y:commission 0aprilready to distillfor ... applications archive/2010...section 6, township 8 north,...

JERRY L. CANFIELD, P.A.THOMAS A. DAILY, P.A.WYMAN R. WADE, JR., P.A.DOUGLAS M. CARSON, P.A.ROBERT R. BRIGGS, P.A. † *C. MICHAEL DAILY, P.A. †COBY W. LOGANL. MATTHEW DAVIS, P.A. †COLBY T. ROE

* 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

______________

COMMERCE PARK II BUILDING2049 EAST JOYCE BOULEVARD, STE. 401

FAYETTEVILLE, AR 72703TELEPHONE (479) 582-0361

FAX (479) 251-8111

JAMES E. WESTPHILLIP E. NORVELL *

DALE CARLTON *

OF COUNSEL

_______

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

April 6, 2010

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

Re: ORDER REFERENCE NO. 267-2010-04

Application of SEECO, Inc. for Integration of All Unleased Mineral Interests andNon-consenting Working Interests in a unit described as Section 6, Township 8North, Range 17 West, Conway County, Arkansas

Commissioners:

SEECO, Inc., 2350 N. Sam Houston Parkway E, Houston, TX 77032, hereby applies tothe Arkansas Oil and Gas Commission for the integration of all unleased mineralinterests and non-consenting working interests in its proposed drilling unit which isdescribed above.

1. The proposed drilling unit is an established unit as defined in paragraph (f) ofArkansas Oil and Gas Commission General Rule B-43. Applicant proposes to drill ahorizontal well from a non-exceptional surface location in the Northwest Quarter ofSection 5 down to a non-exceptional bottom hole location in the Northwest Quarter ofSection 6, Township 8 North, Range 17 West. The tentative proposed allocation of thiswell is 7.39% to Section 5 and 92.61% to Section 6, subject to revision in accordancewith General Rule B-43. Applicant states that it will seek the authority to drill andproduce the shared well in a separate, administrative application. The proposed wellwill be drilled to a total vertical depth of 3,827 feet to test the Fayetteville ShaleFormation. Applicant has obtained one or more oil and gas leases covering itsproposed 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 leasehold

interest in the proposed unit, but applicant has been unable to secure an assignment ofthe leasehold interest on an equitable basis or to secure participation by said parties inthe drilling of the proposed well.

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

(a) Each of the owners of the unleased mineral interests indicatedabove execute and deliver to applicant a one year oil and gaslease, on an AAPL lease form, for a bonus consideration of$1,500.00 per net mineral acre to be paid as fair and reasonablecompensation in lieu of the right to participate in the workinginterest in said unit, and that said oil and gas lease provide for a3/16 royalty on oil and gas.

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

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

Applicant further requests that said mineral owners be required to elect within fifteen(15) days after issuance of the Commission's order which method will be pursued in thedevelopment of the above described unit, and, in the event no election is made, that itshall be assumed that the owner of said unleased mineral interest has elected to accepta bonus of $1,500.00 per net mineral acre as compensation in lieu of the right toparticipate in the working interest in said unit, and with the royalty to be 3/16.

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

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

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

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

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

Very truly yours,

Thomas A. Dailyjmt

Hanna, Euell 08-17 #1-05H6 Section 6 – T8N - R17W Conway County, Arkansas

EXHIBIT A

INTERESTED PARTIES

Page 1 of 3

MINERAL OWNERS

Angell, Jeffrey Donald See Page 1 of Exhibit B

Ashton, Rodney See Page 2 of Exhibit B

Brumley, Flurr See Page 3 of Exhibit B

Brumley, Mark See Page 4 of Exhibit B

Brumley, Mynda See of Exhibit B

Cherbeneau, Jeanne See Page 6 of Exhibit B

D’Antonio, Kathleen Angell See Page 7 of Exhibit B

Deland, Mary Elizabeth Ford See Page 8 of Exhibit B

Gentle, Susan Ashton See Page 9 of Exhibit B Greer, Eunice M., Heirs See Page 10 of Exhibit B Grogan, Robbin Jeffers, a/k/a Robbin Louise Jeffers, a/k/a Robin Jeffers Grogan See Page 11 of Exhibit B

