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SITE CONSTRUCTION CONDITION REVIEW AND FORWARD PLAN

I. Rig Pad Design Concrete versus Matting Board
1. Major equipment load calculation.
a. Drilling Rig predicted combined load: 1,683,000 lbs.
b. Safety Factor: 2 (to compensate live load, wind, vibration, jarring impact)
c. Total combined load for well pad design basis: 3,366,000 lbs. = 1,530 ton.

2. Unitized rigid concrete rig pad design (Halliburton main proposal as per contract)
a. NIL2 well pad: 8 cellar pad.
Net area: 723.5 m2. Total weight of concrete: 521 ton.
Effective load imposed to soil (rig load + concrete weight): 0.25 kg/cm2 = 2.5 ton/m2
b. WJR2 well pad: 3 cellar pad.
Net area: 457.3 m2. Total weight of concrete: 329.3 ton.
Effective load imposed to soil (rig load + concrete weight): 0.38 kg/cm2 = 3.8 ton/m2
From above, the effective load imposed to the soil ranges from 2.5 3.8 ton/m2 depending
on the size of pad related to numbers of well.

3. Matting board (alternative design for comparison)
Matting board area per leg: 30m x 4m = 120m2. Total net area for both leg 240m2.
Weight of matting board 43.6 kg/m2. Total weight: 10.46 ton for the 240m2 area.
Effective load imposed to soil (rig load + matting board weight) = 6.4 ton/m2.

From the above it can be seen that matting board due to less area compared with the unitized
rigid concrete design yields much higher effective load to the soil, i.e.: 6.4 ton/m2 compared to
2.5 3.8 ton/m2, thus potential settling is much higher than concrete.

Further concern is with limited coverage of matting board and the higher potential settlement,
then the requirement to level up and re-compact the area of the following well prior to skidding
may not be avoidable. There have been several cases experienced by other Operators that lost
up to 5 days of down time due to requirement to cut, re-level and re-compact the following well
area prior to skid after experiencing settlement during drilling the previous well.

Based on the above evaluation, our position is to use the unitized rigid concrete design (not
matting board) to avoid experiencing similar problem as mentioned above.

II. Well Pad Foundation Stability Analysis
There is no data of the original NIL2 and NIL1 locations prior to construction available for
reference, the CPT S6 as listed in the SOL document is located outside NIL2 area and was
intended for slope stability analysis. Similar to WJR2, one Hand Bor is available but the CPT S19
is located outside and intended for slope stability analysis.

Soil investigation test was then performed by Hallco after completion of NIL2 and WJR2 site to
obtain data required to establish proper evaluation of soil bearing capacity.

Five CPT points were taken in the NIL2 and two were taken in WJR2 well pads. Result of soil
bearing calculation based on this CPT data shows large discrepancy between the fill area of
average 1.6 ton/m2 with the cut area of average 4.3 ton/m2 consistent for both NIL2 and WJR2,
whereas such large discrepancy indicates that the result of compaction work on the fill area was
not as per the expectation.
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The value of this soil bearing capacity was established using the following approach:
a. All data used are taken from our CPT result, using method (empirical formula) of Terzaghi,
Meyerhoff, and Brinch-Hansen).
b. Since all of the three methods are basically use empirical formulas which could lead into
large discrepancy and considering its direct impact to safety of equipment during operation,
our approach is to use the most conservative value among the three results.
c. The Safety Factor (SF) used is 3, as this is in line with normal code of practice for shallow
foundation design.

There is comment from SOL Civil Engineer on the value of our soil bearing capacity as in SOLs
opinion is too low. Our Civil Consultant has then made the respond by reviewing the SOL
calculation referring to the SOL CPT data with the same safety factor; the result is that we still
obtained significant lower value than the SOL. For example the SOL value in WJR2, from S-19,
shows 29.7 ton/m2, whereas our calculation using the same data, same depth, and same SF of 2
is ranging from 11.57 ton/m2 16.7 ton/m2 using all three methods, which value is still
significantly lower than SOL.

It is therefore we question how SOL obtains this value and what method (empirical formula)
they use, we are welcome to discuss this face to face with SOL Civil Engineer. Until a more
reliable data is obtained, for the time being, we will stick on our number which is more
conservative than SOL but provide better assurance on safety of our operation.

1. Rig Pad Design
It is decided to use a unitized rig pad concrete design for all well sites with reason as
explained in section-I above. This shallow concrete of type K-250 has been calculated as
more than sufficient to ensure integrity providing that the soil strength underneath is
adequate to withstand the load. Based on calculated effective load of 2.5 3.8 ton/m2 and
considering the soil bearing value of avg. 4.3 ton/m2 and 1.6 ton/m2 on the cut and fill
area respectively, then all well pad must be positioned to be on the cut area only, unless
SOL agree to re-work the fill area or accept a modified design such as piled foundation.

