151-2014-05 - aogc2.state.ar.us applications archive... · robert r. briggs, p.a. † ... danny...

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JERRY L. CANFIELD, P.A. THOMAS A. DAILY, P.A. WYMAN R. WADE, JR., P.A. DOUGLAS M. CARSON, P.A. ROBERT R. BRIGGS, P.A. † C. MICHAEL DAILY, P.A. † ! COLBY T. ROE, P.A. † Also Licensed in Oklahoma ! Also Licensed in Wyoming & North Dakota DAILY & WOODS A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW KMW BUILDING 58 SOUTH SIXTH STREET P.O. BOX 1446 FORT SMITH, AR 72902 TELEPHONE (479) 782-0361 FAX (479) 782-6160 ______________ Writer’s Direct Dial No. (479) 242-3968 Writer’s E-mail Address: [email protected] JAMES E. WEST PHILLIP E. NORVELL † OF COUNSEL _______ HARRY P. DAILY (1886-1965) JOHN P. WOODS (1886-1976) JOHN S. DAILY (1912-1987) BEN CORE (1924-2007) May 7, 2014 Arkansas Oil and Gas Commission 301 Natural Resources Drive, Suite 102 Little Rock, Arkansas 72205 Re: ORDER REFERENCE NO. 151-2014-05 Application of XTO Energy Inc. for the integration for Integration of All Unleased Mineral Interests and Non-consenting Working Interests in a unit described as Section 35, Township 11 North, Range 14 West, Van Buren County, Arkansas Commissioners: XTO Energy Inc., 810 Houston Street, Fort Worth, TX 76102, hereby applies to the Arkansas Oil and Gas Commission as follows: 1. The proposed drilling unit is an established unit as defined in paragraph (f) of Arkansas Oil and Gas Commission General Rule B-43. Applicant proposes to drill a horizontal well from a surface location in the Southeast Quarter of Section 35 to a bottom hole location in the Northeast Quarter of Section 35. The proposed well will be drilled to a total vertical depth of 1,980 feet to test the Fayetteville Shale Formation. Applicant has obtained one or more oil and gas leases covering its proposed drill site. 2. Applicant owns oil and gas leases covering a substantial part of the proposed unit. Applicant should be named as operator of the well. The person or persons to be integrated are shown in Exhibit "A" attached hereto and made a part hereof. 3. Applicant has made diligent efforts to negotiate with the non-participating leasehold working interest owners, each of said parties owning an oil and gas leasehold interest in the proposed unit, but applicant has been unable to secure an assignment of the leasehold interest on an equitable basis or to secure participation by said parties in the drilling of the proposed well. 4. Applicant states that it has made repeated efforts to negotiate with the owners of the unleased mineral interests in order to agree on a plan of development of said drilling unit; that those owners have been offered an opportunity to participate in the

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JERRY L. CANFIELD, P.A.THOMAS A. DAILY, P.A.WYMAN R. WADE, JR., P.A.DOUGLAS M. CARSON, P.A.ROBERT R. BRIGGS, P.A. †C. MICHAEL DAILY, P.A. † !COLBY T. ROE, P.A.

† Also Licensed in Oklahoma! Also Licensed in Wyoming & North Dakota

DAILY & WOODSA PROFESSIONAL LIMITED LIABILITY COMPANY

ATTORNEYS AT LAW

KMW BUILDING58 SOUTH SIXTH STREET

P.O. BOX 1446FORT SMITH, AR 72902

TELEPHONE (479) 782-0361FAX (479) 782-6160

______________

Writer’s Direct Dial No. (479) 242-3968Writer’s E-mail Address: [email protected]

JAMES E. WESTPHILLIP E. NORVELL †

OF COUNSEL_______

HARRY P. DAILY (1886-1965)JOHN P. WOODS (1886-1976)JOHN S. DAILY (1912-1987)

BEN CORE (1924-2007)

May 7, 2014

Arkansas Oil and Gas Commission301 Natural Resources Drive, Suite 102Little Rock, Arkansas 72205

Re: ORDER REFERENCE NO. 151-2014-05

Application of XTO Energy Inc. for the integration for Integration of All UnleasedMineral Interests and Non-consenting Working Interests in a unit described asSection 35, Township 11 North, Range 14 West, Van Buren County, Arkansas

Commissioners:

XTO Energy Inc., 810 Houston Street, Fort Worth, TX 76102, hereby applies to theArkansas Oil and Gas Commission as follows:

1. The proposed drilling unit is an established unit as defined in paragraph (f) ofArkansas Oil and Gas Commission General Rule B-43. Applicant proposes to drill ahorizontal well from a surface location in the Southeast Quarter of Section 35 to abottom hole location in the Northeast Quarter of Section 35. The proposed well will bedrilled to a total vertical depth of 1,980 feet to test the Fayetteville Shale Formation.Applicant has obtained one or more oil and gas leases covering its proposed drill site.

2. Applicant owns oil and gas leases covering a substantial part of the proposedunit. Applicant should be named as operator of the well. The person or persons to beintegrated are shown in Exhibit "A" attached hereto and made a part hereof.