Jeffers, Christy, a/k/a Christie Jeffers See Page 12 of Exhibit B

Kane, Georgiana S. See Page 24 of Exhibit B

King, Richard Edward See Page 13 of Exhibit B


EXHIBIT A

INTERESTED PARTIES

Page 2 of 3

Legacy Royalties, Ltd. See Page 14 of Exhibit B

Mayhew, Bradford Thomas See Page 15 of Exhibit B

Mayhew, Doris See Page 16 of Exhibit B

Mayhew, Evan C. See Page 17 of Exhibit B

Mayhew, Jacquelyn See Page 18 of Exhibit B

Mayhew, Kathryn Sue See Page 19 of Exhibit B Moxon, Anna Marie White See Page 26 of Exhibit B

Nelson, Ruth (Ashton), Heirs See Page 20 of Exhibit B

Pipkin, Mary Lynn See Page 21 of Exhibit B

Runnels, Catherine Carter See Page 22 of Exhibit B

Steiner, Bella, Heirs See Page 23 of Exhibit B

Steiner, George W. and Annie M. Steiner, Heirs See Page 24 of Exhibit B Ward, Cynthia Ann See Page 25 of Exhibit B

White, M. S., Heirs See Page 26 of Exhibit B

Whiteley, Stephen Travis See Page 27 of Exhibit B


EXHIBIT A

INTERESTED PARTIES

Page 3 of 3

Winham, Donald, a/k/a Donald Price Winham See Page 28 of Exhibit B

WORKING INTEREST OWNERS

BP America Production Company See Page 29 of Exhibit B

Chesapeake Exploration, LLC See Page 30 of Exhibit B

XTO Energy, Inc. See Page 31 of Exhibit B


EXHIBIT B

RESUME OF EFFORTS TO LEASE

Page 1 of 31

Jeffrey Donald Angell The Title Opinion does not credit this owner with an interest. This interest was owned by Helen N. Jeffers, deceased. She had two children who are her intestate heirs and who have leased their interest to SEECO, Inc. However, according to her will, which was probated in Colorado, she left a 40% interest to each of her children and a 20% interest to be divided among her four grandchildren, one of whom is Jeffrey Donald Angell. However, there has been no ancillary probate filed in Arkansas. Therefore, this interest is being named for protection purposes. January 14, 2010 Checked office records. Located an address and phone number for owner.

Sent a letter to owner explaining his interest in this section and that we would like to get a letter agreement from him until the title question is resolved.

January 28, 2010 Spoke to owner. Discussed the letter agreement and the possibility of the

heirs filing an ancillary probate in Arkansas. He said he would talk to family but doubted that they would want to do that.

February 10, 2010 Spoke to owner. He said the family had discussed filing a probate in

Arkansas but had decided against it. They are still considering signing a letter agreement.

February 20, 2010 Called owner. No answer. Left message. March 8, 2010 Spoke to owner. He said family had not made a decision about signing

letter agreement. March 17, 2010 Called owner. No answer. Left message. March 23, 2010 Spoke to owner. He said he would let us know in a few days what he is

going to do. March 29, 2010 Spoke to owner. He said he would sign letter agreement. April 1, 2010 Letter agreement being prepared. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 2 of 31

Rodney Ashton January 15, 2010 Checked office records. Located an address and phone number for owner. January 20, 2010 Mailed lease proposal letter. February 2, 2010 Called owner. No answer. Left message. February 8, 2010 Called and spoke to owner. Discussed lease proposal. He said he wanted

to think about it. February 18, 2010 Called owner. No answer. Left message. March 3, 2010 Called owner. No answer. Left message after multiple attempts. March 16, 2010 Talked to owner. He agreed to lease. March 18, 2010 Lease and related documents being prepared. March 22, 2010 Lease and related documents mailed. April 1, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 3 of 31

Flurr Brumley This interest is part of the Thurmon A. Mayhew Testamentary Trust. Thurmon A. Mayhew, who is deceased, devised his estate to Emprise Bank, Successor Trustee of the Thurmon A. Mayhew Testamentary Trust dated 12-31-74. His estate has been probated in the state of Kansas. However, it has not been probated in Arkansas. Therefore, the intestate heirs of Thurmon A. Mayhew are named individually. January 15, 2010 Checked office records and located contact information for Dale

Friedman, Trustee of the Thurmon A. Mayhew Trust. Mailed lease proposal letter.

January 29, 2010 Called Mr. Friedman. He said he would talk to the heirs of Thurmon

Mayhew and see what they want to do. February 12, 2010 Talked to Mr. Friedman who said he had been unable to contact some of

the family members who are out of town and will not return for a couple of weeks.

