021-2009-01 applications archive... · resume of efforts section 20, township 9 north, range 10...

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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 † COBY W. LOGAN L. MA TTHEW DAV IS * Fayetteville Office † Also Licensed in Oklahoma 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 ______________ 3538 N. HIGHWAY 112, SUITE 200 FAYETTEVILLE, AR 72703 TELEPHONE (479) 582-0361 FAX (479) 251-8111 JAMES E. WEST PHILLIP J. NORV ELL * DALE CARLTON * OF COUNSEL _______ HARRY P. DA ILY (1886-1965) JOHN P. WO ODS (1886-1976) JOHN S. DAILY (1912-1987) January 6, 2009 Arkansas Oil and Gas Commission 301 Natural Resources Drive, Suite 102 Little Rock, Arkansas 72205 Re: ORDER REFERENCE NO. 021-2009-01 Application of XTO Energy Inc. for Integration of All Unleased Mineral Interests and Non-consenting Working Interests in a unit described as Section 20, Township 9 North, Range 10 West, Cleburne County, Arkansas Commissioners: XTO Energy Inc., 810 Houston Street, Fort Worth, TX 6102, 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 exploratory unit as defined in paragraph (f) of Arkansas Oil and Gas Commission General Rule B-43. Persons who own at least an undivided 50% interest in the right to drill and produce oil and/or gas from the total proposed unit area have agreed to participate in Applicant’s proposed well. Applicant proposes to drill a horizontal well from a non-exceptional surface location in the Southwest Quarter down to a non-exceptional bottom hole location in the Northwest Quarter of the above-described unit. The proposed well will be drilled to a total vertical depth of 4,683 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

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Page 1: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

JERRY L. CANFIELD, P.A.

THOMAS A. DAILY, P.A.

WYMAN R. WAD E, JR. , P.A.

DOUGLAS M. CARSON, P.A.

ROBERT R. BRIGGS, P.A. † *

C . MICHAEL DAILY †

COBY W. LOGAN

L. MA TTHEW DAV IS

* Fayetteville Office

† Also Licensed in Oklahoma

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

______________

3538 N. HIGHWAY 112, SUITE 200FAYETTEVILLE, AR 72703TELEPHONE (479) 582-0361

FAX (479) 251-8111

JAMES E. WEST

PHILLIP J. NORV ELL *

DALE CARLTON *

OF COUNSEL

_______

HARRY P. DA ILY (1886-1965)

JOHN P. WO ODS (1886-1976)

JOHN S. DAILY (1912-1987)

January 6, 2009

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

Re: ORDER REFERENCE NO. 021-2009-01

Application of XTO Energy Inc. for Integration of All Unleased Mineral Interestsand Non-consenting Working Interests in a unit described as Section 20,Township 9 North, Range 10 West, Cleburne County, Arkansas

Commissioners:

XTO Energy Inc., 810 Houston Street, Fort Worth, TX 6102, hereby applies to theArkansas Oil and Gas Commission for the integration of all unleased mineral interestsand non-consenting working interests in its proposed drilling unit which is describedabove.

1. The proposed drilling unit is an exploratory unit as defined in paragraph (f) ofArkansas Oil and Gas Commission General Rule B-43. Persons who own at least anundivided 50% interest in the right to drill and produce oil and/or gas from the totalproposed unit area have agreed to participate in Applicant’s proposed well. Applicantproposes to drill a horizontal well from a non-exceptional surface location in theSouthwest Quarter down to a non-exceptional bottom hole location in the NorthwestQuarter of the above-described unit. The proposed well will be drilled to a total verticaldepth of 4,683 feet to test the Fayetteville Shale Formation. Applicant has obtainedone 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 of

Page 2: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

the 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 theproposed 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:

Page 3: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

(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$1,875.00 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 a1/5 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 $1,875.00 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.