3. Applicant has made diligent efforts to negotiate with the non-participatingleasehold working interest owners, each of said parties owning an oil and gas leaseholdinterest in the proposed unit, but applicant has been unable to secure an assignment ofthe leasehold interest on an equitable basis or to secure participation by said parties inthe drilling of the proposed well.

4. Applicant states that it has made repeated efforts to negotiate with the owners ofthe unleased mineral interests in order to agree on a plan of development of saiddrilling unit; that those owners have been offered an opportunity to participate in the

proposed well; that they have been offered a fair and reasonable bonus considerationfor the execution of an oil and gas lease covering their interests; that they have beenfurnished with a proposed oil and gas lease and a copy of the AAPL operatingagreement form which applicant proposes to use in connection with the drilling of saidwell; but that all of the efforts of the applicant have produced no agreement by saidparties.

5. Applicant states that it is in the best interest of conservation and the protection ofcorrelative rights of all interested parties that the proposed unit be developed for oil andgas production without undue delay.

6. In order that applicant may proceed with the orderly development of said unit,applicant hereby requests that the Arkansas Oil and Gas Commission issue its order, inthe alternative, that:

(a) The owners of non-consenting oil and gas leasehold workinginterests indicated above shall participate in the cost of drilling,testing and completion of the test well to be drilled by applicant onthe captioned unit, subject to the terms of an Operating Agreementwhich substantially employs the terms of the AAPL Operatingagreement, with a COPAS attached.

(b) All of the non-consenting oil and gas leasehold working interestswithin the proposed unit shall be force pooled and integrated intosaid unit, and a reasonable risk factor shall be established andassessed as a penalty against said integrated interest.

7. Applicant further states that due to the risks and costs inherent in the drilling ofthe proposed well, the Commission should fix a reasonable risk factor to be assessedas a penalty against the integrated interests within the unit. The risk factor should beapplied to the proportionate cost and expense of drilling, completing and equipping thewell, which would have been borne by the interest of said parties had they participated.Applicant requests that if the integrated parties do not elect within 15 days afterissuance of the Commission's order as between alternatives (a) and (b), it shall beassumed that the integrated parties elected alternative (b) in lieu of the right toparticipate in the working interest in said unit.

8. Applicant requests that the Arkansas Oil and Gas Commission set this matter forpublic hearing, and after same, issue its order, in the alternative, that:

(a) Each of the owners of the unleased mineral interests indicatedabove execute and deliver to applicant a one year oil and gaslease, on an AAPL lease form, for a bonus consideration of$1,500.00 per net mineral acre to be paid as fair and reasonablecompensation in lieu of the right to participate in the workinginterest in said unit, and that said oil and gas lease provide for a

1/5 royalty on oil and gas.

(b) Each of the owners of unleased mineral interests indicated abovebe force pooled and integrated into the captioned unit withassessment of a reasonable risk factor penalty against theirinterest.

(c) The owners of unleased mineral interests shall participate in thecost of drilling, testing and completion of the test well to be drilledby applicant on the captioned unit, subject to the terms of anoperating agreement which substantially employs the terms of theAAPL Operating Agreement.

Applicant further requests that said mineral owners be required to elect within fifteen(15) days after issuance of the Commission's order which method will be pursued in thedevelopment of the above described unit, and, in the event no election is made, that itshall be assumed that the owner of said unleased mineral interest has elected to accepta bonus of $1,500.00 per net mineral acre as compensation in lieu of the right toparticipate in the working interest in said unit, and with the royalty to be 1/5.

9. Applicant further states that due to the risks and costs inherent in the drilling ofthe proposed well, the Commission should fix a reasonable risk factor to be assessedas a penalty against the integrated interests within the unit. The risk factor should beapplied to the proportionate cost and expenses of drilling, completing and equipping thewell, which would have been borne by the interest of said parties had they participated.

10. Applicant further requests that this Commission's order specifically provide thatany party electing either to participate or be force pooled subject to recoupment of arisk factor penalty be bound by the terms of the attached AAPL Operating Agreementfor the life of commercial production within the unit so that all future unit operationsmight be proposed pursuant to the provisions of such agreement without the necessityof future action by this Commission.

11. Applicant also requests that said order be made applicable to any unknownspouse, heir, devisee, personal representative, successor or assign of said parties.

12. The names and addresses of parties interested in this proceeding are set forth inExhibit "A" attached hereto and made a part hereof.

13. Please note the appearance of Thomas A. Daily of Daily & Woods, P.L.L.C.,P.O. Box 1446, Fort Smith, Arkansas, 72902, on behalf of applicant.

