MEMORANDUM

DATE: Thursday, September 5, 2019

TO: Brett Fillmore, Joint Venture Manager
CC: Phuong Phan, Landman
From: JLC Energy Services Drilling Engineer

Subject: Project Proposal and Adjusted Authority for Expenditure for the Joint Venture
Project with Crescent Point Energy.

With reference to the Joint Venture project with Crescent Point Energy, JLC Energy Services is
submitting a proposal to solve an that has arisen when our company begun our drilling process.
We propose a solution for a critical problem which we are currently managing. It is the waste-
treating in the area of the 250 proposed wells to plan to drill. This is a critical problem because it
may lead to some altering effects on the area environment. Therefore, we recommend Secure
Energy Services in supporting us in controlling the waste. They have experience and high quality
services for us. Moreover, we have calculated the Authorization for Expenditure of this project.
We believe that we can deal with this problem efficiently.
Thank for your consideration. Please let me know if you have any further question about our
proposal.

Sincerely,

JLC Energy Services

PORPOSAL OFR CONTROLLING WASTE SERVICES IN THE
JOINT VENTURE PROJECT WITH CRESCENT POINT
ENERGY

Prepared for:
Mr. Brett Fillmore, Joint Venture Manager

Requested by:
Mr. Brett Fillmore, Joint Venture Manager

Prepared by:
Ms. Ciera Talbot, Project Manager
Ms. Liz Yoon, First Nations Consult
Mr. Jackson Phuong, Landman

Submitted:
April 8th, 2019.
Project Definition
This project is a joint venture between Crescent Point Energy and our company, JLC Energy
Services. The scope of this project will be to develop a new petroleum play in Northern Alberta
with the budget exceeding one billion dollars. In the Joint Venture Agreement, JLC Energy
Services is acquiring leases and licenses to access the projected area. Following, our company
will drill a total of 800 wells by 2021 for the project. Crescent Point Energy has invested in the
project for the first 250 wells that will be finished in this year. The joint venture project has been
discussed and considered by the managers of JLC Energy Services. As well, we have predicted
and created an Authorization for Expenditure for the project to ensure we can finish the
assignment without any damage for the company.

Proposal Objectives
With the completion of our initial budget for this new project we have not included a quota for
waste services that may be required during this project. JLC Energy Services has an outstanding
long going relationship with Secure Energy Services that we plan to utilize for our projected
waste of this project that was not originally allocated. Secure Energy’s Waste Container Services
will allow us to dispose of our filters, rags, absorbent pads, contaminated soils and solids. With
our strong relationship, we are confident we will be able to attain the waste containers needed for
this project. Secure Energy Services also has disposal wells for waste with a cost of $9.00/m3.
We believe Secure Energy will offer the most cost effective method for waste disposal, and by
implementing this new change our project will run more efficiently as well as become more
environmentally friendly. Once this carries out JLC Energy Services budget will no longer
require changes as labour costs as well as land improvements will no longer require additional
spending. The success rate for this proposed change which we hope will be accepted, will be
dependent on our project manager increasing our budget.

Value Proposition
In completing the proposed changes, it will add great benefit to our already existing project, in
allocating separate money specifically for waste services we will not only be in better standing
with the Alberta Energy Regulator, but also will allow us to create a more environmentally
friendly project with a designated waste area. In not adding this service our project will have
improper waste management which could cause higher environmental and health risks as well as
possible chemical contamination. An additional benefit of adding this waste service we will have
potential to reduce our operational and capital expenditures as we can re-risk a poor reputation as
well as less financial and legal liability.
Budget
JLC Energy Services authority for expenditure was as follows before our projected allocation for
waste services.

Our new revised budget will include a section dedicated to waste management and we will
allocate $25,852 for this service for all 250 projected wells.

Waste Management $25,852

In adding this new service to our project this will also increase our labour costs by 28% which
will require an additional $305,527.06 in labour services.

With these new additional costs, it will require our accounting department to revise our
Authority for Expenditure. Secure Energy Services disposal wells for drilling waste are currently
costing $9/m3. This is how our revised budget was decided, we have overestimated on our new
budget in case of unexpected events, as well as increased prices that may arise. As previously
stated we are confident in our relationship with Secure Energy and believe we will be getting the
best possible price for our waste management services.