BEFORE THE BOARD OF OIL, GAS AND MININGDEPARTMENT OF NATURAL RESOURCES

STATE OF UTAH

FILEDJUN 0I 2017

SEoRETARY BOARD OFOIL, GAS A MINING

FIIIDINGS OF FACT,CONCLUSIONS OF LAW AND

ORDER

TN THE MATTER OF THE REQUEST FORAGENCY ACTION OF AXIA ENERGY II, LLC FORAN ORDER POOLTNG ALL INTERESTS,TNCLUDING THE COMPULSORY POOLTNG OFTHE TNTERESTS OF CERTATN NON-CONSENTINC AND IINLOCATABLE OWNERS,WITHIN TWO I,28O.ACRE DRILLING I.INITSESTABLISHED FOR THE PRODUCTION OF OIL,GAS AND ASSOCIATED HYDROCARBONSFROM THE LOWER GREEN zuVER.WASATCH(coLToN) FORMATIONS, COMpzuSED OF ALLOF SECTIONS 29 AND 32, AND 28 AND 33 OFTOWNSHIP 2 SOUTH, RANGE 2 WEST, U.S.M.,

Docket No. 2017-010

Cause No. 139-144

DUCHESNE UTAH"

This Cause came for hearing before the Utah Board of Oil, Gas and Mining (the "Board")

on Wednesday, April 26, 2017, at approximately 11:00 a.m., in the Auditorium of the Utah

Department of Natural Resources Building in Salt Lake City, Utah, on Axia Energy II, LLC's

(ooAxia's") Request for Agency Action filed on March lA,2017 (the "Request") to compulsory

pool certain non-consenting and unlocatable owners in the two wells discussed hereinafter. The

following Board members were present and participated at the hearing: Chairman Ruland J. Gill,

Jr., Carl F. Kendell, Richard K. Borden and Chris D. Hansen. The Board was represented by

Michael S. Johnson, Esq., Assistant Attorney General.

Testifying on behalf of Petitioner Axia Energy II, LLC ("Axia") were Rick Gallegos - Vice

President of Land and Business Development and Taryn Frenzel - Vice President of Completions

and Engineering. The Board recognized Mr. Gallegos as an expert in petroleum land management

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and Mr. Frenzel as an expert in petroleum engineering for purposes of this Cause. David P. Bolda,

Esq., of and for Beatty & V/ozniak, P.C., appeared as attorney for Axia.

Meg Osswald, Esq. appeared as attorney for the Division of Oil, Gas and Mining (the

"Division"). The Division did not f,rle a staff memorandum but nevertheless participated in the

hearing. John Rogers - Associate Director of Oil and Gas and Dustin Doucet - Petroleum

Engineer, asked questions of Axia's witnesses on behalf of the Division.

Newfield Production Company ("Newfield") and Newfield RMI, LLC ("Newfield RMI")

(sometimes jointly referred to herein as "Newfield"), fîled a joint response to the Request (the

ooResponse"). John A. Davis, Esq. of Holland & Hart LLP, appeared on behalf of Newfield.

Newheld did not present witness testimony at the hearing but instead, Mr. Davis stated his client's

position relating to the Request and asked questions of Axia's witnesses.

Newfield's response to the Request touched on two issues. First, Newfield requested that

the Board modify the Request to clarify that the joint operating agreements ("JOA's") sought to

be imposed upon the non-consenting and unlocatable parties apply only to the two wells within

the respective drilling units that are the subject of this Cause (defined below as the "subject

Wells") and not to all future wells within the subject drilling unit. Second, Newfield RMI stated

its desire to have the "Non-Consenting JOA's" imposed upon Axia and Newfield RMI to govern

the relationship between said parties for the Subject W'ells, rather than the JOA proposed by Axia

prior to and independent of the Request (the "Consenting JOA"). Axia filed a response to the

Response clarifying its intent for the Non-Consenting JOA's to apply only to the Subject V/ells

and advised of its plans to drop Newfield RMI from the Request since Newfield RMI had agreed

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to participate in the Subject Wells allowing the parties to continue negotiations for a JOA outside

of the compulsory pooling process.

At the hearing, the Board asked Newfield RMI and Axia to make their respective

arguments for allowing or disallowing Newfield RMI to participate in the hearing on its desire to

have the Non-Consenting JOA imposed upon New{ield RMI and Axia despite Newfreld RMI

voluntarily agreeing to participate in the Subject Wells and having been dropped from the Request

by Axia. The Board allowed Newfield RMI to participate and, at the end of the hearing, ruled that

Newfreld RMI had standing. However, the Board heard only Axia's request to compulsory pool

certain non-consenting parties as of the date of the hearing (which no longer included Newfield

RMI), and asked the parties to continue to negotiate a JOA to govern operations between the two.

The Findings of Fact, Conclusions of Law and Order herein pertain only to those whom Axia

sought to compulsory pool as of the date of the hearing which no longer included Newfield RML

Should the parties fail to negotiate a JOA, the Board will take further action as follows: if

the only outlying issue is the non-consent penalty (which the Board presently understands to be a

primary issue in dispute), the Board will issue an addendum to this order addressing that point. If

there are additional disputed JOA terms, the Board will ask for supplemental briefîng.

No other party appeared or participated at the hearing.

The Division did not formally present a case-in-chief at the hearing but instead asked a

number of questions of Axia's witnesses. At the conclusion of the Division's questions, the

Division did not have any objections to approval of the Request as modified to exclude Ner,vfield

RMI from being compulsory pooled.

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The Board, having considered the testimony presented and exhibits received into evidence

at the hearing, being fully advised, and for good cause, hereby makes the following findings of

fact, conclusions of law and order in the Cause.

FINDINGS OF F'ACT

1. Axia is a Delaware corporation with its principal place of business at the time of

the hearing, in Denver, Colorado. Axia is duly qualified to conduct business in the State of Utah,

and is fully and appropriately bonded with all relevant Federal and State of Utah agencies,

including the Division.

2. Under its Order entered on January 23,2An in Cause No. 139-140 (the "139-140

Order"), which modified previous orders in Cause No. 131-14, Cause No. 139-42 and Cause No.

139-90, the Board established the entirety of Sections 29 and32, Township 2 South, Range 2 West,

U.S.M., as a drilling unit (the"29132 DU"), and Sections 28 and 33, Township 2 South, Range 2

West, U.S.M., as a driliing unit (the "28133 DU") (collectively the 29132 DU and rhe 28133 DU

are the "Subject Drilling Units"), for the purpose of drilling long-lateral horizontal wells

("LLHWs"), for the production of oil, gas and hydrocarbons from the Lower Green River-Wasatch

(Colton) formations defined as follows:

the interval from the top of the Lower Green River Formation (Mahogany MarkerBed) to the base of the Green River-Wasatch or top of the North Horn Formation,the stratigraphic equivalent of which is defined as between 7,2I2 feet and 13,651feet as shown in the Borehole Compensated Sonic-Gamma Ray Log of the FlyingJ - Dustin #1 Well located in the NE%SW% of Section 22, Township 2 South,

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Range 3 Vy'est, U.S.M., and as between 6,555 feet and 12,392 feet as shown on theDigital Sonic Log of the Devon - l-26lc-1rwell located in the SV/%SW% of Section26, Township 2 South, Range i West, U.S.M.