February 26, 2010 Spoke with Mr. Friedman who said the family members had agreed to

lease. March 1, 2010 Lease and related documents being prepared. March 3, 2010 Lease and related documents mailed. March 15, 2010 Talked to Mr. Friedman. He said he had some documents back but did not

have all of them back from family members. March 26, 2010 Talked to Mr. Friedman. He said he would contact the family members

who had not executed the documents to date. April 1, 2010 Called Mr. Friedman. He was out of the office. Left a message. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 4 of 31

Mark Brumley This interest is part of the Thurmon A. Mayhew Testamentary Trust. Thurmon A. Mayhew, who is deceased, devised his estate to Emprise Bank, Successor Trustee of the Thurmon A. Mayhew Testamentary Trust dated 12-31-74. His estate has been probated in the state of Kansas. However, it has not been probated in Arkansas. Therefore, the intestate heirs of Thurmon A. Mayhew are named individually. January 15, 2010 Checked office records and located contact information for Dale










EXHIBIT B


Page 5 of 31

Mynda Brumley This interest is part of the Thurmon A. Mayhew Testamentary Trust. Thurmon A. Mayhew, who is deceased, devised his estate to Emprise Bank, Successor Trustee of the Thurmon A. Mayhew Testamentary Trust dated 12-31-74. His estate has been probated in the state of Kansas. However, it has not been probated in Arkansas. Therefore, the intestate heirs of Thurmon A. Mayhew are named individually. January 15, 2010 Checked office records and located contact information for Dale










EXHIBIT B


Page 6 of 31

Jeanne Cherbeneau January 15, 2010 Checked office records. Located a phone number and address for owner.

Called. Phone has been disconnected. January 20, 2010 Mailed lease proposal letter. January 22, 2010 Conducted internet search for new phone listing for owner. Nothing

found. February 3, 2010 Spoke with a relative of owner who also owns minerals in this section.

She said owner was doing a lot of traveling and had disconnected her phone. She was unable to provide a cell number.

February 18, 2010 Mailed second lease proposal letter. February 26, 2010 Expanded internet search. Still unable to find a phone listing for owner. March 12, 2010 Spoke to another relative of owner who also owns minerals in this section.

He provided a phone number for owner that he believed was current. Called. No answer. Left message.

March 23, 2010 Called owner. She said she did not have time to talk and to call back in a

few days. March 28, 2010 Called owner. No answer. Left message. April 1, 2010 Unable to contact owner at this time. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 7 of 31

Kathleen Angell D’Antonio The Title Opinion does not credit this owner with an interest. This interest was owned by Helen N. Jeffers, deceased. She had two children who are her intestate heirs and who have leased their interest to SEECO, Inc. However, according to her will, which was probated in Colorado, she left a 40% interest to each of her children and a 20% interest to be divided among her four grandchildren, one of whom is Kathleen Angell D’Antonio. However, there has been no ancillary probate filed in Arkansas. Therefore, this interest is being named for protection purposes. January 14, 2010 Checked office records. Located an address and phone number for owner.

Sent a letter to owner explaining her interest in this section and that we would like to get a letter agreement from her until the title question is resolved.


heirs filing an ancillary probate in Arkansas. She said she did not think the family would want to spend the money to file a probate.

February 10, 2010 Spoke to owner. She said the family had discussed filing a probate in


February 20, 2010 Called owner. No answer. Left message. March 5, 2010 Called owner. No answer. Left message. March 12, 2010 Spoke to owner. She said she is still talking to her family about signing a

letter agreement. March 20, 2010 Called owner. She said she would make a decision soon. March 26, 2010 Called owner. No answer. Left message. March 29, 2010 Spoke to owner. She agreed to sign letter agreement. March 30, 2010 Letter agreement being prepared. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 8 of 31

Mary Elizabeth Ford Deland January 15, 2010 Checked office records. Located an address and phone number for owner.

Called. No answer. Left message. January 23, 2010 Mailed lease proposal letter. February 2, 2010 Called owner to confirm receipt of letter. No answer. Left message. February 16, 2010 Spoke with owner. Discussed lease proposal. She said she wanted to

think about it. February 24, 2010 Called owner. No answer. Left message. March 8, 2010 Spoke with owner. She agreed to lease. March 10, 2010 Lease and related documents being prepared. March 12, 2010 Lease and related documents mailed. March 22, 2010 Called owner to confirm receipt of documents. No answer. Left message. April 1, 2010 Waiting for return of executed documents. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 9 of 31