Very truly yours,

Thomas A. Dailyjmt

Respondent’s List

Integration Application Section 35-11N-14W Van Buren County, Arkansas Working Interest: Adexco Production Company Barlow Projects, Inc. BHP Billiton Petroleum (Fayetteville) LLC (f/k/a BHP Billiton Petroleum), (North America) LLC Four Score Oil & Gas, LLC Carrie Hinds William Hinds Hwy. 95 Surprise, LLC Makena Enterprises LLC PetroQuest Energy, LLC Pop’s Pay Dirt, LLC Rtex, Inc. SEECO, Inc. The Shakerag Trust Vendera Resources, LP Unleased Mineral Interest: Louis M. Anders and Jackie S. Anders, h/w Arkla Gas Company, their unknown successors and assigns Bar E. Investments

Billy Frank Booher, single and Kathy J. Booher, single; Booher Family Trust dated April 14, 2008 James Eugene Booher and Jessica G. Booher, h/w Kennith T. Crowell and Patricia O. Crowell, h/w Maurilio De Nicolo and Susan E. De Nicolo, Trustees of the De Nicolo Family Trust dated October 19, 1994 Gordon Fendley Mark Fendley Brent W. Freeman and Erica Freeman, h/w Ken Fritsche and Debbie Fritsche W.E. Hall, apparently deceased Unknown heirs and assigns of W.E. Hall, apparently deceased Anthony R. Henderson and Serena K. Henderson Robert Glenn Henderson and Pamma Lee Henderson, Individually; Robert Glenn Henderson and Pamma Lee Henderson Joint Living Trust; James D. Holt and Ida S. Holt, h/w Derek K. Horton and Natalie M. Horton, h/w Joe Wesley Hunt Hunter Hill Cemetery Danny Linn and Linda Linn, h/w Bradley Q. Mohr and Winnie S. Mohr, h/w M. Edward Morgan and Ginger Morgan, h/w Tammi Neldon a/k/a Tammi Meyers a/k/a Tami Neldon a/k/a Tami Meyers Pierce Mineral, LLLP Gerald Ragland Kimberly Ragland

Yvonne Ragland Reds Corporation Charles N. Wohlford

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

UNCOMITTED WORKING INTEREST Adexco Production Company 4-29-14 Mailed well proposal and AFE Barlow Projects, Inc. 4-29-14 Mailed well proposal and AFE BHP Billiton Petroleum (Fayetteville) LLC 4-29-14 Mailed well proposal and AFE Four Score Oil & Gas, LLC 4-29-14 Mailed well proposal and AFE Carrie Hinds 4-29-14 Mailed well proposal and AFE William Hinds 4-29-14 Mailed well proposal and AFE Highway 95 Surprise, LLC 4-29-14 Mailed well proposal and AFE Makena Enterprises LLC 4-29-14 Mailed well proposal and AFE PetroQuest Energy, LLC 4-29-14 Mailed well proposal and AFE Pop’s Pay Dirt, LLC 4-29-14 Mailed well proposal and AFE

RTEX, Inc. 4-29-14 Mailed well proposal and AFE SEECO, Inc. 4-29-14 Mailed well proposal and AFE The Shakerag Trust 4-29-14 Mailed well proposal and AFE Vendera Resources, LP 4-29-14 Mailed well proposal and AFE UNLEASED MINERAL INTEREST Louis M. Anders and Jackie S. Anders, h/w 11/14/2012 Searched public records for contact information. All numbers were

disconnected. Sent a letter to address of records asking for a return call. 12/10/2012 Sent a letter. 1/21/2013 Sent a lease packet to address of record. 3/2/2013 Searched again for contact information. Found none by name or address.

Sent a letter. 4/26/2013 Sent letter. Found a different address and sent a letter there also. 5/12/2013 Letter to Ohio address returned as undeliverable. 6/13/2013 Sent lease packet. 6/24/2013 Field Agent went to address of record. No one was home so he left a note

asking for a return call. 8/2/2013 Sent letter. 9/5/2013 Field Agent went to address of record. He left a note with a young girl

who said that her parents were at work. 10/1/2013 Mailed lease packet.

11/16/2013 Sent letter.

12/13/2013 Field Agent went to address of record. There was no one home, so he left

a lease packet. 1/17/2014 Mailed letter. 2/27/2014 Mailed lease packet 3/6/2014 Mailed lease packet with Integration terms. 3/20/2014 Field Agent went to address of record. There was no answer, so he left a

note. 3/24/2014 Field Agent spoke with Jackie who said they have not decided on leasing.

She did not provide a phone number, but said she would call if they made a decision.

4/17/2014 Field Agent spoke with Jackie who said they had not decided on leasing.

She would not provide a phone number.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Arkla Gas Company, their unknown successors and assigns THIS IS A PROFESSIONAL IN THE OIL AND GAS INDUSTRY 9/25/2013 Emailed Dwight Johnson to see if they are claiming the interest. He

responded with his terms, but didn't verify if they were claiming the interest or not.

10/7/2013 Sent a lease packet to Monette Harbert to see if they are claiming the

interest. 2/24/2014 Called Dwight Johnson and Monette Harbert. Had to leave a message. 3/4/2014 Emailed Dwight to see if they are claiming this interest. Spoke with

Monette who stated that Dorchester has no record of this interest and is not claiming it. Dwight emailed back they are not claiming this interest.

3/7/2014 Left a message for Arkla Gas in Shreveport. Spoke with the widow of

Ron Ellis who was the Agent for Arkla Gas Company on the WD. She said that Ron had worked for Arkla when the WD was given and the company name changed to Centerpoint Energy. Emailed Dwight Johnson providing a copy of the WD.

3/10/2014 Received an email from David Burnett with Centerpoint regarding the

mineral interest. 4/17/2014 Left a message for Dwight.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Bar E Investments 11/14/2012 Searched public records for contact information. There was no answer.