(the "Subject Formations"), and authorized up to 32 producing wells, which may be any

combination of vertical, short lateral horizontai ("SLHW") or LLHW, to be located no closer than

330 feet to the north and south boundaries, and no closer than 560 feet to the east and west

boundaries of the drilling units, from the Subject Formations on each such drilling unit so

established. However, vertical wells shall be limited to eight (8) within each drilling unit and

vertical well density shall not exceed four (4) vertical wells per 640-acre governmental section (or

substantial equivalent). The two wells that are the subject of this Cause are the Butcher Butte #32-

l44H-22 Well (located in the 29132 DU), and the Butcher Butte #33-34H-22 Well (located in the

2813 DU), (collectively the "Subject Wells")

3. The 29132 DU is a stand-up 1,280-acre drilting unit with oil and gas ownership

divided into 10 (ten) mineral tracts, as described on Exhibit "4" attached hereto and by this

reference incorporated herein. Axia, Newfield, NewfÌeld RMI, Intemational Petroleum Limited

Liability Company ("International"), Crescent Point Energy U.S. Corp. (*CPE') and Dusty

Sanderson all own working interests within |he29l32 DU. All but Newheld (owning a4.734435%

WI), and Dusty Sanderson (owning a 0.A39673% WI) (hereinafter the *29132 DU Non-

participating tWI Owners"), have voluntarily agreed to participate and have executed JOA's

covering the29132 DU (excepting therefrom Newheld RMI who agreed to participate but has not

executed a JOA and was dropped from the Request). The majority of the mineral interests are

under lease to Axia or the other working interest owners. As a consequence, 93.333464% of the

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interest within the 29132 DU is voluntarily pooled by contract. (Newf,reld RMI owns a 0 .128348Yo

working interest in the 29132 DU and negotiations for the voluntary participation of that interest

are ongoing).

4. The following parties remain unleased and all have not otherwise been pooled as to

the Butcher Butte #32-l 44H-22 W ell within tlte 29 I 32 DtJ :

Unleascd & Non-narticipatins Mineral Interest Owner Mineral Interest(Unit %l

Glade Goodrich aka Evan Glade Goodrich 0.158691%

Vorris Livingston 0.2139t4%

Jeremy Hunsaker 0.002539%

Chad Cannon 0.000001%

Jeralie Wirthlin 0.006928%

Heirs of Richard B. Wirthlin 0.006928%

Argo Energy Partners, Ltd 0.039673%

Slover Minerals L.P. 0.079346%

Tracie Brown 0.000311%

Jeff Nicora 0.00031l%

Susan Eaves Migliori, a/kla Susan Eaves Migliore 0.000310%

Diane Sutton 0.000310%

Monette Noble, alUaMonette Tapia 0.0a9945%

Vincent C. Noble 0.009945%

Leland Woodrow Noble, Jr 0.004972%

Robert D. Noble 0.a04972%

Laurence Scott Noble 0.404972%

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Weaver Four Investments 0.074648%

Gorda Sound Royalties, L.P. 0.010709%

Adrienne Larson 0.015069%

University of Utah, a Body Politic and Corporate 0.015069%

Bradley C. Goodrich 4.0t7632%

Heirs of Evan F. Goodrich 0.030227%

Heirs or Devisees of LeRoy Anderson 0.641,74r%

Arnold E. Johnson 0.t28348%

Shauna Livingston 0.0000r0%

Glennis Livingston 0.000010%

Misty Livingston 0.000010%

Croff Oil Company 0.286539%

TOTAL: 1.7640800/0

(hereinaft e r the "29 I 32 DU Non-participating Mineral Owners").

5. Title to some of the underlying oil and gas interests within the29132 DU remains

vested in the following parties now determined to be deceased:

Ray E. Dillman Francis Guie Shelton

Mildred Dillman Eva Mecham

Mary Eldredge Afton Fletcher

Naomi Lunt Virginia Livingston Mecham

Barbara H. Merrill Richard Livingston

Richard F. McKean Howard Mecham, alVaBarl Howard Mecham

Dixie Cannon Leland Anderson, alUaLeland Dan Anderson

Harvey A. Hatch Ralph Davis

Dallas P. Hatch, alklaDallas J. Hatch Richard B. Wirthlin

Mary A. Eaves Ralph A. Sharples

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Nancy Eaves Nicora Virginia B. Peterson

Jeffrey J. Noble Merlyn John Peterson

Lloyd John Goodrich Rhea B. Mecham

Gladys Goodrich Loraine B. Nilsen

Brent Goodrich Harold Magnus Nilsen

Thelma M. Goodrich Ruth T. M. Lowery, alkla Ruth TaylorMarchant Lowry

Norman Goodrich Lydia T. M. Sorensen

Evan F. Goodrich Ardon B. Evans

LeRoy Anderson Bessie Lusty

Mabel Price N. Scott Lusty, alkla Neil Scott Lusty

Elaine German, alVaJoyce Elaine German Evan R. Lusty

Ardon S. Hawkins

(hereinafter the "29132 DU Deceased Parties"). Axia has conducted diligent investigation into

who the 29132 Deceased Parties' successors may be, including internet searches of genealogic

websites, obtaining afÍidavits of heirship from known relatives or friends and probate searches.

While Axia believes that a majority of such successors are now under lease, there are no final Utah

court orders confirming the succession through these Estates.

6. The 28/33 DU is a stand-up 1,280-acre drilling unit with oil and gas ownership

divided into 20 (twenty) mineral tracts, as described on Exhibit o'8" attached hereto and by this

reference incorporated herein. Axia, Newfield, Newfield RMI, and CPE all own working interests

within the 28133 DU. All but Newfield (owning a 7 .447597% WÐ (hereinafter the "28133 DU

Non-participating V/I Owners"; the 29132 DU Non-participating WI Owners and the 28i33 DU

Non-participating WI Owners are collectively referred to hereinafter as the "Non-participating WI

Owners"), have agreed to participate and executed JOA's covering hhe 28133 DU (excepting

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therefrom Newfield RMI who agreed to participate but has not executed a JOA and was dropped

from the Request). The majority of the mineral interests are under lease to Axia or the other

working interest owners. As a consequence, 9l .268190% of the interest within the 28133 DU is

voluntarily pooled by contract. (Newfield RMI owns a L217909% working interest in the 28133

DU and negotiations for the voluntary participation of that interest are ongoing).

7. The following parties remain unleased and all have not otherwise been pooled as to

the Butcher Butte #33-34H-22 Well within the 28/33 DU:

Unleased & Non-narticinatine Mineral Interest Owner Mineral Interest(Unit %)

The University of Utah c/o Williams S. Nicholson 0.0274660/o

Brigham Young University 0.027466%

David Rhodes 0.001099%

Peggy Rhodes 0.00i099%

Daniel Rhodes 0.001099%

Doug Rhodes 0.001099%

Nancy Rhodes 0.001099%

Craig Miller Macfarlane 0.000366%

Laura Twiss 0.000366%

Janiel Smith Hicks, alkla Geneil Hicks 0.000439%

Dawn Smith Soger 0.000146%

Shirley Smith Rasmussen 0.000146%

Mary Ann Smith Armington 0.000146%

Steven Smith 0.000110%

Donald Smith 0.000110%

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Leland Smith 0.0000s5%

Wesley Smith 0.000055%

Thaniel Smith 0.00005s%

Ethan Ben Smith 0.000055%

Denise Lane 0.003828%

TOTAL: 0.066304%

(hereinafter the "28133 DU Non-participating Mineral Owners"; the29132 DU Non-participating

Mineral Owners and the 28133 DU Non-participating Mineral Owners are collectively referred to

hereinafter as the "Non-participating Mineral Owners").

8. Title to some of the underlying oil and gas interests within the28133 DU remains

vested in the following parties now determined to be deceased:

G.L. Higley, a/kla Glen L. Higley Sara I. Tanner

Iola A. Tarurer Ruth T. Doxey, a/k/a Ruth T. V/alker

Zoland Tanner ZolaT. Rhodes

Keith Albert Higley Agnes S. Knapp

Steven Richens Della S. MillerJack Richens Norene Macfarlane

Ruby J. Higley Henry A. Smith

Frank P. Higley Eileen Smith

Lee George Higley Terry Creager Smith

John R. Moritz Guy Palmer Smith

Jeanne R, Moritz LaRae Smith

Edmund D. Moritz Eman H. Smith

Mary H. Goates Verleen Smith

Frederick H. Blechmann Marion Kay Smith

Clarice E. Blechmann Henry Ray Smith

John R. Zack¡ison L.G. Benson

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(hereinafter the "28133 DU Deceased Parties"; the 29132 DU Deceased Parties and the 28133 DtJ

Deceased Parties are hereinafter collectively referred to as the "Deceased Parties"). Axia has

conducted diligent investigation into who the 25133 DU Deceased Parties' successors may be,

including internet searches of genealogic websites, obtaining afhdavits of heirship from known

relatives or friends and probate searches. While Axia believes that a majority of such successors

are now under lease, there are no final Utah court orders confirming the succession through these

Estates. (The Non-participating tü/I Owners, the Non-participating Mineral Owners and the

Deceased Parties and their Estates are collectively referred to hereinafter as the "Non-Consenting

FP Parties").

