DAILY & WOODS A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW

Transcription

1 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. MI CHA EL D AILY, P.A. COBY W. LOGAN L. MATTHEW DAVIS COLBY ROE * Fayetteville Office Also Licensed in Oklahoma November 17, 2009 DAILY & WOODS A PROFESSIONAL LIMITED LIABILITY COMPANY ATTORNEYS AT LAW KMW BUILDING 58 SOUTH SIXTH STREET P.O. BOX 1446 FORT SM ITH, AR TELEPHON E (479) FAX (479) COMMERCE PARK II BUILDING 2049 EAST JOYC E BOULEV ARD, STE. 301 FAYETTEV ILLE, AR TELEPHON E (479) FAX (479) JAMES E. WEST PHILLIP E. NORVELL * DALE CARLTON * OF COUNSEL HARRY P. DAILY ( ) JOHN P. WO ODS ( ) JOHN S. DAILY ( ) Arkansas Oil and Gas Commission 301 Natural Resources Drive, Suite 102 Little Rock, Arkansas Re: ORDER REFERENCE NO Application of SEECO, Inc. for Integration of All Unleased Mineral Interests and Non-consenting Working Interests in a unit described as Section 16, Township 7 North, Range 16 West, Conway County, Arkansas Commissioners: SEECO, Inc., 2350 N. Sam Houston Parkway E, Houston, TX 77032, hereby applies to the Arkansas Oil and Gas Commission for the integration of all unleased mineral interests and non-consenting working interests in its proposed drilling unit which is described above. 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 non-exceptional surface location in the Southeast Quarter down to a non-exceptional bottom hole location in the Northwest Quarter of the abovedescribed unit. The proposed well will be drilled to a total vertical depth of 6,119 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.

2 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 proposed well; that they have been offered a fair and reasonable bonus consideration for the execution of an oil and gas lease covering their interests; that they have been furnished with a proposed oil and gas lease and a copy of the AAPL operating agreement form which applicant proposes to use in connection with the drilling of said well; but that all of the efforts of the applicant have produced no agreement by said parties. 5. Applicant states that it is in the best interest of conservation and the protection of correlative rights of all interested parties that the proposed unit be developed for oil and gas 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, in the alternative, that: (a) (b) The owners of non-consenting oil and gas leasehold working interests indicated above shall participate in the cost of drilling, testing and completion of the test well to be drilled by applicant on the captioned unit, subject to the terms of an Operating Agreement which substantially employs the terms of the AAPL Operating agreement, with a COPAS attached. All of the non-consenting oil and gas leasehold working interests within the proposed unit shall be force pooled and integrated into said unit, and a reasonable risk factor shall be established and assessed as a penalty against said integrated interest. 7. Applicant further states that due to the risks and costs inherent in the drilling of the proposed well, the Commission should fix a reasonable risk factor to be assessed as a penalty against the integrated interests within the unit. The risk factor should be applied to the proportionate cost and expense of drilling, completing and equipping the well, 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 after issuance of the Commission's order as between alternatives (a) and (b), it shall be assumed that the integrated parties elected alternative (b) in lieu of the right to participate in the working interest in said unit. 8. Applicant requests that the Arkansas Oil and Gas Commission set this matter for public hearing, and after same, issue its order, in the alternative, that: (a) Each of the owners of the unleased mineral interests indicated above execute and deliver to applicant a one year oil and gas lease, on an AAPL lease form, for a bonus consideration of $ per net mineral acre to be paid as fair and reasonable