For NIL2 we have agreed to re-position the well cellar to be all on the cut area by shifting
the heading 90 deg from the original, and no issue for WJR2 since most of the area is
located on the cut. However for NIL1 we do have concern on how SOL will position the well
cellar of whether it will be all on the cut area.

2. Cementing Equipment Area
The weight of silo has become a major concern. The effective load of a silo full of cement
could reach 6.4 ton/m2, it could still be fine if it located on the cut area but since it most
likely has to be positioned on the fill area then having a piled concrete foundation may
become mandatorily required.

A case of fatality has been experienced not too long ago in one of the Government O&G
Operator (Pertamina) where a Schlumberger silo was tumbled due to failure of the soil
strength caused one person killed; we certainly do not want to have the same experience.





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3. Mud, Water, and Test Pit Area
Similar concern with rig pad, the pit should be located on the cut area. In the event of a pit
has to be located on the fill area than a thorough soil investigation has to be conducted to
ensure adequate soil integrity and proper design is in place. In this case additional soil test
will be mandatory.


III. Slope Stability Analysis
Slope stability analysis should have been performed in NIL2 location considering the high slope
excavation along the north side and fill on the south side. We do not know what method and
what parameter that SOL referred to in order to provide assurance that land sliding will not
occur in NIL2 area. It seems the BITA document is used by SOL as the only reference that in our
civil consultant opinion is not adequate to be used as design basis, additional data to support a
more comprehensive geotechnical analysis in order to generate reliable design is still required.

A case of land slide incident experienced not long ago by a Geothermal Operator resulted in
multiple fatalities is considered as a kind of lesson learn which should never be given a chance
to re-occur.

Besides NIL2, the major concern is now on NIL1 location as the area is much more confined and
situated between significant cut and fill. We therefore require SOL to share the information on
the method and parameters they use to generate the NIL1 stability analysis.

Not much concern on WJR2 except one point at south edge of location.

Based on the existing condition as mentioned above, from safety perspective we are not
comfortable yet to accept the hand over from SOL, a thorough and comprehensive discussion
between SOL Civil Engineer and our Civil Consultant will still be required to seek conclusion.


IV. Other Issue for Consideration
With rejection from EBTKE on the permanent disposal pit then requirement to have a cutting
house (cutting bunker) in every well site has become mandatory.

Attempt to put the cutting house at location outside well site will not be an appropriate
approach since additional measures will be required such as to build supporting pit to collect
liquid from wet cutting, besides the continuous movement of cutting transportation from well
site to cutting house will still be required which may result complication during operation.

Our proposal remains to have the cutting house having concrete base and permanent roof to be
located next to the mud pit be available for each well site. Due to its limited capacity, SOL needs
to be aware that they will require Utilization Permit to enable a regular moving of the cutting
out of location for use in somewhere else.


V. Forward Plan
1. Requirement for Additional Data and Geotechnical Investigation.
Due to concern on slope stability and foundation integrity, a more comprehensive
geotechnical investigation is become mandatory with the objective to:
Assess subsurface condition
Obtain accurate stratification, physical, and mechanical characteristic of soil.
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Provide comprehensive information to support proper geotechnical design.

The complete geotechnical investigation is programmed to be as follow:
a. Technical drilling (BH) is planned for approx. 6 points in NIL2 and 3 points in WJR2. The
technical drilling shall cover all area of concern such as slope, fill, mud pit, cement unit,
and others as required.
Standard penetration test (SPT)
Undisturbed samples (UDS)
Laboratory test for soil samples to obtain physical and mechanical properties of soil.
Note: Result of soil strength calculation derived from the technical drilling is
considered as better representative compared to CPT which is based on
empirical method.

b. Additional CPT as required to support the existing data.

2. Civil Works Acceptance
The criteria used for acceptance as per the Annex B.2 comprises the following part:
i. Total well pad area shall be compacted to 95% to a 1 meter depth.
Since there is a large portion of the well site area consists of fill and the soil tests have
indicated that the result of compaction is below expectation, therefore a 1 meter
depth of investigation is no longer adequate to assess stability. Additional information
from CPT and / or technical drilling has become a requirement thus to be part of the
acceptance criteria.

ii. Slopes shall be well stabilized in order to avoid future landslides problem.
To do this we will need to review the method and parameter used by SOL to ensure
stability. Currently with our own initiative we are doing technical drilling focused on
assessing soil stability.

Without comprehensive geotechnical investigation as mentioned above, we as operation and
site construction cannot determine the integrity and safety of the location and therefore for the
time being we are not able to accept the hand over from SOL.

However to support the continuity of activities and avoiding further delay, the technical drilling
is conducted parallel with conductor setting which already started in NIL2, whereas location
acceptance will have to wait on the result of the above.

Prepared by:





Adnil Isvan Nurdin
HPM Operations Manager