9. As evidenced by Exhibits c'L" - "QQQ" admitted into evidence and testimony

received at the hearing, Axia attempted in good faith for the voluntary leasing or participation of

the interests of the Non-participating WI Owners and Non-participating Mineral Owners (those

that were locatable). Although sent to their last addresses of record and as disclosed by other data,

not all of the Non-Participating Mineral Owners could be located. Those for whom no valid or

current address could be located are as follows:

Tracie Brown Nancy Rhodes

Susan Eaves Migliori, alWa SusanEaves Migliore

Laura Twiss

Vincent C. Noble Shirley Smith Rasmussen

Bradley C. Goodrich Steven Smith

Arnold E. Johnson Ethan Ben Smith

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Jeff Nicora Peggy Rhodes

Monette Noble, a.4</a Monette Tapia Doug Rhodes

Laurence Scott Noble Craig Miller Macfarlane

Glennis Livingston Dawn Smith Soger

Misty Livingston Mary Ann Smith Armington

David Rhodes Thaniel Smith

Daniel Rhodes

10. Pursuant to the Board's Order entered March 13,2017, a notice of opportunity to

lease or participate in the Subject Wells was published in the Uintah Basin Standard on April 4

and April I1,2017. Evidence of publication of the same was admitted into evidence as Exhibit

*YYY." In addition to the publication being expressly directed to and naming the parties listed in

Findings of Fact No. 9 above, the publication was also expressly directed to any party claiming oil

and gas ownership through the Estates of the Deceased Parties, described in Findings of Fact Nos.

5 and 8, as well as any and all parties not already leased or participating in the Subject Wells. No

responses to said published offer or any tender of the respective share of costs were ever received.

1 1. Given the Findings of Fact Nos. 3 and 6 above, and based on other evidence

presented at the hearing, the risk assumed by Axia and the other participating working interest

owners in the drilling of the Subject Wells, a300Yo risk compensation award (non-consent penalty)

is justified.

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12. The terms and conditions of the JOA's, admitted into evidence at the hearing and

attached hereto and by this reference incorporated herein as Exhibits ooC" and "D," are justified,

fair and reasonable, and are appropriate to govern the relationship between Axia as Operator of

the Subject Wells, and the Non-Consenting FP Parties as non-operators, as to the Subject Wells

within the Subject Drilling Units, to the extent not otherwise inconsistent with this Order.

13. The average weighted fee royalty forthe Butcher Butte #32-144K-22Well (located

in the 29132 DU), is 17.915367%. The average weighted fee royalty for the Butcher Butte #33-

34H-22 Well (located in the 2813 DU), is 17.283924%.

14. An interest rate charge of prime rate in effect at the Wall Street Journal plus 3% is

justified, fair and reasonable.

1 5. Estimated plugging and abandonment costs of $ 1 97 ,945 for the Butcher Butte #32-

l44H-22 Well and $192,888 for the Butcher Butte #33-34H-22 Well, based on 100% working

interest ownership and as detailed on Exhibits "H" and 'oI" admitted into evidence, are justified,

fair and reasonable.

16. Estimated drilling costs of $9,694JA0 forthe Butcher Butte #32-144H-22 Well and

59,542,709 for the Butcher Butte #33-34H-22 Well, based on 100% working interest ownership

and as detailed on Exhibits 'oH" and "I" admitted into evidence, are justified, fair and reasonable.

17. A copy of the Request was mailed, by U.S. Mail, postage pre-paid, certified with

retum receipts requested, and properly addressed to the Non-Consenting FP Parties with known or

previously validated addresses. In addition, a copy of the Request was mailed, postage pre-paid,

certified with return receipts requested, to all other working interest owners with interests in the

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Subject Drilling Units, and to any and all governmental agencies having regulatory authority over

the lands at interest.

18. Notice of the filing of the Request and of the hearing thereon was duly published

in the Salt Lake Tribune and Deseret Morning News on April 2,2017, and in the Uintah Basin

Standard on April 4,2017.

19. The vote of the Board members present at the hearing and participating in this

Cause was unanimous (4-0) in favor of granting the Request.

CONCLUSIONS OF LAW

l. Due and regular notice of the time, place and purpose of the hearing was properly

given to all parties whose legally protected interests are affected by the Request in the form and

manner as required by law and the rules and regulations of the Board and Division.

2. The Board has jurisdiction over all matters covered by the Request and all interested

parties therein, and has the power and authority to render the order herein set forth pursuant to

Utah Code Ann. 940-6-6.5.

3. Axia has sustained its burden of proof, demonstrated good cause, and satisfied all

legal requirements for granting of the Request.

4. Pursuant to the holding in CoWling v. Board of Oil. Gas and Mining,830P.2d220,

226 (Utah 1991), the Applicable Orders established, upon their respective entry, the parties'

correlative rights to production from any well located on the Subject Drilling Units.

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5. Axia exercised good faith in attempting to solicit from all of the Non-Consenting

FP Parties the leasing or participation of their interests in the Subject Drilling Units and the Subject

V/ells.

6. The Non-Consenting FP Parties are deemed oonon-consenting owners," as that term

is defined in Utah Code Ann. $40-6-2(11), as relating to the Subject Wells, and are properly

deemed to have refused to agree to bear their respective proportionate share of the costs of the

drilling and operation of the respective Subject Wells as provided in Utah Admin Code Rule R649-

2-e(1).

7 . Axia, as Operator and on behalf of itself, CPE and Intemational as to the Butcher

Butte #32-144$-22Well(29132 DU) and on behalf of itself and CPE as to the Butcher Butte #33-

34H-22 Well (28133 DU), is deemed a "consenting owner" as the term is defined in Utah Code

Ann. $40-6-2(4), but with the provisions of their respective JOA's governing the consequences of

their respective participation elections with respect thereto.

8. Under the terms and conditions set forth in this Order, the compulsory pooling of

the Non-Consenting FP Parties, made effective on the earlier of the date of issuance or as of the

date of first production from the respective Subject Wells is just and reasonable, and insures all

interest owners will receive their fair and equitable share of production from the Subject Wells.

ORDER

Based upon the Request, testimony, and evidence submitted, and the Findings of Fact and

Conclusions of Law stated above, the Board hereby orders:

1. The Request in this Cause is granted.

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2. The interests of all parties subject to the jurisdiction of the Board, specifically

including the Non-Consenting FP Parties, in the 29132 DU as to the Butcher Butte #32-144H-22

Well, and the 28133 DU as to the Butcher Butte #33-34H-22 Well, are pooled, with this Order

being effective on the earlier of the date of issuance or the date of first production from the

respective Subject Wells.

3. Operations upon any portion of the 29132 DU or the28133 DU shall be deemed for

all purposes to be the conduct of operations upon each separately owned tract in the respective

Subject Drilling Unit by the several owners.

4. Production allocated or applicable to a separately owned tract included in either the

29132 DU or 28133 DU shall, when produced, be deemed for all purposes to have been produced

from that tract by a well drilled on that respective Subject Drilling Unit.