Page 4: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

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

Page 5: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESPONDENTS LIST

Integration Application Section 20 – 9N – 10W Cleburne County, Arkansas Leasehold Owner: Chesapeake Exploration, L.L.C. Strata Minerals, Inc. BP America Production Company Petrohawk Properties, LP Mayhem Oil and Gas, Inc. SEECO, Inc. Unleased Mineral Owner Juanita W. Clark Patricia Diane Myers Susan Jayne Hestir Linda Lee Brown and William Dean Brown Holly Elizabeth Mathisen and Mark Hemphill Mathisen Brian Edward Galloway Clifford Moiser and Antoinette Moiser David Schoolcraft & Marie Schoolcraft Dolphus King and Prediuth King EXXONMobil Oil Corp., Successor in interest to General Crude Oil Company F. A. Sansome Franklin Vaughan & Ruth Vaughan

Page 6: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESPONDENTS LIST

Integration Application Section 20 – 9N – 10W Cleburne County, Arkansas Unleased Mineral Owner – continued: Giva Lynda Gresham (now known as Giva Lynda Gresham Perry) Kathleen Riedel Gresham Kent Krug and Karen A. Krug L. B. Moon Paul E. Smith Sanford D. Cothren and Barbara R. Cothren TEX/CON Oil & Gas Company EEX Operating, L.P. EEX Operating LLC Newfield Exploration Company Walter Smith (a/k/a Walter L. Smith) Catherine Cary James Cary John Cosden Cary Loren Cary August Margo Thorning Mary L. Zill and Karl Zill W. Bruton Thorning a/k/a W. Burton Thorning Unknown Heirs and Assigns of Ima T. Weatherson Unknown Heirs and Assigns of W. Bruton Thorning a/k/a W. Burton Thorning

Page 7: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESPONDENTS LIST

Integration Application Section 20 – 9N – 10W Cleburne County, Arkansas Unleased Mineral Owner – continued: Unknown Heirs and Assigns of Dolphus King Unknown Heirs and Assigns of Prediuth King Unknown Heirs and Assigns of F. A. Sansome Unknown Heirs and Assigns of L. B. Moon

Page 8: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Juanita W. Clark • 12/11/2008- E-mailed proposal to attorneys offering $1875/nma, 5 year

Term and 20% • 12/15/2008- Heirs accepted our proposal and lease packages were e-mailed

On this date

Page 9: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Patricia Diane Myers • 12/11/2008- E-mailed proposal to attorneys offering $1875/nma, 5 year

Term and 20% • 12/15/2008- Heirs accepted our proposal and lease packages were e-mailed

On this date

Page 10: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Susan Jayne Hestir • 12/11/2008- E-mailed proposal to attorneys offering $1875/nma, 5 year

Term and 20% • 12/15/2008- Heirs accepted our proposal and lease packages were e-mailed

On this date

Page 11: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Linda Lee Brown & William Dean Brown, her husband • 12/11/2008- E-mailed proposal to attorneys offering $1875/nma, 5 year

Term and 20% • 12/15/2008- Heirs accepted our proposal and lease packages were e-mailed

On this date

Page 12: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Holly Elizabeth Mathisen & Mark Hemphill Mathisen, her husband • 12/11/2008- E-mailed proposal to attorneys offering $1875/nma, 5 year

Term and 20% • 12/15/2008- Heirs accepted our proposal and lease packages were e-mailed

On this date

Page 13: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Brian Edward Galloway

• 11/5/08 - Checked public records for contact info. All phone numbers have been disconnected.

• 11/6/08 - Sent lease package to address of record.

• 11/19/08 - Spoke with neighbors, they offered no help.

• 12/10/08 - Landman sent Agent to last known address they did not know of him.

RESUME OF EFFORTS

Page 14: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Sherman B. Chickering (life estate); remainderman: Catherine Cary

• 9/24/08 – Agent was told that a Revised Lease form from landowners attorney would be forthcoming

• 10/6/08 - Agent requested revised lease form

• 10/20/08 – Agent received terms requested by landowner.