Sent a letter to address of records asking for a return call. 11/23/2013 No answer. 12/6/2012 No answer. Sent a letter. 12/10/2012 No answer. Found a different number. Called and left a message. 12/11/2013 The Managing Partner called and stated that he would not lease at the

terms being offered. 12/11/2012 Mailed a lease packet. 1/11/2013 Received an email from the Bar E Attorney, Nathan, who stated the terms

that his client wanted. I responded that XTO was not agreeable to the requested terms.

2/7/2013 Received an email from Nathan asking if XTO had changed the leasing

terms. I responded that the terms had not changed. 3/19/2013 Emailed Nathan with leasing terms. However, he responded that his client

would not agree to the terms. 3/29/2013 Emailed Nathan asking if his client would consider leasing at the terms

offered. He said no. 5/3/2013 Left a message for Nathan asking for a return call.

6/25/2013 Lease packet was mailed for consideration. 8/2/2013 Left a message for Managing Partner asking for a return call. 9/12/2013 Left a message for Managing Partner. 10/1/2013 Emailed Nathan with leasing terms and explaining that a lease packet was

being mailed for consideration. 11/17/2013 Left a message for the Managing Partner.

12/18/2013 Field Agent went to address. Tom Elliott wasn't there, but his associate

called him and let me talk to him. He didn't provide a contact number. 1/17/2014 Left a message for the Managing Partner. 2/27/2014 Mailed lease packet. 3/4/2014 Left a message for Tom Elliott asking for an update on leasing. Received

a call from Nathan Morgan stating that his client will only sign a true gross lease.

Received an email from the Attorney stating requested leasing terms.

3/6/2014 Mailed lease packet with Integration terms. 3/19/2014 Emailed Attorney notifying him that a lease packet had been mailed with

the April Intergration terms. 4/11/2014 Spoke with Mark Cambiano in reference to this parcel. 4/14/2014 Emailed Mark regarding the acreage allowed for this parcel.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Billy Frank Booher, single and Kathy J. Booher, single; Booher Family Trust dated April 14, 2008 2/5/2013 Searched public records for contact information. Called and left a

message. 3/11/2013 Left a message. 3/18/2013 Called, but it was a wrong number. Searched for different number, found

nothing. Sent letter to address of record. 3/21/2013 Billy Booher called and stated that the Arrington lease had not been

extended. He also stated that the leasing terms offered were not acceptable.

4/19/2013 Called and left a message. 5/30/2013 Field Agent went to address of record and left a note. He then went to

Courthouse to find a recorded copy of the Trust. None found. 6/25/2013 Lease packet mailed. 7/1/2013 Billy stated that he had previously leased more acreage than what we

offered. He will not lease for less than previously leased. 7/25/2013 Spoke with Billy who said that he was the Trustee, but would not lease for

the acreage we show. 8/22/2013 Spoke with Billy and explained the mineral reservations on a portion of

his property. He does not accept that and also is not agreeable to the leasing terms.

9/9/2013 Billy said he will not lease unless our lease covers all of the mineral

interest. Tried again to explain the reservation. Booher said he would get attorney and get them back.

10/1/2013 Lease packet mailed. 12/9/2013 Left a message. 1/17/2014 Left a message.

2/27/2014 Mailed lease packet. 3/4/2014 Spoke with Billy who is adamant that until a Judge and Court rules that

they do not own the minerals, they will not accept an Attorney’s Opinion. They will also not lease for the terms being offered.

3/6/2014 Mailed lease packet with Integration terms. 4/14/2014 Left a message. 4/17/2014 Left a message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

James Eugene Booher and Jessica G. Booher, h/w 2/5/2013 Searched public records for contact information. Tried seven different

numbers, but all were disconnected. 3/11/2013 Left a message at his Father’s number asking him to please have James

call. 3/18/2013 Called his Father’s number again, but it was a wrong number. Searched

for different number, found nothing. Sent letter to address of record. 3/21/2013 James and his Father, Billy, called and stated that their Arrington lease had

not been extended. They also stated that the leasing terms offered were not acceptable. James said that he would lease if and when his Father did.

4/19/2013 Called and left a message asking Billy to please have James call. 5/30/2013 Field Agent went to address of record and left a note. 6/25/2013 Lease packet mailed. 7/1/2013 Received a call from Billy who stated that his son owns more acreage than

what we are allowing. He said that he, nor James, will not lease for less than what they own.

7/25/2013 Spoke with Billy who again said that he and James would not lease for the

acreage we show. 8/22/2013 Spoke with Billy and asked for James contact number. He said that he

would tell James to call if he wanted to talk to me. 9/9/2013 Billy said that he and James are trying to get the acreage verified, but will

not lease at our offered terms. 10/1/2013 Lease packet mailed. 12/9/2013 Left a message. 1/17/2014 Left a message. 2/27/2014 Mailed lease packet.

3/4/2014 Spoke with Billy who is adamant that until a Judge and Court rules that they do not own the minerals, they will not accept an Attorney’s Opinion. They will also not lease for the terms being offered. He said he would tell James I called.

3/6/2014 Mailed lease packet with Integration terms. 4/14/2014 Left a message at Billy’s number. 4/17/2014 Left a message with Billy asking for a return call.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Kennith T. Crowell and Patricia O. Crowell, h/w 10/1/2013 Searched public records for contact information. Mailed lease packet for

consideration. 11/9/2013 Left a message asking for a return call. 12/9/2013 Sent lease packet. 12/13/2013 Field Agent went to address of record. No one was home, so he left a

lease packet.

