ConocoPhillips Company v. Vaquillas Unproven Minerals, LTD.

• Court: Court of Appeals of Texas
• Decided: February 10, 2015
• Docket: 04-15-00066-CV
• Status: Published

Opinion

ACCEPTED 04-15-00066-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 2/10/2015 1:57:24 PM KEITH HOTTLE CLERK 04-15-00066-CV No. _______________

In the Court of Appeals 4th COURT FILED IN OF APPEALS SAN ANTONIO, TEXAS for the Fourth Judicial District of Texas 02/10/2015 1:57:24 PM

San Antonio, Texas KEITH E. HOTTLE Clerk

CONOCOPHILLIPS COMPANY, Petitioner, V.

VAQUILLAS UNPROVEN MINERALS, LTD., Respondent.

From Cause No. 2014 CVQ000 438 D4 406th Judicial District Court, Webb County, Texas Honorable Oscar J. Hale, Jr., Presiding Judge

Unopposed Petition for Permission to Appeal Adolfo Campero Michael V. Powell State Bar No. 00793454 State Bar No. 16204400 Email: acampero@camperolaw.com Email: mpowell@lockelord.com Campero & Associates, P.C. Cynthia K. Timms 315 Calle Del Norte, Suite 207 State Bar No. 11161450 Laredo, Texas 78041 Email: ctimms@lockelord.com Tel: 956-796-0330 Elizabeth L. Tiblets Fax: 956-796-0399 State Bar No. 24066194 Email: etiblets@lockelord.com Locke Lord LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776 Tel: 214-740-8520 Fax: 214-740-8800

ATTORNEYS FOR PETITIONER CONOCOPHILLIPS COMPANY IDENTITY OF PARTIES AND COUNSEL

Petitioner: Counsel for Petitioners: ConocoPhillips Company Michael V. Powell State Bar No. 16204400 Email: mpowell@lockelord.com Cynthia K. Timms State Bar No. 11161450 Email: ctimms@lockelord.com Elizabeth L. Tiblets State Bar No. 24066194 Email: etiblets@lockelord.com Locke Lord LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776 Tel: 214-740-8520 Fax: 214-740-8800

Adolfo Campero State Bar No. 00793454 Email: acampero@camperolaw.com Campero & Associates, P.C. 315 Calle Del Norte, Suite 207 Laredo, Texas 78041 Tel: 956-796-0330 Fax: 956-796-0399 Respondent: Counsel for Respondent: Vaquillas Unproven Minerals, Ltd. Gregg Owens State Bar No. 15383500 Email: gregg.owens@haysowens.com Robert G. Hargrove State Bar No. 09303300 Email: rob.hargrove@haysowens.com Hays & Owens L.L.P. 807 Brazos Street, Suite 500 Austin, Texas 78701 Tel: 512-472-3993 Fax: 512-472-3883

i A. Michael Jung State Bar No. 11054600 Email: michael.jung@strasburger.com Strasburger & Price, LLP 901 Main Street, Suite 4400 Dallas, Texas 75202-3794 Tel: 214-651-4724 Fax: 214-651-4330 (main) Fax: 214-659-4022 (direct)

Armando X. Lopez State Bar No. 12562400 Email: mandox@rio.bravo.net Law Offices of Armando X. Lopez 1510 Calle Del Norte, Suite 16 Laredo, Texas 78041 Tel: 956-726-0722 Fax: 956-726-6049

Raul Leal State Bar No. 24032657 Email: rleal@rl-lawfirm.com Raul Leal Incorporated 5810 San Bernardo, Suite 390 Laredo, Texas 78041 Tel: 956-727-0039 Fax: 956-727-0369

ii TABLE OF CONTENTS Page

IDENTITY OF PARTIES AND COUNSEL .............................................................i

TABLE OF CONTENTS ......................................................................................... iii

INDEX OF AUTHORITIES......................................................................................v

INFORMATION REQUIRED BY TEXAS RULE OF APPELLATE PROCEDURE 25.1(d) ................................................vi

STATEMENT OF THE CASE ............................................................................... vii

ISSUE PRESENTED ............................................................................................. viii

STATEMENT OF FACTS ........................................................................................1

A. The Two Leases Contain Retained Acreage Clauses............................ 1

B. The Railroad Commission Adopted Field Rules. ................................. 3

C. This Action. ...........................................................................................4

ARGUMENT AND AUTHORITIES ........................................................................ 5

A. The proper interpretation of the leases is a “controlling question of law.”....................................................................................5

B. There is a substantial ground for a difference of opinion. .................... 7

C. An immediate appeal from the Amended Order may materially advance the ultimate termination of the litigation.................................................................................................8

PRAYER ....................................................................................................................9

CERTIFICATE OF CONFERENCE.......................................................................11

CERTIFICATE OF COMPLIANCE .......................................................................11

CERTIFICATE OF SERVICE ................................................................................12

iii APPENDIX:

Amended Order On Cross-Motions For Summary Judgment ..........................TAB 1

Defendant's Motion For Summary Judgment ...................................................TAB 2

Plaintiff's Cross-Motion For Partial Summary Judgment And Response To Defendant's Motion For Summary Judgment ........................TAB 3

Plaintiff's Original Petition ...............................................................................TAB 4

iv INDEX OF AUTHORITIES Page(s)

CASES Johnson v. Burken, 930 F.2d 1202 (7th Cir. 1991) .............................................................................. 6 Jones v. Killingsworth, 403 S.W.2d 325 (Tex. 1965) ................................................................................ 7

RULES AND STATUTES 28 U.S.C. § 1292(b) ...................................................................................................5 TEX. CIV. PRAC. & REM. CODE § 51.014(Vernon Supp. 2014).................. vi, vii, 5, 6 Tex. R. of App. P. 25.1 .............................................................................................vi

Tex. R. of App. P. 28.3 .............................................................................................vi Tex. R. of App. P. 28.4 ........................................................................................... vii

LAW REVIEWS AND TREATISES 16 Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 3930 (3d ed. 2012) .......................................................................6, 7 19 James Wm. Moore, Moore’s Federal Practice & Procedure §203.31[3] (3d ed. 2014) .........................................................................................................8

v TO THE HONORABLE COURT OF APPEALS:

ConocoPhillips Company (“ConocoPhillips”), Defendant below, files this

Unopposed Petition for Permission to Appeal regarding an order signed on January

27, 2015 on the parties’ cross-motions for summary judgment. Because the

underlying lawsuit was filed after September 1, 2011, this appeal is governed by

the 2011 amended version of Section 51.014(d)-(f) of the Texas Civil Practice and

Remedies Code and by Rule 28.3 of the Texas Rules of Appellate Procedure.

Respondent Vaquillas Unproven Minerals, Ltd. (“Vaquillas”), Plaintiff

below, did not oppose Petitioners’ Motion for Interlocutory Appeal filed in the

district court and has agreed to the relief requested in this Petition.

INFORMATION REQUIRED BY TEXAS RULE OF APPELLATE PROCEDURE 25.1(d) In accordance with Texas Rule of Appellate Procedure 28.3(e)(1),

Petitioners provide the following information required by Texas Rule of Appellate

Procedure 25.1(d):

(1) Trial court, style, and case number:

• 406th Judicial District Court, Webb County, Texas,

• Vaquillas Unproven Minerals, Ltd., Plaintiff v. ConocoPhillips Company, Defendant • Case Number: 2014 CVQ000 438 D4.

vi (2) ConocoPhillips Company desires to appeal the Amended Order on Motions

for Summary Judgment signed by the district court on January 27, 2015.

That Amended Order is attached at Tab 1.

(3) This appeal is taken to the Court of Appeals for the Fourth Judicial District,

San Antonio, Texas.

(4) This Petition for Permission to Appeal is filed by ConocoPhillips Company.

(5) This Petition is filed in accordance with Texas Civil Practice & Remedies

Code § 51.014(d) & (f) (Vernon Supp. 2014). If the Court accepts this

appeal, it will be accelerated and governed by Texas Rules of Appellate

Procedure for pursuing an accelerated appeal. See TEX. CIV. PRAC. & REM.

CODE § 51.014(f) (Vernon Supp. 2014). This is not a parental termination or

child protection case, as defined in Texas Rule of Appellate Procedure 28.4.

STATEMENT OF THE CASE Plaintiff Vaquillas is the lessor on two oil, gas, and mineral leases with

ConocoPhillips. One of the leases encompasses 26,622.79 acres and the other

includes 6,740 acres, both in Webb County. Both leases contain a retained acreage

clause, which the parties interpret differently. The leases provide the lessee

(ConocoPhillips) may retain at least 640 acres for each producing or shut-in gas

well, but Vaquillas argues the Railroad Commission’s Field Rules apply under the

leases to limit the retained acreage to 40-acre units for each gas well. Vaquillas

vii claims that ConocoPhillips must release 15,351 acres in addition to the nearly

9,700 acres it has already released so that ConocoPhillips would be retaining 8,320

acres out of the original 33,362.79.

The parties’ dispute turns on the proper interpretation of the retained acreage

clause in connection with the Field Rules adopted by the Railroad Commission for

the particular field included in the leases. Vaquillas argues the Field Rules dictate

that the retained acreage for each well (all of which are gas wells) is only 40 acres

per well. ConocoPhillips argues that the Field Rules do not alter the lease’s

provision that the retained acreage is 640 acres per well.

No material fact necessary to address the legal questions is disputed. The

district court, on cross motions for summary judgment, held that Vaquillas’

proposed lease interpretation was correct. At the same time, the district court ruled

that ConocoPhillips’ lease interpretation was incorrect.

ISSUE PRESENTED The issue in this case is “what is the proper interpretation of the leases’

retained acreage clause?” More specifically, the question is whether the leases’

retained acreage clause permits ConocoPhillips to retain only 40 acres per each

producing or shut-in gas well it has drilled on the two leases or whether

ConocoPhillips is allowed to retain 640 acres for each of those same gas wells.

viii STATEMENT OF FACTS Vaquillas alleged that ConocoPhillips breached the leases by failing to

release additional acreage under the retained acreage clause. The basic, undisputed

facts on which the district court ruled are summarized as follows:

A. The Two Leases Contain Retained Acreage Clauses. This case involves two oil, gas, and mineral leases on which Vaquillas is the

lessor and ConocoPhillips is the lessee. The first lease includes 26,622.79 acres

(the “26,000-acre lease”) and the second lease covers 6,740 acres (the “6,700-acre

lease”). Defendant ConocoPhillips’ Motion for Summary Judgment (“D’s MSJ”),

Tab 2, Exhibits A & B. As lessee under these two leases, ConocoPhillips drilled

208 gas wells prior to the time it ended its continuous program. Id. Exhibits C &

D; Plaintiff Vaquillas’ Cross-Motion for Partial Summary Judgment and Response

to Defendant’s Motion for Summary Judgment (“P’s MSJ”), Tab 3, at 4.

The two leases contain retained acreage clauses, both of which read

essentially identically: 1

On November 1, 1990, Lessee covenants and agrees to execute and deliver to Lessor a written release of any and all portions of this lease which have not been drilled to a density of at least 40 acres for each producing oil well and 640 acres for each producing or shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this lease

1 This quotation is from the 26,000-acre lease. D’s MSJ, Tab 2, Exhibit A, ¶ 18 The only difference between this language in the two leases is that the second lease, the 6,700-acre Lease, starts with: “At the end of the primary term hereof, Lessee covenants and agrees . . . .” D’s MSJ, Tab 2, Exhibit B, ¶ 18.

1 provides for a spacing or proration establishing different units of acreage per well, then such established different units shall be held under this lease by such production, in lieu of the 40 and 640-acre units above mentioned.

There is no dispute that ConocoPhillips conducted a continuous drilling

program and that the 90 days following the end of that program occurred no later

than June 30, 2012.2 Plaintiff’s Original Petition, Tab 4, ¶ 11; D’s MSJ, Tab 2, at

3. The expiration of the 90 days triggered the retained acreage clause.

ConocoPhillips released acreage in accordance with its interpretation of the

retained acreage provision. ConocoPhillips retained 23,671.63 acres, having

released 9,691.16 acres. P’s MSJ, Tab 3, at 6. Vaquillas asserts that

ConocoPhillips should have released all but 8,320 acres, claiming that

ConocoPhillips has retained 15,351.63 acres that also should be released. Id. The

parties’ differing interpretation of the retained acreage clause lies at the heart of the

parties’ contradictory positions in this case.

2 The retained acreage clause provides a time for releasing acreage: “provided, however, that if at such date lessee is engaged in drilling or reworking operations the date for the execution and delivery of such release shall be postponed and the entire lease shall remain in force so long as operations on said well or wells are prosecuted with reasonable diligence, and if, after the completion or abandonment of any such well Lessee commences the drilling of an additional well within Ninety (90) days from the completion or abandonment of the preceding well, or continuously conducts drilling operations in good faith and with reasonable diligence on said lease without any cessation for longer than Ninety (90) days, said lease shall remain in full force and effect during such drilling operations and until the end of Ninety (90) days after the completion or abandonment of the final well, at which time Lessee shall execute and deliver to Lessor said written release, releasing all portions of the lease not then so developed.” D’s MSJ, Tab 2, Exhibit A, ¶ 18.

2 B. The Railroad Commission Adopted Field Rules. The explanation for the differing interpretations of the retained acreage

clause arises out of the Railroad Commission’s adoption of Field Rules for this

field. Those Field Rules provide:

RULE 2: No well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be drilled nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applied for, permitted or completed well in the same reservoir on the same lease, pooled unit or unitized tract. Provided, however, there is no minimum between-well spacing requirement between a well being permitted at least 660 feet from the nearest property line, lease line or subdivision line, and the other wells permitted, drilled or completed on the same lease, pooled unit or unitized tract. A well being permitted at a distance less than SIX HUNDRED SIXTY (660) feet from the nearest property line, lease line or subdivision line must be a minimum of ONE THOUSAND TWO HUNDRED (1,200) feet from any applied for, permitted or completed well in the same reservoir on the same lease, pooled unit or unitized tract, or an exception to Rule 37 must be obtained.

The aforementioned distances in the above rule are minimum distances to allow an operator flexibility in locating a well, and the above spacing rule and the other rules to follow are for the purpose of permitting only one well to each drilling and proration unit. Provided however, that the Commission will grant exceptions to permit drilling within shorter distances and drilling more wells than herein prescribed whenever the Commission shall have determined that such exceptions are necessary either to prevent waste or to prevent the confiscation of property. When exception to these rules is desired, application therefore shall be filed and will be acted upon in accordance with the provisions of Commission Statewide Rule 37 and 38, which applicable provisions of said rule are incorporated herein by reference. Provided however, that persons who are presumed to be affected by a request for an exception to the between-well spacing requirement

3 shall be limited to the operators and owners/lessees of tracts, lease or units within one mile or less of the proposed well.

Final Order Amending Field Rules For The Vaquillas Ranch (Lobo Cons.) Field

Webb County Texas (amended November 2, 2010), D’s MSJ, Tab 2, at Tab 2.

These Field Rules are the source of the parties’ disagreement. Vaquillas

contends the Field Rules triggered the exception to the parties’ basic agreement,

which would otherwise allow ConocoPhillips to retain 640 acres for gas wells.

Plaintiff’s Original Petition, Tab 4, ¶¶ 13-14. Vaquillas contends the Field Rules

“established different units of acreage per well,”—specifically, only 40-acre units

for gas wells. See Id. ¶¶ 14, 17, 18, 19.

C. This Action. Vaquillas filed this action in March, 2014. ConocoPhillips moved for

summary judgment on the entire case and Vaquillas cross-moved for partial

summary judgment on liability. On November 25, 2014, the district court initially

granted Vaquillas’ motion for partial summary judgment and denied

ConocoPhillips’ motion for summary judgment on the entire case. Subsequently,

however, the district court amended its order to grant the parties permission to file

an interlocutory appeal. That Amended Order, attached as Tab 1, was signed on

January 27, 2015.

4 ARGUMENT AND AUTHORITIES A party may take an interlocutory appeal under section 51.014(d), if the

order to be appealed involves a controlling question of law as to which there is a

substantial ground for difference of opinion, and an immediate appeal may

materially advance the ultimate termination of the litigation. TEX. CIV. PRAC. &

REM. CODE § 51.014(d)(1) & (2). The district court properly certified the order

that is the subject of this Petition for interlocutory appeal under section 51.014(d).

Case law construing section 51.014(d) is limited. The requirements for

certifying an interlocutory appeal under section 51.014(d), however, are

substantially identical to those under the federal rule permitting interlocutory

appeals – 28 U.S.C. § 1292(b) – thus, case law interpreting section 1292(b) is

instructive.

A. The proper interpretation of the leases is a “controlling question of law.” First, the parties agree that the interpretation of the oil, gas, and mineral

leases at issue involves a pure question of law. Neither party has pleaded or

argued that the provisions are ambiguous.

Second, there can be no doubt that the construction of the retained acreage

provision is a controlling question of law in this case within the meaning of section

51.014(d)(1). It is the question on which the case turns. If ConocoPhillips is right,

judgment should be rendered against Vaquillas. If Vaquillas’ interpretation is

5 correct, ConocoPhillips will have to release many thousands of additional mineral

acres.

Texas courts have not attempted to give the word “controlling” a precise

definition in section 51.014(d). However, there is no reason to conclude the word

has anything other than its usual meaning. ‘“Controlling’ means serious to the

conduct of the litigation, either practically or legally.” Johnson v. Burken, 930

F.2d 1202, 1206 (7th Cir. 1991) (internal citations omitted). “There is no doubt

that a question is ‘controlling’ if its incorrect disposition would require reversal of

a final judgment, either for further proceedings or for a dismissal that might have

been ordered without the ensuing district-court proceedings.” 16 Alan Wright,

Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure (“Wright &

Miller”) § 3930 at 496 (3d ed. 2012). In this case, if the district court were to enter

judgment based on an erroneous interpretation of the retained acreage provision,

reversal would be required. Accordingly, determination of the proper legal

interpretation of the retained acreage provision is a “controlling question of law.”

Further, a question of law is “controlling” if its resolution could determine

the outcome or future course of the litigation. See Johnson, 930 F.2d at 1206.

Questions also are controlling if “interlocutory reversal might save time for the

district court, and time and expense for the litigants.” Id.; see also Wright &

Miller § 3930 at 499. Here, an interlocutory appeal of the decisive issue before

6 this Court would allow either a final decision of this case or allow the case to go

forward in a manner that will not generate a new set of title issues between the

parties.

The district court properly concluded the issues determined in the Amended

Order present a controlling question of law.

B. There is a substantial ground for a difference of opinion. There is little direct legal guidance concerning the proper interpretation of

the retained acreage clause in the context of its language and the particular

Railroad Commission Field Rules. Both parties cite to the Texas Supreme Court’s

opinion in Jones v. Killingsworth, 403 S.W.2d 325 (Tex. 1965), and both sides

claim the case supports their side of the argument. That case drew differences

between the words “permitted” and “prescribed” as used in the Railroad

Commission Field Rules and in the leases at issue.

Here, the issue is whether the Railroad Commission’s Field Rules

“established” units for gas wells of a different size than 640 acres. ConocoPhillips

advocated that the Field Rules merely permitted the creation of gas units of fewer

than 640 acres. Hence, it argued the Field Rules allow operators to drill wells on a

minimum of 40 acres, but the rules did not “establish” 40 acre units. Vaquillas, on

the other hand, emphasizes a different portion of the retained acreage clause. It

argued the clause allowed for the Field Rules to “establish” units of a different size

7 through the spacing provisions, and that the particular Field Rules established 40-

acre units through its spacing provisions.

The answer to the issue presented requires a careful analysis of the lease

language vis-à-vis the particular words used in the Field Rules. Accordingly, there

is substantial ground for a difference of opinion, as determined by the district

court.

C. An immediate appeal from the Amended Order may materially advance the ultimate termination of the litigation. Determination of whether a legal issue is “controlling” goes hand-in-hand

with the question whether an interlocutory appeal of an order deciding that issue

“may advance the ultimate termination of the litigation.” 19 James Wm. Moore,

Moore’s Federal Practice & Procedure §203.31[3] at 203-120 (3d ed. 2014).

An immediate appeal of the district court’s Amended order will materially

advance the ultimate termination of this litigation. The question how to interpret

the retained acreage provision is the liability issue in this case. However, unlike

many cases where damages can be easily tried, that is not true in this case. We can

start with the relief Vaquillas is seeking. Vaquillas is requesting that

ConocoPhillips release over 15,000 additional mineral acres to Vaquillas, which

Vaquillas would then be free to develop or to lease to a third party oil and gas

producer. This will create chaos if a judgment in Vaquillas favor is reversed on

appeal. Further, even an assessment of damages will prove to be complicated. At

8 issue are tracts of land scattered throughout a field in which damages, if any,

would have to be assessed in accordance with, among other things, those tracts’

size and location. It is a far better approach to finally determine the liability issue

before embarking on implementing remedies that are complicated and difficult to

unwind.

PRAYER ConocoPhillips Company requests the Court to grant permission to take an

interlocutory appeal of the district court’s Amended Order granting summary

judgment for Respondent and denying the summary judgment filed by Petitioner

ConocoPhillips, and for such other relief as they may show themselves entitled.

9 Respectfully submitted, LOCKE LORD LLP /s/ Michael V. Powell Michael V. Powell State Bar No. 16204400 Email: mpowell@lockelord.com Cynthia K. Timms State Bar No. 11161450 Email: ctimms@lockelord.com Elizabeth L. Tiblets State Bar No. 24066194 Email: etiblets@lockelord.com Locke Lord LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776 Tel: 214-740-8520 Fax: 214-740-8800

Adolfo Campero State Bar No. 00793454 Email: acampero@camperolaw.com Campero & Associates, P.C. 315 Calle Del Norte, Suite 207 Laredo, Texas 78041 Tel: 956-796-0330 Fax: 956-796-0399

ATTORNEYS FOR PETITIONER CONOCOPHILLIPS COMPANY

10 CERTIFICATE OF CONFERENCE I hereby certify that on February 8, 2015, counsel for ConocoPhillips conferred with Mr. Michael Jung, counsel for plaintiff / respondent Vaquillas in this case, regarding this Petition. Mr. Jung stated that Vaquillas does not oppose this Petition for Permission to Appeal and has agreed to the relief requested in this Petition.

/s/ Michael V. Powell Michael V. Powell

CERTIFICATE OF COMPLIANCE Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), as amended effective December 1, 2012, the undersigned certifies that this Petition complies with the length limitations of Rule 28.3(g) (which the undersigned understands now to be stated in Rule 9.4(i)) and the typeface requirements of Rule 9.4(e).

1. Exclusive of the contents excluded by Rule 9.4(i)(1), this Brief contains 2,221 words as counted by the Word Count function (including textboxes, footnotes, and endnotes) of Microsoft Office Word 2010. 2. This Brief has been prepared in proportionally spaced typeface using: Software Name and Version: Microsoft Office Word 2010 Typeface Name: Times New Roman Font Size: 14 point

11 CERTIFICATE OF SERVICE I hereby certify that on the 10th day of February 2015, a true and correct copy of Agreed Petition for Permission to Appeal, with Exhibits, was served by File&ServeXpress and/or pdf or Certified Mail, Return Receipt Requested on Respondent through its counsel of record listed below:

Gregg Owens Raul Leal Email: gregg.owens@haysowens.com State Bar No. 24032657 Robert G. Hargrove Email: rleal@rl-lawfirm.com Email: rob.hargrove@haysowens.com Raul Leal Incorporated Hays & Owens L.L.P. 5810 San Bernardo, Suite 390 807 Brazos Street, Suite 500 Laredo, Texas 78041 Austin, Texas 78701 Tel: 956-727-0039 Tel: 512.472.3993 Fax: 956-727-0369 Fax: 512.472.3883

A. Michael Jung Armando X. Lopez State Bar No. 11054600 State Bar No. 12562400 Email: michael.jung@strasburger.com Email: mandox@rio.bravo.net Strasburger & Price, LLP Law Offices of Armando X. Lopez 901 Main Street, Suite 4400 1510 Calle Del Norte, Suite 16 Dallas, Texas 75202-3794 Laredo, Texas 78041 Tel: 214-651-4724 Tel: 956-726-0722 Fax: 214-651-4330 (main) Fax: 956-726-6049 Fax: 214-659-4022 (direct)

Counsel for Vaquillas Unproven Minerals, Ltd.

12 No. _______________

In the Court of Appeals for the Fourth Judicial District of Texas San Antonio, Texas CONOCOPHILLIPS COMPANY, Petitioner, V.

From Cause No. 2014 CVQ000 438 D4 406th Judicial District Court, Webb County, Texas Honorable Oscar J. Hale, Jr., Presiding Judge

Appendix

Amended Order On Cross-Motions For Summary Judgment ..........................TAB 1

Defendant's Motion For Summary Judgment ...................................................TAB 2

Plaintiff's Cross-Motion For Partial Summary Judgment And Response To Defendant’s Motion For Summary Judgment .......................TAB 3

Plaintiff’s Original Petition ...............................................................................TAB 4

13 Tab 1 01-28-15;13:59 ;From:406th Distr i ct Court lo:8111 4 / 4UbbUU ,~OOOLJOUI ~ tt L I U

...

CAUSE NO. 2014CVQ000438 D4

VAQUILLAS UNPROVEN MINERALS, § IN THE DISTRICT COURT LTD, § § Plaintiff, § § v. § WEBB COUNTY, TEXAS 1 "-.·

... ·' CONOCOPBILLI:PS COMPANYt § § ,.~ § ~ ,. Defendant. § 406'l'u JUDICIAL DISTRICT

AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

On October 30, 2014, Defendant's Motion for Summary Judgment and Plaintiffs Cross-

Motion for Partial Summary Judgment were heard. The Court, having reviewed the motion, ·' briefs, responses, competent swnruary judgment evidence, and argument of counsel, rules on

these motions as follows,

IT IS ORDERED, ADJUDGED, AND DECREED that Defendant's Motion for

Summary Judgment is DENIED.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Plaintiffs Cross-

Motion for Partial Summary Judgment is GRANTED. The Court DECLARES that Defendant

has breached the 26,622.79-acre Lease and the 6,740-acre Lease by failing to release all acreage

in excess of 40 acres for each producing and shut-in natural gas well capable of producing in

paying quantities.

This Order of the Court decides the central question in this case, which is the number of

j :....~ ·.; acres under two oil and gas leases that Defendant ConocoPhillips Company retains under the

"retained acreage" clauses of the leases at the conclusion of ConocoPhillips' continuous drilling

operations. The Court finds that the question decided by this order is a controlling question of

;j AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY .JUDGMENT PAGEl

---··- ~·-~-------- ····--···· -·--·-···· ···-··"·-·------~------~·---- 01-28-15; 13:59 ;From:406th Dist r ict Court To:912 14740BBOO ;9565235074 # 31 6 -'-•n•• •4.oO ........ ~·•• ·--•-""""OIO" .._•_ •• ·-· o' I IT 1" , 1 - • ' "t · ~· o'r .... --:..:,_~ --:0• ' "1••"-..ll - -

'l ·j law as to which there is a substantial ground for difference of opinion. The Court also finds that

immediate appeal of the order will materially advance the ultimate termination of this litigation.

This Court's Order, and the underlying controlling question of law, involve the parties'

:i competing legal interpretations of the language of the "retained ac.reage'' clauses and certain

Field Rules adopted by the Railroad Commission of Texas. Although the Court has ruled in

.,;,• favor of the Plaintiff lessor, Vaquillas Unproven Minerals, Ltd., the Court concludes there are '"· I substantial grounds for difference of opinion regarding whether the leases allow ConocoPhillips ~ I to retain 40 acres per well, as Plaintiff contends, or 640 acres, as ConocoPhillips contends.

An immediate appeal from this Court's Order will materially advance the final

conclusion of litigation. Plaintiff seeks judgment ordering ConocoPhillips to cx.ecute releases of

over 15,000 acres described in the leases, as well as possible direct and consequential damages

flowing from ConocoPhillips' alleged breach of the utetained acreage" clauses of the leases. If

ConocoPhillips is forced to release the acreage but later wins an appeal determining that

ConocoPhillips' original interpretation is correct, significant problems could develop. On the

other hand, the lessor, Vaquillas Unproven Minerals, Ltd. is interested in having the release of

acreage as soon as possible. Furthermore, the Court and the parties anticjpate that a

determination of Plaintiff's damages, if any, will be costly and time~consuming. .. '...· ConocoPhillips desires to take an interlocutory appeal. The Court rules that such appeal

shall be defined by the lease interpretation question addressed in the parties' cross-motions for

:.1 summary judgment. More specifically, the question is whether the leases' retained acreage

clause allows ConocoPhillips Company to retain only 40 acres per each producing or shut-in gas

well it has drilled on the two leases, or whether ConocoPhillips is allowed to retain 640 acres

(plus 10% tolerance) for each wells.

" AMENDED ORDER ON CROSS...MOTIONS FOR SUMMARY .JUDGMENT PAGE2 1.! 01-28-15;13:59 ;From:406th District Court To:912 14740S800 ;9565235074 # 4/ I] .. ., ..... =--·.·· ~ ••. ·---_._i.--·--···· ....--....... L.. --··· ---~ ·~ ... •'• __: _ _ •' - - - · - .

·~ ·' ., ... ~~ IT IS HEREBY ORDERED that, pursuant to Texas Civil Practice & Remedies Code §

Sl.014(d) (West. Supp. 2014) an interlocutory appeal is ALLOWED from this Order. ; .~ ·' IT IS FURTllER ORDERED that trial of this action is stayed pending the interlocutory

:I appeal. The Court's Pre-Trial Guideline Order and Scheduling Order arc hereby VACATED.

:j The parties may proceed with discovery and pretrial proceedings by agreement or with leave of

Court. .;·-· ~j q SIGNED1his_2Zf-dayof7-===-t ,2015.

.. ,, ( lr- Hon~Oscar J. Hale, Jr. ~ -~ ' Judge Presiding ;<

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AMENDED ORDER ON CROSS-MOTXONS FOR SUMMARY JtlDGMENT PAGE3 u 01- 28-1 5; 13 :59 ;Fr om :406th Dist ric t Cour t lo:81214 /4UddUU ; ~000L j ou 1~ w ~' ..... -··-· . . -· . . . ... ____..-............ __..... . - ·-~· .··.·-~~"- '!oil.--- ..-..::.. "...1 .:• ..: • • • • • • •• ~· · ---~ ~·-- .. - · - · ·· - -- ..... ........ ----> _.. ._

APPROVED AS TO FORM:

~~·~~ Micfu\CIViPowell State Bar No. 16204400 Email: mpowell@lockelord.com Elizabeth L. Tiblets . ~ State Bar No. 24066194 ..", ~ Email: etib1ets@lockelord.com ·! LOCKE LORD LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201~6776 Tel: 214-740-8520 Fax: 214-740-8800

Adolfo Cam.pero State Bar No. 00793454 Email: acampero@camperolaw.com CAMPERO & ASSOCIATES, P.C. 315 Calle Del Norte, Suite 207 Laredo, Texas 78041 Tel: 956-796-0330 Fax:956~796-0399

ATTORNEYS FOR DEFENDANT CONOCOPHILLIPS COMPANY

:j

AMENDED ORDER ON CROSS-MOTlONS FOR SUMMARY JUDGMENT PAGE4

- - -- - - - - - - - -······-- ..·- - ··- ____________________ ., To:912147408800 ;9565235074 tt bl 0 01 - 28- 15; 13 :59 ;From:406th District Court .. .. ··· -- ~·- ......_ - - --

/s/ P. Michael Jung P. Michael Jung State Bar No. 11054600 Email: micllaeLjung@strasburger.com STRASBURGER. & PRICE, LLP 901 Main Street, Suite 4400 Dallas, Texas 75202-3794 ..• Tel: 214-651-4724 )! Fax: 214-651-4330 (main) ·.• Fax~ 214-659-4022 (direct) J :l Gregg Owens ..· State Bar No. 15383500 Email: gregg.owens@haysowens.com Robert 0 . Hargrove · State Bar No. 09303300 Email: rob.hargrove@haysowens.com H AYS & OWENS L.L.P. 807 BJ:"azos Street, Suite 500 Austin, Texas 78701 Tel: 512-472-3993 Fax: 512~472<3883

Annando X. Lopez State Bar No. 12562400 Email: mandox@rio.bravo.net LAW OFFICES OF ARMANDO X. LOPEZ 1510 Calle Del Norte, Suite 16 Lw:edo, Texas 78041 Tel: 956-726-0722 Fax: 956-726-6049 •·. ...,. ·i Raul Leal !°! State Bar No. 24032657 .~ Email: rleal@rl-lawfirm.com RAUL LEAL lNCOR.PORATEP 5810 San Bernardo, Suite 390 Laredo, Texas 78041 Tel: 956~727-0039 ,, Fax; 956-727r0369

ATTORNEYS FOR VAQUILLAS UNPROVEN MINERALS, LTD.

AMENDED ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGES Tab 2 Filed 7/30/2014 12:03:15 PM Esther Degollado District Clerk Webb District 2014CVQ000438 D4 Although all of the language in the Leases is important, 1 Vaquillas bases all of its claims

in this lawsuit on the following language from Paragraph 18 of both Leases. 2 (ConocoPhillips

will indent and number the sentences and separate phrases quoted from Paragraph 18 in order to

facilitate later discussion of them.)3

Sentence (1): On November 1, 1990, Lessee covenants and agrees to

execute and deliver to Lessor a written release of any and all portions of this lease

which have not been drilled to a density of at least 40 acres for each producing oil

well and 640 acres for each producing or shut-in gas well,

Sentence (2): except that in case any rule adopted by the Railroad

Commission of Texas or other regulating authority for any field on this lease

provides for a spacing or proration establishing different units of acreage per well,

then such established different acreages shall be held under this lease by such

production, in lieu of the 40 and 640-acre units above mentioned;

Sentence (3): provided, however, that if at such date lessee is engaged in

drilling or reworking operations the date for the date for execution and delivery of

such release shall be postponed and the entire lease shall remain in force so long

1 When interpreting an oil and gas lease, the Court must "examine the entire document and consider each part with every other part so that the effect and meaning of one part on any other part may be determined." Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). 2 Each of the alleged causes of action in Plaintiffs Original Petition is based on Vaquillas' erroneous interpretation of Paragraph 18. See Plaintiffs Original Petition '11'11 17-20. This Motion for Summary Judgment explains why Vaquillas' interpretation is wrong as a matter of law. Consequently, this motion seeks summary judgment on the entire case. 3 This quotation is from the "26,622. 79 Acre Lease," as described in Paragraph 8 of Vaquillas' Petition. The only difference between this language in the two Leases is that the second lease, the "6,740 Acre Lease" described by Vaquillas starts with: "At the end of the primary term, Lessee covenants and agrees .... " DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE2 as operations on said well or wells are prosecuted with reasonable diligence, and

if, after the completion or abandonment of any such well Lessee commences the

drilling of an additional well within Ninety (90) days from the completion or the

abandonment of the preceding well, or continuously conducts drilling operations

in good faith and with reasonable diligence on said lease without any cessation for

longer than Ninety (90) days, said lease shall remain in full force and effect

during such drilling operations and until the end of Ninety (90) days after the

completion or abandonment of the final well, at which time Lessee shall execute

and deliver to Lessor said written release, releasing all portions of the lease not

then so developed.

Sentence (4): Each retained unit shall contain at least one (1) well

producing or capable of producing oil or gas in paying quantities, and the acreage

within a unit shall be contiguous.

See Petition 'if'il 11, 13; Huebner Declaration, Exhs. A & B (emphasis added).

The wells on the Leases produce gas, so the relevant "development" obligation and the

retained acreage size to which the parties agreed in Sentence (1 ), quoted above, is 640 acres.

There is no dispute between the parties that ConocoPhillips maintained the 26,622.79 Acre Lease

in full force and effect for many years after November 1, 1990, and the 6,740 Acre Lease in full

force and effect for many years after its primary term by continuous drilling. There is no dispute

that ConocoPhillips' continuous drilling operations ended at or about the time Vaquillas states in

Paragraph 11 of its Original Petition. Due to the end of continuous drilling operations, COPC

filed the Releases of Acreage that it believed were due to Vaquillas as stated in the final phrase

of Sentence (3) and in Sentence (4), copies of which are attached as Exhibits C and D to the

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE3 Huebner Declaration, filed herewith. ConocoPhillips' Releases of Acreage retained 640-acre

units around producing gas wells, as agreed in Sentence (I).

The sole dispute between the parties to this case turns the proper interpretation of

Sentence (2), quoted above. There is no disagreement that the Railroad Commission of Texas

(the "Commission") has adopted Field Rules for the Vaquillas Ranch (Lobo Cons.) Field, Webb

County, Texas. Those Field Rules apply to the wells at issue in this case. Those Field Rules,

originally effective February 24, 1998, were amended into their current form effective November

2, 2010. The Field Rules for the Vaquillas Ranch (Lobo Cons.) Field, as amended, are attached

as Tab 2 to this Motion. The Court may take judicial notice of these Field Rules adopted by the

Commission, and ConocoPhillips requests it to do so. TEX. R. Evm. 201.

Vaquillas contends the Field Rules triggered the exception in Sentence (2) to the parties'

basic agreement of Sentence (1 ), which was that ConocoPhillips would retain 640 acres for gas

wells. (Plaintiffs Original Petition iii! 13-14). Vaquillas contends that the Field Rules

"established different units of acreage per well," specifically only 40-acre units for gas wells, and

that consequently, COPC must forfeit, because of Paragraph 18, a great deal more acreage from

the two Leases than it already has released to Vaquillas. (See Plaintiffs Original Petition iii! 14,

17, 18, 19).

For the reasons explained below, Vaquillas' contentions are wrong Under the

straightforward, plain meaning of Paragraph 18, the Commission's Field Rules do not "establish"

different units of acreage per well. Those Rules state only that no well may be drilled on less

than 40 acres, which is exactly the same minimum density that applied under the Commission's

Statewide Rules in effect for these Leases before the Commission adopted Field Rules. The

Field Rules say nothing about any maximum acreage that may be assigned to gas wells.

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE4 Consequently, nothing in the Field Rules is inconsistent with, or overrides, the parties' basic

agreement that gas wells retain 640 acres. Nothing about those Field Rules "establishes" any

unit different from 640 acres. 4

II. PERTINENT PROVISIONS OF THE TWO LEASES

As Texas oil and gas leases, the two Leases actually are conveyances by which the Lessor

granted a fee simple determinable in the minerals in and under the land described in the Leases

to the Lessee, who is more properly referred to as a "Grantee." Natural Gas Pipeline Co. v.

Pool, 124 S.W.3d 188, 192 (Tex. 2003); accord Anadarko Petroleum Corp. v. Thompson, 94

S.W.3d 550, 554 (Tex. 2002). By the first Lease, Vaquillas and its predecessors granted to

ConocoPhillips' predecessor the mineral estate in and under 26,622. 79 acres of Webb County

land for "five years (called "primary term") and as long thereafter as oil, gas or other mineral is

produced from said land or land with which said land is pooled hereunder." By the second

Lease, Vaquillas and its predecessors did the same for an additional 6,740 acres of Webb County

land, except the term of that Lease was for "three years ... and as long thereafter as oil, gas or

other mineral is produced from said land or land with which said land is pooled .... "

"An oil, gas and mineral lease is indivisible by its nature. Production from any part of

the lease keeps the lease in effect during the primary term and for long as oil, gas and other

minerals are being produced as to all lands described in the instrument." Shown v. Getty Oil Co.,

645 S.W.2d 555, 560 (Tex. App.-San Antonio 1982, writ refd). Accord, Matthews v. Sun Oil

4 There are field rules that do "establish" maximum acreages. As one example, Tab 3 to this Motion is a copy of the Final Order Adopting Temporary Rules and Regulations for the Big Reef (Edwards) Field, Webb County. Rule 3 of that Field Rule establishes standard drilling and proration units to be 160 acres. Those rules provide that "no proration unit shall consist of more than ONE HUNDRED SIXTY (160) acres, plus a 10% tolerance. ConocoPhillips' point is that the Field Rules for the Vaquillas Ranch (Lobo Cons.) Field do not establish any such "maximum" units. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGES Co., 425 S.W.2d 330, 333 (Tex. 1968); Humphrey v. Seale, 716 S.W.2d 620, 622 (Tex. App.-

Corpus Christi 1986, no writ).

Accordingly, ConocoPhillips' extensive production from the two Leases entitles

ConocoPhillips to maintain the Leases in full force and effect as to all of the land covered by the

Leases until one of two events came to pass, both of which are "limitations on the grant." The

first limitation on the grant is found in the habendum clauses of the two Leases and is cessation

of production in paying quantities, an event that has not occurred. Under Vaquillas' arguments,

the second limitation on the grant is the requirement to deliver releases of undeveloped acreage

that is contained in Paragraph 18. Consequently, the question posed by Vaquillas' Petition is

whether by virtue of a second limitation on the grant contained in the two Leases,

ConocoPhillips must release thousands of additional acres it has earned by extensive drilling and

would continue to hold under the habendum clauses because Sentence (2) of Paragraph 18 means

it may retain only 40, rather than the agreed 640, acres around producing wells?

Note that both Leases expressly authorized ConocoPhillips to assign acreage up to 640-

acres (plus a tolerance of 10 percent) to gas wells. Paragraph 4 of both Leases grants optional

pooling authority to the Lessee and says:

... units pooled for gas hereunder shall not substantially exceed in area 640 acres each plus a tolerance often percent (10%) thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified, for the drilling or operation of a well at a regular location or for obtaining maximum allowable from any well to be drilled, drilling or already drilled, units thereafter may conform substantially in size with those prescribed or permitted by governmental regulations.

Paragraph 16 of both Leases created an additional limitation on the Lessee's pooling authority by

restricting the option to pool to leases covering land belonging to Vaquillas or in which

Vaquillas owned an interest, but that restriction is not pertinent here.

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE6 Accordingly, the normal and completely authorized block of acreage under these Leases

for gas wells is 640 acres. As noted above, that acreage for gas wells was expressly authorized

by the pooling clause. Under Sentence (I) of Paragraph 18, that was the parties' agreement for

"retained acreage" around gas wells at the time Paragraph 18 came into play as an active

limitation on the grant of a fee simple determinable to ConocoPhillips "as long thereafter as oil,

gas or other mineral is produced from said land or land with which said land is pooled .... "

(Leases i!2).

III. THE FIELD RULES

The Field Rules do not, on their face, say anything about a minimum density, or

minimum acreage around wells. (See Tab 2 to this Motion). The Field Rules state (with an

important exception) that wells must be at least 467 feet from property and lease boundaries

("lease line spacing") and at least 1,200 feet apart if they are drilled to the "same reservoir on the

same lease, pooled unit, or unitized tract" ("between well spacing"). The exception added by the

20 I 0 amendment to the Field Rules is that there is no between well spacing for wells drilled at

least 660 feet from the nearest property or lease boundary.

The minimum distances of 467 feet for lease line spacing and 1,200 feet for between well

spacing are the very same minimum distances set forth by Statewide Spacing Rule 37, which

governed wells on these Leases before the Commission adopted Field Rules. See 16 T.A.C. §

3.37(a)(l) (stating the Statewide Spacing Rule as follows: "No well for ... gas ... shall

hereafter be drilled nearer than 1,200 feet to any well completed in or drilling to the same

horizon on the same tract or farm, and no well shall be drilled nearer than 467 feet to any

property line, lease line, or subdivision line."). So, the Field Rules did not adopt any "different"

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE7 spacing rules from the Statewide Rules already in effect before the Commission promulgated

those Field Rules.

When, as here, a Field Rule of the Commission does not contain a well density

requirement, which is the minimum amount of acreage needed to drill a well, but does prescribe

minimum spacing requirements, one looks to the Commission's Statewide Rule 38, titled "Well

Densities," to ascertain minimum densities. 16 T.A.C. § 3.38. "Rule 38 establishes the minimum

number of acres to be assigned to each well in a given reservoir." 2 E. Smith & J. Weaver,

TEXAS LAW OF OIL AND GAS if 9.3(B) (2013). Statewide Rule 38(b)(2)(A) provides that for spacing rules requiring a minimum 467 feet lease line spacing and 1,200 feet between-wells

spacing (which is the case for both the Statewide Spacing Rule 37 and the Field Rules for the

Vaquillas Ranch (Lobo Cons.) Field), the minimum number of acres that must be assigned to

each well is 40 acres. There is no maximum number of acres that may be assigned to each well.

Except for the requirement that there must be at least 40 acres, Rule 38 does not require acreages

of any particular size to be assigned to gas wells. 5

The only relevant prohibition in Rule 38 is that "[n]o well shall be drilled on substandard

acreage," which means in this case, no well shall be drilled on less than 40-acre units. 16 T.A.C.

§3.38(b)(l). None of the applicable Commission rules prohibits drilling on, or retention of, units

larger than 40 acres per well. As stated above, neither the Field Rules nor Statewide Rule 38

5 Proper interpretation of the Commission's Field Rules is, of course, a question oflaw for the Court. See, e.g., State v. Bilbo, 392 S.W.2d 121, 122 (Tex. 1965) (interpretation of certificate issued by the Commission presents a question oflaw).

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGES establishes any maximum acreage per well. 6 Consequently, these parties' agreement that

ConocoPhillips may retain 640 acres of retained acreage around gas wells complies in every

respect with the Field Rules for the Vaquillas Ranch (Lobo Cons.) Field and Statewide Rule 38.

As a matter of common sense, blocks of 640 acres plainly satisfy the requirement that there must

be at least 40 acres assigned.

As will be discussed in greater detail below, nothing in the Field Rules for the Vaquillas

Ranch (Lobo Cons.) Field requires, mandates, or-important here--"establishes" any units of less

than 640 acres.

Rule 3 of the Field Rules addresses proration. There is no factor in the proration formula

for the Vaquillas Ranch (Lobo Cons.) Field for the amount of acreage assigned to wells. Other

field rules do employ acreages as a factor for proration, but these Field Rules do not.

IV. ARGUMENT AND AUTHORITIES

A. The Word the Parties Chose for Paragraph 18: "Establish."

In order to decide this case, the Court must closely analyze the specific language these

parties chose to use for Paragraph 18 of these Leases. The operative words from the exception in

Sentence (2), quoted above, are: "in case any rule adopted by the [Commission] for any field on

this lease provides for a spacing or proration establishing different units of acreage per well. then

such established different units shall be held under this lease by such production, in lieu of the ..

. 640-acre units above mentioned."

The leading Texas Supreme Court opinion on this type of language-which

ConocoPhillips says compels a decision in its favor-is Jones v. Killingsworth, 403 S.W.2d 325

6 As noted above, the maximum acreage limitation for the wells at issue here is set forth in Paragraph 4 of the Leases. Paragraph 4 prohibits ConocoPhillips from assigning more than 640 acres (plus a IO percent tolerance) to each gas well. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE9 (Tex. 1965). In Jones, the Court was called upon to construe a pooling provision in an oil and

gas lease that provided, in pertinent part, as follows:

Units pooled for oil hereunder shall not substantially exceed 40 acres each in area, and units pooled for gas hereunder shall not substantially exceed 640 acres each plus a tolerance of I 0% thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified, units thereafter created may conform substantially in size with those prescribed by governmental regulations.

Id. at 327 (emphasis added). The Railroad Commission promulgated Field Rules for the field

covered by the Jones lease, and those Field Rules required operators to assign a minimum of 80

acres to oil wells, but went further to permit them also to assign an additional 80 acres, for a total

of 160 acres to oil wells. Id.

The dispute before the Supreme Court was that the lessor, Jones, contended the language

of her lease authorized the lessee, Killingsworth, to unitize only 80 acres around oil wells.

Killingsworth, the lessee, contended the Field Rules permitted him to create units that conformed

substantially to the maximum acreage of 160 acres that was permitted for oil wells by the

applicable Field Rules. The Supreme Court decided the case for Jones by focusing on the

difference between two specific words-"prescribed" and "permitted"-that the parties had

employed in the Jones-to-Killingsworth lease. The Court held as follows:

The lessors did not consent to enlarge an oil proration unit to any size permitted by governmental regulations. They gave their consent to enlarge a unit of substantially 40 acres, but only to the extent of the size of units prescribed by the regulatory authority. The fact that the Railroad Commission may permit a much larger unit cannot be read into the lease contract when, as here, the authority create larger units is expressly limited to units of the size prescribed by the Railroad Commission. The Commission prescribed a unit of 80 acres. [The field rules clearly say that there must be a proration unit of at least 80 acres, and there may be larger units of not more than 160 acres]. * * *

The parties obviously knew when the lease contract was executed that a permitted oil proration unit could conceivably be much larger in area than one prescribed by governmental authority. To say that a lessee can pool lessors' land

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 10 with units of any size permitted by the Railroad Commission would defeat the intention of the parties to restrict the size of the units to the size prescribed by governmental authority.

Id. at 328 (emphasis in original).

