Chevron Chevron U.S.A. Inc. RO. Box 1635, Houston, TX 77251 • Phone (713) 754-2681

BEFORE EXAMINER CATANACH

Land Representative Interior Division Land Department Central Region

Flay M. Vaden OIL CONSERVATION DIVISION

C h * } * * EXHIBIT NO.

J u l y 9, 1990

CASE NO. / P * * ? - " »

C E R T J _ F J _ E D

Royal ty and O v e r r i d i n g Roya l ty In te res t Owners in the Proposed Expansion Area " B " of the Eunice Monument South Un i t Lea C o u n t y , New Mexico

Dear Roya l ty Owne r :

The w o r k i n g i n te res t owners of the e x i s t i n g Eunice Monument South Uni t (EMSU) and the w o r k i n g i n t e r e s t owners of the proposed U n i t Expans ion Area " B " shown on the enclosed map labeled E x h i b i t " A " have elected to expand the U n i t . The expans ion wi l l take in 3000 addi t ional acres and is shown on the enclosed E x h i b i t " A " and E x h i b i t " B " as t r a c t s 102 t h r o u g h 112.

The costs o f the enhanced r e c o v e r y opera t ions wi l l be borne by the • w o r k i n g i n t e res t owners and not the r o y a l t y or o v e r r i d i n g r o y a l t y o w n e r s .

I t is est imated t ha t app rox ima te l y 13.5 mi l l ion ba r re l s of add i t iona l oil wi l l be recovered f rom the U n i t Expans ion Area B t h r o u g h waterf loocL ope ra t i ons . The enclosed Roya l ty Owners Overv iew was p repa red and mailed to the owners in the o r i g i n a l u n i t area in 1984, and s ince the genera l in format ion on the u n i t appl ies to y o u r i n t e r e s t in the expans ion a rea , i t shou ld help exp la in the proposed opera t ions to y o u .

I have enclosed a copy of the EMSU Un i t Agreement f o r y o u r f i le and f o r you r r e fe rence . We are p l a n n i n g to expand the u n i t unde r the genera l terms of sect ion 4 o f the enclosed Un i t Agreement and u n d e r the New Mexico S t a t u t o r y Un i t i za t ion A c t . We wi l l be send ing not ice of the expansion and the hear ing date in the near f u t u r e .

Request to Join in the Expans ion of the Eunice Monument South U n i t as a Subsequen t Jo inder Under the Terms of the U n i t Agreement and the New Mexico S t a t u t o r y Un i t i za t ion Ac t ( N . M . S . A . 70-7-1 t h r o u g h 70-7-21)

In o rder to proceed w i th our u n i t i z a t i o n , please s ign before a no ta r y p u b l i c , al l seven copies of the enclosed Eunice Monument South Un i t Rat i f icat ion and Jo inder ( w i t h addendum a t t a c h e d ) . Please re ta in one

s igned and no ta r i zed copy fo r y o u r f i les and r e t u r n the remain ing s ix copies in the enc losed , se l f -addressed postage paid envelope on or before A u g u s t 10, 1990. We wi l l f i le two o r ig ina l s of the Rat i f i ca t ion w i t h the Bureau of Land Management, one w i t h the New Mexico Oi l Conserva t ion D i v i s i o n , one w i t h the New Mexico State Land O f f i c e , one wi l l be reco rded in the cour thouse records of Lea C o u n t y , New Mex ico , and one w i l l be re ta ined in Chev ron ' s u n i t f i l e .

I f you have any ques t ions in t h i s r e g a r d , please call or w r i t e me.

Ray M. Vaden Land Represen ta t i ve

RMV:lmm850 Enclosure

CORPORATE ROYALTY JOINDER

ROYALTY AND OVERRIDING ROYALTY INTEREST OWNERS

RATIFICATION AND JOINDER OF THE UNIT AGREEMENT OF THE EUNICE MONUMENT SOUTH UNIT,

LEA COUNTY, NEW MEXICO

In consideration of the execution of the Unit Agreement for the Development and Operation of the Eunice Monument South Unit Area, County of Lea , State of New Mexico, dated June 22 , 1984, i n form approved on behalf of the Secretary of the I n t e r i o r and the state of New Mexico, the undersigned (whether one or more) hereby expressly j o i n s said Unit Agreement and r a t i f i e s , approves, adopts and confirms said Unit Agreement as f u l l y as though the undersigned had executed the o r i g i n a l agreement, SUBJECT TO THE TERMS AND CONDITIONS OF THE ADDENDUM ATTACHED HERETO AND MADE A PART HEREOF.

This R a t i f i c a t i o n and Joinder s h a l l be eff e c t i v e as to the undersigned's interests i n any lands and leases, or interests therein, and ro y a l t i e s presently held or which may arise under existing option agreements or other interests i n unitized substances, covering any lands w i t h i n the Unit Area i n which the undersigned may be found to have an o i l or gas i n t e r e s t .