Susan Ashton Gentle January 15, 2010 Checked office records. Located an address and phone number for owner. January 20, 2010 Mailed lease proposal letter. February 1, 2010 Called and spoke to owner. Discussed lease proposal. She said she

wanted to talk to other family members before making a decision. February 14, 2010 Called owner. No answer. Left message. February 26, 2010 Called owner. No answer. Left message after multiple attempts. March 12, 2010 Talked to owner. She agreed to lease. March 15, 2010 Lease and related documents being prepared. March 18, 2010 Lease and related documents mailed. March 25, 2010 Called owner. No answer. Left message. April 1, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 10 of 31

Eunice M. Greer, Heirs The known heirs of Eunice M. Greer have leased their interest to SEECO, Inc. The heirship of Eunice M. Greer has been established by heirship affidavit executed on March 10, 2010 by Bruce David Greer, who is one of the purported heirs of Eunice M. Greer. The distribution of the estate appears to never have been determined by judicial probate order. Therefore, this interest is being named for protection purposes. The following are the known heirs of Eunice M. Greer and have executed leases with SEECO, Inc.: Judson L. Greer Bruce David Greer Kim Greer Puchek April 6, 2010 Well proposal letter and AFE mailed to Eunice M. Greer, Heirs, in care of

Bruce David Greer.


EXHIBIT B


Page 11 of 31

Robbin Jeffers Grogan, a/k/a Robbin Louise Jeffers, a/k/a Robin Jeffers Grogan The Title Opinion does not credit this owner with an interest. This interest was owned by Helen N. Jeffers, deceased. She had two children who are her intestate heirs and who have leased their interest to SEECO, Inc. However, according to her will, which was probated in Colorado, she left a 40% interest to each of her children and a 20% interest to be divided among her four grandchildren, one of whom is Christy Jeffers. However, there has been no ancillary probate filed in Arkansas. Therefore, this interest is being named for protection purposes. January 14, 2010 Checked office records. Located an address and phone number for owner.



heirs filing an ancillary probate in Arkansas. She said she would discuss it with her family.


Arkansas but had decided against it. She is still considering signing a letter agreement.

February 22, 2010 Called owner. No answer. Left message. March 10, 2010 Called owner. No answer. Left message. March 16, 2010 Spoke to owner. She said the family has not made a decision about

signing a letter agreement to date. March 23, 2010 Called owner. No answer. Left message. March 28, 2010 Spoke with owner. She said family had decided to sign letter agreement. March 30, 2010 Letter agreement being prepared. April 1, 2010 Letter agreement mailed. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 12 of 31

Christy Jeffers, a/k/a Christie Jeffers The Title Opinion does not credit this owner with an interest. This interest was owned by Helen N. Jeffers, deceased. She had two children who are her intestate heirs and who have leased their interest to SEECO, Inc. However, according to her will, which was probated in Colorado, she left a 40% interest to each of her children and a 20% interest to be divided among her four grandchildren, one of whom is Christy Jeffers. However, there has been no ancillary probate filed in Arkansas. Therefore, this interest is being named for protection purposes. January 14, 2010 Checked office records. Located an address and phone number for owner.



heirs filing an ancillary probate in Arkansas. She said they did not want to spend the money to file a probate.



February 20, 2010 Called owner. No answer. Left message. March 5, 2010 Called owner. No answer. Left message. March 17, 2010 Spoke to owner. She said family was considering letter agreement. March 23, 2010 Called owner. No answer. Left message. March 29, 2010 Spoke with owner. She agreed to sign letter agreement April 1, 2010 Letter agreement being prepared. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 13 of 31

Richard Edward King This owner owns minerals in numerous sections in Arkansas and has leased to SEECO a number of times. January 12, 2010 Called and spoke with owner. Discussed lease terms. He agreed to lease. January 14, 2010 Lease and related documents being prepared. January 15, 2010 Lease and related documents mailed. January 20, 2010 Called owner. Was told by secretary that he was out of office. Left

message asking him to call. February 1, 2010 No executed documents received to date. February 15, 2010 Called owner. Was told by secretary that he was out of the office. Left

message. February 23, 2010 Called owner. Was told that he was in a meeting. Left message. March 9, 2010 Called owner. Secretary said he was out of the office. Left message. March 18, 2010 Called owner. He was not in. Left message. March 28, 2010 Called owner. Secretary said he was out of town. Left message. April 1, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 14 of 31

