CITY OF WHITTIER FOR IMMEDIATE RELEASE February 1, 2013 CONTACT: Jeffrey W.

Collier, City Manager, (562) 567-9301 CITY OF WHITTIER PLEASED WITH JUDGES RULING Whittier Mayor Owen Newcomer indicated today that he is pleased with yesterdays ruling in Los Angeles Superior Court denying the request for a temporary restraining order (TRO) that would have prohibited site clearance work; instead clearance work is expressly allowed to continue for the Mineral Extraction project on a 1.99-acre test drill site in the Whittier hills. Newcomer stated that this shows that Matrix was properly following the process laid out in their approvals and obtaining the appropriate permits. Were pleased that the project is moving forward on schedule and with careful monitoring. Judge James Chalfants denial of the requested relief was in response to an application brought by the Mountains Recreation Conservation Authority (MRCA) and County of Los Angeles. The agencies had inaccurately claimed that site grading was commencing. However, Judge Chalfants close examination of the facts found that Whittier had properly approved the clearing of vegetation on the site as well as fuel modification removals along the access road to the site. The Citys approval of the clearance work was issued on January 30, 2013 and specifically prohibited any grading activity. The City has not approved project grading plans nor issued any grading permits details which were overlooked by the challenging parties. The Citys approval for vegetation clearance work came only after Matrix Oil complied with 79 specific requirements from the City Councils 2011 approval of a Conditional Use Permit (CUP) and Environmental Impact Report (EIR). The CUP and EIR established more than 200 conditions of approval and mitigation measures for compliance. The City has retained Marine Research Specialists (MRS) to provide ongoing review of plans and monitoring of all site work to assure full compliance with CUP and EIR requirements. Prior to any site clearance work, Matrix Oil also obtained approval of a Habitat Mitigation and Monitoring Plan from the US Fish & Wildlife Service, as required prior to City approval for work to proceed. As site work commenced yesterday, four environmental compliance monitors were on site to monitor and oversee work. In a statement issued on January 31, 2013, Los Angeles County Supervisor Gloria Molina described the Whittier hills as 1,290 acres of pristine, essentially untouched land perfect for environmental preservation. Unfortunately, this is a significant misrepresentation of the condition of this area. In reality, the land was used as an operating oil field for over 100 years with approximately 550 wells drilled during that time. The area where the new oil drill pad will be located has long been closed to the public and had significant impact from historic oil operations. The seven-acre project site is littered with broken asphalt paving mixed with fill soil, along with numerous

City of Whittier Press Release 2-1-13 invasive, non-native plant materials. The hills in the area are carved with old drill sites and roads. The biological analysis in the projects EIR notes that this area is not within a high quality habitat area. The Citys approval to allow oil extraction from a small seven-acre site includes numerous mitigation measures that provide for significant environmental restoration of this historically degraded habitat area. Some of the required mitigation and habitat enhancements for the site listed below are illustrative of the extensive efforts being made to improve and enhance the quality of the habitat to the benefit of generations to come. Furthermore, the project will provide a replacement funding source for the Puente Hills Habitat Preservation Authority, the agency that oversees management and oversight of the Preserve. Current funding for the Habitat Authority will be lost on October 31, 2013 with the closure of the Puente Hills Landfill. The City applauds Judge Chalfants action to reject the request to stop the current site clearance work and looks forward to resolving the current disputes so this important project can move forward and benefit the residents of Whittier, the County, and, most importantly, the habitat within the Whittier hills.

Key Site Mitigation and Habitat Enhancement Provisions: 1. Revegetation of approximately 25 acres with native seed material around the west end of the Colima tunnel to provide better cover and attract more animals to use the tunnel. (EIR Mit. Measure BIO-4h and CUP COA #23) 2. Establishment of a Land Acquisition/Revegetation fund in the amount of one percent (1%) of gross proceeds, up to $15.0 million. These funds are to be used for acquisition of additional open space land however, if purchase of such lands cannot be accomplished within 10 years of establishment of the fund, the funds could be used to revegetate disturbed property to improve habitat to afford more and better foraging opportunities for wildlife. (CUP COA #80) 3. Preparation of a study to determine the feasibility of an additional underpass or overpass north of the existing underpass on Colima Road and to decide which is most advantageous to animal survival while crossing Colima Road. If an additional wildlife crossing is recommended, Matrix Oil will bear all costs of the design and engineering, environmental review and mitigation (if required) and construction costs of the wildlife passageway/crossing. Matrix is required to advance the funds necessary to build any additional wildlife crossing, but the full amount of the costs advanced will constitute a credit against the Land Acquisition/Revegetation Fund established (pursuant to COA 80). (CUP COA #81) 4. Creation of an exotic eradication/habitat enhancement program within designated priority areas within the Preserve and Project site including annual contributions of $30,000 per year (with annual CPI increases). (CUP COA #70.2)

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5. A Conservation Easement will be placed over the City-owned Preserve Land, which shall except only the surface areas approved for use in the Project. (CUP COA #74) 6. Funding for preparation of a multi-year, scientific study to evaluate the wildlife movement patterns of bobcats and other wildlife species utilizing the Preserve. (EIR Mit. Measure Cumulative BIO-1c) 7. To mitigate the Project's loss of coastal sage scrub (4.84 acres) and loss of habitat value due to the Projects noise impacts affecting 5.49 acres of coastal sage scrub, the project will restore 19.99 acres of degraded habitats in the La Caada Verde and Arroyo Pescadero watersheds to coastal sage scrub communities. (EIR Mit. Measure BIO-1a) 8. The project will restore 22.5 acres of degraded habitats in the La Caada Verde and Arroyo Pescadero watersheds to native communities, as agreed to by the appropriate resource agencies and the City. (EIR Mit. Measure BIO-1b) 9. To mitigate the Project's permanent loss of 0.22 acre of riparian habitat, the Applicant shall provide minimum 3:1 areal replacement. To mitigate the Projects noise impacts affecting 0.75 acres of riparian habitat, Matrix will provide a minimum 1:1 areal replacement. In total, Matrix will restore 1.41 acres of degraded areas within the La Caada Verde and Arroyo Pescadero watersheds, or as otherwise agreed to by the appropriate resource agencies and the City. The 0.12 acre of temporary grading impact would be mitigated through the 1:1 revegetation specified in BIO-1.b. (EIR Mit. Measure BIO-2a) 10. A worker carpooling program will be instituted offsite and away from congested areas to reduce Project traffic through congested areas during all Project phases. (EIR Mit. Measure T-1b) 11. The project will construct and maintain interpretative signage within the Preserves trails to provide an educational component about the Preserve, drilling activities, mitigation, descriptions of local wildlife, habitats, environmental values of the Puente Hills area, historic uses, etc. (EIR Mit. Measure REC-1) 12. High volume, high pressure hydraulic fracturing is prohibited. (CUP COA #77)