• 10/20/08 – Agent rejects landowner’s terms and informs landowners via their attorney that XTO would be integrating interest. Attorney was asked to advise whether XTO Agent should continue to contact him or deal directly with landowner. Agent received no response.

• 11/21/08- Did search for landowner contact info, found 1 working phone number, left message.

• 11/22/08 - Left message explaining reason for call. Got a return call, that I had the wrong number – they had never heard of Catherine Cary.

• 11/24/08 – Agent sent letter with offer to the address of record.

• 12/1/08 - Spoke with Catherine’s brother, James. He has had direct contact with XTO thru the family Attorney. He directed that I should contact XTO for specifics.

• 12/11/08 – Agent sent letter to landowners via attorney requesting decision on accepting XTO Lease offer.

Page 15: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Clifford Moiser and Antoinette Moiser

• 11/5/08 - Checked public records for contact info. Left message

• 11/6/08 - Sent lease package to address of record.

• 11/17/08 - Left message.

• 11/29/08 - Left message

• 12/10/08 - Not interested… stop calling. If they had wanted to lease they would have sent our lease offer back.

Page 16: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

David Schoolcraft and Marie Schoolcraft

• 11/5/08 - Checked public records for contact info. Left messages

• 11/11/08 - Sent lease package to address of record.

• 11/17/08 - Left messages.

• 11/24/08 - Wrong phone numbers. Lady who answered was a relative, but refused to provide any information. Says they don’t live at that address any more.

• 12/9/08 - Field agent is verifying information provided above.

• 12/15/08- Sent letter to last known address

Page 17: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Dolphus King & Prediuth King, both apparently deceased

• 11/5/08 - Checked public records for contact info. Found no working numbers.

• 11/7/08 - Sent lease package to address of record.

• 11/11/08 - Called son’s number and left message.

• 12/3/08 - Field agent went to location. Appears no one lives there.

• 12/9/08 - Spoke with son. Both are deceased and the property is tied up with an estate fight. He stated that he will not lease until it is settled.

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

EXXONMobil Oil Corp (successor in interest to General Crude Oil Co.) (for Curative purposes only)

• 12/11/08 – Asked for copy of Agreement between General Crude and Mobil who becomes EXXONMobil.

Page 19: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

F.A. Sansome, possibly deceased

• 11/5/08 - Checked numerous public records for contact info. Found no information.

• 11/7/08 - Checked vital statistics sites. Found nothing definitive.

• 11/11/08 - Spoke with land owner. Did not know the name.

• 12/3/08 - Called neighbors of subject property they knew nothing of him.

Page 20: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Franklin Vaughan and Ruth Vaughan

• 11/5/08 - Checked numerous public records for contact info. Found no information.

• 11/7/08 - Checked vital statistics sites. Found nothing definitive. Checked previous owners and found nothing.

• 11/11/08 - Spoke with other mineral owner. Did not know the name.

• 12/3/08 - Called neighbors of subject property they knew nothing of him.

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Giva Lynda Gresham & Kathleen Riedel Gresham

• 10/29/08 - Sent lease covering this property and in other sections

• 11/16/08 - They are getting together at Christmas and will sign and get it back immediately.

• 12/6/08 - Spoke with Lynda, just checking in. She assured me they would get it back between Christmas and New Years.

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

Sherman B. Chickering (life estate): remainderman: James Cary

• 9/24/08 – Agent was told that a Revised Lease form from landowners attorney would be forthcoming

• 10/6/08 - Agent requested revised lease form

• 10/20/08 – Agent received terms requested by landowner.

• 10/20/08 – Agent rejects landowner’s terms and informs landowners via their attorney that XTO would be integrating interest. Attorney was asked to advise whether XTO Agent should continue to contact him or deal directly with landowner. Agent received no response.