5. Each owner shall pay his allocated share of the costs incurred in drilling and

operation of the respective Subject Well in which that owner owns an interest, including, but not

limited to, the costs of drilling, completing, equipping, producing, gathering, transporting,

processing, marketing, and storage facilities, reasonable charges for administration and

supervision of operations and other costs customarily incurred in the industry, all to be governed

in accordance with the terms and conditions of the JOA's executed with Axia or, only in the case

of the Non-Consenting FP Parties, the JOA's attached hereto (as Exhibit "C" for the Butcher Butte

#12-144H-22 WeIl in the 29132 DU, and as Exhibit "D" for the Butte #33-34H-22 Well in the

28133 DU), to the extent not otherwise inconsistent with this Order.

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6. The Non-Consenting FP Parties are "non-consenting owners," and Axia, as

Operator of the Subject Wells, on behalf of itself and all other current and future participating

working interest owners, are o'consenting owners" as these terms are utilized in Utah Code Ann.

$$40-6-6.5 arñ 4A'6-2(a) and (11), with respect to the Subject Wells. If, subsequent to the

Hearing, any of the Non-Consenting FP Parties (non-consenting owners) elect to participate and

sign the respective JOA, Axia shall have the sole discretion whether to consider that party a

consenting owner or a non-consenting owner relating to that respective well. Leases executed

after the Hearing, regardless of the lease's ooeffective date," by any of the Non-Consenting FP

Parties, and any and all other parties claiming any right, title, or interest in the oil and gas within

the Subject Ðrilling Units by, through, or under any of the Deceased Parties Estates shali be

ineffective as to the Subject Wells, unless otherwise agreed to in writing and signed by Axia and

such other party, and the calculation of the Average rWeighted Landowner Royalty; however, such

Leases may be applicable to any well drilled in the Subject Drilling Units subsequent to the Subject

Wells.

7. The interests of the non-consenting owners in their respective Subject Well shall

be deemed relinquished to the applicable consenting owner(s) in such well during the period of

payout for the well as provided in Utah Code Ann. $$ 40-6-6.5(4Xb) and 40-6-6.5(8). The

relinquishment does not constitute a defeasance of title to the interests in the mineral estate, but

rather the relinquishment of the revenue stream attributable to the non-consenting owners'

allocated share during the respective period of payout, after payment of any royalty required to be

paid by statute or this Order.

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8. Each non-consenting owrer shall be entitled to receive, subject to the royalty

specified herein, the share of the production of the Subject Well applicable to such owner's interest

in the respective Subject Drilling Unit after the consenting oumer(s) has/have recovered the

following from such non-consenting owner's share of production: (l) 100% of the non-consenting

owner's share of the costs of surface equipment beyond the wellhead connections, including stock

tanks, separators, treaters, pumping equipment, and piping; (2) 100% of the non-consenting

owner's share of the estimated costs of plugging and abandoning the respective Subject Well,

which costs are estimated to be $197,945 for the Butcher Butte #32-144H-22 Well and $192,888

for the Butcher Butte #33-34H-22 Well (based on a 100% working interest); (3) 100% of the non-

consenting ovrner's share of the costs of operation of the respective Subject Well, commencing

with first production and continuing until the consenting owner(s) has recovered all costs,

inciuding those allowed by Paragraph 5 of this Order; and (4) a risk compensation award of 300%

of the non-consenting owner's share of the costs of staking the location, wellsite preparation,

rights-of-way, rigging up, drilling, reworking, recompleting, deepening or plugging back, testing,

and completing, and the costs of equipment in the respective Subject Well, to and including the

wellhead connection, as such costs are delineated in Utah Code Ann. $ 40-6-6.5(4Xd). The non-

consenting o\4mer's share of costs is that interest that would have been chargeable to the non-

consenting owner if such owner had initially agreed to participate in the respective Subject Well

and pay such owner's share of the costs of the respective Subject Well, from the commencement

of operations.

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9. The interestrate, as permitted by Utah Code Ann. $ 40-6-6.5(4xdxiii), is set to the

prime rate, as published by the Wall Street Journal, plus 3olo, or if the Wall Street Journal ceases

to exist or to report a prime rate, then the prime rate shall be the prime rate reported by a reputable

bank lawfully operating in the State of Utah selected by the Operator.

10. For those non-consenting owners whose tract in a Subject Drilling Unit is subject

to a lease or other contract for the development of oil and gas, the consenting owners in such

drilling unit shall pay any royalty interest not subject to the deduction of the costs of production

from the production attributable to that tract between the date of first production from the

respective Subject well to Payout, as defined in Paragraph 12 of this order.

11. For those non-consenting owners whose tract in a Subject Drilling Unit is not

subject to a lease or other contract for the development of oil and gas, the consenting owners in

that Subject Drilling Unit shall pay the Non-participating Mineral Owners an average weighted

landowner royalty equal to 17.915367Yofor the Butcher Butte #32-144H-22 Well inthe 2gl32DlJ,

øad 17.283924% for Butcher Butte #33-34H-22 V/ell in the 2813 DlJ, from the date of first

production from the respective Subject Well until Payout, as defined in Paragraph l2 of this Order.

Upon Payout, the average weighted landowner royalty shall be merged back into the Non-

participating Mineral Owner's working interest and shall be terminated. In calculating the division

of interest for each Non-participating Mineral Owner, the average weighted landowner royalties

shall be proportionately reduced in the ratio that the owner's interest bears to (a) the total interest

in the tract and (b) further reduced in the ratio that the tract acres bear to the total acres in the

respective Subject Drilling Unit.

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12. ooPayout" occurs when the consenting owner(s) who participate in the costs of

drilling and completing the respective Subject Well recoup from the non-consenting owners the

costs and expenses authorized by Paragraphs I and 9 ofthis Order.

13. The consenting owner shall furnish each non-consenting owner with a monthly

statement regarding the respective Subject Well specifying: (i) the costs incurred; (ii) the quantity

of oil or gas produced; and (iii) the amount of oil and gas proceeds realized from the sale of the

production during the preceding month.

14. Upon Payout of a Subject Well, the non-consenting owner's relinquished interests

in that well shali automatically revert to them, and they shall from that time forward own the same

interest in the respective Subject Well and the production from it, and shall be liable for the further

costs of operation, as if such owners had participated in the initial drilling and completion

operations. These costs are payable out of production unless otherwise agreed between the non-

consenting owner and the operator.

15. In any circumstance when any non-consenting owner has relinquished such

owner's share of production to the consenting owner(s) or at any time fails to take such owner's

share of production in-kind, when such owner is entitled to do so, such non-consenting owner is

entitled to an accounting of the oil and gas proceeds applicable to such owner's relinquished share

of production and payment of the oil and gas proceeds applicable to that share of production not

taken in-kind, net of costs.

16. Pursuant to Utah Admin. Code Rules R641 and Utah Code Ann. g63G-4-204 to

208, the Board has considered and decided this matter as a formal adjudication.

2A

17. This Order is based exclusively on evidence of record in the adjudicative

proceeding or on facts officially noted, and constitutes the signed written order stating the Board's

decision and the reasons for the decision, all as required by the Administrative Procedures Act,

utah code Ann. $63G-4-2a8 and utah Administrative code Rule R64l-109.

18- Notice re: Right to Seek Judicial Review by the Utah Supreme Court or to Request

Board Reconsideration: As required by Utah Code Ann. $63G-4-20S(e) - (g), the Board hereby

notifies all parties in interest that they have the right to seek judicial review of this fînal Board

Order in this formal adjudication by filing a timely appeal with the Utah Supreme Court within 30

days after the date that this Order issued. Utah Code Ann. gg63c-4-401(3)(a) and 403. As an

alternative to seeking immediate judicial review, and not as a prerequisite to seeking judiciai

review, the Board also hereby notihes parties that they may elect to request that the Board

reconsider this Order, which constitutes a flrnal agency action of the Board. Utah Code Ann. $63G-

4-302, entitled, "Agency Review - Reconsideration," states:

(lXa) Within 20 days after the date that an order is issued for which reviewby the agency or by a superior agency under Section 63G-4-301 isunavailable, and if the order would otherwise constitute final agencyaction, any party may file a written request for reconsideration with theagency, stating the specific grounds upon which relief is requested.

(b) Unless otherwise provided by statute, the filing of the request is not aprerequisite for seeking judicial review of the order.

(2) The request for reconsideration shall be fîled with the agency and one copyshall be sent by mail to each party by the person making the request.

(3Xa) The agency head, or a person designated for that purpose, shall issue awritten order granting the request or denying the request.

2l

(b) Ifthe agency head or the person designated for that purpose does not issuean order within 20 days after the flrling of the request, the request forreconsideration shall be considered to be denied.

Id. The Board also hereby notifies the parties that Utah Admin. Code Rule R64l-110-100,

which is part of a group of Board rules entitled, "Rehearing and Modification of Existing

Orders," states:

Any person affected by a final order or decision ofthe Board may fîle a petitionfor rehearing. Unless otherwise provided, a petition for rehearing must be filedno later than the 10th day of the month following the date of signing of the hnalorder or decision for which the rehearing is sought. A copy of such petitionwill be served on each other party to the proceeding no later than the 15th dayof the month.