12/9/2013 Left a message. 1/17/2014 Left a message asking for a return call. 2/27/2014 Mailed lease packet.

3/4/2014 Left a message. 3/6/2014 Mailed lease packet with Integration terms. 3/20/2014 Field Agent went to address or record. There were trucks at the house, but

no one came to the door. He left a note. 4/16/2014 Left a message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Maurilio De Nicolo and Susan E. De Nicolo Trustees of the De Nicolo Family Trust dated October 19, 1994 2/5/2013 Searched public records for contact information. Left a message asking

for a return call. 2/11/2013 Spoke with Maurilio who stated that this mineral interest was leased. 3/5/2013 Left a message. 3/11/2013 Left a message. 3/19/2013 Left a message. 3/21/2013 Spoke with Maurilio who again stated that it is leased and he draws a

royalty. 9/20/2013 Checked with XTO, this lease was not extended. 10/1/2013 Mailed lease packet. 11/19/2013 Spoke with Maurilio, who stated that he does not understand why we keep

calling, when this interest is leased. 12/9/2013 Left a message. 1/17/2014 Left a message. 2/27/2014 Mailed lease packet. 3/4/2014 Left a message asking for a return call.

3/6/2014 Mailed lease packet with Integration terms. 4/16/2014 Left a message explaining that this parcel is not covered by any of his

other leases.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Gordon Fendley (Successor in interest to RFC, Inc.) 12/9/2013 Searched public records for contact information. Left a message asking

for a return call. Mailed lease packet. 1/17/2014 Left a message. 2/27/2014 Left a message. 3/4/2014 Spoke with Yvonne who said that her company (RFC, Inc.) had been

dissolved. She stated that she would not lease for the terms being offered and would wait to be Integrated. Said the interest was divided up between a few different owners (didn't provide names) and that she would recommend to the other parties that they do the same . Searched online for Deed, found none. Yvonne stated that she is in tax season, so please do not bother her until after April 15

3/6/2014 Mailed lease packet with Integration terms. 3/10/2014 Field Agent found Deed. Searched paid internet websites for contact

information on the new owners. Found no contact for any of them. Mailed a lease packet to Yvonne and to each of the other owners at Yvonne’s address.

4/18/2014 Spoke with Yvonne who said she had not had time to look at the lease, and

asked what the terms were. I told her the terms offered were the Integration terms. She said she would discuss with the other parties and would call if she had questions.

4/21/2014 Spoke with Yvonne who asked questions regarding the mineral ownership,

they thought they owned all of the minerals. Provided the book and page to the mineral reservation in 1944. She said it would be a family decision and they were considering participating.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Mark Fendley (Successor in interest to RFC, Inc.) 12/9/2013 Searched public records for contact information. Left a message asking

for a return call. Mailed lease packet. 1/17/2014 Left a message. 2/27/2014 Left a message. 3/4/2014 Spoke with Yvonne who said that her company (RFC, Inc.) had been

dissolved. She stated that she would not lease for the terms being offered and would wait to be Integrated. Said the interest was divided up between a few different owners (didn't provide names) and that she would recommend to the other parties that they do the same . Searched online for Deed, found none. Yvonne stated that she is in tax season, so please do not bother her until after April 15

3/6/2014 Mailed lease packet with Integration terms. 3/10/2014 Field Agent found Deed. Searched paid internet websites for contact

information on the new owners. Found no contact for any of them. Mailed a lease packet to Yvonne and to each of the other owners at Yvonne’s address.

4/18/2014 Spoke with Yvonne who said she had not had time to look at the lease, and

asked what the terms were. I told her the terms offered were the Integration terms. She said she would discuss with the other parties and would call if she had questions.

4/21/2014 Spoke with Yvonne who asked questions regarding the mineral ownership,

they thought they owned all of the minerals. Provided the book and page to the mineral reservation in 1944. She said it would be a family decision and they were considering participating.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Brent W. Freeman and Erica Freeman, h/w 10/1/2013 Searched public records for contact information. Mailed lease packet 10/26/2013 Left a message. 11/9/2013 Called and left message. 12/9/2013 Field Agent went to address, but no one was home. He left a lease packet. 1/17/2014 Left a message. 2/27/2014 Mailed lease packet. 3/4/2014 Left a message asking for a return call. 3/6/2014 Mailed lease packet with Integration terms. 3/20/2014 Field Agent went to address of record. Brent said that his wife Wendy had

passed away and he had remarried. He asked that a new lease packet be mailed. A new packet was prepared and the Field Agent dropped it off for execution.

4/16/2014 Left a message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Ken Fritsche and Debbie Fritsche This is a Professional in the Oil and Gas Industry 2/24/2014 No answer. 2/28/2014 No answer. 3/4/2014 No answer, no machine. Mailed lease packet. Spoke with Ken who stated

that he and Charles Wohlford (business partners) had not made a decision on leasing or participating. To check back in a week or so.