3 compensation in lieu of the right to participate in the working interest in said unit, and that said oil and gas lease provide for a 1/6 royalty on oil and gas. (b) (c) Each of the owners of unleased mineral interests indicated above be force pooled and integrated into the captioned unit with assessment of a reasonable risk factor penalty against their interest. The owners of unleased mineral interests shall participate in the cost of drilling, testing and completion of the test well to be drilled by applicant on the captioned unit, subject to the terms of an operating agreement which substantially employs the terms of the AAPL 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 the development of the above described unit, and, in the event no election is made, that it shall be assumed that the owner of said unleased mineral interest has elected to accept a bonus of $ per net mineral acre as compensation in lieu of the right to participate in the working interest in said unit, and with the royalty to be 1/6. 9. Applicant further states that due to the risks and costs inherent in the drilling of the proposed well, the Commission should fix a reasonable risk factor to be assessed as a penalty against the integrated interests within the unit. The risk factor should be applied to the proportionate cost and expenses of drilling, completing and equipping the well, 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 that any party electing either to participate or be force pooled subject to recoupment of a risk factor penalty be bound by the terms of the attached AAPL Operating Agreement for the life of commercial production within the unit so that all future unit operations might be proposed pursuant to the provisions of such agreement without the necessity of future action by this Commission. 11. Applicant also requests that said order be made applicable to any unknown spouse, heir, devisee, personal representative, successor or assign of said parties. 12. The names and addresses of parties interested in this proceeding are set forth in Exhibit "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.

4 Box 1446, Fort Smith, Arkansas, 72902, on behalf of applicant. Very truly yours, Thomas A. Daily jmt

5 Exhibit A RE: SEECO, Inc. Integration Application Section 16, T 7N R 16W Conway County, AR UNIT WORKING INTEREST OWNERS Arrington-Ramshorn Fayettville Shale & Floyd Shale Joint Venture BP America Production Company Ceres Resource Partners Chesapeake Exploration LLC Petrohawk Properties, LP UNLEASED/NON OPTIONED MINERAL INTEREST OWNERS Ethel Bourland Robert E. Bourland and Ada Marie Bourland J. E. Brazil and Carrie Brazil J. E. Brazil Consolidated Resources Company, LLC C.G. Drescher and Helen Drescher Entergy Arkansas, Inc Jay Fontaine Esther Frick William D. Mathis III and Marcia B. Mathis Laura Sparks McCray Victor Porter RidgeRock, LLC Harrold R. Smith and Carolyn Smith Helen Smith Susan Sparks J. L. Chesser and Linda S. Chesser Robert C. Tidwell 1

6 Exhibit A Vivian Rose Counts Jessica Dvergsten a/k/a Jessica Gibson Mary Inez Lane Gibson Leslie Gordon Simons Inez Jessie Brazil Lane and Robert Lane Katherine Rice McRae Vivian Brazil Rice Leslie R. Rathbun Clay Brazil and Velma Brazil Robert Paul McRae and Katherine Rice 2

7 Arrington-Ramshorn Fayetteville Shale & Floyd Shale Joint Venture 11/05/2009 Ben Meggs of SEECO, Inc. sent via FedEx an AFE, JOA, and a well proposal letter for drilling and integration of the Denham Trust #1-16H to Arrington-Ramshorn Fayetteville Shale & Floyd Shale Joint Venture. 1

8 BP America Production Company 11/05/2009 Ben Meggs of SEECO, Inc. sent via FedEx an AFE, JOA, and a well proposal letter for drilling and integration of the Denham Trust #1-16H to BP American Production Company. 2

9 Ceres Resource Partners 11/05/2009 Ben Meggs of SEECO, Inc. sent via FedEx an AFE, JOA, and a well proposal letter for drilling and integration of the Denham Trust #1-16H to Ceres Resource Partners. 3

10 Chesapeake Exploration LLC 11/05/2009 Ben Meggs of SEECO, Inc. sent via FedEx an AFE, JOA, and a well proposal letter for drilling and integration of the Denham Trust #1-16H to Chesapeake Exploration LLC. 4

11 Petrohawk Properties, LP 11/05/2009 Ben Meggs of SEECO, Inc. sent via FedEx an AFE, JOA, and a well proposal letter for drilling and integration of the Denham Trust #1-16H to Petrohawk Properties, LP. 5