The same analysis is applicable here. Before the exception in Sentence (2) of the

Vaquillas Leases, quoted above, comes into play, the Railroad Commission must "establish"

units for gas wells of a different size than 640 acres. The parties used the word "establish" twice,

saying first "establishing different units of acreage," and second, referring to "established

different units." The parties did not say the exception in Sentence (2) comes into play if the

Railroad Commission adopts a Field Rule that merely "permits" the creation of gas units of

fewer than 640 acres, and that is all the Field Rules for the Vaquillas Ranch (Lobo Cons.) Field

do. They permit operators to drill wells on a minimum of 40 acres, but they do not "establish"

40 acre units.

Unless words are specifically defined in oil and gas leases, Texas courts give those words

their "plain, ordinary, and generally accepted meaning." Heritage Resources, 939 S.W.2d at

121. The ordinary meaning of the word "establish" is "to settle, make, or fix firmly." BLACK'S

LEGAL DICTIONARY at 626 (9th ed. 2009). Similarly, an old Texas case says "established"

means "(m]ake steadfast, firm, or stable, to settle on a firm or permanent basis." Rowley v.

Braley, 286 S.W. 241, 245 (Tex. Civ. App.-Amarillo 1926, writ dism'd). WEBSTER'S THIRD

NEW INTERNATIONAL UNABRIDGED DICTIONARY (1993) says "establish" means either "to make

firm or stable," or to "settle or fix after consideration by enactment or agreement." Id. at 778.

Using those definitions, it is flatly incorrect for Vaquillas to argue that the Field Rules in

question "settle" or "fix firmly" that there must be only 40 acre units of acreage for gas wells.

Those Rules clearly do not. Those Rules provide nothing more than that gas wells must have a

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 11 minimum of 40 acres, and ConocoPhillips' retained acreage blocks of 640 acres clearly meet that

minimum limit.

ConocoPhillips was well within its authority under the Vaquillas Leases' pooling clauses

to assign 640 acres to gas wells, and nothing in the Field Rules "established" or in any way

compelled ConocoPhillips to reduce its units to any different size.

In order for the Court to give Sentence (2) the meaning for which Vaquillas contends, the

Court would have to rewrite that sentence in both Vaquillas Leases to say something like: "in

case any rule adopted by the Railroad Commission of Texas or other regulating authority for any

field on this lease provides for a spacing or proration [permitting] different units of acreage per

well, then such [permitted] different units shall be held under this lease by such production, in

lieu of the ... 640-acre units above mentioned." But this Court may not rewrite the Vaquillas

Leases in the guise of interpreting them. E.g., EOG Resources, Inc. v. Killam Oil Co., Ltd., 239

S.W.3d 293, 300 (Tex. App.-San Antonio 2007, pet. denied). And that is precisely the

interpretation the Supreme Court rejected in Jones. 7 "Prescribe" does not mean "permit," and

"establish" does not mean "permit."

B. The Presumption Against a "Limitation on the Grant."

For the reasons explained above, there is no room for doubt about the proper meaning of

Sentence (2). As explained above, "establish" does not mean "permit." Indeed, "establish"

means "to settle, make, or fix firmly," which is a far cry from "permit" or "allow." But even if

there were some possible doubt or ambiguity in Paragraph 18, the Court would be required to

interpret Paragraph 18 as ConocoPhillips contends because of the long-standing, very strong,

7 The Supreme Court decided Jones v. Killingsworth in 1965, several years before either of the Vaquillas Leases was executed. With knowledge of the Court's interpretation in Jones, there can be little doubt that if these parties intended for Sentence (2) to apply when the Railroad Commission merely permitted smaller units, they would have said so. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 12 rule in Texas law that "the language used by the parties to an oil and gas lease will not be held to

impose a special limitation on the grant unless it is clear and precise and so unequivocal that it

can reasonably be given no other meaning." Rogers v. Ricane Enterprises, Inc., 773 S.W.2d 76,

79 (Tex. 1989). Accord, Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex.

2002); Fox v. Thoreson, 398 S.W.2d 88, 92 (Tex. 1966); Knight v. Chicago Corp., 188 S.W.2d

564, 566 (Tex. 1945).

Vaquillas wants the Court to interpret Sentence (2) of Paragraph 18 as a limitation on the

lessors' grant to ConocoPhillips of a fee simple determinable in the mineral estate in and under

all land described in the Vaquillas Leases. Although ConocoPhillips disagrees, Vaquillas even

describes Paragraph 18 as an automatic, self-executing limitation on Vaquillas' grant to

ConocoPhillips. Paragraph 11 of Plaintiffs Original Petition alleges: "Under Paragraph 18 of

both oil and gas leases, un-earned acreage reverted to Vaquillas 90 days after Conoco ceased

drilling wells under the continuous drilling clause." Vaquillas even describes the additional

acreage it contends ConocoPhillips must release as the "Reverted Minerals." (Plaintiffs

Original Petition ii 14). Accordingly, Vaquillas wants the Court to interpret Sentence (2) to result in ConocoPhillips' loss of an additional thousands of acres of leasehold estate, i.e.,

Vaquillas seeks a ruling from this Court that ConocoPhillips forfeited the thousands of acres

Vaquillas calls the "Reverted Minerals," which are those acres included within the 640-acre

"Retained Units" that ConocoPhillips retained when it executed releases to Vaquillas under

Paragraph 18, but would not be within the only 40-acre blocks Vaquillas claims Sentence (2)

allowed ConocoPhillips to retain.

When the word "establish" in Sentence (2) is given its proper, ordinary meaning,

Vaquillas' interpretation of Sentence (2) is not a permissible--or even reasonable--

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 13 interpretation. That is especially true in view of the Texas Supreme Court's strong presumption

against construing lease provisions as limitations on the grant, which is what Vaquillas contends

Sentence (2) of Paragraph 18 is. Vaquillas' interpretation should be rejected as a matter of law.

V. THE SUMMARY JUDGMENT RECORD

The summary judgment record that ConocoPhillips places before the Court consists of:

I. The Declaration of Dana C. Huebner, attached as Tab 1, which authenticates

copies of the two Leases and the Partial Releases of Oil and Gas Leases that ConocoPhillips has

already filed of record releasing acreage from the two Leases, but retaining 640-acre blocks of

acreage around producing gas wells.

2. The Field Rules for the Vaquillas Ranch (Lobo Cons.) Field, Webb County,

Texas, as amended, attached at Tab 2.

3. ConocoPhillips relies on Plaintiffs Original Petition to show what Plaintiff

contends in this case and for certain admissions therein that demonstrate that certain facts are

undisputed. ConocoPhillips has generally denied the allegations in Plaintiffs Original Petition.

If this Motion for Summary Judgment is denied, ConocoPhillips reserves all rights to contest the

allegations in the Petition.

VI. PRAYER FOR RELIEF

Defendant ConocoPhillips Company prays that this Motion for Summary Judgment will

be granted and that final judgment be entered that Plaintiff Vaquillas Unproven Minerals, Ltd.,

take nothing by this action. ConocoPhillips also prays for recovery of its costs and for all other

relief to which it is entitled.

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 14 CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Defendant's Motion for Summary Judgment was served via email on the following counsel of record for Plaintiff as stated on this 30th day of July 2014:

Gregg Owens Raul Leal Email: gregg.owens@haysowens.com Raul Leal Incorporated Robert G. Hargrove 5810 San Bernardo, Suite 390 Email: rob.hargrove@haysowens.com Laredo, Texas 78041 Hays & Owens L.L.P. Tel: 956.727.0039 807 Brazos Street, Suite 500 Fax: 956.727.0369 Austin, Texas 78701 Email: rleal@rl-lawfirm.com Tel: 512.472.3993 Fax: 512.4 72.3 883

Michael Jung Armando X. Lopez Strasburger & Price, LLP 1510 Calle Del Norte, Suite 16 901 Main Street, Suite 4400 Laredo, Texas 78041 Dallas, Texas 75202-3794 Tel: (956) 726-0722 Tel: 214.651.4724 Fax: (956) 726-6049 Fax: 214.651.4330 (main) mandox@rio.bravo.net Fax: 214.659.4022 (direct) Email: michael.jung@strasburger.com

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 16 Dated: July 30, 2014 Respectfully submitted,

7n~~ce Michaelpowell State Bar No. 16204400 Email: mpowell@lockelord.com Elizabeth L. Tiblets State Bar No. 24066194 Email: etiblets@lockelord.com LOCKE LORD LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776 Tel: 214-740-8520 Fax: 214-740-8800

Adolfo Campero State Bar No. 00793454 CAMPERO & ASSOCIATES, P.C. 315 Calle Del Norte, Suite 207 Laredo, Texas 78041 Tel: 956-796-0330 Fax: 956-796-0399 Email: acampero@camperolaw.com

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT PAGE 15 TAB 1 DECLARATION OF DANA C. HUEBNER

I. My name is Dana C. Huebner, and my date of birth is It- ffil - [t\ ~~

My business address is at ConocoPhillips Company, 600 North Dairy Ashford Road, Houston,

Texas 77079. I am employed as a Landman by ConocoPhillips Company, and I currently

provide land support to ConocoPhillips' South Texas operations. I have been employed by

ConocoPhillips Company since June 2013. I hold a B.B.A. degree from the University of

Houston.

2. In my capacity as a landman, I have access to ConocoPhillips' land records,

including oil and gas leases and releases of oil and gas leases. I have examined those leases and

can and do testify as follows:

A. The document attached at Exhibit A to this Declaration is a true and

correct copy of the Oil, Gas and Mineral Lease, as amended November 1, 1987, from Vaquillas

Ranch Company, Ltd., and others to Conoco, Inc., covering 26,622.79 acres of land, more or

less, in Webb County, Texas, as more fully described on Exhibit "A" attached thereto, without

subsequent amendments.

B. The document attached at Exhibit B to this Declaration is a true and

correct copy of the Oil, Gas and Mineral Lease dated November 1, 1987, from Vaquillas Ranch

Company, Ltd., and others to Conoco, Inc., covering 6,740 acres ofland, more or less, in Webb

County, Texas, as more fully described on Exhibit "A" attached thereto, without subsequent

amendments.

C. The document attached as Exhibit C to this Declaration is a true and

correct copy of a Partial Release of Oil and Gas Lease, executed February 17, 2014, that is

shown to be recorded in Volume 3577, Pages 454-530 of the public records of Webb County,

1 Texas. This Partial Release pertains to the 26,622.79-acre lease described in subparagraph A,

above.

D. The document attached as Exhibit D to this Declaration is a true and

correct copy of a Partial Release of Oil and Gas Lease, executed February 17, 2014, that is

shown to be recorded in Volume 3577, Pages 440-453 of the public records of Webb County,

Texas. This Partial Release pertains to the 6,740-acre lease described in subparagraph B, above.

I declare under penalty of perjury that the foregoing is true and correct. Executed in

Houston, Harris County, Texas, on the 'Vl-tvl day of July 2014.

Dana C. Huebner

2 EXHIBIT A ~- Pri>duccn U {140 ?o,~lnllnt ~ Sii1lon1r1 Co •• llou110~, T,~11 • ·\.. ·• ·~.,ViJi UO Acr.1 Po0ll11r- Pr:ovl1lo11 •. I if• ,. OIL, GAS AND MiitJt'RAL LEASE AMENDING OIL·, GAS AND''ntNERAL_ LEASE DATED JUNE 15, 1974 (AS AMENDED) BJ;TWEEN LESSOR-AND LESSEE HEREIN

26,622.79-acres of land, more or less, situated' in Webb County, Texas more fully described in Exhibit "A11 attaclted···he·reto Bnd made a part Of thiS Lease for all relevant purposes, including limitations upon warranty as specifically set out therei~.

"""""' For lli• 11urww of cakul.ilnr th• nntaJ 111:rra1nt1.1i•rdn.ti..r pnivl~td for, uld Ind lo utlm11..i 10 coaiprlM .... ?.~_,_6~-~ ..:.?..9 .... ··-··---·-----;--...acr.. ,_ ":h•lll•r It 1dul': ~prlw1 mor• or,, I~•.. . .five t. Svbh•:t to Ill• othr proYhl11111 bu•h1 oontah1.!!, thh' In.. 1h1.ll ~- for & 111111 Gf Wtt 7Uro from. \bit due (olltd "prL'"1r7 tum.-) and ~.J?,- llitnt!i..r .u oil, ,u or oUl_\f" "''"'~I .h.11~11od frolll '"'1 I•. nd or lan.d wl!21_ •IJJcll nld l1nd 11 ~loci b.,oundoc. 'il'>h~eri)i~M! ~ !l..rtgt.J.P~?L.~2-~. t.f-olf~1f~~~-li~not!ib.P'lf4~~.~ Mi .-U-1i=~J!1R~\!1, 1l~t..0Jllrv'°;~.~t ~. 1 · ••II• or "' tlit credit ot Woo~ 111'° Ult p/PtllllH. 10 •1ilc11 t.b1 -.1r. =•r bt unnt-=i..d 1 Lt•-.al ·J..tf.. 111.,. fro.r.a llnit 10 Lime purdl1M .,.,. ror1llr oil Jn Ju P01 ... 11lon, P•rlnr·the"nnrht Prln th1t1for"'11r.hllln ·-tor th• neld •h•ro · roducod on· lb• dcte·ot·pyrchHU (\I) Jgl .'b-' '"l· . 0.

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ADDENDUM TO AMENDED OIL AND GAS LEASE From Vaguillas Ranch Co., Ltd. et al To Conoco Inc., Oated November l, 1987

12. Should Lessee be prevented from complying with covenants of this lease by reason of conditions or acts set forth in Paragraph 1 11 1 hereof, then Lessee agrees annually to pay to Lessor an amount equal to the delay rentals herein provided for during such period of prevention, whether same be during or subsequent to the primary term, and such payment shall be made at the end of each year of prevention either to Lessor or to the depository above named for credit to the account of Lessor.

13. This lease does not cover or include any right or privilege of hunting or fishing on any part of the above described land, and Lessee agrees with Lessor that neither he nor his assigns or agents or employees of his assigns, will bring fireanns or dogs upon the leased premises, and should this provision against hunting and fishing be violated by any agents, servants, employees or contractors of Lessee's assigns, any such person so violating same shall have no further right to enter upon the leased prem1 ses, and such person sha 11 be regarded as and sha 11 be a trespasser on the premises of Lessor and be subject to the penalties imposed upon trespassers under the laws of the State of Texas.

14. It ls expressly agreed and understood that after production of

oil and gas in commercial quantities is obtained from the leased premises, the minimum annual income to Lessor from payment of renta 1s, shut-in royalty and royalty on production shall be sum of not less than Two ($2.00) Dollars per acre on the total acreage retained and then covered by this lease, but this provision shall not impair the right and privilege of Lessee, his successors and assigns, to release and surrender any part of the above described leased premises as herein provided. Lessee, his successors and assigns, shall detennine within 90 days from the expiration of any lease year during which royalties have been paid on actual production the amount of any deficiency, and shall within said 90-day period pay such deficiency to Lessor or deposit same to Lessor's credit at

-1- GWB2/dm 130(1)

' -·- 1··• I the depository hereinabove designated. Default in the payment of such deficiency shall r.ot operate to tenninate this lease or any part hereof, but Lessee, his successors and assigns, agrees to personally pay such deficiency to Lessor at Laredo in Webb County, Texas, together with any reasonable costt including attorney's fees, incurred by Lessor in

collecting such deficiency if not paid within the 90-day period hereinabove provided for.

15. Nothwithstanding any other provision herein contained, this oil, gas and mineral lease is limited to oil, gas and sulphur and minerals produced with oil and gas, and does not include minerals other than oil, gas and sulphur and minerals produced with oil and gas, as Lessor herein excludes from the leasehold estate herein granted, and reserves unto himself, his heirs and assigns, all minerals other than oil, gas and

sulphur and minerals that may be produced with oil and gas, but it is expressly agreed that 'gas' as used herein includes gas, condensate, distillate or any other gaseous substance or any other mineral produced with oil and gas, including sulphur.

16. The right to pool under Paragraph '4' of this oil, gas and mineral lease shall be limited to lease or leases on land belonging ·to Lessor herein, or in which lessor owns an interest in the oil, gas and other minerals.

17. For the purposes of the annual rental payments due under paragraph 5, Lessor and Lessee agree that said payments have been timely

paid and received, and that this Lease is perpetuated, without the necessity of further delay rental payments, until the expiration of the primary term.

18. On November 1, 1990, Lessee covenants and agrees to execute and deliver to Lessor a written release of any and all portions of this lease which have not been drilled to a density of at least 40 acres for each producing oil well and 640 acres for each producing or shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this lease provides for a

-2- GWB2/dm 130(1) spacing or proration establishing different units of acreage per well, then such established different units shall be held under this lease by such production, in lieu of the 40 and 640-acre units above mentioned; provided, however, that if at such date lessee is engaged in drilling or reworking

operations the date for the execution and delivery of such release shall be postponed and the entire lease shall remain in force so long ·as operations on said well or wells are prosecuted with reasonable diligence, and if,

after the completion or abandonment of any such well lessee commences the drilling of an additional well within Ninety (90) days from the completion or abandonment of the preceding well, or continuously conducts drilling

operations in good faith and with reasonable diligence on said lease without any cessation for longer than Ninety (90) days, said lease shall remain in full force and effect during such drilling operations and until the end of Ninety (90) days after the completion or abandonment of the final well, at which time lessee shall execute and deliver to lessor said written release, releasing all portions of the lease not then so developed. Each retained unit shall contain at least one (1) well producing or capable of producing oil or gas in paying quantities, and the acreage within a unit shall be contiguous.

If, after the date the partial release called for under this Paragraph 18 takes affect, all production from a retained unit around a well or wells cease to produce oil or gas in commercial or in paying quantities, Lessee shall have one hundred eighty (180) days thereafter within which to commence operations to establish or re-establish production therein in conmercial or paying quantities, whether such production be from the same wellbore or other wellbore. If such operations result in commercial production, then this lease, as it applies to such unit sha 11 continue until such corrmercial or paying production again ceases. However, if such operations do not result in convnercial production, then Lessee shall have ninety (90) days after completion of such operations within which to commence drilling or reworking operations within such unit, and this lease, as it applies to said unit, shall remain in force so long as operations on said well or for drilling or reworking of any additional well therein are prosecuted with no cessation of more than ninety (90) consecutive days, and if they result in the production of oil or gas therein, so long thereafter

-3- GWB2/dm 130(1) as oil or gas is produced from said unit. As to any unit upon which commercial production may periodically terminate, the above right to timely resume operations and continue this lease as to such unit shall be reoccurring right.

The stipulation above as to the size of retained tracts around wells shall never be construed as a satisfaction of Lessee's right, duty and obligation to reasonably develop the leasehold held by Conoco or its successors or assigns. After November 1, 1990, Lessee agrees to drill such additional wells on the leased premises or such portions thereof as may be in force

and effect from time to time, as may be necessary to reasonable develop the same for the production of oil and/or gas as a reasonable prudent operator.

19. A portion of paragraph 3 has been deleted and the following is in lieu thereof.

(b) ,on gas, including casinghead gas or other gaseous substances,

produced from said land, the Lessors royalty shall be calculated and paid as follows:

a) Sales To Non-Affiliated Third Parties: In the event Lessee enters into a gas sales contract with a non-affiliated third party, Lessor's royalty shall be one-sixth (l/6) of the gross proceeds received by Lessee from the sale of such gas.

b) Sales To Related Or Affiliated Entities For Resale: In the event Lessee enters into a gas sales contract to sell gas to a related or affiliated entity, then Lessor's royalty shall be computed on the greater of the following: l. One-sixth (1/6) of the gross proceeds received by Lessee or any affiliate or related entity from the sale of such gas to the first non-affiliated entity, or

2. One-sixth (1/6) of the highest price reasonably obtainable for gas by Lessee and other producers or operators in the

-4- GWB2/dm 130(1) east one-fourth of Webb County, Texas, who are producing gas

of 11ke k1nd, quality and quantity.

In this regard, it is understood that the "highest price reasonably obtainable" may be equal to, but is not necessarily, the h1ghest price then being obtained by other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of 11ke kind, qual1ty and quantity.

c) Taking, Selling Or Delivery Of Gas To Lessee Or Its Related Or Affil lated Entities For Use (Not For Resale): In the event Lessee takes gas for its own use, or sells or

transfers gas to a related or affiliated entity for use, then Lessor's royalty shall be computed on tbe greater of the following:

1. One-sixth ( 1/6) of the highest price reasonably ob ta i nab 1e for gas by Lessee and other producers OI" operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

In this regard; it is understood that the "highest price reasonably obtainable" may be equal to but is not necessarily the highest price then being obtained by other producers or operators in the east one-fourth of Webb

County, Texas, who are producing gas of like kind, quality

and quantity, or

2. One-sixth (1/6) of the quarterly weighted average of the prices being paid by "purchasers" (as hereinafter defined) in the east one-fourth of Webb County, Texas, who are purchasing gas of 1i ke kind and qua 1i ty. For the purposes

of calculating the average price under this Paragraph c2, prices paid shall be those as reported in the Energy Planning Book publication or as reported to the State of

-5- GW82/dm 130(1) 11 Texas for severence tax purposes. Purchasers 11 shall mean the. three largest purchasers based on volume of gas purchased for such calendar quarter, in the east one-fourth of Webb County, Texas. For an example of the calculation of the quarterly weighted average of such price, see Exhibit 11511

Lessor and Lessee shall meet within eleven (11)· months after the end of each calander year. At least thirty (30) days prior to such meeting, Lessee should furnish to Lessor a statement or other documentation of the basis upon which royalties accrued to lessor under the terms of the Lease for the previous calender year. Any additional royalties calculated by Lessee to be due, if any, shall be paid at such meeting. Within one (1) year from delivery of the above referred to statement or other documentation, lessor shall notify Lessee of any discrepancies. Failure to notify Lessee timely of any discrepancies shall constitute final acceptance of royalty payments as covered by such s~atements or other documentation. The first period for which Lessee shall prepare such statements or other documentation shall begin on April 1, 1988 and end on December 31, 1988. Nothing in this paragraph shall preclude Lessor from claiming any royalty which Lessor is entitled to as a result of mistake in computation, oversight in computation, or error in computation of royalty or which may result from the subsequent disclosure of a discrepancy.

LESSOR'S royalty shall be without deduction for any costs, such as, but not limited to, costs of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting and otherwise making the oil, gas and associated substances ready for sale or use, except for a) severance and related taxes, and b) reasonable transportation expenses which may be necessary to be paid to non-affiliated third parties or entities to get Lessor 1 s gas to a market or point of sale off the leased premises and which sale or sales will result in a net price equal to or higher than if said gas had been sold at the wellhead.

LESSOR'S royalty on all production from depths below the stratigraphic equivalent of the top of the Cretaceous System as seen at 12,810 feet

--------- ICOP 0012151 I -6- GWB2/dm 130( 1) in the electric log of the Vaquillas #7 Well located 260' FNL and 1,700' FWL of Survey 987, A2061, Webb County, Texas, under the lands now held by Lessee under this Lease shall be one-fifth (1/5) instead of one-sixth (1/6).

LESSEE may submit a copy of a proposed gas sales contract to Lessor which is acceptable to Lessee and request that Lessor approve same for royalty computation purposes. Lessor shall have thirty (30) days after receipt of a gas contract to approve same. If lessor approves same or does

not timely dee 1ine to do so, then Lessor• s royalty on gas sold under such gas sales contract shall be based on the gross proceeds received under said contract.

GAS contracts with a term in excess of three (3) years shall contain a provision for price redetermination no later than the end of the 3rd year and subsequent price redeterminations thereafter at intervals no greater than two (2) years apart.

20. Lessee agrees to fill all slush pits and level the same when they have ceased to be used and to restore the land to as near its original state as is practicable and to pay for damages to the surface of the land and the improvements, water wells, growing crops and livestock thereon, and to any other personal property of Lessor, Vaquillas Ranch Company, Ltd., occasioned by, arising out of, or resulting from operations by Lessee, his agents, employees or independent contractors on the land hereby leased to Lessee. Lessee also agrees, when requested in writing by Lessor, to divulge to Lessor true and correct infonnation as requested by Lessor as to all drilling, producing and marketing operations conducted under this lease and to furnish to lessor copies of all electric well logs taken hereunder; provf ded, however, Lessee sha 11 not be ob 1i gated to re 1ease such information until it has been released to the industry.

21. Lessee hereby agrees to ensure that the two exit gates on F.M. 2895 (Forest Gate and Reynolds Gate) are guarded in an efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Lessee and Lessor. As to the exit

-7- GWB2/dm 130( I) gate on the north side of U.S. Highway 59, Lessee agrees to use its best efforts to work out an arrangement with other exploration companies using such gate to ensure that it is guarded in an efficient and prudent manner during drilling, reworking or plugging operations and other times as mutually agreed to by Conoco and Lessor. Further, Lessee agrees to use its best efforts to work out an arrangement with TransAmerican Natural Gas Corporation or its successors or assigns to ensure that the exit gate located 9 miles north of Aguilares, Texas, on F.M. 2895 is guarded in an

efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Lessee and lessor. In regard to gates used by Lessee and other exploration companies, Lessee agrees to pay its share of the cost of guarding such gates when such gate guards are required under this agreement. Lessee shall not be obligated to furnish a gate guard on any gate which has been abandoned or is not being used by Lessee.

22. Lessee agrees that before abandoning any well drilled on said lease for oil or gas purposes, it will notify the owner or the surface estate in person or by telephone of its intention to do so, and it will allow said owner of the surface estate a reasonable time, not exceeding twenty-four (24) hours thereafter, within which to elect to take over the hole for the purpose of attempting to make and complete a water well. Lessee agrees to consult with such surface owner as to the location of a potential water zone, without any liability or warranty for such consultation. Upon the owner of the surface estate election, within the specified time, to attempt to complete the well as a water well and complying with all rules and regulations of the Railroad Commission of Texas and applicable statutes, Lessee will, at its expense, set all plugs to just below the designated water sand as may be required by the Railroad Corrmi ss ion and thereafter deliver the we 11 to said owner of the surface estate, leaving in such well all surface casing and such intermediate casing as may have been run and set to at least the depth of the designated water sand and thereafter the owner of the surface state shall own the well and shall be responsible for all subsequent matters in connection with the well and for compliance with the applicable statutes and regulations of all regulatory agencies having jurisdiction. Lessee shall have no liability to

-8- GWB2/dm 130( 1) --~-~---

--------I (COP 0012153 '". ' .

-- Lessor in connection with any of the operations which may be conducted by the owner of the surface estate who shall thereafter bear all responsibility and liability with respect thereto. It is expressly understood that Lessee shall not be required to furnish any additional casing or other equipment for any well plugged back at the request of the owner of the surface estate under this paragraph. Should the owner of the surface estate elect not to attempt to make a producing water well out of any such hole, Lessee shall plug the well in accordance with all applicable rules, regulations and statutes.

23. It is expressly agreed and understood that for the purposes of this lease the following definitions shall apply:

11 Corranences 11 - A well shall be deemed commenced on the date which the drilling bit enters the earth for the drilling of a well. 11 Abandoned 11 - A well shall be deemed abandoned on the day when it ls finally plugged as a dry hole. ''Completed" - A well shall be deemed completed thirty (30) days after the day the Lessee sets production casing. 24. Lessor and Lessee agree to 1 imit the commencement of actual

drilling during deer hunting season to 1) those wells drilled in areas which would not disturb deer hunting, and 2) offset wells. If Lessee must commence a well during deer hunting season to perpetuate said lease, then Lessor will either a) not object to the drilling of such well during deer hunting season or b) agree to extend the commencement date for such well to a mutually agreeable date after deer hunting season ends. For the purposes of this paragraph 11 deer hunting season 11 shall be that period defined by

State law.

25. Nothwlthstanding anything contained herein to the contrary, the Lessor at any time and from time to time, upon not less than ninety (90) days notice to the holder of this lease, may elect to require the payment of any royalties accruing to such royalty owner under this lease to be made in kind; provided that any expenses incident to the exercise of such election shall be borne by Lessor and such election shall be for periods of not less than twelve (12) months. Lessor shall only be allowed to take in

-9- GW82/dm 130(1) kind when Lessee is producing for his own account. In the event of such an election by Lessor, Lessee shall cooperate fully with Lessor in allowing Lessor to take their royalty in kind, including permitting Lessor to use Lessee's wellhead equipment and, to the extent that Lessee has assignable rights, the use of Lessee's purchaser's transportation facilities in good faith and not to exceed prevailing charges for similar services in the industry at the time if Lessee or its affiliates are transporting the gas, but if Lessee has a third party contract for the transport of said gas, Lessor will be bound by said contract. Should Lessee desire to enter into a gas purchase contract having a term of more than one (1) year, then (a) Lessee shall include in such contract a provision that allows Lessor to elect to take its gas in kind and be released from such contract one hundred twenty (120) days after notice, or (b) Lessor may approve of such contract in writing, in which event, Lessor may elect to take its gas in kind either at the end of such gas contact or one (1) year after notice to Lessee, whichever happens sooner. Any equipment installed by Lessor necessary to take in kind must be approved by lessee and maintained according to Lessee's specifications.

If Lessee is unable to obtain a more favorable gas contract because of Lessor s reservation of this election to take in kind, then Lessee may 1

elect to give notice of its intention to sign a gas contract acceptable to Lessee and request that lessor join in signing same, and if Lessor elects to sign same, then Lessor's royalty share of revenue shall be bound by such contract and Lessor may not elect to take its royalty in kind during the term of such gas purchase contract.

26. This Amendment is applicable to only that leasehold interest presently owned and held by Conoco Inc. Nothing contained herein shall in any way inure to the benefit of or be applicable to third parties who hold or claim any interest in said 26,622.79 acre lease or who claim an undivided interest therin either jointly or separately with Conoco. Nothing herein shall in any way prejudice any claim, demand or cause of action which Vaquillas may have or assert against third parties holding any leasehold interests in Vaquillas lands. Nothing herein shall be construed as a release or modification of any right, claim or cause of action which

-10- i'COP.~lsSI GWB2/dm 130(1) ---~------- Vaquillas may have aga_inst third parties who claim any interest in said 26,622.79 acre lease or any other Vaquillas lease.

27. Lessor does further RATIFY, CONFIRM and ADOPT all of the terms, provisions and conditions of said June 15, 1974 Lease, as amended and as it applies to those rights held by Conoco Inc. thereunder, and that such lease, as amended and as it applies to Conoco Inc. is in full force and effect as of this date. Further, nothing contained herein shall in any way inure to the benefit of or be· applicable to any interest held by third parties in and to the June 15, 1974 Oil and Gas lease.

DATED this ~~day of January, 1988. VAQUILLAS RANCH COMPANY, LTD. VAQUILLAS UNPROVEN MINERAL TRUST

~ By: f.l«f.Wf ~MW! . a er u ros

By:

VAQUILLAS PROVEN MINERAL TRUST CONOCO INC.

. Wal er, Jr,, rustee ;µBy: ~·f~~~-Jl(~ By: 6: '~OJ*~ &~'ti~ E. er uiros, I ru tee )

-11- GWB2/dm 130(1) EXHIBIT "A"

..!!!lli1 ABSTRACT CERTIFICATE GRANTEE ACRES

1649 1°110 1158 CCSD & RGNG 640;0 1651 1112 1159 CCSD & RGNG 640.0 1652 2876 1159 \/, H. Taylor 640.0 1661 1122 1164 CCSD & RGNG 640.0 1663 1123 1165 CCSD & RGNG 640.0 1633 1323 4/808 GC & SF 640.0 1634 2252 4/808 GC & SF 659.96 1665 1124 1166 CCSO & RGNG 640.0 S.1/2 1666 2253 1166 CCSD & RGNG 328.75 N.1/2 1666 3142 1166 CCSD & RGNG 328.79 468 2255 236 AB & H 659. 14 467 799 236 AB & H 640.0 1635 1797 17 TC Ry. 640.0 865 1438 12/2541 H & GN 640.0 1683 1115 1175 CCSD & RGNG 640.0 1691 1267 5446 GC & SF 640.0 1696 2418 5448 GC & SF 640.0 1695 1268 5448 GC & SF 640.0 279 (pt. only) 1353 3702 GC & SF 458.2 1004 2421 2/105 J. Poi tevent 634,58 1692 2419 5446 GC & SF . 613.04 1693 1269 5447 GC& SF 640.0 2112 2420 & 1925 63] B.~F. James 627 .12 276 i552 3'/00 GC & SF 640.23 228 2550 134~ ·.. CCSli .& 'RGNG 636.93 ·227 1133 1344°~ CCSD & RGNG 640.0 988 2593 2/103 J. ·Pol tevent 637 .10 987• 2061 . 2/1.93' J .. Poltevent 640.0 2n• 1 141 13~9. CCSD & RGNG 640.0 275* 1336 3700. . ·GC »·& ..SF . 640.0 ·27H · 1337 3l01 cqo & RGNG 640;0 :~·. v~ ·31, Bl9ck 2 I 043 453 ..cc so:.,• .~GNG 320.0 . 25, Block 2 l 042 ~52 . CCSO i. RGNG 640.0 ·232• 2148 1346 CCSO & RGNG 462. 70 ·233• 1117 1347 CCSD & RGNG 4~5.9 N.:fi2 51, Block 2 1045 460 . CCSD & RGNG 320.0 .259 (pt. only) 1137 1074 CCSO & RGNG 600.0 1955 1328 4526 GC & SF 640.0 2057 985 302 CCSD & RGNG 652.25 2060 (pt. only) 3329-30 303 CT & H 440.0 E. I /2 2059 984 303 CT& H 320.0 E.1/2 1953• 1329 4527 GC& SF 320.0 1627 (pt. only) 1324 4683 GC & SF 160.0 1629 (pt. only) 1275 4682 GC & SF 292.65 W.1/2 1662 2230 1164 CCSD & RGNG E.1/2 1648 329.31 24'1 1157 CCSD & RGNG 325. 75 W.1/2 1648 3301 1157 CCSD & RGNG 26, Block 2n 325.75 452 R. O.. Barnsley 640.0 2335 3025 School W. Brown 27.3 E.1/2 1956• 2560 4526 GC & SF 327.34 Lessor's.warranty hereunder as to all of Survey$ 987, 273, 275, 277, 26, the E.1/2 of 1953, E.l/2 of 1956 and ~Ol.9 acres out of Survey 233 (all except 54 acres out of SW corner of said Sur. 233) Is expressly llmlted to 1/2 of the executive rights In the oil. and gas rights In and under said lands, and as to all of Survey 232.-l~:e)!:pressly limited to 4/S of the executive rights In the oil.and gas rights. · · ·

The following parts of surveys are expressly excluded.Jieief~om, viz.·:.

{ 1) The SE 1/4 of Sii 11", Sii 1/4 of HE 1/4 (80 acs.),'and N »1/2 of Sii I/~ and SW 1/4 of SI/ 1/4 (120 acs.) of CT&H Survey 2060. ··' .,,_.,. · ·.. '··

(2) the W. 3/4 or GC&SF Survey 1627 described tn O&G lse. to Daniel A. Pedrotti dutcd September 24 1 1973, as a~ended.

(3) Any part of a survey listed herein not included within any specific fraction<:il reference preceding the su.rvcy reference. (4) The HE 160 acres of GC&SF Survey 279, (5) -Block 11 as per the E.D.Clugget.t Subdivision of record 2 Plat Records 29, \.lcbh County, cont<>inlng ~O acre~, l1~ing the N\.I 1/lf of SE J/l; of CC:SO i RGNG Survl·~· 259. (6) All of the \J, 320 :i.:r~·::. of Survey 1629 d<.•scribi?d and included In O&G Lsc. tu ();1nlel A. Pedrotti dated Sc-j'\.-;:1h1.•r 2~. 1973, a,s amcndi:d.

T~OP00121s7:• --~---~-.--- EXlllllT I

C1lcul1tlon of toy1lty to bt SNld on t•• d•~l't'•r•d to L••••• or Afftll•t•• far u11 (Ind nn for renltl tn •ccard1nc1 'llth p1r111r1ph 19.

'tlnclp1h '•Y L111or roy1lty bind on th• 11r11t1r of the v1l;ht1d 1v1r1;1 ptlc• peld by th1 thr11 l1r1111t vol\ldtrtc p1Jrcb111ra for th• c1l1nd1r quarter In th• 111t q\llrttr of Vtbb COl.lntY or the v1l11httd 1v1r1;• of the prlc•• us1d by tilt L"•or for roy1L tY pt)'Mnt p1.1rpo11• a

0111 sources rntrVY Pl.nnlnv loot publtc1tlon or 11 r1parud to th• State of t11t11 h1r 11v1r1nc1 tu purpo••••

Utp 1. r1lcul1t1 tht v1l9ht1d 1v1r1111 prtc1 for th• .onth for 11ch of thv thr•• llr11si volumt P'lrch1111 far tit qu1rt1r tr- th• tax r1c:ord1.

llMth•Jpnu•ry 19§!

Purchn11 fro,. Ca!l!P•ny A

Lt••t 1 100,000 z.oo 200,1163 Unit 14 ao,ooo 1.51 120,eoo ?yrehnet frO!!I Cp•p•ny I

291,733 1110,1121 '·" TOTAL Unftltd T1x11 360,tlZI C1lc:ul1t1 613,396 Tren••l••ton

Monthly V1l11ht1d Av1r1111 Price 61J,396/l60,t121 • S1.70/MKitu.

t1p11t procedure for r11111lnln11 two 11onth1 for thh purch111r ind for re1111tnlnt t110 purch111r1.

Step 2. C1lcul1t1 tht v1hht1d 1v1r1111 price of the thr11 t1r;est volu1111trlc purch111r1 for th1 qu1rt1r using JllOnthly v1lun fro• lttp t.

Montb•J1ny1ry \9!! Month • Februuv 12aa Hon th ' March l?IU!

?mb.WL VolUM Prlca Extanslon Vo\\nlt Prlc:a Extant Ion Vol~t Price Extension

"' .S/HCf • "' S/HCF • "' S/MCF • Unltad TIXll 360,1121 1.70 61J,J96 397, t:SO t.5a 627 ,465 :S20,J06 t.5a 506,0!:S Traru11ls1lon

uruor: South Gulf

Tot1l1 400,m ill..222 Lil t, 136,044 1.55 620,346 ~ = 350,723

1,!l3,74Z 1 1 047 1 009 1.60

WI. 561, 157 lli.m soo,126 1.55 775,195 :i.!!!...222•'~·'~''---''~"""''~··· 1,673,255 I, 121,432 1,756,158

Sum of Volurau IUll of E11un1!on1

l,304,485 5,263,855 1.59

sup l. C1lcul1t1 wal;htad avar191 prlca U.td by Lat••• to calculatt roy1lty p1y11111nt1 on 111 d1ltv1rtd to L11111 or l1ftlht11 and not for rn1le.

Honth•Jaouary 1?!8 Month•February 191111 Hpntb•Mprch 1988

Voh.-1 Pr I ca Extension Voluma Price Extension Vol1o1111e Prlc1 Exunalon

"" S/llCf • "' S/HCf • "' $/HCf • 155,000 1.60 248,000 140,000 1.62 Z26,!00 155,000 t.5e 244,900

'II' gt vo1y..., Sypi 9t E11un1ton1 Velghsrd &ysrpgs rcie•

719,700 1.60

IUp 4, CIO'lplra 111l9httd 1v1ra91 price ctlculattd In Sup Z to tha walthtad 1var•t• \111a1 prlc1 c:1lc:ul1tad In •t•p J.

Sl.60/HCF 11 1n1t1r than S1,59/KCf ao no addltlon1l roy1lty p1y111ent1 1ra required 1or thh qVlrt1r,

VOIU1111 and prlcu u11d In thh u:1111pla tra ua1d for lllunrulon and 111y not b1 rtflactlvt of 1c:tu1l condltlona. THE STATE OF TEXAS § § COUNTY OF WEBB § '-{iL This instrument was acknowledged before me on the q day of January, 1988, by J. 0. WALKER, JR., General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

~ . µA,. *~o,,°}-- Notary Public in an or The State of Texas. My Co1T111ission Expires 7-3- o 1

Lt:1vR.A BA LLEvJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § oY--L This instrument was acknowledged before me on the I day of January, 198B, by E. WALKER QUIROS, General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

THE STATE OF TEXAS § § COUNTY OF WEBB §

This instrument was acknowledged before me on the 9~day of January, 1988, by GENES. WALKER, General Partner of Vaqu111as Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

oar): ub~in and for The State of Texas. My Corrrnission Expires ,_ 7- 3- '1 oq ,l_,11012.A GA usvl Printed/stamped name of Notary.

This instrument was acknowledged before me on the CJ~ day of January, 1988, by EVAN B. QUIROS, General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

d.,j,a ~,J(1,,'}- Notary Public in and for The State of Texas. My CDITllliss1on Expires '7-3-J"

'-~ • AA. ·~fi. O.u.if Notary frublic in a~for The State of Texas. oa My Conmission Expires: 7-o- 6 1

Lil uRA b>A LLEN Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § ~ This instrument was acknowledged before me on the '=t day of January, 1988, by E. WALKER QUIROS, Trustee for the Vaquillas Unproven Mineral Trust.

~··~4~~ Notary Pu lie in and for The State of Texas. My Conmission Expires: 7-:3- ?9 .IJA vv 811 LLEvJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § n'fL This instrument was acknowledged before me on the -, day of January, 1988, by GENE S. WALKER, Trustee of the Vaquillas Unproven Mineral Trust.

~" 94~'" OOr,,t ~Pub le in and for The State of Texas My Commission Expires: '1-3- J'? l.,,,11uR.A "£5,.,, LlsvJ Printed/stamped name of Notary.

This instrument was acknowledged before me on the day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Unproven Minera 1 Trust. ~ "

~Y - ~ !! ), a, 4-11Q,"9-' Public in and for The State of Texas My Commission Expires: '7-3-11'! lc.u/(A 1J,.,, Lle:vJ Printed/stamped name of Notary.

-13- GWB2/dm 130(1) THE STATE OF TEXAS § § COUNTY OF WEBB §

This instrument was acknowledged before me on the CJ fl--, day of January, 1988, by J. 0. WALKER, JR., Trustee of Vaquillas Proven Mineral Trust.

NOtarY ic in and for The State of Texas " My Corranission Expires: 7-3- i?{ LAJ~A 12,,q l..LG vJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § y.LJ the 9 day of January, 1988, by E. Proven Mineral Trust.

Printed/stamped name of Notary.

This instrument was acknowledged the 9 ~ day of January, 1988, by GENE S.WALKER, Trust Proven Mineral Trust.

otary ub 1c 1n an for The State of Texas My Commission Expires: 7- .3- 'g"f L.4 J)/(A BA LL;;;vJ Printed/stamped name of Notary.

on the This instrument was acknowledged before me 9 L day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquil 1as Proven Mineral Trust.

Notary Public in and for The State of Texas My Commission Expires: 7-3-:>!j 0AuRA S-4 LLev-1 Printed/stamped name of Notary.

-14- GWB2/dm 130(1) ·.. ·..

This instrument was acknowledged before me on the 'l-J-b day of January, 1988, by l ci c. • .So..el er . Attorney-in-Fact for CONO~ INC., ali aware corporation, on behalf of said corporation.

NotlU~in?fk'~ The State of Texas My Commission Expires: 9-!&'· f?g' LJ e.fl«- !/la. r Ke. rt- Printed/stamped name of Notary.

-15· GWB2/dm 130(1)

·r...,,.... . EXHIBITB ., •

•

J : Oo oO • •- A

"i • itu1d11uu U (1 .. 0 ;. iJ:I UD Acf• l'oollns Pro.-bi..11

• OIL, GAS AND MINERAL LEASE TBIS AGltEEKENT mat. lbb._!~ .. ------·l!&T of. Novemb~L--------·--···--··--·-···11~?._, b.t..._11 Vaguillas RancQSoml?fil}Y.t,_Ltd.; Vaguill~.Y.9.P.roven_Mingal Tn,ist i ...Y!9..'!!.+1.~!..9.Y.~D. _ _2!!!.l~ral_!~ust..;_l!f:.S.'!!!~nd thr.g.H.&h....!~f!....&.fil!.i:nLPJ!t..t.~ ....-h..-Q.,_B!J..lc.er. Jr~·-·---···­ -~. Wal~r_gu_!~.l!.i....£~~~!!s~L~M-~<'!!!-Jb.. ...Q.\!ill.~ - . ---·-···-·----··· ;::·~:~ Oii• ~ inon>. • " - add ..... lu- ·- P..!.~O:B-~;1086:-~p Texa! 7B04Ji=~===-====-~ and __G..?.!!~~.£:..z.Y-~-~ox 219L__~o'!~!Q..l!.t._'.t~!!P_-1.1.£?_~-----·--·-·---·• r..-. WITNESS!:THi - 1• t.NoJ- 111 ccmaw...,i.101> ot......!en Do l la r..§..!!E.!!. •.9.~-1!~_99_0_4....rul!LY.~.!..1.@bl t;:_~..QJ!§.!~.E~!!P.!L.--.-- ...»oll&r• 11.J: 0•00 )Jn b.nd paMt. of Lh• roJalU11 bu.In Pf'llYIW, •11d Of U.. &pMmuts ol I.Maw banln toat.IMd, berebr sraa.ta. kuM u.4 J.tt.o u:clual"'1' viii,;'L.'.... tor tb• InUpoM of h1n•Ua1U11s, t:Xpl.orl111', pro.p1atl11s, drUlh•s U>d minlnl' for a11d Pf'Odud.ns oll, I'll 1.1\d all otbar mir.1rals, C011d1Ktlns p;plora~n. noloslc and ctoph111c&I 111rYirJ'I b7 ~a»b, oora Ullo sn.'Pi&;J and 111asn.tlu• -".~:~~· au, watu an.s ~sr t111lda. and air lnto aubnrl1q Hrat.. 1.,.1,... pfoe Un•, bulldf•s ~ 1 lmnita, ~ 1t1Llo11a, te 1. _ nM 111 - . - 1tn1oo hlAI thtr91111 11111. 011, o\'tr •nd uzw1 Ind.I DWlll

6,740 acres of land, more or less, situated in Webb County, Texas, more fully described in Exhibit "A'1 attached hereto and made a part of this Lease for all relevant purposes, including limitations upon warranty as specifically set out therein, .·

The attached addendum dated November 1, 1987 1 is attached hereto and made a part hereof -™···a1r--·1nterits·anapiirposes:--·--·---·-- ··-··-··-----···----·-·-··-·-··-.. . --............................. ------------------·-··--- ____________ ___..____............... ,,

lrAn: or . ClOVNTY OF----· _} ~ aii'*"'1~-------------------------------·---- =--~ '(:, ':._.bt ~~ ~-iii;;;ii~...nbMrlbed to the forqolq hllbislunt, Md .d!llO'Wiedp;!, to m. tbat _be.. .. aecut«I

GI"" ull411 1111' Jiud al'ld llhl or ornoe.. ttii. U...----4&7 ol--·-----------------· A. D, 11---·-··· ------·----..... Not&Q J>ubllv h~ f.lld for ----°"'"'~· ------ ITATZ 07__

OOVNT?OJ': __} T&XUJOlNT .lCKNOWLU>OlilEHT

Nt1tu7 hbllt la -4 tor____ """"'· -----·---- t

, II ~ ~ l ~ " ~ 0 ~~ ol l f ~ • ·f .]::: 0, •! 1 l ( I ~ ~ i: la • I, ~ • • fF l I l ~ k ' l ! [ i' i p,.

f. 'j t •

~ ; t' r { t i I

.' . r,. L" .•. _:.:·. f i • irr r i • J

• I i • • ADDENDUM TO OIL AND GAS LEASE From Vaquillas Ranch Co., Ltd. et al To Conoco Inc., Dated November 1, 1987

12. Should Lessee be prevented from complying with covenants of this lease by reason of conditions or acts set forth in Paragraph '11' hereof, then Lessee agrees annually to pay to Lessor an amount equal to the delay rentals herein provided for during such period of prevention, whether same be during or subsequent to the primary term, and such payment shall be made at the end of each year of prevention either to Lessor or to the depository above named for credit to the account of Lessor.

13. This lease does not cover or include any right or privilege of hunting or fishing on any part of the above described land, and Lessee agrees with Lessor that neither he nor his assigns or agents or employees of his assigns, will bring firearms or dogs upon the leased premises, and should this provision against hunting and fishing be violated by any agents, servants, employees or contractors of Lessee 1 s assigns, any such • person so violating same shall have no further right to enter upon the leased prem1 ses, and such person sha 11 be regarded as and sha 11 be a

trespasser on the premises of Lessor and be subject to the penalties imposed upon trespassers under the laws of the State of Texas.

