the vibration is decreased to below the limit well away from any developed areas(Behrens and Associates 2012b).October 2012 Cardno ENTRIX Environmental Effects 4-53Hydraulic Fracturing Study_Inglewood Field_10102012.docx

148. Hydraulic Fracturing Study PXP Inglewood Oil Field Figure 4-11 Vibration Sensitivity ChartSound level measurements were conducted at 100 feet and 200 feet from the TVIC-221 andTVIC-3254 high-rate gravel pack operations. The measured noise level at 100 feet was measuredat 68.1 dBA and the noise level at 200 feet was 63.5 dBA (Behrens and Associates 2012b).These are within CSD limits.4.9 Los Angeles County Department of Public Health StudyIn response to health concerns expressed by residents in communities near the Inglewood OilField during the EIR process for the CSD, and at the request of the Second Supervisorial District,the Los Angeles County Department of Public Health (LAC DPH) conducted a communityhealth assessment on the population living in communities surrounding the Inglewood Oil Field.The assessment was designed to determine if the health concerns reflect a higher than expectedrate or an unusual pattern of disease in the concerned communities. The report was sent to threeexternal peer reviewers who found it to be technically sound.The conclusions of the health study indicate that there is not a detectable relationship between theactivities at the Inglewood Oil Field and the health of the surrounding community. Five types ofblood-related cancer (most common types of cancer associated with petroleum exposure) todetermine if operations at the Inglewood Oil Field had any adverse impact on cancer rates in the4-54 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

149. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldsurrounding community. The study found there was no conclusive evidence or link betweenInglewood Oil Field activities and cancer rates in the community. The report acknowledges that thedata cannot determine whether there is a small adverse health effect, nor can the data address thecontribution of other, non-quantifiable health-related issues such as smoking, lack of exercise, andsocial determinants of health (LAC DPH 2011). As described in Chapter 7, conventional hydraulicfracturing and high-rate gravel pack operations have occurred at the field for several years alongwith other oil and gas development activity. Any prospective impact from these operations wouldhave contributed to the assessment’s baseline findings. The Health Study indicates that operationsat the field have not had an adverse effect on the health of the local community.The Health Assessment included five components, each of which is summarized below: An analysis of mortality (death) rates based on data reported on death certificates; An analysis of rates of low-birth-weight births based on data reported on birth certificates; An analysis of rates of birth defects based on data collected by the California Birth Defects Monitoring Program; An analysis of cancer rates based on data compiled by the University of Southern California (USC) Cancer Surveillance Program; and A community health survey of self-reported illness, including asthma and other health concerns.The report of the Health Assessment (LAC DPH 2011) included conclusions for the first fourcomponents. The community health survey of self-reported illness was postponed to allowenough time to evaluate the effects of continuous drilling and released in April 2012.4.9.1 MortalityFrom 2000 to 2007, the mortality rate for all causes of death was 731.9 deaths per100,000 persons in the Inglewood Oil Field communities and 751.7 deaths per 100,000 personsin Los Angeles County, after adjusting for age and the racial/ethnic distribution of the underlyingpopulations. Although the mortality rate appears lower in the Inglewood Oil Field communities,there was no statistically significant difference in the mortality rates for all causes of death, afteradjusting for age and race/ethnicity.The differences in mortality rates for the leading causes of death and premature death do notappear to be related to the geographic location of the Inglewood Oil Field communities. Many ofthe differences observed within these communities are common in Los Angeles County andrepresent a significant public health challenge throughout the county. The disparities in mortalityrates can best be addressed by targeting the underlying causes of these disparities.4.9.2 Low Birth WeightAfter adjusting for race/ethnicity, the rate of low-birth-weight births was 7.2 per 100 live birthsin the Inglewood Oil Field communities and 7.0 per 100 live births in Los Angeles County as awhole. There was no statistical difference in the rates of low-birth-weight births in the InglewoodOil Field communities compared to Los Angeles County, after adjusting for race/ethnicity. Therewere differences in rates of low-birth-weight births among racial/ethnic groups with AfricanOctober 2012 Cardno ENTRIX Environmental Effects 4-55Hydraulic Fracturing Study_Inglewood Field_10102012.docx

150. Hydraulic Fracturing Study PXP Inglewood Oil FieldAmericans having the highest rates of low-birth-weight births in the Inglewood Oil Fieldcommunities as well as in Los Angeles County. These disparities in low-birth-weight birthsrepresent another significant public health challenge throughout the county.4.9.3 Birth DefectsFor 28 of the 29 categories of birth defects, there was no statistically significant difference in theInglewood Oil Field communities compared to Los Angeles County as a whole. Babies born inthe Inglewood Oil Field communities between 1990 and 1997 were slightly more likely (1.2times as likely) to be born with a limb defect compared to babies countywide. Limb defects arenot known to be caused by exposure to petroleum products. Since multiple comparisons weremade, the increase may be explained by statistical chance.4.9.4 CancerThe analysis found no evidence of elevated rates of acute myelogenous leukemia (AML), thetype of cancer most definitively linked to petroleum products (benzene) or three of the othertypes of blood-related cancer for any of the race/ethnic groups examined. There was an excessrisk of chronic myelogenous leukemia (CML) in non-Hispanic whites based on the occurrence oftwo cases above the expected number in 2000 through 2005. CML has not been consistentlylinked with exposure to petroleum products from oil fields or refineries. These two additionalcases of CML may be explained by statistical chance, because the analysis examined multiplecomparisons. Furthermore, in most of the studies examining this issue, occupational exposure tospecific petroleum-based chemicals, such as benzene, was measured, rather than residentialproximity to oil wells.4.9.5 Community SurveyThe community survey was developed to quantify self-reported illness and environmental concernsamong residents living near the Inglewood Oil Field. The community was defined by a 1/5-milebuffer around the oil field and participants were randomly selected. Surveying was conducted bytelephone in both English and Spanish. A total of 1,020 residents participated. The survey resultswere compared to a health survey conducted for all of Los Angeles County in 2007 to provide acomparison between those living in proximity to the Inglewood Oil Field and residents of thecounty as a whole. The results indicated that the prevalence of health conditions reported byrespondents to the Inglewood Oil Field survey were similar to those in Los Angeles County, withthe exception that more reported high blood pressure/hypertension in the area around theInglewood Oil Field than in the Los Angeles County survey. The survey also found that theracial/ethnic disparities that exist in Los Angeles County were also reflected in the Inglewood OilField community (greater African Americans report hypertension and heart disease and the46 percent of respondents in the Inglewood Oil Field community survey were African Americancompared to 9 percent in the Los Angeles County survey. Other issues addressed in the surveywere smoking (13 percent of respondents reported smoking), eating fast food more than once perweek (38 percent), and being obese or overweight (26 percent and 39 percent respectively).With regard to the Inglewood Oil Field, participants were asked about the presence of offensiveodors, illnesses caused by outdoor air pollution, and noise. Of the respondents, 86 percent did notnotice any odors, and of those that did report odors, only 1.3 percent indicated concern that theodor was caused by the oil field. While 58 percent of respondents indicated concerns about air4-56 Environmental Effects Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

151. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldpollution, only 14.5 percent reported having an illness or symptom in the past year caused bypollution in the air outdoors. This percentage is slightly less than the percentage reported by LosAngeles County residents as a whole (17.5 percent). In regard to noise, participants were askedhow much they were bothered by noise from six neighborhood sources: (1) cars and trucks,(2) airplanes, (3) garden equipment, (4) neighbors (including loud music, crying children, orbarking dogs), (5) construction, and (6) oil field operations. Of the six sources, noise from the oilfield was reported least frequently (LAC DPH 2012).4.9.6 Health Assessment Limitations and RecommendationsThe Health Assessment (LAC DPH 2011) noted limitations and a recommendation. Thelimitations were as follows: The analyses cannot confirm whether exposures to chemicals from oil drilling activities at the Inglewood Oil Field may be associated with a small increase in the risk of mortality, low-birth weight births, birth defects, or cancer among specific individuals living nearby, because epidemiological investigations of this type are more conclusive with larger sample sizes (more cases to analyze). The analyses do not take into account other important determinants of health such as behavioral risk factors (such as smoking and physical activity), social factors (such as community resilience, education, income, and access to health care) since these data were not available on the birth certificates, death records, or cancer registry records. The analysis cannot establish causal relationships between emissions from oil drilling activities and specific causes of death because of the lack of information on the individual levels of exposure to emissions that could establish dose-response curves and temporal relationships as well as the multitude of other risk factors that influence these disease outcomes. For example, a high-rate of mortality from asthma in the community adjacent to the Inglewood Oil Field would not prove that the oil field operations are causing asthma since there are many other potential causes, such as exposures to traffic-related air pollution, tobacco smoke, or adverse environmental conditions in the home. Alternatively, a normal or low rate of mortality from asthma would not prove that the Inglewood Oil Field is safe, again because of the many other factors that influence the rate. Thus, these results should be interpreted with caution.All of the conclusions of the health study indicate that there is not a detectable relationshipbetween the activities at the Inglewood Oil Field and the health of the surrounding communityand that the occurrences of diseases of concern and mortality rates in the community areconsistent with the rate of occurrences throughout the Los Angeles Basin. In other words, areaswith no oil field operations were determined to have roughly the same mortality rate as thesurveyed community around the Inglewood Oil Field. However, the report acknowledges that thedata cannot determine whether there is a small effect, nor can the data address other health-related issues such as smoking, exercise, and social determinants of health. Because of theselimitations, the Health Assessment recommends that local community health and safety would bemore appropriately assessed by careful monitoring of the Inglewood Oil Field operations toensure compliance with regulations and standards. In this regard, the CSD provides forEnvironmental Compliance Coordinator inspections and the annual Environmental QualityAssurance Program audit.October 2012 Cardno ENTRIX Environmental Effects 4-57Hydraulic Fracturing Study_Inglewood Field_10102012.docx

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153. Chapter 5Regulatory Framework5.1 Introduction: Local Source of Energy in the Context of Community ConcernsSince high-volume hydraulic fracturing was first used for shale gas development in thenortheastern United States and tight sands development in the Intermountain West, there hasbeen extensive coverage of controversies surrounding its use. Hydraulic fracturing has beencalled “the environmental issue of 2011” by Time magazine, was the subject of an HBO® movie(“Gasland”), and has been at the center of the debate regarding the pace at which the UnitedStates will move towards renewable sources of energy generation.Although most of the news has been about the development of shale gas, tight sands and coalbedmethane deposits, rather than the type of oil and natural gas development that occurs at theInglewood Oil Field, community outreach conducted as part of this study (including one publicmeeting and open comment period) has indicated that many of the concerns surrounding shalegas development are shared by the local community. Questions and concerns submitted by thepublic to Los Angeles County for evaluation in this study were clearly influenced by mediacoverage of controversies in other parts of the country. As identified through the communityoutreach conducted by the County and other studies conducted on hydraulic fracturing operationsin the U.S., the primary environmental and health issues of concern associated with hydraulicfracturing operations include: Potential for contamination of groundwater, including drinking water supplies; Potential for migration of gases and related explosion hazards; Environmental hazards associated with the chemical packages used during hydraulic fracturing operations; Potential for hydraulic fracturing operations to cause earthquakes; Issues related to well integrity; and, Air emissions and greenhouse gas emissions of hydraulic fracturing operations in comparison to regular oil field operations.Many of these concerns are addressed by the existing regulatory framework. However, publicconcern has led to continuing efforts to expand the regulatory framework. This section summarizesthe California regulatory framework as it pertains to oil and gas development, and hydraulicfracturing. The section then summarizes regulations and ongoing studies conducted by the Federalgovernment, and many state governments. Finally, the regulatory framework specific to theInglewood Oil Field, including the additional regulatory overlay of the CSD provisions, isconsidered in the context of state and federal regulations and guidelines.October 2012 Cardno ENTRIX Regulatory Framework 5-1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

154. Hydraulic Fracturing Study PXP Inglewood Oil Field5.2 Regulatory Framework and Government-Sponsored Reviews of Hydraulic FracturingThe federal, state, and local laws, ordinances, regulations, and standards that govern oil fielddevelopment throughout the United States mandate protection or mitigations against the potentialenvironmental impacts of the entire development process. These protections include numerousprovisions in the Clean Air Act, Clean Water Act, Safe Drinking Water Act, Endangered SpeciesAct, and the Oil Pollution Act. Extensive California regulations and local provisions regulatingnuisance also apply. The Inglewood Oil Field is unusual in that it has much greater regulationand oversight of its operations than most other onshore oil fields as a result of the Baldwin HillsCSD, which governs operations at the Inglewood Oil Field.The widespread use of hydraulic fracturing since 1949 has been addressed through this extensiveregulatory framework. Hydraulic fracturing is only one part of the entire oil and natural gasdevelopment process, and does not require, by itself, individual permits or approvals inCalifornia or most other oil and gas producing states. Instead, protections required for theseresources during oil and gas development also apply to the use of hydraulic fracturing in general,as a completion technique.Natural gas drilling activity brought hydraulic fracturing well completion techniques into publicprominence. Shale gas production began and was first proven successful in the current oil andgas-producing states of Texas, Oklahoma, and the Intermountain region, and was viewed as ameans to more securely achieve energy independence. USEPA reviews of high-volume hydraulicfracturing as used for coal-bed methane in 2004 found no justification for additionalenvironmental controls (USEPA 2004). Significant national and public interest in the techniqueemerged however, when the shale gas production reached the Marcellus Shale in the northeastUnited States, especially Pennsylvania. The introduction and application of new technologies ledto a dramatic and rapid increase in exploration activity. Communities largely unfamiliar with theoil and natural gas industry began seeing a large influx of drill rigs and production pumps, andconstruction of new well pads, access roads, and supporting infrastructure such as tanks andsurface impoundments. This led to public concern that environmental issues were not beingadequately addressed. That initial concern was primarily related to the policy of oilfield servicecompanies to maintain confidentiality of the precise chemical names and concentrations used inhydraulic fracturing fluids. This information was considered a proprietary trade secret andoilfield service companies maintained that to reveal the information would put them at acompetitive disadvantage. As a result, several states initiated independent reviews of theenvironmental impacts of hydraulic fracturing with an emphasis on water quality and chemicaldisclosure. The most comprehensive of these reviews was the Supplemental GenericEnvironmental Impact Statement (SGEIS) prepared by the State of New York in 2011, followingrelease of a Generic Environmental Impact Statement which had not specifically regulatedhydraulic fracturing operations as a specific action.Growing public attention has also led the USEPA to allocate increased resources to studying thetechnique. In addition, the USEPA currently has two ongoing reviews, the first focused on thepotential effects of hydraulic fracturing on drinking water supplies, and the second focused onthe definition of “diesel fuel” as part of a review of the 2005 EPAct provisions. The 2005 EPActrecognizes hydraulic fracturing as a well completion process, and requires a UIC permit if the5-2 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

155. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldfluid used for hydraulic fracturing is diesel fuel. The USEPA is the federal agency tasked withimplementing the underground injection control program; however, 42 states (includingCalifornia) have primary enforcement and permitting responsibility under this program. InCalifornia, the Division of Oil, Gas, and Geothermal Resources (DOGGR) is the state agencythat enforces the underground injection control program. The USEPA also recently released airquality rules relative to hydraulic fracturing.Since the passage of the 2005 EPAct, many states have adopted regulations or passed legislationrequiring operators to disclose the composition of the fluids used in the hydraulic fracturingprocess. In 2011, the U.S. Secretary of Energy convened a shale gas Production Subcommitteemade up of university, agency, and NGO experts to address the expanded production of shale gasin a safe manner (www.shalegas.energy.gov). The committee concluded that shale gas can bedeveloped in an environmentally responsible manner, and emphasized among other things theneed for improved public information, improved coordination between shale gas developers andlocal, state, and federal government (including the STRONGER reviews described in thisSection), as well as the kinds of protections that are in place at the Inglewood Oil Field throughthe CSD and other regulations and voluntary reporting.The Inglewood Oil Field is not developing shale gas reserves, but primarily oil reserves withassociated natural gas. As such, some specific regulations, studies, and concerns described in thissection are not strictly applicable to the Inglewood Oil Field. However, they are described in thisreport because they give an important context to the questions and concerns that have been raisedby the community.This section addresses the current regulatory framework governing the use of hydraulicfracturing at the time of writing, and presents the results of various studies prepared by thefederal government and by individual states.5.3 California Regulations5.3.1 DOGGR RegulationsDOGGR was formed in 1915 to regulate all oil and gas activities in the state of California withuniform laws and regulations. DOGGR supervises the drilling, operation, maintenance, andplugging and abandonment of onshore and offshore oil, gas, and geothermal wells. By regulatingthese activities DOGGR aims to prevent damage to: (1) life, health, property, and naturalresources; (2) underground and surface waters suitable for irrigation or domestic use; and (3) oil,gas, and geothermal reservoirs.DOGGR responsibilities are detailed in Section 3000 of the California Public Resources Codeand Title 14, Chapter 4 of the California Code of Regulations. These regulations address issuessuch as well spacing, blow-out prevention devices, casing requirements, plugging andabandonment of wells, maintenance of facilities and safety systems, inspection frequency andreporting requirements. DOGGR programs also include: well permitting and testing; safetyinspections; oversight of production and injection projects; environmental lease inspections; idle-well testing; inspecting oilfield tanks, pipelines, and sumps; hazardous and orphan well pluggingand abandonment contracts; and subsidence monitoring.October 2012 Cardno ENTRIX Regulatory Framework 5-3Hydraulic Fracturing Study_Inglewood Field_10102012.docx

156. Hydraulic Fracturing Study PXP Inglewood Oil FieldCalifornia oil and gas regulations were reviewed in 1992 by the IOGCC and USEPA, at whichtime DOGGR made numerous changes to its program based on recommendations provided as partof the review. For example, DOGGR initiated the Idle-Well Management Program, which aims toreduce the number of long-term idle wells by encouraging operators to reactivate or plug andabandon their idle wells. In addition, DOGGR strengthened its requirements regarding well bondsand pipelines located in environmentally sensitive areas. The State Review of Oil and Natural GasEnvironmental Regulations (STRONGER), a non-profit, multi-stakeholder organization that helpsoil and natural gas producing states evaluate their environmental regulations associated with theexploration, development and production of crude oil and natural gas was formed in 1999, andreviewed California’s regulations again in 2002. The STRONGER Review took note ofCalifornia’s stringent regulations on exploration and production waste management requirementsand Underground Injection Control (UIC) programs. The Review included DOGGR’s publicparticipation and outreach, interagency coordination, abandoned well program, and datamanagement proficiency. During the 2002 review the Stronger Review team did not address, noroffer recommendations for, hydraulic fracturing operations or regulations (STRONGER 2002).While DOGGR’s regulations do not include provisions specific to hydraulic fracturing, its broadauthority over oil and gas operations gas and regulations encompasses the regulation of hydraulicfracturing in order to protect life, health, property, and natural resources including water supply(under Section 3106 of the Public Resources Code).5.3.2 Baldwin Hills Community Standards DistrictThe Baldwin Hills CSD, on Page 9, describes hydraulic fracturing (fracing) by including it in thedefinition of reworking, as follows: “‘Reworking’ shall mean recompletion of an existing well and includes operations such as liner replacements, perforating, or fracing. Reworking also includes redrilling a well that is not deepened or sidetracked beyond the existing well bore.”The CSD does not contain specific provisions which apply only to hydraulic fracturing. Rather,the CSD addresses all environmental aspects of oil field operation, and these aspects also applyto the potential environmental effects associated with hydraulic fracturing. These includeanalysis and provisions that address air quality, water quality, traffic, noise, and impacts to otherenvironmental resource categories. The Baldwin Hills CSD also addresses seismic risk,contingency measures in the event of earthquakes including a requirement for an on-siteaccelerometer to measure effects of seismic activity and trigger contingency actions. The CSDalso analyzes cumulative impacts, and environmental justice. The Baldwin Hills CSD, and theassociated EIR, are incorporated by reference in to this Hydraulic Fracturing Study. TheHydraulic Fracturing Study does not identify a new impact not analyzed in the EIR, nor does itidentify impacts greater in significance than those analyzed in the EIR.5.3.3 Proposed California RegulationsAs stated above, DOGGR does not currently regulate hydraulic fracturing specifically; it doesnot monitor hydraulic fracturing, nor are there reporting or permitting requirements. Duringlegislative budget hearings held in Sacramento in March 2011, representatives from theCalifornia State Department of Conservation (DOC) testified that the agency would promulgate5-4 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

157. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldits own rulemaking process related to hydraulic fracturing. DOGGR hosted seven workshopsbetween May and July 2012, to gather information as part of the rulemaking process. Twoworkshops were conducted in the Los Angeles Basin, one in the City of Culver City on June 12,2012, and one in Long Beach on June 13, 2013. DOGGR plans to circulate the draft regulationsin Fall 2012.In addition to DOGGR’s plans for rulemaking, two bills related to establishing new regulationsfor the practice of hydraulic fracturing were introduced in the California Legislature during the2011–2012 legislative session, Assembly Bill 591 and Senate Bill 1054. The Legislatureadjourned for the year without passing either measure.California Assembly Bill 591, introduced in February 2011, would have required operatorsconducting hydraulic fracturing to disclose the chemical constituents of the fracturing fluid toDOGGR and the public, as well as the following additional information to DOGGR: the source and amount of water used in the exploration or production of the well; data on the use, recovery and disposal of any radiological components or tracers injected into the well; and if hydraulic fracturing is used, disclosure of the chemical information data described above.California Senate Bill 1054 (Pavley), introduced in February 2012, would have required wellowners or operators to notify surface property owners before commencing drilling operationsand hydraulic fracturing operations near or below their property. The bill would have alsorequired that notification be given to DOGGR, the appropriate RWQCB, water supplier, andmunicipal government. The bill would have also extended DOGGR’s permit review time fromthe current 10 days to 15 days and required DOGGR to submit an annual report to theLegislature that includes the number of wells with notices, and an evaluation of compliance forthe notification requirements.5.4 Federal Regulations and Studies5.4.1 Federal RegulationsUnderground Injection Control ProgramAt the federal level, hydraulic fracturing is addressed under the Safe Drinking Water Act(SDWA), which was enacted in 1974. The SDWA gives USEPA’s Office of Water the primaryauthority to protect drinking water. Under the UIC Program of the SDWA, USEPA is required toprotect drinking water from contamination caused by underground injection of fluids. The UICProgram established six classes of injection wells that have purposes ranging from injection ofhazardous materials and sewage, mining fluids, radioactive wastes, oil and gas fluids, and carbondioxide (CO2) sequestration. Class II wells are associated with oil and natural gas productionand include injection of: Fluids brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production (e.g., produced water); Fluids used for enhanced oil or natural gas recovery; and,October 2012 Cardno ENTRIX Regulatory Framework 5-5Hydraulic Fracturing Study_Inglewood Field_10102012.docx

158. Hydraulic Fracturing Study PXP Inglewood Oil Field Liquid hydrocarbons being stored, usually as part of the U.S. Strategic Petroleum Reserve. (USEPA 2011b).As part of the 2005 EPAct, the U.S. Congress included hydraulic fracturing under the authorityof the UIC Program when diesel fuels are used in the fracturing process (Paragraph 1 ofSection 1421(d)). The EPAct did not provide a definition of diesel fuel. As of this writing,USEPA is conducting a review to develop a definition of diesel fuel. Interpretations of “dieselfuel” vary from only the use of 100 percent diesel fuel to the use of any diesel in a chemicalpackage. The review process began in spring 2011 and draft guidance was issued in May 2012.The Inglewood Oil Field does not use diesel fuel, in any amount, for hydraulic fracturing, andavailable records indicate that it was never used.Chemical DisclosureIn 2009, the Fracturing Responsibility and Awareness of Chemicals Act was introduced inCongress. The legislation is commonly referred to as the FRAC Act. The FRAC Act proposesregulating hydraulic fracturing by requiring public disclosure of the chemical constituents usedin hydraulic fracturing fluids. The FRAC Act states that proprietary information must be releasedin the event of a medical emergency. Congress did not take any action of the FRAC Act in the111th session of Congress, (2009 through 2011). The Act was re-introduced in the 112th Congressin March 2011 (Lustgarten 2009). Since the FRAC Act, there have also been other billsdiscussed or introduced in Congress.PXP posts the chemicals used in hydraulic fracturing on the public website FracFocus.org, asdescribed below. This disclosure is consistent with the current regulations in the various stateswith disclosure laws.EPA Regulation for VOC ReductionOn April 17, 2012, the USEPA released new regulations for reducing air pollution from hydraulicfracturing under the National Emissions Standard for Hazardous Air Pollutants (NESHAPS) for oiland natural gas production. The focus is on reduction of volatile organic compounds (VOCs) thatare smog precursor compounds. The new regulations will take effect in two phases: Phase 1: Before January 1, 2014, use a combustion device (flare) or gas capture to reduce VOC emissions. Phase 2: Before January 1, 2015, capture all natural gas for sale. Exceptions are provided for exploratory wells or delineated wells used to determine or define the area of a natural gas reservoir, because exploratory wells are not near a pipeline and unable to bring gas to market, and for low pressure wells that cannot supply a gathering line.The Inglewood Oil Field already exceeds the requirements of this new regulation throughcompliance with SCAQMD provisions as discussed in greater detail in Chapter 4.5-6 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

159. Hydraulic Fracturing StudyPXP Inglewood Oil Field5.4.2 Federal StudiesUSEPA’s Review of the Impacts of Hydraulic Fracturing on Drinking Water - 2004In 2004, the USEPA conducted a study that analyzed the potential for contamination ofunderground sources of drinking water (USDW) caused by hydraulic fracturing of coalbedmethane (CBM) natural gas wells. Like shale gas, CBM is an unconventional source of natural gas.Natural gas extraction wells are drilled into coal seams, the coal seam is dewatered by pumping,and natural gas then can desorb from the coal and be brought to the surface in the well. While notall CBM wells are completed by hydraulic fracturing, a portion of the wells do require theutilization of the technique. CBM resources tend to be at shallower depths than shale gas, andaccordingly have a greater potential for affecting groundwater supplies if wells are not installedand abandoned according to current standards. The USEPA conducted this study in response topublic concern that completing CBM wells by hydraulic fracturing had impacted the quality ofgroundwater, as well as by congressional need for additional data in the development of the 2005EPAct. The USEPA released the results of the study in a report titled Evaluation of Impacts toUnderground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reserves.The USEPA’s 2004 study was two-fold. The first part was an extensive review of existingliterature on the impacts of hydraulic fracturing on USDWs. The USEPA reviewed more than 200peer reviewed publications and interviewed more than 50 employees in the natural gas industry,representatives of state and local agencies, and 40 concerned citizens and groups. The researchfocused on water quality incidents potentially associated with CBM hydraulic fracturing.The second part of the study included a review of incidents of drinking water contaminationthought to be associated with CBM hydraulic fracturing operations. The USEPA reviewedstudies and investigations performed by state agencies in response to citizen complaints.Complaints investigated included: (a) drinking water with unpleasant taste and odor, (b) impactsto wildlife and vegetation, and (c) loss of water in wells and aquifers. After reviewing the dataand incidents, the USEPA concluded that there were no conclusive links between water qualitydegradation in USDWs and hydraulic fracturing in nearby CBM wells, even though thousands ofCBM wells annually were being hydraulically fractured.The USEPA did determine that in some instances, the coal beds being produced were locatedwithin drinking water sources; that is, the coal beds were shallow enough to be within freshwater aquifers. In these cases, fluids and chemicals (including diesel fuels) used for hydraulicfracturing were introduced directly into drinking water sources, because the coal beds werelocated in drinking water sources. As a result of this finding, the USEPA entered into aMemorandum of Agreement in 2003 with three major service companies, which cumulativelyperform 95 percent of the United States’ hydraulic fracturing projects, to eliminate diesel fuelfrom the fracturing fluids that are injected directly into USDWs.The 2004 USEPA study concluded that hydraulic fracturing fluids in CBM wells do not threatenUSDWs. Based on this conclusion, the USEPA recommended against a Phase II study(USEPA 2004).The Inglewood Oil Field does not use diesel for hydraulic fracturing or for high-rate gravelpacks.October 2012 Cardno ENTRIX Regulatory Framework 5-7Hydraulic Fracturing Study_Inglewood Field_10102012.docx

160. Hydraulic Fracturing Study PXP Inglewood Oil FieldUSEPA’s Additional Review of Impacts of Hydraulic Fracturing – 2011Continued technological advancements in the field of hydraulic fracturing and the application ofthe technology to tight sand and shale reservoirs has made the practice more prevalent sinceUSEPA released its 2004 report. Public interest and concerns about the impact of hydraulicfracturing on human health and the environment have grown in direct proportion with increasedmedia and internet attention to the practice. Concerns intensified when hydraulic fracturing wasintroduced in the Marcellus Shale in the northeastern states in approximately 2005. As a result ofincreased public interest, in fiscal year 2010 the U.S. Congress’ Appropriation ConferenceCommittee directed USEPA to conduct research to study the relationship between hydraulicfracturing and drinking water resources. The purpose of the study was to answer two overarchingquestions: (1) Can hydraulic fracturing impact drinking water resources, and, if so, (2) whatconditions intensify these impacts?In February 2011, the USEPA published a Draft Plan to Study the Potential Impacts ofHydraulic Fracturing on Drinking Water Resources, with the objective of identifying the factorsthat have the potential to affect sources of drinking water. The study began with input from anExternal Science Advisory Board, which recommended that the study include: Use of lifecycle framework to identify important research questions; Direct initial research to sources and pathways of potential impacts of hydraulic fracturing on water resources, especially drinking water; Analysis of five to ten in-depth case studies at locations representing the full range of regional variability across the nation; and, Stakeholder engagement throughout the research process.As the study focuses almost exclusively on water resources, USEPA examined how water wasused during each stage of hydraulic fracturing operations and developed related fundamentalresearch questions (Table 5-1).To answer these questions, the USEPA study will use a combination of: retrospective case studies focusing on studying potential impacts where hydraulic fracturing has already occurred; prospective case studies focusing on sites where hydraulic fracturing will occur after research has begun so that site conditions can utilize monitoring before, during, and after hydraulic fracturing operations; and general scenario evaluations which will explore hypothetical situations related to hydraulic fracturing.5-8 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

161. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable 5-1 Examination of Water Use During Hydraulic FracturingWater Use in Hydraulic Fracturing Stage Research QuestionsWater acquisition How might large volume water withdrawals from ground and surface water resources impact drinking water resources?Chemical mixing/site management What are the possible impacts of releases of hydraulic fracturing fluids on drinking water resources?Well construction and injection of fracturing fluids What are the possible impacts from the injection and fracturing process on drinking water resources?Flowback and produced water generation What are the possible impacts of releases of flowback and produced water on drinking water resources?Water treatment and waste disposal What are the possible impacts of inadequate treatment or hydraulic fracturing wastewater on drinking water resources?Source: USEPA 2011dIn each case, the research approach includes literature reviews, gathering and analyzing existingdata, analytical methods, modeling/scenario evaluations, toxicity assessments, and stakeholder-suggested case studies. In addition, the USEPA will summarize the available data on chemical,physical, and toxicological properties of hydraulic fracturing fluid additives to better understandtheir effects and identify data gaps. The chemicals will also be compared to naturally occurringsubstances.The USEPA’s November 2011 Final Study Plan states that they have conducted an initial literaturereview, requested and received information from industry on chemicals and practices used inhydraulic fracturing, discussed initial plans for case studies with landowners and industryrepresentatives, and conducted baseline sampling for retrospective case studies. An interim reportis expected by the end of 2012 and is expected to contain a synthesis of results from the retroactivecase studies and initial results from prospective case studies. A final report will be released in2014, which will include results from the long-term prospective studies (USEPA 2011d).The Inglewood Oil Field has very limited groundwater, no aquifers or water supplies, and isnot located within or near an underground source of drinking water. The water supply for thenearby communities is derived primarily from the Colorado River and from NorthernCalifornia with supplemental groundwater sources all located more than 1.5 miles from the oilfield. As such, the results of the ongoing USEPA Study on the effects of hydraulic fracturingto drinking water supplies are not anticipated to produce results that are relevant to operationson the Inglewood Oil Field.5.5 State Regulations and Studies5.5.1 State-Specific RegulationsHydraulic fracturing that includes diesel fuel is subject to the federal UIC program; this programis implemented by the California DOGGR, consistent with most states that have an oil and gasindustry. The Inglewood Oil Field does not use diesel fuel for hydraulic fracturing.Oil and gas producing states have regulated the practice by focusing on regulations specific to wellbore integrity, well drilling and casing requirements, waste disposal, setback and operatingrequirements, and other conditions. The USDOE has stated that regulation at the state and localOctober 2012 Cardno ENTRIX Regulatory Framework 5-9Hydraulic Fracturing Study_Inglewood Field_10102012.docx

162. Hydraulic Fracturing Study PXP Inglewood Oil Fieldlevel allow laws to be tailored to the local environment, and state regulatory agencies tend to havethe best information, knowledge and experience of the local conditions (USDOE et al. 2009).State Chemical Disclosure RegulationsWhile regulations requiring the disclosure of the chemical constituents used in hydraulicfracturing fluids are under consideration at the federal level, several states have enactedregulations requiring chemical disclosure. Between 2010 and 2011, eight states passed chemicaldisclosure regulations. Wyoming was first to pass a regulation in September 2010, followed byArkansas, Pennsylvania, Michigan, Texas, Montana, Colorado, Louisiana, and West Virginia.Ohio also amended existing laws in July 2012, to include disclosure of chemicals used inhydraulic fracturing. California, Illinois, and New Mexico have proposed rules, and severaladditional states appear to be considering rules.Each state’s regulations are generally consistent, although each differs slightly. For example,some regulations follow the federal proposal that companies can assert that information isproprietary. Other states require disclosure of propriety information to regulatory agencies butnot the public. Table 5-2 summarizes the key provisions of the chemical disclosure regulations ofthe eight states that have enacted chemical disclosure laws.Legislation was introduced in the 2011–2012 California legislative session that would haverequired operators conducting hydraulic fracturing to disclose the chemical constituents of thefracturing fluid to DOGGR and the public. In addition, a rulemaking process that will likelyrequire disclosure of hydraulic fracturing chemicals is currently (as of the writing of this study)underway by DOGGR.The Inglewood Oil Field voluntarily meets the requirements of most state chemical disclosurelaws by posting the information on the publically-available website FracFocus.org, describedbelow. As such, PXP would likely be in compliance with any reasonably contemplatedchemical disclosure laws at either the State or Federal level.Table 5-2 Summary of State Chemical Disclosure Regulations Volume or Date Reporting Concentration ProprietaryState Enacted Enforced By Required Reporting Required Chemical DisclosureWyominga Sep-10 Wyoming Oil and Gas All chemicals used in Volume and Disclosed to regulators; Conservation hydraulic fracturing concentration of the undisclosed to the public. Commission products are disclosed, but not of individual ingredients in chemical mixturesArkansasa Jan-11 Arkansas Department of All chemicals used in None Disclosure not required Environmental Quality hydraulic fracturingPennsylvaniaa Feb-11 Bureau of Oil and Gas All fracturing additives For hazardous chemicals Disclosure not required Management and chemicals only All hazardous chemicals (as defined by OSHA) used on well-by-well basis5-10 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

163. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable 5-2 Summary of State Chemical Disclosure Regulations Volume or Date Reporting Concentration ProprietaryState Enacted Enforced By Required Reporting Required Chemical DisclosureMichigana Jun-11 Michigan Department of All hazardous chemicals For hazardous chemicals Disclosure not required Environmental Quality (as defined by OSHA) onlyTexasa Dec-11 Texas Railroad All chemicals used in For hazardous chemicals Disclosure not required Commission hydraulic fracturing. onlyMontanab Aug-11 Montana Board of Oil All chemicals used on Concentrations of Disclosure not required and Gas Conservation well-by-well basis additivesColoradoc Dec-11 Colorado Oil and Gas All chemicals used in Concentration of all Requires disclosure of Conservation hydraulic fracturing chemicals chemical family only CommissionWest Virginiae Dec-11 West Virginia All chemical used in None Disclosure not required Department of hydraulic fracturing Environmental ProtectionLouisianad Oct-11 Louisiana Department of All chemicals used in Concentration of all Requires disclosure of Natural Resources hydraulic fracturing chemicals chemical family onlyOhioe Jul-12 Ohio Department of All chemicals used in Volume and Disclosure not required Natural Resources hydraulic fracturing concentration of productsSources: a Kusnetz 2011, b Falstad 2011, c Watson 2011, d Hall 2011, eNRDC 2012bSelf-Regulation by IndustryDisclosure of the chemical compounds used in hydraulic fracturing has been one of the primaryissues that aroused public skepticism regarding the safety of hydraulic fracturing fordevelopment of shale gas in New York. As state and federal chemical disclosure laws were indevelopment, the Groundwater Protection Council and Interstate Oil and Gas CompactCommission (IOGCC) in collaboration with the oil and natural gas industry, began examiningmethods to promote self-reporting and self-regulation to fill the gap and respond to publicinterest. This collaboration led to the development and launch of FracFocus (www.fracfocus.org)in 2011, a national hydraulic fracturing chemical registry.FracFocus is managed by the Ground Water Protection Council and IOGCC. The mission ofthese organizations is conservation and environmental protection. The site was created to providepublic access to reported chemicals used for hydraulic fracturing within an area of interest in auser-friendly interface. To help the public put the information into perspective, the site alsoprovides objective information on hydraulic fracturing, the chemicals used, and the purposesthey serve and the means by which groundwater is protected.The high-volume hydraulic fracturing operations completed for this study were reported byPXP on FracFocus and are provided in Appendix B. PXP uses FracFocus on a company-widebasis for all shale oil and natural gas related hydraulic fracturing completions.New York Supplemental Generic EISIn 1992, New York State published a Generic Environmental Impact Statement on the Oil, Gas andSolution Mining Regulatory Program. In general, a Generic EIS (GEIS) is similar to aProgrammatic Environmental Impact Report prepared pursuant to the California EnvironmentalOctober 2012 Cardno ENTRIX Regulatory Framework 5-11Hydraulic Fracturing Study_Inglewood Field_10102012.docx

164. Hydraulic Fracturing Study PXP Inglewood Oil FieldQuality Act (CEQA). The New York GEIS analyzes the environmental impacts of thedevelopment of oil, natural gas, and solution mining resources, and provides options for mitigation.In this way, common or generic impacts of these activities can be considered “pre-evaluated,” andif implemented in conformance with the mitigation conditions no further review is needed. Wheresite-specific actions differ from those evaluated in the GEIS, or where alternate mitigation isproposed, supplemental environmental review is conducted on those site-specific features.New York’s GEIS did not evaluate the effects of high-volume hydraulic fracturing as currentlyapplied in the Marcellus Shale. As a result, the New York Department of Environmental Qualityprepared a Supplemental Generic EIS (SGEIS) to study new technology and techniques relatedto hydraulic fracturing and to identify potential adverse impacts associated with the newtechnologies. The Draft SGEIS was released in September 2009 and in response to publiccomment, a Revised Draft was released in September 2011. The public comment period for therevised draft ended in January 2012, no further iterations have been released.The draft SGEIS and the GEIS noted potential impacts, including water withdrawals, stormwaterrunoff, leaks and spills, and waste disposal. However, no adverse impacts to water resourceswere determined with regard to disposal of waste fluids, except that the disposal of flowbackwater could cause adverse impacts if not treated before disposal.The draft SGEIS also finds that there is no significant impact to water resources likely to occuras a result of underground vertical migration of fracturing fluids through the shale formations,primarily the Marcellus Shale. The shale formations are vertically separated from the potentialfreshwater aquifers by at least 1,000 feet of sandstones and shales with low permeability.Furthermore, a supporting study for the draft SGEIS determined that it is highly unlikely thatgroundwater contamination would occur by fluids escaping from wellbores. The study notes thatregulatory officials from 15 states recently testified that groundwater contamination as a result ofhigh-volume hydraulic fracturing has not occurred (NYSDEC 2011).In 2009, the New York City Department of Environmental Protection (NYCDEP) expandedupon the draft SGEIS, assessing potential impacts specific to the New York City water supplyresulting from natural gas development in the Catskill and Delaware watersheds. Although, theMarcellus Shale in these areas has high gas production potential, these two watersheds provide90 percent of New York City’s water supply. The assessment concluded that there were potentialcumulative impacts from a conceivable large-scale high-volume fracturing program in theCatskill and Delaware watersheds, which could substantially increase the risk to the New YorkCity water supply (NYCDEP 2009). The overall recommendation of the NYCDEP study is thathydraulic fracturing not proceed, although it provides recommended mitigation measures ifhydraulic fracturing does occur. However, in comparison to current and future activities to theInglewood Oil Field, the NYCDEP assessment assumes a high density fracturing effort, which ismuch less than what has been done so far, and is proposed to occur, at the Inglewood Oil Field.There are several relevant comparisons to be made between the conditions evaluated in the SGEIS,the NYCDEP study, and the Inglewood Oil Field. First, New York City’s water supply, as well asmuch of the state, is derived from surface waters in relatively pristine areas and transported inpipes to New York City, and as such the water supply does not require filtration. The InglewoodOil Field, however, has no surface water supplies within 10 miles, no groundwater supplies within5-12 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

165. Hydraulic Fracturing StudyPXP Inglewood Oil Field1.5 miles and no water transportation infrastructure. Ballona Creek is north and west of the field,but is not used for water supply. As is discussed in detail in Chapter 4, beneath the field itself, thereis very limited groundwater, no aquifers or water supplies. The water supply for the nearbycommunities is derived primarily from the Colorado River and from Northern California; withsupplemental groundwater sources all located more than 1.5 miles from the oil field (West BasinMunicipal Water District 2011, Culver City 2010, City of Inglewood 2010, Golden State WaterCompany 2011, California American Water 2011b, see Figure 4-3b). There are no sources ofgroundwater supplying the City of Culver City system (Culver City 2010). The distance fromwater supply systems minimizes any potential risk of water quality contamination from fracturing.Note that even with this consideration, the SGEIS protections are still met by the Inglewood OilField, despite the much lower potential for water quality impacts.Second, the Inglewood Oil Field has recently been the subject of a site-specific EIR, promptedby the proposal of the CSD by the County. Table 5-3 below provides a summary of the findingsof the SGEIS and a comparison of its’ suggested mitigation measures with the Baldwin HillsCSD regulations. In part because the CSD is site-specific, there is a greater amount and type ofprotections required compared to the SGEIS.Table 5-3 Summary of Findings of the SGEIS and Comparison with Baldwin Hills CSD Consistency withResource SGEIS Impact SGEIS Mitigation Inglewood Oil Field CSD Depletion of water supply in streams Passby Flow Requirements No nearby streams for water supply, Cal Water indicates there is sufficient water supply to meet field needs Damage to groundwater resources Pump testing and site-specific Site specific monitoring and reporting; evaluation no local groundwater use and limited isolated occurrence of groundwater Water Contamination from State Pollution Discharge National Pollutant Discharge stormwater runoff Elimination System (SPDES) Elimination System (NPDES permits permit with all associated and compliance with a site specific requirements Construction Stormwater Pollution Prevention Plan are required Water Contamination from spills or Onsite reserve pits, blow-out Secondary containment units, Catch hydraulic fracturing fluids in preventers, secondary containment Basins, containment berms, SPCC,Water Resources wellbores (dikes, pads, liners, sumps) NPDES permit Aquifer/Groundwater Contamination Site specific monitoring and reporting; from Hydraulic Fracturing no local groundwater use and limited isolated occurrence of groundwater Contamination of soil/water from BMPs required as part of SWPPP. improper disposal or transportation BMPs include: operating procedures, of waste solids and fluids and practices to control site runoff, spills/leaks, waste disposal Contamination of NYC unfiltered No hydraulic fracturing within Nothing comparable in California to water supply 4,000 feet of these watersheds NY unfiltered supply. No fracturing in Inglewood occurs closer than 1.5 miles (7,920 feet) from any water resource.October 2012 Cardno ENTRIX Regulatory Framework 5-13Hydraulic Fracturing Study_Inglewood Field_10102012.docx

166. Hydraulic Fracturing Study PXP Inglewood Oil FieldTable 5-3 Summary of Findings of the SGEIS and Comparison with Baldwin Hills CSD Consistency withResource SGEIS Impact SGEIS Mitigation Inglewood Oil Field CSDFreshwater Wetlands Contamination from accidental Site-specific SEQRA review and A system of catch basins around the release required permits. Mandatory field addresses potential for setbacks. accidental releases. Regulated by NPDES program. Habitat fragmentation BMPs to reduce habitat impacts, Site specific special status species surveys and restrictions during habitat protection plan and reporting mating migratory/mating seasons Site specific Stormwater Pollution Prevention PlanEcosystems and Harm to populations due to habitat Well pad reclamation Site specific special status speciesWildlife loss habitat protection plan and reporting Invasive species BMPs to reduce invasive species Site specific special status species habitat protection plan and reporting Monitoring; restoration focused on removal of invasive speciesAir Quality Degradation of air quality Technology standards, restrictions Implementation of Air Monitoring on sulfur content and BTEX class Plan. H2S provisions. Extensive compounds, and public reporting regulatory framework monitored and enforced by SCAQMD that exceeds NY requirementsGHG emissions Increased GHG emissions due to GHG impacts mitigation plan Compliance with AB 32 California drilling and production Climate Change Act, GHG inventories Site specific Air Monitoring PlanNaturally Occurring Exposure of workers and the public Monitoring and testing CSD does not address becauseRadioactive Material to harmful levels of radiation requirements Naturally Occurring Radioactive Material does not occur onsite.Visual Temporary visual impacts from new Visual impacts mitigation plan and Landscaping Plan, Visual Site plan structures design siting requirements (removal of abandoned/unused equipment, licorice paint used on equipment)Screening landscaping, paintingNoise Temporary Impacts from drilling and Noise impacts mitigation plan CSD Section E.5: Noise Attenuation fracturing operations and traffic (noise limits, back-up alarm restrictions, limited delivery hours, construction time limits, construction equipment requirements): Quiet Mode Drilling Plan including sound walls for drilling within 300 feet of residences.Transportation Increased traffic, damaged Road use agreements, There is no anticipated roadways transportation plan, road condition impact/increase to traffic associated assessment with future oil development; addressed in CSD EIR Inglewood Oil Field is an already developed, active oil field, and drilling is at existing pads to the extent feasible. Different from New York case where much of the development footprint is new.Source: NYSDEC 2011, County of Los Angeles 20085-14 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