Legacy Royalties, Ltd. A deed was located from the Estate of Barbara Jean Bellis Franklin by Phillip Franklin, Independent Executor for the Estate to Legacy Royalties, Ltd. The deed contained the following: “All of Grantor’s right, title and interest, in and to all of the oil, gas and other minerals and all of the royalties and overriding royalties, excluding any and all working interests, in and under and that may be produced and mined, that grantor owns in the following property: All lands situated all or in part in Conway County, Arkansas, whether or not described herein. All of Section 33, T8N, R17W in Conway County, Arkansas.” Phillip Franklin maintains his intention was to convey a specific tract only and not all the Estate’s interest in Conway County. November 15, 2006 Talked with Jeanne Davis at Legacy Royalties, Inc. She obtains information and forwards her

recommendations on to Steven D. Smith. Mr. Smith makes the final decision on leasing. December 11, 2006 Ms. Davis will send a copy of their lease form. January 15, 2007 Ms. Davis said they will not consider an option in their lease. They do not have an inventory of

interests owned in Conway County. February 20, 2007 Ms. Davis sent a copy of their lease terms. They are unacceptable. Unable to lease at this time. As

there is no deed of record actually describing these lands, this interest is being named for protection purposes due to the intent language in the 25-9N-19W deed.

March 12, 2008 Contact with Legacy indicates that no work has been done to resolve the title dispute between

Legacy and the Franklins. April 16, 2008 Contact with Legacy indicates that there has still been no work done to resolve the title dispute

between Legacy and the Franklins. May 27, 2008 The questions surrounding title of this interest are still unanswered. Therefore, we are unable to

lease this interest and it is being named for protection purposes. January 5, 2009 Status remains unchanged. Title questions still unresolved. July 30, 2009 Status remains unchanged. Title questions still unresolved. January 26, 2010 Talked to Ms. Davis. Discussed the title questions between Legacy Royalties, Ltd. and Phillip

Franklin and Betsy Franklin Burcham. She said to send the information regarding the minerals in question. Legacy now has an attorney in Arkansas and they will have him take a look at it.

February 20, 2010 Mailed letter to Ms. Davis outlining proposal to do letter agreements in several sections until title

issue is resolved. March 1, 2010 Called Ms. Davis to confirm receipt of letter. No answer. Left message. March 14, 2010 Called Ms. Davis. No answer. Left message. March 20, 2010 No return phone call or response to letter received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 15 of 31

Bradford Thomas Mayhew January 15, 2010 Checked office files. Located an address and phone number for owner.

Called. No answer. Left message. January 18, 2010 Mailed lease proposal letter. February 1, 2010 Called owner to confirm receipt of letter. No answer. Left message. February 10, 2010 Called owner. No answer. Left message. February 18, 2010 Spoke with owner. Discussed lease terms. He said he wanted to think

about it. February 28, 2010 Spoke with owner. He agreed to lease. March 1, 2010 Lease and related documents being prepared. March 3, 2010 Lease and related documents mailed. March 12, 2010 Called owner to confirm receipt of documents. No answer. Left message. March 18, 2010 Spoke with owner. He said he had not received documents. March 19, 2010 Sent new lease and related documents. March 25, 2010 Called owner. No answer. Left message. April 1, 2010 Waiting for return of executed documents. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 16 of 31

Doris Mayhew This interest is part of the Thurmon A. Mayhew Testamentary Trust. Thurmon A. Mayhew, who is deceased, devised his estate to Emprise Bank, Successor Trustee of the Thurmon A. Mayhew Testamentary Trust dated 12-31-74. His estate has been probated in the state of Kansas. However, it has not been probated in Arkansas. Therefore, the intestate heirs of Thurmon A. Mayhew are named individually. January 15, 2010 Checked office records and located contact information for Dale










EXHIBIT B


Page 17 of 31

Evan C. Mayhew January 17, 2010 Checked office records. Located an address and phone number for owner.

Called. No answer. Left message. January 23, 2010 Mailed lease proposal letter. February 2, 2010 Called owner to confirm receipt of letter. No answer. Left message. February 8, 2010 Spoke with owner. Discussed lease terms. Agreed to lease. February 10, 2010 Lease and related documents being prepared. February 12, 2010 Lease and related documents mailed. February 23, 2010 Called owner to confirm receipt of documents. No answer. Left message. March 3, 2010 Called owner. No answer. Left message. March 15, 2010 Spoke with owner. He said he would sign and return documents shortly. March 25, 2010 Called owner. No answer. Left message. April 1, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 18 of 31

Jacquelyn Mayhew January 17, 2010 Checked office records. Located an address and phone number for owner.