12 Ethel Bourland 08/03/2009 Kim Huett stated that she double checked title to verify not leased. Kim will update when finished and locate contact information. 08/09/2009 Kim Huett found documents on this mineral owner. Kim stated that she updated the system with the new information. 09/05/2009 Jason P. Wyer sent offer letter. 09/10/2009 Jason P. Wyer located several telephone number listings. Jason called telephone numbers but was not successful in locating this mineral owner. 09/14/2009 Jason P. Wyer spoke with a person of interest concerning leasing. 09/26/2009 Jason P. Wyer called left message. 10/05/2009 Jason P. Wyer called was told Ms. Bourland left for the day, should return Thursday, left message. 10/14/2009 Jason P. Wyer left message with new terms. 10/16/2009 Jason P. Wyer spoke with a person of interest concerning this interest states they have had offers of a certain amount and would be looking for at least a matching amount to consider leasing with us. 10/26/2009 Jason P. Wyer called left message. 6

13 Robert E. Bourland and Ada Marie Bourland 08/03/2009 Kim Huett stated that she double checked title to verify not leased. Kim will update when finished and locate contact information. 08/06/2009 Kim Huett found contact number for this mineral owner, called and left message on answering machine. Kim stated that on this same day she spoke with lessor and they have agreed to lease. Kim explained information with them. 09/14/2009 Kim Huett sent out lease and lessor is reviewing. 10/30/2009 Kim Huett stated that this lessor has advised that they have mailed the lease back. Kim advised that she will input information when received. 7

14 J. E. Brazil and Carrie Brazil 08/16/2009 Kim Huett received information concerning this mineral owner. 09/18/2009 Kim Huett has spoke with some people of interest concerning leasing of this mineral owner. Kim is in the process of locating verification of this information. 09/24/2009 Kim Huett found an address and phone number to a person of interest regarding this mineral owner called and left message. 10/13/2009 Jason P. Wyer spoke with Mr. Brazil will have his own lease form within next week or so. 10/19/2009 Kim Huett received information concerning this mineral owner and leasing. Kim spoke with a person of interest regarding this matter. Kim is waiting on approval of offer for them. 10/27/2009 Jason P. Wyer spoke with a person of interest states an attorney contacted them today about needing some paperwork signed and will be in touch with him. 10/28/2009 Kim Huett has this lessor committed. 8

15 J. E. Brazil 08/16/2009 Kim Huett received information concerning this mineral owner. 09/18/2009 Kim Huett has spoke with some people of interest concerning leasing of this mineral owner. Kim is in the process of locating verification of this information. 09/24/2009 Kim Huett found an address and phone number to a person of interest regarding this mineral owner called and left message. 10/13/2009 Jason P. Wyer spoke with Mr. Brazil will have his own lease form within next week or so. 10/19/2009 Kim Huett received information concerning this mineral owner and leasing. Kim spoke with a person of interest regarding this matter. Kim is waiting on approval of offer for them. 10/27/2009 Jason P. Wyer spoke with a person of interest states an attorney contacted them today about needing some paperwork signed and will be in touch with him. 10/28/2009 Kim Huett has this lessor committed. 9

16 Consolidated Resources Company, LLC 09/17/2009 Kim Huett mailed offer letter. 10/28/2009 Kim Huett spoke with this lessor and was advised that they will consider leasing with us but is recommending a certain amount. Kim stated they requested that she them an offer in regards to this mineral interest owned. Kim has ed a request of offer. 10

17 C.G. Drescher and Helen Drescher 07/30/2009 Kim Huett researched and did not locate any contact information through tax records. Kim is going to the courthouse to search for possible contact information. 08/11/2009 Kim Huett is trying to find correct information on this mineral owner. 09/17/2009 Kim Huett mailed offer letter to last address found. Kim is still trying to locate a person of interest. 10/05/2009 Kim Huett has tried several possible contact numbers and still not able to locate proper contact. 10/18/2009 Kim Huett called a possible contact telephone number and left detailed message. 10/24/2009 Kim Huett has not received a response from possible contact. Kim is working other avenues on the internet for possible contact. 11

18 Entergy Arkansas, Inc 08/06/2009 Kim Huett researched and found new information out regarding this mineral owner. 08/12/2009 Kim Huett has made a few phone calls to get contact information. 08/19/2009 Kim Huett received a phone number, called and left message. 08/20/2009 Kim Huett spoke with a person of interest who takes care of the mineral leasing. Kim made them an offer. Kim stated they will contact her with their request. 09/17/2009 Kim Huett sent an to see what other information or to find out the request of this mineral owner. 10/03/2009 Kim Huett sent another to this lessor. 10/20/2009 Kim Huett received a call from a person of interest and was advised they will have to call back due to them getting busy. 10/21/2009 Kim Huett called back and was away from desk, left detailed message requesting call back in regards to mineral interest and the offer they want. 10/24/2009 Kim Huett was advised that Jason Wyer is working this interest of negotiations. 12