167. Hydraulic Fracturing StudyPXP Inglewood Oil FieldSTRONGER ReviewsIn 2007 there were 33 states with either oil or natural gas production, 27 of which cumulativelyproduce more than 99.9 percent of the United States’ oil and natural gas (GWPC 2009). TheState Review of Oil and Natural Gas Environmental Regulations (STRONGER) was formed in1999, and is a non-profit, multi-stakeholder organization that helps oil and natural gas producingstates evaluate their environmental regulations associated with the exploration, development andproduction of crude oil and natural gas. Prior to 1999, reviews were jointly conducted by theIOGCC and USEPA. The USEPA, USDOE and the America Petroleum Institute, among others,have provided funding to support the STRONGER reviews of the State regulatory reviewprocesses. In 2009, a Hydraulic Fracturing Workgroup was formed within STRONGER toaddress regulatory issues specific to hydraulic fracturing as a well completion technology.STRONGER reviews in 2011 have tended to focus on oil and gas regulations as they apply tohydraulic fracturing operations. STRONGER developed guidelines for hydraulic fracturing in2010, and reviews of this process in different states generally follow these guidelines. Theguidelines are not detailed, but set forth general guidelines such as: Wells should be properly designed and constructed. Water, wastewater, and waste management should be planned and conducted carefully. Information on the chemicals used in hydraulic fracturing operations should be disclosed and reported.Four states were reviewed in 2011: Oklahoma, Ohio, Louisiana, and Colorado. Pennsylvania wasreviewed in 2010 and Arkansas was reviewed in 2012. There was a STRONGER review forCalifornia in 2002, but the review did not address hydraulic fracturing. The STRONGER statereview process is a non-regulatory program and relies on states to volunteer for reviews.Summaries of the findings for California and the states reviewed from 2010 to 2012 followbelow.CaliforniaCalifornia regulations were initially reviewed by IOGCC and USEPA in 1992, at which timeDOGGR made numerous beneficial changes to its program. For example, DOGGR initiated theIdle-Well Management Program, which aims to reduce the number of long-term idle wells byencouraging operators to reactivate or plug and abandon their idle wells. In addition, DOGGRhas strengthened its requirements regarding well bonds and pipelines located in environmentallysensitive areas. STRONGER reviewed California’s regulations in 2002. The STRONGERReview Team commended DOGGR’s changes since the initial IOGCC/USEPA review and alsotook note of California’s stringent regulations on exploration and production waste managementrequirements and UIC programs. The Review included DOGGR’s public participation andoutreach, interagency coordination, abandoned well program, and data management proficiency.During the 2002 review the Stronger Review team did not address, nor offer recommendationsfor, hydraulic fracturing operations or regulations (STRONGER 2002). This 2002 Reviewindicated that as of 2000, California had approximately 207 operating oil fields and produced840,000 barrels per day, ranking fourth in the United States for oil production. Today, Californiaproduces approximately 550,200 barrels per day with 209 active oil fields (DOGGR 2011).October 2012 Cardno ENTRIX Regulatory Framework 5-15Hydraulic Fracturing Study_Inglewood Field_10102012.docx

168. Hydraulic Fracturing Study PXP Inglewood Oil FieldOklahomaThe Oklahoma Corporation Commission and the Oil and Gas Conservation Division (OGCD)regulate oil and gas operations in the state. Hydraulic fracturing has been conducted inOklahoma for over sixty years. More than 100,000 wells have been hydraulically fracturedduring this time and state regulatory agencies have never identified an instance where hydraulicfracturing has adversely affected groundwater resources. Specifically, the OGCD mapped thebase of fresh water throughout the state and determined that the oil and gas producing zoneswere all much deeper than the base of fresh water in nearly all well locations. Consequently, theOGCD determined that the risk of drinking water contamination resulting from hydraulicfracturing operations is limited. Nonetheless, in 2010, the OGCD recently incorporated newregulatory measures, such as well completion reports, and stricter requirements for the storageand recycling of flowback water, to address this limited risk. The state also initiated a five-yearplan to help manage hydraulic fracturing (STRONGER 2011a).PennsylvaniaThe STRONGER review for Pennsylvania was conducted in 2010. Hydraulic fracturing isregulated by the Department of Environmental Protection (DEP) and the Bureau of Oil and GasManagement (BOGM). Hydraulic fracturing has been used in Pennsylvania since the 1950s andnearly all of the wells drilled since the 1980s have been hydraulically fractured. According to theDEP there are no verified instances of groundwater contamination resulting from hydraulicfracturing. Pennsylvania has more comprehensive regulations than Oklahoma, likely due to theincreased interest in development of the Marcellus Shale. (STRONGER 2010) For example, in2008, BOGM began requiring plans to manage water withdrawal and protect water qualitystandards.As a result of the development of the Marcellus Shale, there have been several surface andsubsurface water control issues, such as water withdrawal and wastewater management. Plansmust indicate how much water will be withdrawn and from where, so that the DEP can ensurethat excessive water withdrawals will not impact water quantity. Produced water recycling isencouraged, and there are strong regulations for fracturing waste generation, transportation anddisposal. The 2010 film “Gasland” highlighted drinking water concerns in the town of Dimock,Pennsylvania. This topic is addressed in Chapter 4, including the results of recent USEPAsampling of local supply wells in Dimock that did not detect contaminants of concern.OhioOil and natural gas operations are overseen by the Ohio Department of Natural Resources(ODNR) and the Divisions of Mineral Resource Management (DMRM). Hydraulic fracturinghas been performed since the 1950s and most wells drilled today are hydraulically fractured. TheSTRONGER review did not identify any instances of groundwater contamination as a result ofhydraulic fracturing. After an independent review of its oil and gas program, the DMRM updatedits regulations pertaining to hydraulic fracturing in June 2010.STRONGER’s 2011 review indicated that Ohio has strong reporting requirements andenforcement tools. They also praised Ohio for thoroughly reviewing potential pathways forgroundwater contamination and increasing staffing levels in the DMRM. In addition,STRONGER commended Ohio for thoroughly reviewing and revising oil and gas regulations in5-16 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

169. Hydraulic Fracturing StudyPXP Inglewood Oil Field2010. STRONGER provided several recommendations on how to strengthen existing regulationsincluding ensuring that sufficient information is available with regard to the chemicalconstituents of fracturing fluids and thoroughly evaluating the need for and availability ofsurface and groundwater for hydraulic fracturing operations in the context of competing wateruses. The overall finding was that the regulations protect water resources. More than800,000 wells have been fractured in Ohio without any verified instances of groundwatercontamination (STRONGER 2011b).LouisianaHydraulic fracturing has been occurring in Louisiana since the 1960s, and is regulated by theLouisiana Office of Conservation. Currently, the Haynesville Shale is the primary area of interestfor hydraulic fracturing operations in the state of Louisiana. This formation must be fractured to becommercially productive. Work permits are required prior to well construction operations,including hydraulic fracturing. Production in the Haynesville Shale began in 1910 and there are1,586 Class II injection wells in this area. There have been no cases of contamination ofunderground sources of drinking water in this area. There are also rules related to the explorationand production of gas in the Haynesville Shale, including setback, noise, vibration, odor, lighting,venting and flaring requirements. Regulations for pressure testing of casing and cementing, as wellas requirements for fracturing fluid flowback storage and disposal, also exist (STRONGER 2011c).ColoradoThe Colorado Oil and Gas Conservation Commission regulates oil and gas operations, includinghydraulic fracturing, which has been occurring in Colorado since 1947. Nearly all active wells inColorado have been hydraulically fractured, and no instances of ground water contaminationhave been confirmed. In 2007, Colorado comprehensively updated its oil and gas regulations,resulting in several new requirements related to hydraulic fracturing including but not limited to:(a) chemical inventories at well sites are required, (b) wells must be cased with steel pipes andsurrounded by cement to prevent fluid and gas leakage, (c) surface casing to a specifiedminimum depth is required for well control and to protect shallow aquifers, (d) setbacks, baselinewater quality sampling and other improved environmental protections, (e) baseline water wellsampling is required, and (f) operators developing coal bed methane (CBM) wells must inspectlocal plugged and abandoned wells within one-quarter mile, sample adjacent water supply wells,and meet other requirements to minimize gas or water leakage. These new regulatory provisionswere all commended by STRONGER (STRONGER 2011d).ArkansasSTRONGER issued its review of Arkansas’ oil and gas regulatory program in 2012. TheArkansas Oil and Gas Commission regulates the industry, and the review concluded that theArkansas program is well managed and generally meets the 2010 Hydraulic FracturingGuidelines. Program strengths included an update of oil and gas rules in 2004, in response to theincreased activity in the Fayetteville Shale. In particular, Arkansas was among the first states inthe nation to establish a system for the public disclosure of chemicals used in hydraulicfracturing operations. The program also has an effective water well complaint protocol, and aweb site with information on hydraulic fracturing, including the areas of the Fayetteville Shalewith active hydraulic fracturing of wells.October 2012 Cardno ENTRIX Regulatory Framework 5-17Hydraulic Fracturing Study_Inglewood Field_10102012.docx

170. Hydraulic Fracturing Study PXP Inglewood Oil FieldThe Fayetteville Shale currently has 4,000 active oil and gas wells, with plans for developmentof over 14,000 more natural gas wells. Both the Arkansas Oil and Gas Commission and theArkansas Department of Environmental Quality have responded to complaints of water wellcontamination within the Fayetteville Shale development area. To date, neither agency has foundany evidence of water contamination from hydraulic fracturing in any of the water wells tested.In addition, the United States Geological Survey office in Little Rock has recently completed awater well testing program in Van Buren County, one of the most heavily drilled counties wherehydraulic fracturing operations have occurred. No evidence of contamination from hydraulicfracturing has been found in the water wells tested.STRONGER recommended that Arkansas require agency notification prior to commencinghydraulic fracturing operations. They also recommended increased funding and staffing of theArkansas Oil and Gas Commission to allow for inspections (STRONGER 2012).SummaryThe STRONGER reviews have focused on regulatory programs, but in each state they alsoevaluated records with respect to contamination of underground sources of drinking water byhydraulic fracturing activity, hence the relevance to this study. The states reviewed in 2011 and2012 have thousands of wells that had been hydraulically fractured. No evidence forgroundwater contamination was found in any of these cases. Reviews had been conducted bystate agencies, federal agencies, and the U.S. Geological Survey.Table 5-4 summarizes the findings of the STRONGER reviews as they relate to hydraulicfracturing. The first column includes strengths of the regulatory program, and the second columnincludes recommendations. In general the comments refer to the regulatory programs themselves.Although the recommendations apply more to regulatory agencies than to specific oil fields, wherethe recommendations are specific to the process of hydraulic fracturing, the Inglewood Oil Fieldwould either meet or exceed these recommendations. In part this is because the Inglewood OilField operates under enhanced environmental controls that require notification, setbacks, and otherprovisions as required by existing regulations, primarily the CSD. In addition, PXP is voluntarilyfollowing chemical disclosure policies that meet those recommended by STRONGER.Table 5-4 Summary of State STRONGER Reviews of Hydraulic FracturingExisting Regulation Strengths as summarized by STRONGER Recommendations from STRONGER Oklahoma Comprehensive regulatory standards for hydraulic fracturing have  Reporting requirements should include volumes of hydraulic been developed which: (see following cells) fracturing fluids and proppants used, pressures recorded, and hydraulic fracture materials used Prohibits pollution of a fresh water from well completion activities  Recycling of flowback water and use of alternate, lower quality water should be encouraged Provides minimum casing and cementing standards  More stringent regulations with regard to notification to the Oklahoma Corporation Commission prior to fracturing operations should be required5-18 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

171. Hydraulic Fracturing StudyPXP Inglewood Oil FieldTable 5-4 Summary of State STRONGER Reviews of Hydraulic FracturingExisting Regulation Strengths as summarized by STRONGER Recommendations from STRONGER Provides strong regulations related to the construction and  The state should procure additional funding to ensure a staffing maintenance of flowback water storage tanks needs are met based on expected needs in the future Requires sampling of hydraulic fracturing waste materials or flowback water to monitor chemicals of concern, primarily salts and TDS Pennsylvania Comprehensive water planning process to ensure that demands  Stronger casing and cementing requirements have been on water resources related to hydraulic fracturing are managed proposed but have not been adopted into law through a planning process Regulations encourage baseline groundwater quality sampling  Encourage more comprehensive baseline studies in situations plans where there are increased risk factors Potential risks must be identified in a preparedness plan, which  Require operators to identify potential conduits for fluid migration requires operators to list chemical additives used and wastes generated Waste characterization is required, including generation,  Require notification prior to hydraulic fracturing. Currently this transportation and disposal tracking information is only transmitted via well completion reports and DEP does not have the opportunity to inspect Strong waste storage tank/pit requirements  Secondary containment requirements for tanks used in hydraulic fracturing regulations Ohio Comprehensive well completion reporting is required and must  Chemical disclosure regulations should be more comprehensive include type and volume of fluid used for stimulation, reservoir than currently exist breakdown pressure, recovered fluid containment methods, etc. Casing and cementing plans are required during the permitting  The state should evaluate the impact of hydraulic fracturing on process surface and groundwater availability Notification is required before hydraulic fracturing occurs  Stricter spill notification regulations Well permits require a comprehensive review of potential pathways for groundwater contamination Pit placement and construction guidelines are implemented through permit conditions Strong enforcement tools Louisiana The use of alternative water sources and the recycling of waste  The minimum depth of surface casing is based on the total depth fluids are encouraged and promoted by recent legal amendments of the well. To protect groundwater, the depth to the USDW and depths of productive zones should also be considered Permitting of commercial waste fluid treatment and reclamation  There are no cementing requirements for well construction or for for hydraulic fracturing water supply purposes has been casing weights or grades. Standards should be developed to meet streamlined to make the process easier anticipated pressures Increase in water source and volume reporting requirements,  Reporting should include materials used, volumes of fracturing coupled with recycling provisions has significantly decreased fluids, proppants used, and fracture pressures water demand Surface water has been sufficiently analyzed and there is  Spill Prevention and Control Plans are currently required, but adequate water available for anticipated hydraulic fracturing additional contingency plans are recommended needsOctober 2012 Cardno ENTRIX Regulatory Framework 5-19Hydraulic Fracturing Study_Inglewood Field_10102012.docx

