RE: AFIN: ADEQ Reference #: WG-LA Well Site: Suarez-Gartner 8-12 No. 1-30H

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1 November 2, 2017 Rick Spicer Regulatory & Environmental Superintendent Operations BHP Billiton Petroleum, LLC Fayetteville Petroleum Unit 1686 Letona Rd Searcy, AR RE: AFIN: ADEQ Reference #: WG-LA Well Site: Suarez-Gartner 8-12 No. 1-30H County: Faulkner Dear Mr. Spicer: On October 11, 2017, I performed an inspection of the above referenced drilling site in accordance with the provisions of the Arkansas Water and Air Pollution Control Act and the regulations promulgated thereunder as well as the Arkansas Oil & Gas Commission s General Rule B-17. At the time of my inspection, the site was in compliance with above mentioned Act, regulations and rule. However the following concerns were noted: There was an erosion gulley formed on the eastern side of the pad. Evidence of sediment traveling offsite and downslope was observed during the inspection. Approximately 80 yards downslope is an unnamed tributary to Mill Creek. Please see Figure 1. Please submit a written response to these concerns to the Water Division Inspection Branch of this Department. This response should be mailed to the address at the bottom of the first page of the letter or ed to Water-Inspection-report@adeq.state.ar.us. This response should contain documentation describing the course of action taken to correct each item noted. This corrective action should be completed as soon as possible, and the written response with all necessary documentation (i.e. photos) is due by November 17, If I can be of any assistance, please contact me at or by at long@adeq.state.ar.us. Sincerely, Robert A. Long Oil & Gas Field Inspector Office of Water Quality cc: Rick Spicer, Regulatory & Environmental Superintendent Operations, richard.spicer@bhpbilliton.com

2 OIL & GAS RESERVE PIT AND PAD INSPECTION FORM ADEQ Reg 34 / AOGC Rule B-17 ADEQ Ref # WG-LA Pad/Pit Construction Pad/Pit Completed Active Drilling/Fracking Well(s) Completed Operator BHP Billiton Petroleum Well Name / No. Suarez-Gartner 8-12 No. 1-30H Section 30 Township 8N Range 12W GPS Well Location: Latitude Longitude County Faulkner CURRENT PIT STATUS Reserve pit utilized at this site? Y Closed Loop System Undetermined Has a Form 2A been filed Y N N/A Reserve pit closed? Y N N/A If yes, was pit closed prior to Rule B-17 requirements? Y N PIT CONSTRUCTION Pit Type: Circulation Mud Reserve Above Ground Level Below Ground Level Are any surface waters (including streams, creeks, lakes, wetlands, any other bodies of water) impacted by construction Y N Name: Stage of Pit Construction: Excavation Berms Completed Liner Installed Pit Completed Reserve Pit Construction: Berm 2 wide at top of wall Y N 2 to 1 slope on berm walls Y N Liner Type: 20 mils 40 mils 4 Lap Clay Liner damage Y N Construction defects Y N Alternative liner construction Y N MUD, CIRCULATION OR RESERVE PIT OPERATION Pit Conditions: Fluids present in pit? Y N Is pit utilized in the fluid recycling program? Y N If yes, date of approval: Drill cuttings present Y N Adequate berm Y N NA Adequate freeboard Y N Trash / debris Y N Synthetic liner damage Y N NA MUD, CIRCULATION, OR RESERVE PIT CLOSURE Fluids removed from pit Y N Fluids pumped down well bore Y N Fluids burned on-site Y N Synthetic liner removed from pit Y N Synthetic liner removed from location Y N Site remediated Y N Pit filled Y N Covered with topsoil Y N Returned to original grade Y N Post Closure: Form 2B filed? Y N N/A Seeded Y N 75% vegetation coverage Y N STORMWATER EROSION AND SEDIMENT CONTROL INSPECTION Erosion or sedimentation problems? Y N Erosion and sediment controls in place? Y N If so, are they adequate? Y N Is sediment deposition off site? Y N Does the operator have a stormwater erosion and sediment control plan? Y N N/A SUMMARY AND REMARKS There was an erosion gulley formed on the eastern side of the pad. Evidence of sediment traveling offsite and downslope was observed during the inspection. Approximately 80 yards downslope is an unnamed tributary to Mill Creek. Please see Figure 1. PDS # Inspected by: Robert A. Long Date Inspected: October 11, 2017

3 Arkansas Department of Environmental Quality (ADEQ) Official Photograph Sheet Location: Suarez-Gartner 8-12 No. 1-30H Photo # 1 Of 6 Date: 10/11/2017 Time: 1213 Site ID Photo # 2 Of 6 Date: 10/11/2017 Time: 1216 View of the pad

4 Arkansas Department of Environmental Quality (ADEQ) Official Photograph Sheet Location: Suarez-Gartner 8-12 No Photo # 3 Of 6 Date: 10/11/2017 Time: 1217 Erosion gulley formed on the eastern corner of the pad Photo # 4 Of 6 Date: 10/11/2017 Time: 1217 Erosion gulley formed on the eastern corner of the pad

5 Arkansas Department of Environmental Quality (ADEQ) Official Photograph Sheet Location: Suarez-Gartner 8-12 No Photo # 5 Of 6 Date: 10/11/2017 Time: 1218 View of sediment traveling downhill Photo # 6 Of 6 Date: 10/11/2017 Time: 1220 Looking west towards the erosion gulley. Note the sediment leaving the pad.

6 Figure 1: This figure demonstrates the location of the erosion gulley formed on the pad (red circle) and the path the resulting sediment traveled (black arrows) towards waters of the State (Blue line).

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