14. It is expressly agreed and understood that after production of ., oil and gas in corrmercial quantities is obtained from the leased premises, ~C'I

the minimum annual income to Lessor from payment of rentals, shut-in c)1)

royalty and royalty on production shall be sum of not less than Two_($2.00) Dollars per acre on the total acreage retained and then covered by this lease, but this provision shall not impair the right and privilege of Lessee, his successors and assigns, to release and surrender any part of the above described leased premises as herein provided. Lessee 1 hfs successors and assigns, shall detennine within 90 days from the expiration of any lease year during which royalties have been paid on actual production the amount of any deficiency, and shall within said 90-day period pay such deficiency to lessor or deposit same to Lessor's credit at

GW82/dm 124(7) °"'I JUt 1 4 ~ .......

the depository hereinabove designated. • Default in the payment of such deficiency shall not operate to terminate this lease or any part hereof, but Lessee, his successors and assigns, agrees to personally pay such deficiency to Lessor at Laredo in Webb County, Texas, together with any reasonable cost, including attorney's fees, incurred by Lessor in

collecting such deficiency if not paid within the 90-day period hereinabove provided for.

15. Nothwlthstanding any other provision herein contained, this oil, gas and mineral lease is limited to oil, gas and sulphur and minerals produced with oil and gas, and does not include minerals other than oil, gas and sulphur and minerals produced with oil and gas, as Lessor herein excludes from the leasehold estate herein granted, and reserves unto

himself, his heirs and assigns, all minerals other than oil, gas and sulphur and mi nera 1s that may be produced with oil and gas, but it is 1 expressly agreed that gas 1 as used herein includes gas, condensate,

distillate or any other gaseous substance or any other mineral produced

with oil and gas, including sulphur.

16. The right to pool under Paragraph '4' of this oil, gas and minera 1 lease sha 11 be 1imi ted to 1ease or 1eases on 1and belonging to Lessor herein, or in which Lessor owns an interest in the oil, gas and

other minera 1s.

17. For the purposes of the annual rental payments due under paragraph 5, Lessor and lessee agree that said payments have been timely paid and received, and that this Lease is perpetuated, without the necessity of further delay rental payments, until. the expiration of the primary term.

18. At the end of the primary tenn hereof, Lessee covenants and L D? agrees to execute and deliver to Lessor a written release of any and all

portions of this lease which have not been drilled to a density of at least

40 acres for each producing oil well and 640 acres for each producing or

shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this

GWB2/dm 124(7) • • lease provides for a spacing or proration establishing different units of acreage per well, then such established different units shall be held under ~e~se by-su~h production, in lieu of the 40 and 640-acre units above mentioned; provided, however, that if at such date lessee is engaged in

drilling or reworking operations the date for the execution and delivery of such release shall be postp~n;d a~d the entire lease shall remain in force so long as operations on said well or wells are prosecuted with reasonable diligence, and if, after the completion or abandonment of any such well ~.): Lessee commences the drilling of an additional well within Ninety (90) days from the comPlet1on or abandonment of the preceding well, or continuously conducts drilling operations in good faith and with reasonable diligence on said lease without any .ces_s.atjon for longer than Ninety (90) days, said lease shall remain in full force and effect during such drilling operations and until the end of Ninety {90) days after the completion or abandonment of the final well, at which time Lessee shall execute and deliver to Lessor said written release, releasing all portions of the lease not then so developed, Each retained unit shall contain at least one (1) well producing or capable of producing oil or gas in paying quantities, and the acreage within a unit shall be contiguous.

lf, after the date the partial release called for under this Paragraph 18 talces affect, all production from a retained unit around a well or wells

cease to produce oil or gas in commercial or in paying quantities, Lessee

shall have one hundred eighty (180) days thereafter within which to commence operations to establish or re-establish production therein in

cormnercial or paying quantities, whether such production be from the same

wellbore or other wellbore. If such operations result in commercial

production, then this 1ease, as it applies to such unit sha 11 continue

until such corrmercial or paying production again ceases. However, if such

operations do not result in corrmercial production, then Lessee shall have

ninety ( 90) days after completion of such operations within which to commence drilling ·-or reworking operations within such unit, and this lease,

as it applies to said unit, shall remain in force so long as operations on

said well or for drilling or reworking of any additional well therein are

prosecuted with no cessation of more than ninety {90} consecutive days, and

if they result in the production of 011 or gas therein, so long thereafter

GWB2/ dm 124 ( 7) "· ...

• as oil or gas is produced from said unit. • As to any unit upon which cornnercial production may periodically terminate, the above right to timely resume operations and continue this lease as to such unit shall be reoccurring right.

The stipulation above as to the size of retained tracts around wells shall never be construed as a satisfaction of Lessee's right, duty and obligation to reasonably develop the leasehold held by Conoco or its successors or assigns. After November I, 1990, Lessee agrees to dri 11 such add it i ona 1 we 11 s on the leased premises or such port i ans thereof as may be in force and effect from time to time, as may be necessary to reasonable develop the same for the production of oil and/or gas as a reasonable prudent operator.

19. A portion of paragraph 3 has been deleted and the following Is in lieu thereof.

(b) on gas, including casinghead gas or other gaseous substances, produced from said land, the Lessors royalty shall be calculated and paid as follows:

a) Sales To Non-Affiliated Third Parties: In the event Lessee enters into a gas sales contract with a non-affiliated third party, Lessor's royalty shall be one-fifth (1/5) of the gross proceeds received by Lessee from the sale of such gas.

b) Sales To Related Or Affiliated Entities For Resale: Jn the event Lessee enters into a gas sales contract to sell gas to a related or affiliated entity, then Lessor s royalty shall be 1

computed on the greater of the following: I. One-fifth (1/5) of the gross proceeds received by Lessee or any affiliate or related entity from the sale of such gas to the first non-affiliated entity, or

2. One-fifth (1/5) of the highest price reasonably obtainable for gas by lessee and other producers or operators in the

-4- GWB2/dm 124(7) • • east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

11 In this regard, it is understood that the highest price

reasonably obtainable" may be equal to, but is not necessarily, the highest price then being obtained by other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

c) Taking, Selling Or Delivery Of Gas To Lessee Or Its Related Or Affiliated Entities For Use (Not For Resale): In the event Lessee takes gas for its own use, or sells or

transfers gas to a related or affiliated entity for use, then Lessor's royalty shall be computed on the greater of the following:

!. One-fifth (1/5) of the highest price reasonably obtainable for gas by Lessee and other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

In this regard, it is understood that the "highest price reasonably obtainable" may be equal to but is not

necessarily the highest price then being obtained by other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity, or

2. One-fifth (1/5) of the quarterly weighted average of the prices being paid by "purchasers" (as hereinafter defined) in the east one-fourth of Webb County, Texas, who are purchasing gas of like kind and quality. For the purposes of calculating the average price under this Paragraph c2,

prices paid shall be those as reported in the Energy Planning Book publication or as reported to the State of

-5- GWB2/dm 124(7) • Texas for severence tax purposes. the three largest purchasers • "Purchasers 11 sha 11 mean based on volume of gas purchased for such calendar quarter, in the east one-fourth of Webb County Texas. 1 For an example of the calculation of the quarterly weighted average of such price, see Exhibit

Lessor and Lessee shall meet within eleven (11) months after the end of each calander year. At least thirty (30) days prior to such meeting, Lessee should furnish to Lessor a statement or other documentation of the basis upon which royalties accrued to Lessor under the terms of the Lease for the previous calender year. Any additional royalties calculated by Lessee to be due, if any, shall be paid at such meeting. Within one (1) year from delivery of the above referred to statement or other documentation, Lessor shall notify Lessee of any discrepancies. Failure to notify Lessee timely of any discrepancies shall constitute final acceptance of royalty payments as covered by such statements or other documentation. The first period for which Lessee shall prepare such statements or other documentation shall begin on April 1, 1988 and end on December 31, 1988. Nothing in this paragraph shall preclude Lessor from claiming any royalty which Lessor is entitled to as a result of mistake in computation, oversight in computation, or error in computation of royalty or which may result from the subsequent disclosure of a discrepancy.

LESSOR'S royalty shall be without deduction for any costs, such as, but not limited to, costs of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting and otherwise making the oil, gas and associated substances ready for sale or use, except for a) severance and related taxes, and b) reasonable transportation expenses which may be necessary to be paid to non-affiliated third parties or entities to get Lessor's gas to a market or point of sale off the leased premises and which sale or sales will result in a net price equal to or r' <. I" I higher than if said gas had been sold at the wellhead.

LESSEE may submit a copy of a proposed gas sales contract to Lessor which is acceptable to Lessee and request that Lessor approve same for

-6- GW82/dm 124(7) ". -

• royalty computation purposes. • Lessor sha 11 have thirty (30) days after receipt of a gas contract to approve same. If Lessor approves same or does not timely decline to do so, then Lessor's royalty on gas sold under such gas sales contract shall be based on the gross proceeds received under said contract.

GAS contracts with a term in excess of three (3) years shall contain a provision for price redetermination no later than the end of the 3rd year and subsequent price redeterminations thereafter at intervals no greater than two (2) years apart.

20. Lessee agrees to fill all slu~h pits and level the same when they have ceased to be used and to restore the land to as near 1ts original state as is practicable and to pay for damages to the surface of the land and the improvements, water wells, growing crops and livestock thereon, and to any other personal property of Lessor, Vaquillas Ranch Company, Ltd., occasioned by, arising out of, or resulting from operations by Lessee, his agents, employees or independent contractors on the land hereby leased to Lessee. Lessee also agrees, when requested in writing by Lessor. to divulge to Lessor true and correct information as requested by Lessor as to all drilling, producing and marketing operations conducted under this lease and to furnish to Lessor copies of all electric well logs taken hereunder; provided, however, lessee shall not be obligated to release such information until it has been released to the industry.

21. Lessee hereby agrees to ensure that the two exit gates on F.M. 2895 (Forest Gate and Reynolds Gate) are guarded in an efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Lessee and Lessor. As to the exit gate on the north side of U.S. Highway 59, Lessee agrees to use its best efforts to work out an arrangement with other exploration companies using such gate to ensure that it is guarded in an efficient and prudent manner during drilling, reworking or plugging operations and other times as mutually agreed to by Lessee and Lessor. Further, Lessee agrees to use its best efforts to work out an arrangement with TransAmerican Natural Gas Corporation or its successors or assigns to ensure that the exit gate

-7- GWB2/dm 124(7) • • ....

located 9 miles north of Aguilares, Texas, on F.M. 2895 is guarded in an efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Conoco and Lessor. In regard to gates used by lessee and other exploration companies, Lessee

agrees to pay its share of the cost of guarding such gates when such gate guards are required under this agreement. Lessee shall not be obligated to

furnish a gate guard on any gate which has been abandoned or is not being

used by Lessee.

22. Lessee agrees that before abandoning any well drilled on said ;j'., '0 ':) lease for oil or gas purposes, it will notify the owner or the surface estate in person or by telephone of its intention to do so, and it will allow said owner of the surface estate a reasonable time, not exceeding

twenty-four (24) hours thereafter, within which to elect to take over the hole for the purpose of attempting to make and complete a water well. Lessee agrees to consult with such surface owner as to the location of a potential water zone, without any liability or warranty for such consultation. Upon the owner of the surface estate election, within the specified time, to attempt to complete the well as a water well and complying with all rules and regulations of the Railroad Co"'11ission of Texas and applicable statutes, Lessee will, at its expense, set all plugs to just below the designated water sand as may be required by the Railroad Convnission and thereafter deliver the well to said owner of the surface estate, leaving in such well all surface casing and such intennediate

casing as may have been run and set to at least the depth of the designated water sand and thereafter the owner of the surface state shall own the well and shall be responsible for all subsequent matters in connection with the

well and for compliance with the applicable statutes and regulations of all

regulatory agencies having jurisdiction. Lessee shall have no liability to Lessor in connection with any of the operations which may be conducted by the owner of the surface estate who shall thereafter bear all responsibility and liability with respect thereto. It is expressly understood that lessee shall not be required to furnish any additional casing or other equipment for any well plugged back at the request of the owner of the surface estate under this paragraph. Should the owner of the surface estate elect not to attempt to make a producing water well out of

-8- GWB2/dm 124(7) .... • any such hole, Lessee shall plug the well in accordance with all applicable rules, regulations and statutes.

23. It is expressly agreed and understood that for the purposes of this lease the following definitions shall apply:

11 Cormnences 11 - A well shall be deemed corranenced on the date which the drilling bit enters the earth for the drilling of a well. 11 Abandoned 11 - A well shall be deemed abandoned on the day when it is finally plugged as a dry hole. 11 Completed 11 - A well shall be deemed completed thirty (30) days after the day the Lessee sets production casing. 24. Lessor and Lessee agree to limit the conrnencement of actual Ao~ drilling during deer hunting season to 1) those wells drilled in areas which would not disturb deer hunting, and 2) offset wells. If Lessee must

co1T1J1ence a well during deer hunting season to perpetuate said lease, then

Lessor will either a) not object to the drilling of such well during deer hunting season orb) agree to extend the commencement date for such well to a mutually agreeable date after deer hunting season ends. For the purposes of this paragraph "deer hunting season" shall be that period defined by State law.

25. Nothwithstanding anything contained herein to the contrary, the lessor at any time and from time to time, upon not less than ninety {90)

days notice to the holder of this lease, may elect to require the payment

of any royalties accruing to such royalty owner under this lease to be made in kind; provided that any expenses incident to the exercise of such

election shall be borne by Lessor· and such election shall be for periods of not less than twelve (12) months. Lessor shall only be allowed to take in kind when lessee is producing for his own account. In the event of such an

election by Lessor, lessee shall cooperate fully with Lessor in allowing Lessor to take their royalty in kind, including permitting lessor to use

Lessee 1 s wellhead equipment and, to the extent that Lessee has assignable

rights, the use of Lessee's purchaser 1 s transportation facilities in good

faith and not to exceed preva i 1 i ng charges for s imi 1ar services in the

industry at the time if Lessee or its affiliates are transporting the gas,

-9- GWB2/dm 124( 7) • .......

•• but if Lessee has a third party contract for the transport of said gas, Lessor will be bound by said contract. Should Lessee desire to enter into a gas purchase contract having a tenn of more than one (1) year, then (a) Lessee shall include in such contract a provision that allows Lessor to elect to take its gas in kind and be released from such contract one hundred twenty (120) days after notice, or (b) Lessor may approve of such contract in writing, 1n which event, Lessor may elect to take its gas in kind either at the end of such gas contact or'one (1) year after notice to Lessee, whichever happens sooner. Any equipment installed by Lessor necessary to take in kind must be approved by Lessee and maintained according to Lessee 1 s specifications.

If Lessee is unable to obtain a more favorable gas contract because of Lessor's reservation of this election to take in kind, then Lessee may elect to give notice of its intention to sign a gas contract acceptable to Lessee and request that Lessor join in signing same, and if Lessor elects to sign same, then Lessor's royalty share of revenue shall be bound by such contract and Lessor may not elect to take its royalty in kind during the term of such gas purchase contract.

DATED this 91Jr day of January, 1988.

VAQUILLAS RANCH COMPANY, LTD. VAQUILLAS UNPROVEN MINERAL TRUST

By: ;&. E. Wa

-10- GWB2/dm 124(7) • • ......

By~~4 rif1 By: -'l.fd:::;:f;f

-11- GWB2/dm 124(7) ...

,l'j:.....,:j (; /_11'c...'

SURVEY ABSTRACT CERTIFICATE GRANTEE ACRES

·1652 2876 1159 w. a. TAYLOR 6 40 .o -1661 1122 1164 CCSD & RGNG 640. 0 -1663 1123 1165 CCSD & RGNG 640. 0 ~ .Y ~---:i,_63"3. 1323 4/808 GC & SF 640.0 , -'"1634 225_7_______ 4/.B.Oil____ GC L~F- __ ..-___ . __ 6_59__,_96_, =-r665 1124 1166 CCSD & RGNG 640.0 ""~ -~ i::.16.3.5_ 17 97 17 TC RY; 6 40 , 0-.., - 2060 (SE/4 3329-30 ·- · 303 · - ···--cT--&·M · -- ----y-6·0":-o·· only) -1953 (E 1/2) 1329 4527 GC & SF 320. 0 1627 (pt. 1324 4683 GC & SF 160.0 only) -1629 (pt. 1275 4682 GC & SF 264.65 only) 1662 (W 1/2) 2230 1164 CCSD & RGNG 329.31 1648 (E 1/2) 2441 1157 CCSD &- RGNG 325. 7 5 1648 (W 1/2) 3301 1157 CCSD & RGNG 325.75 2335 3025 SCHOOL w. BROON 27.3 • 1956 (E 1/2) 2560 4526 GC & SF 327.34

The following parts of surveys are expressly excluded herefrom, viz.: (1) The SE 1/4 of SW 1/4, SW 1/4 of NE 1/4 (80 acs.) and N 1/2 of SW 1/4 and SW 1/4 of SW 1/4 (120 acs.) of €T & M Survey 2060. (2) The W. 3/4 of GC & SF Survey 1627 described in O&G Lease to Daniel A. Pedrotti dated September 24, 1973, as amended. (3) All of the W. 320 ~cres of Survey 1629 described and included in O&G Lease to Daniel A. Ped~otti dated September 24, 1973, as amended. • lXlllllt I

c 1tculitlon of roy1lty n bt p1ld on gu dtllvtrtd to Lttnt or Affllhtn for \llt C•nd not for r111lt) In 1ccord1nct vllh p1r1tr1ph 19.

''Y Ln1ot roy1lty ~tnd on th• 1ru•nr of • tht v1l9httd tYttlOt prlct ptlcl by tl11 thrtt hr11n YOlll9ettle pur~tfttl for th• ctltnd.r qu1rttr In th• 1111 11,u1rur of lltbb Co\11\tY or tbt 111t9bt1d 1v1r111 of th• prl;n Uttd by th• LUIOt tor royalty pt)'lltnt P'Jt'J)OllH

C1lcu\1tlon: 01t1,..ln1 1ddltlon1l roy1\ty p1y111nt1, If 1ny,

in1r1r PhMlnt loot publlcatlon or 11 rep11rt1d to th• Stitt of Ju.11 for ttYtttl"ICt Ull purpo111.

Slip \, Ctlcuhu tht vtllbttd ntt111 prlct for th• aonth tor 11ch of tht tht•• l1r91n vol\.at purch11u for 1111 qu1rt1r fro. tht ttx r1cord1.

M2f!th• J•"VUY 198§

"'' .. 1 100,000 z.oo Z00,A6J Unit 14 ao,ooo 1.s1 tzo,aoo ru1"ch11n fc2111 cg111ppny I

lltl\ 'Z 180,821 1.6Z

TOTAL Vnlud T•••• 360,az1 Tr1M•l111!on

Monthly ll•hht•d AYttlf! ,,,,, 61l,l26/J6o,a:n • s1,10/M1t1i~.

11put proc:1d11r1 for n111\nln; tvo •ontht for thl• purc:h111r t.ml toe c11ulnln; two purch111r1.

$l1p z. t1\c:ul1u tht v1t;ht1d 1v1r191 prlu of tht thrtt \1r11n vo\U111tric purch111r1 for th• qv1rt1r v1ln9 aonth\y v1\u11 froa sup 1.

Month·Juiy•ry 1211 t!ontb • ••bOJuy 1211 t!opth ~ t11rch 12§0

~ Volva• Prlc:t !xuntlon Volu111 Prlc1 !xitn•lon Vo\111111 Pr let E11nn1lon

"' l/Mtf • "" 1/MCf • "" .S/t!Cf • Unltsd T1;ii:11 360,tZI 1.10 613,396 391, 130 1,58 627,465 :n.o,Jo6 1,51 506,0ISl

- Tr1l'll•h1lon

UJIAOC 400,ZZl \,5S 6ZO,l46 561,157 soo,126 1.ss 775,125 South Cul f l!L.W. L.U w...w. '""'~'--'~7u5c.>J5a,.o Ul...2.22 lotllt 1,136,044 1,IJJ,74Z 1,047,009 1,67J,ZS5 1, IZ1,4JZ 1,756,858

SU- of V!!IYIHI Su,. 2f [!ltt"'ton1 V1!9bt1d Av1c991 Prier

1oul• 5,Z6l,155 1,59

Sttp J, C1\c:11l1tt v1l9bttd 1v1r1111 pclc:t 1111d by Ltnt• to c1lc11l1u roy1lty p1y111nu on 1111 dtllvtrtd to Lt11u or 1ftlllnt1 tnd not for r11111,

t!opth•Jenyuy 1000 t!ontb•ltbrupy 12AA Montb•H11rcb 12AA

Volu.1 Prlc:• E:r.t1ntlon Yolu111 Prlc• h:t1n1ion Yolu.111 Price Extrn1lon

"" S/ltCl • "" S/MC, • "" $/lltl

1n,ooo 1.60 241,0DO 1'0,0DO \,62 U6,&00 155,000 1.sa 2U,900

he 2f vgtu.,,.. SUI! gf fxt1n1 Igo•

ll•P ' · Cffip•rt 111lthnd 1Y1r1111 prlct c1lcul1t1d In sup z to the vthht•d •v1r191 ~"''' pcl;e ;1Lc:ul1od In :sup J,

S1.60/MCr 11 ' ' ' " ' ' Hllfl Sl.50/MCf 10 M 1ddltl2n.1l roy1tty P•Y••l\U lfl r1q.1.lr•d for thh qu1rt1r,

llOUt Vol"'-"• UICI prlcu uud In thl1 1x19f!l• 1r1 u11d for l\\uttrnlon and ••Y not b1 r1H1nlvt of 1c:t111I c~hlona, ' .. ' ' . THE STATE OF TEXAS COUNTY OF WEBB • § § § • This instrument was acknowledged before me on the 9y.f-_,day of January, 1988, by J. O. WALKER, JR., General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership,

i-- ~ .. ....';·.· .· ·. ·- ....... ._\.:. " ..•. -·· ·· ......... ~·~ otarY ~600•. s- ~le in and for !~:~ .. ._ The State of Texas. \ : My Coomission Expires .LA (J/?Jj BA LLi::v.J 7- B -'89 ·• '"'· ~ ....... -~. ___ ..... Printed/stamped name of Notary.

This instrument was acknowledged before me on the 9'1+- day of January, 1988, by E. WALKER QUIROS, General Partner of Vaqu1llas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

• f • ~)i~aQ_Q,,[Y :...~~"',· • _:':!-. ..,. otal'Yublic in and for § ~i The State of Texas. My Co11111ission Expires '7-:3- o0 9 •, ~A-oJRA ~ LlEW \. -~~·:--..... -· Printed/stamped name of Notary.

This instrument was acknowledged before me on the 't'ff- day of January, 1988, by GENES. WALKER, General Partner of Vaqui11as Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

~~~~,,;)--' NOtarYUbfc in allor The State of Texas. My Co11111ission Expires 7-3-89 LAat

THE STATE OF TEXAS § § COUNTY OF WEBB § 'fk_ This instrument was acknowledged before me on the CJ day of January, 1988, by EVAN B. QUIROS, General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

~ ublic in and for The State of Texas. 7-.B-89 My Co11DT1ission Expires LA uRA b'-4 LL,;;vJ Printed/stamped name of Notary. -12- GWB2/dm 130(1) • :

\ •. .. - • . THE STATE OF TEXAS COUNTY OF WEBB • § § § • This instrument was acknowledged before me on the 9+L day of January, 1988, by J. 0. WALKER, JR., Trustee for The Vaquillas Unproven Mineral Trust.

~·~ ~a~Q,,,'}- Ofu'YPuiC in anCFfOr The State of Texas. My Conmlssion Expires: 7- 3-a00I LA~R-A /?,.., LLe"J Printed/stamped name of Notary.

This instrument was acknowledged before me on the g i-R_, day of January, 1988, by E. WALKER QUIROS, Trustee for the Vaquil las Unproven Mineral Trust.

l ;:_[ i ... .· - .. ~~~~~ The State of Texas. My Conmission Expires: '7-:3- 8 9 ~ ~. ·. ·.......... .. . •, L11uRA BALLEvJ Printed/stamped name of Notary. ~,.

This instrument was acknowledged before me on the 9 -r/:_; day of January, 1988, by GENE S. WALKER, Trustee of the Vaquillas Unproven Mineral Trust.

Notary Pu ~in and for The State of Texas My Commission Expires: 7-3- ?/ LA ORA B,o L.LE:vJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § '-HU This instrument was acknowledged before me on the Cf day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Unproven Mineral Trust •

. _,,~ ~c~n~,')--' The State of Texas a My Commission Expires: 7-3-f? f JvMR/i »A LlevJ Printed/stamped name of Notary.

-13- GWB2/dm 130(1) • • . - ••

--- c.•••

. ' THE STATE OF TEXAS § COUNTY OF WEBB • § § . • o~ This instrument was acknowledged before me on the t day of January, 1988, by J. 0, WALKER, JR, , Trustee of Va qui ~i1ra~s-'-,.P~ro_v_e_n-'Mi nera 1 Trust.

.•' c_:-' :; ~ j ~ ~a Q(b_,f}--- {~(:/. ·-,·<; atarYtJiC';n and for The State of Texas My Coomission Expires: '7'-:3- 'f?9 ~ ~:..,,.·...~ -----·· LA ul2A ~ UBvJ ~ Printed/stamped name of Notary. -

This instrument was acknowledged before me on the 'fl_, day of 9 January, 1988, by E. WALKER QUIROS, ~: Vaqu~ Proven Mineral Trust.

_. t, - · · ;, · Notary PubM in The State of Texas an~ My Commission Ex pi res: 7- 3- tJ00f L110R,q l3'4 LlHvJ Printed/stamped name of Notary.

This instrument was acknowledged before me on the 9-fV day of January, 1988, by GENE S,WALKER, Trustee of Vaquillas Proven Mineral Trust.

}'--· ~. -~ ~~ici~~«Y The State of Texas "' . My Commission Expires: 7-3-!?'1 i..JAol2A BA LL~vJ ·--:. . ·. Printed/stamped name of Notary. -.

THE STATE OF TEXAS § § COUNTY OF WEBB § y.J__,' This instrument was acknowledged before me on the 9 day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Proven Minera 1 Trust.

~uh

-14- GWB2/dm 130( 1) • • .,.. ,. ..

THE STATE OF TEXAS •§ § • COUNTY OF WEBB §

This instrument 'l c/,.. day of Attorney· in-Fact corporation.

The State of Texas My Commission Expires: 9-/8'-yi( L)e//«- /?1<>.. Y'A-'ert" Printed/Stamped name of Notary.

·15- GWB2/dm 130(1) EXHIBITC PARTIAL RELEASE OF OIL AND GAS LEASE

STATE OF TEXAS § § COUNTY OF WEBB §

WHEREAS on June 15, 1974, Vaquitlas Ranch Company, Ltd., a limited partnership acting- therein through its general partners, J.O. Walker, Jr., Gene S. Walker, Evan B. Quiros and E. Walker Quiros, as Lessors, and Continental Oil Company, as Lessee, entered into an Oil and Gas Lease, recorded in Volume 460, Page 324 of the Deed Records of Webb County, Texas, covering 26,622.79 acres of land, more or less, hereinafter referred to as "the Lease,· and;

WHEREAS the Lease was revised, more particularly described in that certain Oil, Gas and Mineral Lease Amending Oil, Gas and Mineral Lease dated November 1, 1987, as evidenced by said Memorandum of Amendment to Oil and Gas Lease, dated June 16, 1988; recorded in Volume 1303, Page 879 in the Real Property Records Of Webb County, Texas.

WHEREAS the Lease has also been amended from time to time, as reflected in the Public Records of Webb County, Texas, and all references to the Lease herein shall be to the Lease as amended.

NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, ConocoPhillips Company, does hereby RELEASE, RELINQUISH and SURRENDER unto the Lessor, all of its right, title and interest and estate in the Lease SAVE AND EXCEPT THOSE LANDS AS MORE PARTICULARLY DESCRIBED ON THE EXHIBIT "A," AND FURTHER DESCRIBED ON EXHIBITS A-1 THROUGH A-36 ATTACHED HERETO AND MADE A PART HEREOF.

Provided, however, Lessee shall have and retain full rights of access and all easements of ingress and egress over and across those lands covered by the Lease, including the lands which are hereby released, for the production of oil and gas and operations in the acreage not hereby released, and Lessee shall not be required to remove or relocate any pipelines, utilities, roads, tank batteries, or other surface equipment or installations from any portion of the Lease or lands herein released for so long as same continues to be used for the exploration, development or operation of such portions of the Lease that continue in force and effect

This instrument is binding upon and inures to the benefit of the parties hereto, their heirs, successors and assigns.

Executed this ) 1 'th day of f.k,,4 ,2014.

LESSEE:

::~oc~ Michael P. Rose Attorney-In-Fact

Volume: 3577 Page: 454- 530 Ooe#11!M188 Doc Type: PARTIAL RB.EASE OF OIL & GAS LEASE RecOC'd Date: 21251201411:28:17 AM Record By: Mtc 199129-001 Fees·.$330.00. Margie Ramirez Ibarra, Webb County Cieri!. ACKNOWLEDGEMENT

STATE OF TEXAS § § COUNTY OF HARRIS §

ACKNOWLEDGED BEFORE ME, this 11le>. day of F... 'k!onnJ , 2014, by Michael P. Rose, Attorney-in-Fact for ConocoPhillips Company, a Delaware (Corporation, on behalf of said corporation.

199129-001 OVERALL EXHIBIT "A" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH RETAINEO TRACTS 1-36 CONTAINING A TOTAL OF 21,291.86 ACRES

GRAPffiC SCALE

( ltl f[[1 )

CONOCOPHILLIPS COMPANY HOWLAND ENGINEERING AND SURVEYING CO., _ Tl!PEF'll-nlleghn--~ TDPl.$FWrl~No. VAQUIUAS RANCH RETAINED TRACTS BASE HAP T81~N.-A_,.,. LMBl£S. l!Cl'll\MD Elfl)ljEElllH(: N10 ~C CO., 1iC. >SSUJtS NO RESPONSIBIUTY TO LOCAlt PPEl.11£ Oii CAa£ ~CS. CHECKED BY: J.S. =~H:c~RE~~~~~~E/::.O!At rn: O'ME1!SHP Oii JOB No. 221Ji-1J c:oPmOfT HOWl.IHJ OICKV!tlr:l N10 ~ CO., l

>t\HCl'MNID\i\IR\IO'WG DUAA™ltll\lob>\NIN1lJl·lJ\271ll·lJ.do.g. IJl/201• 2:1C:IC ;>M, , . _ POf HOWLAND ENGINEERING AND SURVEYING CO.

EXlllBIT "A-1"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 199129--001 RETAINED TRACT 1 (VAQUILLAS RANCH WELLS A-3 No. 61, No. 67, No. 199, No. 200, & No. 203) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1955, G.C. & S.F. R.R. CO., Abstract 1328, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a foWld Y:i." iron rod next to a fence comer, which bears N 56°51 '30" W, a distance of 886.46 feet, from the Vaquillas Ranch A 3 No. 199 Well;

THENCE, N 89004'24" E, along an existing fence line, a distance of392.77 FEET, to a point for a deflection right;

THENCE, N 89°17'59" E, continuing along said existing fence line, a distance of 1,379.80 FEET, to a point for a deflection right;

THENCE, N 89042'30" E, continuing along said existing fence line, a distance of 695.33 FEET, to a found 1 Y:i." pipe at fence comer, for the Northeast comer hereof;

THENCE, S 00°20'36" E, along an existing fence line, a distance of2,S33.32 FEET, to a point for a deflection right;

THENCE, S 00°19' 10" E, continuing along said existing fence line, a distance of2,829.52 FEET. to a point for a deflection left;

THENCE, S 00°20'17" E, continuing along said existing fence line, a distance ofl,697.58 FEET, to a point, for the Southeast corner hereof;

THENCE, S 89°39'43" W, a distance of 4,334.37 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°38'14" W, a distance of 4,273.09 FEET, to a point under an existing fence line, for an exterior comer hereof; j p

THENCE, N 89°20'19" E, along an existing fence line, a distance of 1,910.21 FEET, to a fowid Vi" iron rod at fence comer, for an interior comer hereof;

THENCE, N 00°39'19" W, a1ong an existing fence line, a distance of3,668.08 FEET, to a point for a deflection right;

THENCE, N 00°33'14" W, continuing along said existing fence line, a distance of96.40 FEET, to the POJNT OF BEGINNING, containing 640.00 acres of land, more or less.

Basis of Bearing: G.P.S., TX. South Zone, NAD-27

SHEET! OF2 H:\HOWLAND\SURVEYING DEPARTMEN1\lobs\20\3\l2131.l-13\22131.1-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue 1 P.O. Box451128 (78045) i Laredo, TX78041P.956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 l TBPLS Arm Registration No. 100464-00 EXHIBIT "A-1" CONOCO PHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001. N RETAINED lRACT 1 (VAQUIUAS RANCH A-3 WELLS No. 61, No. 67, No. 199, No. 200, & No. 203) 640.00 ACRES WEBB COUtm', TEXAS

SURVEY 294 N l04-•24• E N 89"17°9• E SURVEY 2'14

-- --- -- ABSTRACT 2227 --'-'~~-- ~")------: Found 1/Z' H 00"33'14• W Iron Rod 98.40' 392.Tt 1,379.80' -.:::..;;;;~~+-"=----,_..;;;;.;;;..~ '-..~,. _r.,__10o VAQUIUAS RANCH

O fenca Comer -----bVAOUILL.AS RANCH 737' A-J No. 199 (SHL}

VAOUILLAS :0 VAQUILLAS ...

I RANCH A-3 No. 61 RANCH SURVEY 2098 (SHL) A-J No. 61 D. C. FANNING (BHL) ABSTRACT 2228 ' "' UI

SURVEY 1955 G.C. & S.F. R.R. CO. ABSTRACT 1328 WEBB COUNTY, TEXAS WEST 1/2 SURVEY 1844 P.K. CONNOWAY N 89"20'19• E ... 1,910.21' ABSTRACT 2188 VAOUILLAS -¢- Found 112· RANCH A-3 No. 67 '~""' 0 Fonce Comer _n_VAQUILLAS ¥ RANCH No. 211

CONOCOPHILLIPS COMPANY VACUlLLAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) RETAINED 840.00 ACRE UNrT SURVEY 1958 H. E. BROCK ABSTRACT 2580

VAOUILLAS RANCH A-J No. 200 (BHL)f.t:.... ~ VAOUILlAS RANCH A-3 No. 200 (SHL) z VAQUJLlAS -¢f)VAQUILLAS RANCH RANCH A-3 No. 203 A-3 No. 203 (BHL) (SHL) UI

s 89'39 4Ji w- 4.334

1-.-..-~-.-~ ......... ------------------------.,..-L------ .-.-...................... GRAPHIC SCALE SURVEY 2058 SURVEY 851 T C.T. & M.C. R.R. CO . ABSTRACT 2880 S.B. TURNER ABSTRACT 1842

LEGEND Dale

HOWLAND ENGINEERING AND SURVEYING CO. lllPE"'ni~Na.1'-«1111" TBPl.SFm>Reglsltolb\Ho..1-..00 ~ 0 = HORIZONTAL WE:Ll stJRr>.a: LOCATION WW. UHIT UN£ 04-05-lJ 10-1&-\J

7&15N._ ........ ~lX.nGlt P.05&.122.+ltl www.howlundc::ornpanltt!!.eom """ "'" ""' SURVEY UNE WARNING: a>.s1S OF BEAAINC: C.?.S. Tx. South 2<>1"1c. NAO. 27. 1NS l'lAT "'IV llOT .51-JJW .OU CROss:tlCS ~ PF'£lJ!-IES CR Cla!S. ~D ENCINtEJllHG Nf:J SUIM:'T"llC CD.. INC. ASSUMES HO llfSPOHSltlUTY TD ~Tt ~EU'< OR CA

EXHIBIT"A-2"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 2 (VAQUILLAS RANCH A-5 WELLS No. 126, No. 166, No. 205, & No. 230) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 2057, C.T. & M.C. R.R. CO., Abstract 985, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a found fence comer post, which bears N 38°52'07" W, a distance of 2,936.16 feet, from the Vaquillas Ranch A-5 No. 205 Well;

THENCE, N 89°22'34" E, along an existing fence line, a distance of3,669.76 FEET, to a found 60 D nail at fence comer, for a deflection right;

THENCE, N 89°35'52" E, along an existing fence line, a distance of 1,477.59 FEET, to a point for the Northeast corner hereof;

THENCE, S 00°37'35" E, a distance of 5,425.18 FEET, to a point, for the Southeast comer hereof;

THENCE, WEST, a distance of 5,187.42 FEET, to a point for the Southwest comer hereof;

THENCE, NORTH, a distance of3,634.94 FEET, to a found Y:i" iron rod at fence comer, for a deflection left;

THENCE, N 00°37'32" W, along an existing fence line, a distance of 1,739.69 FEET. to the POINT OF BEGINNING, containing 640.00 acres ofland, more or less. .·: Basis of Bearing: G.P.S., TX. South Zone, NAD-27 '

SHEET I OF2 H:\HOWLAND\SURVEYlNG DEPARTMENl\Job5\20J3\22131.2-13\lll31.2-13.doc . ;/'.-:: :,:;x--~.01

:{i~_..:.; www.howlandcompanies.com 7615 N. Bartlett Avenue I P.O. Box 451128 (78045) r Laredo, lX78041 P. 956.722.4411 1 F. 956.722.5414 TBPE Firm Registration No. F-4097 : TBPLS Firm Registration No. 100464-00 EXHIBIT "A-2" CONOCOPHILLIPS COMPANY VAQUJLLAS RANCH LEASE 199129-001 N RErAJNED TRACT 2 (VAQUJLLAS RANCH A-5 WELLS No. 126, No. 166, No. 205, & No. 230) 640.00 ACRES WEBB COUNTY, TEXAS

I I •

! ,,..

J SURVEY 1954 SURVEY 1956 SURVEY 1956 D. C. FANNING D. C. FANNING H. E. BROCK

(PO~ ABSTRACT 2226 ABSTRACT 2591 I ABSTRACT 2560

~)_ Found 60 0 Noa 0 Fence Comer{ ti H 89"35'52• E 0 found Fenc:o Carner Poat I '\l"~~..1.~~....:";..:: .. :.:..::.:·"'::..·~·~-;..:~~..~·~J:'.!:-~.==~,;'.'.:~~,-:-i~~.==~·;r•:77:·:""~,~·=='.":",:'i'f_-T"I~~·~~ ... '\, t x ~ ' '\. ',1- I r : I. ',~ '\~o.... :

: >

'\.~ ~: CONOCOPHILLIPS COMPANY ""1 : \' \~,p"-S- ',~60• NI I : VAQUILLAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) RErAIHED 840.00 ACRE UNIT >< \ I 1 Foundt ' ' I I i• Iron Rod '\ I VAQUILLAS _A_ ~.1 O Fenca Comer ', l VAOUILLAS RANCH RANCH V -------~~~--------0 VAOUlLLAS RANCH . -Q-A-5 No. 205 (BHL) A-5 No. 166 ~I ro·1 A-5 No. 205 VAQUILLAS RANCH-¢'. .~.1 (SHL) A-5 No. 2.30 - 0 (BHL) · ':n 1 VAQUILLAS RANCHO I')

"' "'"' ·"' 11; SURVEY 2057 A-5 No. 230 ~"'O i' ~o:"' "' "'"'·~ ~..; C.T. & M.C. R.R. CO. (SHL)

~~~ ABSTRACT 965

"'""""'.... ' WEBB COUNTY. TEXAS 1: "'cJ !:] ci ~ _n_ VAQUILLAS V RANCH A-5 No. 126 ~ J

VAOU!LLAS i) • RANCH • A-5 No. 118

I• f -~-:;:-0~ ~ SURVEY 2060 • L.F. UPDEGROVE ., "' .,00::;;;

li ABSTRACT 3330 I• , ~~= >--Cf.)~ A VAOUILLAS [;;' "' GRAPHIC SCALE ¥. RANCH A-5 No. 40 : NE 1/4 SURVEY 2060 I : !5 ~ &; T I• R.D. GUINN ABSTRACT 3331 • en"'!:] ( ti FEET) I heh • lDCOFl. I t£GEND R...,!slon 0<1!•

HOWLAN~ __ ,_ .... "' HORIZONTAL w:EtL SUllrAC£ 1.0CJiTlOH ,' 04-12 \J OS-11 \J ENGINEERING AND SURVEYING CO. TBPEArmR

WARNING: 8ASIS OF BEARING; C.P.S. T•. South Zone, NAO. 27. ... UNIT LINE F'EHCE UNt SURVEY UllE '• 00--06-13 10-18-13

ntS Pl.AT W.Y NOT S>fO'll' AU. mosstlCS Of Pl'WIC OR C\ll.ES. HOOl\NIO [NOll££JIN; ,tllO SIJR\ltYlllG CO., INC. ASSIJloC5 NO RESPOIG!llU!Y TO l..OCATE PIP£ll'< OSI CMllL CllOSSN'lS. t<0 C>J,111 IS ll£R£B"I' WD£ R.E~ CIMIEHT OR =wl.. SUIT~ f'El: OWMERSHI' OR FlEW DATE

'" """ "" PAGE"

'" DRAWN BY: CHECKED BY: LAF./S.LM. J.S. lt$SCll. !)llS DAAJrllfC w.D!: EXCUISMl.Y ftlR C0H0coPt-.u>s Cl)UIWN. JOB No. 221J1.2 lJ ~ ~o [N(;»lttAINQ NrJ ~c co., 1HC. 201JC SHEET: 2 OF 2 HOWL.lt\~~D; ENGINEERING AND SURVEYING CO.

EXHIBIT"A-3"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 3 (VAQUILLAS RANCH A-5 WELLS No. 40, No. 97, No. 101, No. 108, No. 110, No.113, & No. 118) 515.26 ACRES

A TRACT OF LAND CONTAINING 515.26 ACRES, more or less, being out of the Vaquillas RJmchLease 199129-001, 26,622.79 Acres (Called), situated in Survey 2059, C.T. & M.C. RR. CO., Abstract 984, acd Survey 2060, L.F. Updegrove, Abstract 3330, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 11°25'37" W, a distance of 2, 799.89 fee~ from the Vaquil!as Ranch A-5 No. 108 Well;

THENCE, EAST, a distance of 6,540.37 FEET, to a point for the Northeast corner hereof;

THENCE, S 01°14'46" E, a distance of 1,214.36 FEET, to a point for an exterior comer hereof;

THENCE, S 88°51'20" W, a distance ofl,363.69 FEET, to a point for an interior comer hereof;

THENCE, S 00°34'04" E, a distance of 1,364.74 FEET, to a point for an exterior corner hereof;

THENCE, S 89°54'17" W, a distance of 2,712.87 FEET, to a point for an interior comer hereof;

THENCE, S 00°23'37" E, a distance of24.86 FEET, to a point for a deflection left;

THENCE, S 00°33'33" E, a distance of2,796.79 FEET, to a point under an existing fence line, for the Southeast comer hereof;

THENCE, S 89°25'42" W, along an existing fence line, a distance of2,494.30 FEET, to a point for a deflection right;

THENCE, S 89°37'21., W, continuing along said existing fence line, a distance of60.97 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°14'54" E, a distance of5,457.34 FEET, to the POINT OF BEGINNING, containing 515.26 acres of land, more or less.

SHEET 1 OF2 11:\HOWLAND\SURVEYlNG DEP ARTMEN1\Jobs\2013\22131.3-13\2213l .3-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue . P.O. Bo)( 451128 (78045) ; Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 : TBPLS Firm Registration No. 100464-00 EXHIBIT "A-3" CONOCOPHILLIPS COMPANY VAQUILI.AS RANCH LEASE 199129-001 N RETAINED lRACT 3 (VAQUILI.AS RANCH A-5 WELLS No. 40, No. 97, No. 101, No. 108, No. 110, No. 113, & No. 118) 515.26 ACRES WEBB COutfTY, lEXAS

SURVEY 2057 SURVEY 1953 C.T. & M.C. R.R. CO. G.C. & S.F. R.R. CO. ABSTRACT 985 ABSTRACT 1329 A VAOUILLAS y RANCH A-5 No. 126

-- -~--..-----------+--'BIST='--~-"o.... ""'"-'"$1';.;...._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _<>- - - -- '' l' -¢- '\ ' VAQUILLAS VAQUJLLAS '' CONOCOPHILLIPS COMPANY RANCH A-5 No. 101 VAQUILlAS RANCH LEASE 199129-001 1-.£ 1-" ;,-: ;:!: I 26,622.79 ACRES (CALLEO) A-5 No. 116 -¢- \''• NI RETAINED !51!5.26 ACRE UNrT SURVEY 2060 \'ij. I L.F. UPDEGROVE \!1, t ABSTRACT 3330 \£ I s 88'!51"20. w ll \t-> : VAOUILLAS 1,383.69' 0 0::; I RANCH A ~111~ . \~ ,.\~.:' I SURVEY 2059 C.T. & M.C. R.R. ABSTRACT 984 co. I A-5 No. 40 ¥ ILi !to'- or- SW!/40F NE 1/4 : ru§:._. ~zu

~ ~ '!t_ SURVEY 2060 1 > Ul Ci? •• \I < I WEBB COUNTY, TEXAS I !! ?!, R.D. GUINN I 0: .( E-< U) - ABSTRACT 3331 1 ~ i;ri ~ !

dA~~~'1io. ~~CH "~ SURVEY 2060 R.D. GUINN {SHL) ,.J.., VAOUlUAS RANCH z ABSTRACT 3332

~ V L-4 No. 95 VAQUILLAS (BHL)

,-----1 RANCH A-5 No. 11.:5 SURVEY 2060 -¢- VAOUILL.AS RANCH A-5 No. 97 -¢- ..' C.C. MARSHALL ABSTRACT 3329 SE 1/4 OF : SW 1/4 SURVEY 2060 I A VAQUILLAS RANCH V l-4 No. 105 R.D, GUINN VAQUILlAS A : ABSTRACT 3331 : RANCH y A-5 No. 110 I I DETAIL: N.T.S. -s 89"37'21· w 60.97' NORTH HALF SURVEY 1838 S 00'23'31 E ? P .K. CONNOWAY 24.86' _,/ ABSTRACT 2187

GRAPHIC ~ ..•Jo-" lol• ~~ T (If fUT) I Inell - lOOOfl. -- ----- -- -- HOWLANIJ 0 -¢- LEGEND = llORIZONTAI. WElL SURFACE l..OCATIOH R•vlllon

' . """ : 12. 13 I OS-17-13 ENGINEERING ANO SURVEYING CO. • WW. " UNIT LINC ' 0&-06-IJ

•' T&PEF'im~NO.fJHR TBPUIAm ~J'ol>.1~ • ftNCE UHE 78l~H.e.t.llA...,. Lot.io,l)'..nol1 P.llM.Tn.4411 www.howtandcomp.1mles.com ' - - - - - - - .. Tits - • • - ' " S U R V E Y LINE 10-1a-1J

~ BASIS Of BEARING: G.P.S. Tx. South Zon~. NAD.-27. FIELD lli\TE PAGE s MS Pl.Ar 11.