172. Hydraulic Fracturing Study PXP Inglewood Oil FieldTable 5-4 Summary of State STRONGER Reviews of Hydraulic FracturingExisting Regulation Strengths as summarized by STRONGER Recommendations from STRONGER Colorado Operators are required to keep chemical inventories at all well  To help protect water resources from contamination, standards sites, which must be provided to agencies and health care should be developed for minimum and maximum surface casing providers upon request depths. All past problems related to surface casing in a hydraulically fractured well should be considered when developing this standard. Bradenhead annulus pressure during hydraulic fracturing  Materials used, aggregate volumes of fracturing fluids, proppants operations must be measured and reported in an effort to help used and fracture pressures should be recorded protect groundwater Identification of potential pathways for fluid migration is required in  An evaluation of naturally occurring radioactive material in certain circumstance hydraulic fracturing wastes should be required  The availability of water resources for fracturing operations should be evaluated, as water supply is a significant issue in this arid region. Plans should be implemented to maximize water reuse and recycling if it is determine that water supply is an issue  Requires operators to study and address potential pathways for fluid migration in more detail  Stricter regulations related to providing notification and receiving approval prior to hydraulic fracturing Arkansas Since 2006, AOGC reviewed and revised numerous rules  Notification prior to hydraulic fracturing so field inspectors can concerning environmental and production related concerns better monitor operations and related activities associated with hydraulic fracturing Developed water well complaint protocol, guiding staff towards  Funding to continue support of Arkansas Department of efficient review and response to water well complaints and Environmental Quality and seek resources to better Department identification of laboratory analysis parameters AOGC’s user friendly website informs public of hydraulic  Funding to increase AOGC Staffing Levels to ensure Commission fracturing operations and other pertinent information regarding inspection goals are met hydraulic fracturingSource: STRONGER 2010, 2011a-d, 2012.NRDC’s Evaluation of Hydraulic Fracturing Wastewater and Disclosure RegulationsIn May 2012, the Natural Resources Defense Council (NRDC) published a report analyzingregulations related to wastewater generated from hydraulic fracturing. The report focuses onwastewater disposal methods and regulations in Pennsylvania but notes that the issues raised arerelevant everywhere hydraulic fracturing occurs.The report states that the most common management options for shale gas wastewater arerecycling for continued use during oil and gas operations, treatment and discharge to surfacewaters, storage in impoundments and tanks, and applying it to the land (e.g. dust suppression).NRDC highlights environmental concerns associated with each disposal method, such asaccidental spills when wastewater is temporarily stored in tanks or ponds on-site, inadequatetreatment at publicly owned treatment facilities, or chemicals washing off roadways as a result ofthe land application method. Subsequently, NRDC recommends the following policy changes tostrengthen regulations: regulate discharges from treatment plants more strictly; regulate hydraulicfracturing wastewater as a hazardous waste, either under RCRA or state regulations; only allowinjecting of wastewater with hazardous characteristics into Class I hazardous waste wells, and5-20 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

173. Hydraulic Fracturing StudyPXP Inglewood Oil Fieldstrictly regulate Class II disposal wells in the interim; and prohibit land application and temporarystorage in impoundments and tanks.At the Inglewood Oilfield, produced water is transported by pipeline to the field’s water treatmentplant where it is mixed with other produced water generated at the field, treated, and reinjected intothe oil and gas producing formations. This is in accordance with CSD Condition E.2.(i), whichrequires that all produced water is contained within closed systems at all time. NRDC notes thaton-site recycling can have significant cost and environmental benefits by reducing freshwaterconsumption as well as the amount of wastewater requiring disposal. NRDC also notes thatdisposal by underground injection requires less treatment than other methods and creates the leastrisk of contaminating the environment. NRDC notes that this method can create risks ofearthquakes and can require transportation over long distances, though in the case of the InglewoodOilfield it is transported within the field boundary via pipeline and the existence of the waterfloodoperation significantly reduces concerns of induced seismicity because it injects water in to thedepressurized zones of oil extraction.NRDC encourages on-site wastewater recycling, the method used at the Inglewood Oilfield forbeneficial reuse of its treated produced water, and does not identify any related policyrecommendations directly pertaining to wastewater reuse other than noting that the benefits ofreuse can sometimes be offset by the energy use and generation of concentrated residuals(NRDC 2012a).As noted above, the focus of the NRDC report is primarily hydraulic fracturing in the MarcellusShale and Pennsylvania regulations. In response to the report, in July 2012, the Secretary ofPennsylvania Department of Environmental Protection (DEP) issued a letter stating that “theReport is incorrect and inapplicable to Pennsylvania in many respects.” The letter asserts that thereport incorrectly characterizes wastewater disposal methods currently used in Pennsylvania andthe associated regulations. The letter also mentions that report underestimates the quantity ofwastewater that is recycled and indicates that the NRDC is biased against the industry(Pennsylvania DEP 2012). In turn, the NRDC issued a response letter defending the report andcontinuing to urge Pennsylvania DEP to strengthen their regulations.In addition to assessing wastewater regulations, in a separate article published in July 2012, NRDCconducted a comparison of disclosure regulations for hydraulic fracturing between states related toadvance public notice requirements prior to hydraulic fracturing; disclosure of informationconcerning the geological and environmental context of the wells, comprehensive disclosure aboutthe hydraulic fracturing “treatment” (i.e. pressures, volume and type of base fluids, depths, etc.);and disclosure about the volume of wastewater created as well as its storage, treatment and/ordisposal. The article points to lack of public access to disclosed information even when disclosureregulations do exist, and poor compliance with and enforcement of regulation (NRDC 2012b).5.6 Inglewood Oil Field in State and National Regulatory PerspectiveThe federal, state, and local laws, ordinances, regulations, and standards that govern oil fielddevelopment throughout the United States require protections against the potential environmentalimpacts of the entire development process. These protections range from provisions in the CleanAir Act, Clean Water Act, Safe Drinking Water Act, Endangered Species Act, and throughextensive California regulation addressing air quality, water resources, biological resources, andOctober 2012 Cardno ENTRIX Regulatory Framework 5-21Hydraulic Fracturing Study_Inglewood Field_10102012.docx

174. Hydraulic Fracturing Study PXP Inglewood Oil Fieldcultural resources, and at the local level. The Inglewood Oil Field is unusual in that it has muchgreater regulation and oversight of its operations than most other onshore oil fields as a result ofthe County of Los Angeles CSD.The Baldwin Hills CSD, and the associated EIR, together address most of the issues that are partof a hydraulic fracturing operation, such as truck traffic, water use, community compatibility(noise, light and glare, etc.), air quality, and other environmental resource categories. In addition,the EIR evaluates cumulative impacts, and environmental justice. These two documents areincorporated by reference into this Hydraulic Fracturing Study, which evaluates the effectsmeasured and monitored during the high-volume hydraulic hydraulic fracturing and high rategravel packing operations conducted in 2011 and 2012, as well as past activities of this type. TheHydraulic Fracturing Study did not identify a new impact not analyzed in the EIR, nor did itidentify impacts greater in significance than those analyzed in the EIR.Exacting protective measures and close monitoring are required by the Baldwin Hills CSD andby county, regional and federal agencies. These field-specific reviews and public and agencyinteractions compel PXP to enforce real-time compliance with all environmental standards in theInglewood Oil Field. The long history of oil production in the area provides operators with anexcellent understanding of the local subsurface conditions and reduces standard risks anduncertainties that would be present in new operations.5-22 Regulatory Framework Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

175. Chapter 6 Qualifications of Preparers Daniel R. Tormey, Ph.D., P.G. Hydrogeologist, Geochemist, & Civil EngineerCurrent Position Dr. Tormey is an expert in water and energy. He works with the environmental aspects of allVice President, types of energy and energy development, as well as water supply, water quality, hydrology,Senior Principal sediment transport, and groundwater-surfacewater interaction. He has well-developed skills in framing and analyzing environmental issues, and in communicating complex ideas to a wideDiscipline Areas range of audiences. Noted for the creativity of his approaches, he has conducted numerous Geology studies related to the development of unconventional sources of natural gas, including high- Geochemistry volume hydraulic fracturing of oil and gas shales, and coal bed methane development. Hydrogeology Remediation Technology Dr. Tormey has managed projects on behalf of government regulatory agencies (US Bureau of Fate and Transport Land Management, US Forest Service, Federal Energy Regulatory Commission, US Bureau of Analysis Reclamation, US Army Corps of Engineers, US Office of Surface Mining, California State CEQA/NEPA Lands Commission, California Public Utilities Commission, RWQCB-SD, local agencies) and Environmental Impact for project proponents (PG&E, SCE, oil and gas companies, water agencies, among others). Analysis He has testified in the Federal Court of Claims on water rights and water takings issues. Dr. Sediment Transport Tormey has managed the preparation of 15 Proponents Environmental Assessments for Analysis submission to the California Public Utilities Commission for projects including transmission Civil Engineering lines and pipelines, and power plants fired by natural gas, oil, diesel, coal, and nuclear.Education Dr. Tormey has evaluated environmental aspects and risks of oil and gas development and Ph.D., Geology and transport on many oil and gas fields in California and elsewhere in America, and more than 15 Geochemistry, fields worldwide. He has led studies of the environmental impacts of hydraulic fracturing, water Massachusetts Institute of injection, and other oil and gas practices. He has evaluated beneficial reuse of produced water Technology, 1989 for agriculture, industrial, and restoration of habitat. He has studied carbon capture and B.S., Civil Engineering storage using depleted oilfields as the storage reservoir, as well as the use of CO2 for and Geology, Stanford enhanced oil recovery. He has prepared environmental reports for pipelines carrying oil, University, Stanford, 1983 natural gas, hydrogen, refined products, and biosolids. He has managed or been technical lead on offshore oil and gas projects, including licensing of eight liquefied natural gas (LNG) importProfessional terminals, marine terminals, and platforms (operation, abandonment, and reuse). He hasRegistrations extensive experience in the preparation of environmental reviews supporting acquisition or California Registered divestiture of oil and gas producing facilities and related infrastructure. Geologist No. 5927 He has worked on assessment, remediation, and restoration on many oilfields throughout theAppointed Positions world, and is an expert on benchmarking and applying sound environmental solutions in that arena. He has pioneered bioremediation of oil-impacted soils, and has designed over 15 acres National Academy of Sciences appointed of such treatment cells. He has also considered the overall environmental setting (biological Scientific Advisory Board and cultural resources) of the oilfield in determining appropriate remediation responses. – Giant Sequoia National Dr. Tormey has been technical lead for over two hundred projects requiring fate and transport Monument analysis of chemicals in the environment, including modeling of chemicals in groundwater and Natural Resources surfacewater, study of linked groundwater-surfacewater systems, sediment transport analysis, Management Department, quantification of adsorption/desorption kinetics, air dispersion modeling, among others. His former Executive in Residence – California work with contaminants also includes site assessment, forensic geochemistry, risk Polytechnic University, assessment, feasibility study, and site remediation. Dr. Tormey has served as a technical San Luis Obispo expert in fate and transport issues supporting either litigation and testimony in State Court, and UNESCO World Heritage agency testimony involving petroleum, solvents, metals, pesticides, and plastic components. Site Designation Advisory Dr. Tormey actively pursues volcanology research around the world, with a focus on Council interactions between geophysical variables that affect risk assessment, risk preparedness, and Volcanologist, RED contingency planning. Nacional de Emergencia, Chile DANIEL R. TORMEY, PH.D., P.G.www.cardnoentrix.comwww.cardno.com

176. Megan Schwartz Senior Project ScientistCurrent Position Ms. Schwartz is a senior environmental planner and project manager with a Masters inSenior Project Scientist Environmental Science and Management. She has addressed many controversial issues related to energy development in the southwestern United States and globally. Ms. SchwartzDiscipline Areas has addressed the potential impacts of proposed projects under both the California> NEPA CEQA Planning Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA). She also> Permitting excels at regulatory compliance, including permitting and mitigation planning and> Oil and Gas implementation. She works with electrical local utilities and the oil and gas industry, as well as> Renewable Energy the regulatory agencies with jurisdiction over energy production.> Litigation Support Ms. Schwartz has worked on a variety of energy issues including hydroelectric power including> Environmental Site dam removal on the Klamath River, oil and gas development around the world with a focus on Assessments water quality and community compatibility. She has also evaluated environmental effects ofEducation submarine cable installation, natural gas storage, transmission lines in the southwest and> M.E.S.M. Environmental connecting to wind power in Mexico, and coal-fired power plants being either retired or Science & Management, repowered. Ms. Schwartz has been a technical lead on studies examining potential UC Santa Barbara, 2004 contamination of local groundwater supplies and beneficial reuse options of produced water> B.A. Biological from oil and gas fields. She has also evaluated the composition of additives used for hydraulic Anthropology, fracturing. UC San Diego, 2002 Molly Middaugh Senior Staff ScientistCurrent Position Ms. Middaugh is a senior staff environmental scientist with a background in environmentalSenior Staff Scientist science, economics, and policy. Her experience includes employment in the public, private and NGO sectors. Ms. Middaugh has worked on significant projects related to energy policy, withDiscipline Areas an emphasis on climate change, carbon offsets and international deforestation policy. She has> Environmental a strong understanding of federal environmental regulations and policy that first developed Management, Permitting, when she worked for a member of the U.S. House of Representatives on Capitol Hill, as well and Compliance as for the Energy and Climate Change program of the Center for Strategic and International> NEPA/CEQA Studies, also in Washington D.C.> Permitting Ms. Middaugh has evaluated the environmental impacts of energy and mining-related projects> Litigation Support under the NEPA and CEQA process, as well as obtaining California and federal permits for> Natural Resources these actions. She assists in analyzing and prioritizing environmental risks of oil and gas Damages development. Ms. Middaugh also characterizes the chemical properties of and assesses> Environmental beneficial reuses of produced water. She is currently engaged in the analysis of the chemical Communications composition of fluids used as additives in hydraulic fracturing. She has also analyzed the> Energy and Climate environmental economic consequences in Natural Resource Damage claims. Change PolicyEducation Ms. Middaugh also works as part of the environmental communications team to translate> B.A. Environmental technical scientific documents into more simple and understandable language. Analysis, Pomona College (Magna Cum Laude), 2010

177. Chapter 7Supporting Material and References7.1 Supporting MaterialBehrens and Associates, Inc. 2011. Well VIC1-330 Hydraulic Fracture Operation Ground-Borne Vibration Level Survey.Behrens and Associates, Inc. 2012a. Gravel Pack Operation Ground-Borne Vibration Level Survey.Behrens and Associates, Inc. 2012b. Well VIC1-635 Gravel Pack Operation Ground-Borne Vibration Level Survey Report. January 20.Cardno ENTRIX. 2012. PXP Inglewood Oil Field Groundwater Monitoring Results First Quarter 2012.Fugro Consultants. 2011. Annual Geotechnical Report, Ground Movement Survey, Inglewood Oil Field, Baldwin Hills Community Standards District, Los Angeles County, California. June.Fugro Consultants. 2012. Annual Geotechnical Report, Ground Movement Survey, Inglewood Oil Field, Baldwin Hills Community Standards District, Los Angeles County, California. July.GeoScience Analytical, Inc. 2009. 2009 Abandoned Well Testing Report (CSD Condition E.32) – Inglewood Oil Field. December.GeoScience Analytical, Inc. 2011. 2011 Abandoned Well Testing Report (CSD Condition E.32) – Inglewood Oil Field. December.Halliburton. 2012. Hydraulic Fracturing Report. Prepared for PXP.Matheson Mining Consultants, Inc. 2012a. VIC1-635 Hydraulic Fracturing Surface Ground Motion Monitoring Report. January 4-6.Matheson Mining Consultants, Inc. 2012b. VIC1-330 Hydraulic Fracturing Surface Ground Motion Monitoring Report. September 15-16, 2011.Matheson Mining Consultants, Inc. 2012c. TVIC 221 and 3254 High-Rate Gravel Pack Completions Surface Ground Motion Monitoring Report. January 9-11.Psomas. 2012. Baldwin Hills Community Standards District Ground Movement Survey – 2012. May.October 2012 Cardno ENTRIX Supporting Material and References 7-1Hydraulic Fracturing Study_Inglewood Field_10102012.docx