Id. See Utah Admin. Code Rule R641-110-200 for the required contents of apetition for

Rehearing. If there is any conflict between the deadline in Utah Code Ann. $63G-4-302 and

the deadline in Utah Admin. Code Rule R64l-110-100 for moving to rehear this matter, the

Board hereby rules that the later of the two deadlines shall be available to any party moving

to rehear this matter. If the Board later denies a timely petition for rehearing, the party may

still seek judicial review of the Order by perfecting a timely appeal with the Utah Supreme

Court within 30 days thereafter.

The Board retains continuing jurisdiction over all the parties and over the subject

matter of this cause, except to the extent said jurisdiction may be divested by the filing of a

timely appeal to seek judicial review of this order by the utah Supreme court.

22

For all pu{poses, the Chairman's signattne on a fa"xed copy of this Order shall be

deemed the equivalent of a signed original.

DATED AND EFFECTIVE this 9th day of June, 2017.

STATE OF'UTAHOIL, GAS AND MIIYING

J. Gill,

23

CERTIFICATE OF SERVICE

I hereby certify that on this 12th day of June,2017,I caused a true and correct copy of

the foregoing ORDER for Docket No. 2017-010 Cause No. 139-144, to be mailed by Email or

via First Class Mail with postage prepaid, to the following:

BEATTY & WOZNIAK, P.C.DAVID P. BOLDA, ESQ.5406W. 11000 N., STE. 103-221HIGHLAND, UT 84003

PETITIONER'S ADDRESS:

EMAI L: dbolda@bwenerqylaw. com

AXIA ENERGY II, LLCATTENTION: RICK GALLEGOSVICE PRESIDENT - LAND1430 LARIMER STREET, SUITE 4OO

DENVER, CO 80202ATTORNEY FOR PETITIONER AXIAENERGY II, LLC EMAI L: rqallegos@axiaenerqv.com

HOLLAND & HARTA. JOHN DAVISMARK L. BURGHARDT222 SOUTH MAIN STREET, SUITE 22OOSALT LAKE CITY, UT 84101

EMAI L: mlburqhardt(Ahollandhart.com

A TTORNEYS FOR RESPONDENTS NEWF I ELDPRODUCTION COMPANY, AND NEWFIELDRMI, LLC

STEVEN F. ALDERMEG OSSWALDUTAH ATTORNEY GENERAL'S OFFICENATURAL RESOURCES DIVISIONI594 W. NORTH TEMPLE, SUITE 3OO

SALT LAKE CITY, UT 84I16

EMAI L: stevealder(ôutah. qovEMAIL: mosswald@utah. gov

ASS/SIANT A TTORNEYS G ENERALREPRESENTING THE DIVISION OF OIL, GASAND MINING

RESPONDENTS'ADDRESS:

NEWFIELD PRODUCTION COMPANYNEWFIELD RMI, LLCTRAVIS LINDSEY, LAND LEAD UTAH24 WATERWAY AVE., SUITE 9OO

THE WOODLANDS, TX 77380

EMAI L: tlindsev@newfield.com

MIKE JOHNSONUTAH ATTORNEY GENERAL'S OFFICENATURAL RESOU RCES DIVISION1594 W. NORTH TEMPLE, SUITE 3OO

SALT LAKE CITY, UT 84116

EMAI L: mikejohnson@utah.gov

ASS/SÏANT ATTORNEY GENERALREPRESENTING THE BOARD OF O/1, GASAND MINING

24

ATTN: LAND MANAGERNEWFIELD PRODUCTION COMPANY24 WAÏERWAY AVE.THE WOODLANDS, TX 77380

DONALD SMITH569 MAIN ST.PAYSON, UT 84651

DUSTY SANDERSON7802 BENNINGTON DR.AMARILLO, TX 791 19-4994

ATTN: LAND MANAGERCRESCENT POINT ENERGY U.S. CORP555 17TH ST., STE 1800DENVER, CO 80202

WESLEY SMITH9489 FAIRFAX BLVD, #103FAIRFAX, VA22031

JANIEL SMITH HICKS AKA GENEIL HICKS43 SOUTH 3OO NORTHBOX 591ROOSEVELT, UT 84066

BRIGHAM YOUNG UNIVERSITY50 E. NORTH TEMPLE STREET, 12TH FLOORSALT LAKE CITY, UT 84150

VALERIE MIREMADI31014 OLD COLONY WAYWESTLAKE VILLAGE, CA 91361

MARY ANN SMITH ARMINGTON5OOO S. 19OO WEST, UNIT 40ROY, UT 84067

NANCY ELLEN PUGSLEY, AKA MARY ELLENPUGSLEY1842 YALE AVE.SALT LAKE CITY, UT 84108

ATTN: LAND MANAGERINTERNATIONAL PETROLEUM LLC4834 S. HIGHLAND DR., SUITE 2OO

SALT LAKE CITY, UT 84117

ATTN: LAND MANAGERNEWFIELD RMI, LLC24 WATERWAY AVE.THE WOODLANDS, TX 77380

LELAND SMITH5406 BLOOMFIELD DRMIDLAND, Ml48642

LAURA TWISS2O3O BITTERROOT DR.TWIN FALLS, ID 83301

THE UNIVERSITY OF UTAHC/O WILLIAMS S. NICHOLSON3OO EAST 45OO SOUTHMURRAY, UT 84107

DENISE LANE7128 DANKO DRIVEAPTOS, CA 95003

SHIRLEY SMITH RASMUSSEN1279 E.600 NORTH CIRCLEAMERICAN FORK, UT 84003IUndeliverable]

SUZANNE WEAVER2532F-. MAYWOOD DRIVESALT LAKE CITY, UT 84109

JOHN LEONARD BENSONPO BOX 4343RANCHO CUCAMONGA, CA 991729

CRAIG MILLER MACFARLANE509 S WALNUT ST.BOISE, tD 83712

25

J. STEVEN BENSON7 121 04-936 FAI RFI ELD ROADVICTORIA, BC V8V 3A4CANADA

ARGO ENERGY PARTNERS, LTDPO BOX 1808CORSICANA, TX 75151

VORRIS LIVINGSTON4920 PLYMOUTH VIEW DRIVETAYLORSVILLE, UT 84123

LELAND WOODROW NOBLE, JR7021 WEST VOLTAIRE AVENUEPEOR|A, AZ 85381

SLOVER MINERALS L.P3614 ROYAL ROADAMARILLO, TX 79109

JEREMY HUNSAKER223 N 100 EBRIGHAM CITY, UTAH 84302

LAURENCE SCOTT NOBLEI3019 DICKENS ST.sïuDlo ctTY, cA 91064

JEFFREY ALAN NICORA5618 EASTRIDGE DRIVESACRAMENTO, CA 95842

SHARRON G. THORPE, TRUSTEE OF THESHARRON G. THORPE FAMILY TRUST,DATED DECEMBER 18, 1985, AMENDEDMARCH 11,20096900 SOUTH 595 EASTMIDVALE, UT 84047