EXHIBIT "A-4"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 4 (VAQUILLAS RANCH CO., LTD. WELLS No. 11, No. 20, No. 30 & VAQUILLAS STATE G.U. No. 5) 640.00 ACRES

A TRACT OF LAND CONTAlNlNG 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 468, N.B. Gossett, Abstract 2255; and Survey 1634, N.B. Gossett, Abstract 2252, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 15°06'54" E, a distance of 1,098.65 fee~ from the Vaquillas Ranch State G.U. No. 5 Well;

THENCE, S 00°31'13" E, a distance of 1,549.69 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°43'43" W, a distance of 10,925.96 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°12'49" W, a distaoce of3,536.51 FEET, to a point for the Northwest corner hereof;

THENCE, N 89°52'00" E, a distance ofS,489.79 FEET, to a point for an exterior comer hereof;

THENCE, S 00°22'48" E, a distance of 1,945.34 FEET, to a point for an interior comer hereof;

THENCE, S 89°58'23" E, a distaoce of 5,422.26 FEET, to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

Basis ofBearing: G.P.S., TX. South Zone, NAD-27

SHEET! OF2 H:\HOWLANDISURVEYING DEPARTMENl\Jobs\2013\22 I31.4-13\22131.4-13.doc

www.howlandcompanies.com 7515 N. Bartlett Avenue , P.O. Box451128 {78045) ~ Laredo, TX78041 P. 956.722.4411 1 F. 956.722.5414 TBPE Firm Registration No. F-4097 TBPLS Finn Registration No. 100464-00 II I 1 ' i'

~ SURVEY 1633 ' i; G.C. & S.F. R.R. CO. ABSTRACT 1323

t-· N 89"S2'oo• E ,.. ~48Sl.7SI' ~- .1 : -~ CONOCOPHILLIPS COMPANY l... I SURVEY 467 A.B. & M. ABSTRTACT 799 I SURVEY 1664 G.T. BLACK ABSTRACT 2696 VAQUILLAS RANCH LEASE 199129-001

i,. I 26,622.79 ACRES (CALLED) RETJJNED &40.00 ACRE UNIT I~ "' s 89"08'23" E H . • H22.2 ' VAQUILLAS RANCH STATE G.U. No. 1-R -¢- I' y~J t'E-PO~ l j ~ -¢- I I

.I."'/.~ SURVEY 1634 ~ N.B. GOSSE'IT VAQUILLAS RANCH CO. LTD. No. 20 81 .JtllfJ ILi

z ABSTRACT 2252 -~ ~/:t ~~ WEBB COUNTY, TEXAS VAQUIUAS VAQUILLAS RANCH CO. I 1-., I !J/C!, :-'I:!: ,.,-~ RANC~ " . !;! RANCH CO. LTD. No. 11 LTD. No. 30 -¢- VAQUILLAS - -¢- STATE G.U. No. S W

s 89'43'43• w ... 10,925.98' -:- I

SURVEY 468 '

IVAQ~l:. VAQUIUAS RAt.;CH N.B. GOSSETT CO. LTD. No. 73 ABSTRTACT 2255 GRAPHIC SCALE -¢- k.•.-L:Uoo \j 1j ' -¢- VAQUILIJIS RANCH ·"'· - - - ( IH rtET ) I 1n

ltevl11on Doi• EXHIBIT "A-4" LEGEND

HOWLANIJ) ENGINEERING AND SURVEYING CO. 11WEFlllll~ll0.F-40G'T TBPLSArll~N0.1-.og CONOCOPHILLIPS COMPANY VAQUIL!AS RANCH LEASE 199129-001 0 -¢- ;; HORl10HTAL W[U SUltrACt LOCATION - wru. • UHtr LINE 10-18-IJ

r6Ult.llutM-o L.or-,TX.11041 P,~.m.«11 - - ' - - • Fl:NCE LINE www.hOY.i11ndoomp.11nles.com RETAINED TRACT 4 - - - - - - - "TICS - " '" - " SURVEY LINE ~ BASIS OF &ARING: G.P.S. T~. South Zeno, NAD.-27. (VAQUIL!AS RANCH CO., LTD. WELLS No. 11, No. 20, 'l>llS Pl>.T IAAY llOT SHC7il' 111..L CROSSllfOS (1' PIPllllts Oii CAii.ES. 1tOWV.HO CNGl~O No. 30, & VAQUIL!AS STATE G.U. No. 5) flEtO OAlE BOOK PAC[{• DRAWN SY: s.1.1.1. NID SlllV£nNQ CO., I«:. /.SSUllE!i NO ~E$PONSll!IUJY TO LDC.\TE PIPD..l;t O!t Cla£ CltOSSH:S. H/A CHECKED SY: J.S. "" N/A ~~r:s:HG%~~~~=-W~Rfct~CR.ll rtE O'llNERHP 01t 640.00 ACRES JOB No. 221J1.<4-1J COPTRICHT HOWIJ,NO OfQllEDIUfCl NIO SUIMYWQ CO, !NC. 2013C WEBB COUNTY, TEXAS SHEET: 2 Of 2 lt\How.AllD\'IUll\ltWll; OIPARTMlNl\Job<\201Nl1lL4-ll\211lL<-1ldlog. l/!,l70l~ 105.!.WJ.U. Mobo POI' HOWLAND ENGINEERING AND SURVEYING CO.

EXHIBIT "A-5"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY V AQUllLAS RANCH LEASE 199129-001 RETAINED TRACT 5 (VAQUllLAS RANCH CO., LTD. WELLS No. 3, No. 14, No. 41, No. 45, & No. 69,) 640.00 ACRES

A TRACT OF LAND CONTAJNING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 865, H. & G.N. R.R. CO., Abstract 1438, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point under an existing fence line which bears N 24°04'13" W, a distance of2,161.34 feet, from the Vaquillas Ranch Co., LTD. No. 69 Well;

THENCE, N 89'30'43" E, partially along an existing fence line, a distance of 5,303.50 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°28'34" E, a distance ofl,802.66 FEET, to a point for a deflection right;

THENCE, S 00°09'23" E, a distance of2,489.65 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°35'00" W, a distance ofS,256.20 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°14'17" W, a distance of3,677.21 FEET, to a point for an interior corner hereof;

THENCE, S 89°45'43" W, a distance of 44.35 FEET, to a found l" pipe at fence corner, for an exterior corner hereof;

THENCE, N 00°37 150" W, along an existing fence line, a distance of 1,608.36 FEET, to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

SHEET! OF2 H:\HOWLAND\SURVEYING DEPAR1MENJ\JabsUO 13U213 J.5-13U2131.5-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 451128 (78045) ! Laredo, 1X 78041 P. 956.722.4411 F. 956.722.5414 T6PE Firm Registration No. F-4097 TBPLS Firm Registration No. 100464-00 EXHIBIT "A-5" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 1N99129-001 - RETAINED "TRACT 5 (VAQUIUAS RANCH CO., LTD. WELLS No. 3, No. 14 No. 41, No. 45, & No. 69) 640.00 ACRES WEBB COUNlY, TEXAS

SURVEY 2238 P.O. BODE I I SURVEY 866 FRANCISCO CONTRERAS ABSTRACT 2065 ABSTRACT 3016 I

------ SURVEY 2336 _, __ , __ ,_ J.E. ANDERSON ABSTRACT 3183

\ ---- t ... --- -- -------- N 89"30'-43• E "" S,303..50'

~ \\~.,o ! {Cl "' j§ a: "'., ~

~i .: "' .... "' I \""; VAQUILLAS RANCH CO. LTD. No. 45 ~ ~z

!! ,., \V, \i:.\1. i

~.- Found 1· Pipe 0 Fence ComerG \~: ¥A0Ulll.AS' ,._ I I RANCH \ 1 VAQUILLAS RANCH ~

iii "'~" ."'"" ~ SEEL -'CO. LTD. \ I A CO. LlD. No. 14 DETAIL No. 69 A

t 818 (BHL) V

CO. LTD. )-1 I-----;--- VAQUlUAS RANCH VAQUILLAS RANCH CO. LTD. No. 41 . No. 69 (SHL) VAOUIUAS RANCH CO. LTD. No. 56 CONOCOPHIWPS COMPANY VAQUIUAS RANCH LEASE 199129-001 26,622.79 ACRES {CALLED) ------- REJ'MNED 840.00 ACRE UNfT

SURVEY 665 H. & G.N. R.R. CO. ABSTRACT 1436 WEBB COUNTY. TEXAS w

"' ~--~--~...lb-~~~~~~~~~~~~~~~-6-~--~ s av35•00• w - 5.256.20'1 DETAIL' N.T~lr.S. ' I found 1· Pipe 0 fence Comar SURVEY 1683 C.C.S.D. & R.G.N.G. R.R. CO. s ....,,.. 89"45'43. w ABSTRACT 1115 ' SURVEY 1700 H.E. BROCK ABSTRACT 2559 -¢- GRAPHIC VAQUILLAS RANCH

-- CO. LTD. ~ "'--?--' ~ 500

1 "'Ch• lDOOF\. T No. 23

LEGEND

HOWlA~~~ ENGINEERING AND SURVEYING CO. _ 0 -¢- - KO!l:IZOKTA.L wtU. SURF'ACE LOCATION = WEU. ...._ _ = Ltl!JUME I 2 3 04-12-13 05-17-13 06-06-13 lBJ'EFkn>~tb.~ Till'l.Sfrn.~No.I~ 7e151t._/'o._ t.a..do,lX.78001 P.115a.722Ml1 - - ' - - = ftHCE UHE <4 11 27-13 www.howlandcompankls.com - - - - - - - •TIES " .. '" SURVEY UHE WARNING: SI.SIS OF BEARING: C.P.S. Tx. South :Zone, N.A.O. 27. THIS l'Ull llAY HOT $HOW ALL alOSSf'ICS Of PIPQJN£S OR CA8.tS. IKN\NICI E>IGll~ AAD ~I: en.. lie. ~ NCI l!C'J'CINSlllUIY TO l.CICA.TE Pf'UK Cit eoa£ D!OSSINCS. flEW DATE ,,, ''°' ,,, PAGEi~ DRAWN BY: LAF./S.l.r.I. NII Cl.AIW IS HEN£Erl' IMO( R£lW!lllH(l i;:mR£HT OR ,oCTU.1,1. SUIU'...::C/l.IHERN. FU OWNERSlfP OR l.£SSOR.. 1lltS OR>.11'111: WDE DCClilSMl.Y Rl!I CONOCOl'HUJPS IXlMP>HI'. "" CHECKED BY: J.S. JOB No. 221.ll.5-13 COP'l'RlCHT HOWl.AACI ENl:INEE!tliG N«l SlJIMW«O CO •• N;. 20130 SHEET: 2 or 2 HOWUJ\N[l) ENGINEERING AND SURVEYING CO.

EXHIBIT "A-6"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 6 (VAQUILLAS RANCH CO., LTD. WELLS No. 31, No. 56 & W.R. CARR, ET AL No. 1) 620.58 ACRES

A TRACT OF LAND CONTAINING 620.58 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called1 situated in Survey 1635, T.C. R.R. CO., Abstract 1797; Survey 865, H. & G.N. R.R. CO., Abstract 1438; and Survey 467, A.B. & M., Abstract 799, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 67°46'35" W, a distance of 4,196.87 feet, from the Vaquillas Ranch Co., LTD. No. 31 Well;

THENCE, N 88°55'14" E, a distance ofl,040.09 FEET, to a point under an existing fence line, for a deflection right;

THENCE, N 89051'04" E, a distance of3,989.57 FEET, to a found I" pipe at fence comer, for a deflection left;

THENCE, N 89°45'43" E, a distance of 44.35 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°14'17" E, a distance of3,677.21 FEET, to a point for an exterior comer hereof;

THENCE, S 89°35'00" W, a distance of 44.35 FEET, to a point for a deflection right;

THENCE, S 89054'09" W, a distance ofl,767.82 FEET, to a point for an interior comer hereof;

THENCE, S 00°17'52" E, a distance of3,432.25 FEET, to a p_oint for a deflection left;

THENCE, S 00°38'54" E, a distance of 54.14 FEET, to a point for the Southeast comer hereof;

THENCE, N 89°49'18" W, a distance of2,249.93 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°10'41" E, a distance of54.13 FEET, to a point for a deflection left;

THENCE, N 00°21'54" W, a distance of 1,361.31 FEET, to a found fence corner post, for a deflection left;

THENCE, N 00°30'20" W, aJong an existing fence line, a distance of 1,631.92 FEET, to a point for a deflection right;

THENCE, N 00°28'47" W, continuing along said existing fence line, a distance of 882.77 FEET, to a point for a deflection left;

THENCE, N 00°29'28" W, continuing along said existing fence line, a distance of 1,092.72 FEET1 to a point for an interior corner hereof;

SHEET! OF3

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box451128 (78045) ; Laredo, lX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Finn Registration No. F-4097 , TBPL5 Firm Registration No. 100464-00 Ho.aAli[] /~ [fc..~l~':c,;;~-; 'WW:f~~J:d'\~JP:-:-:-::~· ENGINEERING AND SURVEYING CO.

Continuation

THENCE, S 88°55'14,, W, a distance of 1,965.93 FEET, to a point for an exterior comer hereof;

THENCE, N 01°04'46" W, a distance of2,125.56 FEET, to the POINT OF BEGINNING, containing 620.58 acres of land, more or less.

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www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 451128 {78045) Laredo, 1)( 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 i TBPLS Firm Registration No. 100464-00 EXHIBIT "A-6" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 6 (VAQUIUAS RANCH CO., LID. WELLS No. 31, No. 56 & W.R. CARR, ET AL No. 1) 620.58 ACRES WEBB COUNlY, TEXAS I SURVEY 1838' FRANK BARRETT ' ABSTRACT 2137 ' ~ I • I SURVEY 2336 J.E. ANDERSON ~ I ' ' ABSTRACT 3183 SEE

VAQUlll..AS RANCH CO. LTD. No. 69 (SHL)

W.R. CARR. ET Al No. l -¢-

CONOCOPHlLUPS COMPANY SURVEY 1632 VAQUIUAS RANCH LEASE 199129-001 FRANK BARRETT 26,622. 79 ACRES (CAUED) ABSTRACT 2140 RET~ED 820.SS ACRE UNrT' o---------.(J)o- w ----w--. s B9"54'oo• 5 89'M'oo• 1,767.82' 44.35' z

SURVEY 1683 I DETAIL: N.T.S. N 89"4&'43. E i r44.30' ..'" ' ~. ill C.C.S.D. & R.G.N.G. R.R. ABSTRACT 1115 co. il "'I ii~ ~VAOUILLAS RANCH Found 1") S ..:1 l c~~. \~· Plpoc!~~" z 1' "' ~•--•--•--•--•--X-y I µ \Found Fenca Com

~~i --- ---- ----- ---o.r-- -- ... ----- SURVEY 467 N 00'10'41" E ...--.-<>--::-:;::~:::::;-;::""."."'::'"::~~-~"- S 00'38'54" E 54.13' N 89"49'18" w ... 2,249.93" I 154.14' VAOUILLAS RANCH CO. LTO. A. B. & M. No. JJ ST (BHL) ABSTRTACT 799 -¢- ' GRAPHIC VAOUJLLAS RANCH CO. LTD. No. 71 VAQUIL~! !.00 ~ --- •J-' ~ 500

I loch • 1ooan. T c~Cr~. No. SJ I• -¢- VAOUlLLAS RANCH CO. LTD. No. 5

LEGEND Rnl1lon

HOWL.A~~ = M--17-13 0 HOR!ZOKTAL WEU SURFACC L.OCATIOH ENGINEERING AND SURVEYING CD. -¢- • WW. 06-06-1J 08-14-13 Tl!PE Fhn llo;IMdoo HO>. ~1 T8P\..S Fhn ~ ...,_ IOOolM«I -~,--: ~1.R(Ji£ 7~1'N.llallldllvm>110 Ls-._TX.7111M1 P.111:16..72:2.4411 10-18-tJ www.howlandcompanles.com - - - - - - - = TIES .. ,. = SURV£Y Ult( 11-27-1J WARNING: BASIS Or BOOING: G.P.S. Tx. South Zone, NAD.-27. n-=> FU.l KAI'" NOT SllOllf JU o:ICJSSlj(;S Of' PlPEIJ'IES 00 eoa.tS.. ltl:l'fl'V'ltl DIC»l(£JllNc; FlUD DATE "o' PAGE ~l DRAWN BY: LAF./S.1.ld.

"'' "'' CHECKED SY: J.S. JOB No. 221Jl.6-IJ SHEET: J or J Ho-1Q1~ ilir S~-~[f~; 'WW~t£-::J.Li~r.~ '-'.21 1 ~;----··/ ENGINEERING AND SURVEYING CO.

EXHIBIT "A-7"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 7 (VAQUILLAS RANCH CO., LTD. WELLS No. 5, No. 8, No. 23, No. 25, No. 33 ST, & No. 64) 639.48 ACRES

A TRACT OF LAND CONTAINING 639.48 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1683, C.C.S.D. & R.G.N.G. RR. CO., Abstract 1115, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 09°35'49" W, a distance of 1,417.68 feet, from the Vaquillas Ranch Co., LTD. No. 64 Well;

THENCE, N 89°54'09" E, a distance ofl,767.82 FEET, to a point fora deflection left;

THENCE, N 89°35'00" E, a distance of3,454.97 FEET, to a point for the Northeast corner hereof;

THENCE, S 00'02'16" W, a distance of 4,514.84 FEET, to a point for a deflection left;

THENCE, S 00°56'49" E, a distance of845.79 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°46'53" W, a distance of 2,479.20 FEET, to a point for a deflection right;

THENCE, S 89°59'21" W, a distance of2,715.08 FEET, to a point for the So_uthwest comer hereof;

THENCE, N 00°38'54" W, a distance of 1,910.27 FEET, to a point for a deflection right;

THENCE, N 00°17'52" W, a distance of3,432.25 FEET, to the POINT OF BEGINNING, containing 639.48 acres of land, more or Jess.

Basis of Bearing: G.P.S., TIC South Zone, NAD-27

. ·;~.-

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www.howlandcompanies.com 7615 N, Bartlett Avenue 1 P.O. Box451128 (78045) ; Laredo, 1X78041 P. 956.722.4411 I F. 956.722.5414 TBPE Finn Registration No. F-4097 TBPLS Firm Registration No.100464-00 EXHIBIT "A-7" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 N RETAINED TRACT 7 (VAQUILLAS RANCH co., LTD. WEllS No. 5, No. 8, No. 23, No. 25, No. 33 ST, & No. 64) 639.48 ACRES WEBB COUNTY, TEXAS I -¢-VAQUILLAS RANCH Ji CO. LTD. No . .31 ' r.: ' ;:1 I • SURVEY 1635 I' j~'f!i

J T.C. R.R. co. SURVEY 665 ABSTRACT 1797 • H. & G.N. R.R. co. . I' ABSTRACT 1438

VAQUIUAS RANCH POnft OP;) 1 llllllNlllllC CO. LTD. No. 3-¢- N 89'54'09• E ,.. 1,787.82' I N 89'35'00- E ,.. 3,454.97' ---- N 09'35'49" W~ ''I lII 1,417.68' I I \

.- I lia lJi!!. SURVEY 1683 C.C.S.D. & R.G.N.G. R.R. co.

!-e;,,,. II II ABSTRACT 1115 ~ VAQUILLAS RANCH WEBB COUNTY, TEXAS CO. LTD. No. 64

" ' VAOUILLAS RANCH-¢- CO. LTD. No. 2J ! ~ VAQUILlAS RANCH ~ 8::.:: "' :g CO. LTO. No. JJ ST §" ' ""'"' z O (SHL) CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 26,622.79 ACRES {CALLED) ." m l; -o ~ §1t> !5,;. 01b; RETNNED 639.48 ACRE UNIT s "' "' "'< " --------!:; VAOUILlAS RANCH CO.~ LTD. No. JJ ST (BHL)

s VAOUILLAS C~N&~.-¢- C>

No. 53 ' -¢- ii;" :------· VAOUILlAS RANCH VAOUILLAS RANCP- CO. LID. No. 5 -¢- CO. LTD. No. 8 ~

VAOUILLAS RANCH SURVEY 467 A. B. & M. ~ CO. LTD. No. 25 !:DI ~I":

ABSTRTACT 799 z ~~ S 89"9'21· W ,.. 2.71S.08' I s 89"48'53. w- 2.479.20' " • ' • • SURVEY 1684 ' ' ~

I• I' D. B. GRACY ABSTRACT 2910 I ~oco - ... "'"'- >-a:; u ' • SURVEY 1684 •' [::!"« 1----------- ___J G.T. BLACK ABSTRACT 2698 I• "'-~ p~Cl'l ., .. <;;] GRAPHIC SCALE ' ~

-- )or• ~~ •J-' ( IN ft:ET) I lnc:h • lOOOR. ·~ I =I I• LEGEND R•vlston Dola

HOWLANf3 ENGINEERING ANO SURVEYING CO. 0 -¢- • UNIT UNE = HORIZONTAL waL SURf'AC( l.OCA.TION o~ ' ' 04-06-13 0~17-13

06-06-13 •' TI!PE Fm Rtp:lr_, No. F-«m TBPL.S Arm~ Ne. 100ol&4-0CI _ , _ =FDIC£Ul'lt: tr.nN.IW'6ti;A-.o ......,._ lX. J'e

WARNING: BASIS Of" BEARING: G.?.S. fa. South Cantrol Zona, NAO. 11«S l'tAT W.Y NOT SHOW AU. C!!OSStlCS Of PIP£l.NES OR C>.9l£S- HCN!J.110 DIJ!S>F OR LLSS0R. l1ll:5 DRA1nHC w«: fXCl.USMl.Y RIR IUIUNCTON ~ 0A<: CO. IP. '" CHECKED BY; J.s. JOB No. 22131.7 COP'tRICl!T \\O'Wl\H

FIELD NOTES FOR CONOCOPHILLIPS COMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 8 (V AQUILLAS RANCH CO., LTD. WELLS No. 29 ST, No. 53, No. 61, No. 71, AND STATE G.U. No. 1-R & No. 15) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 467, A.B. & M., Abstract 799, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 71°42'56" W, a distance of3,308.04 feet, from the Vaquillas Ranch Co., LTD. No. 29 ST Well;

THENCE, N 89°34'30" E, a distance of3,072.45 FEET, to a point for an exterior comer hereof;

THENCE, S 00°10'42" W, a distance of54.13 FEET, to a point for an interior comer hereof;

THENCE, S 89°49'18" E, a distance of2,249.93 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°38'54" E, a distance ofl,856.13 FEET, to a point for a deflection right;

THENCE, S 00°10'56" E, a distance of1~31.92 FEET, to a point for a deflection right;

THENCE, S 00°33'35" W, a distance of 1,995.98 FEET, to a point for the Southeast corner hereof;

THENCE, N 89°58'23" W, a distance of 5,333.62 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°22'48" W, a distance of 1,945.34 FEET, to a point for a deflection right; : .i

THENCE, N 00°19'36" E, a distance of3,274.41 FEET, to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

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www.howlandcompanies.com 7615 N. Bartlett Avenue I P.O. Box451128 {78045) ! Laredo, TX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 I TBPLS Firm Registration No. 100464-00 EXHIBIT "A-8" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 N RETAINED lRACT 8 {VAQUIUAS RANCH CO., LTD. waL.S No. 29 ST, No. 53, No. 61, No. 71, AND STATE G.U. No. 1-R &: No. 15) 640.00 ACRES WEBB COUN1Y, TEXAS SURVEY 1632 FRANK BARREIT 'I' ' ' -:.=.._""'X" .; ~x ABSTRACT 2140 _ _ _ , _ _ , __ , __ , _ _ , __ , Tii I SURVEY 1635 ' 0 T.C. R.R. CO. ' VAOUIUAS

i~-.~.~.~. . .". RANCH ABSTRACT 1797 I' No. .33 ST (SHL)

' ' ~.. ~.,~ -~2.49"'. . 0 L... -... .....ol'J E -· '.072.''' • - ...... s OO'to'42• w I I ..o:: .... .;t""""- u

........................... !! ., • 54.13' I VAQU!LI..AS RANCH ;., 71 --...

~ ~~g CO. LTD. No. 29 ST (SHL) · ' VAOUILL.AS i5 :> ... "' "'u~ "' VAQUIUAS RANCH-O- RANCH en ~m CO. LTD. No. 29 ST STATE G.U. ci (BHL) No. 15 >--· .. --••• {BHL) o § 0 A V 1&1 "' - co>oci z CONOCOPHILLIPS COMPANY -¢- VAOUILLAS «>UN

~~t; VAQUIUAS RANCH LEASE 199129-001 VAQUILLAS RANCH RANCH 26,622.79 ACRES (CALLED) ~"'.~ CO. LTD. No. 61 STATE G.U. RETAINED &40.00 ACRE UNIT No. 15 (SHL) "!De-< :::::> t:i 00 "' ~ "' ·------ SURVEY 46? A.B. & M. >--------- ABSTRACT 799 WEBB COUNTY. TEXAS ., 1o

t ' ~

z VAOU!LLAS RANCH-¢- STATE C.U. No. 1-R I "' -:Je.. >-"' u "'"' "'"'"'"'

~"g I I' N 89"58'23• W ,,.,, !S.333.62' -¢-VAOUILLAS !3 ci"' SURVEY 468 CO. LTD. No. 20 RANCH "' ~ N.B. GOSSETT ABSTRACT 2255 '

-¢- -¢- I VAQUILLAS RANCH CO. LTD. No. JO V Y..t. VAOUILLAS RA.'ICH '' VAQUILLAS RANCH STATE .G.U. CO. LTD. No. 11 I ,----- No. 5

'• ' GRAPHIC SCALE ' ~--A..J--~ 1; 'j .'' VAOUIUAS RANCH (II( IIlT) I lnok • 1DOOfl. -0-CO. LTD. No. 59

!.£GENO R•vhlon ,,.,. HOW!L~B~lfi) : HORIZONTAL WELL 04-12-IJ

ENG1NEER1NG AND SURVEYING CO. l1Wfl'tm~Ho.'F-4W7 lBPLSFITll~No:l,1004&4-00 74l~N.- ........ L...so. 'IX.79Colt F'.~722M11 www.howlandcompanies.com _, __ SURFACE LOCATIOH ~ UNIT I.DIE F"EHC[ UNE Tio; 10-18-13

f--~~~~~~~~~~~~~~~~~~11~--~ SUl!Vt'I' UNE ~ St.SIS OF BEJ.RlliG: G.P.S. Tx. Soult\ Zone, N.A.D.-27. I:":~~~::;:=:;;;:"=:':':'~~~'.";=:=;:==::::=:=:=:=:=:=: THIS PLAT 1111'1'" tor 9Cll' NJ.. CROSSf'1GS Of Pffl.ltlts OR c..aJ:S. HOW1.N10 EllG!Nt[RIH(; FlElD DATE BOOK PAGEfsl DRAWN BY: lAF./5.1.M. :'a%.~~~~ :r~~~~~OWN~~ NA NIA NIA CHECKED EJ'(: J.S. u;ssoR. tlllS" O/Wll!Ne 11,0.oE: DCeU.1$Ml.T fUR CCltfQCOPtlllUP r:ll>M'N«. JOB No. 2ZU1.6-1.l COl'l'RIQfl llOWINIO El!C1!£ERf!G Nil SUIM.YNl 00., J'IC. 2013CI SHEET: 2 OF 2 HOWLA~~D ENGINEERING AND SURVEYING CO.

EXHIBIT "A-9"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 9 (VAQUILLAS RANCH CO., LTD. WELLS No. 39, No. 40, & No. 46) 635.23 ACRES

A TRACT OF LAND CONTAINING 635.23 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1633, G.C. & S.F. R.R. CO., Abstract 1323; and Survey 467, A.B. & M., Abstract 799,Webb County, Texas, and being more particularly described as foUows:

BEGINNING at a point which bears N 66°46'35" W, a distance of 1,328.20 feet, from the Vaquillas Ranch Co., LTD. No. 40 Well;

THENCE, N 89°30'45" E, a distance of2,492.56 FEET, to a found fence corner post, for a deflection right;

THENCE, N 89°32'27" E, along an existing fence line, a distance ofl,572.15 FEET, to a point for a deflection left;

THENCE, N 89°29'25" E, continuing along said existing fence line, a distance of 2,016.77 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°33'08" W, a distance of 1,348.09 FEET, to a point to an exterior corner hereof;

THENCE, S 89°34'30" W, a distance of80.70 FEET, to a point to an interior comer hereof;

THENCE, S 00°19'36" W, a distance of 3,274.41 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°52'00" W, a distance of 5,977.93 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°06'46" E, a distance of4,585.15 FEET, to the POINT OF BEGINNING, containing 635.23 acres of land, more or less.

Basis of Bearing: G.P .S., TX. South Zone, NAD-27

SHEET I OF2 H:\HOWLAND\SURVEYmG DEPARi'?'>fENNoln\2013\22131. 9-13\22131.9-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue 1 P.O. Box 451128 (78045) i Laredo, lX 78041P.956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 TBPLS Firm Registration No. 100464-00 EXHIBIT "A-9" CONOCOPHILLIPS COMPANY VAQUILU\S RANCH LEASE 199129-001 N RETAINED TRACT 9 (VAQUIUAS RANCH CO., LTD, WELLS No. 39, No. 4-0, & No. 46) 635.23 ACRES WEBS COUNlY, TEXAS

:'·I ., -----, SURVEY 1631 G.C. & S.F. R.R. CO. I! I j

:1 A ABSTRACT 1317 SURVEY 1632 '' 1·.l FRANK BARRE'IT ABSTRACT 2140 I ,I I i . H 89"32'2r E N 89'29'25" E 't;::::::.:~~-;....::"°:':46~::.;:~N:::::..:.. ~.?-""':.:-..:::::::::;i;:::::.:•~•~'=':"':2.::;.;l~;O;•:.::::o.:•:.:•..;:::::..;:•~2:.;0;1;•·:"::;.;'-:.:•..:::::::}- . t - ........ }{ .... ~fi't6, 1.J2;;~· II' l· Ira , _ _ _ ,_

-<'o"'l ... .._, I ~---,-.222'----=¢-VAQUILLAS RANCH SURVEY 1633 CO. LTD. No. 40 G.C. & S.F. R.R. CO. ABSTRACT 1323 WEBB COUNTY, TEXAS ----- "' -¢-VAQUJLI.AS RANCH s 89".34'30. w CO. l TO. No. 39 60.70'

CONOCOPHILLIPS COMPANY VAOUILLAS RANCH LEASE 199129-001 26.622.79 ACRES (CALLEO) RETAINED 635.23 ACRE UNrr

-¢-vAaUlllAS RANCH CO. LTD. No. 46

I'---- ~ "' "' ..,.,.,... ,['-

0 w ... ~"'~ > .... "' " ,..... s 89"52'00" 5,9nSJ' [3~:;: '

~ ---JJ.: 1 ~ (l!lfWJ 'j - 1ooon.

LEGEND R•Ylslon

HOWLffif!N~ENGINEERING ANO SURVEYING CO. --'-- 0 __ , __ -¢- =HDRl20t(JAL WELL "' ~~ACE LOCATIDH UMIT UHE 04-12-13 06-17-lJ 06-06-13 1llPE AnnRagllhO:n HIO,f-4097 TtlPl.S f\'m RagllhO:n H<>. 1-.00 Til1,~Botto!IA..-.. i.a.-,T.ll.1Dl1 P.115&.n2M11 FnlCE LINE 10-18-13 www.howlondc:ornpanles.com n" SlJRVtY UHr ~ BASIS OF BEARlNG: G.P.S. Tx. South Zona, NAD.-27. 11WS Pt.Ill ""'T H!ll' StEll MJ.. Cl!OSSllC:S Df PIP£l.JNCS OR C'8.£S. HOllll.JiliO EliGll LDC.I.IE ~ ~ c:oa.I: CROSSllfGS. ~ni:s~~~~~~fll~O>I FlELO DATE

" '"" ,,. . DRAWN BY: LAFJS.l.M. CHECKED BY: J.S.

CCIP'lll!tl'1" "°"""""° ~ AHO SUi\01tlG CO., t-H;, 20130 JOB No. SHEET: 22131.9 IJ 2 OF 2 HOWlMANlt~ ENGINEERING AND SURVEYING CO.

EXIDBIT "A-10"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 10 (VAQUILLAS RANCH CO., LTD. WELLS No. 27, No. 43, No. 44, No. 59, No. 73, No. 74 & VAQUILLAS RANCH A-2 No. 6) 640.00 ACRES

A TRACT OF LAND CONTAlNING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 468, N.B. Gossett, Abstract 2255; North V, of Survey 166, A.C. Gaeth, Abstract 3142; and Survey 1634, N.B. Gossett, Abstract 2252, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 29°17'05" E, a distance of2,149.76 feet, from the Vaquillas Ranch Co. Ltd. No. 44 Well;

THENCE, S 00'31'13" E, a distance of3,087.94 FEET, to a point for the Southeast corner hereof;

THENCE, WEST, a distance of7,909.49 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°00'03" W, a distance of 1,852.04 FEET, to a point for an interior comer hereof;

THENCE, S 89°43'42" W, a distance of3,039.93 FEET, to a point for an exterior comer hereof;

THENCE, N 00°12'49" W, a distance of 1,198.42 FEET, to a point for the Northwest corner hereof;

THENCE, N 89°43'43" E, a distance of 10,925.96 FEET, to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

:f. Basis of Bearing: G.P.S., TX. South Zone, NAD-27

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www.howlandcompanies.com 7615 N. Bartlett Avenue i P.O. Box451128 (78045} I Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Finn Registration No. F-4097 t TBPLS Firm Registration No. 100464-00 .... ___ .. .. .. .. .. .. 1 l• -¢- • SURVEY 1684

~ G.T. BLACK VAOUILlAS RANCH CO. LTD. No. 20 • ABSTRACT 2898 SURVEY 1834 N.B. GOSSETT • I• VAQUILLAS RANCH CO. VAQUILLAS RANCH CO. I• <:~P] LTD. No. 11 ABSTRACT 2252 LTD. No. JO -¢- VAQUIUAS RANCH-¢- • -¢- ~ • I STATE G.U. No. 5 \BIGllOOllG j N 8V43'43" E ... 10,925.96' I j

• I I

" •• ' • I ~I

''' ~/ '-··--··- ~i CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 I• VAQUlLLAS RANCH CO. LTD. No. 73 ''' """':,' ll:: 26,622.79 ACRES (CALLED) -¢- " ~' z RETA!~ &40.00 Jal£.. UNrT

··-··-··-··-i • -¢- VAOUILLAS CO. LTD. No. 59 RANCH bl

~· ~· ' 4/ • .~/ f> I I

.. ~ VAQUILLAS -¢- ''' VAQUILLAS RANCH s 89""43'•2• w ,.. 3,039.93' ~I RANCH CO. CO. LTD. No. 43-¢- I ~ i.' I LTD. No. 24 I SURVEY 468 ' I I 0 NORTH 1/2 SURVEY 1868 A.C. GOETH ABSTRACT 3142 II I -¢-vAQUJLLAS RANCH CO. LTD. No. 74 N.B. GOSSETT ABSTRTACT 2255 WEBB COUNTY, TEXAS VAQUILlAS RANCH CO. LTD. No. 44 '" -¢-----!,Q.Sf ___ ' ;"' ;;; _,,, ; ro~~ u,.. .f.D

>- . t; SURVEY 1665 ~ I -¢-VAQUlllAS RANCH ll [;'"'"" ,,,"'[:: 8 VAQUILLAS RANCH CO. LTD. No. 27 "' -¢- C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 1124 ll z A-2 No. 6

I I I '"'"" "' u .';';] ..; I '-r VAQUILLAS RANCH WEST ,... 7.909.49' -¢- • CO LTD No 32 -¢- I VAQUILLAS I VAQUILLAS RANCH I I RANCH CO

L .. ---------··--·. - .. _ :o~ :_": _'_j_t~o- ~'- .. I

I 500 Po;;•.- -~~ GRAPHIC SCALE

·-I ,_ I I • (ti rt:ET) I Inc~ • 1000fl I EXHIBIT "A-10" LEGEND Ravl•!on "'" HOWL.AND ENGINEERING AND SURVEYING CO. CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 0 -¢- = HORIIONTl.1. W£U •WW. SURFAtr tOCAOON

' ' 04-1.:l:-1J 05-17-\J 00-00-13

•' TBPEFkm~No.F-oCOV'I lBPLllFm.~IC>.1CXMS4-0:l • UNIT UH[ _ , _ . , rEHCE UH£ 78'5N.llullollA...,. u..da,TX.76041 P.~r.,7Z2M11 10-U~-IJ www.hoWlandeompanles.com RETAINED TRACT 10 - - - - - - - = TICS 11-27-13 WARNING· BASIS OF BEAAING: G.P.S. T1t. S

FlELD OA.lE • SURVCY UNE

1 PACE 11 11 "RAWN BY; ' nllS PIJ,f W.Y lfO'f $HOft ALI. CROSSIHGS Of PIPEUl!ES OR C08lD. llO'fl'l.NC) DIQHFXRINC HlO Sll1M:YIHG CO., IHC. "5S\llil!$ NO R£Sl'ONSl81LnY TO LOC\Tt: PIPCM Oii eoa..E CltQSSIH(:S. No. 59, No. 73, No. 74 & VAQUIUAS RANCH A-2 No. 6) 64-0.00 ACRES "1' "'" "1' N/A II A.LC.'S.1.1.t. CHECKED BY: J.S.

- ~~~~"':s~~:gr~Rf'~~ rn: O'llWElmlP OR WEBB COUNTY, TEXAS -, II JOB No, 221.:n.11-n COPTlllQ{f ttO'll\,.IHJ D

,~, -· --·- ' II SHEET: 2 OF 2 ~ ~$,]~ HOIQ[llj 'WWA~~~U::lhb' ENGINEERING AND SURVEYING CO.

EXHIBIT "A-11"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 11 (VAQUILLAS RANCH CO., LTD. WELLS No. 7, No. 12, No. 18, No. 22, No. 24, No. 35, No. 51, No. 65, No. 67, & No. 68) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1691, G.C. & S.F. R.R. CO., Abstract 1267; Survey 1696, G.C. & S.F. R.R. Co., Abstract 2418; North Y, of Survey 1666, A.C. Gaeth, Abstract 3142; and South Y, of Survey 1666, N.B. Gossett, Abstract 2253, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 67°14'28" W, a distance of 873.05 feet, from the Vaquillas Ranch Co. LID. No. 24 Well;

THENCE, N 89°24'40" E, a distance ofS,260.70 FEET, to a point for an exterior comer hereof;

THENCE, S 00°22'59" E, a distance of 1,911.15 FEET, to a point for an interior corner hereof;

THENCE, EAST, a distance of 1,816.67 FEET, to a point for an exterior corner hereof;

THENCE, SOUTH, a distance of 3,271.85 FEET, to a point under an existing fence line, for the Southeast corner hereof;

THENCE, WEST, along an existing fence Jine, a distance of 4,066.67 FEET, to a point for an interior comer hereof;

THENCE, SOUTH, a distance of 50.64 FEET, to a point for an exterior corner hereof;

THENCE, S 89°32'20" w. a distance of249.8S FEET, to a point for an exterior comer hereof; ~ i THENCE, NORTH, a distance of 1,930.06 FEET, to a point for an interior comer . hereof; ' THENCE, WEST, a distance of2,743.83 FEET, to a point for an exterior comer hereof; " ~ ;"~~- ·~ ·~Iv.-. THENCE, N 00°31'13" W, a distance of3,251.63 FEET, to the POlNT OF :.~\,: . BEGINNING, containing 640.00 acres of land, more or less.

SHEET 1 OF2 H:\HOWLA ND\SURVEYING DEPARThffiNl\Jobs\2013\22131.12· I3\2213 I. 12-13.doc

www.howlandcompanies.com 7615 N. BartfettAvenue , P.O. Box451128 (78045) l Laredo, lX78041P.956.722.4411 F. 956.722.5414 TBPE Arm Registration No. F-4097 ; TBPl5 Firm Registration No. 1004&4-00 EXHIBIT "A-11" CONOCOPHILLIPS COMPANY VAQUlli.AS RANCH LEASE 199129-001 N RETAINED TRACT 11 (VAQUlli.AS RANCH CO., LID. WELLS No. 7, No. 12, No. 18, No. 22, No. 24, No. 35, No. 51, No. 65, No. 67, & No. 68) 640.00 ACRES WEBS COUNTY. TEXAS

-¢- SURVEY 1684 VAQUlllAS G.T. BLACK RANCH A-1 No . .3 ABSTRACT 2698

N 6714'28' W m:os---- - - - • .. - .... - .... - - - - - - - VAQUlll.AS N 89"24'.W- E ,.. S.260.70° RANCH ... ___ -- ,, '!§!

-~·--".:-:¢- VAOUILLAS RANCH CO. -¢- VAOUILLAS RANCH CO. VAQUILLAS RANCH A-1 No. 7 -¢- A-1 No. 214

¢- (BHL}

VAQUJUAS LTD. No. 24 LTD. No. 7 RANCH VAOU!LLAS A-1 No. 214 SURVEY 468 -¢- RANCH CO. (SHL) LTD. No. 67 A.B. & M. SURVEY 1698 ABSTRACT 2255 G.C. & S.F. R.R. CO. ABSTRACT 2418 CONOCOPHILLIPS COMPANY VAQUlLLAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) VAOUILLAS EAST ,... 1,818.67" RETAHD 540.00 ACRE UNIT -¢- RANCH CO. LTO. No. 12 SURVEY 1691 z VAQUILLAS G.C. & S.F. R.R. CO. -¢- RANCH CO. VAOUILLAS ABSTRACT 1287 LTD. No. 51 -¢- RANCH CO. WEBB COUNTY, TEXAS LTD. No. 18 VAOUILLAS RANCH CO. LTD. No. 65 . Q(SHL) WEST - 2.743.83" VAOUILlAS -¢- · VAOUILLAS

NORTH 1/2 SURVEY 1666 ~--·::! RANCH CO. LTD. No. 65 -¢- RANCH CO. LTD. No. 35

----- ------- --- --. A.C. GOETH (BHL) ABSTRACT 3142

VAOUlllAS ~ VAQUILLAS _n_ RANCH CO. >i\..j RANCH co.¥ SOUTH 1/2 LTD. No. 68 . VAOUILLAS LTD. No. 22 SURVEY 1666 (BHL) RANCH CO. LTD. No. 68 N.B. GOSSETT (SHL) ABSTRACT 2253

--- --- --- --- --~===---==:::~~~.----~i-.. ...., SOUTH ,.. &>.64' WEST ,... 4,066.67 s 89"32'20• w 249.85'

SURVEY 1678 C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 2495

-------- GRAPHIC SCALE 1000 2000

~~~I (~FEET) 1 one~~ IOOOF\.

U:GEMD Ruisi on Dot•

HOWLAND ENGINEERING AND SURVEYING CO. TBP£ firm f!ookn!tln No.""4Wl' TBl'L!I ~ 118'1*"°"' ..... 1(l(ll64-00 _ 0 -¢- _.._ _ " __ , _ = FE!tCt "' HORIZONTAL WELL

. ""' SIJ!IFAC[ LOCATION UNIT UHt UNt 2 05-17-13 060613 08-14-13 76\SH.- ...VOBJO ~.TJC.lflCM• P.lloSll.722.4411 - - - - - - - ,. TJES 10--18 13 www.howlandcomp&oles.com - • • - •SURVE'l'UN£ 11-27-13 ~ a.\SIS OF BE.ARING: G.P.S. Tx. South Zono, N.A.D.-27. FIELD DATE ,. PAGE a

"'' lHS Pl.AT MAY tlOT SHOii' >LL CRQ$$lllG$ Of' Pl>£IJl6 OR C>.l!U3. HCMV.H0 ~ DRAWN BY: U..F./S.1.1.4. NID Sl..1IM:Tlle CO.. M:. ASSUt45 NO l!£SPClt

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 12 (VAQUlLLAS RANCH A-2 WELLS No. 4, No. 38, No. 68 & VAQUlLLAS RANCH CO. LTD. No. 2, No. 32) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 468, N.B. Gossett, Abstract 2255; North 112 of Survey 1666, A.C. Gaeth, Abstract 3142; and South l/2 of Survey 1666, N.B. Gossett, Abstract 2253, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 65°04'35" W, a distance of5,456.00 feet, from the Vaquillas Ranch A-2 No. 38 Well;

THENCE, EAST, a distance of7,909.49 FEET, to a point for an exterior comer hereof;

THENCE, S 00°31'13" E, a distance of864.99 FEET, to a point for an interior comer hereof;

THENCE, EAST, a distance of2,743.83 FEET, to a point for an exterior comer hereof;

THENCE, SOUTH, a distance of 1,930.06 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°32'20" W, a distance of 10,661.34 FEET, to a point for the Southwest comer hereof;

THENCE, N 00'00'13" W, a distance of2,880.79 FEET, to the POINT OF BEGINNING and containing 640.00 acres of land, more or less.

Basis of Bearing: G.P.S. 1 TX. South Zone, NAD~27

SHEET10F2 H:\HOwt.AND\SURVEYrNG OEPARTMENl\Jobs\2013\22131.13· 13\22131. I3-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue , P.O. BoK451128 {78045) Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 TBPl5 Finn Registration No. 100464-00 ---------------------------------

I I I ' ' I' A VAQUIL.1-'S VAQUILLAS ¥RANCH CO. -¢- RANCH CO. SURVEY 1691 LTD. No. 74 LTO. No. 44 G.C. & S.F. R.R. CO.

~~ VAQUILLAS -¢- RANCH LTD. No. 27 CO. ABSTRACT 1267 VAQUILLAS RANCH CO. LTD. No. 12 -¢- JI ~~ ::z: I

I! '¢' VAQUILlAS £AST ,.. 7,009.-49' I VAllUILLJ>S ~­ ~ .,-g ~ .,. -¢- YAQUI LL.AS RANCH CO. VAQUILLAS

',, L LTD. No. 51 ....... ................ 1 RANCH CO LTD. No. 32_ I : SURVEY 468 RANCH CO.y LTD. No. 2 -¢- RANCH CO. N.B. GOSSETT ~:Ii LTD. No. 18 VAOUILLAS I !!~ RANCH CO. i!; '',,, : ABSTRACT 2255 EAST ... 2,74J.83' LTD. No. 65

2 '-.. N ',!.S·~· • - - - · · --··--·~--· · - - · • - - · · - - •• I "' {SHL)

~ -,_;.,. "· '" • I ~I I VAQUILlAS -¢- . 0 l ................... .s VAOUILLAS "!.: NORTH 1/2 SURVEY 1666 1 RANCH CO. 65 ~ .... - .... -- "" -- .... - . .::~~ ? A-~~~~ ~: 1 LTD. No.

8 68 A.C. GOETH, ABSTRACT 3142 ----,:-- ---- -:---- - -- ,..,v;a-u1;:;::;s • --- -- --- - -- -- -- - - --- - '' yRAN~ a1 8 ~ (BHL) VAQUILLAS RANCH CO. LTD. No. sa.n.,,__ ~ ........ iI A-2 No. 4 SOUTH 1/2 SURVEY 1666 l (8HL) "'l"\J VAQUILLAS z 4,948' ................... 1 VAOUJLLAS CONOCOPH1U1PS COMPANY N.B. GOSSETT ~ • RANCH CO. --------------------------------------------------V;A- 2RANCH VAQUJLLAS RANCH LEASE 199129-001 ABSTRACT 2253 • LTO. No. ea

r· __. No. 38 26,622.79 ACRES (CALLED) WEBB COUNTY, TEXAS {SHL) RETNNED 640.00 ACRE UNT

! I ......·20· w - to...,.... ! 'I.-.-·- 1 SURVEY 1678 SURVEY 1667 I C.C.S.D. & R.G.N.G. R.R. CO. GRAPHIC SCALE C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 1125 SURVEY 1677 C.C.S.D. & R.G.N.G. R.R. CO. I ABSTRACT 2495 ~ o L:.U 1j J.·.·---- { IH tUT} 2000 I ' ABSTRACT 1130 ' ' I 1 noh - nx19n I LEGEND R1vl1lon Dalo EXHIBIT "A-12" HOWLAND ENGINEERING ANO SUR\ISYINQ CO. CONOCOPHILLIPS COMPANY 0 -¢- • HORIZOHTAL 'flEl.L SURrACE LOCATION • WELl • UNIT UNE ' ' 04-11-\J 05-17-13 oe-oe-u •' Tll!'fRTTl~l!o.F-4081 TBPLS Rom~ No.100464-00 76151<1..e...:IMIA- Llt.:lo. lX.18041 P.9:i&.m..u11 VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 12 - - >- - • rEHCE UHE 10-18-13 www.hOINlandeompanlM.com - - - - - - - • 11£S (VAQUIUAS RANCH A-2 WEI.LS No. 4, No. JB, No. 68 & - • • - ,. SUll\ICY UHE 11-27-13 WARNING: BASIS Of B&.RINC: C.P.S. T1. South Zone, N.A.0.-27. nn PLAT MAY r«IT SHC# Ju. Cf!OSS.fjll! or c.oau::s. f«IW'lNCI OCH~ Plf'EL.IHl:5 Oft VAQUIUAS RANCH CO. LlD. No. 2, No. 32) FIELD DATE I BOOK I PACE(t) II DRAWN BY; ' L.A.r./S.l.M. HID SURY£'11t1G CO~ lllC. AS'SIJll£S HO RtSPONSIMITT TO LOCATt PIPWNE Oft CAEl.E CllOSSNGS.. 640.00 ACRES N/A I N/A I N/A II CHECKED SY: J.S. ~nt:HO~~Ml."J'TJ.r~WPS~ IU OWICJtSHI' OR WEBB COUNTY. TEXAS I I 11 JOB No. 22131-:13-13 COl'TIUGNT HOWl»IO OIDIN1'.JJUN(I ANO Sl/INt'l'NJ CO., H:, 2013C I SHEET: 2 OF 2 H.\llOWWI~ OCP~U\221JUJ..ll\Ul.ll..1J..ll.<1vo9. IJIJl0)1~ U.~20IN.l.-POF EXHIBIT "A-13"

FIELD NOTES FOR CONOCOPRUJJPS COMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 13 (VAQUILLAS RANCH A-1 WELLS No. 3, No. 7, No. 33, No. 144, No. 156, No. 163, No. 214) 636.53 ACRES

A TRACT OF LAND CONTAINING 636.53 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1696, P.B. Reynolds, Abstract 2418; and Survey 1695, G.C. & S.F. R.R. CO., Abstract 1268, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 53°13'51" W, a distance of 1,137.24 feet, from the Vaquillas Ranch A- 1 No. 3 Well;

THENCE, N 89°19'22" E, a distance of 6,735.31 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°58'29" E, a distance of 4,150.50 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°19'59" W, a distance ofll.75 FEET, to a point for a deflection right;

THENCE, N 89°52'06" W, a distance of 4,950.94 FEET, to a point for a deflection left;

THENCE, WEST, a distance of 1,816.67 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°22'59" W, a distance ofl,911.15 FEET, to a point for a deflection right;

THENCE, N 00°21'20" W, a distance of2,147.98 FEET, to the POINT OF BEGINNING and containing 636.53 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYING DE>ARTMEN1\JobsU013U2131.14-13U2131.14-13.doc

www.howlandcompanies.com 7615 N. S

·; h" I·. SURVEY 1697 T.M. R.R. CO . J.11 .q. ~ r:P0t;. OJ' ABSTRACT 1813 "'"'"'I co u ;:lt;. \; C\l '-BBGINHING - _,_,_,_ ~;· ~"'ii!· z~ [/)~ ~ &J:l ~r -ab:..:~:.-...~~.;-...:z::..-:.:.-.:z::..:-"'-r.,.:."N~...~··~·22~"_!E~-·~·~"7~35.3~~··:.:·.:-:..:=c:•:..•:..:=:..:·,:·:.,:=:..:•:..:•.:=~-- • ''~,~ J ;'/ ~ ~~)~s,. ~ -¢- • ,..: ·

VAQUIU.AS RANCH il / 26,622.79 ACRES (CALLED) RETMNED 830.oJ """" UNlf VAOUILLAS ... VAOUILLAS A-1 No. 214 -¢- RANCH RANCH {BHL) A-1 No. 144 A-1 No. 7 -¢- 0VAOUJLLAS VAQUIUAS RANCH A-1 No. 156 RANCH SURVEY 1696 (BHL) "' "' .,' A-I No. 214 (SHL) P.B. REYNOLDS ABSTRACT 2418 0 VAOUILLAS """""'' ~~ WEBB COUNTY, TEXAS RANCH

I z I A-1 No. 156 (SHL)

WEST,.. 1,816.87' I N 69"52'06" W .... 4,9~.94' SEEL __ J DETAIL

DETAIL: N.T.S.