This R a t i f i c a t i o n and Joinder of Unit Agreement s h a l l be binding upon the undersigned, h i s , her or i t s heirs, devisees, executors, assigns or successors i n in t e r e s t .

EXECUTED t h i s day of , 19

By

Address:

THE STATE OF §

COUNTY OF §

The foregoing instrument was acknowledged before me t h i s day of , 19 , by ,

behalf of said corporation.

My Commission Expires:

, for/of , , a " corporation, on

380203/03280/348 70590

ROYALTY AND OVERRIDING ROYALTY INTEREST OWNERS

RATIFICATION AND JOINDER OF THE UNIT AGREEMENT OF THE EUNICE MONUMENT SOUTH UNIT,

LEA COUNTY, NEW MEXICO

In consideration of the execution of the Unit Agreement fo r the Development and Operation of the Eunice Monument South Unit Area, County of Lea , State of New Mexico, dated June 22 , 1984, i n form approved on behalf of the Secretary of the I n t e r i o r and the state of New Mexico, the undersigned (whether one or more) hereby expressly j o i n s said Unit Agreement and r a t i f i e s , approves, adopts and confirms said Unit Agreement as f u l l y as though the undersigned had executed the o r i g i n a l agreement, SUBJECT TO THE TERMS AND CONDITIONS OF THE ADDENDUM ATTACHED HERETO AND MADE A PART HEREOF.

This R a t i f i c a t i o n and Joinder s h a l l be ef f e c t i v e as to the undersigned's interests i n any lands and leases, or interests therein, and royal t i e s presently held or which may arise under existing option agreements or other interests i n unitized substances, covering any lands w i t h i n the Unit Area i n which the undersigned may be found to have an o i l or gas i n t e r e s t .

This R a t i f i c a t i o n and Joinder of Unit Agreement s h a l l be binding upon the undersigned, h i s , her or i t s heirs, devisees, executors, assigns or successors i n int e r e s t .

EXECUTED t h i s day of 19

Address:

THE STATE OF §

COUNTY OF §

The foregoing instrument was acknowledged before me th i s , 19_, by

day of

My Commission Expires:

380203/03280/348 70590

R 36 E

p i • i * J n i • i • i • i pi m i wc — CO-HOCO ATLANTIC A T t A N T K S t i g M s.. RICHF»£LO * K 5 H F I E L C t — •• T A l COMPANY C O M P A N Y *

EXHIBIT "A*

mm ACREAGE

E i l l

FEDERAL LANDS

STATE LA NOS

PATENTED LANOS

PERCENTAGE

76.00 2280

400 13.33

320 10.67

3000 100.00

O TRACT NUMBER

TOTAL

UNIT OUTLINE

l/2

SCALE NMLES

NOTE Uf«SSOT>«BWBE»OOWH) Trtl SE&Vr4S OH

EUNICE MONUMENT SOUTH UNIT

EXPANSION AREA "B" LEA CO.. NEW MEXICO

UNIT EFFECTIVE 2 - 1 - 8 5 EXPANDED/REV. 9 - 1 - 9 0

CHEVRON U.S.A. INC. HOUSTON. TEXAS

R 37 E UNIT AREA "B"

FEDERAL LAM ACREAGE PERCENTAGE

STATE LANDS

m m m PATENTED LANDS

2.280 7600

400 13.33

320 1067

3.000 100.00 TOTAL

UNO AREA B OUTLINE ^ TRACT NUMBER

UNIT AREA "A ACREAGE PERCENTAGE

FEDERAL LANDS 2.7347$ 1927

STATE LANDS 8.27480 58.32

PATENTED LANDS 3.180.28 2241

TOTAL 14.188.84 10000

UNIT AREA A OUTLINE TRACT NUMBER

UNIT-AREAS "A" & "B" OF THE EUNICE MONUMENT SOUTH UNIT

ACREAGE PERCENTAGF

V / / / 7 ) FEDERAL LANDS 5.01476 29 17

! i STATE LANDS 8.674.80 5047

W M & M PATENTED LANDS 3.50028 20.36

TOTAL 17.188.84 100 OU

UNIT BOUNDARY ( g \ TRACT NUMBER

SGMi M W I S

MOIC 19K£S& OTtCTCMSE M O C d B ) T X IMM3UB SECTtCMS ON T>4S AJU COM1M* MO 00 MLVf S

R 37 E

UNIT EFFECTIVE 2 -1 -85 UNIT EXPANSION AREA "B" ADDED

EFFECTIVE 1990

UNIT AREA "A"

13

R 35 E R 36 E EXHIBIT "A"

EUNICE MONUMENT SOUTH UNIT AREA

LEA COUNTY. NEW MEXICO

CHEVRON U.S.A. INC. HOUSTON. TEXAS

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