178. Hydraulic Fracturing Study PXP Inglewood Oil Field7.2 ReferencesAmerican Petroleum Institute (API). 2009. Hydraulic Fracturing Operations – Well Construction and Integrity Guidelines. API Guidance Document HF1, First Edition. October.Associated Press. 2011. Oklahoma still shakin’ from earthquake. November 7. New York Daily News article available online at http://articles.nydailynews.com/2011-11- 07/news/30371543_1_Magnitude-aftershocks-earthquake.Baisch, S.D. Carbon, U. Dannwold, B. Delacou, M. Devaux, F. Dunard, R. Jung, M. Koller, C. Martin, M. Sartori, R. Secanell, and R. Voros. 2009. Deep Heat Mining Basel – Seismic Risk Analysis. Available online at http://esd.lbl.gov/files/research/projects/ induced_seismicity/egs/baselfullriskreport.pdf.Barbat, W.F. 1958, The Los Angeles Basin area, California. In Habitat of Oil: American Association of Petroleum Geologists, L.G. Weeks, ed., pp. 62-77.Bauers, S. 2011. Duke study finds methane in well water near gas drilling sites. The Philadelphia Inquirer article available online at http://articles.philly.com/2011-05- 10/news/29528399_1_shale-gas-water-wells-gas-drilling.Biddle, K.T. 1991. Active Margin Basins. American Association of Petroleum Geologists Memoir 52.California American Water. 2011a. 2010 Consumer Confidence Report: Baldwin Hills. Available online at http://www.amwater.com/files/CA_1910052_CCR.pdf.California American Water. 2011b. 2010 Urban Water Management Plan for the Southern Division – Los Angeles County District. July.California Climate Action Registry (CCAR). 2009. General Reporting Protocol, Version 3.1. Available online at http://www.climateregistry.org/tools/protocols/general-reporting- protocol.html.California Department of Conservation Division of Oil, Gas, and Geothermal Resources (DOGGR). 2011. 2011 Preliminary Report of California Oil and Gas Production Statistics. Available online at www.conservation.ca.gov.California Department of Conservation Division of Oil, Gas, and Geothermal Resources (DOGGR). 2007. Inglewood Field Rules. No. 107-012, 107-014, 107-015.California Department of Water Resources (DWR). 1961. Planned utilization of the ground water basins of the Coastal Plain of Los Angeles County. DWR Bulletin 104.California Division of Mines and Geology (CDMG). 1982. Slope Stability and Geology of the Baldwin Hills, Los Angeles, County, California.7-2 Supporting Material and References Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

179. Hydraulic Fracturing StudyPXP Inglewood Oil FieldCalifornia Public Utilities Commission (CPUC). 2004. Southern California Gas Company’s Application to Value and Sell Surplus Property at Playa del Ray and Marina del Rey (A.99-05-029) Final Environmental Impact Report. Available online at http://www.cpuc.ca.gov/Environment/info/esa/playa/feir/feir_toc.shtml.Casagrande, A., S. Wilson, and E.D. Schwantes. 1972. The Baldwin Hills Reservoir Failure in Retrospect. Harvard University.Castle, R.O., and R.F. Yerkes. 1969. A Study of Surface Deformations Associated with Oil-Field Operations. Report of the U.S. Geological Survey, Menlo Park, CA.Chernoff, G., W. Bosan, and D. Oudiz. 2008. Determination of a Southern California Regional Background Arsenic Concentration in Soil. Department of Toxic Substance Control, Sacramento, CA.Chilingar and Endres. 2005. Environmental hazards posed by the Los Angeles Basin urban oilfields: an historical perspective of lessons learned. Environmental Geology 47 302-317.City of Inglewood. 2010. Urban Water Management Plan.City of Los Angeles, Bureau of Engineering, Department of Public Works. 2004. Methane and Methane Buffer Zones. Available online at http://methanetesting.org/PDF/LA_MethaneZones.pdf.Colorado Oil and Gas Association (COGA). 2012. Does Hydraulic Fracturing Cause Earthquakes? Facts on Geo-Seismic Activity and Natural Resource Development.County of Los Angeles. 2008. Baldwin Hills Community Standards District. Ordinance Section 22.44.142 and Environmental Impact Report.Culver City. 2010. Urban Water Management Plan. Available online at http://www.gswater.com/csa_homepages/documents/CulverCity_2010_UWMP.pdfDeichmann, N., and D. Giardini. 2009. Earthquakes induced by the stimulation of an enhanced geothermal system below Basel (Switzerland). Seismological Society of America 80 (5): 784-798.De Pater, C.J., and S. Baisch. 2011. Geomechanical Study of Bowland Shale Seismicity. November. Available online at http://www.cuadrillaresources.com/wp- content/uploads/2012/02/Geomechanical-Study-of-Bowland-Shale-Seismicity_02-11- 11.pdf.EnCana Oil & Gas (USA) Inc. 2009. Letter to Pavillion residents. Available online at http://www.energyindepth.org/wp-content/uploads/2009/09/wy_pavillion-area- letter_-final-8-28-09-2.pdf.Environmental Data Resources, Inc. 2012. EDR Geocheck Report. June 4.October 2012 Cardno ENTRIX Supporting Material and References 7-3Hydraulic Fracturing Study_Inglewood Field_10102012.docx

180. Hydraulic Fracturing Study PXP Inglewood Oil FieldFalstad. 2011. Montana implements fracking disclosure rules. The Billings Gazette article available online at http://billingsgazette.com/news/local/article_c7f61634-68ec-54b0- ae25-dfffc03c987a.html. January.Federal Interagency Committee on Noise. 1974. Information on Levels of Environmental Noise Requisite to Protect Public Health and Welfare with an Adequate Margin of Safety.Fisher and Warpinski. 2011. Hydraulic fracture-height growth: real data. SPE Paper 145949.Fountain, Henry. 2011. Add quakes to rumblings over gas rush. New York Times article available online at http://www.nytimes.com/2011/12/13/science/some-blame-hydraulicfracturing-for-earthquake-epidemic.html?pagewanted=all .Frolich, C. 2012. Two-year survey comparing earthquake activity and injection-well locations in the Barnett Shale, Texas. Proceedings of the Natural Academy of Sciences. July.Fugro NPA. 2012. InSAR Surveying Technical Report, Baldwin Hills Community Standards District: DifSAR Monitoring Analysis 2011/2012. July.Gardett, P.H. 1971. Petroleum potential of the Los Angeles Basin. In Future Petroleum Provinces of the United States—Their Geology and Potential, American Association of Petroleum Geologists Memoir 15, Volume 1, I.H. Cram, ed., pp. 298–308.Gardner, T. 2012. Dimrock, PA water deemed safe By EPA. The Huffington Post article available online at http://www.huffingtonpost.com/2012/05/11/dimock-pa-water-safe- epa_n_1510035.html. May.Gautier, D., M.E. Tennyson, R.R. Charpentier, T.A. Cook, and T.R. Klett. 2012. Forgone oil in the Los Angeles Basin: assessment of the remaining petroleum in Giant Fields of Southern California. American Association of Petroleum Geologists Annual Convention and Exhibition, April 22-25.GeoScience Analytical Inc. 1986. A Study of Abandoned Oil and Gas Wells and Methane and Other Hazardous Gas Accumulations. California Department of Conservation. October. Available online at ftp://ftp.consrv.ca.gov/pub/oil/A%20Study%20of%20Abandoned%20Oil%20and%20 Gas%20Wells%20and%20Methane%20and%20Other%20Hazardous%20Gas%20Ac cumulations.pdf.Golden State Water Company. 2011. 2010 Urban Water Management Plan, Southwest. June.Golden State Water Company. 2012. Water Quality Report for 2011: Culver City Water System. Available online at http://www.gswater.com/documents/216034_GS-culvercity- R3.pdf.Gronberg, J.M. 2011. Map of Arsenic in Groundwater of the United States. Available online at http://water.usgs.gov/lookup/getspatial?arsenic_map.7-4 Supporting Material and References Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

181. Hydraulic Fracturing StudyPXP Inglewood Oil FieldGround Water Protection Council (GWPC). 2009. State Oil and Natural Gas Regulations Designed to Protect Water Resources. U.S. Department of Energy, Office of Fossil Energy.Hall, K. 2011. EPA to use Toxic Substances Control Act to require disclosures regarding hydraulic fracturing fluids. Oil and Gas Law Brief. Stone Pigman Walther Wittmann LLC. November 28.Hamilton, D., and R. Meehan. 1971. Ground Rupture in the Baldwin Hills: Injection of Fluids into the Ground for Oil Recovery and Waste Disposal. Science 23: 333-344Hamilton, D., and R. Meehan. 1992. Cause of the 1985 Ross store explosion and other gas ventings, Fairfax District, Los Angeles. Engineering Geology Practice in Southern California.Hauksson, E. 1987. Seismotectonics of the Newport-Inglewood fault zone in Los Angeles Basin, Southern California. Bulletin of the Seismological Society of America 77: 539-561.Hayes, D. 2012. Is the recent increase in felt earthquakes in the central U.S. natural or manmade? DOI News Article available online at http://www.doi.gov/news/doinews/Is-the- Recent-Increase-in-Felt-Earthquakes-in-the-Central-US-Natural-or-Manmade.cfm.Holland, A. 2011. Examination of possibly induced seismicity from hydraulic fracturing in the Eola Field, Garvin County, Oklahoma. Oklahoman Geological Survey article available online at http://www.ogs.ou.edu/pubsscanned/openfile/OF1_2011.pdf.Hoots, H.W. 1931. Geology of the Eastern Part of the Santa Monica Mountains, Los Angeles County, California.Howarth, R., R. Santoro, and A. Ingraffea. 2011. Methane and the greenhouse-gas footprint of natural gas from shale formations. Climatic Change 106 (4): 679-690.Hsu, E.Y. et al. 1982. Slope stability and geology of the Baldwin Hills, Los Angeles County, California. California Department of Conservation, Division of Mines and Geology B 170, MS 10.Hudson, D.E., and R.F. Scott. 1965. Fault motions at the Baldwin Hills Reservoir site. Bulletin of the Seismological Society of America 55 (1): 165-180.Hughes, J.P., W. Won, R.C. Erickson. Earthquake Damage to the Coalinga Oil Fields. 1990. USGS Professional Paper 1487.International Energy Agency (IEA). 2012. Golden Rules for a Golden Age of Gas: World Energy Outlook Special Report on Unconventional Gas. Available online at http://www.worldenergyoutlook.org/media/weowebsite/2012/goldenrules/WEO2012_ GoldenRulesReport.pdf.October 2012 Cardno ENTRIX Supporting Material and References 7-5Hydraulic Fracturing Study_Inglewood Field_10102012.docx

182. Hydraulic Fracturing Study PXP Inglewood Oil FieldKusnetz, N. 2011. Critics find gaps in states laws to disclose hydrofracking chemicals. ProPublica article available online at http://www.propublica.org/article/critics-find- gaps-in-state-laws-to-disclose-hydrofracking-chemicals/single. June 20.Los Angeles County Department of Public Health (LAC DPH), Bureau of Toxicology and Environmental Assessment. 2011. Inglewood Oil Field Communities Health Assessment. February. Available online at http://www.cityprojectca.org/blog/wp- content/uploads/2012/07/InglewoodOilField-Report-With-Appendix-20110200.pdf.Los Angeles County Department of Public Health (LAC DPH), Bureau of Toxicology and Environmental Assessment. 2012. Results of the 2011 Inglewood Oil Field Communities Survey. April. Available online at http://planning.lacounty.gov/assets/upl/project/bh_community-health-survey- results.pdf.Los Angeles Regional Water Quality Control Board. 2001. Order No. 01-05, Waste Discharge.Lustgarten, A. 2009. FRAC Act—Congress introduces twin bills to control drilling and protect drinking water. ProPublica article available online at http://www.propublica.org/article/frac-act-congress-introduces-bills-to-control- drilling-609.Martin, J. 2012. Testimony of Jim Martin, Region 8 Administrator, USEPA. Hearing before the U.S. House of Representatives Committee on Science, Space and Technology, Subcommittee on Energy and the Environment. Hearing on Ground water research at Pavillion, WY. Feb 1, 2012. Available online at http://www.epa.gov/ocir/hearings/testimony/112_2011_2012/2012_0201_jm.pdf.Molofsky, L.J., J.A. Connor, S.K. Farhat, A.S. Wylie Jr., and T. Wagner. 2011. Methane in Pennsylvania water wells unrelated to Marcellus shale fracturing. Oil and Gas Journal 109: 54-67.Myers, T. 2012a. Potential contaminant pathways from hydraulically fractured shale to aquifers. Ground Water: February.Myers, T. 2012b. Review of Draft: Investigation of Ground Water Contamination near Pavillion, Wyoming. Technical Memorandum. Available online at http://docs.nrdc.org/energy/files/ene_12050101a.pdf.National Research Council (NRC). 2012. Induced Seismicity in Energy Technologies. The National Academies of Science.Natural Resources Defense Council (NRDC). 2012a. In Fracking’s Wake: New Rules are Needed to Protect Our Health and Environment from Contaminated Wastewater. Available online at http://www.nrdc.org/energy/files/Fracking-Wastewater- FullReport.pdf.7-6 Supporting Material and References Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