19 Jay Fontaine 08/03/2009 Kim Huett is checking information out pertaining to this mineral owner. 08/10/2009 Kim Huett found a person of interest, address and possible telephone number concerning this lessor. 09/05/2009 Jason P. Wyer sent offer letter. 09/10/2009 Jason P. Wyer located several telephone number listings. Jason called telephone numbers but was not successful in locating this mineral owner. 09/14/2009 Jason P. Wyer spoke with a person of interest concerning leasing. 09/26/2009 Jason P. Wyer called left message. 10/05/2009 Jason P. Wyer called was told they had left for the day, should return Thursday, left message. 10/14/2009 Jason P. Wyer left message with new terms. 10/16/2009 Jason P. Wyer spoke a person of interest, stating that they have had offers before and would be looking for at least a matching amount to consider leasing with us. 10/26/2009 Jason P. Wyer called this lessor no answer, left message. 13

20 Esther Frick 08/03/2009 Kim Huett is verifying information regarding this mineral owner. 08/12/2009 Kim Huett found a document concerning this lessor. Kim will verify other information. 09/15/2009 Kim Huett is going to try and find a document for lessor. 10/03/2009 Kim Huett is going to have to send letter of contact for information. 14

21 William D. Mathis III and Marcia B. Mathis 08/03/2009 Kim Huett is verifying information regarding this mineral owner. 08/07/2009 Kim Huett found a contact number and left message. 08/10/2009 Kim Huett sent letter of contact and leaving message at different times to hopefully get response. 08/13/2009 Kim Huett spoke with Ms. Mathis and advised her to call back in the afternoon. 09/05/2009 Jason P. Wyer sent offer letter. 09/10/2009 Jason P. Wyer spoke with Ms. Mathis, asked that he call back after 6:30. Jason spoke with Mr. Mathis concerning leasing. 10/12/2009 Jason P. Wyer spoke with Ms. Mathis, having phone difficulties. Jason stated he will call them back on Tuesday. 10/13/2009 Jason P. Wyer spoke with Mr. Mathis and he has agreed to terms to lease. Jason mailed lease offer. 10/21/2009 Jason P. Wyer called and spoke with Mr. Mathis. Mr. Mathis stated that he now has offer from another company, stated we will need to beat this for his lease. 10/26/2009 Jason P. Wyer called no answer. 10/28/2009 Jason P. Wyer called left message. 15

22 Laura Sparks McCray 08/03/2009 Kim Huett is verifying information regarding this mineral owner. 08/10/2009 Kim Huett stated she is working on trying to locate proper contact information for lessor. 09/05/2009 Jason P. Wyer located possible address, mailed offer letter. 09/10/2009 Jason P. Wyer located potential telephone listing, wrong number. 09/22/2009 Jason P. Wyer was informed by Ms. McCray in that she had received offer letter and this is not the correct Ms. McCray. 09/26/2009 Jason P. Wyer searched for possible telephone listing no result. 10/05/2009 Jason P. Wyer located a telephone number called, wrong number. 10/14/2009 Jason P. Wyer located a possible address and telephone number called and was disconnected, sent offer letter. 10/21/2009 Jason P. Wyer searched for additional telephone listings, none found. 10/27/2009 Jason P. Wyer sent offer letter. 16

23 Victor Porter 08/03/2009 Kim Huett is verifying information regarding this mineral owner. 08/10/2009 Kim Huett is trying to locate correct number and/or address for contact. 09/05/2009 Jason P. Wyer located possible address for this lessor, mailed offer letter. 09/10/2009 Jason P. Wyer located several telephone listings, he was not successful. 09/19/2009 Jason P. Wyer called no answer. 09/26/2009 Jason P. Wyer called no answer. 10/05/2009 Jason P. Wyer called previous working telephone listing was told he had the wrong number. 10/14/2009 Jason P. Wyer located a possible address and telephone number called and was disconnected, sent offer letter. 10/16/2009 Jason P. Wyer sent offer letter to previously used address as well. 10/19/2009 Jason P. Wyer received offer letter returned undelivered for previous address. 10/21/2009 Jason P. Wyer called no answer. 10/27/2009 Jason P. Wyer called wrong number. 17