Called. No answer. Left message. January 21, 2010 Mailed lease proposal letter. February 2, 2010 Called owner to confirm receipt of letter. No answer. Left message. February 10, 2010 Called owner. No answer. Left message. February 16, 2010 Spoke with owner. Discussed lease terms. Agreed to lease. February 18, 2010 Lease and related documents being prepared. February 22, 2010 Lease and related documents mailed. March 3, 2010 Called owner to confirm receipt of documents. No answer. Left message. March 12, 2010 Spoke with owner. She said she had not had a chance to review

documents but would do so soon. March 24, 2010 Called owner. No answer. Left message. March 31, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 19 of 31

Kathyrn Sue Mayhew January 15, 2010 Checked office records. Located an address and phone number for owner.

Called. No answer. Left message. January 23, 2010 Mailed lease proposal letter. February 2, 2010 Called owner to confirm receipt of letter. No answer. Left message. February 14, 2010 Spoke with owner. Discussed lease terms. She said she would consider it

and to call back next week. February 21, 2010 Called owner. No answer. Left message. March 1, 2010 Spoke with owner. She agreed to lease. March 3, 2010 Lease and related documents being prepared. March 5, 2010 Lease and related documents mailed. March 12, 2010 Called owner to confirm receipt of documents. No answer. Left message, March 19, 2010 Talked to owner. She said she had not looked at documents yet but would

do so soon. March 26, 2010 Called owner. She said she had signed and returned documents. April 1, 2010 No executed documents or return phone call received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 20 of 31

Ruth (Ashton) Nelson, Heirs Rodney Ashton See Page 2 of Exhibit B Susan Ashton Gentle See Page 9 of Exhibit B Catherine Carter Runnells See Page 22 of Exhibit B


EXHIBIT B


Page 21 of 31

Mary Lynn Pipkin January 15, 2010 This owner owns minerals in numerous sections in Arkansas and she has

leased to SEECO, Inc. in a number of those sections. Called owner. No answer. Left message.

January 27, 2010 Called owner. No answer. Left message. February 8, 2010 Spoke with owner’s mother who also owns minerals in section. She said

her daughter is very ill with cancer but to send the lease documents and she would see if her daughter could sign them.

February 10, 2010 Lease and related documents being prepared. February 11, 2010 Lease and related documents mailed. February 26, 2010 Spoke with owner’s mother who said her daughter was in an oxygen

bubble and unable to sign any documents. March 10, 2010 Spoke with owner’s mother. There has been no change in owner’s

condition. March 24, 2010 Spoke with owner’s mother. Her daughter is still unable to sign

documents. Her mother said she hoped that in a few weeks there would be improvement.

April 1, 2010 No change in status. Owner unable to sign documents. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 22 of 31

Catherine Carter Runnells January 15, 2010 Checked office records. Located an address and phone number for owner. January 20, 2010 Mailed lease proposal letter. February 2, 2010 Called and spoke to owner. Discussed lease proposal. She said she

wanted to think about it. February 16, 2010 Called owner. No answer. Left message. March 1, 2010 Called owner. No answer. Left message after multiple attempts. March 14, 2010 Talked to owner. She agreed to lease. March 16, 2010 Lease and related documents being prepared. March 18, 2010 Lease and related documents mailed. March 25, 2010 Called owner. No answer. Left message. April 1, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 23 of 31

Bella Steiner, Heirs This owner has been integrated in numerous sections in the past. Extensive efforts were made at that time without any success to locate information regarding her or her heirs. February 3, 2010 Conducted a new internet search in hopes that information had become

available on owners. Nothing found. February 17, 2010 Asked other leasers on crew if any had been able to locate owner or

possible heirs. None had any information. March 1, 2010 Expanded internet search. Located information establishing the marriage

and deaths of owners. Based on this information, they had no children. March 10, 2010 Checked directories in the state where owners lived at the time of their

deaths. Nothing found. March 20, 2010 Unable to locate any additional information on owners. March 31, 2010 Status remains unchanged. No new information has been located that

would provide information on the whereabouts of possible heirs of owners.

April 6. 2010 Unable to locate.


EXHIBIT B


Page 24 of 31

George W. Steiner and Annie M. Steiner, Heirs Georgiana S. Kane These owners have been integrated in numerous sections in the past. Extensive efforts were made at that time without any success to locate information regarding them or their heirs. February 3, 2010 Conducted a new internet search in hopes that information had become

available on owners. Nothing found. February 17, 2010 Asked other leasers on crew if any had been able to locate owner or

possible heirs. None had any information. March 1, 2010 Expanded internet search. Located information establishing the marriage

and deaths of owners. Based on this information, they apparently had one daughter, Georgiana S. Kane who is now deceased. She had no children and her husband predeceased her.