• 11/21/08- Did search for landowner contact information, found one working phone number, left message.

• 11/22/08 - Left message explaining reason for call. Got a return call, that I had the wrong number – they had never heard of the Cary’s.

• 11/24/08 – Agent sent letter with offer to the address of record.

• 12/1/08 - Spoke with James. He has had direct contact with XTO thru the family Attorney. He directed that I should contact XTO for specifics.

• 12/11/08 – Agent sent letter to landowners via attorney requesting decision on accepting XTO Lease offer.

Page 23: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Sherman B. Chickering (life estate): remainderman: John Cosden Cary

• 9/24/08 – Agent was told that a Revised Lease form from landowners attorney would be forthcoming

• 10/6/08 - Agent requested revised lease form

• 10/20/08 – Agent received terms requested by landowner.

• 10/20/08 – Agent rejects landowner’s terms and informs landowners via their attorney that XTO would be integrating interest. Attorney was asked to advise whether XTO Agent should continue to contact him or deal directly with landowner. Agent received no response.

• 11/21/08- Search for landowner contact info, found one working phone number, left message.

• 11/22/08 - Left message explaining reason for call. Got a return call, that I had the wrong number – they had never heard of the Cary’s.

• 11/24/08 – Agent sent letter with offer to the address of record.

• 12/1/08 - Spoke with John’s brother, James. He has had direct contact with XTO thru the family Attorney. He directed that I should contact XTO for specifics.

• 12/11/08 – Agent sent letter to landowners via attorney requesting decision on accepting XTO Lease offer.

Page 24: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Kent Krug and Karen A. Krug (Fayetteville Royalty, LLC)

• 12/13/08 – Spoke with Mr. Krug. He is willing to sign the lease if XTO will agree to some other negotiations.

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

L. B. Moon

• 11/5/08 - Checked numerous public records for contact info. Found no information.

• 11/7/08 - Checked vital statistics sites. Found nothing definitive. Checked previous owners and found nothing.

• 11/11/08 - Spoke with other mineral owners. Did not recognize the name.

• 12/3/08 - Called neighbors of subject property – they did not know L. B. Moon.

Page 26: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Sherman B. Chickering (life estate): remainderman: Loren Cary August

• 9/24/08 – Agent was told that a Revised Lease form from landowners attorney would be forthcoming

• 10/6/08 - Agent requested revised lease form

• 10/20/08 – Agent received terms requested by landowner.

• 10/20/08 – Agent rejects landowner’s terms and informs landowners via their attorney that XTO would be integrating interest. Attorney was asked to advise whether XTO Agent should continue to contact him or deal directly with landowner. Agent received no response.

• 11/21/08- Search for landowner contact info, found one working phone number, left message.

• 11/22/08 - Left message explaining reason for call. Got a return call, that I had the wrong number – they had never heard of the Cary’s.

• 11/24/08 – Agent sent letter with offer to the address of record.

• 12/1/08 - Spoke with Loren’s brother, James. He has had direct contact with XTO thru the family Attorney. He directed that I should contact XTO for specifics.

• 12/11/08 – Agent sent letter to landowners via attorney requesting decision on accepting XTO Lease offer.

Page 27: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Paul E. Smith

• 11/5/08 - Checked numerous public records for contact info. Found no information.

• 11/7/08 - Sent lease package to address of record.

• 11/27/08 - Lease package returned as “Undeliverable”.

• 12/3/08 - Agent went to address. No one there..

• 12/10/08 - Spoke with ex-wife, they have mutual friends, she will contact them to see if they have an address or phone number for him. There is no work number.

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Sanford D. Cothren and Barbara R. Cothren

• 11/5/08 - Checked numerous public records for contact info. Left message.

• 11/7/08 - Sent lease package to address of record.

• 11/19/08 - Left message.

• 12/3/08 - He doesn’t understand why he owns the minerals. I explained, he wants to have some time to think about it.

