RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL

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1 RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL OIL AND GAS DOCKET NO. 7C IN THE SPRABERRY (TREND AREA) FIELD AND VARIOUS STRAWN FIELDS FINAL ORDER AMENDING RULE 1 OF THE FIELD RULES FOR THE SPRABERRY (TREND AREA) FIELD AND TO APPROVE RULE 10 EXCEPTIONS VARIOUS STRAWN FIELDS AND THE SPRABERRY (TREND AREA) FIELD VARIOUS COUNTIES, TEXAS The Commission finds that after statutory notice in the above-numbered docket heard on July 22, 2010, the presiding examiner has made and filed a report and recommendation containing findings of fact and conclusions of law, for which service was not required; that the proposed application is in compliance with all statutory requirements; and that this proceeding was duly submitted to the Railroad Commission of Texas at conference held in its offices in Austin, Texas. The Commission, after review and due consideration of the examiner's report and recommendation, the findings of fact and conclusions of law contained therein, hereby adopts as its own the findings of fact and conclusions of law contained therein, and incorporates said findings of fact and conclusions of law as if fully set out and separately stated herein. THEREFORE, it is ORDERED by the Railroad Commission of Texas that Rule 1 of the field rules for the Spraberry (Trend Area) Field, adopted in Final Order No. 7C , effective December 18, 2007, is amended as hereafter set out: Rule 1: The entire correlative interval from 6,865 feet to 10,605 feet as shown on the log of the Houpt Well No. 1, API No , Section 24, T2S, Block 39, T & P RR Survey, Midland County, Texas, shall be designated as a single reservoir for proration purposes and be designated as the Spraberry (Trend Area) Field. This interval is intended to include all reservoirs between the Clearfork marker and the top of the Strawn. It is further ORDERED by the Railroad Commission of Texas that exceptions to Statewide Rule 10 are hereby approved for all wells in the Spraberry Trend (Area) Field in Districts 7C, 8 and 8A, and any of the fields listed on Attachment A. For wells which are commingled in any combination of the subject fields after the effective date of this order, commingled production shall be assigned to the Spraberry (Trend Area) Field. Further, acreage assigned to wells on any leases for allocation of allowable shall not be assigned to any other well or wells projected to or completed in any of the fields; such

2 OIL AND GAS DOCKET NO. 7C Page 2 duplicate assignment of acreage is not acceptable, provided however, that this limitation shall not prevent the reformation of development or proration units so long as no duplicate assignment of acreage occurs, and further, that such reformation does not violate other conservation regulations. The operator of any well downhole commingled in any combination of the subject fields shall file the appropriate completion forms and/or other forms as required by the Commission and shall file at the same time the appropriate Commission required administrative Rule 10 exception downhole commingling fee. Done this 24 th day of August, RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixed by OGC Unprotested Master Order dated August 24, 2010)

3 OIL AND GAS DOCKET NO. 7C Page 3 ATTACHMENT A The operator of any well downhole commingled in the Spraberry (Trend Area) Field and one of the fields listed below shall file the appropriate completion forms, an abbreviated Rule 10 Data Sheet for Wells Subject to Fieldwide Rule 10 Exception, and the Rule 10 exception downhole commingling fee. Such applications may be approved without notice and hearing. This provision shall apply to the following fields: District Field # Field Name 7C AMACKER-TIPPETT (STRAWN) 7C AMACKER-TIPPETT (STRAWN -A-) 7C AMACKER-TIPPETT (STRAWN LO) 7C AMACKER-TIPPETT (STRAWN 9150) 7C AMACKER-TIPPETT, EAST (STRAWN) 7C AMACKER-TIPPETT, EAST (STRAWN-A-) 7C AMACKER-TIPPETT, SE. (STRAWN) 7C AMACKER-TIPPETT, SE (STRAWN DETR) 7C AMACKER-TIPPETT, SE. (STRAWN LM) 7C AMACKER-TIPPETT, SW (STRAWN) 7C AMACKER-TIPPETT, W (STRAWN-DETR) 7C AMACKER-TIPPETT, S (STRAWN 8750) 7C AMACKER-TIPPETT, S (STRAWN 9250) 7C AMIET (STRAWN) 8A AMROW (STRAWN) 8A AMROW, NORTH (STRAWN) ANDREWS, EAST (STRAWN) ANDREWS, NORTH (STRAWN) ANTELOPE (STRAWN) ARLIS (STRAWN) AZALEA (STRAWN) AZALEA, EAST (STRAWN) AZALEA-HALE (STRAWN) 7C B.F.P. (STRAWN) 8A BALE (STRAWN) BELSPEC (STRAWN) BERRYHILL (STRAWN) BETTY SUE (STRAWN) BETTY SUE, SOUTH (STRAWN) 7C BIG LAKE (STRAWN) BIG SPRING (STRAWN) BIG SPRING (STRAWN, LO.) BLALOCK (STRAWN) BLALOCK LAKE (STRAWN) BLOCK 42 (STRAWN, LO.) BLOCK 42 (STRAWN) BLOCK 6 (STRAWN) BLOCK 6, NE. (STRAWN)