March 8, 2010 Checked county records. Located mineral lease of record executed by

Georgiana Kane in 1977. March 10, 2010 Checked directories in the state where Georgiana Kane lived at the time

she leased this interest. Nothing found. March 20, 2010 Unable to locate any additional information on owner. March 31, 2010 Status remains unchanged. No new information has been located that

would provide information on the whereabouts of possible heirs of owners.

April 6. 2010 Unable to locate.


EXHIBIT B


Page 25 of 31

Cynthia Ann Ward January 14, 2010 Checked office records. Located an address and phone number for owner.

Mailed lease proposal letter. January 23, 2010 Called owner. Discussed lease proposal. She agreed to lease. January 25, 2010 Lease and related documents being prepared. January 28, 2010 Lease and related documents mailed. February 11, 2010 Called owner to confirm receipt of documents. No answer. Left message. February 23, 2010 Called owner. No answer. Left message after multiple attempts. March 8, 2010 Spoke with owner. She said she had not received lease documents. Told

her we would resend them. March 10, 2010 Mailed documents. March 20, 2010 Called owner to confirm receipt of documents. No answer. Left message. March 26, 2010 Spoke with owner. She said she had received documents and would sign

and return them shortly. April 2, 2010 Waiting for return of executed documents. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 26 of 31

M. S. White, Heirs Anna Marie White Moxon January 15, 2010 Checked internet and local phone directories for address or phone number

for owner. Nothing found. January 29, 2010 Checked records at county courthouse for information on owner. Nothing

found. February 13, 2010 Talked to local officials. No one contacted knew owner or possible heirs

of owner. February 26, 2010 Contacted other owners in area of subject property. No one contacted

knew of owner or heirs of owner. March 10, 2010 Searched out of state listings on internet. No results returned on owner. March 18, 2010 Expanded internet search. Located information that Anna Marie White

was the widow. They apparently had two children. Anna Marie White later remarried.

March 22, 2010 Searched internet for information on Anna Marie White Moxon and her

children. Unable to locate any information regarding whereabouts of heirs of owner.

March 22, 2010 All efforts to locate this owner or heirs have been exhausted. March 31, 2010 Status remains unchanged. No new sources have surfaced and no new

knowledge of this owner’s whereabouts has been obtained. Owner’s location remains unknown.

April 6, 2010 All additional efforts to locate this owner or heirs of owner have had no

results.


EXHIBIT B


Page 27 of 31

Stephen Travis Whiteley January 17, 2010 Located address and phone number for owner from office records. Called.

No answer. Left message. January 22, 2010 Talked to owner. Discussed lease terms. Owner agreed to lease. January 25, 2010 Lease and related documents being prepared. January 27, 2010 Lease and related documents mailed. February 10, 2010 Called owner to confirm receipt of documents. No answer. Left message. February 20, 2010 Spoke with owner who said he had received documents and would sign

and return soon. March 5, 2010 Called owner. No answer. Left message. March 12, 2010 Spoke with owner. He said he had not received the lease. He said he was

mistaken when he said he had received it. March 15, 2010 Replacement documents being prepared. March 17, 2010 Replacement documents mailed. March 22, 2010 Called owner to confirm receipt of documents. No answer. Left message. March 28, 2010 Called owner. No answer. Left message. April 1, 2010 No executed documents received to date. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 28 of 31

Donald Winham, a/k/a Donald Price Winham January 20, 2010 This party owns minerals in numerous sections. His assistant handles his

mineral leasing. Called assistant. Discussed lease proposal. She said she would talk to owner.

February 1, 2010 Called owner. His assistant said he had not made a decision about leasing

at this time. February 12, 2010 Received an email from owner’s assistant saying he has leased this

interest with a third party. February 20, 2010 Lease not of record to date. March 7, 2010 Talked to owner’s wife who said they had leased with third party. No

lease of record found to date. March 20, 2010 Still no third party lease found of record. March 28, 2010 Status unchanged. No third party lease found of record. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 29 of 31

BP America Production Company BP America Production Company owns a working interest in the following Oil and Gas leases recorded in Conway County, Arkansas:

1) Judith Lynne Schmidt to Chesapeake Exploration Limited Partnership dated December 11, 2006 and recorded in Oil and Gas Book 151 at page 434.

