Future Tertiary Operations

Cedar Creek Anticline (CCA). CCA is the largest potential EOR property that we own and currently our largest producing property, contributing approximately 25% of our 2018 total production. Historical production from the property has primarily been from the Red River interval. The field is primarily located in Montana but extends over such a large area (approximately 126 miles) that it also extends into North Dakota. CCA is a series of 14 different operating areas on a common geological trend, each of which could be considered a field by itself. We acquired our initial interest in CCA as part of the Encore merger in 2010 and acquired additional interests from a wholly-owned subsidiary of ConocoPhillips in the first quarter of 2013 for $1.0 billion, adding 42.2 MMBOE of incremental proved reserves at that date. In addition to the Red River interval, CCA contains other oil-bearing intervals such as the Mission Canyon and Charles B. We began pursuing these additional exploitation opportunities in late 2017.

CCA is located approximately 110 miles north of Bell Creek Field, and our current plan is to connect this field to our Greencore Pipeline by the end of 2020. Our current plan for initiating a CO2 flood at CCA is several years from now, the timing of which may change depending on future oil prices, pipeline permitting and sources and availability of CO2. In June 2018, we announced the sanctioning of the CO2 enhanced oil recovery development project at Cedar Creek Anticline. The capital outlay for the initial phase of the project is currently estimated at $200 million through 2022, which includes $150 million for a 110-mile extension of the Greencore CO2 pipeline from Bell Creek Field discussed above and $150 million for development in the Red River formation at East Lookout Butte and Cedar Hills South fields in CCA. First tertiary production from CCA is expected in the second half of 2022 or early 2023. Additional phases of development are expected to target the Interlake, Stony Mountain and Red River formations at Cabin Creek Field beginning in 2024.

Grieve Field. Under a 2011 farm-in agreement, we obtained a 65% working interest in Grieve Field, located in Natrona County, Wyoming, in exchange for developing the Grieve Field CO2 flood. During 2016, the Company and its joint venture partner in Grieve Field revised their development arrangement for the field so that our partner funded $55 million of the remaining estimated capital to complete development of the facility and fieldwork in exchange for a 14% higher working interest and a disproportionate sharing of revenue from the first 2 million barrels of production. Thus, our working interest in the field was reduced from 65% to 51%, and our net revenue interest on the first million barrels of production is approximately 20%. This arrangement accelerated the remaining development of the facility and fieldwork, and we currently anticipate first tertiary production in early 2019.

Hartzog Draw Field. We acquired our interest in Hartzog Draw Field in 2012 in conjunction with the Bakken exchange transaction with ExxonMobil. The field is located in the Powder River Basin of northeastern Wyoming, approximately 12 miles from our Greencore Pipeline. Industry activity around this field has been increasing for the past several years, with several operators testing various formations such as the Turner, Niobrara, Shannon, Parkman and Mowry for potential development. We believe the oil reservoir characteristics of Hartzog Draw Field make it well suited for CO2 EOR in the future. We currently plan to initiate a CO2 flood at Hartzog Draw Field several years from now, the timing of which is dependent on capital availability and priorities and future oil prices.

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