24 RidgeRock, LLC 09/17/2009 Kim Huett mailed offer letter. 10/15/2009 Kim Huett has received no contact still trying to find proper contacts for this company. 10/29/2009 Kim Huett spoke with a person of interest and asked that Kim send an offer via . Kim stated that she ed a request offer. 11/04/2009 Kim Huett sent an offer to see if she can get a response. 18

25 Harrold R. Smith and Carolyn Smith 09/18/2009 Kim Huett found several telephone numbers left detailed messages on answering machines. 10/03/2009 Kim Huett spoke with Ms. Smith and obtained her phone number and address. Ms. Smith stated that she has already received an offer from another company and asked if we were capable of giving more. Kim was advised that she was not able to do more at this time due to interest have. 11/04/2009 Kim Huett called to see if they had signed with another company yet since she has a new offer. Kim stated that they have signed. 19

26 Helen Smith 09/18/2009 Kim Huett found several telephone numbers left detailed messages on answering machines. 10/03/2009 Kim Huett is researching to find trying to locate proper contacts. 10/19/2009 Kim Huett spoke with Ms. Smith and obtained her address. Ms. Smith stated that she has already received an offer from another company and asked if we were capable of giving more. Kim was advised that she was not able to do more at this time due to interest have. 11/04/2009 Kim Huett called to see if they had signed with another company yet since she has a new offer. Kim was informed that they have signed. 20

27 Susan Sparks 08/03/2009 Kim Huett has double checked title to verify not leased. Kim will update when proper information is located. 08/10/2009 Kim Huett is working on trying to locate proper contact information. 09/05/2009 Jason P. Wyer located possible address, mailed offer letter. 09/10/2009 Jason P. Wyer located several telephone listings, he was not successful. 09/18/2009 Jason P. Wyer received offer letter returned undeliverable. 09/19/2009 Jason P. Wyer could not locate a different address from county tax rolls. Jason stated that he called previous found working numbers, there was no answer. 09/26/2009 Jason P. Wyer searched additional telephone listings, none were valid. 10/05/2009 Jason P. Wyer called a possible telephone no one there by that name. 10/14/2009 Jason P. Wyer located a possible address and telephone number, wrong number, sent offer letter. 10/21/2009 Jason P. Wyer searched for additional listings, none found. 10/28/2009 Jason P. Wyer received offer letter returned undeliverable. 21

28 J. L. Chesser and Linda S. Chesser 08/28/2009 Kim Huett found information out about this mineral owner. 09/13/2009 Kim Huett is checking court records for information concerning this interest. 10/12/2009 Kim Huett mailed letter of contact. 11/05/2009 Kim Huett found possible contact number. Kim stated she will call to verify information that is of concern. 22

29 Robert C. Tidwell 07/30/2009 Kim Huett found a new address for this mineral owner. 08/05/2009 Kim Huett has located a number to a person of interest called and left message. Kim also sent a letter of contact to this mineral owner. 08/06/2009 Kim Huett called and spoke with Mr. Tidwell. Kim stated that Mr. Tidwell would lease for a certain amount. 08/06/2009 Kim Huett spoke with Mr. Tidwell and still would like to receive a certain amount for leasing. Mr. Tidwell would like all documentation and contacts to go through his attorney from now on. 08/07/2009 Kim Huett received a call from Mr. Tidwell and has denied our offer. Mr. Tidwell stated he would lease through another company. 08/11/2009 Kim Huett received a message from Mr. Tidwell requesting information concerning leasing and integration. 08/19/2009 Kim Huett received call from Mr. Tidwell s attorney whom advised her that they have not leased with anyone and are willing to negotiate. 09/02/2009 Kim Huett is advised this is stranger to title. 10/19/2009 Kim Huett received a call from attorney and explained information concerning this interest to him. Kim stated that she advised him if he needed any more information to contact her. 23