2) Kendra Whiteley to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 438. 3) Bryan Wade Whiteley to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 442. 4) Martha Holland to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 446. 5) Charles L. Owen to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 450.

6) Edwin L. Owen to Chesapeake Exploration Limited Partnership dated December 11, 2006 and recorded in Oil and Gas Book 151 at page 454.

7) Charles W. Whiteley to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 458. 8) Billie L. Whiteley, Individually and as Trustee of the Whiteley Family Trust u/t/a/d 27-Apr-95 to

Chesapeake Exploration Limited Partnership dated December 11, 2006 and recorded in Oil and Gas Book 151 at page 462.

9) Donald B. Owen to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 466. 10) Kirby Minerals to Chesapeake Exploration, LLC dated February 28, 2008 and recorded in Oil and Gas

Book 160 at page 537. 11) Bandera Minerals, LLC to Chesapeake Exploration, LLC dated February 28, 2008 and recorded in Oil

and Gas Book 160 at page 537. 12) Phillip Franklin to Chesapeake Exploration, LLC dated September 29, 2008 and recorded in Oil and

Gas Book 173 at page 113. Lease expires March 29, 2010. 13) Betsy Burcham to Chesapeake Exploration, LLC dated September 29, 2008 and recorded in Oil and

Gas Book 173 at page 117. Lease expires March 29, 2010.

Chesapeake Exploration, L. L. C. assigned an undivided interest to BP America Production Company. Said assignment is effective July 1, 2008, and recorded in Oil and Gas book 171 at page 610. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 30 of 31

Chesapeake Exploration, LLC Chesapeake Exploration, LLC owns a working interest in the following Oil and Gas leases recorded in Conway County, Arkansas:

1) Judith Lynne Schmidt to Chesapeake Exploration Limited Partnership dated December 11, 2006 and recorded in Oil and Gas Book 151 at page 434.

2) Kendra Whiteley to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 438. 3) Bryan Wade Whiteley to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 442. 4) Martha Holland to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 446. 5) Charles L. Owen to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 450.

6) Edwin L. Owen to Chesapeake Exploration Limited Partnership dated December 11, 2006 and recorded in Oil and Gas Book 151 at page 454.

7) Charles W. Whiteley to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 458. 8) Billie L. Whiteley, Individually and as Trustee of the Whiteley Family Trust u/t/a/d 27-Apr-95 to

Chesapeake Exploration Limited Partnership dated December 11, 2006 and recorded in Oil and Gas Book 151 at page 462.

9) Donald B. Owen to Chesapeake Exploration Limited Partnership dated December 11, 2006 and

recorded in Oil and Gas Book 151 at page 466. 10) Kirby Minerals to Chesapeake Exploration, LLC dated February 28, 2008 and recorded in Oil and Gas

Book 160 at page 537. 11) Bandera Minerals, LLC to Chesapeake Exploration, LLC dated February 28, 2008 and recorded in Oil

and Gas Book 160 at page 537. 14) Phillip Franklin to Chesapeake Exploration, LLC dated September 29, 2008 and recorded in Oil and

Gas Book 173 at page 113. 15) Betsy Burcham to Chesapeake Exploration, LLC dated September 29, 2008 and recorded in Oil and

Gas Book 173 at page 117. Chesapeake Exploration Limited Partnership, by affidavit of Identity and Corporate Successorship, is now Chesapeake Exploration, L. L. C. effective August 6, 2007 and recorded in Oil and Gas book 151, page 239. April 6, 2010 Well proposal letter and AFE mailed.


EXHIBIT B


Page 31 of 31

XTO Energy, Inc. BP America Production Company owns a working interest in the following Oil and Gas leases recorded in Conway County, Arkansas:

1) Paschall Properties, Inc., Susan P. Paschall, Trustee of the Susan P. Paschall Revocable Intervivos Trust No. 1, dated December 23, 1993 and amended April 15, 2005, Rod D. Limke, Todd D. Limke and Lisa D. Limke, Scott D. Limke, Trustee of the Scott D. Limke 2005 Revocable Trust, dated April 1, 2005 to XTO Energy, Inc. dated October 9, 2007 and recorded in Oil and Gas Book 153 at page 719.

April 6, 2010 Well proposal letter and AFE mailed.

EXHIBIT “C”Applicant’s statement regarding Operating Agreement

The applicant requests incorporation of the Model Form Joint Operating Agreement

approved by the Arkansas Oil and Gas Commission on October 24, 2006, with Paragraph

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

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

insertions, if applicable:

NONE

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