3/6/2014 Mailed lease packet with Integration terms. 3/7/2014 Spoke with Charles Wohlford who said that he and Ken had not made a

decision on whether to participate or lease and to send both lease packets to the Ft. Smith address. They will wait on an AFE.

3/19/2014 Spoke with Charles who said that he and Ken are going to wait for

Integration and to please just send one AFE for he and Ken instead of one to each.

4/21/2014 Spoke with Charles to let him know that we are going to Integration in

May for this interest. He said he would notify Ken.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

W.E. Hall, apparently deceased Unknown heirs and assigns of W.E. Hall, apparently deceased This is listed for curative purposes, as it appears that the Hall heirs have leased this interest. 12/14/2013 Searched public records for contact information. Spoke with John Hogan,

who is one of the Hall heirs. He stated that all documentation had been provided to Petrohawk Energy and suggested that we obtain it from them.

1/19/2014 Left messages for several other apparent heirs asking for a return call. 2/6/2014 Left messages for eleven other heirs who have leased their interest. 2/16/2014 Spoke with William Irby. He stated that to his knowledge all of the

known heirs of W.E. Hall have leased their interest. He said that the necessary documents had been provided when the heirs

signed leases and before they were paid. He did not have a copy. 3/24/2014 Field Agent went to address of record for an apparent heir. He left a note

asking for a return call. .

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Anthony R. Henderson and Serena K. Henderson 9/14/2013 Searched public records for contact information. Found no working

numbers. Sent letter to two addresses asking for a return call. 10/1/2013 Sent a lease packet to address of record. 10/2/2013 Searched internet for phone number. All are disconnected.

1/17/2014 Mailed a letter asking for a return call. 2/27/2014 Mailed lease packet. 3/4/2014 Mailed a letter asking for a return call.

3/6/2014 Mailed lease packet with Integration terms. 3/21/2014 Field Agent went to address of record. There was no answer, so he left a

note asking for a return call. 4/16/2014 Searched websites again for contact information. Called and spoke with

Anthony who said they will not lease before Integration.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Robert Glenn Henderson and Pamma Lee Henderson, Individually; Robert Glenn Henderson and Pamma Lee Henderson Joint Living Trust 9/14/2013 Searched public records for contact information. Found no working

numbers. Sent letter to Van Buren address asking for a return call. 10/1/2013 Sent a lease packet to Edgemont address. 10/2/2013 Searched internet for contact information. Found a new address and

phone number. Called and left a message. 11/6/2013 Left a message asking for a return call. 12/14/2013 Left a message.

1/17/2014 Left a message. 2/27/2014 Mailed lease packet. 3/4/2014 Left a message asking for a return call. 3/6/2014 Mailed lease packet with Integration terms. 4/16/2014 Searched websites again for contact information. Left a message asking

for a return call.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

James D. Holt and Ida S. Holt, h/w 10/1/2013 Searched public records for contact information. Sent lease packet. 11/16/2013 Left a message. 12/9/2013 Sent lease packet. 12/13/2013 Field Agent went to address of record and spoke with Ida. She said they

were not interested and slammed door in his face. 1/17/2014 Left a message. 2/27/2014 Mailed lease packet. 3/4/2014 Called and Ida answered. When I told her who I was, she said they are not

interested and hung up. 3/6/2014 Mailed lease packet with Integration terms. 4/16/2014 Left a message asking for a return call.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Derek K. Horton and Natalie M. Horton, h/w 10/1/2013 Searched public records for contact information. Sent lease packet. 11/16/2013 Left a message. 12/9/2013 Sent lease packet. 12/13/2013 Field Agent went to address of record, there was no one home, so he left a

note asking for a return call. 1/17/2014 Left a message. 2/27/2014 Mailed lease packet. 3/4/2014 No answer. No machine. 3/6/2014 Mailed lease packet with Integration terms. 3/20/2014 Field Agent went to address of record. Derek asked that a new lease

packet be mailed. Lease packet was prepared and Field Agent delivered it to the house.

. 4/16/2014 Spoke with Natalie who said that she would have her husband call.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Joe Wesley Hunt 10/1/2013 Searched public records for contact information. Mailed lease packet. 11/6/2013 Sent letter asking for a return call. 11/11/2013 Received a note from Joe Hunt stating that he wanted to sell the minerals

not lease, and that he wanted a much larger offer. 12/9/2013 Sent lease packet. 1/17/2014 Mailed letter asking for a return call. 2/27/2014 Mailed lease packet. 3/6/2014 Mailed lease packet with Integration terms. 4/16/2014 Called other landowners in the area, but none of them knew him. Mailed

letter.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Hunter Hill Cemetery 10/4/2013 Searched public records for contact information. Mailed lease packet. 11/16/2013 Called and left a message at the McCormick number. 12/13/2013 Field Agent went to address and left a lease packet with Ms. McCormick. 1/17/2014 Left a message for Mr. McCormick. 2/27/2014 Mailed lease packet. 3/6/2014 Mailed lease packet with Integration terms. 3/24/2014 Field Agent went to address of record. There was no answer, so he left a

note asking for a return call. 4/16/2014 Spoke with the widow of another Trustee who referred me to Steven

Smith at Simmons Bank. Spoke with Steven who stated that most of the Trustees are either deceased or not capable of executing a lease. He will try to find persons that would be in charge and call.