4 OIL AND GAS DOCKET NO. 7C Page BLOCK 9 (STRAWN) BLOCK A-34 (STRAWN) 7C BLUE DANUBE (STRAWN) BOOKS (STRAWN) BRADFORD RANCH (STRAWN) BREEDLOVE (STRAWN) BREEDLOVE, SOUTH (STRAWN) 8A BRENNAND (STRAWN) 8A CHAMPMON (STRAWN) 8A CHAMPMON, NORTH (STRAWN) 8A CHAMPMON, NORTH (STRAWN -B-) CLARENCE SCHARBAUER (STRAWN) 7C CORBETT, N. (STRAWN) 7C CORDOVA (STRAWN) COWDEN (STRAWN) COWDEN, N. (STRAWN) CURRIE RANCH (STRAWN) DEADWOOD (STRAWN) DEADWOOD, WEST (STRAWN) DEWEY LAKE (STRAWN) DEWEY LAKE, S. (STRAWN) DORA ROBERTS (STRAWN) ELBOW, S.E (STRAWN) EMMA (STRAWN) ERNIE PINNELL (STRAWN) F.G. (STRAWN) FLORAC (STRAWN) FLORWILL (STRAWN) 7C FRADEAN (STRAWN) GARDEN CITY (STRAWN) GARDEN CITY, NE. (STRAWN) GARDEN CITY, NW (STRAWN) GARDEN CITY, NW (STRAWN 9630) GARDEN CITY, S. (STRAWN) GARDEN CITY, SE. (STRAWN) 8A GARLAND (STRAWN) 7C GEORGETOWN (STRAWN, LOWER) GLADYS COWDEN (STRAWN) 8A GLASCO (STRAWN) GLASCO, EAST (STRAWN) GREENTREE, NORTH (STRAWN) 7C GRIERSON SPRING (STRAWN) 7C GUNNX HALLANAN (STRAWN) HAMILTON DRAW (STRAWN) HEADLEE (STRAWN) HEADLEE, N (STRAWN) 7C HIGHLINE ROOST (STRAWN) HODNETT (STRAWN REEF) HOFFERKAMP (STRAWN)

5 OIL AND GAS DOCKET NO. 7C Page HOLTON (STRAWN) HORSELOT (STRAWN) INEZ (STRAWN) ISAAC (STRAWN) J C (STRAWN) 7C JACK HERBERT (STRAWN PENN.) JACO (STRAWN) JAMESON, NORTH (STRAWN) KELLY-STEPHENS (STRAWN) 7C KING MOUNTAIN (STRAWN) 7C KING MOUNTAIN (STRAWN 9150) 7C KING MOUNTAIN, N. (STRAWN) KNOTT, SW (STRAWN) LENORAH, WEST (STRAWN) LOMAX (STRAWN) LOWE (STRAWN) LOWE, WEST (STRAWN) MABEE (STRAWN) MAGUTEX (STRAWN) MAGUTEX N. (STRAWN) 7C MCELROY (STRAWN) MEANS (STRAWN) MEANS, EAST (STRAWN) MIDLAND, EAST (STRAWN) MIDLAND FARMS (STRAWN) MIDLAND, WEST (STRAWN) MID-MAR (STRAWN) MID-MAR, EAST (STRAWN) MILLENIUM (STRAWN) MON BAK (STRAWN) MOORE (STRAWN 9500) N. Y. Y. (STRAWN) NO AMIGO (STRAWN) PETTY 48 (UPPER STRAWN) R. W. P. (STRAWN) 7C RED HOUSE (STRAWN) RK (STRAWN) S. F. M. (STRAWN) SAINT LAWRENCE (STRAWN) SAINT LAWRENCE SOUTH (STRAWN) SALE RANCH (STRAWN) 8A SEAGRAVES (STRAWN) 8A SEAGRAVES, W. (STRAWN) 8A SEMINOLE, SE. (STRAWN) 8A SEVEN YEARS (STRAWN) SIDCO (STRAWN) SPRABERRY (TREND AREA STRAWN) 7C SPUG (STRAWN) TEX-HARVEY (STRAWN) TOM RANCH (STRAWN)

6 OIL AND GAS DOCKET NO. 7C Page TRES AMIGOS (STRAWN) 7C TRIGG (STRAWN) 7C TRIUMPH (STRAWN DETRITAL) UNDERWOOD (STRAWN) 7C UNIVERSITY (PENN. STRAWN) VIREY (STRAWN) 7C W. RICHARDSON (STRAWN) WARFIELD (STRAWN) 8A WESCOTT (STRAWN) WESTERFELD (STRAWN) 7C WILLRODE (STRAWN) 7C WILLRODE (STRAWN 9950)

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