• 12/14/08 - He’s still not sure, but will sign the lease and get it back to us as soon as possible.

Page 29: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

TEX/CON Oil & Gas Company Possible Successors to Title: EEX Operating, L.P. EEX Operating LLC Newfield Exploration Company

• 12/9/08 – Checked public records for contact info.

• 12/15/08 - Spoke with representative of TEX/CON and she will have the Exploration Manager call back

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST

CLEBURNE COUNTY, ARKANSAS

Walter Smith (a/k/a Walter L. Smith)

• 11/6/08 – Checked public records for contact info. Found number for relative.

• 11/6/08 - Sent lease package to address of record.

• 11/17/08 - Left message on relative’s phone.

• 12/1/08 - Left message.

• 12/9/08 - Field agent went to address, no answer at door.

• 12/14/08 - Left message

Page 31: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

Resume of Efforts Section 20, Township 9 North, Range 10 West

Cleburne County, Arkansas XTO Energy Inc.

W. Bruton Thorning, a/k/a W. Burton Thorning, apparently deceased Apparent heirs: Margo Thorning, apparent heir of W. Bruton Thorning, a/k/a W. Burton Thorning, apparently deceased Mary L. Zill and Karl Zill, apparent heir of W. Bruton Thorning, a/k/a W. Burton Thorning, apparently deceased

• 11/17/2008-Searched for contact information.

• 11/24/2008-Called numerous “Thornings” in area of last known address.

• 12/02/2008-Searched various data basis for contact information. Trying to make contact with possible heirs.

• 12/08/2008-Landowner called me back and said they are interested in leasing and requested a lease packet.

• 12/09/2008-Heard from heir’s attorney - they are interested in leasing.

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RESUME OF EFFORTS

SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS

The following parties are listed for Curative Purposes Only: The unknown Heirs and Assigns of F. A. Sansome The unknown Heirs and Assigns of Dolphus King The unknown Heirs and Assigns of Prediuth King The unknown Heirs and Assigns of L.B. Moon The unknown Heirs and Assigns of Ima T. Weatherson The unknown Heirs and Assigns of W. Bruton Thorning a/k/a W. Burton Thorning

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EXHIBIT “C”Applicant’s statement regarding Operating Agreement

Docket Reference No. 021-2009-01

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 $7,500.00 and a producing

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

insertions, if applicable:

NONE

Page 34: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

XTO ENERGY INC.AUTHORITY FOR EXPENDITURE

AFE DESC: D&C&EQUIP-HORIZ FAYETTEVILLE FIELD: B-43

DATE: 06/05/2008 107676ACCOUNTING ID:

AFE TYPE: WELL NAME:DEVELOPMENT DRILLING

OPERATOR: ARKANSAS / CLEBURNESTATE/COUNTY:81 - XTO ENERGY INC.SECTION/TOWNSHIP/RANGE: 20/9N/10W XTO WI DECIMAL: 0.999990000