30 Vivian Rose Counts 08/16/2009 Kim Huett received information concerning this mineral owner. 09/18/2009 Kim Huett has spoke with some people of interest concerning leasing of this mineral owner. Kim is in the process of locating verification of this information. 09/24/2009 Kim Huett found a possible address and phone number regarding this mineral owner called and left message. 10/13/2009 Jason P. Wyer spoke with a person of interest regarding this interest, they stated there will be a lease form sent within the next week or so. 10/19/2009 Kim Huett was advised about information concerning this mineral owner. Kim will go to the court house to verify this information. 10/19/2009 Kim Huett received information concerning this interest. Kim stated she is going to the court house to research documents which she was advised about. 24

31 Jessica Dvergsten a/k/a Jessica Gibson 08/16/2009 Kim Huett received information concerning this mineral owner. 09/18/2009 Kim Huett has spoke with some people of interest concerning leasing of this mineral owner. Kim is in the process of locating verification of this information. 10/19/2009 Kim Huett received information concerning this mineral owner and leasing. Kim spoke with a person of interest regarding this matter. Kim is waiting on approval of offer for them. 25

32 Mary Inez Lane Gibson 08/16/2009 Kim Huett received information concerning this mineral owner. 09/18/2009 Kim Huett has spoke with some people of interest concerning leasing of this mineral owner. Kim is in the process of locating verification of this information. 09/24/2009 Kim Huett found a telephone number and address of a person of interest concerning this lessor, left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 10/19/2009 Kim Huett received information regarding the interest of this mineral owner. Kim stated that she spoke to a person of interest concerning this interest associated with leasing. 26

33 Leslie Gordon Simons 08/16/2009 Kim Huett received information concerning this mineral owner. 09/18/2009 Kim Huett has spoke with some people of interest concerning leasing of this mineral owner. Kim is in the process of locating verification of this information. 09/24/2009 Kim Huett found a telephone number and address of a person of interest concerning this lessor, left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 10/28/2009 Jason P. Wyer called a person of interest reminding them of lease form as they requested. 27

34 Inez Jessie Brazil Lane and Robert Lane 07/30/2009 Kim Huett has found information concerning this lessor. Kim is working on proof of this information. 08/04/2009 Kim Huett spoke with a person of interest and received information regarding this mineral owner. 08/10/2009 Kim Huett is working to determine correct information provided about this mineral owner. 08/16/2009 Kim Huett received information regarding this lessor. 08/19/2009 Kim Huett keeps receiving information pertaining to this mineral owner but has not found proof on this matter. Kim has spoke to a person about this situation and is trying to resolve this issue. 09/18/2009 Kim Huett has spoke with persons of interest regarding the issues pertaining to this lessor. 09/03/2009 Jason P. Wyer located a couple of telephone numbers called and received no answer. 09/04/2009 Jason P. Wyer could not locate any other valid telephone numbers, will send offer letter for proper contact. 09/09/2009 Jason P. Wyer spoke with a person of interest states someone wants to discuss our lease. 09/18/2009 Jason P. Wyer received a letter from a person of interest requesting several changes to the lease, sent letter of request for approval. 09/24/2009 Kim Huett found a telephone number and address of a person of interest concerning this lessor, left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 10/19/2009 Kim Huett received information regarding the interest of this mineral owner. Kim stated that she spoke to a person of interest concerning this interest associated with leasing. 28

35 Katherine Rice McRae 07/30/2009 Kim Huett found information concerning this mineral owner. Kim is working on locating records of this information. 08/04/2009 Kim Huett spoke with a person of interest who has advised her about information pertaining to this lessor. 08/10/2009 Kim Huett still is working on this mineral owners information. 08/19/2009 Kim Huett has received information pertaining to this mineral owner. Kim is requesting information on this matter. 09/03/2009 Jason P. Wyer located a couple of telephone number both were disconnected. 09/04/2009 Jason P. Wyer could not locate any other valid telephone numbers. Jason stated that he will send offer letter for proper contact. 09/09/2009 Jason P. Wyer spoke with a person of interest who stated they would like to discuss our lease with him. 09/18/2009 Jason P. Wyer received a letter from a person of interest requesting several changes to lease, sent letter of request for approval. 09/24/2009 Kim Huett found a telephone number and address of a person of interest concerning this lessor, left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 10/19/2009 Kim Huett received information regarding the interest of this mineral owner. Kim stated that she spoke to a person of interest concerning this interest associated with leasing. 29