SURVEY 1691 G.C. & S.F. R.R. CO. s 89"19'59• w SURVEY 1692 11.75'\ ABSTRACT 1267 P.B. REYNOLDS ABSTRACT 2419 VAOUILLAS -¢- RANCH CO. VAOUlLLAS-¢- LTD. No. 35 RANCH VAOUJLLAS A-1 No. 73 VAQUILLAS RANCH A-l No. 106 RANCH CO.'¢- LTD. No. 22 (8HL) VAQUILLAS VAQUILLAS -¢- RANCH -¢- RANCH GRAPHIC SCALE VAOUILLAS VAQUIUAS A-1 No. 198

... A-1 No. 24 ~9;~00 1000 2000-¢- RANCH 0 RANCH (BHL) ~~·-~-··~"'=~~~~-iiiiii"''~~~~""il (IH F"EE1) A-I No. 72 A-L (~~l.) 1 O~ -¢- O 1 ltl

Rnblon Def•

HOWLA~~ENGINEERING ANO SURVEYING CO. " HORIZONTAL WELL • wru S\JRl"Act LOCATION 1 2 3 041113 05--17-13 06 06-13 TllPEFm~No.~ TBl't.Sl'hfl~tto..1004&4-«I 7815H.llotllot.....,._,. t.-., TX."lllOll P.llM.1'22-"ll 4 08-14-13 www.hrNU ~ Of PPEl.JNES QI. coaIS. ltC7lilHIO ~ NID SIJl!YE'VIHC co_ INC. ~ lfO RESPa

"" ,,. '"" PAGE s

"" DRAWN BY: CHECKED B'I': LAF./S.l.M. J.S. lLSSOll. '!MIS CfWl'M'.: W.0C CXCUISMJ.Y fCR CCHOCOPtlU.l"S Cf>U'Nrr. JOB No. 221ll.14-1J c:a>l'RIGHT llOWlNlO ~ >16) SU1MW1G CO., INC. 2013C SHEET: 2 DF 2 HOW~~~[lW ENGINEERING AND SURVEYING CO.

EXHIBIT "A-14"

FIELD NOTES FOR CONOCOPHILLlPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 14 (VAQUILLAS RANCH A-1 WELLS No. 18, No. 35, No. 85, No. 155, No. 185, & No. 240) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1695, G.B. & C.N.G. R.R. CO., Abstract 1268, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a found 2" pipe which bears N 41°50'50" W, a distance of 1,969.80 feet, from the Vaquillas Ranch A-I No. 35 Well;

THENCE, N 89°21 '27" E, a distance of 6,725.49 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°48'50" E, a distance ofl,999.05 FEET, to a point for a deflection right;

THENCE, S 00°39'16" E, a distance of2,150.00 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°20'44" W, a distance of 6,707.86 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°58'29" W, a distance of 4,150.50 FEET, to the POINT OF BEGINNING and containing 640.00 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYrNG DEr ARTMEN1'Jobs\2013\22131.15-13\22131.15-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue . P.O. Box451128 (78045) , Laredo, TIC 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 , TBPLS Firm Registration Na. 100464-00 EXHIBIT "A-14" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 - RETAINED TRACT 14 (VAQUILLAS RANCH A-1 WELLS No. 1B, No. 35, No. 85, No. 155, No. 185, & No. 240) 640.00 ACRES WEBB COUNTY, TEXAS I I ' ' ' I' ' I' 1i ' 0 t.>" ·"' "''""0:" I SURVEY 1698 T.M. R.R. CO. I Ni:i::..-. >- . t; ABSTRACT 2592 ' ' f:!°"g o:"'

... N 89"21 'ZJ" E ,.. 8,725..49' "'"'"' "' t.>. ~ ej

t ~ '' ' ~ ~: ~' '' ..' '' CONOCOPHILLIPS COMPANY

I"' _- • '•\ : VAQUILLAS VAQUIU..AS RANCH LEASE 199129-001 ~ f.-----1~~'!.'..----~ RANCH 26,622.79 ACRES (CAUED) S A-1 No. 35 RET.NNED &40.00 N:SlE. l»llT :;; .... ~ ' VAOUILLAS -¢-A-1RANCH Iz YAQUlLLAS No. 185

SURVEY 1695 G.B. & C.N.G. R.R. CO. ABSTRACT 1286 -¢- A-1RANCH No. 18 WEBB COUNTY, TEXAS VAQUILLAS VAOU!LlAS -¢-A-1RANCH -¢- A-1RANCH No. 85 No. 155

VAQUILLAS s sg-20·44• w I"' e,101.as• RANCH VAQUJLLAS VAQUILLAS ,..l.,: A-1 No. 215 ~-o RANCH 'I VAOUIUAS RANCH V (BHL) ¥ A-1 No. 215 (>- A-1 No. 191 (SHL) r RANCH A-1 No. 193 VAQUILLAS VAQUILLAS RANCH -¢- RANCH A-1 No. 241A A-1 No. 11 (BHL) '"() VAQUILLAS a UA5 n. RANCH SURVEY 1692 VARA~CH V A-1 No. 241 P.B. REYNOLDS A-1 No. 184 (SHL) -¢- VAOUILLAS ~ ABSTRACT 2419 SURVEY 2112 VAQUILLAS I RANCH ¥ P.B. REYNOLDS RANCH 1 A-1 No. 73 ABSTRACT 2420 A-1 No. 1301 GRAPHIC SCALE VAOU!LLAS -¢- RANCH VAQUILLAS k--J-2L~ 'j VAOUILLAS -¢- A-1RANCH A-1 No. 186 A-1 RANCH No. 212 c .. fE£T) No. 15 1 """' • 1ooon. , (BHL) .(

LEG£ HD R•vlsfon ""'' " HOWlANlW ENGINEERING ANO SURVEYING CO. 0 -¢- - HORIZOHTAL WEU. SURF...a: UICATIOH wru. UNIT UHL ,' 04-12 OS-17-13 06-13 "" •' rapfflnn~N<>.F-40!:f7 TDPl.!l"""~N<>.l~ ITHCE WIE 781~"L-A..,,,. Lan

.'IX.~1 P.1155.nl.44\1 ' ------- www.howlandcompanlet>.com ---- ""' SURVEY WIE I 10-16-13

WARNING: BASIS OF OC>.RlNG: G.P.S. Tx. South Zone, N.A.O. 27. TlfS PlA1 lolNlr'. flElD DATE

"" 900<

"" ' "" . DRAWN SY: LAF./S.l.t.4. CHECKED BY: J.S. JOB No. 22131.\5 13 COP'r!ll(;llf llQWVJll DfCll£IRtfG NfO ~co.• U:. 2013C SHEET: 2 OF 2 . . •Q~1i_ Ho ,;®~ ~1~~.''' 'WWJf.\l!.,.,,;.~\%..&J~~ ENGINEERING AND SURVEYING CO.

EXHIBIT "A-15"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 15 (VAQUILLAS RANCH A-1 WELLS No. 180 & No. 217) 541.82 ACRES

A TRACT OF LAND CONTAlNlNG 541.82 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 279, G.C. & S.F. R.R. CO., Abstract 1353; and Survey 1004, P.B. Reynolds, Abstract 2421, Webb County, Texas, and being more particularly described as follows:

BEGINNING ala point which bears S 54°13'31" E, a distance of2,749.54 feet, from the Vaquillas Ranch A-1 No. 180 Well;

THENCE, S 89°24'49" W, a distance of 5,281.57 FEET, to a point for the Southwest corner hereof;

THENC~ N 00°46'34" W, a distance of2,624.47 FEET, to a point for a deflection right;

THENCE, N 00°30'06" W, a distance of3,119.05 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°45'42" E, a distance of2,654.31 FEET, to a point for an exterior corner hereof;

THENCE, S 00°28'50" E, a distance of2,550.31 FEET, to a point for an interior comer hereof;

THENCE, N 89°35'17" E, a distance of2,653.22 FEET, to a point for an exterior corner hereof;

THENCE, S 00°16'38" E, a distance of3,169.04 FEET, to the POINT OF BEGINNING, containing 541.82 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYING DEPARTMENl\Jobs\20 ! 3U2131.16-13\22131.16-I 3.dce

www.howlandcompanies.com 7615 N. Bartlett Avenue , P.O. Box451128 (78045) , Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Flrm Registration No. F-4097 : TBPLS Finn Registration No. 100464-00 EXHIBIT "A-15" CONOCOPHILLIPS COMPANY VAQUJLLAS RANCH LEASE 199129-001 RETAINED TRACT 15 (VAQUJLLAS RANCH A-1 WELLS No. 180 & No. 217) 541.82 ACRES WEBB COUNTY. TEXAS . ' SURVEY 41

-----\ SURVEY 280 J. LEONARD ABSTRACT 2634 C.C.S.D. & ~ R.G.N.G. R.R. CO. \ ABSTRACT 1039

SURVEY 1698

~~a:c~· i~s21>----"-... ' I

_.._·~-·-·_•_-_.."'".... _.3_,_.___,_ .... __________ -4 ~ SURVEY 279 G.C. & S.F. R.R. CO. ABSTRACT 1353 :i WEBB COUNTY, TEXAS ,.• JI lo p :;i !! z "' '--------- SURVEY 40 C.R. DAVIS ABSTRACT 2203 CONOCOPHILLlPS COMPANY VAOUILLAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) RETAlhEJ 54 t .82 N.!ff£. Ltm'

VAQUILLAS RANCH A-1 No. 180*::--------!~~:_ _________ ! ~ ,. VAOUIUAS RANCHO I 1 r ', ',, ',~ t! .- ,.S.,. ~ •~ A-I No. 217 I -¢- (SHL) • I i'!)'4J• ! ~J "~1i~e "' VAQUILLAS RANCH A-1 No. 104 0 z -- --- ---- .... ---- .. :.:---- ' I VAOUILLAS RANCH ----~ ', .. -- ' . ., A-1 No. 217 -¢- jl '-.,~ (BHL) , VAOUILLAS RANCH/,...------:::::<.---.-.-~-.-.~... -.:'.~W::-_-,-... '-,-.S-7~'----------~'?-~, A-1 No. 240 ,1 "i ' VAOU!LLAS RANCH "'·OA-1 No. 242 ' ~) """ ( POINT DP l 1 VAOUILLAS RANCH¥ (SHL) ' I A-1 No. 242 {BHL) I' VAQUIU.AS RANCH_A SURVEY 1004 A-1 No. 157 Y P.B. REYNOLDS ' ABSTRACT 2421 I' bo·---- ' GRAPHIC SCALE I' VAQUlllAS RANCH !iOJ 0 ~ !iOJ If' A-1 No. 218 -Q- (BHL) VAOUJLLAS RANCH VAQUIUAS RANCH 0 VAOUIUAS RANCH A-1 No. 216....._ A-1 No. 216 A-1 No. 218 (SHU (BHL1 V (SHL)

LEGEND RHlslcn Oo!•

HOWLAND ENGINEERING ANO SURVEYING CO. TBPl'flnn~tlo.14Wl' TBl'l..SAml~/ob,!t!Cl01.(l(J -¢- 0 -~,-- ·~ ~EU~E : HORIZOKTAI.. WELL SuRr...a: LOCl.TIOH =Will , 2 0+-12 13 07-02-IJ

7a1SH.-A....,. ~lX.711(111 P.1156.TZZMll WWW .howlandcompanies.corn - - - - - - - =TIES - .. '" - '" SURvtY UH£ WARNING: BASIS OF BEARING: G.P.S. Tx. South Zone, NAO. 27. ntS PIM 1111'1' HOT $HOW M.l. ~ OF PP£IJKS OR t>8..ES. llOll'l.NIO DfCL'UJll'IC NII SIJll'>Q1Hll CO. 1HC. ~HD~ ro ux:AJE PAl.1£ Ofl c.oBL.£ ~ FIELD DATE: ""°K PAGE s DAAWH BY: A.LC./LA.F.

~11~=oo~~~~ra:010ND1S>POR '" '" '" CHECKED EJY: JOB No. J.S. 221J1.15-1J SHEET: 2 OF 2 ENGINEERING AND SURVEYING CO.

EXHIBIT "A-16"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 16 (VAQUILLAS RANCH A-1 WELLS No. 29, No. 44, No. 157, No. 212, No. 216, No. 218, & No. 242) 558.74 ACRES

A TRACT OF LAND CONTAlNING 558.74 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1004, P.B. Reynolds, Abstract 2421, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 74°36'06" E, a distance of2,077.33 feet, from the Vaquillas Ranch A-1 No. 242 Well;

THENCE, S 00°31 '16" E, a distance of 4,612.08 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°23'44" W, a distance of 5,270.83 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°39'16" W, a distance of 4,613.75 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°24'49" E, a distance of 5,281.57 FEET, to the POINT OF BEGINNING, containing 558.74 acres of land, more or less.

,,j ,.

SHEET! OF2 H:\HOWLAND\SURVEYING DEPARTMENl\lohs\2013U2131.17-13U2131. I7-13.doc /~~-~¥..·~~ ...' www.howlandcompanies.com 7615 N. Bartlett Avenue : P.0. Box 451128 {78045) , Laredo, TX 78041 P. 955.722.4411 TBPE Firm Registration No, F-4097 ' TBPL5 Firm Registration No. 100464-00 F. 956.722.5414

lt;r EXHIBIT "A-16" CONOCO PHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 N RErAINED TRACT 16 (VAQUIUAS RANCH A-1 WELLS No. 29, No. 44, No. 157, No. 212, No. 216, No. 218, & No. 242) 558.74 ACRES WEBB COUNTY, TEXAS

II A VAQUIUAS RANCH I1

I 1 SURVEY 279 G.C. & S.F. R.R. ABSTRACT 1353 co. 0 VAQUILtAS RANCH VA-1 No. 180 I 1

VAQUILlAS A-1 No. 217 1 _Yx_ RANCH . {SHl) 1 VA-1 No. 104 _J L----~AOu~~~c;---------------- I I A-t No. 217

: (BHL) -¢- N 89"24'1 -49• E ,.. 5,281.5.,. :

I ;...1 i;'!J6'9rt..-'<--- ----- VAQUIUAS< VAQUILLAS :21_l:!.J.{011·~ RANCH RANCH AQ~~:.: ___ ~----------- A-1 No. 240 A-1 No. 242 V VAQUIUAS 2.008' (BHL) RANCH A-1 No. 242 _n_ VAQUILlAS (SHL) SURVEY 40 5 V RANCH C.R. DAVIS

. ____ __,.. A-1 No. 157 ABSTRACT 2203 CONOCOPHILLIPS COMPANY VAQUlllAS RANCH LEASE 199129-001 ~ VAOUILLAS A RANCH -y- ~ G .,; VAQUILL.AS RANCH .Q- 26,622.79 ACRES (CALLED) RETAl\IED &!58..74 ~ UNIT VA~~'H"'5 ,_ ~ ______ _ ...• A-1 No. 191 A-1 No. 218('.) VAQUIUAS A-1 No. 216d'"'t.. SURVEY 2112 l (BHL) RANCH (BHL) ¥ P .B. REYNOLDS 3t A-1 No. 218 VAQUJLLAS ':.:, ABSTRACT 2420 • (SHL) RANCH DVAOUILLAS ~ SURVEY 1004 P.B. REYNOLDS A-1 No. 216 - (SHL) ~ RANCH "> A-1 No. 241 ~ ABSTRACT 2421 (SHL) -¢-z VAOUlLLAS WEBB COUNTY, TEXAS VAOUlllAS -¢- RANCH A-1 No. 29 RANCH A-1 No. 1.30 VAOUJUAS RANCH VAOUILLAS A-1 No. 212 } RANCH A-1 No. 186 Q (SHL) VAQUlllAS-¢- _y'-( VAQUILLAS RANCH ¥ RANCH A-1 No. 44 A-1 No. 212 (BHL} s 89"23'-M. w ... a,210.aJ' VAQUILLAS VAOU!LLAS RANCH ~ RANCH A-l No. 239 A-t No. 187 (SHL) (), VAQUJUAS I V RANCH A-1 No. 2.39

csH'I SURVEY 1003 J. POITEVENT ABSTRACT 1655

i-.-.--- !oC(I 0 GRAPHIC SCALE VO ~ llljlO

c: ( IN f'E£l) 1 Ire), • lOIXH\. T r------- •. I UGENO Revl•lon Date .. H i ~ .""' lil kiti'i' HO ,.~~~~ft§ji ENGINEERING AND SURVEYING CO.

EXHIBIT "A-17"

FIELD NOTES FOR CONOCOPRIIJJPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 17 (VAQUILLAS RANCH A-1 WELLS No. 15, No. 71, No. 130, h~~~~~~m~mh~k~k~ No. 239, No. 241, & VAQUILLAS RANCH A No. 89) 635.73 ACRES

A TRACT OF LAND CONTAlNING 635.73 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 2112, P.B. Reynolds, Abstract 2420, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 41°40'24" W, a distance of 1,866.60 feet, from the Vaquillas Ranch A-I No. 184 Well;

THENCE, N 89"20'44" E, a distance of 3,399.18 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°39'16" E, a distance of3,089.17 FEET, to a point for a deflection right;

THENCE, S 00°12'57" E, along an existing fence line, a distance of3,414.86 FEET, to a point for the Southeast comer hereof;

• THENCE, S 89°22'44" W, a distance ofS,109.93 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°20'48" E, a distance of3,275.75 FEET, to a point for an exterior corner hereof;

THENCE, N 89°26'27" E, a distance of 1,655.49 FEET, to a point for an interior comer hereof;

THENCE, N 00°13'32" W, a distance of3,228.56 FEET, to lhe POINT OF BEGINNING, containing 635.73 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYlliG DEPARTMEl\i\Jobs\2013\22131.18-13122131.18-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 451U8 {78045) Laredo, TIC 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 1 TBPLS Flrm Registration No. 100464-00 EXHIBIT "A-17" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 17 (VAQUIUAS RANCH A-1 WEUS No. 15, No. 71, No. 130, No. 145, No. 184, No. 186, No. 187, No. 191, No. 192, No. 193, No. 194, No. 239, No. 241, & VAQUIUAS RANCH A No. 89) 635.73 ACRES WEBB COUNTY, TEXAS

VAOUJLlAS -¢1 VAOU!UAS RANCH I -¢- A-1 No. 240 • .~ RANCH VAOUJUAS

SURVEY 1695 A-1 No. 18 RANCH A-1 No. 155 -¢- riiif]P-, -¢- VAOUJUAS I•

J RANCH G.B. & C.N.G. R.R. CO. ABSTRACT 1268 """"""""' A-1 No. 85 • .._ _____ ---- --- ...... - -- ' ,,.,, N 89"20' +4-• E ... 3,399.18' I I VAOUILLAS -¢- '~~- I VAOUILLAS -¢-0. A-1RANCH I

VAQUILLAS No. 215 (SHL) VAOUJUAS RANCH 'j. , 't"• .. 1~ VAQUJLLAS RANCH A-1 No. 191 ~Cllc;j

l " A-1 No. 19J RANCH VAOUIUAS ',, .~ RANCH !:: o~.., OoN A-1 No. 215 A-1 No. 241

~ (BHL) -¢- RANCH '°~ '\.~cv.1 II (BHL) -!() ~z,... A-1 No. 11 . VAQUILLAS ~~'-' "' "'Qi I') '.,_ l

SURVEY 1692 t L-----1235.----~ RANCH A-1 No. 241 l w ..... ¢- VAOUILLAS P.B. REYNOLDS AB,STRACT 2419 ~ \., ' VAOU!LLAS RANCH {SHL) -¢- :. ""'"' "'.,;~

i A-1 No. 184 VAQUJLLAS RANCH 11-1 No. 7J VAOUILLAS h RANCH A-1 No. 130 VAOtJILLAS RANCH § RANCH A-1 No. 237 z -¢-VAOUILLAS "' A-1 No. 212 (SHL) VAQUILLAS {BHL) VAOUIUAS RANCH

VAOUILLAS RANCH A-1 No. 2.37 ail- -¢- RANCH A-1 No. 15 A-1 No. 186 0 RANCH (SHL) -¢- A-I No. 198 VAOUJLLAS 0 (SHL) N 89"2&'2r E 1.~.49' RANCH ;-.-· VAOUILLAS RANCH A-1 No. 187 A-1 No. 212 •"'?"')( x~~· VAQUILLAS RANCH -¢- (BHL) -¢- VAQU!LI.AS RANCH A-1 No. 91 A-1 No. 239 (SHL) % ,. -¢- VAQU!LLAS CONOCOPHILLIPS COMPANY VAOUILlAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) • VA~~~'H"5 ,. VAOUILLAS RANCH :; RANCH A-1 No. 192 RETAINED 63S.73 ACRE UNJ" A-1 No. 239 ...m A-1 No. 195 ~ (8HL) ~ b (SHL) l -¢- VAQUILLAS RANCH w l

w A No. 89 SURVEY 2112 ~ "' ~!l SURVEY 1693 VAQUJLLAS P.B. REYNOLDS g~~ -¢-A-IRANCH ~~- G.B. & C.N.G. R.R. co. No. 194 ABSTRACT 2420 WEBB COUNTY, TEXAS § ><"' ... ABSTRACT 1269 :z "' [;'~~ "'P. .. ~...;~ VAOUILLAS VAOUILLAS -¢- RANCH RANCH A-1 No. 71 A-1 No. 90 VAQUILLAS -¢- -¢- RANCH A-1 No. 145 :'J. s 89"22'44. w .... 5,109.93'

·~~·~ ~ VAQUILLAS RANCH A-1 No. 208 •• F.R. FE!LLE AB~:T-~---··

GRAPHIC SCALE I- ' • 'll -· "'1 I w~-·~->~->

SURVEY 278 T-.....AJ--!r(J ·=. = I FRED SPEED ABSTRACT 2462 (ll

~

LEGEND Ravlslon Doi• ' HOWLA~~~i 0 = HORIZONT.U. WELL SURrACE LOCATION ' 04-12-lJ

__-¢-,_ 12-05-13 ENGINEERING AND SURVEYING CO. Tl!PEFhn~No.. F-«1117 l1'PUll'm~N>. 1004.54-00 • WW. Ul'!IT Ull[ f'DICE UHE ' 11115N.BM!oll.A......,. 1..8Mo.lX.1ll(l41 P.lil::IG-722.Mll ------- WARNING: BASIS Of' BEARING: G.P.S. www.howlandcompenles.com T~. South Centrcl Zone. NAD.-27. -··- "' SURVE"f UNE

THS PLAT l.IAY MlT SHOW Ml. Cll!lSSl'ICS IY l'Mllt£S OR CA!l..£S. HOM.AllD ElfClt£E!INO FIELD DATE BOOK PN:."'a\ DRAWN BY: LAF. NG SlMIYEY»IG 00.. Ille. .tSSUMES HO AESPOl!SlllUlY "lU l.OCO.TE PIPEl..N'. Of!; CA8l( a!OSSIHCS.. ~~':HG~~NEL~~=:::J:"::-oon:""IJ'~ ~ COPl'RICHT HCN\H(I) DlCff:ERllC ~ SU!MYN: CO., .fie. 201JC 0 "'' "'' "'' CHECKED BY: J.S. JDS No. 22131.18 " SHEET: 2 Of ' Ho. •'1.\\'1 1 ·_:!JJ~~h\ lf1\~rr.··I~· 'WWA[~..,.f~.f'<1lJfili.v ENGINEERING AND SURVEYING CO.

EXHIBIT "A-18"

F1ELDNOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETA1NED TRACT 18 (VAQUILLAS RANCH A-1 WELLS No. 11, No. 24, No. 72, No. 73, No. 106, No. 198, No. 215, & No. 237) 615.92 ACRES

A TRACT OF LAND CONTAINING 615.92 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1692, P.B. Reynolds, Abstract 2419, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 77°14'2T' E, a distance of2,088.50 feet, from the Vaquillas Ranch A-1No.215 Well;

THENCE, S 00°13'32" E, a distance ofJ,228.56 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°26'27" W, a distance of7,026.24 FEET, to a found fence comer post for a deflection right;

THENCE, S 89°56'25" W, a distance of 1,257.95 FEET, to a point for the Southwest comer hereof;

THENCE, NORTH, a distance ofJ,271.85 FEET, to a point for the Northwest comer hereof;

THENCE, S 89°52'06" E, a distance of 4,950.94 FEET, to a point for a deflection left;

THENCE, N 89°20'44" E, a distance of3,320.43 FEET, to the POINT OF BEGINNING, containing 615.92 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYlNG DEPARTMENT\Jobs\2013\22131.19-13\22131.19-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box451128 {78045) : Laredo, TX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Finn Registration No. F-4097 : TBPLS Firm Registration No. 100464-00 .I -.,,,--- • _n_ VAOUILLAS ' VAQUJLLAS V RANCH VAOUlLLAS 1· I• ' ii RANCH RANCH .I A-1 No. 18

~ I''L_ _____ A-1 No. 85 SURVEY 1696 A-1 No. 156 SURVEY 1695 VAOUILLAS (SHL) -¢- RANCH -¢- G.B. & C.N.G. R.R. CO. 155 (ii,,~ P .B. REYNOLDS A-1 No. x ABSTRACT 2418 ' ABSTRACT 1268 N 7714'27" E - --- - .. I 2,088.SO' ~) I l s 89'52'0S-' -c. ... 't,VOU.V't N 89'20'44-. E ... 3,320.43' VAQUILLAS RANCH -.., !;;II --- _ ...... -------- .. -

·~ SURVEY 1691 "I "1 "1 >< A-1 (~~L} 215!-J?:s-=-=-------2.ros·-------~- VA~~~'H"s RANCH A-1 No. 215 VAQUILLAS YA-1 No. 193

i G.C. & S.F. R.R. CO. CONOCOPHILLIPS COMPANY SHL RANCH VAQUILL-6.S RANCH CO. ABSTRACT 1267 tel,. VAQUILLAS RANCH LEASE 199129-001 ( ) -¢-. A-1 No. 11

Q LTO. No. 65 :i ~-I ~ I 26,622.79 ACRES (CAllED) RET~ED 81S.92 ~ UrtT SURVEY 1692 VAQUILLAS _r,_ ~ (SHL)

i ' RANCH V P.B. REYNOLDS ~- VAQUILLAS A-1 No. 184 i)- RANCH CO. ABSTRACT 2419 "' ~1- VAQUILLAS .r'-f VAQUJLLAS LTD. No. 35 ' RANCH V WEBB COUNTY, TEXAS ~ RANCH CO. LTD. No. 68 §z VAQUILLAS RANCH A-1 No. 73 VAQUILLAS RANCH § (BHL) VAQUILLAS A ><,.1 A-l No. 106 A-1 No. 237 RANCH co.V (BHL) VAQUILLAS (BHL) "' -¢()VAQUILLAS RANCH CO. LTD. No. 22 VAOUIUAS RANCH 11 ><,. -¢- VAQUILLAS RANCH A -y- VAQUILLAS VAQUJLLAS RANCH RANCH A-1 No. 237 air -¢- VAQUILLAS RANCH A-1 No. 15 LTD. No. 68 A-1 No. 72 A- l No 24 Q RANCH A- 1 No. 198 VAQUILLAS (SHL) (SHL) -¢- 11 FatJr.d Fenee A-L No. 106 (BHL) RANCH I >< >< C"..imar P03t (SHL) Q A-1 (:~l.) 198 -¢" ! 1=1 ' I ,_ ' s 89'66'25. 1.257.~' w tIff>< ' s ' ' ' 89"28'27" w ... 7 ,026.24' ' -¢-' ' VAQUILLAS • I SURVEY 1676 RANCH I 911 VAQUILLAS

ll .' -¢- A-1 No ABSTRACT 2495 >< RANCH A-1 No. 192

I VAOU!LLAS VAQUJLL.AS I SURVEY 2112

·~ur GRAPHIC SCALE

'i ,. RANCH A-1 No. 92 RANCH A-1 No. 195 _ -Q-Q VAQUILLAS RANCH I P .B. REYNOLDS ABSTRACT 2420 VAOU!LLAS ..:-.- ........ (Nrm) , 1,..h .. 1ooon. =I tI ¥I >< -¢- (BHL) A-1 No. 195 (SHL) 1 1 I -¢- RANCH A No. 89

LEGEND Rwlslon Doi•

HOWl"AN~ EXHIBIT "A-18" : HORIZONTAL WEil. 0 SUllF"AC[ LOc.t.TlON 04-11-13 11-27-13 ENGINEERING AND SURVEYING CO. CONOCOPHJLLIPS COMPANY -¢- •WW. .. ' :,'.';" "'" UNIT UN[ 12-0~13 l9PfAon~No.F-f097 T8Pl.8Rnl~No.1-..00 7..$N.B.uoa.1.- Utwdo,TX,710t1 P.~722.U11 www.howlandcompanlos.com VAQUIUAS RANCH L£ASE 199129-001 ~ RETAINED TRACT 18 =~=: (VAQUIUAS RANCH A-1 WEUS No. 11, No. 24, No. 72, No. 73, - · · - • "'""" "" "' " WARNING: BAS!S OF BEARING: G.P.S. T•. South Zono. NAD.-27. TIU l'L'T MOT SHOW AU. CROSSINCOS or l'll'tUtUHt OR eo.el..E CftOSSINGS. 615.92 ACRES N/A I H/A N/A II CHECKED BY: J.S. ~TH\:NO~~cr~~~F"tt~OR WEBB COUN1Y, TEXAS 1 11 JOB No. 22131.19-13 COPYRIGHT llClWWIO DOh'WtlNC AA'll SUlMYINO co.. INC. 20130 SHEET: 2 OF 2 1-1.\ll~ OfPAA1'MtNf\JObl\l'DUUJ.1Jll21JU!-~ l/!m1'1 WUI PU. Adobl PDF HOWLAND ENGINEERING AND SURVEYING CD.

EXHIBIT"A-19"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 19 (VAQUILLAS RANCH A-1 WELLS No. 25, No. 90, No. 91, No. 92, No. 132, No.143, No. 195 No. 208, & No. 238) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1693, G.B. & C.N.G. R.R. CO., Abstract 1269, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 24°31 '42" W, a distance of 1,631.39 feet, from the Vaquillas Ranch A-I No. 92 Well;

THENCE, N 89026'27" E, a distance ofS,370.75 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°20'48" W, a distance of3,275.75 FEET, to a point for a deflection right;

THENCE, S 00°41'52" W, a distance of862.52 FEET, to a point for a deflection· left;

THENCE, S 00°21'12" E, a distance of 1,087.58 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°28'19" W, a distance of 5,311.17 FEET, to a point for the Southwest comer hereof;

THENCE, N 00"23'39" W, a distance ofS,222.38 FEET, to the POINT OF BEGINNING and containing 640.00 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SUR VI:.i'ING DEPARTMEN'NobsUOJJ\22131.21-13\22131.21-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box451128 (78045) i Laredo, TIC78041P.956.722.4411 F. 956.722.5414 TBPE Rrm Registration No. F-4097 TBPLS Arm Registration No. 100464-00 EXHIBIT "A-19" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 N RETAINED TRACT 19 (VAQUILLAS RANCH A-1 WELLS No. 25, No. 90, No. 91, No. 92, No. 132, No. 143, No. 195 No. 208, & No. 238) 640.00 ACRES WEBB COUNTY, TEXAS

·1I. _r.,_ VAQUIUAS V RANCH A-1 No. 11

·1I. ·1 J • ¥-< ~ VA.?_~!CLlASH II >< I "1 ><

H--;) >< >< I p~~:~Nl~~S ABSTRACT 2419

VA~6'if5 -Q-A-1 No 24 - VAQUILLAS A-L No. 106 (BHL) -¢- VA~~6~ 0 A-L VAQUILL.AS RANCH A-1 No. 198 VA~~6'H"'5 -¢-A:~~~:3 - VAQUILLAS A-I No. 237

@ (BHL)

VAOUILL.AS

.'. . V """ ,........,... .,. No. 106 (BHL) A-1 No. 198 RANCH A-1 No. 72 >< >< llBGIKNING (SHL) -¢- Q (SHL) A- l No. 237 N 89"26'27" E ,.. 6.J]0.75' (SHL) h.-------~-- ,=-r-- --....:..;::..:.:;,.;;...:..;....;;:;;,;=.,..._,.--===~= --- --- ~ -¢- VAQUILL.AS l\~ '{J • 1 RANCH A-1 No. 91 -¢- I.~~- ~: I

>< ':"~-:, ~I VAQUILL.AS ~-\ ~ I VAOUILL.AS RANCH

I l >< '~ I \ \ I VAOU!LL.AS RANCH YAQUI LL.AS RANCH A-1 No. 195 _,.i.,_ ¥0 RANCH A-1 No. 195 (SHL) A-1 No. 192

t-6Jft_4A-1 No. 92 (BHL)

...., .I VAOU!LLAS J?c... VAQUILLAS RANCH ' U RANCH VAQUIUAS -¢- VAQUILLAS RANCH A-1 No. 194

~I A-1 No. 238 A-1 No. 238 0: (BHL) (SHL) -¢- RANCH ~ ., x A-1 No. 25 SURVEY 2112 "'~'""' r- " ~f..?N.,,,_. ..' l CONOCOPHILLIPS COMPANY VAQU!LLAS RANCH LEASE 199129-001 VAQUILLAS RANCH P.B. REYNOLDS ABSTRACT 2420

i 1~I 26,622.79 ACRES (CALLEO) A-1 No. 90 ~~~ RETAINED &40.00 ACRE UNIT -¢- -¢- ~B~ x

-¢- ~ - --- -. - ...;

"'~~ z VAOUILLAS ~~ ,." I~ RANCH A-1 No. 208 ~~ SURVEY 2367 F.R. FEILLE !l"' ABSTRACT 3333

Ii. SURVEY 1693 G.B. & C.N.G. R.R. CO . ABSTRACT 1269 I WEBB COUNTY, TEXAS

I ..-'-<: VAQUILLAS ¥ RANCH A-1 No. 1.32 I "' SURVEY 276 s 89"28'19• w .... 5,311.17' FRED SPEED 1 ABSTRACT 2462

SURVEY 1694 FRED SPEED ABSTRACT 2461

GRAPHIC SCALE ~93~00 ,i '"""--~ (IN FIIl") I ' I-..---·- LEGEND Ravlslon Drita

HOWLAND ENGINEERING AND SURVEYING CO. lBPEFltmlteglob!lonNo..F-!097 Ttlf'l.8Rm~lt:>.10G4M-03 --"-- 0 = ;; -¢- ,. =ACE LOCAnOH UKlf LINE HOllJZOKTAL WELL 1 2 J 04-12-13 05-17 13 10-18-IJ 76\~H.-A......., l.a'..m.TX.7ZIO

Flf;l.D OATE PAGE 9 ORA.WI'! SY: LAF./S.l.M.

"' "" CHECKEO SY: J.S. JOB No. 2.2131.21-IJ SHEET: 2 or 2 EXHIBIT "A-20"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 20 (VAQUILLAS RANCH E WELLS No. 31, No. 70, No. 82, No. 209, & No. 210 ST) 502.31 ACRES

A TRACT OF LAND CONTAINING 502.31 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 277, G.C. & S.F. R.R. CO., Abstract 1337, Webb County, Texas, and being more particularly described as follows:

BEGlNNlNG at a point which bears N 66°41 '22" W, a distance of 1,659.92 feet, from the Vaquillas Ranch E No. 31 Well;

THENCE, N 88°50'37" E, a distance of 10,425.89 FEET, to a found concrete monument under an existing fence line, for the Northeast comer hereof;

THENCE, S 00°36'47" E, along an existing fence line, a distance of 686.92 FEET, to a point for an exterior comer hereof;

THENCE, S 89°31'31" W, a distance ofS,280.30 FEET, to a point for an interior corner hereof;

THENCE, S 00°28'29" E, a distance ofl,992.64 FEET, to a point for an exterior comer hereof;

THENCE, S 89°49'01" W, a distance of 5,164.33 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°11 '12" W, a distance of 3,529.26 FEET, to the POINT OF BEGINNING, containing 502.31 acres of land, more or less.

Basis of Bearing; G.P.S., TX. South Zone, NAD-27

SHEETl OF2 H:IHOWLAND\SURVEYrNG DEP ARTMENT\Jobs\2013\21131.22-13\22131.22-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue 1 P.O. Box45ll28 (78045) i Laredo, TX 78041 P. 956.722.4411 J F. 956.722.5414 TBPE Firm Registration Na. F-4097 ! TBPL.S Firm Registration No. 100464-00 l SURVEY 278 FRED SPEED

~ ABSTRACT 2482 f"aund Cone/'1!111

A ' "····-·n\--....... -- 1

,, '../(~IS': l. VAQUILLAS N 88'50'379 E - 10,42.5.89'

VAOUILLAS RANCH ... ~- ,. N

:I! ~ !s 1.ss"-}~?.: Jy l[8 RANCH -¢-E No. 209 (ll -9<·'""-..... I A E No. 210 ST • 1----------.-----:_. . .,,..L, VAQUIUAS V (BHL) S 89'.31'31• W ... 5.280.JO' l,522 -Y- RANCH 0· + E No. 31 VAQUILtAS /

SURVEY 1694 FRED SPEED ABSTRACT 2461 !., l SURVEY 277 G.C. & S.F. R.R. CO. ABSTRACT 1337 (SHL) RANCH E No. 210 ST

A VAQUILLAS -y· RANCH l ;""

E No. 70 WEBB COUNTY, TEXAS ~ l

"' § I CONOCOPHILLIPS COMPANY VAQUILlAS RANCH LEASE 199129-001 SURVEY 32 z 26,622.79 ACRES (CALLED) A VAQUILLAS C.R. DAVIS RETNNED 502.31 ACRE UNIT ¥ RANCH ABSTRACT 2582 E No. 82 "' t~I ------k--,~ \+'+ s 89"-49'01· w ... 5,164.33' I I \"' SURVEY 275 I +, G.C. & S.F. R.R. CO. GRAPHIC SCALE ABSTRACT 1336 !!oOO .J. ~ ~00 1000 2000 1"1.-•••- ....... _ . I VAQUILLAS ( JI fEET} RANCH ' 1 mh • 1ooon ,..i.., A No. 19 I ~ LEGEND II Rtvlolon Dalt

HOWLAND ENGINEERING ANO SURVEYING CO. TBPER!ll~ll'rtOtlNo.F-4087 11lPUIFm~No.10045'<00 EXHIBIT "A-20" CONOCOPHILLIPS COMPANY 0 -¢- .. wcu "

-~,-- : ~~1£u~~r HORIZONTAL W[U SURFACt LOCATIOH

J ' 2 04-09-13 05-17-\3 06-05-13 101Ul.-"-'lo ~1X.ta)41 P.~7"M11 www.howland<;0mpanlel!.com VAQUILLAS RANCH LEASE 199129-001 N RETAINED lRACT 20 (VAQUILLAS RANCH E WEUS No. 31, No. 70, - - - - - - - = Tl[S - • • - = SURV[Y LIME • 08-14-13

WARNING: BASIS OF BEARING: G.P.S. 1.... South Zono, N.A.0.-27. No. 82, No. 209, & No. 210 ST) ms !'Liff W.Y ttOT SllO'll" IU CROSSINGS or Pl~E:S Oil C>Jlt.E!I. H:lWVl!tl tNGIHt[lb!IG " " stJRV£YING CO., .ic. JSS\JllE:S NO R£SPOHSetm' ltl l.CIC\Tt ~C Ofl C0&£ CllO$SN;l5.. 502.31 ACRES FlELD DATE NIA BOOK ,,, PACE(•) ORi\WN BY: L.A.F. CHECKED BY: J.S. ~~~~~~%i.~co~~!Jlr~CRN. ft[ OWllDISlllP Ofl WEBB COUNTY, TEXAS "'' JOB No. 22\Jl.22-ll COP"rlllllttT HOl'!lM'O DIQNwtlNO NIO SllfM'l'JIQ CO. INC. 20\3C SHEET: 2 OF 2 ll:'IHCIYMN~UPMYING DaMfl,OlHT\Jcbo~U\UllUl·U\nUJ.U-~.~ J.U:U7PM.AdoboPDf How· ENGINEERING AND SURVEYING CO.

EXHIBIT "A-21"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUJLLAS RANCH LEASE 199129-001 RETAINED TRACT 21 (VAQUILLAS RANCH A-7 WELL No. 249) 608.05 ACRES

A TRACT OF LAND CONTAlNlNG 648.05 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 259, C.C.S.D. & R.GN.G. & R.R. CO., Abstract 1137, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 39°24'54" W, a distance of 1,866.66 feet, from the Vaquil!as Ranch A-7 No. 249 Well;

THENCE, N 88°53'51" E, a distance of5,385.00 FEET, to a point for the Northeast comer herof;

THENCE, S 00°35'40" E, a distance of 5,280.00 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°32'20" W, a distance ofS,369.40 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°45'49" W, a distance of 5,219.79 FEET, to the POINT OF BEGINNING and containing 648.05 acres of land, more or less.

LESS AND EXCEPT 40.00 ACRES, described as follows:

BEGINNING at a point which bears S 52°35'23" E, a distance of 1,871.58 feet, from the Vaquillas Ranch A-7 No. 249 Well;

THENCE, N 89°32'20" E, a distance ofl,320.00 FEET, to a point for the Northeast corner hereof;

THENCE, S 00°27'40" E, a distance of 1,320.00 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°32'20" W, a distance of 1,320.00 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°27'40" W, a distance of 1,320.00 FEET, to the POINT OF BEGINNING, containing 40.00 acres of land, more or less.

SHEET! OF2 H:\HOWLAND\SURVEYING DEPARTMENT\JobsU0\ 3\22131.2l- !3\22 \ 3 J.23-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue : P.O. Box 451128 {78045) ; Larr: do, lX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Regl5tration No. F-4097 , T8PL5 Firm Registration No. 100464-00 EXHIBIT "A-21" CONOCOPHILLIPS COMPANY VAQUILlAS RANCH LEASE 199129-001 RETAINED TRACT 21 (VAQUILlAS RANCH A-7 WEll. No. 249) 608.05 ACRES WEBB COUNTY, TEXAS

SURVEY 36 C.R. DAVIS I' J ~ ABSTRACT 2581 ' SURVEY 35 ' I' C.C.S.D. & R.G.N.G. R.R. co. ABSTRACT 1036 I• I' -· ' ' SURVEY 16

@~ I C.C.S.D. & R.G.N.G. R.R. CO.

:~ ~ 1

' ABSTRACT 2727

----- N 88'53'51 • E ,,.. s.;585.00' ------ '' ' ' ',<- lI

>''~ Ito -~~ ... ~~~ ,_.·~ I SURVEY 259 SURVEY 264 I C.C.S.D. & '~ I R.G.N.G. R.R. co. G.C. & '' I ABSTRACT 1137 S.F. R.R. co. I

1166' '-$ ' IVAQUILLAS RANCH A-7 No. 249 WEBB COUNTY, TEXAS ABSTRACT 3302 ---!.I.----- (SHL) VAOUIUAS RANCH ', A-7 No. 249 '.._

(BHL) ,, ·~).J~~~J ' " .,. -~ JlllGllOOllG 40.~ or ~ i" for m '3cP>-,e trocl ;;. ',,, N 89"32°20• E " ', 1 32000' I I ~ ~ "' "'~ ~ ~~ LESS " EXCEl'T ~8 ~ iii' 40.00 M:RES !:; ci I! ~~ I!~ I! ci .. u .. z z " " "'"" C') ~- 0 >- i::i i:i:: E-< s 89'J2·20- w ~0ci~ u. CONOCOPHILLIPS COMPANY VAQUJLLAS RANCH LEASE 199129-001 1,320.00' :>uzrn "' ci ':! 26,622.79 ACRES (CALLED) RETNNED 608.05 l-o A. et: E-<

I' C.C.S.D. & R.G.N.G. R.R. co. ABSTRACT 2816 I' r:'~c;Ol ~I'.:! 'E-< :>uZi{/} u

' "' ""' ' I I "'"" ' . GRAPHIC SCALE ' ~

" = bes......- ·~ ~ = I I' {'" rro I I lr'Ch - 1DOCJf\.

' Rn1slon LEGEND "'" HOWliL~~fill 0 -¢- " HORIZONTAL Wl:Ll SUAf,lCC l.OC.l.TIOH wru ' 'J 04-12-lJ 05-17-IJ ENGINEERING ANO SURVEYlNG CO. _,_ 111PEFhn~W...f-4Clll'

www.howlandcompenles.com TIIPl..Sfb>RogialldcnNo.IQ04&1.(1() l'll15N.-,l-... Undl>.TX.71IO

""' SURVEY UHE ' 06-06-IJ 08 14-IJ

~ l!,l.SlS Of BEARING: G.PS. T~. South Csntrnl Zeme, NA0.-27.

""° Tll!S Pl.AT W.T' NOT $HOW AU. O!OSnfCS Dr l'IPEUNtS OR coa£S. HUil't.NID ENGME!lllC ~ co. INC. ASSl.l.l£S !IP OR l.fSSOlt. THIS DRAn1CO W« IXCWSNCLT' FM lllR.JHCTCl'I R£SCM!C£S O.kC CD. lP. '" CHEC!(E() BY: J.S. JOB No. 221J1.2J-1J COPmlCH1" HOWUoNO EHCl!€IRtlC ~ SUllVE'l\ltl;l CO~ ..-;:. lOllC SHEET: 2 ' OF HOWLAl~D ENGINEERING AND SURVEYING CO.

EXHIBIT "A-22"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 22 (VAQUILLAS RANCH A WELLS No. 14, No. 19, No. 20, & VAQUILLAS RANCH B No.13) 612.33 ACRES

A TRACT OF LAND CONTAINING 612.33 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 275, G.C. & S.F. R.R. CO., Abstract 1336, Webb County, Texas, and being more particularly described as follows:

BEGINNING ata point which bears N 46°23'57" W, a distance of936.17 feet, from the Vaquillas Ranch A No. 14 Well;

THENCE, N 89°49'01" E, a distance ofS,164.33 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°30'14" E, a distance of5,150.08 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°49'01" W, a distance ofS,194.07 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°10'23" W, a distance of 5,150.00 FEET, to the POINT OF BEGINNING, containing 612.33 acres of land, more or less.