AFE NO.: 803818 DISTRICT: ARKOMA

CLARK 01-20H

TOTALCOMPLETIONDRYHOLEDETAIL OF EXPENDITURES SUPPLEMENT

536,500.00Drilling/Rig Move 0.00 0.00 536,500.00

0.00Completion Unit 30,000.00 0.00 30,000.00

8,500.00Surf/Int Csg Crew/Laydown Service 0.00 0.00 8,500.00

235,000.00Directional Tools/Services 0.00 0.00 235,000.00

132,500.00Roads & Location 0.00 0.00 132,500.00

200,000.00Mud/Chemicals 0.00 0.00 200,000.00

45,000.00Well Logging: Open Hole 0.00 0.00 45,000.00

15,000.00Surf/Int Cement & Related Services 0.00 0.00 15,000.00

75,000.00Bits, Mills, Reamers 0.00 0.00 75,000.00

65,000.00Drlg Rentals: Sub-Surface 0.00 0.00 65,000.00

38,000.00Drlg Rentals: Surface 0.00 0.00 38,000.00

100,000.00Rig Fuel, Power & Water 0.00 0.00 100,000.00

0.00Cased Hole Logging/Perf 60,000.00 0.00 60,000.00

0.00Stimulation & Pumping Services 600,000.00 0.00 600,000.00

37,700.00Drilling Supervision 0.00 0.00 37,700.00

30,000.00Mud Logger 0.00 0.00 30,000.00

10,000.00Misc Supplies 0.00 0.00 10,000.00

3,500.00Commission/Legal 0.00 0.00 3,500.00

5,800.00Drilling Overhead 0.00 0.00 5,800.00

7,500.00Cost of Control Insurance 0.00 0.00 7,500.00

10,000.00Drlg Trucking & Hot Shot 0.00 0.00 10,000.00

0.00Completion Dress Location 10,000.00 0.00 10,000.00

75,000.00Fluid Haul/Solid Control 0.00 0.00 75,000.00

0.00Completion Services 50,000.00 0.00 50,000.00

0.00Flowback 20,000.00 0.00 20,000.00

0.00Frac Tanks/Fluid Hauling 100,000.00 0.00 100,000.00

0.00Prod Csg Cement & Related Service 40,000.00 0.00 40,000.00

0.00Prod Csg Crew/Laydown Service 17,500.00 0.00 17,500.00

0.00Cmpl Rentals: Sub-Surface 10,000.00 0.00 10,000.00

0.00Cmpl Rentals: Surface 20,000.00 0.00 20,000.00

0.00Cmpl Engr/Supervision 10,000.00 0.00 10,000.00

0.00Cmpl Overhead 2,500.00 0.00 2,500.00

0.00Cmpl Trucking & Hot Shot 5,000.00 0.00 5,000.00

0.00Intang. Cmpl Contingencies 10,000.00 0.00 10,000.00

0.00Cmpl Misc Labor 5,000.00 0.00 5,000.00

25,000.00Hammer Bits 0.00 0.00 25,000.00

8,500.00Air Hammer Rental 0.00 0.00 8,500.00

5,000.00Plug and Abandon Unsuccessful Well 0.00 0.00 5,000.00

8,000.00Misc Labor/Welding 0.00 0.00 8,000.00

Page 1 of 2

Page 35: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

XTO ENERGY INC.AUTHORITY FOR EXPENDITURE

AFE DESC: D&C&EQUIP-HORIZ FAYETTEVILLE FIELD: B-43

DATE: 06/05/2008 107676ACCOUNTING ID:

AFE TYPE: WELL NAME:DEVELOPMENT DRILLING

OPERATOR: ARKANSAS / CLEBURNESTATE/COUNTY:81 - XTO ENERGY INC.SECTION/TOWNSHIP/RANGE: 20/9N/10W XTO WI DECIMAL: 0.999990000

AFE NO.: 803818 DISTRICT: ARKOMA

CLARK 01-20H

TOTALCOMPLETIONDRYHOLEDETAIL OF EXPENDITURES SUPPLEMENT

10,000.00Intang. Drlg Contingencies 0.00 0.00 10,000.00

1,686,500.00 990,000.00WIP-Intan. Devlpmt Costs TOTAL: 2,676,500.00

1,500.00Conductor Pipe / Caisson 0.00 0.00 1,500.00

0.00Tubing 20,000.00 0.00 20,000.00

9,500.00Wellhead Equipment 0.00 0.00 9,500.00

0.00Tank Batteries 45,000.00 0.00 45,000.00

0.00Lease & Flow Lines 15,000.00 0.00 15,000.00

21,000.00Surface Casing 0.00 0.00 21,000.00

0.00Production / Liner Casing 278,400.00 0.00 278,400.00

0.00Tubing Head / X-mas Tree 15,000.00 0.00 15,000.00

0.00Tang. Cmpl Contingency 10,000.00 0.00 10,000.00

10,000.00Tang. Drlg Contingency 0.00 0.00 10,000.00

42,000.00 383,400.00WIP-Lease & Well Equip. TOTAL: 425,400.00

1,728,500.00 1,373,400.00TOTAL THIS AFE:

