Friday, July 21, 2006


BP: It is BP's policy to seek a Surface Use Agreement (SUA) with affected landowners for all new wells. In La Plata County, the company plans to drill new 80 acre infill wells from existing wellpads wherever possible. This modern approach to resource development will help keep impacts from BP's operations on neighbors to a minimum.

As part of this new approach, BP will offer owners of properties on which an 80 acre infill well is to be drilled a one-time, cash payment as part of the surface use agreement.

For the approximately 150 remaining 160 acre wells that BP has identified as suitable for development, the company will seek an agreement with the landowner that offers a one-time cash payment that is two and a half times larger than the cash offer for an 80 acre well on an existing wellpad. In developing a new 160 acre well, BP will most likely have to construct a new wellpad, access road and service pipelines.

Typically, such new wellpads disturb an area of about four-fifths of an acre. The company will discuss with the landowner possible locations for the wellpad taking into account factors such a ground contours and ongoing agricultural activities.

BP's landowner payment and surface use agreement are part of a process that is transparent and consistent for all landowners. In the event BP and the landowner are unable to reach an agreement, BP may find it necessary to seek a permit to drill through the state's regulatory process. In such cases, BP will still offer a cash payment, smaller than the original offer, to the landowner as a show of good faith.

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