SHEET 1 OF2 H:U:l.OWLAND\SURVEYrnG DEPARTMEN"Nobs\2013\221J1.24-13\22131.24-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue ; P.O. Box 451128 (78045) i Laredo, l'X 78041 P. 956.722.4411 f_ 956. 722.5414 TBPE Firm Registration No. F-4097 1 TBPLS Firm Registration No. 100464-00 EXHIBIT "A--22" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 22 {VAQUIUAS RANCH A WEllS No. 14, No. 19, No. 20, & VAQUIUAS RANCH B No. 13) 61 2.33 ACRES WEBB COUN1Y. TEXAS

I• ,....., VAOUJLLAS V RANCH I 1 ENo.70 • 1

I• SURVEY 277 I• I • I• G.C. & S.F. R.R. CO. ABSTRACT 1337 -¢- VAQUJUAS • I• J~ • POINT o!'l RANCH E No. 82 • lllGllOOllG

- • • - ., • --,;..,---.------_;•;;..;... ;;.."0~1~·-=·-N_.;~~·~'84;.;.;.33';;;;._ _ _ _ _ _ _ _ _ _- ; ;;.... I• 't._....r. t .s>.J:'$:• I~ SURVEY 32 ~,*. t '~ VAQU!UAS C. R. DAVIS f---576'"--Y- RANCH ABSTRACT 2582 A No. 14

VAQUILLAS RANCH A No. 19

~d CONOCOPHILLIPS COMPANY VAQUJUAS RANCH LEASE 199129-001 ~

,.~ SURVEY 275 G.C. & S.F. R.R. CO. ~ ABSTRACT 1336 "' WEBB COUNTY, TEXAS

0 u

VAQUILLAS RANCH A No. 20 VAOUILLAS-¢- RANCH 8 No. 13 ~~"' ~ei8 >- :i E-o - · · -- · · __...11-----------s-...--.-.'"·o-,::-.-w-N-.-.-,.-.-.o-r.,...----------9 " ... ~ei~ ""'' 0: •• "'"""' r:i<;l .; I• uu SURVEY 274 G.T. BLACK • ABSTRACT 2551 I• GRAPHIC SCALE • (IN m;r) 'j r I• 1 Inch~1DODFl.

Revlslcm

HOWlA~lQJ ENGINEERING AND SURVEYING CO. -¢- __ 0 • ~;~~~. ...._ ~ ~ 1.JHE 2 ' '°'" 04-09-13 05-17 13 3 06-06-13 TBPE~~.::.....F-4097~~~~~~~ ---<- • F'tNCE: UN[

U---------~===~==~---------H www.howlandoompa.l'\les.com ------- " - • • - TIES = SURVEY LINE • 06-14 13

FIELD OATE BOO< ,,, PAGE sl DRAWN EJY: LAF.

"' "' CHECKED BY: JOB No. 221J1.24 13 J.S.

SHEET: 2 or 2 HOWLAND ENGINEERING AND SURVEYING CO.

EXHIBIT"A-23"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAlNED TRACT 23 (VAQUILLAS RANCH A WELLS No. 27, No. 36, No. 146, No. 149, & No. 158) 639.04 ACRES

A TRACT OF LAND CONTAINING 639.04 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 276, G.T. Black, Abstract 2552, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a found iron rod on the West right-of-way line of Ranch Road 2895, which bears N 52°54'37" W, a distance of 838.32 feet, from the Vaquillas Ranch A No. 36 Well;

THENCE, N 89°34'02" E, along as existing fence line, a distance of5,282.71 FEET, to a found concrete monument, for the Northeast comer hereof;

THENCE, S 00°10'23" E, a distance ofS,279.75 FEET, to a point for the Southeast corner hereof;

THENCE, S 89°33'08" W, a distance of 5,260.79 FEET, to a found 2" pipe, for the Southwest comer hereof;

THENCE, N 00024'40" W, a distance of 5,281.06 FEET, to the POINT OF BEGINNING, containing 639.04 acres of land, more or less.

SHEET I OF2 H:\HOWLAND\SURVEYING DEPARTMENl\Jobs\20 \ 3\22 l3 l .25-13\22131.25-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box45112B (78045) J Laredo, TX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 ! TBPL5 Firm Registration No. 100464-00 EXHIBIT "A-23" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 23 (VAQUILLAS RANCH A WELLS No. 27, No. 36, No. 146, No. 149, & No. 158) 639.04 ACRES . WEBB COUNTY, TEXAS

I ! ~ • )i I~

I ~ ~ SURVEY 1694 F. SPEED ABSTRACT 2461

'~"' c~mt• I 1 I j --- -- Y 0 '""' ''o" Rod ~~~--.~~~~--'..,.;;.;.-,;;;;;....;;,_..;;;;;~~~~~~~~ P:::l',: l. N 8V'34'02• E - 5.282.71' Mo""m~t-, l ......------- N 52'5" '37• YI-..- ' , , I;;;; 8JB.J2' ,-:;¢'-VAQUILLAS

I >< 655 RANCH ANo.36 VAOUlllAS RANCH A No. 27 -¢- VAQUIUAS • RANCH

.I A No. 14

.I YAQUI LI.AS

-¢- A ~~C~49 .., ~I lo CONOCOPHlLLIPS COMPANY

~ 0 ~ ' i. VAQUILLAS RANCH LEASE 199129-001 26,622.79 ACRES (CAUED) RETAINED 839.04 ACRE Ut«T "' '"'"' ·"' """'"' VAQUILLAS ...' Nii ...... "I -¢- RANCH j:i ~.: t; i II A No. 158 SURVEY 276 0 "'ui 0'1 G.T. BLACK ABSTRACT 2552 ~ U> "'"'!ii UJ u !:! •

z . WEBB COUNTY, TEXAS VAQUILlAS RANCH A No. 146 ci

-¢- .I (BHL)

I I VAOUILLAS VAQUJLlAS RANCH A No. 20 RANCH I 7 ANo.1460 (SHL) ,_ ---- ----&-1---------------------------'9'-- s w ,.. ~I ---- --- "l:r-- round 2" 89"33 08• 1 5,2.60.79'

:\ \ Pipo VAQUILLAS -¢- RANCH

ti· .. 1 No. 174

SURVEY 226 ·1 • I I G.T. BLACK ABSTRACT 2550 GRAPHIC SCALE :500 9 2'0 ~ 1000 '~ °l".•..W;;,,,jwwi . I ( ti rn;r)

. LEGEND RoYlslon Doto

HOWLANDENGINEERING AND SURVEYING CO. ll!PEArm~Ni>.F-40ll"f l8Pt.11Arm~Ho..1004&4-00 0 -¢- ;o HDIUZOHTAL WELL SURFACE LOCATION wru. UHIT UHE ' 04-11 1.'.5 05-17-IJ 06-06-1.'.5 711~N.-A- Lo-TX.19001 P.O!fl.722.0411 ftMCC UMC 08-14-13 www.howtandeompanles.com

WARNING: BASIS Of SD.RING: G.?.S. Tx. South Control Zon ... NAD.-27. "" SUMY UHE 5 11 27-1.'.5

nus P\,lil w.y NOT SKlW MJ. CROSSJjCS or Pl'El.JNES Oii CAil.ES. HOlltNIO DIWiEl'.laNC FIElD [).t.7£ PAGE" DRAWN BY: LAf.

"" "" CHECKED B'f: JOB No. 221J1.25-1J J.s.

SHEET: 2 OF 2 Ho ... ~1 ~tf!J., IT\1:.~Wf.~1 . 'WWJl1..-m@~J1f~fll:b.Jt ENGINEERING AND SURVEYING CO.

EXHIBIT "A-24"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 24 (VAQUILLAS RANCH WELLS No. 16, No. 164, No. 174, AND VAQUILLAS RANCH A WELLS No. 111, No. 116, & No. 125) 633.38 ACRES

A TRACT OF LAND CONTAlNlNG 633.38 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 228, G.T. Black, Abstract 2550, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a found 2" pipe on the West right-of-way line of Ranch Road 2895, which bears N 73°18'04" W, a distance of2,034.65 feet, from the Vaquillas Ranch No. 174 Well;

THENCE, N 89033'08" E, a distance ofS,260.79 FEET, to a point for the Northeast corner hereof;

THENCE, S 00°10'58" E, a distance of 5,254.72 FEET, to a point for the Southeast corner hereof;

THENCE, S 89"32'59" W, a distance of 5,240.13 FEET, to a point under an existing fence on the West right-of-way line of said Ranch Road 2895, for the Southwest comer hereof;

THENCE, N 00°24'29" W, a distance of 5,254.89 FEET, to the POINT OF BEGINNING, containing 633.38 acres of land, more or less.

,. !; .~-1., ;.;;.: ;,ii-~ ~:~1 /:~1 /..- .~;

SHEET! OF2 H:\HOWLAND\SURVEYlNG DEPARTMEt-rruobs\2013\22131.26-13\22131.26-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 451128 (78045) . Laredo, TX 78041 P. 956.722.4411 1 F. 956.722.5414 TBPE Firm Registration No. F-4097 ; TBPLS Firm Registration No. 100464-00 EXHIBIT "A-24" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH L.£ASE 199129-001 N RETAINED TRACT 24 {VAQUIUAS RANCH WELLS No. 16, No. 164, No. 174, AND VAQUIUAS RANCH A WELLS No. 111, No. 116, & No. 125) 633.36 ACRES WEBS COUNTY, lE

'" ~ v·1 J I I

o~~ "'<"' .,,,.. ~Ciro i. SURVEY 276 I ~~" ll G.T. BLACK ABSTRACT 2552 I I

0:0~ ::i-oo rt.l~~

1----.. - I z ,.. '-' fl I ~ >< BICllOOMG Found 2· Pipe

u-------~-~~::_-:::::~~ VA~~ ----- - -•....7.!'19• >OJ,-~·. N 89"JJ'oa· E ... 5.2eD.79' A No. 146

II§ I -¢- VAQUILLAS RANCH A~ ' I I I .... VAOUILLAS -¢- A RANCH ____ No. 20

>< 1,945' No. 174

I" SURVEY 274 J" SURVEY 228 G.T. BLACK ABSTRACT 2551 G.T. BLACK 0 I ABSTRACT 2550 " ~., " -¢- WEBB COUNTY, TEXAS

-~g'" J ,I VAOUILL.AS RANCH No. 164 "'~~- -~ 1· " 1~ I I CONOCOPHILLIPS COMPANY ~~t VAQUJUAS RANCH LEASE 199129-001 "' "''"~ ~ ! 26,622.79 ACRES (CALLED)

::>"'"' "' . ':! ""II~ RETJ.tiED 8JJ.J8 N:R£. UNrr -¢- ..~ "'uui z ' ~ VAQUILl.AS 1·~ VAQUILLAS RANCH u ~la -¢- RANCH A No. 116 A No. 125

1·~ 11 -1 1· -¢- VAQUILLAS -¢- VAOUILLAS RANCH I II,[ RANCH A No. 111

~------ No. 16 -------· s 89"32'~9· w ... !5,240. 13'

I • I I VAQUILLAS -¢- RANCH I

I. I No. 10

II SURVEY 227 C.C.S.D. & R.G.N.G. R.R. co. VAQUIUAS~ I• •• ABSTRACT 1133 RANCH I No. 12 T

Il I I ~ I I

soo -- ~--A-" GRAPHIC SCALE ~ soo ·~I -I VAQUILLAS -¢- ~c1~ I I ( N FUT) 1 1'><11 ~ 1000fl. . I

LEGEND Revhlon Oat•

HOWLAND ENGINEERING AHO SURVEYING CO. TBPEFnnRoQllhlb'IMl>.F.-r TllPl..Sfm~Nc>.•~ _,_ 0 -¢- = HORIZONTAL WELL SURFACC L.OCATlOH wru UNIT UHE ' (M.-11-13

m«:£ UNE 7 a 1 5 K . - - ~lX.78041 P.~722M11 www.hoWlandcompanles.com ---- ------- = SURVEY Uff[ ~ BASIS OF BE'ARING' G.P.S. Tx. South Zono, N.A.D.-27. llG Pl.AT 111.Y l!OW MJ. CROSSINGS or P!l>[ll;£S OR CIBl.!:S. l/OMNID EHGff.DlllG Niil SU~ CO~ IHC. A.SSIJMES NO RE?iPOIGlllUl'I TO LOCATE Wfl..tfE Ofl Cla.E CROSSINGS. flElD tlATE "'o' PAGE s ORAWM Br: LM.

~~~~~~CO~:~ rtl: OWHE11SHP OR "' " "" CHECKED SY: J.S. JOB No. 22131.25 CIJPTRICHT HOM.NID o.'QH[ERlllG Al«> ~ co~ INC. 201lC SHE.ET: 2 OF 2 " , U11[l,/1{\ ~\DC't;:) HO 'WWA~~~-~w ~1Lz.-.· ENGINEERING AND SURVEYING CO.

EXHIBIT "A-25"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 25 (VAQUILLAS RANCH WELLS No. 10, No. 11, No. 12, VAQUILLAS RANCH A No. 80, & No. 99) 640.00 ACRES

A TRACT OF LAND CONTAlNlNG 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 227, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1133; and Survey 273, C.C.S.D. & R.G.N.G. R.R. C.o .• Abstract 1141, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 33°34'02" E, a distance of 1,360.57 feet, from the Vaquillas Ranch No. 12 Well;

THENCE, S 00°26'16" E, a distance of 4,991.78 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°36'57" W, a distance of332.74 FEET, to a point for a deflection left;

THENCE, S 89°36'41" W, a distance of 5,270.89 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°05'03" W, a distance of 4,985.84 FEET, to a point for the Northwest corner hereof;

THENCE, N 89'32'59" E, a distance of 5,572.87 FEET, to the POINT OF BEGINNING and containing 640.00 acres of land, more or less.

SHEET 1 OF2 H;\HOWLAND\SURVEYJNG DEPARTMENT\JobsUO 13\22131.27· 13\22131.27-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue : P.O. Box451128 {78045) 1 Laredo, TX78041 P. 956.722.4411 J F. 956.n2.5414 TBPE Finn Registration No. F-4097 : TBPLS Finn Registration No. 100464-00 EXHIBIT "A-25" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 25 (VAQUILLAS RANCH WELLS No. 10, No. 11, No. 12, VAQUILLAS RANCH A No. 80, & No. 99) 640.00 ACRES WEBB COUNTY, TEXAS

a 1[ ' I' ,,.,' ~I C) -¢- Pi VAQUILLAS .-\~~ SURVEY 226 -¢- VAQUILLAS RANCH RANCH ' I' A No. 125

>- :z; t; ~

[· G.T. BLACK ABSTRACT 2550 A No. 116

[;'~O'i !3"' .... ·1 l ' ~ "'"~ ti l -¢- VAOUILLAS I SURVEY 274 "oj C) ti :j l -¢- VAQUILtAS RANCH No. 16 RANCH A No. 111 I I ,__ _______ G.T. BLACK ABSTRACT 2551

~--- I N 89"32'9• E ,., r5$12.t!n"

f .v' ' a.I ·% .I -¢- VAQUILLAS RANCH ~· ~1

I ~/-, 4;:~. ~ GPODIT or'"') ~

"' ' VAQUIUAS-r!f- _7_!!!: ____

ffi~~ "'"'

ii ~ VAQUILLAS RANCH LEASE 199129-001 ,.~t; 26,622.79 ACRES (CALLED) [;'"' O'i ·1 RET""ED &40.00 10.E. UNIT !3 .bl ~ "'""'< J., .I 1 .. ~ rl! -¢- VAQUILLAS RANCH No. 11 ;; ~ a ' ' C)

.i w Pi ~:g SURVEY 227 C.C.S.D. & R.G.N.G. R.R. co. 'lo "',._ Pi~..,. -¢- i"' .~ ABSTRACT 1133 Nt!!- !;: ,.,,, .... I VAOUILLAS WEBB COUNTY, TEXAS z RANCH [;'ti C)

-¢- VAOUILLAS RANCH A No. 99 !3 Pi~ I A No. 80 rn~~ "u;ti .I ti I __...., __.....--'- ------ .iI s 89'36°41. w ,., :5,270.89' __...., __...., __...., - ------ ' s 89".38'~.,. w VAQUILLAS 332.74' I -¢- RANCH -¢- VAQUILLAS RANCH .--' '' No. 18 No. 15 (BHL) I' It OVAOUILLAS RANCH No. 15 (SHL) -¢- VAQUILLAS RANCH A No. 2J1 I' SURVEY 967 J. POITEVENT ii -- - ABSTRACT 2061

- 1 SURVEY 966 GRAPHIC SCALE J.H. FULLER • I.' 500 ~ ~ ..Ioo ABSTRACT 2593 "~- (IN m;r) I 1 1n<11 - 1ooan

R.vls1on .,,. LEGEND '' HOWLANll ENGINEERING AND SURVEYING CO. 0 -¢- __ ,_ "'~ ,. HORLZOHTJ.l. WElL SURrACE LOCAnOH

UNIT UHC ' ' 04-11-lJ 05-17 1J 06 06-IJ

•' ~FOTo~No.1411!11 TBPLSFOTo~No-1~ rtHCC UHE 71115N.-A.....,. ....00. nt.1&041 P.1161!.722Ml1 ------- "" 10-IS-IJ www.hoWlandcompanles.com -··- S\IR'VU UHE ~ BASIS OF BEA.RING: G.P.S. Tx. South Zone, NA0.-27. THS P\AI' 14'.'I' 001' SHOW JU ~ Of' PIPEIJC OR CAa£$. HOllll.AMl ~ NtO st1M:D1G CO~ NC. ASSlAES NO ~ TO toC.UE Pf>£lJH£ OR CIBl.E Cl!OSSl«l$. ~~'=.c~~~~~ ffl: a..wtSHI' OR FJELD DATE

"" "' "'•I• . DRAWN BY: LA.F./S.l.M. o-IECKED BY: J.s. JOB No. 221Jl.27 COFYRD€£RtlC ~ Sl.RM'EYIHG CO.. NC. 20!JCI SHEET: 2 OF 2 " HOWi~i~[x_g ENGINEERING ANO SURVEYING CO.

EXHIBIT"A-26"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 26 (VAQUILLAS RANCH WELLS No.15, No. 18, No.154, No. 177, No. 182, AND VAQUJLLAS RANCH A No. 175, & No. 231) 635.36 ACRES

A TRACT OF LAND CONTAINING 635.36 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 988, J.H. Fuller, Abstract 2593, Webb County, Texas, and being more particularly described as follows:

BEGlNNING at a point which bears N 59°15'10" W, a distance of907.68 feet, from the Vaquillas Ranch No. 18 Well;

THENCE, N 89°36'41" E, a distance ofS,270.89 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°06'58" E, a distance of 5,240.20 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°23'40" W, a distance ofS,272.32 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°06'07" W, a distance ofS,260.16 FEET, to the POINT OF BEGINNING, containing 635.36 acres of land, more or less.

,. r~ ~

I .

I ' .•...,u.:• . l _..·"I' f '.4 ;.. '} l· . 1

SHEET 1 OF2 H:\HOWLAND\SURVEYING DEP ARTMENl\l'Qbs\2013\22131 28-13\22l l 1.2g.. l3,doc

www.howlandcompanies.com 7615 N. Bartlett Avenue ; P.O. Box451128 (78045) : Laredo, TX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 ; TBPL5 Firm Registration No. 100464-00 EXHIBIT "A-26" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 N RETAINED TRACT 26 (VAQUILLAS RANCH WELLS No. 15, No. 18, No. 154, No. 177, No. 182, AND VAQUILLAS RANCH A No. 175, & No. 231) 635.36 ACRES WEBB COUNlY, TEXAS

-¢- I • VAOUILl..AS RANCH " t' A No. 99

I " VAOUJLLAS

I -¢-RANCH A No. 231 " I SURVEY 986 J.H. FULIER " ABSTRACT 2593

I WEBB COUNTY, TEXAS

I • -'~No. A VAQUlllAS RANCH 182 ~>< .~. V VAQUILlAS RANCH A No. 175 -'1---'1- -'/; "1--- "1- \ z CONOCOPHlLLIPS COMPANY VAQU!LLAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) " \ .. VAQUILlAS REl'AliED 835.38 ACRE UNIT "\ >'< RANCH V No. 154 \ ,• VAOUILLAS >'< RANCH \" I V No. 177 \ [ I -- ---- -- ~~---------,s~..-"'2.>""°'<0"'='·~w~~-:•~;1.:!'7':'2.32~.--"""-------t~- ~~

' ' I 0""' 01"' '' "'""' :~:" SURVEY 229 C.C.S.D. & R.G.N.G. R.R. CO. I [;' "'"' . "'~ ABSTRACT 1132 GRAPffiC SCALE '' T "'~':\! I {IN f'!:rT) W~ • IODIJR. I' l.£GENO R•vblon ""'' HOWlANtlJJ ENGINEERING AND SURVEYING CO. lllPEFtmRoglonlion/ob.~1 Tlll'l.SFtm~ND.11XM64-0:l 0 -¢- ,. HORIZONTAL WELL SURFACE \.OCATIOH wru UHIT UHC ' 0'4-11-1.3

7815N._ll_ t..ot.io,TX.7'°'1 P.ll:le..n:z.M\1 F£HCE LJH[ www.howlandcompanles.com

WARNING: BASIS OF BEAAING: C.P.S. Tx. South Central Zone. NAD.-27. ""' SURV£Y UN£

nG PUJ W.1 NOT SHOlf NJ. alOSStfCS Of' PIPEIJNES 00 Cla.l:li. HOWl.HiO ENOINCERING FlElD DATE BOOK PAGE SJ DRAWN BY: LA.F. NID ~ CO~ t1C. ASSWCi NO RESl'ONSlllUIY T1l UlCA.l( PPllJNE OR CA!J.£ C!OSSINCS. NO ~ IS llO!E8'1' W.OC l!El;NIDING ClRROIJ OR ACTiw. SURl',ia/l.llHEJW. U3SOlt. nns llRAJiTfC w« DCCWslVEl.T fllf! ~ ~ °""' ru:OllNERS>IP Off co. U'. '" '" " CHECKED BY: J.S. JOB No. 22131.28-lJ COl"l'RICHT ltOWWll ENCll£El!fiG AHO Sl.Rt'E'l'M:: co., t«:. 201JC SHEET: 2 OF 2 HOWLL~~,~~~ ENGINEERING AND SURVEYING CO.

EXHIBIT "A-27"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 27 (VAQUILLAS RANCH A-12 WELLS No. 168 & No. 202) 614.74 ACRES

A TRACT OF LAND CONTAlNING 614.74 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 987, J. Poitevent, Abstract 2061, Webb County, Texas, and being more particularly described as follows:

BEGlNNING at a point which bears N 13°58'44" E, a distance of 1,605.58 feet, from the Vaquillas A-12 Ranch No. 168 Well;

THENCE, S 00°30'00" E, a distance of 5,218.37 FEET, to a found 8" fence comer post, for the Southeast comer hereof;

THENCE, S 89°22'22" W, a distance ofS,138.40 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°06'58" W, a distance of 5,240.20 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°36'57" E, a distance of 5,103.29 FEET, to the POINT OF BEGINNING, containing 614.74 acres of land, more or less.

;.i.

_:~ i- ~ . • r·~i

SHEET 1 OF2 H:\HOWLANDISURVEYING DEP ARTMENl'Jobs\2013U2l3I.29-13\22131.29-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Boll 451128 (78045) i Laredo, 1){78041P.956.722.4411 1 F. 956.722.5414 TBPE Firm Registration No. F-4097 i TBPlS Firm Registration No. 100464-00 EXHIBIT "A-27" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 ~ RETAINED TRACT 27 {VAQUIUAS RANCH A-12 WELLS No. 168 & No. 202} 614.74 ACRES WEBB COUNTY, TEXAS

I I

SURVEY 273 ' ' C.C.S.D. & R.G.N.G. R.R. co. I SURVEY 227 I ABSTRACT 1141

,__! •

r=~\ C.C.S.D. & R.G.N.G. 1 R.R. CO. ABSTRACT 1133 1 _____ , ___ .,,--.,,--r . ~\__ VAOUILLAS _..-'1. __ .,, N 89"38"F E \ ... ~.103.29' RANCH ------_,,,,_*"':..:....~~~....::..=..::::.::..~~::.:.::::::::..~~~~~-.~~ A-4 No. 173

_......,,--- '1.---1- ""1 '' "'/ • J. .. -I .+~ \ VAQUILI.AS ~! ;,~· "1 RANCH 168~ I ;e:I • A-12 No. (BHL) ,.,f I SURVEY 988 J.H. FULLER ABSTRACT 2593 1• , 0--- I SURVEY 987 1 VAOUILLAS RANCH A-12 No. 168 401' -¢- VAQUlUAS

l •1 J. POITEVENT (SHL) RANCH ABSTRACT 2061 A-4 No. 121 WEBB COUNTY, TEXAS

_rt_ VAQUJUAS RANCH VA No. 175 • l :I: " I A VAOUIUAS L ___ _ i CONOCOPHJLLIPS COMPANY " I VAQUILLAS RANCH LEASE 199129-001 i.r· RANCH A-12 No. 202 ~ !} 26,622.79 ACRES (CALLED) RErAIN£D 814.74 ACRE utlT ...• I " I VAOUILLAS I RANCH C No. 64

f - - ~-~~- ~------::-:::=~r":-:-:.=-=-----~;;:=-t-t=l= S 89"22'22"' W - 15,138.40' Found 8" fanca Post

SURVEY 230 W.R. AU.DREDGE ABSTRACT 2523 I. ~------ .'1: GRAPHIC SCALE :i.oo 0 2SO SOO 1000 'r-.•.«w,,,)--1 I

(tll'!FI) I: l£CtNO R•vl•lon

HOWLAt~l[l) 0 -¢- = HORIZOKTAL WEU. SURFACE l.OCATIOlt Q-1.-09 \J

ENGINEERING AND SURVEYING CO. TDPEFlmi~Na.~ 1BPLS F'""'Rldsh6lnNa.1~ 76\SN._A_ 16odo.1X.78l)O\ F>.PS&.722Mll ""' UNIT LINE f'I"HCE Ul'IE www.howlanck:ompanles.ccm

WARNING: B.o\SIS OF BEAR!liG; G.P.S. Tx. South Central Zone, NAD.-27. "" SURVEY UHE

Tlf:S PL» W.T NJT S>10111 ALL C110SS11c:S Of' P'PEl.JtCS OR C1aLS. tlOWlAllD £NCIN(£~ ""'° ~ CO., INC- MSl.MCS 1«1 ~!11.Jl'r TO 1,0CATI: Pffl.H: Oii CIBL.E Cl!OSSIHGS. FlElD OATE 'OOK N' "''". OAAWH BY: tAF.

~~H=.c~~~i::.=~rorr:-U'~Dlt "' " CHECKED SY; JOB No. 22131.29-IJ J.S.

COPmlClfT "OMJ,HI) EHCHDll'IC AN> SUIMwt: CO.. tlC. 20\JC SHEET: 2 or 2 HOWLA~JD ENGINEERING AND SURVEYING CO.

EXHIBIT "A-28"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129..001 RETAINED TRACT 28 (VAQU1LLAS RANCH A-6 WELLS No. 41, No. 57, No. 229, VAQU1LLAS RANCH H No. 28, No. 109, VAQU1LLAS RANCH H No. 224 A & V AQUILLAS RANCH H No. 46 C) 640.00 ACRES

A TRACT OF LAND CONTA1NING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 31, C.C.S.D. R.G.N.G. R.R. CO., Abstract 1043; and Survey 26, R.0. Bamesley, Abstract 2133, Webb County, Texas, and being more particularly described as follows:

BEGINN1NG at a point which bears N 58°26'33" W, a distance of 1,644.66 feet, from the Vaquillas Ranch A-6 No. 41 Well;

THENCE, N 89"29'46" E, a distance of 5,358.90 FEET, to a point for the Northeast corner hereof;

THENCE, S 00°29'05" E, a distance of2,525.78 FEET, to a point for a deflection left;

THENCE, S 01°28'37" E, a distance of2,670.53 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°32'59" W, a distance ofS,399.74 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°32'40" W, a distance ofS,190.85 FEET, to the P01NT OF BEGINNING and containing 640.00 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\.SURVEYING DEPARTMENNobs\2013\22131.31-13\22131.31-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue : P.O. Box451128 (78045) Laredo, TX78041P.956.722.4411 F. 956.722.5414 TBPE Arm Registration No. F-4097 TBPLS Firm Registration No. 100464-00 EXHIBIT "A-28" CONOCOPHILLIPS COMPANY VAQUJUAS RANCH LEASE 199129-001 ~ RETAINED TRACT 26 (VAQUIUAS RANCH A-6 WEllS No. 41, No. 57, No. 229, VAQUJUAS RANCH H No. 26, No. 109, VAQUJUAS RANCH H No. 224 A & VAQUJUAS RANCH H No •.46 C) 640.00 ACRES WEBB COUITTY, TEXAS ' (' I' J;j ' I' -¢- VAQUJLLAS ~~~J B ~~ • -\BBGINHING SURVEY 31 C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 1043 WEBB COUNTY. TEXAS ' I' ' A - - - - - - - -~·!:'__,J::....·'-----..,---..:•:..::119"29:..:;:;.;'... ::....:•;..;-.;...:5.::•="'="0::.'----------i I o"'o"' r- 01

', ',~~ I "'"'"' N(5C\J ""'<'6'· I bl, CONOCOPHIWPS COMPANY ..,.., >- . t; !3s: ...... ·a~,...U~ ·- VAQUIUAS RANCH LEASE 199129-001 ";l ·(Js">-..if- co: VAQUILLAS '-.., -----1~1' ____':...'-Q-A-6 No. 41 1 RANCH 26,622.79 ACRES (CALLEO) RETAttED &40.00 JafE. UNIT 5 "'"' "'01"' I§.,, VAOUJUAS ' 01 RANCH "' A-6 No. 229 -¢-.(BHL) VAOU!LLAS ~ RANCH ~ .0 VAOUILL.AS -o-A-6 No. 57 !! RANCH A-6 No. 229 "' (SHL)

~ ------------------------ ----- VAOUILLAS z VAQUIUAS RANCH RANCH -¢- H No. 109 -¢-H No. 46 C

SURVEY 274 G.T. BLACK ABSTRACT 2551 SURVEY 26 R.O. BARNESLEY VAQUILLAS ABSTRACT 2133 RANCH -Q-H No. 224 A VAOUIUAS -¢- VAOUILLAS ,_________ vr'-iHNo.28 RANCH RANCH A-6 No. 83 ~.-----------s---,-.~.,.-.:-w---o~~.~J~.7.----------1... ... VAOUILLAS ' RANCH -¢- H No. 96

CRAPlliC SCALE VAQUILL.AS 1; ~

Joow·---- ' o"'°~

(IN Fm) 1 Inch - 1ooon VAOUILLAS RANCH -¢- H No. 225 RANCH -¢-H No. 115

HOWLAND ENGINEERING AND SURVEYING CO. TaPEFm.~No..l'-4097 n?Ull'tm~N<>.1~ 0 -¢- ., l'IORl2Dl!'IAL W<:lL SURrACE LOCATIOH ~ UNIT LINE 71115"1.-- 1M.io. TX.7&04! P.-722.MH FENCE UNE

WARNING: BASIS or www.howlendcompanles..com BEARING: G.P.S. Tx. South Zono, N.AD.-27. "" SURVEY LINE

'MS PlA7 NAY NOT ~ ALL CROSSINtS Of PIPEl#£S DR aa..E5. liDWlNftl ~ flElD O.ATE PAGE ~I OAAWN BY; LA.F"./S.1.1.1. AHO SUIMYflG co~ INC. ~ ND R£:Sl>ONSIBl.JI ro LDCUE PffUI( OR C>aL CROSSINGS. ~ll~~~~~d:x:o~~.EJW. FD: OIM1!SllP OR "' "'' OiECKED SY: J.S. JOB Ne. 221J1.Jl 13 COP'l'l!IGNT lfOlllNID DK:11ED!1NC ANO SUIM:'l'\NC CO~ tole. 20!lC SHEET: 2 OF 2 HOWUi\~;~~ ENGINEERING AND SURVEYING CO.

EXHIBIT "A-29"

FIELD NOTES FOR CONOCOPBILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 29 (VAQUILLAS RANCH B WELLS No. 96, No. 115, No. 162, No. 226, VAQUILLAS RANCH D No. 117, No. 153, No. 223 & VAQUILLASRANCBNo.17) 618.16 ACRES

A TRACT OF LAND CONTAlNING 618.16 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 26, R.O. Baroesley, Abstract 2133; aod Survey 273, C.C.S.D. & R.G.N.G. R.R. C.O., Abstract 1141, Webb County, Texas, and being more particu]arly described as follows:

BEGINNING at a point which bears N 33°41 '33" E, a distance of 1,796.29 feet, from the Vaquillas Ranch H No. 162 Well;

THENCE, S 01'28'37" E, a distaoce of2,576.14 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°10'24" W, a distaoce of 10,341.47 FEET, to a point for the Southwest comer hereof;

THENCE, N 00'26'16" W, a distaoce of2,643.65 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°32'59" E, a distaoce of 10,294.50 FEET, to the POINT OF BEGINNING and containing 618.16 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYJNG DEPARThffi.N"Nobs\2013\22131.32-tl\22131.32-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue i P.O. Box451128 (78045) I Laredo, lX78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 I TBPLS Firm Registration No, 100464-00 SURVEY 274 G.T. BLACK • ABSTRACT 2551 • I VAOUll.l..AS

~\ RANCH

-¢- VAQUILLAS RANCH !I ANo.{11 "" - "" - "" - "" - "" - "" - "" - "" ~ H No. 28

1--- N 80'32.1S9• E ,... 10.294.SO' 4 , j 1 I '

i! -¢- VAQUILLAS RANCH I I

-¢- VAQUILLAS RANCH SURVEY 26 R.0. BARNESLEY I ' I "' • ' .:.i'~ /

~ c; -z...."' D No. 117 H No. 96 ;...I ABSTRACT 2133 ~I ,../!

1 " c'1 CONOCOPHILLIPS COMPANY I ' "'" 0 I -¢- I ' VAQUILLAS RANCH LEASE 199129-001 I ' !>.JS· 1:; ~~~~ No. 12 T 0 No. 223 VAOUILLAS RANCH VAOUILLAS °ta <-i 1;j ~z RANCH -¢-H No. 115 RANCH ;... -¢- H No. 226 H No. 162 o " "' "? "' t--~ ~ ~~o- "" E""o;~ .. VAQUILLAS RANCH J~ !5c::i~Ul SURVEY 273 A-4 No. 150-¢- ,..[Zl .. ti}~ ~ C.C.S.D. & R.G.N.G. R.R. co. [;:el" c..i ABSTRACT 1141 "'"Cl ::> .. . "' "' ~';j GRAPHlC SCALE I SURVEY 25 "~ I• C.C.S.D. & R.G.N.G. R.R. CO.

• • LJ..3 ';,-- 'j ( IN filT) 1 .... ~ • 1000 Fl I >--\ ' .-J ABSTRACT 1042 I I I LEGE:NO R•villon 001•

HOWLANDENGINEERING ANO SURVEYING CO. 18PERmoRogftltolkwl"°·-' lllPUIFmRo;lolrftontlo.1~ EXHIBIT "A-29" CONOCOPHILLIPS COMPANY 0 -¢- : HORl20KTAL WEU. = SURrAC£ LOCATION lfl'[ll ., UNIT UM£ 04-12-13 05-17-13 08-06-13 1016H.-.S,O,- i..mlX.111(141 P.llC.0.1n.4<11 VAQUILLAS RANCH LEASE 199129-001 - RETAINED TRACT 29 <- - " rt:NCC UN[ 10-18-13 www.howlarnlcompanles.com - - - - - - - =TIES (VAQUILLAS RANCH H WEUS No. 96, No. 115, No. 162, • SURVEY UNE 11-::n-13 ~ BASIS OF' BEAAINC: G.P.S. T~. South Zone, N.A.D.-27. No. 226, VAQUILLAS RANCH D No. 117, No. 153, No. 223 & 'l1ms PlAT W.'1 HOT 3'°" l i l C!IOSSINC:s Of PIPD.JllCS OR t.oa.e. HOWl.NIO UONl'.ERlllC FlElO DATE 800' PACE(,) ORAWN SY: u..r.;s.1.1... NICI $lJM'l'l1IC CO., l

EXHIBIT "A-30"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 30 (VAQUILLAS RANCH A.{i WELLS No. 30, No. 83, & No. 228) 323.87 ACRES

A TRACT OF LAND CONTAINING 323.87 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 51, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1045, Webb County, Texas, and being more particularly described as foUows:

BEGINNING at a point which bears S 60°45'43" W, a distance of996.74 feet, from the Vaquillas Ranch A-6 No. 83 Well;

THENCE, N 01°28'38" w. a distance of2,622.92 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°15'20" E, a distance of 5,375.43 FEET, to a point for the Northeast comer hereofj

THENCE, S 00°51 '59" E, a distance of2,640.06 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°26'29" W, a distance of5,347.54 FEET, to the POINT OF BEGINNING, containing 323.87 acres of land, more or less.

SHEET 10F2 H:\HOWLAND\SURVEYING DEPARThlENT\Jobs\2013\22131.33-13\2213 I .Jl-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue ; P.O. Box451128 (78045) ; Laredo, TX 78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 i TBPL5 Finn Registration No. 100464-00 EXHIBIT "A-30" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 30 (VAQUILLAS RANCH A-6 WELLS No. 30, No. 83, & No. 228) 323.87 ACRES WEBB COUNTY, TEXAS

I • 0 ' " ' '0:" ~ ~ I-'

j ~ci~ >o :i E-< ' 0 [;'ci" "' ... "''" ioi I' "'" "'>-~in [;' 0 "'"'"' ,,;~ ' "' ;:i~N ."' .,; t.i SURVEY 260 I ~~t; t.i ERNEST C. GASSER '' '"ioi.,!;; VAQUILLAS

-¢- RANCH A-6 No. 57 ABSTRACT 2607 I' §c!~ o~ ' "'"t.i I'----- N 89"15'20• E ,.. ~,37!5.43' I ----

I.. CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 -¢-A-6 VAQUILLAS RANCH No. 30 i... ' 26,622.79 ACRES (CALLED) REl'AINED 323.87 ACRE UtlT ' ~

ji ~ 0 VAOU!LLAS ;; !! " (O!j ~ ,. "' 0 z --~:._ __ ;qA-6 No. 83 VAOUILLAS RANCH RANCH -¢-A-6 No. 228 "' '" 25 ~

"'"'"'... .,,;'J.•-'~,.. "' . "' "'""' ,.~ 1:0 ~9'"1" i!;;: >-Ze-- [;' " ~--~I>· [;' ci" !3"' ~ S 89"28"29• W ,.. S.347.54' "''" ioi :::i.:d~ (/l o,,, •Cll

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".,; -~

I~ I' t.i t.i ' ' ' SURVEY 51

-¢- VAOUILLAS I c.c.s.D. & R.G.N.G. R.R. ABSTRACT 1045 WEBB COUNTY, TEXAS co. I' RANCH ' ' H No. 162 ' I I ' '' ' ~-----+----------------------- GRAPHIC SCALE . • = = =I I ~ ·~ SURVEY 24 ~-·:w.J-1 R.O. BARNESLEY (Ill ~ET) ABSTRACT 2134 l Ill<~ - 1000F'I..

LEGEND Revision Do•

HOWLAND ENGINEERING AND SURVEYING CO. TllPEAm~-F-40ll'I 1N'LS,,...~H0.1004M.(ID 0 -¢- =SURrACE HOIUZOHTAL WElL WW. LOCATION

UMIJ LIME ' 04-09-13

7&1~H.-A ...... • i...:b,ll(.7!041 P.~7Z1M11 ------- ' """ ""' www.how1andcompanles.com

WARNING: BASIS OF' BEAAING: G.P.S.. Tx. South Central Zone, NAO. 2'. -- TIES SURV£'r UHE

l11IS PIJIT W.Y HOT S»0W Ml. CROSSJ'!l:S Of" PIPEUHES OR Cla.£S. llOlll'IHfO ~ >JjO ~C CO.. ~ ASSIAl£S HO R[5PIJtlSllllUT'I' TO 1..0CA.n'. PP0..M: OR Cla..E CllOSSINCS. FlEl.D OAT( ,,, ""'" PAGE" ORAWN 6"1': LM. HO CU1M 15 HCREllT W.0C ~ C\R!£NT OR JCfUlL Sl.wJiCC/W(C!IA(. I'll ~ OR llSSIJR. TlllS OllAIYl'IG IWJ!: OICW5fYD.Y flJR !11.AJNCTCW llESIJlR:lS ~ CO. LP. "'' '" CliECKED BY: JOB No. J.S.

~ HOWl.AICJ DICll€tRN: NtO SUIMYll'!G co., N::. 20\3C SHEET: 22131.3.l " ' "' ' Ho.·.•••J 'WWj :~.i. ,/'IA~ ~r1~~~r''; ~-~ ~~ --~El \J~. ENGINEERING AND SURVEYING CD.

EXHIBIT "A-31"

FIELD NOTES FOR CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 31 (VAQUILLAS RANCH A-4 WELLS No. 150, No. 167 & No. 227) 567.81 ACRES

A TRACT OF LAND CONTAINING 567.81 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 25, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1042; and Survey 273, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1141, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 34°45'22" E, a distance of 820.70 feet, from the Vaquillas Ranch A-4 No. 150 Well;

THENCE, S 01°11 '23" E, a distance of2,428.19 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°36'57" W, a distance ofl0,373.11 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°26'16" W, a distance of2,348.13 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°10'24" E, a distance of 10,341.47 FEET, to the POINT OF BEGINNING and containing 567.81 acres of land, more or less.

SHEET I OF2 H:UIOWLAND\SURVEYJNG DEPARTMENI\Job.s\2013\22131.34-13\2213 l.34-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue : P.O. Box451128 {78045) . Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registratlon No. F-4097 i TBPLS Firm Registration No. 100464-00 T T ' ' SURVEY 26 VAQUILLAS r_:i z LO .., I R.O. BARNESLEY ABSTRACT 2133 RANCH H No. 162 -¢- - '°~o­ . >- O::UE-< 0

•' SURVEY 273 VAQU!LLAS RANCH f;' ... "~ !. C.C.S.D. & R.G.N.G. R.R. CO. VAOUILLAS

I' ~~~~ -¢-H No. 115

@?.! RANCH ABSTRACT 1141 -¢- H No. 226 ~ ~ I~ ~

' u N 89"10'24• E ... 10_341.47" SURVEY/UNIT LINE VAQUILLAS - .. - .. • RANCH I N J4"45'22" E d A-4 No. 1 S7 VAQU\LLAS '!;;I 620.70' ~ : ~ ( 8Hl) _A V RANCH A-4 No. 227 ..,l 1/ / ... ~o\!ll'.- ~ l'- ~ (") . ~ gg ~....., I 1 ~ ~ t CONOCOPHILUPS COMPANY VAQU!LlAS RANCH LfASE 199129-001 26,622.79 ACRES (CALLED) 0 VAQUILLAS RANCH -¢- VAQUILLAS RANCH A-4 No. 150 ~ N z e-.. I REr.-JNED 567.81 N:;fif. UNIT A-4 No. 167 ...' ~~~ .; ! + _ ,. - , (SHL)

"'""~ ci I~I - - ' \ y, _J I I SURVEY 25 C.C.S.D. & R.G.N.G. R.R. co e 0 z ABSTRACT 1042 . 0 '-! I

,-- '1..--'f, \ I I WEBB COUNTY, TEXAS "' ,. .... {.) ~~~ c..::,......:~ ..-- ..-- I SURVD'/UNIT LINE s 89"36'07" w 10,373.11' ~~t; "'"'"' I """' H

con: Cl aJ~IO 01 ;::3 C\l I I ,._ \ I 1 I 1 _A_ V VAQUILLAS •• ...O! ""' "' ~~ >- ~ t) I I1 A-4rv.:.:o~H173 f;' g;=r:~ SURVEY 987 J. POJTEVENT VAQUILLAS RANCH 1 I• UJ..; gj i' 1 ABSTRACT 2061 . A-12 No. (BHL) 1se-¢- 'ir 1 SURVEY 232 C.J. BERGSTROM < 1 >< VAOUILLAS RANCH 0 1 ABSTRACT 2148 VAQUILLAS VAQUILLAS RANCH -¢-A-4 No. 151 ~ - J GRAPHIC SCALE 2U° 1o::io 2o::io • A-12 No. 168 1 I -¢- RANCH (llllUT) • \ (SHL) 1 1 A-4 No. 121 , .... h .. 10001'\.

LtGE:NO RHl1!on Dale

HOWLANtt\9ENGINEERING ANO SURVEYING CO. EXHIBIT "A-31 CONOCOPHILLIPS COMPANY H 0 -¢- • HORIZONTAL Wtu.

-•UNITUllE SURrAet LOCATIOll a WEU ,' 04-09-13 05-17-U OCl-06-13

•' TllPeFllmflogllnllontlo.~I Tlll'l..SFhn~Na.1C13"164-00 1~1~11.~A- lon

(VAQUIUAS RANCH A-4 WELLS No. 150, No. 167 & No. 227) - • "' - = SURVEY UllE WARNING· SAStS OF BEARING: G.P.S. Tx. South Zomt, N.A.0.-27. or PIPn.r."ES Oft c.oa.£S. HOWlAND OfCIH!DllNG lll! l'\>.T W.Y J

EXHIBIT "A-32"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 32 (VAQUILLAS RANCH C WELLS No. 84, No.103, No.160, & No. 246 ST) 460.44 ACRES

A TRACT OF LAND CONTAlNlNG 460.44 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 232, C.J. Bergstrom, Abstract 2148, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears S 25°59'31" W, a distance of2,521.75 feet, from the Vaquillas Ranch C No. 84 Well;

THENCE, N 00°08'17" W, a distance of 1,437.56 FEET, to a point for a deflection left;

THENCE, N 00°30'00" W, a distance of 5,218.37 FEET, to a point for the Northwest comer hereof;

THENCE, N 89°36'_57" E, a distance of 131.54 FEET, to a point for the northernmost Northeast corner hereof;

THENCE, S 00°28'50" E, a distance of2,901.83 FEET, to a point for an interior comer hereof;

THENCE, N 89°56'18" E, a distance of 5,133.27 FEET, to a point for the southernmost Northeast comer hereof;

THENCE, S 00°43'00" E, a distance of 3, 709.15 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°26'29" W, a distance of 5,286.78 FEET, to the POINT OF BEGINNING, containing 460.44 acres of land, more or less. ' ·~ Basis of Bearing: G.P.S., TX. South Zone, NAD-27

SHEET! OF2 H:\HOWLAND\SURVEYING DEP ARTMENT\Jobs\2013\22131.JS-I l\2213 L3S- l3.doe

www.howlandcompanies.com 7615 N. Bartlett Avenue ; P.O. Bo:ii:451U8 (78045) i Laredo, 1X78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. f.4097 ; TBPLS fl rm Registration No. 100464-00 EXHIBIT "A-32" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 32 (VAQUILLAS RANCH C WELLS No. 84, No. 103, No. 160, & No. 246 ST) 450.44 ACRES WEBB COUt((Y, TEXAS

SURVEY 273 C.C.S.D. & R.G.N.G. I N 89"3t5'S7" E I• R.R. CO. r- 1

131 .54, " ------- ABSTRACT 1141 • ..·.l

~.. VAOUILLAS -¢- SURVEY 25 I• RANCH c.c.S.D. & R.G.N.G. R.R. co. • VAQUIUAS

A-12RANCH ""· No. 168¥ (BHL) A-4 No. 173 ABSTRACT 1042 I• ... VAOUIUAS • RANCH I• ~~~

I.. -¢-A-4 No. 151 VAOUIUASQ RANCH -¢- VAOUIUAS """"' "' >

VAQUILLAS I• ""' '"'... ~~ RANCH • A-4 No. 247 n (BHL) ------ z _re VAQUlll.AS SURVEY 232 V RANCH C No. 160 C.J. BERGSTROM SURVEY 987 ABSTRACT 2148 J. POITEVENT WEBB COUNTY, TEXAS ABSTRACT 2061 VAQUILlAS CONOCOPHlLLIPS COMPANY RANCH Y. ____ !!!]~---A VAOUILLASH VAOUJLL.AS RANCH LEASE 199129-001 B-t No. 23>,. _'1" RANC 26,622.79 ACRES (CALLEO) ci <.,/I C No. 84 RErAINED 4eQ,44 N:;R£. UNIT ~ ;: ....~' : C')

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_ ... - ~ U - .. -;:::::-l==l/:::::="X-t=="/===l==l==l==l-l==l-l~x-x_!_x- ~ -*' I :I l VAQUILl.AS ~ VAQUIUAS "s 0 ~... ., g;q:~ '" u t;

• / ...., 0,"'>1 1 1 {/)ti ~ ."ii ~I I : RANCH C No. 246 ST (SHL) "-¢- j' : (BHL) VAOUILLAS ' I RANCH A-10 No. 81 z / ' : I

/ j SURVEY 230 ~----...I...---:;-:::::::::::::-:;-".'.":~:'-:::---------?- s w ,.. ""- ""- W.R. AU.DREDGE I ABSTRACT 2523 i' PO;r 01\ 89"2&'29. 5.288.76' • • -I ~ I• I: SURVEY 231 c.c.s.D. & R.G.N.G. R.R. co. • 11 ABSTRACT 1116 I• [: • GRAPHIC SCALE I• T • l Wh • llXXlR I LEGEND Rn!slon Oat•

HOWLAND ENGINEERING AND SURVEYING CO. $ = HORIZOHTAL \11£1..1. . ""'- SURFACE LOCATION ' TIIPEA.~WI 7&"N._A_ l...so.lX.1llOO\ P,1151!.722..«11 T'llPUlnm~-1(XM6+.CO -~,-- ~ ~~E~~E www.howlamk:cmpanles.corn ------- = TIES ,. ,. '" SUl!VE't UNE WARNING: B"SIS OF BEARING: G.P.S. Tx. South ~ntral Zone, NAD. 27. llllS PVoT llAV HOT St!O'll' ,l,U. CR0SSNCS Of PFllJNES CR aaLS. HCNIV"ID DQ.IEERN: NICI SlJfM:l1'IG co_ IMC. ASS1M:S HO RESPOtiSIBU1Y ro 1.DCATE PIPfl.HE CR aaL C!K:!S9NGS. FlaD OATE '"''' PAGE"

"' DRAWN SY: LAF.

~ni:s~~~~~~~~=r:D.tttlP~ COP\'RC>{T lfOWlNIO Dlc:fl~ .<>ill SIJIM.WIC CO~ INC. 2013CI QI "' CHECK£D BY: JOB No. J.S. 221ll.JS ll SHEET: 2 OF 2 HoaQI 'WWJ~~ &~~ [~\J; t;\i ENGINEERING AND SURVEYING CO. '· ~:&f::-r

EXHIBIT"A-33"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 33 (VAQUILLAS RANCH WELL A-10 No. 81, VAQUILLAS RANCH B-1 WELLS No. 23, & No.120) 382.64 ACRES

A TRACT OF LAND CONTAlNING 382.64 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 233, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1117, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 42°39'42" W, a distance of 1,797.35 feet, from the Vaquillas Ranch 8-1 No. 23 Well;

THENCE, N 89°08'54" E, a distance of 4,485.02 FEET, to a point under an existing fence line, for the Northeast comer hereof;

THENCE, S 00°19'51" E, along an existing fence line, a distance of3,744.45 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°36'00" W, a distance of 4,459.86 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°43'00" W, a distance of3,709.15 FEET, to the POlNT OF BEGINNING, containing 382.64 acres of land, more or less.

I ' ~

SHEET! OF2 H:\HOWLAND\SURVEYING DEPARTMEN'Nobs\1013\21131.36-!3\22131.36-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 451128 {78045) l Laredo, TIC 78041 P. 956.722.4411 F. 956.722.5414 TBPE Arm Registration No. F-4097 ! TSPlS Firm Registration No. 100464--00 EXHIBIT "A-33" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LfASE 199129-001 ~ RETAINED TRACT 33 (VAQUJUAS RANCH A-10 waL No. 81, VAQUJUAS RANCH B-1 WELLS No. 23, &: No. 120) 382.64 ACRES WEBB COUNlY, TEXAS I

i I I

I l I I

I ~ I

ll I SURVEY 24

SURVEY 25 I I R.O. BARNESLEY ABSTRACT 2134 C.C.S.D. & R.G.N.G. I R.R. CO. ABSTRACT 1042 I l --· I POlllT or ~ ---------- I N 89"08'54• E - -4-.485.02" ' ',~ ',~ t I '~.,p. I SURVEY 232 ,?. I C.J. BERGSTROM ABSTRACT 2148 """' :* '~.>. ',.si_.. ,·~-: I - J- I CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLEO) ~ ."' ;, f- - - -1.201'- - - -'.:¢- RErAIHED J82.M laf£. UNT :t "" ~~ VAQUlllAS

...' RANCH 8-1 No. 23

==: l==- z ~ )( ...!.="i" - SURVEY 233 ...;;; SURVEY 271 C.C.S.D. & R.G.N.G. -61VAQUILLAS C.C.S.D. & R.G.N.G. R.R. co. VAOUILLAS § R.R. CO. RANCH C ABSTRACT 1117 ABSTRACT 1136 VAOUILLAS No. 246 ST (SHL) WEBB COUNTY, TEXAS RANCH -r;f-1 No. 120 "' RANCH c No. 246 ST -¢- (BHL) VAQUILLAS RANCH A-10 No. 81

------- SURVEY 231 s 89"3fl'oo· w .... 4,4!5s.aa' ' C.C.S.D. & R.G.N.G. R.R. CO. I I ABSTRACT 1116 I' 1• SURVEY 234 ' C.J. BERGSTROM I• ABSTRACT 2146

' t• I GRAPHIC SCALE 1 . = I ~

--·J-1 )or• ~~

(Ill n:u) ·~

l ltlell • lODOrt. I 1 LEGEND R""lslon Dela

HOWLAND ENGINEERING AN) SURVEYING CO. Te?E~~Ha.F-4D!l7 TUPUIFkmRoogllhloo'INl>.ICI0'&4-00 0 -¢- = HORl20NTAL WEU. SURFACE l.OCATIOH • WW. • UNrr UllC ' 04-09-IJ

7515N._,,,_,,, ...-_r.c,7!041 P.D56.122M\1 - ' -- = fU{C[ Ula:

-··- www.howlandoompanle&.oom - - - - - - - =TIES • StJR\l£Y LINE ~ BASIS OF BOOING: G.P.S. Tx. South Central Zona, NA0.-27. ms P\JiT llAY HOT SHC7ll' AU. tmlSSHCS OF P1'£1.JllES OR Cla.E.S. HOWl.NIO DICmEllll«; flEl.D DATE BOOK PAGE si DAAWN BY: LM. NIO ~G CO.. tlC. ASSl.M£S NO lt£SPCHSl!IUTY ro 1.0CATE Pf'Q.t£ OR c.oa£ CROSSN:lS. ~lln':s:.C~R!~~~~J1LIP~ OR "'' '" "" CHECKED BY: J0a No. J.S. 221:::11.36-13 CIOl'l'RICHT HOWVllO ~ N'J ~c co., li'IC. :to\JC SHEET: 2 OF 2 HOWLAND ENGINEERING AND SURVEYING CO.

EXIDBIT "A-34"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 34 (VAQUILLAS RANCH A-8 WELLS No. 59, No. 66, & VAQUILLAS RANCH A No. 86) 606.84 ACRES

A TRACT OF LAND CONTAINING 606.84 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1649, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1110, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 38°23'35" E, a distance of2,217.27 feet, from the Vaquillas Ranch A-8 No. 59 Well;

THENCE, S 00°17'51" W, a distance ofS,027.60 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°24'12" W, a distance ofS,177.16 FEET, to a point for the Southwest corner hereof;

THENCE, N 00°30'01" W, a distance of 5,115.58 FEET, to a point for the Northwest corner hereof;

THENCE, S 89°37'46" E, a distance ofS,247.75 FEET, to the POINT OF BEGINNING, containing 606.84 acres of land, more or less.

SHEET I OF2 H:\HOWLAND\SURVEYING DEPARThfEN'J\JobsUO 13\22131.37-13\22131.37-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue , P.O. Box451128 (78045) ! Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Firm Registration No. F4097 ; TBPLS Firm Registration No. 100464-00 . EXHIBIT "A-34" CONOCOPHILLIPS COMPANY VAQUILI.AS RANCH LEASE 199129-001 N RETAINED lRACT 34 (VAQUILI.AS RANCH A-8 WELLS No. 591 No. 66. & VAQUILI.AS RANCH A No. 86} 606.84 ACRES WEBB COUNTY, TEXAS

•• •• • • I• I• I• • SURVEY 1646 O.A. & F.A. SITZ • SURVEY 1648 • I• ABSTRACT 3301 I• C.M. SAWYER ABSTRACT 2441 I• ~ ~ ·,llBOOOllllG • • • 1- S 89"37'46• E 5:.Z.47.75'

lI ' ' ------- I I ,.,-6/'' .,., SURVEY 1927 I ,_, ' '"' I T.M.R.R. CO. ABSTRACT 1808 ~· ~·I _,j>,..,/ ' I I ~'?/' I ~/ I 1/' ' I

~ -¢-------,,68'---- l CONOCOPHILUPS COMPANY ...;j: --------:a' VAQUILLA.S RANCH LEASE 199129-00 I VAOUIUAS 26,622.79 ACRES (CALLED) RANCH 0 0: ~~N ... RETAHD 608.84 AmE UNT A-8 No. 59

' t> >- < "' !5~"'"" i z SURVEY 1649 C.C.S.D. & R.G.N.G. R.R. co. ABSTRACT 1110 VAOUJLLAS RANCH A-8 No. 66 -¢- ~ ..~ .~ "!., "'"!:! WEBB COUNTY. TEXAS "' ·rn ~go:i "' ~ ... >dl~o

~'" ;l o:::iif;) VAQUILLAS 1il" !:l -¢- RANCH A No. 86

-·----- 15 89'24'12· w ... 5,1n.1e• ------- • SURVEY 1906 • T.T. R.R. co. ABSTRACT 3103 I• • SURVEY 1653 I• C.C.S.D. & R.G.N.G. R.R. ABSTRACT 1099 co. • I GRAPHIC SCALE = bo------ 0 ~ = ·=I

( IN f'EU ) 1 Inch• IOOOn. ·=I

LEGEND Ravlslon 0 ..1.

HOWLAND ENGINEERING ANO SURVEYING CO. TBPEF\mRlglol'16onNO.f~ ~ftmR19ahblllo.ICOl6UD 0 -¢- = HORIZONTAL WELL • SURFACt LOCAnoH M~ = UN!T UH[ I 04-11 lJ

• FEHCE a-IE 761~N.Flallo!IA- t...-.ll<..7ll041 P,111511.nz.4411 www.l'>owlandcompanle11.com - ' - - - - - - - "' TIE'S " " - " SURVEY UH! WARNING: BASIS or BEAAING: G.P.S. T~. so ... th Zone, N.A.D. 27. t.U. MS P\AT W.Y liOT SHOii' ALL CROSSt!GS Of" l'IPWhG OR aa..r:s.. llOWlJJIO ENC1111£ERN; HIO SUIM:'l'i'tG CO. lllC. .ISSl..::s NO JIC;PC»&Ell!IY ro l.OClTE P1PDJNt OR C08IL CllllSSHClS. FlEUl DATE 'NA PAGE :s DRAWN SY: NO QJ.&1 IS 1tER1'.BT MM)[ f!teN!IJHG OJRRDIT Oii M:f\£1.t. S!RlF>a'./latU;AAI, f!I: OllMRS>!P OR U3SOfL n11S OAAllllf(l WNX txQ..l.!SMl.Y Rlll CCINOCOPliUJPS COIWNIT. " "' CHECKED SY' JOB No. 221J1.J7-1J J.S.

~ ~ EHCN'.DiHD .lHO StJll\ll"l'N; i::o.. INC. 20130 SHEET: ' O' ' HOWL.A~~mJ ENGINEERING AND SURVEYING CO.

EXHIBIT"A-35"

FIELD NOTES FOR CONOCOPRUJ.IPS COMPANY VAQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 35 (VAQUILLAS RANCH A·ll WELLS No. 55, No. 58, No. 79 & No. 147) 640.00 ACRES

A TRACT OF LAND CONTAlNlNG 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129-001, 26,622.79 Acres (Called), situated in Survey 1651, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1112, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bearsN 46°43'15" W, a distance of799.66 feet, from the Vaquillas Ranch A·l I No. 79 Well;

THENCE, EAST, a distance of 5,173.18 FEET, to a point for the Northeast corner hereof;

THENCE, S 00°01'12" E, a distance ofS,422.60 FEET, to a point for the Southeast comer hereof;

THENCE, WEST, a distance ofS,077.78 FEET, to a point for the Southwest comer hereof;

THENCE, N 01°30'06" W, a distance of3,788.66 FEET, to a point for a deflection right;

THENCE, N 00°04'11" E, a distance of 1,635.25 FEET, to the POINT OF BEGINNING and containing 640.00 acres of land, more or less.

.;

SHEET I OF2 H:\HOWLAND\SURVEYING DEPARTMENl'Jobs\2013\22131.311-13\22131.38-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue ' P.O. 8oK451128 (78045) i Laredo, lX 78041 P. 956.722.4411 I F. 956.722.5414 TBPE Firm Registration No. F-4097 1 TBPLS Firm Registration No. 100464-00 EXHIBIT "A-35" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 199129-001 ~ RETAINED TRACT 35 (VAQUILLAS RANCH A-11 WEU.S No. 55, No. 58, No. 79, & No. 147) 640.00 ACRES WEBB COUNTY, T£Xlo.S

SURVEY 1647 C.C.S.D. & i R.G.N.G. R.R. co. i I

IT SURVEY 1646

~-· ABSTRACT 1101 BLAS PENA ABSTRACT 2396

i N 46"43'15• W ;$· H _ c_799.66' - -,- - .. - - - .... -EAST .:-g:;'13.1's~ - .. - .... - .... - ;, ' j I ~ ',,, ~ - • -~---,.,..- "°"''""- VAQUILLAS l RANCH SURVEY 1664

. A-11 No. 79 W.H. TAYLOR ABSTRACT 2877

f-------~ i A V VAOU!UAS RANCH A-11 No. 55

CONOCOPHIUIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 26,622.79 ACRES (CALLED) RETAINED 540.00 ll;flE. UNTT -¢- VAQUIUAS RANCH A-11 No. 58

SURVEY 1651 C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 1112 WEBB COUNTY, TEXAS

-¢- -- .. --- 0 u VAOUILLAS RANCH SURVEY 1650 A-1 l No. 147 C.M. SAWYER ABSTRACT 2444 WEST ,.. ~.Cf77.7B'

.-p-• VAQUIUA~ SURVEY 1652

------~ W.H. TAYLOR ABSTRACT 2876 ~

I RANCH 1 L No. 196 GRAPHIC

"""·-- .... ~UT 1 l t1 n:a) 1neh • 1ooon T LEGEND Revl~on Dote

HOWLAND ENGINEERING AND SURVEYING CO. T'BPE F1tm Regll- tb. F-4097 TBPUI Am~ Na. 10G464-0) 0 -¢- -~,-- " ~~:~~'r~~N = WW. : ~EU/1~£ 1 2 3 ~-11

05-17-IJ 05-06-lJ lJ

7B\5N.Bo_A_ ~lX.7BO't'l'ING CO., II<. 2'1130 SHEET: 2 OF 2 HOWlt~~~ ENGINEERING AND SURVEYING CO.

EXHIBIT "A-36"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY V AQUILLAS RANCH LEASE 199129-001 RETAINED TRACT 36 (VAQUILLAS RANCH A-4 WELLS No. 121, No. 151, No. 173 & No. 247) 367.60 ACRES

A TRACT OF LAND CONTAlNING 367.60 ACRES, more or less, being out of the Vaquillas Ranch Lease 199129·001, 26,622.79 Acres (Called), situated in Survey 25, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1042, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 72°18'31" W, a distance of 1,190.94 fee~ from the Vaquillas Ranch A-4 No. 173 Well;

THENCE, N 89036'57" E, a distance of 5,471.02 FEET. to a point for the Northeast comer hereof;

THENCE, S 01°11'25" E, a distance of2,927.97 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°08'54" W, a distance of374.16 FEET, to a point for a deflection right;

THENCE, S 89°56'18" W, a distance of 5,133.27 FEET, to a point for the Southwest comer hereof;

THENCE, N 00'28'50" W, a distance of2,901.83 FEET, to the POINT OF BEGINNING and containing 367 .60 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVh"YING DEPARTMENI\Jobs\2013122131.39-l 3U213 l .39-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue 1 P.O. Box451U8 (78045) : Laredo, lX 78041P.956.722.4411 F. 956.n2.S414 TBPE Arm Registration No. F-4097 I TBPLS Firm Registration No. 100464-00 EXHIBIT "A-36" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 199129-001 N RETAINED TRACT 36 (VAQUIUAS RANCH A-4 WEUS No. 121, No. 151, No. 173, & No. 247) 367.60 ACRES WEBB COUNTY, TEXAS

: -¢- VAOUILL.AS 1 ;~

~------= """:~-::;.,.,, ---:.:=··+ .1~ 0 u

"' (")~:;jl ~r_;::! ~:z; t> A-4 No 167 _r'-r_ A- 4 No. 227 RANCH 1 Ct:~~ ' (BHL} ¥ -¢- A-4 No. 150-¢-

::>.:d~ ' I '.;!l1' I' VAOUlw.P "' .< RANCH JH A-4 No. 167 "cjoi (SHL)

cj ' I• SURVEY 25 C.C.S.D. & R.G.N.G. R.R. ABSTRACT 1042 co . • N 72'18'31" W WEBB COUNTY. TEXAS

__ r l,190.94'

~--~--_;;,~_--_-1-f~-~ol~~....::..;:::.::::""-.:;..;;;-"""..:::::;~~~~~~~--r N 88'38'S7• E - &.471.02'

I - -... 1:)1 ___ .lJ.~:.-~~ VAQUIUAS •' >,.< RANCH A-4 No. 173 CONOCOPHILUPS COMPANY VAQUIU.AS RANCH A-12 No. 168--1"-<_ (BHL) ¥ 1:l 0 ::! • VAOUILLAS VAQUILLAS RANCH LEASE 199129-001 26,622.79 ACRES {CALLED) RETAINED 357.tlO N:iP£. UNIT !• w VAQU!U.AS VAOUILLAS RANCH 0 " ii RANCH -¢-A-4 No. 121 RANCH -¢-A-4 No. 151 VAOUJLLAS A-12 No. 168 (SHL) Iii RANCH !! A-4 No. 247 0 (SHL) z VAOUILLAS RANCH A-4 No. 247·

·YI" (BHL) .fl. 1>-~~~~~~~~~~~.;.....;_-"'-~~~~~~~~-9-r-o-~--- s 89'58'1s• w- 5,133.27" S 89"08'M• W SURVEY 987 A VAQUJLLAS 374.16' J. POITEVENT y RANCH I C No. 160 ABSTRACT 2061 SURVEY 232 C.J. BERGSTROM VAQUILLAS ABSTRACT 2148 RANCH -¢- C No. 84

' ' v~~2~ j

+=I - •• - •- i==i==i==~==2==i==i==i===i== C No. 246 ~x----X VAOUILLAS (BHL) ffi VAQUILLAS I RANCH C No 103 _,.i.,__ V ~ RANCH VAQUILl.AS C No 246 & RANCH No 246 STI I 1 I -¢-

l ~~:~~~:'. C No. 246 ST1 (SHL)

=~ ~-~-~-~-8~-=~:.~R~,~ .!.,i ~i -i ~i ~i ";, ~nAL~E~ ~ ~=~I - "" - -- - "" - - "~L~" - ..

L£GEHO R.vlslon Doi•

HOWLAND ENGINEERING AND SURVEYING CO. ll!l'E~~Ho.F-<097 T51'\.SAm~HD.I~. _ 0 -¢- " HOR!ZOM1"AL wtU. SURFACE LDC.\TIOH • WW. ....._ _ ,. UMIT LIKE I 10-18-IJ

74151<.8allldli_..• l.ando.1X..1ll041 P.9'6.mMl_l -~•- " F"ENCE LtlE www.howlandcompanles.com ------- = 11£5 - • • - " SURV[Y UHE ~ &.SIS OF BEAA!NG: G.P.S. Tic. South Zone. N.A0.-27. 'MS P\AT ""'T llOT SfOW H..L ~ OF PfflJKES OR Cla..ES. l!O'll'l.AHtl , ~ AHO SIJRVl:THP CO. ttC. AS9.lilES NCI FIESPCIHSlllllY Tll L.OC.'-TE PPElM OR ClaL Cl!OSSNGS. ~r!s~~~~~~rtt.OMil'.JlSHPOR FJELD CATE

"' "'Q' "'' ' "" . DRAWN BY: CHECKED BY: SJ.I.I J.S. JOB No. 221.'.U.39 13 CCIP'r1'llCKl' tKlWlNE DDNEIRll-IG N(J SUIM."!1NG CO.. N:. 20\JC SHEET: 2 or 2 EXHIBITD PARTIAL RELEASE OF OIL AND GAS LEASE

WHEREAS on January 9, 1988, Vaquillas Ranch Company, Ltd., Vaquillas Unproven Mineral Trust and Vaquillas Proven Mineral Trust acting therein through its general partners, J.O. Walker, Jr., Gene S. Walker, Evan B. Quiros and E. Walker Quiros, as Lessors, and Conoco Inc., as Lessee, entered into an Oil, Gas and Mineral Lease dated November 1, 1987, covering 6,740 acres of land, more or Jess, hereinafter referred to as Mthe Lease,· and;

WHEREAS the Lease description was amended May 31, 1988, by deleting the acreage covered from 6,740 acres, more or less, to include a revised total of 4,800 acres, more or less, as evidenced by Memorandum of Oil and Gas Lease, dated June 16, 1988; recorded In Volume 1303, Page 886 of the Real Property Records of Webb County, Texas.

WHEREAS the Lease has also been amended from time to time, as reflected in the Public Records of Webb County, Texas, and all references to the Lease herein shall be to the Lease as amended_

NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt of which Is hereby acknowledged, ConocoPhillips Company, does hereby RELEASE, RELINQUISH and SURRENDER unto the Lessor, all of its right, title and interest and estate in the Lease SAVE AND EXCEPT THOSE LANDS AS MORE PARTICULARLY DESCRIBED ON THE EXHIBIT "A," AND FURTHER DESCRIBED ON EXHIBITS A-1 THROUGH A-5 ATTACHED HERETO AND MADE A PART HEREOF.

Provided, however, Lessee shall have and retain full rights of access and all easements of ingress and egress over and across those lands covered by the Lease, including the lands which are hereby released, for the production of oil and gas and operations in the acreage not hereby released, and Lessee shall not be required to remove or relocate any pipelines, utilities, roads, tank batteries, or other surface equipment or installations from any portion of the Lease or lands herein released for so long as same continues to be used for the exploration, development or operation of such portions of the Lease that continue in force and effect

This instrument is binding upon and inures to the benefit of the parties hereto, their heirs, successors and assigns. ~ VOlmne: 3517 Page:44'1 -453 Executed this n day of f~\o .... 'Qc-1I • 2014. Doc# 1194187 Doc Type: PARTIAL RE.£ASE OFOIL & GAS LEASE Record Dllte: 2125/201.C 11:28:17 AM Record By: MIC Fees $71.00 Margie Ramirez Jbaml. Webb County Clerk

25757HJ01 ACKNOWLEDGEMENT

ACKNOWLEDGED BEFORE ME, this rl "' day of F"... lon••"f • 2014, by Michael P. Rose, Attorney-in-Fact for ConocoPhillips Company, a Delawar; orporation, on behalf of said corporation.

257577-001 I OVERALL EXHIBIT "A" I : \_____ -,--y ! , I CONOCOPHILLIPS COMPANY VAQUILLAS RANCH RETAINED TRACTS 1-5 I . !' I CONTAINING A TOTAL OF 2,379.77 ACRES 1-- : i i I ' I ill