183. Hydraulic Fracturing StudyPXP Inglewood Oil FieldNatural Resources Defense Council (NRDC). 2012b. Issue Brief. State Hydraulic Fracturing Disclosure Rules and Enforcement: a Comparison. July. Available online at http://www.nrdc.org/energy/fracking-disclosure.asp.New York City Department of Environmental Protection (NYCDEP). 2009. Final Impact Assessment Report; Impact Assessment of Natural Gas Production in the New York City Water Supply Watershed. December.Nicholson, C., and R. Wesson. 1990. Earthquake Hazards Associated with Deep Well Injection. A Report to the United States Environmental Protection Agency. Available online at http://foodfreedom.files.wordpress.com/2011/11/earthquake-hazard-associated-with- deep-well-injection-report-to-epa-nicholson-wesson-1990.pdf.Ohio Department of Natural Resources (ODNR). 2008. Report on the Investigation of the Natural Gas Invasion of Aquifers in Bainbridge Township of Geauga County, Ohio. Available online at http://s3.amazonaws.com/propublica/assets/ natural_gas/ohio_methane_report_080901.pdf.Ohio Department of Natural Resources (ODNR). 2012. Preliminary Report on the Northstar 1 Class II Injection Well and the Seismic Events in the Youngstown, Ohio, Area. Available online at http://ohiodnr.com/downloads/northstar/UICreport.pdf.Osborn, S., G.R.B. Jackson, B.R. Pearson, N.R. Warner, and A. Vengosh. 2011. Methane contamination of drinking water accompanying gas-well drilling and hydraulic fracturing. Proceedings of the National Academy of Science. Available online at http://www.nicholas.duke.edu/cgc/pnas2011.pdf.Palmer, K. 2012. After earthquakes, Ohio city questions future fracking wells. Reuters article available online at http://www.reuters.com/article/2012/01/13/us-earthquakes-wells- ohio-idUSTRE80C2E620120113. January.Pennsylvania Department of Environmental Protection (DEP). 2012. Letter from DEP Secretary Michael Krancer to NRDC President Frances Beinecke. Available online at http://files.dep.state.pa.us/AboutDEP/AboutDEPPortalFiles/RemarksAndTestimonies /DEP_Sec_Krancer_NRDC_Letter_062512.pdf.Petersen, M.D., and S.G. Wesnousky. 1994. Fault slip rates and earthquake histories for active faults in Southern California. Bulletin of the Seismological Society of America 84: 1608-1649.Petroleum Association of Wyoming (PAW). 2011. Petroleum Association of Wyoming states serious concerns with EPA’s unsubstantiated and reckless claims. PAW News article available online at http://www.pawyo.org/PAW_News%20Release_12082011.pdf.Porter, W.W. 1938. The Practical Geology of Oil. Houston, TX.Schlumberger. 2012a. Oil Field Glossary. Available online at: http://www.glossary.oilfield.slb.com/Display.cfm?Term=gravel%20pack. September.October 2012 Cardno ENTRIX Supporting Material and References 7-7Hydraulic Fracturing Study_Inglewood Field_10102012.docx

184. Hydraulic Fracturing Study PXP Inglewood Oil FieldSchlumberger. 2012b. Well VIC1-330 StimMAP Evaluation Report.Siegel, D. 2012. Errors in Myers Marcellus Shale groundwater paper from start to finish. Energy in Depth article available online at http://eidmarcellus.org/marcellus-shale/errors-in- myers-marcellus-shale-groundwater-paper-from-start-to-finish/8761/. May 13.South Coast Air Quality Management District (SCAQMD). 2011. SCAQMD Air Quality Significance Thresholds. Available online at. http://www.aqmd.gov/ceqa/handbook/signthres.pdf.South Dakota Geologic Survey. 2012. Graphic Representation of the Richter Scale. Available online at http://www.sdgs.usd.edu/publications/maps/earthquakes/rscale.htm.State Review of Oil and Natural Gas Environmental Regulations (STRONGER). 2002. California Follow-up and Supplemental Review. December.State Review of Oil and Natural Gas Environmental Regulations (STRONGER). 2010. Pennsylvania Hydraulic Fracturing Review. September.State Review of Oil and Natural Gas Environmental Regulations (STRONGER). 2011a. Ohio Hydraulic Fracturing Review. January.State Review of Oil and Natural Gas Environmental Regulations (STRONGER). 2011b. Oklahoma Hydraulic Fracturing Review. January.State Review of Oil and Natural Gas Environmental Regulations (STRONGER). 2011c. Louisiana Hydraulic Fracturing State Review. March.State Review of Oil and Natural Gas Environmental Regulations (STRONGER 2011d. Colorado Hydraulic Fracturing State Review. October.State Review of Oil and Natural Gas Environmental Regulations (STRONGER). 2012. Arkansas Hydraulic Fracturing State Review. February.Tovell, W.M. 1942. Geology of the Nodular Shale of the Middle and Upper Miocene of the Western Los Angeles Basin.U.S. Census Bureau. 2010. Inglewood, California. Available online at http://quickfacts.census.gov/qfd/states/06/0636546.html.U.S. Department of Energy (USDOE), Office of Fossil Energy and National Energy Technology Laboratory. 2009. State Oil and Natural Gas Regulations Designed to Protect Water Resources. Prepared with Groundwater Protection Council. May.U.S. Department of Energy (USDOE), Office of Fossil Energy and National Energy Technology Laboratory. 2012. State Oil and Natural Gas Regulations Designed to Protect Water Resources. Prepared with Groundwater Protection Council. May.7-8 Supporting Material and References Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

185. Hydraulic Fracturing StudyPXP Inglewood Oil FieldU.S Energy Information Administration. 2012. Petroleum & Other Liquids. Crude Oil Production http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_m.htm. June.U.S. Environmental Protection Agency (USEPA). 2004. Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reserves.U.S. Environmental Protection Agency (USEPA). 2010. Hydraulic Fracturing Research Study Fact Sheet. Available online at http://www.epa.gov/safewater/uic/pdfs/hfresearchstudyfs.pdf.U.S. Environmental Protection Agency (USEPA). 2011a. Draft: Investigation of Groundwater Contamination near Pavillion, WY. Available online at http://www.epa.gov/region8/superfund/wy/pavillion/.U.S. Environmental Protection Agency (USEPA). 2011b. Underground Injection Control. Accessed December 5, 2011. Available online at http://water.epa.gov/type/groundwater/uic/index.cfm.U.S. Environmental Protection Agency (USEPA). 2011c. Regulation of Hydraulic Fracturing Under the Safe Drinking Water Act. Website (http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/wells_hydroreg .cfm) accessed December 5.U.S. Environmental Protection Agency (USEPA). 2011d. Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources.U.S. Environmental Protection Agency (USEPA). 2011e. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2009, Annexes 2 & 3. Available online at http://www.epa.gov/climatechange/emissions/usinventoryreport.html.U.S. Environmental Protection Agency (USEPA). 2011f. Compilation of Air Pollution Emission Factors (AP-42), Fifth Edition (1995-2011). Available online at http://www.epa.gov/ttn/chief/ap42/.U.S. Environmental Protection Agency (USEPA). 2012a. 40 CFR Part 63. Docket EPA-HQ- OAR-2010-0505 NSPS and NESHAPS for the Oil & Gas E&P Sector.U.S. Environmental Protection Agency (USEPA). 2012b. EPA completes drinking water sampling in Dimock, PA. News Release July 25. Available online at http://yosemite.epa.gov/opa/admpress.nsf/0/1A6E49D 193E1007585257A46005B61AD.U.S. Environmental Protection Agency (USEPA). 2012c. Statement on Pavillion, Wyoming groundwater investigation. News Release. Available online at http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/176 40d44f5be4cef852579bb006432de!opendocument.October 2012 Cardno ENTRIX Supporting Material and References 7-9Hydraulic Fracturing Study_Inglewood Field_10102012.docx

186. Hydraulic Fracturing Study PXP Inglewood Oil FieldU.S. Environmental Protection Agency (USEPA). 2012d. Overview of final amendment to air regulations for the oil and gas industry: Fact Sheet. Available online at http://www.epa.gov/airquality/oilandgas/pdfs/20120417fs.pdf.U.S. Geological Survey (USGS). 2003. Geohydrology, geochemistry and groundwater simulation-optimization of the Central and West Coast Basins, Los Angeles County, California. USGS Water Resources Investigation Report 03-0465.U.S. Geological Survey (USGS). 2012. Are seismicity rate changes in midcontinent natural or man-made? SSA 2012 Abstract 12-137. April. Available online at http://www2.seismosoc.org/FMPro?-db=Abstract_Submission_12&- sortfield=PresDay&-sortorder=ascending&- sortfield=Special+Session+Name+Calc&-sortorder=ascending&- sortfield=PresTimeSort&-sortorder=ascending&-op=gt&PresStatus=0&-lop=and&- token.1=ShowSession&-token.2=ShowHeading&-recid=224&- format=/meetings/2012/abstracts/sessionabstractdetail.html&-lay=MtgList&-find.U.S. Office of Surface Mining. 2001. Technical Measures for the Investigation and Mitigation of Fugitive Methane Hazards in Areas of Coal Mining. September. Available online at http://arblast.osmre.gov/downloads/Mine%20Gases%20and%20Dust/FINAL- Methane.pdf.Warner, N., R.B. Jackson, T.H. Darrah, S.G. Osborn, A. Down, K. Zhao, A. White, and A. Vengosh. 2012. Geochemical evidence for possible natural migration of Marcellus Formation brine to shallow aquifers in Pennsylvania. Center on Global Change, Duke University, Durham, NC.Watson, M. 2011. Colorado sets the bar on hydraulic fracturing chemical disclosure. Environmental Defense Fund: Energy Exchange. December 13. Available online at http://blogs.edf.org/energyexchange/2011/12/13/colorado-sets-the-bar-on-hydraulicfracturing-chemical-disclosure/.Welch, A.H., D.B. Westjohn, D.R. Helsel, and R.B. Wanty. 2000. Arsenic in ground water of the United States: occurrence and geochemistry. Ground Water 38 (4): 589 – 604.West Basin Municipal Water District. 2011. 2010 Urban Water Management Plan. May. Available online at http://www.westbasin.org/water-reliability-2020/planning/water- resources-planning.Wissler, S. 1943. Stratigraphic formations of the producing zone of the Los Angeles Basin oil fields. California Department of Natural Resources, Division of Mines, Bulletin 118: 209-234.Wright, T. 1987a. Geologic summary of the Los Angeles Basin. In Petroleum Geology of Coastal California: AAPG Pacific Section Guidebook 60, T. Wright and R. Heck, eds., pp. 21-31. As cited in Halliburton 2012.7-10 Supporting Material and References Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

187. Hydraulic Fracturing StudyPXP Inglewood Oil FieldWright, T 1987b. The Baldwin Hills reservoir failure another view. In Petroleum Geology of Coastal Southern California: AAPG Pacific Section Guidebook 60, T. Wright and R. Heck, eds., pp. 93-103.Wright, T. 1991. Structural geology and tectonic evolution of the Los Angeles Basin, California. Chapter 3 in Active Margin Basins: AAPG Memoir 52, K.T. Biddle, ed., pp. 35-134.October 2012 Cardno ENTRIX Supporting Material and References 7-11Hydraulic Fracturing Study_Inglewood Field_10102012.docx

188. Hydraulic Fracturing Study PXP Inglewood Oil Field This Page Intentionally Left Blank7-12 Supporting Material and References Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx

189. Appendix APeer Reviewer Comment Letter

190. Summary of Peer Reviewer Comments for theHydraulic Fracture Study: PXP Inglewood Oil FieldPrepared forRena KambaraRegional Planning AssistantLos Angeles CountyDepartment of Regional Planning320 West Temple Street, 13th floor,Los Angeles, CA 90012Prepared byJohn P. Martin, Ph.D.JPMartin Energy Strategy LLCSaratoga Springs, NYPeter D. Muller, Ph.D., C.P.G.Consulting GeologistPhiladelphia, PAOctober 3, 2012FINAL REPORT

191. ContextIn May, 2012, the authors of this report were selected by the County of Los Angeles (the“County”) and Plains Exploration & Production Company (“PXP”) as peer reviewers for theHydraulic Fracturing Study: PXP Inglewood Oil Field prepared by Cardno-ENTRIX (the“consultant”). This report and peer review resulted from the Baldwin Hills CSD litigationSettlement Agreement.Based on the direction provided in Term 13 of the Settlement Agreement, the objective of thepeer review is to review the work of the independent consultant and provide advice to theconsultant and a final evaluation to the County and PXP in order to provide an accurate andverifiable study: The peer reviewer will be provided with access to all the data and materials provided to the independent expert. The peer reviewer shall agree to keep all proprietary information confidential. If the peer reviewer determines that the study is materially inadequate, incomplete or inaccurate, it shall so advise PXP’s consultant who will complete the study as reasonably recommended by the peer reviewer and provide the revised study to the peer reviewer within 90 days. Upon acceptance by the peer reviewer, the study and all supporting material, including comments by the peer reviewer, shall be forwarded to the County, DOGGR, the Regional Water Quality Control Board (“RWQCB”), CAP and Petitioners and be available to the public, with any proprietary information redacted.In June, 2012, we began the process of reviewing the data used to develop the study,evaluating reports drafts and conducting a two day visit the site to get a perspective on the sitecontext. What follows is a summary of the iterative process of review, advice and evaluationthat led to the completion of the final study. Upon completion of the review, we both feel,based on information provided us and our own experience, that the report is adequate,complete and accurate and reflected thoughtful consideration for our comments andsuggestions.ProcessWe received the report draft of the study on July 14th, 2012 in compliance with the SettlementAgreement. We were also provided access to all data, research and reports used to assemblethis draft at this time. We completed an initial review of the draft and the background materialand developed comment and advice. These comments were communicated over a period ofweeks rather than as one single response as we worked independently and then incoordination with each other and the contractor. This process allowed a number of key pointsto be refined based on effective criticism. The consultant responded by providing a revised1|Page Peer Reviewer Report 10-3-2012

192. draft for our review and advice. From this draft, we provided further advice and comment. Thefinal study therefore reflects this iterative peer review process rather than a single review andresponse that typify journal peer review. Ultimately, the final report is more responsive to ourinput than may have been otherwise.Throughout this process, we strived to offer thoughtful and timely input into the evaluation andprovide advice to the consultant on ways to improve the study and ultimately to considerwhether the report was materially adequate, complete and accurate. In this memo, we tried tobe cognizant of this charge and summarize the process, advice and evaluation.Evaluation of the Draft ReportsOverall Impression: For the first draft of the report, both of us concluded that the report’sorganization was overly complex which might have made it difficult for a general audience tounderstand. We found ourselves losing some key concepts due to the flow. We suggested thatcertain chapters be combined and that the flow reflect a time relationship. This request led theconsultant to produce a second draft reflecting the reorganization. The number of chapterswent from 11 to 7 in total. With this consolidation and reorganization, the second draft was farmore understandable for the non-technical reader.The major consolidations involved creating a chapter called “Environmental Effects Monitoredin Conjunction with Hydraulic Fracturing Tests” by combining two chapters that split theenvironmental effects into two parts. Also, the overall discussion of hydraulic fracturing wastaken from two chapters to one covering “past, present and future.” Finally, a single regulatorychapter captured both the regulatory framework of various jurisdictions and public concernswith operations that were originally two separate chapters. This new report structure carries tothe final version.The study benefits from the tremendous amount of available data. Given the field’s longhistory of production, there is a significant amount of data available to assess the geologicaland operating conditions at the field. In addition to the historic data, the current operatorconducted two fully-monitored hydraulic fracturing operations and two high-rate gravel packs.Other available data includes a number of reports on geological characterization,environmental evaluations, potential community impacts, and regulations. The draft report dida reasonable job presenting a summary of this vast database. We offered some suggestions ofways to streamline the material presented to enhance readability.Completeness: Both the first and revised draft were quite comprehensive and for the mostpart complete. A few areas found to be lacking in the first draft included the following:2|Page Peer Reviewer Report 10-3-2012