WEAVER FOUR INVESTMENTSBARBARA WEAVER WYNE, MANAGINGPARTNER7817 VILLA NUEVA NEALBUQUERQUE, NM 87109

GLADE GOODRICH AKA EVAN GLADEGOODRICH331 S. RIDGE RD.CEDAR CITY, UT 84720

THE DANIEL A. SISK AND KATHERINE B.SISK REVOCABLE TRUST DATED JANUARY3, 19895917 CAMINO PLACIDO NEALBUQUERQUE, NM 87109

RED RIVER ROYALTIES, INCP.O. BOX 576ARDMORE, OK73402-0576

BRADLEY GOODRICH3665 S. SPRINGFIELD AVE.MERtD|AN, tD 83642-6937

ROBERT D. NOBLE1809 CHESTER AVE.BAKERSFIELD, CA 93301

TRACIE BROWN2735 KNOB HILL DRIVECONNELLY SPRINGS, NC 286I2

CHAD CANNON4351 SOUTH2TOO EASTSALT LAKE CITY, UT 84121

DEATON INVESTMENTS, A PARTNERSHIP5415 CHEVY CHASE PARI(A/AY NWWASHINGTON, DC 20015

SUSAN EAVES MIGLIORI AKA SUSAN EAVESMIGLIORE39933 BELLA VISTA RD.TEMECULA, CA 92592

JERALIE WIRTHLIN2625 OLD ORCHARD CIRCLEHOLLADAY, UT 84121

26

DIANE SUTTON17832 S. GREENFIELD DRIVEOREGON CITY, OR 97045

HEIRS OF RICHARD B, WIRTHLINC/O JERALIE WIRTHLIN2625 OLD ORCHARD CIRCLEHOLLADAY,UT 84121

GORDA SOUND ROYALTIES, L.PP.O. BOX 671099DALLAS, TX 75367

HARDY MINERAL AND ROYALTIES, LTD.C/O BHCH MINERAL, LTD.5111 BROADWAYST.SAN ANTONIO, TX 78209-5709

SHAUNA LIVINGSTON4920 PLYMOUTH VIEW DRIVETAYLORSVILLE, UT 84123

VERA MADSEN WEST LUSTYOUR HOUSE CLOSE TO HOMEATTN: VERA MADSEN WEST LUSTY,ROOM #139532 SOUTH 7OO EASTSANDY, UT 84070-3458

CROFF OIL COMPANY9595 SIX PINES DR., STE 8210THE WOODLANDS, TX 77380

TRAVIS COMPANY JV, LTD.C/O BHCH MINERAL, LTD.5111 BROADWAY ST.sAN ANTON|O, TX 78209-5709

DT ROYALTY PARTNERS, L.L.CC/O BHCH MINERAL, LTD.5111 BROADWAYST.SAN ANTONIO, TX 78209-5709

TC CRAIGHEAD & COMPANYP.O. BOX 576ARDMORE, OK73402-0576

MONETTE NOBLE AKA MONETTE TAPIA3811 4TH AVE.SACRAMENTO, CA 95817

ADRIENNE LARSONC/O WILLIAMS S. NICHOLSON3OO EAST 45OO SOUTHMURRAY, UT 84107

HEIRS OF EVAN F. GOODRICHC/O GLADE GOODRICH331 S. RIDGE RD.CEDAR CITY, UT 84720

LAURIE STOREYI42O HOLLYWOOD AVENUESALT LAKE CITY, UT 84105IUNDELTVERABLEI

QEP RESOURCES, INC.ATTN: SARA STEVENSON1O5O 17TH STREET, SUITE 8OO

DENVER, CO 80265

GALLAGHER H EADQUARTERS RANCHDEVELOPMENT LTD.C/O BHCH MINERAL, LTD.5111 BROADWAY ST.sAN ANTONtO, TX 78209-5709

FREDERICKSBURG ROYALTY, LTDC/O BHCH MINERAL, LTD.5111 BROADWAY ST.SAN ANTONIO, TX 78209-5709

BHCH MINERAL, LTD.511I BROADWAY ST.sAN ANTON|O, TX 78209-5709

27

BIA UINTAH AND OURAYAGENCYP.O. BOX r30FORT DUCHESNE, UT 84026

UNITED STATES BUREAU OF LANDMANAGEMENTVERNAL FIELD OFFICEATTN: JERRY KENCZKA170 SOUTH 5OO EASTVERNAL, UT 84078

28

EXHIBIT 664''

The Butcher Butte 32-144H-22 V/ell located in the 29132 DU is a stand-up, 1,280-acre

drilling unit comprised of Sections 29 and 32 of Township 2 South, Range 2 West, U.S.M.,

Duchesne County, Utah, with oil and gas ownership divided into the following 10 (ten) mineral

tracts:

Tract Section Lesal GrossAcres

7" of Unit Ownership

I 29 NE %, E % S E 74lIW %, EVISEY4 260.00 20.3t250% Fee

il 29 NTrNW%, N%SW74NW%,N%S%SV/Y4NWY4,w%sE7À{w%

130.00 10.15625% Fee

m 29 S%S%SW74INW%; Alsobeginning at the V/est quartercorner, thence East 1732.5feet, thence South 1194.3 feet,thence West 1732.5 feet,thence North 1194.3 feet toplace of beginning.

57.50 4.492t9% Fee

IV 29 Beginning at the SouthwestCorner of Section 29,thenceNorth 1445.7 feet, thence East1732.5 feet, thence South1445.7 feet, thence West1732.5 feet to the place ofbeginning.

57.50 4.492t9% Fee

V 29 The East 55 rods of the SW%,W%SEY4

135.00 10.546880/0 Fee

I 32 NE'/ 160.00 12.50000% Fee

2 32 NW% 160.00 12.50000% FeeaJ 32 EYTSWY4 80.00 6.25000% Fee

4 32 WYTSWY4 80.00 6.25000% Fee

5 32 SEY4 160.00 t2.50000% Fee

Total 1280.00 100.00000%

EXHIBIT 668''

The Butcher Butte 33-34H-22 Well located in the 28133 DU is a stand-up, 1,280-acre

drilling unit comprised of Sections 28 and 33 of Township 2 South, Range 2 West, U.S.M.,

Duchesne County, Utah, with oil and gas ownership divided into the following 20 (wenty) mineral

tracts:

Tract Section Lesal GrossAcres

7o of Unit Ownership

I 28 NTrN%, SE74NE% 200.00 15.62500% TribalII 28 SW7ÀIE%, S72NW%,

N%SV/%, SE%SW% and thefollowing metes and boundstract: Beginning at theSouthwest corner of the SW%;thence North 80 rods; thenceEast 80 rods; thence South1020 feet; thence V/est 740

[sic, 790] feet; thenceSouthwest to a point 180 feetEast of said Southwest corner,thence West 180 feet to pointof beginning.

273.35 2r.35547% Fee

m 28 WYzSEt/+, NE%SE% 120.00 9.37500% Fee

IV 28 SEY4SEY4 40.00 3.12500% Fee

V 28 Beginning 180 feet East of theSW corner of Sec. 28; thenceEast I140 feet; thence North300 feet; thence West 790 feet;thence Southwesterly to thepoint of beginning.

6.6s 05r9s3% Fee

1 29 NW74NE%,EY2Ì\EY4 120.00 9.37s00% Fee

2 29 SW74NE% 40.00 3.t2500% Fee

3-A 29 Beginning at a point theNorthwest corner of theNW7ÀIW% and runningthence East 165 feet; thenceSouth 165 feet; thence West165 feet; thence North 165 feetto the point of beginning.

0.63 0.04922% Fee

3-B 29 Beginning at a point 165 feetEast of the Northwest corner ofthe NV/7¿NW%; thence East300 feet; thence South 465feet; thence V/est 465 feet;thence North 300 feet; thenceEast 165 fet; thence North 165feet to the point of beginning;ALSO Beginning at a point465 feet South of theNorthwest corner of theNW7ò{W%; thence South 100feet; thence East 213 feet;thence North 100 feet; thenceWest 213 feet tot he point ofbeginning.

4.82 0.37656% Fee

3-C 29 Beginning at a point 465 feetSouth arñ213 feet East of theNorthwest corner of theNW74NW%; thence South 300feet; thence West 213 feet;thence South 555 feet; thenceEast2640 feet; thance North1320 feet; thence West 2175feet; thence South 465 feet;thence West 252 feet to thepoint of beginning.

73.57 s.74766% Fee

3-D 29 Beginning at a point 565 feetSouth of the NW7+NW%;thence South 200 feet; thenceEast2l3 feet; thence North200 feet; thence 213 feetto thepoint of beginning.

