The RD&D Lease site activities are described in an Addendum to the Plan of Operations that was approved by the Bureau of Land Management in 2008. Field activities occur in three phases:
Phase I: Site Characterization and Baseline Establishment (2007 - 2010)
Phase I was started in 2007 and was completed in 2010. It incorporates site characterization and baseline establishment through a series of drilling tests and studies. This phase will establish site-specific geo-hydrologic conditions of the mining interval and the strata immediately above and below the mining interval. This will enable us to better understand the resource and the site specific properties, as well as continue to design environmental protection methods. During this phase we have drilled water monitoring wells as shown in the following figures and continuously monitored the ground water. We found no producible water in either our retort interval or the Wasatch Formation immediately below.
Phase II: Retort RD&D and Commercial Conversion Application (2009 - 2014)
In this phase we will build and operate a pilot plant and subsequently larger scale production facilities that will demonstrate the commercial viability of our process. At the conclusion of this phase, upon meeting all lease requirements for commercial conversion, we plan to apply for a commercial lease.
In our first heating test, we will drill an inclined well that will be used to introduce heat into the subsurface and produce generated oil and gas. This can be seen in the schematic diagram below:
Construction of the Pilot Test facilities is nearly completed, and heating will commence in December 2011.
Following the initial pilot test, we will conduct additional tests in a similar geometry that may involve multiple wells with heaters 300 feet or longer. As these are conducted, we will continue to rigorously monitor the water, air and environmental impacts of our operations.
Phase III: Transition from Commercial Conversion Application to Commercial Lease Issuance
Phase III includes continued R&D at this site that would be conducted as needed to enhance the conversion to commercial operations, including improving process and reclamation technology. We expect that the primary commercial operations will be started several miles from the RD&D Tract, but some small-scale commercial operations may be conducted at the RD&D Tract. Once RD&D is complete, facilities no longer required for commercial operations will be reclaimed.