~~~I ' : I I ! A-t : I /;--------f: - " "i' 3211.Jll

! !' ' i __ J I

I1-----+--- rl \ _____ _J

r\--- ~}----- i~--I •;:-.:; A->

1::::.-_ ------i_ - - - --~---

~-----T-----~ Lr:}-\ L_ __ -r _____ l-- --1- ·! 'r--- : -----1 J_: :

I' :------

I' ----1----

_____ -}-------1--------· :::T-- : ' : : . -1--------_; 1--T--T------f i i ------- _J---- -----~ ! ! ! ~--j_--+-----1 ~-------t------+--,--- i .~----- ~ \ l_ ___-:-=-----~--=4 : ------ : i i : : . L-----,-------r---~---- L_ __ j___ I ------- .:O.lo ---i_ i i i --._, - _____ j______ _j__ _____ +I ---- Acres 1 ' '

L__ L ___ LJ'f~ 598.911 kres : L ___ _ GRAPHIC SCALE 30XI 0 I~ .3000 ~

'°9--oj;;j-! I

CONOCOPHILLIPS COMPANY HOWLAND ENGINEER/NO AND SURVEYING CO. TBPERmllrlglolr-.llo.~ TBl'l.5Fm~llo.1- VAQUILIAS RANCH RETAINED TRACTS BASE lilAP 71115N.-A....,. lAnldOo TX.7'°"1 P.llM.12ZM11 www.howtandcompanJas.com LEASE 257577-001 WEBB COUNJY, TEXAS WARNING: BASIS OF 8£.1.RING: C.P.S. l•. South Zone, NAO. 27. ms Pl.AT MAY HOT Sim MJ. CRCSSll'fCS Of Pf'(Ll'£S OR eo.au:s. IKJllll..NID ~c DRAWN BY: LAf./S.l.M. 10-11-IJ >HD ~ CO.. INC. J.SSULS HO ReiPCl'ISmilY TO LOCATE PF£l.K Cll CAtl.t CROSS1NCS. ~n':sH~~~~,&'~u.W"~ FEE~ OR "" "" CHECKED SY: J.S. JOB No. 22160-13 SHEET: 1 Of 1 HOWLAND ENGINEERING AND SURVEYING CO.

EXHIBIT "A-1"

F1ELDNOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 257577-001 RETAINED TRACT 1 (VAQUILLAS RANCH L-6 WELL No. 211) 328.36 ACRES

A TRACT OF LAND CONTAINING 328.36 ACRES, more or less, being out of the Vaquillas Ranch Lease 257577--001, 6,740.00 Aaos (Called), situated in Survey 1956, H.B. Brock, Abstract 2560, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a found monument at fence comer, which bears N 70°15'08" W, a distance of 1,699.67 fee~ from the Vaquillas Ranch L-6 No. 211 Well;

THENCE, N 89°20'09" E, along an existing fence line, a distance of3,112.47 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°38'14" E, a distance of 4,600.71 FEET, to a point under an existing fence, for the Southeast comer hereof;

THENCE, S 89030'49" W, along an existing fence line, a distance of 1,416.19 FEET, to a point for a deflection right;

THENCE, S 89035'52" W, continuing along said existing fence 1ine, a distance of 1,696.63 FEET, to a found 60 D nail at fence comer, for the Southwest corner hereof;

THENCE, N 00°37'59" W, continuing along an existing fence line, a distance of 4,588.56 FEET, to the POINT OF BEGINNING, containing 328.36 acres of land, more or less.

,: ·'

SHEET! OF2 H:\HOWLAND\SURVEYING DEPARTMENNobs\2013\22160.1-13122160.1· 13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue ; P.O. Box 45112B {78045) : Laredo, TX 78041 P. 956.722.4411 F. 956.n2.5414 TBPE Firm Registration No. F-4097 : TBPLS Arm Registration No. 100464-00 EXHIBIT "A-1" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LfASE 257577-001 RETAINED TRACT 1 (VAQUILLAS RANCH L-6 WELL No. 211) 328.36 ACRES WEBB COUNTY, TEXAS

• ' 1 I SURVEY 2096 ' ' D.C. FANNING

I' J ABSTRACT 2228 - ' (~ - I ---------- N 89"20'09• E ,.. 3112.47'

Found Monl.lll'lllllt --___,,.,,, ,-~~- t 1m 0 Fence Comer '6.99.a) ..Jt I -- '¢-VAQUILLAS -------T.5~i3.------::: RANCH SURVEY 1955 G.C. & S.F. R.R. CO. L-6 No. 211 ABSTRACT 1326

I CONOCOPHILLIPS COMPANY ,_ J~ ~ VAQUILLAS RANCH LEASE 257577-001 ~ 6,740.00 ACRES (CALLED) !§ RETNNED 328.38 ACRE UNfT ~ l l ...... SURVEY 1956 s];;'" ~ VAOUILLAS RANCH A-3 No. 200 (BHL) D.C. FANNING I! "' -lb ABSTRACT 2591 z SURVEY 1956 VAOUlUAS RANCH H.E. BROCK A-3 No. 200 (SHL) ABSTRACT 2560 WEBB COUNTY. TEXAS

r~round

- Ko~ 0 ooFence o Comllr

' ' ' ' x- s 89"~·~2· 1,696.63' w - )ti >< 1 s 89"30""'9. 1,416.19' w

SURVEY 2057 I: C.T. & M.C. R.R. CO. ABSTRACT 965 II 1: SURVEY 2056 "lI, C.T. & M.C. R.R. CO. ABSTRACT 2680

VAQUILLAS RANCH A-5 No. 205 (SHL)Q VAQUILlAS RANCH -¢- A-5 No. 205 (BHL) VA~~~-¢. A-5 No. 166 liI: II ~ • = ~--"'wiJ-' GRAPHIC SCALE ~

(IN fE£r) ·=. -I 0 VAQUlUAS .•RANCH A-5 No. 230 (SHL)

" 1 l'><.h • IDOOF\.

LEGEND Rtvblcn Dell

HOWLAND ENGINEERING AND SURVEYING CO. TBPE Fm\ Rogllt_, ~ f..Q11 Tlll'l.S llm ~HO. ICICM64-00 _, 0 -¢- =WW. ., HORIZONTAL WELL

"' UNIT UHE SURFACE LOCATION ' 04-10-ll

,. FOIC£ LIKE 761,,t.lllllldA--.. ~ 1)(.1l!G41 P.li5a.122Ml1 ------- =TIES www.howl11ndcomp11nles.com

WARNING: BASIS OF B£AAING: GJ>.S. b. So111h Zone, NAO. 27. -- " SURVEY UNE

rntS PlAl' W.T NOi' 9llW N.1. CROSStlc:s OF PIP£l.Jlml OR CAllUS. 110W1.N10 ~ .-HO $l.IFN£TtlG CO., tfe. ASSlAIES HO RESPOtGaUTT TO l,DCU'[ Pffl.JI£ OR CAll..E ~ FIELD DATE ""'• t'AGE s DRAWlll BY: A.LC. NO CUit.i 15 KEREBT WOE: ~ CU!!1oa OR H;T\W. SURI"~ f'EE ~ Oii USS0R. ltn QRla'J'tG WOE: aa.\ISVELV FOR CCitfOCOPKUW'S COllPAlfT. CllPYlllQIT HC7M..IHD DONEERttC Nm ~CO., tc. 2CllJC " "" "'' CHECKED BY: J.S. JOB No. 22160.1-13 SHEET: 2 OF 2 Ho~~ .~~\ ~"ii,l~I[~® ,--~~~~ ,1J~~f? ENGINEERING AND SURVEYING CO.

FIELDN01ES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 257577-001 RETAINED TRACT 2 (VAQUILLAS RANCH L4 WELLS No. 95 & No. 105) 172.43 ACRES

A TRACT OF LAND CONTAINING 172.43 ACRES, more or less, being out of the Vaquillas Ranch Lease 257577-001, 6,740.00 Acres (Called), situated in SE \4 of Survey 2060, C.C. Marshall, Abstract 3329, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 50°34'35" W, a distance of 490.36 feet. from the Vaquillas Ranch L-4 No. 95 Well;

THENCE, N 89°18'10" E. a distance of 1,350.57 FEET, to a point for a deflection right;

THENCE, S 89°39'06" E, a distance of 1,338.93 FEET, to a point on an existing fence line, for the Northeast comer hereof;

THENCE, S 00°18'08" E, along an existing fence line, a distance of2,76S.12 FEET, to a found fence comer post, for the Southeast comer hereof;

THENCE, S 89°15'36" W, along said existing fence line, a distance ofl,691.33 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°48'19" W, a distance of 1,517.91 FEET, to a point for a deflection right;

THENCE, N 00"22'53" E, a distance ofl,273.82 FEET, to the POINT OF BEGINNING, containing 172.43 acres of land, more or less.

SHEET I OF2

H:\HOWLAND\SURVEYrNG DEPARTMEITT\Job$\20\ 3\22 I 60.2- l3\22160.2- I 3.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 451128 (78045) ! Laredo, 1X 78041 P. 956.722.4411 F. 956.722.5414 TBPE Finn Registration No. F-4097 • TBPLS Firm Registration No. 100464-00 EXHIBIT "A-2" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 257577-001 RETAINED TRACT 2 (VAQUIUAS RANCH· L-4 WEU.S No. 95 & No. 105) 172.43 ACRES WEBS COUNTY, TEXAS

I A VAOUlllAS ¥ RANCH A-5 No. 126

. I SURVEY 2058 C.T. & M.C. R.R. CO . A-2880 . I L I It

11 --- .. - M .. -·.-¢- ~:=L~~ ·--··-. -- .---.,---- -----1f-------------f·- RANCH A-5 No. 118 VAQUILLAS A-5 No. 101 I : 0 l ~1·c..{j: i

SURVEY 2080 ~ o~~ ~ ~~: /f.~1i C.T. & M.C. R.R. CO. : ABSTRACT 3330

VAQUILLAS RANCH ,------1 I I .,«01 ~;:gE-< Ii A-5 No. 40 0 I 1 SURVEY 2060 R.D. GUINN I

I 1 => Od Cll rn .___: ~ ~ j r~~ I ABSTRACT 3331 ti

~~: N 89'18'10• E - - - - - - - - - - ~3°4·3s~·'°w~_.:-,....,.,:r,1:,,"""~".o~r--.1..-....:1.i:•::o:~:::: •3··---1 i S 89'39'oe• E SURVEY 1884 M.E. WIDEMAN 49Cl.36' ~;;;i VAQUILLAS RANCH ABSTRACT 2501 ti.I tJBi.C:} L-4 No. 95 i:l ii . (SHL) SURVEY 2060 R.D. GUINN "§_. ,. ; ~ -¢-vAOU!UAS RANCH L-4 No. 95 ABSTRACT 3332 (BHL) z

,-~ ~ 1 1 tOZM ozM --: • • CONOCOPHILUPS COMPANY

6,740.00 ACRES (CALLED) R£TAINED 172."3 ACRE 111 VAQUILLAS RANCH LEASE 257577-001 ~ co UN~ 8 § 00 se-o at"'" :-~ SE 1/4 OF "' ~ c; U !> · 01 §:;j- VAQUIL~ RANCH SURVEY 2080 C. C. MARSHA!L o:: A E-< z L- 4 No. 1OS ABSTRACT 3329 =>~ r/l rn !:J WEBB COUNTY, TEXAS

LI---·-·-·-·-· _L --··--''-----:s'""'B9"""1o"JO"'•..-·w:::-'.~~..~.:<,;;1-;.JJ~-~,_-r- ----------- found Fen~ I •' Comer Post

NORTH 1/2 SURVEY 1836 P.K. CONNOWAY ABSTRACT 2187 I ' ' I SURVEY 260 MARY E. WIDEMAN ' ABSTRACT 2504 ' GRAPHIC SC~ - - - - - - - - - -S:: ~-- - ---i k-.JJ-; i ~~J:~ :I 1

T < IN nu I ABSTRACT 2137 I lll<:h • 1000F\.

Ravlalon LEGEND "'" HOWL.ANrE ENGINEERING ANO SURVEYING CO. 0 -¢- ,. HORIZOKTAI.. WELL stlRl'ACt LOC4l10H wru. ,' 04-11-13

" 27-1J TllPEflm~No.l409l' TllPLSflm~No..1(1(14114-00 7&\0N.->-- ~TX.111C4• P.$$8.722M11 www.howlandcompanles.com -·-·- .. ------ UNIT UHE rENC£ UH[ n"' 5U)IVEY I.JN[ WARNING: BASIS OF BEARING: G.P.S. T~. South Zone, NAD.-27.

·~' 'lllS PW' l&Al' NOT SllOW .0.U. CROSSflCS Of PPDJH£5 OR CAIUS.. lfllWl.AIE £NCltlECJl!NG flM DATE l'AGE s DRAWN BY: A.LC. N't/) $UR't'E'l'flC co. tlC. ...ssu.1ES 110 ~BUT'I' TO \.DCAn: PPD.N: OR CAa( ~ HO a>!lol IS Hl1!EllT WDE RtCAIUllH!l Clf!R£M1' OR ACf\IAL SURfJa:/lllHO!Al fU °""'ER!MP OR 1ISSOR. n11S l;IRl.ln

FIELD NOTES FOR CONOC.OPHILLIPS COMPANY VAQUILLAS RANCH LEASE 257577--001 RETAINED TRACT 3 (VAQUILLAS RANCH L WELLS No.129, No.137, No.171, No.135 & No.196) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES, more or less, being out of the Vaquillas Ranch Lease 257577-001, 6,740.00 Acres (Called), situated in Survey 1661, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1122; and Survey 1663, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1123, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears N 52°37'00" E, a distance of 1,377 .16 feet, from the Vaquillas RanchL No. 137 Well;

THENCE, S 00°36'33" W, a distance of 4,858.64 FEET, to a point for a deflection left;

THENCE, S 00°31'54" W, a distance of355.21 FEET, to a point for the Southeast corner hereof;

THENCE, WEST, a distance of 5,314.75 FEET, to a point for the Southwest comer hereof;

THENCE, N 00°07'00" W, a distance of S,213.52 FEET, to a point for the Northwest corner hereof;

THENCE, N 89°59'58" E, a distance of S,380.33 FEET, to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

SHEET! OF2 H:\HOWLAND\SURVEYING DEPARTMENl\Iobs\2013\22160.3-!3\22160.3-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box 45112B (78045) ! Laredo, TX 78041 P. 956.722.4411 f. 956.722.5414 TBPE Firm Registration No. F-4097 ; TBPL5 Arm Registration No.100464-00 EXHIBIT "A-3" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LFASE 257577-001 RETAINED TRACT 3 (VAQUILLAS RANCH L WEUS No. 129, No. 137, No. 171, No. 135 & No. 196} 640.00 ACRES WEBB COUNTY, TEXAS I '

- "' - I' - BC\J '' ' SURVEY 1665 c.c.s.n. & "' CD~

>oc:!lit; • :::: SURVEY 1664 W.H. TAYLOR I R.G.N.G. R.R. CO. ABSTRACT 1124 ~~ci~ ABSTRACT 2877 ' ~~ ·e-. ' ' ::=> u rt.I :z; rJJ C?~ I' I' "' ' ' POm~ WUUNG N 89"59'M• E ,.. S,380.33' , -¢- t .' &~ ...... ! VAOUlllAS ~ ~-t.~q\.,t

~ RANCH

.... ____ f,,.~ .. A-11 No. 147 ' , I CONOCOPHlLLIPS COMPANY -¢-'.:.--"~---· VAQUllt.AS RANCH LEASE 257577-001 VAQUILl.AS 6, 740.00 ACRES (CALLED) RETAINED MO.OD ACRE UNIT RANCH L No. 137 I ~ ~ ~ !i "l } VAOUIUAS ..~ .. RANCH L No. 196

SURVEY 1663 .. ~------ $!;; I C.C.S.D. & R.G.N.G. R.R. co. "' "'"',._ ABSTRACT 1123 ~sre !! WEBB COUNTY, TEXAS -~E-t z ., ~e-" VAOUILLAS-¢-

g;:'i~ RANCH L No. 129

"'"'~ Q- VAOUlLLAS RANCH l No. 171

VAQUILLAS RANCH l No. 135 --- -- - - --- --- - - -- - - ---$-- - - - ~ OCTJ1'M• W ~.21' WEST ... ~.314.7!5' ' I' SURVEY 1661 C.C.S.D. & R.G.N.G. R.R. co. ' ABSTRACT 1122

--~ VAQUILLAS RANCH L No. 190 SURVEY 1668 -¢- VAQUIUAS Y. VERGARA RANCH ABSTRACT 2490 ' l No. 136 ' -¢- GRAPIDC SCALE =i--......_...... ' = ~ ·=. = I VAOULLLAS RANCH {"' FEtl J 1 net. - IDOOrt. -¢- L No. 134

-- LEGEND Rlv!ston Dall

HOWL.AM~ ENGINEERING ANO SURVEYING CO. 0 -¢- "' HORIZONTAL WEtl SURF"Att 1.0CATIOM

' ' 05-20-13 08-05-lJ TnPf.Almll

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 257577..()01 RETAINED TRACT 4 (VAQUILLAS RANCH L WELLS No. 134, No. 136, No. 140, & No. 190) 598.98 ACRES

A TRACT OF LAND CONTAINING 598.98 ACRES, more or less, being out of the Vaquillas Ranch Lease 257577-001, 6,740.00 Acres (Called), situated in Swvey 1661, C.C.S.D. & R.G.N.G. R.R. CO., Abstract 1122, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears S 69°30'42" W, a distance of 936.29 feet, from the Vaquillas Ranch L No. 140 Well;

THENCE, N 00°00'04" E, a distance of 3,136.05 FEET, to a point for an exterior comer hereof;

THENCE, EAST, a distance of 611.10 FEET, to a point for an interior comer hereof;

THENCE, N 00007'00" W, a distance of 1,238.25 FEET, to a point for the Northwest corner hereof;

THENCE, EAST, a distance of 5,314.75 FEET, to a point for the Northeast corner hereof;

THENCE, S 00°31 '54" W, a distance of 4tl53.62 FEET, to a point for the Southeast comer hereof;

THENCE, S 89°31'54" W, a distance ofl,354.96 FEET, to a point for an interior comer hereof;

THENCE, S 00°28'06" E, a distance of 597.66 FEET, to a point for the South comer hereof;

THENCE, N 80025'28" W, a distance of3,S82.90 FEET, to the POINT OF BEGJNNING, containing 598.98 acres of land, more or less.

SHEET10F2 H:\HOWLANO\SURVEYING DEPAR'IME\'1\lobs\2013\22100.4-13\22160.4-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue P.O. Box451128 (78045) : Laredo, TX78041 P. 956.722.4411 F. 956.722.5414 TBPE Arm Registration No. F-4097 : TBPlS Firm Registration No. 100464-00 EXHIBIT "A-4" CONOCOPHILLIPS COMPANY VAQUIUAS RANCH LEASE 257577-001 RETAINED TRACT 4 (VAQUJUAS RANCH L WELLS No. 134, No. 136, No. 140, &: No. 190) 598.98 ACRES WEBB COUNTY, TEXAS

i SURVEY 1663 VAQUIUASi.yr

i t-1,_ VAQUtllAS C.C.S.D. & R.G.N.G. R.R. ABSTRACT 1123 co. RANCH L No. 129

i tr" RANCH L No. 171

i VAOUlllAS RANCH L No. 135

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SURVEY 1661 C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 1122 ....,.z WEBB COUNTY. TEXAS

- - - -"""".;.""·1;..;0;...'" VAQU!UAS -¢-VAQUIUAS RANCH RANCH L No. 136 L No. 190 -¢-

CONOCOPHILLIPS COMPANY -¢- VAQUllLAS VAQUILLAS RANCH LEASE 257577-001 RANCH 6,740.00 ACRES (CALLED) L No. 134 RETAINED 1598.98 ACRE UNff

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!--··-··-··-··· -- S 8Sr31 154 W N 2,.354..96'

~ ~ 00'28'06• E ~ "-.:..-ss1.B&' (POINT or \BJ:GOOIING

SURVEY 374 L. AYALA ABSTRACT 2125 I SURVEY 1660 C.C.S.D. & R.G.N.G. R.R. CO. I ABSTRACT 2229

~ 0 GRAPHIC SCALE :i3ll !>DO ,i I ~----- • (INFaT) I I .. I lnoh - lDDOFl.