0.98 0.07656% Fee

4 29 S%NV/% 80.00 6.25000% Fee

5 29 N%SW% 80.00 6.25000% Fee

6 29 sw%sw% 40.00 3.12s00% Fee

2

7 29 Beginning at the South quartercorner of Section 33, thenceSouth 89o36'38" V/est 290.00feet along the South line ofsaid section to a nail andwasher set in the pavement ofState Highway 87; thenceNorth 00o00'00" East 826.14feet to a 5/8" rebar with analuminum cap; thence North89o36'38" East 290.00 feet to a5/8" rebar with an aluminumcap situated on the East line ofthe Southeast quarter of theSouthwest quarter of saidsection 33; thence South00o00'00" East 826.14 feetalong said East line to thepoint of Beginning. Basis ofBearings being along the Eastline of said Southeast quarterof the Southwest quarter ofsaid section, that bearing isassumed to be "North", lessthe portion of Tract 8 lyingtherein.

3.04 0.23750% Fee

8 29 Beginning at the Southeastcorner of the Southwestquarter thence running North342feet, thence West 313 feet,thence South 342 feet, thenceEast 313 feet to the place ofbeginning.

2.49 0.19453% Fee

9 29 SE%SW% less Tracts 7 and 8 34.47 2.69297% Fee

10 29 NE%SE% 40.00 3.t2500% Fee

11 29 NW%SE% and S%SE% lessTruct 12

116.80 9.t2500% Fee

3

t2 29 Commencing at the SouthwestCorner of the Southeast

Quarter of the Southeast

Quarter, running thence North32 rods; thence East l6 rods;thence South 32 rods; thenceWest 16 rods to the point ofbeginning.

3.20 0.25000% Fee

Total: 1280.00 100.00000%

4

4185373.3

A.A.P.L. FORM 610 - 1989

MODEL FORM OPERATING AGREEMENT

OPERATING AGREEMENT

DATED

February 1 , 2017 , year

OPERATOR Axia Energy II, LLC

CONTRACT AREA Butcher Butte 32-144H-22 Well

Township 2 South, Range 2 West, USM

Sections 29 & 32:

COUNTY OR PARISH OF Duchesne County , STATE OF Utah

COPYRIGHT 1989 – ALL RIGHTS RESERVED

AMERICAN ASSOCIATION OF PETROLEUM

LANDMEN, 4100 FOSSIL CREEK BLVD.

FORT WORTH, TEXAS, 76137, APPROVED FORM.

A.A.P.L. NO. 610 – 1989

EXHIBIT "C"

A.A.P.L. FORM 610 - MODEL FORM OPERATING AGREEMENT - 1989

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expense and for the account of the Consenting Parties. Upon commencement of operations for the drilling, Reworking, Sidetracking, Recompleting, Deepening or Plugging Back of any such well by Consenting Parties in accordance with the provisions of this Article, each Non-Consenting Party shall be deemed to have relinquished to Consenting Parties, and the Consenting Parties shall own and be entitled to receive, in proportion to their respective interests, all of such Non- Consenting Party's interest in the well and share of production therefrom or, in the case of a Reworking, Sidetracking, Deepening, Recompleting or Plugging Back, or a Completion pursuant to Article VI.C.1. Option No. 2, all of such Non- Consenting Party's interest in the production obtained from the operation in which the Non-Consenting Party did not elect to participate. Such relinquishment shall be effective until the proceeds of the sale of such share, calculated at the well, or market value thereof if such share is not sold (after deducting applicable ad valorem, production, severance, and excise taxes, royalty, overriding royalty and other interests not excepted by Article III.C. payable out of or measured by the production from such well accruing with respect to such interest until it reverts), shall equal the total of the following: (i) 100 % of each such Non-Consenting Party's share of the cost of any newly acquired surface equipment beyond the wellhead connections (including but not limited to stock tanks, separators, treaters, pumping equipment and piping), plus 100% of each such Non-Consenting Party's share of the cost of operation of the well commencing with first production and continuing until each such Non-Consenting Party's relinquished interest shall revert to it under other provisions of this Article, it being agreed that each Non-Consenting Party's share of such costs and equipment will be that interest which would have been chargeable to such Non-Consenting Party had it participated in the well from the beginning of the operations; and (ii) 300 % of (a) that portion of the costs and expenses of drilling, Reworking, Sidetracking, Deepening, Plugging Back, testing, Completing, and Recompleting, after deducting any cash contributions received under Article VIII.C., and of (b) that portion of the cost of newly acquired equipment in the well (to and including the wellhead connections), which would have been chargeable to such Non-Consenting Party if it had participated therein. Notwithstanding anything to the contrary in this Article VI.B., if the well does not reach the deepest objective Zone described in the notice proposing the well for reasons other than the encountering of granite or practically impenetrable substance or other condition in the hole rendering further operations impracticable, Operator shall give notice thereof to each Non-Consenting Party who submitted or voted for an alternative proposal under Article VI.B.6. to drill the well to a shallower Zone than the deepest objective Zone proposed in the notice under which the well was drilled, and each such Non- Consenting Party shall have the option to participate in the initial proposed Completion of the well by paying its share of the cost of drilling the well to its actual depth, calculated in the manner provided in Article VI.B.4. (a). If any such Non- Consenting Party does not elect to participate in the first Completion proposed for such well, the relinquishment provisions of this Article VI.B.2. (b) shall apply to such party's interest. (c) Reworking, Recompleting or Plugging Back. An election not to participate in the drilling, Sidetracking or Deepening of a well shall be deemed an election not to participate in any Reworking or Plugging Back operation proposed in such a well, or portion thereof, to which the initial non-consent election applied that is conducted at any time prior to full recovery by the Consenting Parties of the Non-Consenting Party's recoupment amount. Similarly, an election not to participate in the Completing or Recompleting of a well shall be deemed an election not to participate in any Reworking operation proposed in such a well, or portion thereof, to which the initial non-consent election applied that is conducted at any time prior to full recovery by the Consenting Parties of the Non-Consenting Party's recoupment amount. Any such Reworking, Recompleting or Plugging Back operation conducted during the recoupment period shall be deemed part of the cost of operation of said well and there shall be added to the sums to be recouped by the Consenting Parties 400_% of that portion of the costs of the Reworking, Recompleting or Plugging Back operation which would have been chargeable to such Non-Consenting Party had it participated therein. If such a Reworking, Recompleting or Plugging Back operation is proposed during such recoupment period, the provisions of this Article VI.B. shall be applicable as between said Consenting Parties in said well. (d) Recoupment Matters. During the period of time Consenting Parties are entitled to receive Non-Consenting Party's share of production, or the proceeds therefrom, Consenting Parties shall be responsible for the payment of all ad valorem, production, severance, excise, gathering and other taxes, and all royalty, overriding royalty and other burdens applicable to Non-Consenting Party's share of production not excepted by Article III.C. In the case of any Reworking, Sidetracking, Plugging Back, Recompleting or Deepening operation, the Consenting Parties shall be permitted to use, free of cost, all casing, tubing and other equipment in the well, but the ownership of all such equipment shall remain unchanged; and upon abandonment of a well after such Reworking, Sidetracking, Plugging Back, Recompleting or Deepening, the Consenting Parties shall account for all such equipment to the owners thereof, with each party receiving its proportionate part in kind or in value, less cost of salvage. Within ninety (90) days after the completion of any operation under this Article, the party conducting the operations for the Consenting Parties shall furnish each Non-Consenting Party with an inventory of the equipment in and connected to the well, and an itemized statement of the cost of drilling, Sidetracking, Deepening, Plugging Back, testing, Completing, Recompleting, and equipping the well for production; or, at its option, the operating party, in lieu of an itemized statement of such costs of operation, may submit a detailed statement of monthly billings. Each quarter month thereafter, during the time the Consenting Parties are being reimbursed as provided above, the party conducting the operations for the Consenting Parties shall furnish the Non-Consenting Parties with an itemized statement of all costs and liabilities incurred in the operation of the well, together with a statement of the quantity of Oil and Gas produced from it and the amount of proceeds realized from the sale of the well's working interest production during the preceding quarter month. In determining the quantity of Oil and Gas produced during any month, Consenting Parties shall use industry accepted methods such as but not limited to metering or periodic well tests. Any amount realized from the sale or other disposition of equipment newly acquired in connection with any such operation which would have been owned by a Non-Consenting Party had it participated therein shall be credited against the total unreturned costs of the work done and of the equipment purchased in determining when the interest of such Non-Consenting Party shall revert to it as above provided; and if there is a credit balance, it shall be paid to such Non- Consenting Party. If and when the Consenting Parties recover from a Non-Consenting Party's relinquished interest the amounts provided for above, the relinquished interests of such Non-Consenting Party shall automatically revert to it as of 7:00 a.m. on the day following the day on which such recoupment occurs, and, from and after such reversion, such Non-Consenting Party shall own the same interest in such well, the material and equipment in or pertaining thereto, and the production therefrom as such Non-Consenting Party would have been entitled to had it participated in the drilling, Sidetracking, Reworking, Deepening, Recompleting or Plugging Back of said well. Thereafter, such Non-Consenting Party shall be charged with and