4/19/2014 Spoke with Richard McCormick who said the Trustees were meeting this

week to sign the lease.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Danny Linn and Linda Linn, h/w 10/10/2013 Spoke with Danny who stated that they will participate. 11/5/2013 Field Agent went to Danny’s place of business. He was not there, but

Agent left a note with an employee who said that he would make sure that Danny got it.

12/14/2013 Left a message. 1/12/2014 Left a message. 2/4/2014 Spoke with Danny who said that he is going to participate. 3/6/2014 Mailed lease packet with Integration terms. 3/19/2014 Spoke with Danny and he said that they are going to participate. 4/16/2014 Left a message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Bradley Q. Mohr and Winnie S. Mohr, h/w 10/1/2013 Searched public records for contact information. Sent lease packet. 11/16/2013 Left a message. 12/13/2013 Field Agent went to address of record. There was no one home, so he left

a lease packet. 1/12/2014 Spoke with Bradley. There are not going to lease. 2/27/2014 Mailed lease packet. 3/6/2014 Mailed lease packet with Integration terms.

3/20/2014 Field Agent went to address of record and spoke with Bradley who said

that are not interested in leasing. 4/16/2014 Left a message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

M. Edward Morgan and Ginger Morgan, h/w 3/24/2014 Spoke with Eddie who asked that a lease packet be emailed for execution.

Lease packet emailed. 4/2/2014 Received an email for Eddie who said his wife wanted a lease packet

mailed to their address. Lease packet mailed. 4/16/2014 Left a message for Eddie. He is on vacation and out of the office. 4/21/2014 Left a message with his Receptionist. 4/22/2014 Spoke with his Secretary who said he is in Court, but she will give him my

message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Tammi Neldon a/k/a Tammi Meyers a/k/a Tami Neldon a/k/a Tami Meyers 10/1/2013 Searched public records for contact information. Sent lease packet. 11/16/2013 Left a message. 12/13/2013 Field Agent went to address of record. Lady who answered the door said

Tammi was asleep, but she would have her call. A lease packet was left. 12/14/2013 Tammi called Field Agent and said that she wanted a lot more money than

was being offered. 12/16/2013 Tammi called and asked for more money. Told her that was most that had

been offered. She said she would sign and mail the lease. 12/26/2013 Tammi called and said that her name was now Meyers and that she

couldn’t cash the draft with Neldon on it. Explained that it takes 30 banking days to process and that we would send her a new lease packet with the name change. Mailed new lease packet for execution.

1/17/2014 Left a message. 2/27/2014 Mailed a lease packet. 3/4/2014 Left a message. 3/6/2014 Mailed lease packet with Integration terms. 3/20/2014 Field Agent went to address of record, but there was a “Private Property

No Trespassing” sign at the driveway, so he went no further. 4/16/2014 Left a message.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Pierce Mineral, LLLP This is Professional in the Oil & Gas Industry 2/26/2014 Left a message asking for a return call. 3/4/2014 Spoke with Tyler who asked that a lease packet be emailed for

consideration. Emailed lease. 3/6/2014 Mailed lease packet with Integration terms. 3/19/2014 Spoke with Tyler who provided the Deed into Pierce Mineral and asked

that a new lease packet be emailed. They have not decided on whether to lease or participate.

4/16/2014 Emailed asking Tyler if they had made a decision on leasing or

participating.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Gerald Ragland (Successor in interest to RFC, Inc.) 12/9/2013 Searched public records for contact information. Left a message asking

for a return call. Mailed lease packet. 1/17/2014 Left a message. 2/27/2014 Left a message. 3/4/2014 Spoke with Yvonne who said that her company (RFC, Inc.) had been

dissolved. She stated that she would not lease for the terms being offered and would wait to be Integrated. Said the interest was divided up between a few different owners (didn't provide names) and that she would recommend to the other parties that they do the same . Searched online for Deed, found none. Yvonne stated that she is in tax season, so please do not bother her until after April 15

3/6/2014 Mailed lease packet with Integration terms. 3/10/2014 Field Agent found Deed. Searched paid internet websites for contact

information on the new owners. Found no contact for any of them. Mailed a lease packet to Yvonne and to each of the other owners at Yvonne’s address.

4/18/2014 Spoke with Yvonne who said she had not had time to look at the lease, and

asked what the terms were. I told her the terms offered were the Integration terms. She said she would discuss with the other parties and would call if she had questions.

4/21/2014 Spoke with Yvonne who asked questions regarding the mineral ownership,

they thought they owned all of the minerals. Provided the book and page to the mineral reservation in 1944. She said it would be a family decision and they were considering participating.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Kimberly Ragland (Successor in interest to RFC, Inc.) 12/9/2013 Searched public records for contact information. Left a message asking

for a return call. Mailed lease packet. 1/17/2014 Left a message. 2/27/2014 Left a message. 3/4/2014 Spoke with Yvonne who said that her company (RFC, Inc.) had been

dissolved. She stated that she would not lease for the terms being offered and would wait to be Integrated. Said the interest was divided up between a few different owners (didn't provide names) and that she would recommend to the other parties that they do the same . Searched online for Deed, found none. Yvonne stated that she is in tax season, so please do not bother her until after April 15

3/6/2014 Mailed lease packet with Integration terms. 3/10/2014 Field Agent found Deed. Searched paid internet websites for contact

information on the new owners. Found no contact for any of them. Mailed a lease packet to Yvonne and to each of the other owners at Yvonne’s address.