193. 1. Given the relevance of fluid migration to this topic, we felt that the consultant needed to expand the discussion of hydraulic connectivity given in the first draft. In the revised draft, the discussion was combined into one clear section discussing this important topic. 2. The first draft was lacking a truly representative geological cross section of the field along with a geologic map. A sequence of cross sections providing a better visualization and a geologic map of the field appeared in the revised draft. 3. Being that our experience is primarily in the northeastern USA and Canada, we thought that a better discussion was needed on how this field compares to those outside of California where many of these issues have arisen. 4. Many figures lacked scales, adequate figure captions, and legends. In the revised draft, these items were improved. Annotation was added to the remaining figures for the final report. 5. We suggested a revised discussion of induced seismicity to include the relevance of the 1983 Coalinga earthquake to potential hydraulic fracturing in the, deeper thrust-faulted, pre-Pliocene units of the Inglewood field in light of similar geologic settings and regional stress regimes. This was included in section 4.5.5.Also, there were a few key resources were not included in the draft that, if included, could helpthe reader understand the issues involved with hydraulic fracturing including Frolich 2012,Myers 2012, NRC earthquake study 2012, USGS 2012, and Warner 2012. Most of our suggestedreferences were incorporated into the revised draft and many of these references were used torespond to our concerns above.Adequacy: As mentioned, the draft report was extremely comprehensive. There were a fewareas that we did not feel were completely adequate: 1. The diagrams showing the geologic structure at the field are difficult to understand and interpret. We requested that these should be redone or the text should be expanded to explain the visual. The final draft accomplishes this. 2. The oil fields of California and this field particularly are not similar to the fields of either Texas or the northeast. This distinction needed to be adequately explained to put the discussion of environmental issues in context. The revised draft did a much better job of this. 3. The regulatory section initially did not focus on the key elements of California in a way that made it clear to us how operations are regulated. The revised draft3|Page Peer Reviewer Report 10-3-2012

194. combined sections and brought California front and center making this much easier to follow.Accuracy: We did not find any major inaccuracies in either draft though there were somespecific statements that were either inaccurate or contradictory and needed revision. Also,there were a few statements that lacked supporting evidence and could be questioned foraccuracy. We requested that these statements be corrected or supporting evidence beprovided. In response to our comments the author corrected statement in revised draft orprovided a rationale for leaving the text as is that satisfied our inquiry.Topic-Specific Report CommentsIn addition to the numerous typographical edits and suggestions, there were some topic-specific comments that we spent considerable time reviewing. These topics include geology,induced fractures, seismicity, environmental issues, and regulation.Geology: We had some issues with the readability of the diagrams for non-technical audiences.The first draft included one diagram which did not convey the complexity of the field asdescribed by the work of Elliot and others (2009). The final version includes all three of theircross sections and the description. This helps to explain the geological conditions in the fieldmuch better and helps put the 3D visualizations in context. Blade-like features in the subsurfaceof several of the diagrams were unexplained and easily misinterpreted as fracture orientation.These features actually represent the distribution of proppant for the hydraulic fracturingstages. The final draft clarifies this with better legends.Induced Hydraulic Fractures: We had some trouble understanding the discussion of the heightand orientation of the induced hydraulic fractures from the two Nodular Shale tests. Wesuggested clarification of height of induced fractures to read height of zone of inducedfractures. This change was made in the final draft.Seismicity: In addition to the comment on page three, we requested some discussion of howthe operator designs the surface infrastructure for hydraulic fracturing to mitigate the impact ofa seismic event similar to what occurred at Coalinga. The final draft includes a description of therequired standards for structures and other surface equipment.Environmental Issues: The report covered the environmental issues typically identified withhydraulic fracturing but these issues were spread among a few chapters. We suggested thatthey be combined into one chapter.One issue that we commented on was the potential for fluid migration. The first draft didapproach this topic but we felt that a clearer description needed to be included regarding why4|Page Peer Reviewer Report 10-3-2012

195. the geology limited fluid movement. In the revised report, the information presented and theflow of the discussion better explains why the lack of hydraulic connectivity minimizes thepotential for fluid migration off of the site.Since air emissions releases are of concern, the air quality section needs to be ascomprehensive as possible. The draft report covered this topic well in three different chapters.We suggested that this might be more effective if most of this information could be condensedinto the environmental effects chapter. This was accomplished in the reorganization of therevised draft.There are a number of issues with hydraulic fracturing that are actually common to any oilfieldoperation regardless of the completion method. This includes many of the community impactssuch as traffic and noise. The Baldwin Hills CSD EIR covers many of these common issues.Though we did not suggest that this study repeat the contents of the EIR, we felt that somereference should refer the reader to the appropriate EIR documents.Regulation: The first draft covered regulations but we felt that the section should bereorganized so California regulation was covered first and that comparisons with otherjurisdictions be made to California. Upon revision, the new regulation section accomplishes thiseffectively. The comparison table with the New York SGEIS is particularly useful to identifyspecific issues such as spill containment that were identified as important issues in the NewYork process.Concluding Comments and Final Report EvaluationThrough the iterative review process, our comments, questions and criticisms were integratedinto study in ways that, we feel, improved the final product. As peer reviewers, it is not ourcharge to become coauthors but to offer suggestions for improvement based on our expertise.In the end, the work remains that of the authors.As the endpoint of the peer review process, the County and PXP has asked us to make adetermination as specified in the Settlement Agreement: “If the peer reviewer determines that the study is materially inadequate, incomplete or inaccurate, it shall so advise PXP’s consultant”On September 30, 2012 we received from the consultant the final report for review andacceptance. Upon review, we both feel, based on information provided us and our ownexperience, that the report is adequate, complete and accurate and reflected thoughtfulconsideration for our comments and suggestions. This document serves as our final advice tothe consultant, the County and PXP.5|Page Peer Reviewer Report 10-3-2012

196. The Reviewers:John P. Martin, Ph.D.John is the founder of JPMartin Energy Strategy LLC which provides strategic planning, resourceevaluation, project management and government/public relations services to the energyindustry, academic institutions and governments. Prior to forming JPMartin Energy Strategy LLCin 2011, John spent 17 years working on energy research and policy issues at the New YorkState Energy Research and Development Authority and developed a series of projects targetingoil and gas resources, renewable energy development and environmental mitigation. Hecurrently serves on the USDOE’s Unconventional Resources Technical Advisory Committee.While at NYSERDA, he co-directed the Governors Carbon Capture and Sequestration (CCS)Working Group, an interagency committee organized in 2007 to address CCS issues and servedas point person on a series of technical studies looking at all aspects of hydraulic fracturing andmultiwell pad development. John regularly lectures and publishes on such diverse topics as theshale resources development, carbon capture and sequestration, compressed-air energystorage, renewable energy resource development, and research policy. Prior to joiningNYSERDA, he worked in academia, consulting and regional planning. He holds a Ph.D. in Urbanand Environmental Studies, an M.S. in Economics and a B.S. in Geology, all from RensselaerPolytechnic Institute. He also holds an M.B.A. from Miami University and completed graduatework in mineral economics at West Virginia University.Peter D. Muller, Ph.D., C.P.G.Independent consulting geologist specializing in structural geology, geologic mapping, andgeologic data analysis. Presently researching subsurface migration of fluids in the northernAppalachian Basin and the relationship to hydraulic fracturing. Senior Geologist with AlphaGeoscience (2010-2012) concentrating on shale gas development in NY and PA. Professor ofgeology at the State University of New York at Oneonta (1983-2009; Chair 1999-2003) teachingcourses in structural geology, map and field geology, engineering geology, mineral resources,waste management, physical geology, and environmental science. Worked as a staff geologistfor Dames and Moore Consultants (1973-1975) and the Maryland Geological Survey (1980-1982). Peter received his BS in geology from Bucknell University (1971) and PhD in geologyfrom Binghamton University (1980). He has extensive geological field experience in a widerange of settings, both domestic and international, and has published peer-reviewed research(articles and maps) on the structure, petrology, and tectonics of the Maryland Piedmont, theAdirondack Mountains of New York, and the Ruby and Blacktail ranges of southwest Montana.6|Page Peer Reviewer Report 10-3-2012

197. Appendix BChemical Additives Used and FracFocus Reports

198. Hydraulic Fracturing Fluid Product Component Information Disclosure Fracture Date 9/15/2011 State: California County: Los Angeles API Number: 0403726720 Operator Name: Plains Exploration & Production Well Name and Number: VIC 1-330 Longitude: -118.379139976 Latitude: 34.006457093 Long/Lat Projection: NAD83 Production Type: Oil True Vertical Depth (TVD): 8,030 Total Water Volume (gal)*: 168,210Hydraulic Fracturing Fluid Composition: Trade Name Supplier Purpose Ingredients Chemical Maximum Maximum Comments Abstract Service Ingredient Ingredient Number (CAS #) Concentration Concentration in Additive in HF Fluid (% by mass)** (% by mass)** 7% KCL Water Operator 100.00% 86.77644% Density = 8.700 SAND - PREMIUM WHITE Halliburton Proppant Crystalline Silica, Quartz 14808-60-7 100.00% 3.70605% PRC SAND Halliburton Proppant Crystalline Silica, Quartz 14808-60-7 100.00% 8.59803% Hexamethylenetetramine 1009-7-0 2.00% 0.17196% Phenol / Formaldehyde Resin 900303-35-4 5.00% 0.42990% SSA-2 Halliburton Sand Crystalline Silica, Quartz 14808-60-7 100.00% 0.35578% FR-66 Halliburton Friction Reducer Hydrotreated Light Petroleum Distillate 64742-47-8 30.00% 0.01335% LOSURF-300M™ Halliburton Surfactant 1,2,4 Trimethylbenzene 95-63-6 1.00% 0.00079% Ethanol 64-17-5 60.00% 0.04763% Heavy Aromatic Petroleum Naphtha 64742-94-5 30.00% 0.02382% Naphthalene 91-20-3 1.00% 0.00079% Poly(oxy-1,2-Ethanediyl), 127087-87-0 10.00% 0.00794% Alpha-(4-Nonylphenyl)-Omega-Hydroxy -,Branched CL-28M CROSSLINKER Halliburton Crosslinker Crystalline Silica, Quartz 14808-60-7 5.00% 0.00249% Borate Salts Proprietary 60.00% 0.02989% MO-67 Halliburton Buffer Sodium Hydroxide 1310-73-2 30.00% 0.00283%BA-40L BUFFERING AGENT Halliburton Buffer Potassium Carbonate 584-08-7 60.00% 0.03990% FE-1A ACIDIZING Halliburton Misc Additive Acetic Acid 64-19-7 60.00% 0.00255% COMPOSITION Acetic Anhydride 108-24-7 100.00% 0.00425% K-38 Halliburton Crosslinker Disodium Octaborate Tetrahydrate 12008-41-2 100.00% 0.02099% LGC-36 UC Halliburton Gelling Agent Guar Gum 9000-30-0 60.00% 0.16582% Naphtha, Hydrotreated Heavy 64742-48-9 60.00% 0.16582% BE-3S BACTERICIDE Halliburton Biocide 2,2 Dibromo-3-Nitrilopropionamide 10222-01-2 100.00% 0.00119% 2-Monobromo-3-Nitrilopropionamide 1113-55-9 5.00% 0.00006% OPTIFLO-III DELAYED Halliburton Breaker Ammonium Persulfate 7727-54-0 100.00% 0.00889% RELEASE BREAKER Crystalline Silica, Quartz 14808-60-7 30.00% 0.00267% SP BREAKER Halliburton Breaker Sodium Persulfate 7775-27-1 100.00% 0.00237%

199. * Total Water Volume sources may include fresh water, produced water, and/or recycled water** Information is based on the maximum potential for concentration and thus the total may be over 100%All component information listed was obtained from the supplier’s Material Safety Data Sheets (MSDS). As such, the Operator is not responsible for inaccurate and/or incomplete information. Any questionsregarding the content of the MSDS should be directed to the supplier who provided it. The Occupational Safety and Health Administration’s (OSHA) regulations govern the criteria for the disclosure of thisinformation. Please note that Federal Law protects "proprietary", "trade secret", and "confidential business information" and the criteria for how this information is reported on an MSDS is subject to 29 CFR1910.1200(i) and Appendix D.

200. Hydraulic Fracturing Fluid Product Component Information Disclosure Fracture Date 1/5/2012 State: California County: Los Angeles API Number: 0403726421 Operator Name: Plains Exploration & Production Well Name and Number: VIC1 635 Longitude: -118.3771225 Latitude: 34.00234951 Long/Lat Projection: NAD83 Production Type: Oil True Vertical Depth (TVD): 8,430 Total Water Volume (gal)*: 125,248Hydraulic Fracturing Fluid Composition: Trade Name Supplier Purpose Ingredients Chemical Abstract Maximum Maximum Comments Service Number Ingredient Ingredient (CAS #) Concentration Concentration in Additive in HF Fluid (% by mass)** (% by mass)**7% KCL Water Operator 100.00% 81.77644% Density = 8.700SAND - COMMON Halliburton Proppant Crystalline silica, quartz 14808-60-7 100.00% 1.42615%WHITESAND - PREMIUM Halliburton Proppant Crystalline silica, quartz 14808-60-7 100.00% 4.30405%WHITECRC SAND Halliburton Proppant Crystalline silica, quartz 14808-60-7 100.00% 9.98805% Hexamethylenetetramine 1009-7-0 2.00% 0.19976% Phenol / formaldehyde resin 900303-35-4 5.00% 0.49940%LOSURF-300M™ Halliburton Surfactant 1,2,4 Trimethylbenzene 95-63-6 1.00% 0.00079% Ethanol 64-17-5 60.00% 0.04763% Heavy aromatic petroleum naphtha 64742-94-5 30.00% 0.02382% Naphthalene 91-20-3 1.00% 0.00079% Poly(oxy-1,2-ethanediyl), 127087-87-0 10.00% 0.00794% alpha-(4-nonylphenyl)-omega-hydroxy-, branchedK-38 Halliburton Crosslinker Disodium octaborate tetrahydrate 12008-41-2 100.00% 0.02099%FR-66 Halliburton Friction Reducer Hydrotreated light petroleum distillate 64742-47-8 30.00% 0.01335%SandWedge® NT Halliburton Conductivity Enhancer Dipropylene glycol monomethyl ether 34590-94-8 60.00% 0.29738% Heavy aromatic petroleum naphtha 64742-94-5 10.00% 0.04956%BA-40L Halliburton Buffer Potassium carbonate 584-08-7 60.00% 0.03990%BUFFERINGAGENTCL-28M Halliburton Crosslinker Crystalline silica, quartz 14808-60-7 5.00% 0.00250%CROSSLINKER Borate salts Confidential Business 60.00% 0.02995% InformationFE-1A ACIDIZING Halliburton Misc Additive Acetic acid 64-19-7 60.00% 0.01278%COMPOSITION Acetic anhydride 108-24-7 100.00% 0.02130%

201. LGC-36 UC Halliburton Gelling Agent Guar gum 9000-30-0 60.00% 0.16582% Naphtha, hydrotreated heavy 64742-48-9 60.00% 0.16582%MO-67 Halliburton Buffer Sodium hydroxide 1310-73-2 30.00% 0.00283%BE-3S Halliburton Biocide 2,2 Dibromo-3-nitrilopropionamide 10222-01-2 100.00% 0.00285%BACTERICIDE 2-Monobromo-3-nitrilopropionamide 1113-55-9 5.00% 0.00014%K-38 Halliburton Crosslinker Disodium octaborate tetrahydrate 12008-41-2 100.00% 0.01902%SP BREAKER Halliburton Breaker Sodium persulfate 7775-27-1 100.00% 0.01949%* Total Water Volume sources may include fresh water, produced water, and/or recycled water** Information is based on the maximum potential for concentration and thus the total may be over 100%Ingredient information for chemicals subject to 29 CFR 1910.1200(i) and Appendix D are obtained from suppliers Material Safety Data Sheets (MSDS)

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