4185373.3

A.A.P.L. FORM 610 - 1989

MODEL FORM OPERATING AGREEMENT

OPERATING AGREEMENT

DATED

February 8 , 2017 , year

OPERATOR Axia Energy II, LLC

CONTRACT AREA Butcher Butte 33-34H-22 Well

Township 2 South, Range 2 West, USM

Sections 28 & 33: ALL

COUNTY OR PARISH OF Duchesne County , STATE OF Utah

COPYRIGHT 1989 – ALL RIGHTS RESERVED

AMERICAN ASSOCIATION OF PETROLEUM

LANDMEN, 4100 FOSSIL CREEK BLVD.

FORT WORTH, TEXAS, 76137, APPROVED FORM.

A.A.P.L. NO. 610 – 1989

EXHIBIT "D"

A.A.P.L. FORM 610 - MODEL FORM OPERATING AGREEMENT - 1989

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expense and for the account of the Consenting Parties. Upon commencement of operations for the drilling, Reworking, Sidetracking, Recompleting, Deepening or Plugging Back of any such well by Consenting Parties in accordance with the provisions of this Article, each Non-Consenting Party shall be deemed to have relinquished to Consenting Parties, and the Consenting Parties shall own and be entitled to receive, in proportion to their respective interests, all of such Non- Consenting Party's interest in the well and share of production therefrom or, in the case of a Reworking, Sidetracking, Deepening, Recompleting or Plugging Back, or a Completion pursuant to Article VI.C.1. Option No. 2, all of such Non- Consenting Party's interest in the production obtained from the operation in which the Non-Consenting Party did not elect to participate. Such relinquishment shall be effective until the proceeds of the sale of such share, calculated at the well, or market value thereof if such share is not sold (after deducting applicable ad valorem, production, severance, and excise taxes, royalty, overriding royalty and other interests not excepted by Article III.C. payable out of or measured by the production from such well accruing with respect to such interest until it reverts), shall equal the total of the following: (i) 100 % of each such Non-Consenting Party's share of the cost of any newly acquired surface equipment beyond the wellhead connections (including but not limited to stock tanks, separators, treaters, pumping equipment and piping), plus 100% of each such Non-Consenting Party's share of the cost of operation of the well commencing with first production and continuing until each such Non-Consenting Party's relinquished interest shall revert to it under other provisions of this Article, it being agreed that each Non-Consenting Party's share of such costs and equipment will be that interest which would have been chargeable to such Non-Consenting Party had it participated in the well from the beginning of the operations; and (ii) 300 % of (a) that portion of the costs and expenses of drilling, Reworking, Sidetracking, Deepening, Plugging Back, testing, Completing, and Recompleting, after deducting any cash contributions received under Article VIII.C., and of (b) that portion of the cost of newly acquired equipment in the well (to and including the wellhead connections), which would have been chargeable to such Non-Consenting Party if it had participated therein. Notwithstanding anything to the contrary in this Article VI.B., if the well does not reach the deepest objective Zone described in the notice proposing the well for reasons other than the encountering of granite or practically impenetrable substance or other condition in the hole rendering further operations impracticable, Operator shall give notice thereof to each Non-Consenting Party who submitted or voted for an alternative proposal under Article VI.B.6. to drill the well to a shallower Zone than the deepest objective Zone proposed in the notice under which the well was drilled, and each such Non- Consenting Party shall have the option to participate in the initial proposed Completion of the well by paying its share of the cost of drilling the well to its actual depth, calculated in the manner provided in Article VI.B.4. (a). If any such Non- Consenting Party does not elect to participate in the first Completion proposed for such well, the relinquishment provisions of this Article VI.B.2. (b) shall apply to such party's interest. (c) Reworking, Recompleting or Plugging Back. An election not to participate in the drilling, Sidetracking or Deepening of a well shall be deemed an election not to participate in any Reworking or Plugging Back operation proposed in such a well, or portion thereof, to which the initial non-consent election applied that is conducted at any time prior to full recovery by the Consenting Parties of the Non-Consenting Party's recoupment amount. Similarly, an election not to participate in the Completing or Recompleting of a well shall be deemed an election not to participate in any Reworking operation proposed in such a well, or portion thereof, to which the initial non-consent election applied that is conducted at any time prior to full recovery by the Consenting Parties of the Non-Consenting Party's recoupment amount. Any such Reworking, Recompleting or Plugging Back operation conducted during the recoupment period shall be deemed part of the cost of operation of said well and there shall be added to the sums to be recouped by the Consenting Parties 400_% of that portion of the costs of the Reworking, Recompleting or Plugging Back operation which would have been chargeable to such Non-Consenting Party had it participated therein. If such a Reworking, Recompleting or Plugging Back operation is proposed during such recoupment period, the provisions of this Article VI.B. shall be applicable as between said Consenting Parties in said well. (d) Recoupment Matters. During the period of time Consenting Parties are entitled to receive Non-Consenting Party's share of production, or the proceeds therefrom, Consenting Parties shall be responsible for the payment of all ad valorem, production, severance, excise, gathering and other taxes, and all royalty, overriding royalty and other burdens applicable to Non-Consenting Party's share of production not excepted by Article III.C. In the case of any Reworking, Sidetracking, Plugging Back, Recompleting or Deepening operation, the Consenting Parties shall be permitted to use, free of cost, all casing, tubing and other equipment in the well, but the ownership of all such equipment shall remain unchanged; and upon abandonment of a well after such Reworking, Sidetracking, Plugging Back, Recompleting or Deepening, the Consenting Parties shall account for all such equipment to the owners thereof, with each party receiving its proportionate part in kind or in value, less cost of salvage. Within ninety (90) days after the completion of any operation under this Article, the party conducting the operations for the Consenting Parties shall furnish each Non-Consenting Party with an inventory of the equipment in and connected to the well, and an itemized statement of the cost of drilling, Sidetracking, Deepening, Plugging Back, testing, Completing, Recompleting, and equipping the well for production; or, at its option, the operating party, in lieu of an itemized statement of such costs of operation, may submit a detailed statement of monthly billings. Each quarter month thereafter, during the time the Consenting Parties are being reimbursed as provided above, the party conducting the operations for the Consenting Parties shall furnish the Non-Consenting Parties with an itemized statement of all costs and liabilities incurred in the operation of the well, together with a statement of the quantity of Oil and Gas produced from it and the amount of proceeds realized from the sale of the well's working interest production during the preceding quarter month. In determining the quantity of Oil and Gas produced during any month, Consenting Parties shall use industry accepted methods such as but not limited to metering or periodic well tests. Any amount realized from the sale or other disposition of equipment newly acquired in connection with any such operation which would have been owned by a Non-Consenting Party had it participated therein shall be credited against the total unreturned costs of the work done and of the equipment purchased in determining when the interest of such Non-Consenting Party shall revert to it as above provided; and if there is a credit balance, it shall be paid to such Non- Consenting Party. If and when the Consenting Parties recover from a Non-Consenting Party's relinquished interest the amounts provided for above, the relinquished interests of such Non-Consenting Party shall automatically revert to it as of 7:00 a.m. on the day following the day on which such recoupment occurs, and, from and after such reversion, such Non-Consenting Party shall own the same interest in such well, the material and equipment in or pertaining thereto, and the production therefrom as such Non-Consenting Party would have been entitled to had it participated in the drilling, Sidetracking, Reworking, Deepening, Recompleting or Plugging Back of said well. Thereafter, such Non-Consenting Party shall be charged with and