4/18/2014 Spoke with Yvonne who said she had not had time to look at the lease, and

asked what the terms were. I told her the terms offered were the Integration terms. She said she would discuss with the other parties and would call if she had questions.

4/21/2014 Spoke with Yvonne who asked questions regarding the mineral ownership,

they thought they owned all of the minerals. Provided the book and page to the mineral reservation in 1944. She said it would be a family decision and they were considering participating.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Yvonne Ragland (Successor in interest to RFC, Inc.) 12/9/2013 Searched public records for contact information. Left a message asking

for a return call. Mailed lease packet. 1/17/2014 Left a message. 2/27/2014 Left a message. 3/4/2014 Spoke with Yvonne who said that her company (RFC, Inc.) had been

dissolved. She stated that she would not lease for the terms being offered and would wait to be Integrated. Said the interest was divided up between a few different owners (didn't provide names) and that she would recommend to the other parties that they do the same . Searched online for Deed, found none. Yvonne stated that she is in tax season, so please do not bother her until after April 15

3/6/2014 Mailed lease packet with Integration terms. 3/10/2014 Field Agent found Deed. Searched paid internet websites for contact

information on the new owners. Found no contact for any of them. Mailed a lease packet to Yvonne and to each of the other owners at Yvonne’s address.

4/18/2014 Spoke with Yvonne who said she had not had time to look at the lease, and

asked what the terms were. I told her the terms offered were the Integration terms. She said she would discuss with the other parties and would call if she had questions.

4/21/2014 Spoke with Yvonne who asked questions regarding the mineral ownership,

they thought they owned all of the minerals. Provided the book and page to the mineral reservation in 1944. She said it would be a family decision and they were considering participating.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Reds Corporation 11/14/2013 Searched public records for contact information. Found nothing by this

name. Sent letter to address of record. 12/10/2013 Sent letter asking for a return call. 12/11/2013 Spoke with a local Realtor who provided contact information. Left a

message asking for a return call. 12/14/2013 Left a message. 1/17/2014 Spoke with the Owner, Pat Jones, who said that this interest was leased

already. 1/30/2014 Field Agent checked Courthouse records, but found no lease. 1/31/2014 Spoke with Pat again and she stated that she will not lease and will be

integrated. 2/27/2014 Mailed lease packet. 3/4/2014 Spoke with Pat who said that she will lease for different leasing terms. 3/6/2014 Mailed lease packet with Integration terms. 4/16/2014 Left a message.

.

RESUME OF EFFORTS

SECTION 35, TOWNSHIP 11 NORTH, RANGE 14 WEST VAN BUREN COUNTY, ARKANSAS

Charles N. Wohlford This is a Professional in the Oil and Gas Industry 1/3/2013 Charles emailed asking what the leasing terms are. Emailed leasing terms. 3/4/2014 Spoke with Ken Fritsche who stated that he and Charles had not made a

decision on leasing or participating. To check back in a week or so. 3/6/2014 Mailed a lease packet with Integration terms. 3/7/2014 Spoke with Charles who said that he and Ken had not made a decision on

whether to participate or lease and to send both lease packets to the Ft. Smith address. They will wait on an AFE.

3/19/2014 Spoke with Charles who said that he and Ken are going to wait for

Integration and to please just send one AFE for he and Ken instead of one to each.

4/21/2014 Spoke with Charles to let him know that we are going to Integration in

May for this interest. He said he would notify Ken.

EXHIBIT “C”Applicant’s statement regarding Operating Agreement

The applicant requests incorporation of the Model Form Joint Operating Agreement

approved by the Arkansas Oil and Gas Commission on October 28, 2008, with Paragraph

III.1.A.(1) of the COPAS providing for a drilling well rate of $7,500.00 and a producing

well rate of $750.00 , and with the following proposed revisions, deletions and/or

insertions, if applicable:

NONE

L1L2

McCaslin 11-14

#3-36H Wellpath

Griffin 11-14

#1-36H Wellpath

McCaslin 11-14

#2-36H Wellpath

McCaslin 11-14 #1-36H Wellpath

LINE TABLELINE

L1L2

GRID AZIMUTH89.859941°0.935780°

LENGTH

4726'607'

Higgins #1-35H Exceptional Location

Section 35 – T11N R14W Van Buren County, Arkansas

UPPER FAYETTEVILLE SHALE STRUCTURE MAP

Contour Interval 100’

Exhibit E Geologist: K. Fawcett Date: March 2014

UPPER FAYETTEVILLE SHALE ISOPACH MAP Contour Interval 50’

Exhibit F Geologist: K. Fawcett Date: March 2014

Higgins #1-35H Exceptional Location

Section 35 – T11N R14W Van Buren County, Arkansas

UPPER FAYETTEVILLE SHALE PLAT MAP

Exhibit G Geologist: K. Fawcett Date: March 2014

Higgins #1-35H Exceptional Location

Section 35 – T11N R14W Van Buren County, Arkansas