*** This AFE is an estimate only. By returning one signed copy, you agree to pay your share of the actual costs incurred. ***

REMARKS: DRILL, COMPLETE & EQUIP 9,500' TMD; 5,180' TVD HORIZONTAL FAYETTEVILLE SHALE

PILOT HOLE 4,785' TVD; PROPOSED PRODUCTIVE LATERAL 4,214'

DAYRATE: 25 DAYS @ $18,500/DAY

SURFACE CASING: 9-5/8", J-55, 36#, 600', $35.00/FT

PRODUCTION CASING: 5-1/2", P-110, 17#, 9,500' @ $29.00/FT

TUBING: 2-3/8", J-55, 4.7#, 4,000' @ $4.25/FT

3,101,900.00

Signature: TITLE

BY

Approved By: Keith HuttonCOMPANY

Prepared By: DATESusan Garrett

Non Operator Approval

Page 2 of 2

Page 36: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

161718

19 20 21

282930

- 3900 - 390

083-0083-

- 3700

- 37

63-

0063-

Cos den PetDanaphan 1

-3,79

0

SeecoCaldwell Foods 1-29H

XTOFous t 1-16H

-3,688

-3,5

40

-3,688

XTOClark 1-20H

XTO

XTODixon 1-28H

XTOGres ham 1-17H

XTOSlade 1-21H

XTOGraham-Bowen

FEET

0 3,000

PETRA 12/10/2008 10:15:24 AM

UPPER FAYETTEVILLE SHALE STRUCTURE MAP

Contour Interval: 100’

Geologist: S. FineganDate: Dec., 2008Exhibit ___

Clark #1-20H

Section 20 –

T9N R10WCleburne County,

Arkansas

Non-Exceptional Location in the SW1/4

SHL

PBHL

Unit Boundary

-3500

E

Page 37: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

161718

19 20 21

282930002

002

Cos den PetDanaphan 1

SeecoCaldwell Foods 1-29H

XTOFous t 1-16H

202

237

XTOClark 1-20H

XTO

XTODixon 1-28H

XTOGres ham 1-17H

XTOSlade 1-21H

XTOGraham-Bowen

FEET

0 3,000

PETRA 12/10/2008 10:43:06 AM

Geologist: S. Finegan

FAYETTEVILLE SHALE ISOPACH MAP

Contour Interval: 50’

Exhibit ___

SHL

PBHL

Unit Boundary

T1XTO

Chalk 1-23H

400350300250200150100

500

Clark #1-20H

Section 20 –

T9N R10WCleburne County,

Arkansas

Non-Exceptional Location in the SW1/4

Date: Dec., 2008

250

F

Page 38: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records

161718

19 20 21

282930

Cos den PetDanaphan 1

SeecoCaldwell Foods 1-29H

XTOFous t 1-16H

XTOClark 1-20H

XTO

XTODixon 1-28H

XTOGres ham 1-17H

XTOSlade 1-21H

XTOGraham-Bowen

FEET

0 3,000

PETRA 12/10/2008 10:49:26 AM

Geologist: S. Finegan

Unit PlatSect 20 9N-10W

Exhibit ___

SHL

PBHL

Unit Boundary

Clark #1-20H

Section 20 –

T9N R10WCleburne County,

Arkansas

Non-Exceptional Location in the SW1/4

Date: Dec., 2008G

Page 39: 021-2009-01 Applications Archive... · RESUME OF EFFORTS SECTION 20, TOWNSHIP 9 NORTH, RANGE 10 WEST CLEBURNE COUNTY, ARKANSAS Brian Edward Galloway • 11/5/08 - Checked public records
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