36 Vivian Brazil Rice 07/30/2009 Kim Huett found information concerning this mineral owner. Kim is working on locating records of this information. 08/04/2009 Kim Huett spoke with a person of interest who has advised her about information pertaining to this lessor. 08/10/2009 Kim Huett still is working on this mineral owners information. 08/16/2009 Kim Huett has been advised information pertaining to this mineral owner. 08/19/2009 Kim Huett has received information pertaining to this mineral owner. Kim is requesting information on this matter. 09/03/2009 Jason P. Wyer located a possible telephone number called left message. 09/04/2009 Jason P. Wyer called left message with new terms. 09/09/2009 Jason P. Wyer spoke with a person of interest states someone wants to discuss our lease. 09/18/2009 Jason P. Wyer received a letter from a person of interest requesting several changes to the lease, sent letter of request for approval. 09/24/2009 Kim Huett found a possible address and telephone number for this lessor called and left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 30

37 Leslie R. Rathbun 09/19/2009 Kim Huett found and is researching information concerning this mineral owner. Located possible number, called, wrong number. 10/14/2009 Kim Huett attempting to locate the mortgage that appears to have incorrect legal making cloud in title. Still searching for contact number. 11/05/2009 Kim Huett still attempting to locate person listed on mortgage with incorrect legal description. 31

38 Clay Brazil and Velma Brazil 07/30/2009 Kim Huett found information concerning this mineral owner. Kim is working on locating records of this information. 08/04/2009 Kim Huett spoke with a person of interest who has advised her about information pertaining to this lessor. 08/10/2009 Kim Huett still is working on this mineral owners information. 08/16/2009 Kim Huett has been advised information pertaining to this mineral owner. 08/19/2009 Kim Huett has received information pertaining to this mineral owner. Kim is requesting information on this matter. 09/03/2009 Jason P. Wyer located a possible telephone number called left message. 09/04/2009 Jason P. Wyer called left message with new terms. 09/09/2009 Jason P. Wyer spoke with a person of interest states someone wants to discuss our lease. 09/18/2009 Jason P. Wyer received a letter from a person of interest requesting several changes to the lease, sent letter of request for approval. 09/24/2009 Kim Huett found a possible address and telephone number for this lessor called and left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 32

39 Robert Paul McRae and Katherine Rice 07/30/2009 Kim Huett found information concerning this mineral owner. Kim is working on locating records of this information. 08/04/2009 Kim Huett spoke with a person of interest who has advised her about information pertaining to this lessor. 08/10/2009 Kim Huett still is working on this mineral owners information. 08/16/2009 Kim Huett has been advised information pertaining to this mineral owner. 08/19/2009 Kim Huett has received information pertaining to this mineral owner. Kim is requesting information on this matter. 09/04/2009 Jason P. Wyer could not locate any other valid telephone numbers, will send offer letter for proper contact. 09/09/2009 Jason P. Wyer spoke with a person of interest states someone wants to discuss our lease. 09/18/2009 Jason P. Wyer received a letter from a person of interest requesting several changes to the lease, sent letter of request for approval. 09/24/2009 Kim Huett found a possible address and telephone number for this lessor called and left message. 10/13/2009 Jason P. Wyer spoke with a person of interest stating they will contact Jason tomorrow. Jason stated they will have their own lease form ready within a week or so. 10/19/2009 Kim Huett received information regarding the interest of this mineral owner. Kim stated that she spoke to a person of interest concerning this interest associated with leasing. 33

40 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 24, 2006, with Paragraph III.1.A.(1) of the COPAS providing for a drilling well rate of $7, and a producing well rate of $750.00, and with the following proposed revisions, deletions and/or insertions, if applicable: NONE

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