LEGEND R.vl1lon ~

HOWLANflV ENGINEERING AND SURVEYING CO. _,_ 0 -¢- - HORIZONTAL WELL SURrAC£ LOCATIOH wm UffJT UMC ' ' 04-11-13 05-12 13 06-05-13 TBPE fmi~1'0..l'-'W7 TBl'lS Fmi~ND. 10>4&MXI 7'15N._A_ u..!o, lX.7!041 P.1156.t22M11 "'" ""' ------- n"' ' www.howlandcompanles.com

~ BASIS OF BEAAlm>: G.P.S. Tx. South Zone. N.A.0.-27. THIS PW" MAT MCFI' Slt:IW Ml aiosstlGS OF" Pl'ELN!i OR CAIUS. ttC7111»10 EHQHEERIHG ---- FlELO OATE SURVEY UHE

PAGE~ OAAWN B'f; ' A.LC./S.1.M. 10-22-13

Nil SIJ!f\IETllG CO.. tlC. ASSlAIES HO R£SPOICSl!lllJI lO LOCAT"t l'PQJNE OR C03.t CROSSllC::~.

~~~~~~~~g~-DIAL FEE O'fMRSIF OR "" "" CHECKED B'f: JOB No. J.S. 22160.'4 13 COPmQfT llOWl.IHO ~ Nil su:M:nC co., rte.. 201JC SHEET: 2 OF 2 EXHIBIT "A-5"

FIELD NOTES FOR CONOCOPHILLIPSCOMPANY VAQUILLAS RANCH LEASE 257577-001 RETAINED TRACT 5 (VAQUILLAS RANCH L WELLS No. 138, No. 139, No. 133 & No. 188 ST) 640.00 ACRES

A TRACT OF LAND CONTAINING 640.00 ACRES. more or less, being out of the Vaquillas Ranch Lease 257577-001, 6,740.00 Acres (Called), situated in the West Y2 of Survey 1662, R.E. Farr, Abstract 2230; and Survey 1652, W .H. Taylor, Abstract 2876, Webb County, Texas, and being more particularly described as follows:

BEGINNING at a point which bears S 41°48'58" E, a distance of782.90 feet, from the Vaquillas Ranch L No. 138 Well;

THENCE, N 80°01'00" W, a distance of 1,834. 72 FEET, to a point for the Southwest comer hereof;

THENCE, NORTH, a distance of 1,133.33 FEET, to a point for an exterior comer hereof;

THENCE, EAST, a distance of97.l2 FEET, to a point for an interior comer hereof;

THENCE, NORTH, a distance of 5,125.38 FEET, to a point for the Northwest comer hereof;

THENCE, S 89°33'23" E, a distance of 5,644.97 FEET, to a point for the Northeast comer hereof;

THENCE, S 00°07'00" E, a distance of 4,247.26 FEET, to a point for an exterior comer hereof;

THENCE, WEST, a distance of3,943.78 FEET, to a point for an interior comer hereof;

THENCE, S 00°00'05" E, a distance of2,285.82 FEET, to the POINT OF BEGINNING, containing 640.00 acres of land, more or less.

SHEET 1 OF2 H:\HOWLAND\SURVEYmGDEPAR'IMEITTUobs\2013\22160.5-13\22160.5-13.doc

www.howlandcompanies.com 7615 N. Bartlett Avenue : P.O. Box451128 (78045) : Laredo, lX 78041P.956.n2.4411 F. 956.722.5414 TBPE Firm Registration No. F-4097 ; TBPLS Firm Registration No. 100464-00 EXHIBIT "A-5" CONOCOPHILLIPS COMPANY VAQUILLAS RANCH LEASE 257577-001 RETAINED TRACT 5 (VAQUIUAS RANCH L WELLS No. 133, No. 138, No. 139 & No. 188 ST) 640.DD ACRES WEBB COUNTY, lEXAS

SURVEY 1650 -- --- ---- -- ------ -------- C.C.S.D. & R.G.N.G. R.R. CO. ABSTRACT 2444

SURVEY 1652 SURVEY 1653 W.H. TAYLOR C.C.S.D. & ABSTRACT 2878 R.G.N.G. R.R. CO. CONOCOPHILLIPS COMPANY ABSTRACT 1099 VAOUILtAS RANCH LEASE 257577-001 6,740.00 ACRES (CALLED)

i...• RETAINED 840.00 ACRE UNrr VAQUJLlAS RANCH -¢-L No. 1J3

-¢- VAOUILLAS RANCH k VAQUILlAS l No. 188 ST ~ RANCH L No. 1J9 (BHL) -¢- O

WEST ~ SURVEY 1862 R.E. FARR 0 ABSTRACT 2230 VAQUIUAS RANCH WEBB COUNTY, TEXAS L No. 188 ST (SHL)

WEST ,.. 3,943.78' .,.,. 97.22'

....... ---- .. -""':""' ...• ~ SURVEY 1662 A.F. CARROLL

? VAOUlllAS RANCH :s8 ABSTRACT 3094

~ L No. 138 -¢(-512_:_ ~ o .,, cns•1·•<>'~"·E z - i1 ,.,,,,...,-- - -- SURVEY 1654 /'N BO"o 1• ·; '\, 782.90' oo• W ,.. 1.834:.

------- --- ---, ------ C.C.S.D. & R.G.N.G. R.R. ABSTRACT 3104 co. I I 72 ,' ----- ... I 9 I •• :llXI J-w•w'\OJ-' GRAPHIC SCALE 9:z-rosco ,j I SURVEY 373 S. & M. ABSTRACT 1718 I , b:h - 10000. • I l£GE:NO Revbh>n Dall 0 "' HORIZO~Al.. WELL SURFACE LOCATION 1 04-12 13

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111-~,-- : =EU~E - - - - - - - • TIES --·- • SURVl:I' LIKE WARNING: BASIS OF BEARlNG: G.P.$. Tx. Soirth zon.,, NAO. 27. 1HS Pl.111 WAY HOT S>torr H..L l;ltOSSltGS OF" PIPO.llC Oil ~ HOWW«l ~ AHO SIJIM:nl(l CO., INC.. ASSl.UES NO ~ErulY TO l.DCIJE P5'EtlfE OR ClaE CROSSN(l5. EID ,,, °"" '""" ,,, PAGE s OAAWN BY: A.L.C./5.1.M.

~TttlSIS~~~~d:cx:a~~~ Ftt OWKJ1SHP OR '" CHECKED SY: JOB No. JS. 22160.5-1.} SHEET: 2 or z TAB2 ,, ..;:.

RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL

OIL AND GAS DOCKET IN THE VAQUILLAS RANCH (LOBO NO. XX-XXXXXXX CONS.) FIELD, WEBB CO~NTY, TEXAS

FINAL ORDER AMENDING FIELD RULES FOR THE VAQUILLAS RANCH (LOBO CONS.) FIELD WEBB COUNTY, TEXAS The Commission finds that after statutory notice In the above-numbered docket heard on September 23, 2010, the presiding examiner has made

The Commission, after review and due consideration of the examiner's report and recommendation, the nndlngs of fact and conclusions of law contained therein, hereby adopts as Its own the nndlngs of fact and conctuslons 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 ofTexas that Rule 2 of the neld rules adopted In Final Order No. 04-0217 435, effective February 24, 1998, for the Vaqulllas Ranch (Lobo Cons.) Field, Webb County, Texas, Is amended as hereafter sat out:

RULE 2: No well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY SEVEN (467) feat to any property llne, lease llne or subdivision line and no well shall be drllled nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applied for, permitted or completed well In the same reservoir on the same lease, pooled unit or unitized tract. Provided, however, there Is no minimum between-well spacing requirement between a well being permitted al least 660 feel from the nearest property line, lease line or subdivision llne, and the other wells permitted, drllled or completed on Iha same lease, pooled unit or unltlzed tract. A well being permitted at a distance less than SIX HUNDRED SIXTY (660) feet from the nearest property line, lease line or subdivision line must be a minimum of ONE THOUSAND TWO HUNDRED (1,200) feet from any applied for, permitted or completed well In the same reservoir on the same lease, pooled unit or unitized tract, or an exception to Rule 37 must be obtained.

The aforementioned distances In the above rule are minimum distances lo allow an operator flexlblllty In locating a well, and the above spacing rule and the other rules to follow are for the purpose of permitting only one well to each drllllng and proration unit. Provided however, that the Commission will grant excepilons to .permit drllllng within shorter distances and drllllng more wells thar,diereln prescribed whenever the Commission shall '\ /•

OIL AND GAS DOCKET NO. 04·0265630 Page2 have determined that such exceptions are necessary either to prevent waste or to prevent the conflscatlon of property. When exception to these rules Is desired, application therefore shall be filed and will be acted upon In accordance with the provisions of Commission Statewide Rule 37 and 38, which applicable provisions of said rule are Incorporated herein by reference. Provided however, that persons who are presumed to be affected by a request for an exception to the between-well spacing requirement shall be limited ·to the operators and owners/lessees of tracts, lease or units within one mile or Jess of the proposed well.

In applying this rule the general order of the Commission with relation to the subdivision of property shall be observed.

Done this 2nd day of November, 2010.

RAILROAD COMMISSION OF TEXAS

(Order approved and signatures affixed by OGC Unprotested Master Order dated November 2, 201 O) .. , ' •• ·fl. RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL

OIL AND GAS DOCKET ... NO. XX-XXXXXXX

FINAL ORDER CONSOLIDATING VARIOUS FIELDS INTO A NEW FIELD CALLED THE VAQUILLAS RANCH (LOBO CONS.) FIELD AND ADOPTING FIELD RULES FOR THE VAQUILLAS RANCH (LOBO CONS.) FIELD WEBB COUNTY, TEXAS

The Commission finds that after statutory notice in the oibove-numbered docket heard on ·October 8, 1997, 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 Commls.slon, 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, ii Is ordered by the Rallroad Commission of Texas that the following fields located In Webb County, Texas, are hereby combined Into a new field called the Vaqulllas Ranch (Lobo Cons.) Field (No. q3;7.[5 l+OO ):

BALTAZAR (LOBO 6 10470) FIELD 05357 400 BARNSLEY (LOBO 10900) FIELD 05791 800 BARNSLEY (LOBO) FIELD 05791 400 BONEBRAKE (LOBO 6) FIELD 10419 500 BONEBRAKE (UPPER LOBO) FIELD 10419 800 CALICHE CREEK {LOBO) FIELD 14735 225 CARR (LOBO 10100) FIELD 15874 350 CARR (LOBO 8300) FIELD 15874 235 CARR (LOBO 8600) FIELD 15874 250 CARR (LOBO 8700) FIELD 15874 275 CARR (LOBO) FIELD 15874 200 CARR (WILCOX 8200) FIELD 15874 600 CARR (WILCOX 8300) FIELD 15874 700 CARR (WILCOX) FIELD 15874 500 CATTO (LOBO 9900) FIELD 16405 400 CATTO (LOBO 10200) FIELD 16405 500 • .' " .... OIL AND GAS DOCKET!i. XX-XXXXXXX PAGE 2

DESPARADO (LOBO 6) FIELD 24394 500 DIAMONDBACK (LOBO 3) FJELD 24574 400 GATO CREEK (9800) FJELD 34238 400 GATO CREEK (LOBO 1) FJELD 34238 300 GATO CREEK (LOBO 1-SEGA) FIELD 34238 325 GATO CREEK (LOBO 3) FIELD 34238 350 GATO CREEK (LOBO 6 SEGMENT A) FIELD 34238 375 GATO CREEK, SE (9800) FIELD 34242 980 GATO CREEK, SE (LOBO 1) FIELD 34242 500 GATO CREEi<, SE (UP. LOBO STRAY) FIELD 34242 750 HIRSCH (LOBO 9746) FIELD 41659 075 JURASCHEK (LOBO) FIELD 47740 500 JURASCHEK (WILCOX 11600) FIELD 47740 600 LUNDELL (LOBO 9200) FIELD 55755 180 LUNDELL (LOBO) FIELD 55755 175 MCLEAN (LOBO) FIELD . 59725 500 MUJERES CREEK (LOBO 1) FIELD 63666 300 MUJERES CREEK (LOBO 3) FIELD 63668 400 MUJERES CREEK (LOBO 6) FIELD 63666 500 MUJERES CREEi< (LOBO) FIELD 63668 250 MUJERES CREEK, SOUTH (LOBO) FIELD 63670 500 NICHOLSON (LOBO 3) FIELD 65469 020 NORDAN (LOBO) FIELD 65934 500 POZO (LOBO) FIELD 72838 500 RANCHO VIEJO, S. (LOBO 6) FIELD 74570 100 RANCHO VIEJO (LOBO 3) FIELD 74570 680 RANCHO VIEJO (LOBO 6) FIELD 74568 700 VAQUILLAS RANCH (LOBO 8100) FIELD 93215 680 VAQUJLLAS RANCH (UP. LOBO STRAY) FIELD 93215 600 VAQUJLLAS RANCH (WALKER 8300) FIELD 93215 680 VAQUILLAS RANCH (WALl

ll is further ordered that the following rules are adopted for the Vaqulllas Ranch (Lobo Cons.) Field: . ""· .: 'OIL AND GAS DOCKE• . XX-XXXXXXX • PAGE 3

RULE 1: The entire Lobo Formation from the Lobo Unconformity to the lop of the Wills Point (Midway Shale) and Including the above listed fields In Webb County, Texas, shall be designated as a single reservoir for proration purposes and be designated as the Vaqulllas Ranch (Lobo Cons.) Field. , RULE 2: No gas well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be drilled nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applled for, permitted or completed well In the same reservoir on the same lease, pooled unit or unitized tract. The aforementioned distances In the above rule a~e minimum distances to allow an operator flexlblllty In localing a well, and lhe above spacing rule and the other rules to follow are for the purpose of permlt11ng only one well to each drllllng and proration unit. Provided however, that the Commission wlll grant exceptions to permit drllllng within shorter distances and drilling more wells than herein prescribed whenever the Commission shall have determined that such exceptions are necessary either to prevent waste or to prevent the confiscation of property. When exception to these rules Is desired, application therefore shall be filed and will be acted upoo In accordance wltti the provisions of Commission Statewide Rule 37 and 38, which applicable provisions of said rule are Incorporated herein by reference. Provided however, that persons who are presumed to be affected by a request for an exception to the between-well spacing requirement shall be llmlted to the operators and owners/lessees of tracts, lease or units within one mile or less of the proposed well.

In applying this rule lhe general order of the Commission with relation to the subdivision of property shall be observed.·

RULE 3: The daily allowable production of gas from individual wells completed In the subject field shall be determined by allocating the -allowable production, after deductions have been made for wells which are Incapable of producing their gas allowables, among the Individual wells in the following manner:

TEN percent (10%) of the total field allowable shall be allocated equally among the individual wells producing from this field.

NINETY percent (90%) of the total field allowable shall be allocated among the Individual wells In the proportion that the dellverabilily of such well, as evidenced by the most recent G-10 test flied with the Railroad Commission bears to the summation of the dellverabllity of all proratable wells producing from this field.

It is further ordered by the Railroad Commission of Texas ihat the allocation formula for the Vaquillas Ranch (Lobo Cons.) Field be suspended. The allocation formula may be reinstated administratively if the market demand for gas In the Vaquillas Ranch (Lobo Cons.) Field drops below 100% of dellverability. If the market demand for gas in the Vaquillas Ranch (Lobo Cons.) Field drops below 100% of dellverability while the allocation formula Is suspended, the operator shall immediately notify the Commission and the allocation formula shall be immediately ' ' ... ··"·' I . ,.. ' ' . OIL AND GAS DOCl

reinstated. Failure lo give such notice to the Commission may result In a fine (as provided for in 'fex. Nat. Res. Code §86.222) for eac day the operators fail to give notice lo the Commission.

Effective this d,lf ~ay of , 19qg . RAILROAD C MMISSION OF TEXAS

..---::?· 6

OIL AND GAS DOCKET IN THE BIG REEF (ED\VARDS) FIELD, NO. XX-XXXXXXX \VEBB COUNTY, TEXAS

FINAL ORDER ADOPTING TEMPORARY RULES AND REGULATIONS FOR THE BIG REEF (ED\VARDS) FIELD \VEBB COUNTY, TEXAS The Commission finds that after statutory notice in the above-numbered docket heard on June 3, 2002, 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 co1:npliance 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 "the following temporary rules shall be adopted for the Big Reef (Edwards) Field, Webb County, Texas. RULE 1: The entire correlative interval from 9365' TVD to 9815' TVD as shown on the Array Induction Gamma Ray Neutron log of the Lewis Petro Properties W.V. Booth Jr. et al 2292 Lease Well No. 3-B, Joaquin Galan Survey, \Vebb County, Texas, shall be designated as ·a single reservoir for proration purposes and be designated as the Big Reef (Edwards) Field. RULE 2: No well for gas shall hereafter be drilled nearer than FOUR HUNDRED SIXTY-SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be drilled nearer than NINE HUNDRED THIRTY-THREE (933) feet any applied for, permitted or completed well in the same resenroir on the same lease, pooled unit or unitized tract. The aforementioned distances in the above rule are minimum distances to allow an operator flexibility in locating a well, and the above spacing rule and the other rules to follow are for the purpose of permitting only one well to each drilling and proration unit. Provided however, that the Commission will grant exceptions to permit drilling within shorter distances and drilling more wells than herein prescribed whenever the Commission shall have determined that such exceptions are necessary either to prevent waste or to prevent the confiscation of property. \Vhen exception to these rules is desired, application therefor shall be filed and will be acted upon in accordance with the provisions of Commission Statewide Rules 37 and 38, which applicable provisions of said mies are incorporated herein by reference, ' In applying this rule the general order of the Commission with relation to the subdivision of property shall be observed. RULE 3: The acreage assigned to the individual gas well for the purpose of allocating allowable gas production thereto shall be known as a proration unit. The standard drilling and proration units are established hereby to be ONE HUNDRED SIXTY (160) acres. No proration unit shall consist of more than ONE HUNDRED SIXTY (160) acres; provided that, tolerance acreage of ten (10) percent shall be allowed for each stnndard proration unit so that an amount ' Oil & Gas Docket No'( '."!;0231407 (~ Page 2

not to exceed a maximum of ONE HUNDRED SEVENTY-SIX (176} acres may be assigned. The two farthermost points in any proration unit shall not be in excess of FOUR THOUSAND FIVE HUNDRED (4500} feet removed from each other. Each proration unit containing less than ONE HUNDRED SIXTY (160} acres shall be a fractional proration unit. All proration units shall consist of continuous and contiguous acreage which can reasonably be considered to be productive of gas. No double assignment of acreage will be accepted. An operator, at his option, shall be permitted to form optional drilling units of FORTY (40} acres. A proportional acreage allowable credit will be given for a well on a fractional proration unit. The two farthermost points of a FORTY (40} acre fractional proration unit shall not be greater than TWO THOUSAND ONE HUNDRED (2100} feet apart.

Operators shall file with the Commission certified plats of their properties in said field, which plats shall set out distinctly all of those things pertinent to the determination of the acreage credit claimed for each well; provided that if the acreage assigned to any proration unit has been pooled, the operntor shall furnish the Commission with such proof as it may require as evidence that. interests in and under such proration unit have been so pooled. RULE 4: The daily allowable production of gas from individual wells completed in a no·n- associated gas reservoir of the subject field shall be determined by allocating the allowable production, after deductions. have been made for wells which are incapable of producing their gas allowables, among the individual wells in the following manner: FIVE percent (5%} of the total field allowable shall be allocated equally among the individual proratable wells producing from this field. NINETY-FIVE percent (95%} of the total field allowable shall be allocated among the individual wells in the proportion that the deliverability of such well, as evidenced by the most recent G-10 test filed with the Railroad Commission bears to the summation of the deliverability of all proratable wells producing from this field. It is further ORDERED that these rules are temporary and effective until January 1, 2004, or until Commission staff evaluates appropriate data after notice and opportunity for hearing as offered by the Commission prior to the expiration of the mies. After this notice and opportunity for hearing, should the evidence evaluated during review be insufficient to sustain spacing or proration unit mies, these temporary rules, on the Commission'sown motion, will be terminated and the field will revert to Statewide spacing and density mies. Done this twenty-fifty day of June, 2002.

Q .... Commissioner Charles R. Matthews

Commissioner Tony Garza Tab 3 Filed 9/8/2014 4:12:20 PM Esther Degollado District Clerk Webb District 2014 CVQ000 438 D4 CAUSE NO. 2014 CVQ000 438 D4

VAQUILLAS UNPROVEN MINERALS, § IN THE DISTRICT COURT OF LTD., § Plaintiff, § § v. § WEBB COUNTY, TEXAS § CONOCOPHILLIPS COMPANY, § Defendant § 406th JUDICIAL DISTRICT

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 1 TABLE OF CONTENTS

I. SUMMARY ......................................................................................................................... 3

II. SUMMARY JUDGMENT STANDARD.......................................................................... 6

III. BACKGROUND ................................................................................................................. 7

A. The purpose of an oil and gas lease, as well as a retained acreage clause, is to develop property to produce minerals................................................................................................... 7 B. Spacing, density, and proration units. ............................................................................. 8 C. The Leases contain a retained acreage clause limiting the amount of acreage Conoco was allowed to retain for each well. ....................................................................................... 10 D. The Railroad Commission adopted spacing rules for the Vaquillas Ranch (Lobo Cons.) Field. ............................................................................................................................. 12 IV. ARGUMENT AND AUTHORITIES ............................................................................. 13

A. Under the plain language of the Leases, Conoco is entitled to retain no more than the 40-acre units per well established by the Railroad Commission. ....................................... 13 B. Conoco’s contention that the field rules for the Vaquillas Ranch (Lobo Cons.) field do not establish 40-acre units requires the Court to disregard or to add words to the Leases........................................................................................................................................ 16 C. Jones v. Killingsworth, cited by Conoco, supports Vaquillas’s position that the field rules “establish” or “prescribe” 40-acre units, and operators are only “permitted” to form larger units...................................................................................................................... 19 D. Conoco’s interpretation ignores the inherent role of drilling units as specifying the minimum acreage required to drill wells, and thereby renders the word “spacing” in Paragraph 18’s agreed exception meaningless. .................................................................... 22 E. Conoco’s argument regarding a presumption against a “limitation on the grant” is not relevant to the question of whether Conoco is obligated to execute a formal release of the Reverted Minerals. Further, the presumption does not apply in the context of Paragraph 18’s clear condition. ............................................................................................. 24 V. CONCLUSION ................................................................................................................. 25

VI. SUMMARY JUDGMENT EVIDENCE ......................................................................... 26

VI. PRAYER ........................................................................................................................... 28

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 2 CAUSE NO. 2014 CVQ000 438 D4

VAQUILLAS UNPROVEN MINERALS, § IN THE DISTRICT COURT OF LTD., § Plaintiff, § § v. § WEBB COUNTY, TEXAS § CONOCOPHILLIPS COMPANY, § Defendant § 406th JUDICIAL DISTRICT

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE JUDGE OF SAID COURT:

Plaintiff Vaquillas Unproven Minerals, Ltd. (“Vaquillas”) moves for partial

summary judgment against Defendant ConocoPhillips Company (“Conoco”), and urges

the denial of Conoco’s motion for summary judgment, and in support respectfully shows:

I. SUMMARY

Vaquillas seeks a partial summary judgment holding that Conoco retains only 40

acres for each producing and shut-in gas well drilled by Conoco on the oil and gas leases

that are the subject of this lawsuit. Vaquillas also seeks denial of Conoco’s motion for

summary judgment.

The central issue in this case is the legal interpretation of a retained acreage clause

that is identical in two oil and gas leases between Vaquillas, as lessor, and Conoco, as

lessee. Under both leases, Conoco was entitled to retain acreage for each producing or

shut-in gas well capable of producing in paying quantities upon the expiration of its

continuous drilling program. For each gas well Conoco drilled, it was entitled to retain

acreage equal to the size of units established by the spacing provided in the rules adopted

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 3 by the Railroad Commission for the field of production, here 40 acres per well. Had the

Commission not adopted such rules, Conoco would have been entitled to retain 640 acres

per gas well. But that is not the case. Conoco did not drill the additional wells to

develop the leasehold acreage to the density provided by the Railroad Commission rules.

Accordingly, the leases terminated as to all but the 40 acres retained for each well, and

the remaining acreage reverted to Vaquillas.

The key language is in Paragraph 18 of both Leases:

…Lessee covenants and agrees to execute and deliver to Lessor a written release of any and all portions of this lease which have not been drilled to a density of at least 40 acres for each producing oil well and 640 acres for each producing or shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas . . . for any field on this lease provides for a spacing or proration establishing different units of acreage per well, then such established different units shall be held under this lease by such production, in lieu of the 40 and 640-acre units above mentioned…

(Emphasis added).1

Some 33,363 acres were leased to Conoco. As reflected in Conoco’s written

releases, 208 wells were drilled under the leases prior to the expiration of the continuous

drilling program.2 As it was entitled to retain 40 acres for each well, Conoco was entitled

to retain a total of up to 8,320 acres (208 x 40).3 The remaining 25,043 acres reverted to

Vaquillas (the “Reverted Minerals”).

1 26,622.79 Acre Lease at ¶ 18 (Ex. B-2 to Smith Aff.); 6,740 Acre Lease at ¶ 18 (Ex. B-3 to Smith Aff.). 2 Conoco’s Motion for Summary Judgment (“Conoco MSJ”) at Exs. C and D. 3 This, of course, is assuming that each of the 208 wells is producing or capable of producing in paying quantities. That issue is not before the Court in this motion.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 4 Summary judgment evidence establishes the following as a matter of law or

uncontested fact:

 The Railroad Commission of Texas adopted special field rules for the Vaquillas Ranch (Lobo Cons.) Field.4

 Those field rules apply to the wells drilled by Conoco under the two Vaquillas Leases.5

 The spacing provided for in the special field rules established units of acreage for gas wells.6

 Those units were different than 640 acres.7

 The units established were 40 acres per well.8

 Conoco ended its continuous drilling program on or about June 21, 2012 (90 days after the completion date of Conoco’s Vaquillas Ranch A-7 No. 249 Well (API No. 42-479-41635), which is the last well drilled under the continuous drilling program).9

 The leases terminated for all but 40 acres for each producing or shut-in gas well capable of producing in paying quantities on June 21, 2012 (90 days after completion of the above-referenced well), and the acreage thereby reverted to Vaquillas.10

 Conoco was required to execute a formal release for the Reverted Minerals, but has not done so as to most of the acreage that comprises the Reverted Minerals.11

Conoco acknowledges that it was not entitled to retain all the leasehold acreage,

but claims that it is entitled to retain significantly more than 40 acres per well, for a total

4 Ex. A-1 to Ringuet Aff., accord Conoco MSJ at 4. 5 Id. 6 16 TAC § 3.38(b)(2)(A) (Ex. A-2 to Ringuet Aff.). 7 Id. 8 Id. 9 Conoco’s Resp. to Interrogs. Nos. 16 & 17 at p. 8. (Ex. A-3 to Ringuet Aff.). 10 Ex. B-2 & B-3 to Smith Aff. 11 Ex. B-2 & B-3 to Smith Aff.; Exs. C & D to Conoco Motion.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 5 of 23,671.63 acres.12 This stands in sharp contrast to the 8,320 acres retainable on the

basis of 40 acres per well. Conoco thus wrongfully claims title to 15,351.63 acres of the

Reverted Minerals. Conoco’s wrongful claim of title to these disputed minerals forced

Vaquillas to file this case.

In support of its argument that it is entitled to retain 640 acres per well, Conoco

argues that the Commission did not “establish” 40-acre units because the units

established by the special field rule for the Vaquillas Ranch (Lobo Cons.) Field only set

out the minimum amount of acreage for drilling units required to drill a well. Conoco

also suggests that the 40-acre units established by the special field rules for the Vaquillas

Ranch (Lobo Cons.) Field do not trigger the exception set forth in Paragraph 18 because

they are not different than the 40-acre units established by the statewide rules. Each

contention misses the point and requires that certain language be ignored and that other

words be added to the Leases, contrary to accepted rules of contract instruction.

II. SUMMARY JUDGMENT STANDARD

This is a “traditional” motion for summary judgment, filed pursuant to Rule

166a(c), as to certain of Vaquillas’s claims against Conoco. “[T]here is no genuine issue

as to any material fact and [Vaquillas is] entitled to judgment as a matter of law on the

issues expressly set out in the motion.”13

12 Conoco MSJ at Exs. C and D. 13 TEX. R. CIV. P. 166a(c).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 6 III. BACKGROUND

A. The purpose of an oil and gas lease, as well as a retained acreage clause, is to develop property to produce minerals.

An oil and gas lease is, at its core, a bargain struck by a landowner/lessor to have

developed the hydrocarbons beneath his land with another who has the experience and

capability to do so by undertaking the complex process of drilling and producing those

hydrocarbons.14 The landowner/lessor wants the mineral value of the land developed; the

oil and gas company/lessee wants the opportunity to make a profit. In order to have their

minerals developed, landowners/lessors generally must transfer the rights to explore,

drill, produce, and market the minerals to an oil and gas company with the skill and

financial ability to do so, such as Conoco.15 The oil and gas lease is the instrument that is

almost invariably used to transfer these rights to the oil and gas company.16 In return for

the risk assumed by the oil and gas company, it receives the lion’s share of the profit

derived from production and a generous time period (typically so long as production is

obtained and maintained in paying quantities) within which to continue operations on the

lease.

Absent an express limitation in the lease, a lessee’s rights under an oil and gas

lease may continue, as to the entire property, for an indefinitely long period of time. This

is the case because leases are typically structured so that if oil or gas in paying quantities

is found during the lease’s primary term, the oil and gas company’s rights to operate will

14 1 Ernest E. Smith and Jacqueline Lang Weaver, Texas Law of Oil and Gas § 4.1(B) (2014). 15 Id. 16 Id.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 7 continue for so long thereafter as any well is producing oil or gas in paying quantities on

the leased property.17

Oil and gas leases frequently contain a retained acreage clause that provides

operators with the choice and flexibility to develop the acreage to a specified density, or

to not do so and have acreage revert to the landowners/lessors. The retained acreage

clause also helps the landowners/lessors ensure that his property is fully developed within

a reasonable period of time, by allowing development of reverted acreage by another

lessee.18 In specifying the density for development, the clause may provide for reference

to Railroad Commission rules.19

B. Spacing, density, and proration units.

The Railroad Commission is responsible for preventing waste of the state’s oil and

gas natural resources and protecting the correlative rights of mineral owners, and it

adopts statewide rules and special field rules as means to accomplish this end.20 Special

field rules for a given field (reservoir) are commonly referred to simply as “field rules.”

Field rules typically address, among other things, spacing requirements. The

Railroad Commission’s spacing requirements typically establish the minimum distance a

well can be located to the nearest lease line, property line, or subdivision line, and to

other wells on the same lease completed in the same reservoir. 21 Spacing in effect

17 Id. 18 1 Smith & Weaver § 5.2(B)(3). 19 1 Smith & Weaver § 5.2(B)(3) (citing ConocoPhillips Co. v. Ramirez, 2006 WL 1748584 (Tex. App.— San Antonio 2006, no pet.) (mem. op.). 20 R.R. Com'n of Texas v. WBD Oil & Gas Co., 104 S.W.3d 69 (Tex. 2003). 21 16 TAC § 3.37.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 8 mandates that a certain number of acres be allotted to a given well, and is intertwined

with “density.”

The Railroad Commission’s “density” requirements govern the number of wells

that may be drilled on a given amount of acreage in a reservoir.22 The density

requirement does so by prescribing the minimum required size of the “drilling unit” – the

minimum number of acres the operator must have to drill a well.23 This is the essential

nature of the drilling unit. The “drilling unit” is on occasion also referred to as a “spacing

unit” or a “development unit.”24 Such units are by their nature minimum-sized units,

because they prescribe the minimum acreage required to obtain a Railroad Commission

permit to drill a well. An operator may always drill a well with more acreage than the

minimum.

The Railroad Commission also regulates production levels to prevent waste and

protect correlative rights. One way this is done is through specification of “prescribed”

“proration units” for a field. These units are often confused with drilling units, though

they are very different. A prescribed proration unit does not address the number of acres

necessary to drill a well.25 It simply specifies the maximum amount of acres that an

operator may assign to a well as the proration unit for that well. In turn, the Commission

uses the well proration units designated by operators for the purpose of assigning

22 16 TAC § 3.38. (Ex. A-2 to Ringuet Aff.) 23 16 TAC § 3.38(a)(2), (d)(1). (Ex. A-2 to Ringuet Aff.) 24 2 Smith & Weaver § 10.1(B)(2). 25 See 2 Smith & Weaver § 10.1(B)(2).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 9 production allowables that allocate total field production among individual wells.26

Prescribed proration units are by their nature maximum-sized units, because they

prescribe the maximum acreage that an operator may assign to a well as a proration unit

for production allowable purposes. An operator may always assign fewer acres to its

proration unit than the maximum.

C. The Leases contain a retained acreage clause limiting the amount of acreage Conoco was allowed to retain for each well.

The properties that are the subject of this lawsuit are a 26,622.79-acre tract27 and a

6,740-acre tract,28 both located in Webb County, Texas. Vaquillas is the successor-in-

interest to the original lessor(s) under both the 26,622.79-acre lease and the 6,740-acre

lease (the “Leases”).29 Defendant Conoco is a successor-in-interest to the original

lessee(s).

The Leases have been amended and supplemented a number of times. On or about

November 1, 1987, the 26,622.79-acre lease was amended to include Paragraph 18.30 On

the same date, the 6,740-acre lease was entered into, containing the same Paragraph 18.

This paragraph provides for the release of acreage at the end of the continuous drilling

26 16 TAC § 3.38(a)(3). (Ex. A-2 to Ringuet Aff.) 27 26,622.79 acres of land, more or less, situated in Webb County, Texas more fully described in the Oil, Gas and Mineral Lease dated June 15, 1974 (as amended) between Vaquillas Ranch Company, Ltd. et al., as Lessor, and Conoco Inc., as Lessee, a copy of which is recorded in Volume 460, Pages 324-330 of the Webb County Deed Records (hereinafter the “26,622.79-acre lease”). (Ex. B-2 to Smith Aff.). 28 6,740 acres of land, more or less, situated in Webb County, Texas more fully described in the Oil, Gas and Mineral Lease, dated effective November 1, 1987, and entered into by and between Vaquillas Ranch Company, Ltd., Vaquillas Unproven Mineral Trust, and Vaquillas Proven Mineral Trust, as Lessor, and Conoco Inc., as Lessee, a Memorandum of which is recorded in Volume 1303, Pages 886 et seq. of the Webb County Real Property Records (hereinafter the “6,740-acre lease”). (Ex. B-3 to Smith Aff.). 29 See Ex. B Smith Aff. 30 The retained acreage clause found in Paragraph 18 was also in the original 26,622.79-acre lease. In the original 1974 lease, the clause was found in section 12(g). (Ex. B-2 to VAQ Aff.).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 10 program. In order to be engaged in a continuous drilling program, after the end of the

primary term, Conoco must commence the drilling of a new well within 90 days after the

completion of each well. At the end of the continuous drilling program (i.e., when

Conoco elects to cease commencement of the drilling of new wells within the 90 day

period(s)), the Leases are maintained only as to an amount of acreage for each producing

or shut-in gas well that is capable of producing in paying quantities. The Leases go on to

require Conoco to execute and deliver to Vaquillas a written release of any acreage not

retained.

Paragraph 18 states in pertinent part:

… Lessee covenants and agrees to execute and deliver to Lessor a written release of any and all portions of this lease which have not been drilled to a density of at least 40 acres for each producing oil well and 640 acres for each producing or shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this lease provides for a spacing or proration establishing different units of acreage per well, then such established different units shall be held under this lease by such production, in lieu of the 40 and 640-acre units above mentioned.

(Emphasis added).31

Conoco and Vaquillas thus agreed to an exception to Conoco’s otherwise-existing

right to retain 640 acres for each gas well. If the Commission adopts a rule for the field

providing for spacing or proration that establishes units of acreage different than 40 acres

[oil wells] or 640 acres [gas wells], Paragraph 18’s “except” provision is triggered and

Conoco therefore retains only the amount of acreage per well established by the spacing

provided in the Railroad Commission’s rules for the field. The expressed intent of the

31 Exs. B-2 & B-3 to Smith Aff. at ¶ 18.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 11 parties’ agreed exception is clear. In lieu of the default 640 acres, the units established by

the Railroad Commission’s rules for the field were to determine the amount of acreage

that would be retained for each well.

D. The Railroad Commission adopted spacing rules for the Vaquillas Ranch (Lobo Cons.) Field.

The Railroad Commission of Texas adopted spacing rules in its special field rules

for the Vaquillas Ranch (Lobo Cons.) Field.32 Each of the wells drilled under the Leases

is in the Vaquillas Ranch (Lobo Cons.) Field.33

After the November 1, 1987, amendment to the Leases, at Conoco’s request, the

Railroad Commission adopted rules specifically for the Vaquillas Ranch (Lobo Cons.)

Field. These field rules, which were initially adopted on February 24, 1998, contained

spacing rules providing that no well could be drilled nearer than 467 feet to any property

line, lease line, or subdivision line (the “lease-line spacing” requirement), and that no

well could be drilled nearer than 1,200 feet from any other well (the “between-well

spacing” requirement).34 Under such rules, the established spacing unit (i.e., drilling

unit) was a minimum of 40 acres per well.

On or about November 2, 2010, and again at Conoco’s request, the Railroad

Commission held a field rule hearing for the Vaquillas Ranch (Lobo Cons.) Field.

Following the hearing, the Commission amended the rules for the field, leaving the 40-

32 Conoco MSJ at 4. 33 Id. 34 The 467 foot lease-line spacing and 1,200 foot between-well spacing requirements happen to be identical to the requirements set out in Statewide Rule 37, which would apply in the absence of field rules. The Commission, through its adoption of special field rules for the field, considered the evidence presented and in its expertise concluded that this was the appropriate spacing rule for development in this particular field. (Ex. A-4 to Ringuet Aff.).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 12 acre drilling unit requirement intact.35 The 1998 field rules, as amended, remain in effect

today.

The amended field rules continue to provide for lease-line spacing of 467 feet, and

between-well spacing of 1,200 feet, with one exception. As has become common for

certain types of fields, in the 2010 amendments to the field rules, the Commission

eliminated the minimum between-well spacing requirement for wells located at least 660

feet from the nearest property line, lease line, or subdivision line. This gave the operators

in the field greater flexibility in locating wells.36 The 40-acre established drilling unit

requirement continued to apply for all wells drilled in the field.37

A. Under the plain language of the Leases, Conoco is entitled to retain no more than the 40-acre units per well established by the Railroad Commission.

Paragraph 18 of the Leases unambiguously provides that when the Railroad

Commission adopts field rules that provide for spacing “establishing different units of

35 Ex. A-5 to Ringuet Aff. 36 Conoco sought to eliminate the between-well spacing requirement for interior wells because the area is highly faulted. Because of the complexity of the geology, the difficulty of developing the many separate fault blocks in the field, and the desire to ensure all the “sweet spots” were produced, the between-well spacing requirement for interior wells was eliminated. See Ex. A-5 to Ringuet Aff. 37 Importantly, while the field rules were amended in 2010 to remove the between-well spacing requirement for interior wells, the amendments did not affect the density requirement for any wells drilled on the Subject Property. As discussed above, the purpose of the elimination of the between-well spacing requirement for interior wells was to promote production in a tight formation and deal with structural anomalies. The effect was not to amend or remove the density requirement. The Commission did not amend or eliminate the acreage requirement for drilling wells, including interior wells, in the field. Where field rules are amended, but the amendments do not expressly amend, eliminate, or address an already-existing portion of the field rule, that section of the rule is unaffected by the amendments. After the 2010 amendments, the Commission continued to require standard drilling units of 40 acres per well. See, e.g., “Field Rules Display” for the field on the Commission’s website. (Ex. A-1 to Ringuet Aff.). Further, the 40-acre standard drilling unit requirement is consistent with Conoco’s W-1 drilling permits. E.g., W-1 for API No. 42-479-41635. (Ex. A-6 to Ringuet Aff.).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 13 acreage per well, then such established different units shall be held under this lease by

such production, in lieu of the 40 [for oil wells] and 640-acre [for gas wells] units above

mentioned.”38 The Railroad Commission did adopt field rules providing for spacing that

established 40-acre units for the Vaquillas Ranch (Lobo Cons.) Field. Conoco, therefore,

may retain no more than 40 acres per gas well.

In Paragraph 18, the parties agreed to an exception to Conoco’s otherwise existing

right to retain 640 acres for gas wells. The exception is triggered by the Railroad

Commission’s adoption of spacing or proration establishing “… different units of

acreage per well …” (the “agreed exception”). Thus, the parties clearly contemplated

that spacing rules (as well as proration rules) trigger the agreed exception, if the units of

acreage thereby established are different than 640 acres for gas wells. When triggered,

the agreed exception allowed Conoco to retain only those units of acreage per well

established by the spacing provided in the Railroad Commission rules, thus reducing the

acreage Conoco could retain. This is precisely what occurred here. It is undisputed that

the Railroad Commission, through its special field rules, provided spacing rules for the

Vaquillas Ranch (Lobo Cons.) Field.39 As discussed below, these spacing rules in turn

establish 40-acre units per well.

In situations such as this one, in which the Commission adopts rules for a field

providing for spacing, but where the field rules do not explicitly set out the required

density (minimum acres required to drill a well), Railroad Commission Rule 38 operates

38 Exs. B-2 & B-3 to Smith Aff. at ¶ 18. 39 Conoco MSJ at 4.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 14 to prescribe the units of acreage established by the spacing provided in the rules for the

field. 16 TEX. ADMIN. CODE § 3.38 (“Rule 38”).40 Rule 38 provides in pertinent part:

The standard drilling unit for all oil, gas, and geothermal resource fields wherein only spacing rules… are applicable is hereby prescribed to be the following.

Spacing Rule Acreage Requirement (1) 150 - 300 2

(2) 200 - 400 4

(3) 330 - 660 10

(4) 330 - 933 20

(5) 467 - 933 20

(6) 467 - 1200 40

(7) 660 - 1320 40

16 TEX. ADMIN. CODE § 3.38(b)(2)(A) (emphasis added).41

The Commission’s special field rules provide a spacing rule – 467 feet lease-line

spacing and 1,200 feet between-well spacing – for the Vaquillas Ranch (Lobo Cons.)

Field. As is contemplated by Rule 38, these special field rules did not contain a density

rule. Nevertheless, as shown on the above table, the special field rules’ designation of

40 Ex. A-2 to Ringuet Aff. 41 Ex. A-2 to Ringuet Aff.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 15 spacing operated to prescribe and establish 40-acre drilling units for each oil or gas well

in the Vaquillas Ranch (Lobo C.) Field.42

The agreed exception was triggered by the adoption of the Vaquillas Ranch (Lobo

Cons.) special field rules, which included spacing that established 40 acre units. Conoco

was therefore entitled to retain no more than 40 acres for each of the gas wells it drilled

on the Subject Property. Consistent with the fundamental purpose of the oil and gas lease

– to develop and produce the minerals – this allows Conoco to continue to produce the

minerals from the wells that it has drilled on the acreage that it has developed. The

remaining undeveloped acreage reverts to Vaquillas, allowing Vaquillas or another party

to develop the undeveloped reverted acreage and produce the minerals underlying that

acreage.

B. Conoco’s contention that the field rules for the Vaquillas Ranch (Lobo Cons.) field do not establish 40-acre units requires the Court to disregard or to add words to the Leases.

Conoco argues that the established 40 acre spacing/drilling units are not

“established” because they constitute a minimum (with no maximum) acreage

requirement for drilling each well. In advancing this argument, Conoco would have the

Court ignore well-settled rules of contract construction in order to fulfill Conoco’s quest

42 Prior to 1955, the Commission relied upon spacing rules alone to govern the density of drilling. Observing that on tracts of irregular size and shape, wells could be drilled with less acreage per well (i.e., to a greater density), as compared to regularly-shaped tracts, i.e., square tracts, in 1955, the Commission first adopted the chart found in Rule 38. The chart was adopted to prescribe the required minimum number of acres per well based on the applicable spacing to remedy this “disadvantage” for regularly- shaped tracts. The chart remains the same to this date. (Exs. A-2, A-7 of Ringuet Aff.). The chart in Rule 38 effectively serves as a backstop or gap-filler when only spacing is provided for in the special field rules.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 16 to retain 640 acres for each well drilled under the Leases.43 Conoco’s reading is at odds

with the plain language of the Leases.

Paragraph 18’s agreed exception to Conoco’s otherwise existing right to retain 640

acres for gas wells is triggered by the Railroad Commission’s field rules providing for

spacing or proration establishing “…different units of acreage per well….” It does not

use the words establishing “…maximum units of acreage per well….” The units are no

less “established” or “prescribed” because they operate as minimums. Acceptance of

Conoco’s argument that because the 40 acre units are only minimums, Paragraph 18’s

agreed exception is not triggered, would require that the court add words to the language

chosen by the parties, contrary to accepted rules of contract interpretation.44

To the extent that Conoco means to imply that because the 40-acre units

established by the spacing provided in the field rules for the Vaquillas Ranch (Lobo

Cons.) Field are the same as the statewide rules (which apply if field rules have not been

established), the exception provision of Paragraph 18 is not triggered, Conoco is

incorrect.45

Where the language of Paragraph 18 refers to the Railroad Commission’s adoption

of “spacing … establishing … different units of acreage per well …,” the word

“different” refers back to the 40 acres for each oil well and 640 acres for each producing

43 See Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003) (courts “may neither rewrite the parties' contract nor add to its language,” but rather, must interpret unambiguous contract language as written). 44 Id. 45 Conoco MSJ at 8.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 17 or shut-in gas well earlier in the sentence.46 The word “different” here does not, as

Conoco suggests, mean different from the “statewide rules” for well density; had it meant

that, the parties would have referenced the statewide rules.47 Conoco’s effort to add

words to the contract must again be rejected.

Conoco also appears to take the position that the reference to “units of acreage per

well” refers only to “proration units” and does not include “drilling units.”48 The parties

chose the broader term “units of acreage,” and specified that spacing rules or proration

rules could trigger the exception. Thus the provision cannot be limited to proration

units, but must include both drilling units and proration units. This is consistent with the

language of Paragraph 18’s agreed exception referring to “…spacing or proration

establishing different units of acreage per well.”

In addition, Conoco references the pooling clause in the Leases.49 Under the

Leases, however, the pooling clause has nothing to do with or effect on the acreage

limitation in the retained acreage clause. Conoco’s statement that the pooling clause

somehow establishes the “normal and completely authorized block of acreage” under the

Leases would render meaningless the agreed exception.50

46 Indeed, Conoco acknowledges this on page 11 of its Motion for Summary Judgment, when it states that before Paragraph 18’s exception is triggered, “the Railroad Commission must ‘establish’ units for gas wells of a different size than 640 acres.” 47 Notably, there is no reference to statewide rules in Paragraph 18. 48 Id. at 4. 49 Conoco MSJ at 6. 50 Conoco MSJ at 7.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 18 The Commission has, through the spacing rules adopted for the field, established a

40-acre spacing/drilling unit requirement. Paragraph 18’s condition was thus triggered.

Conoco is entitled to retain no more than 40 acres per well.

C. Jones v. Killingsworth, cited by Conoco, supports Vaquillas’s position that the field rules “establish” or “prescribe” 40-acre units, and operators are only “permitted” to form larger units.

Jones v. Killingsworth, 403 S.W.2d 325 (Tex. 1965), dealt with a pooling clause

and proration units prescribed by the Railroad Commission, not a retained acreage clause.

Nonetheless, the case is instructive and supports Vaquillas’s position that the

Commission’s field rules for the Vaquillas Ranch (Lobo Cons.) Field “establish” 40-acre

units.

Jones involved a lessee’s attempt to create a pooled unit for oil of 160 acres rather

than an 80-acre unit, which the lessor believed to be the maximum size allowed under the

pooling clause of the parties’ oil and gas lease. Similar to the retained acreage clause in

this case, the pooling provision in Jones also created an exception to the default

maximum pooled unit size when a different one was prescribed by a governmental

authority.

Units pooled for oil hereunder shall not substantially exceed 40 acres each plus a tolerance of 10% thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified, units thereafter created may conform substantially in size with those prescribed by governmental regulations.

Id. at 327 (emphasis added).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 19 The lessee in Jones argued that because rules adopted by the Railroad Commission

prescribed oil proration units of not less than 80 acres but merely permitted up to 160

acres for each oil unit, that by reading these rules into the lease’s pooling provision the

lease would read: “the size of the units thereafter created may not be substantially less

than 80 acres nor substantially more than 160 acres. Id. at 327. The Supreme Court

disagreed with this construction, writing:

The lessors did not consent to enlarge an oil proration unit to any size permitted by governmental regulations. They gave their consent to enlarge a unit of substantially 40 acres, but only to the extent of the size of units prescribed by the regulatory authority. The fact that the Railroad Commission may permit a much larger unit cannot be read into the lease contract when, as here, the authority to create larger units is expressly limited to units the size prescribed by the Railroad Commission. The Commission prescribed a unit of 80 acres. The field rules clearly say that there must be a proration unit of at least 80 acres, and there may be larger units of not more than [160] acres. The parties obviously knew when the lease contract was executed that a permitted oil proration unit could conceivably be much larger in area than one prescribed by governmental authority. To say that a lessee can pool lessor’s land with units of any size permitted by the Railroad Commission would defeat the intention of the parties to restrict the size of the units to a size prescribed by governmental authority.

Id. at 327-28 (boldface added; italics in original).

Jones stands for the proposition that when an oil and gas lease provision references

acreage prescribed by a Railroad Commission rule as a marker that will restrict or limit

the size of the units that the lessee is otherwise allowed to retain, the unit size prescribed

by the Commission rule controls over a larger-sized unit that is merely permitted or

allowed by such Commission rule.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 20 Like Jones, here the Vaquillas retained acreage clause clearly contemplated a

restriction in the size of the otherwise allowed 40- or 640-acre units to the size prescribed

by Railroad Commission field rules. The parties knew when the Leases were executed

that field rules could be adopted for a field on the Vaquillas Ranch providing for spacing

that established units different than 640 acres per gas well. That is what happened. The

467-1200 spacing in the field rules established the 40-acre drilling unit requirement.

The standard drilling unit for all oil, gas, and geothermal resource fields wherein only spacing rules… are applicable is hereby prescribed to be the following.

Spacing Rule Acreage Requirement ... ... (6) 467 – 1200 40 ... ... 51 16 TEX. ADMIN. CODE § 3.38(b)(2)(A) (emphasis supplied). The field rules provide for

spacing establishing 40 acre units. In the Jones pooling provision, the limiting word was

“prescribed.” In the Vaquillas Leases, the word of limitation is “established.” As

Conoco’s motion correctly states, Black’s Law Dictionary defines “Establish” as “To

settle, make or fix firmly; place on a permanent footing; found; create; put beyond doubt

or dispute; prove; convince.”52 Black’s also defines “Prescribe” with an equivalent

meaning: “Prescribe”- “To dictate, ordain, or direct; to establish authoritatively (as a

rule or guideline).”53 (emphasis added). The applicable rules for the field include

51 Ex. A-2 to Ringuet Aff. 52 Conoco MSJ at 11. 53 Black’s Legal Directory at 1373 (10th ed. 2014). Likewise, Webster’s Dictionary defines “prescribe” to include “to establish rules, laws, or directions.” Webster’s II New College Dictionary at 874 (Houghton Mifflin Company 1999).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 21 spacing rules that clearly “establish” or “prescribe” 40-acre units for the Vaquillas Ranch

(Lobo Cons.) Field.

Conoco argues that because the prescribed density rule sets out only a minimum

amount of acreage required for a drilling unit (i.e., to drill a well) rather than a fixed

acreage or the maximum acreage, that this somehow means the spacing rules provided in

the special field rules do not establish units of acreage different than 640 acres. 54 This is

incorrect. The units are no less “prescribed” and “established” because they are

minimums. And, the prescribed and established 40-acre units are unarguably different

than 640-acre units. Conoco’s argument tracks the argument made (and lost) by the lessee

in Jones. That argument was rejected by the Texas Supreme Court, and it should be

rejected by this Court.

D. Conoco’s interpretation ignores the inherent role of drilling units as specifying the minimum acreage required to drill wells, and thereby renders the word “spacing” in Paragraph 18’s agreed exception meaningless.

Conoco’s erroneous interpretation of Paragraph 18 also fails because it would

render Paragraph 18’s “except” clause meaningless as it relates to spacing.

The Texas Supreme Court has held that in construing an oil and gas lease, one

must “examine the entire document and consider each part with every other part so that

the effect and meaning of one part on any other part may be determined.”55 This is

because the court presumes “that the parties to a contract intend every clause to have

54 Conoco MSJ at 4, 8, 11-12. 55 Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996) (emphasis added).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 22 some effect.”56 And in construing the language of a contract, the court should consider

the surrounding circumstances as part of determining whether the language can be given

a definite meaning. E.g., Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex.

1981).

Conoco argues that spacing provided in the Railroad Commission’s field rules do

not “establish” 40-acre units, because they “permit operators to drill wells on a minimum

of 40 acres.”57 By their very nature, because of their purpose, the Railroad Commission’s

density requirements establish only a minimum acreage requirement – they establish the

minimum amount of acreage required for drilling a well.58 Conoco’s construction,

whereby the exception applies only when the Commission establishes a precise and fixed

drilling unit size or proration unit size, ignores the fact that by their nature, prescribed

drilling units are minimum requirements.59 The agreed exception of Paragraph 18,

however, unquestionably indicates that the parties contemplated that special field rules

that provide for spacing could trigger the retained acreage clause’s exception, and thereby

reduce the number of acres that Conoco could otherwise retain.60

56 Id. (emphasis added). 57 Conoco MSJ at 11. 58 This, of course, is because any other requirement would lead to absurd results (e.g., an operator with a 45 acre tract being denied a drilling permit, where the established density is 40 acres) and because the Commission’s concern in establishing drilling units is to prevent waste caused by excessively dense drilling. 59 This motion concerns drilling/spacing units, and not proration units. Conoco’s reference to proration units in footnote 4, page 5 of its Motion for Summary Judgment ignores this distinction and the lease language that speaks to “spacing or proration establishing … units.” As noted above, proration units serve an entirely different purpose than drilling units, and establish the maximum amount of acreage that an operator may assign to a well for proration purposes. 60 It is settled law that contracts are presumed to incorporate regulations and laws existing at the time of execution. Amarillo Oil Co. v. Energy-Agri Products, Inc., 794 S.W.2d 20, 22-25 (Tex. 1990); Houston Lighting & Power Co. v. R.R. Comm'n, 529 S.W.2d 763, 766 (Tex.1975).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 23 If Conoco were correct that the Commission-established 40-acre units do not

apply because the required drilling units are always only the minimum acreage required

to drill a well, then there would be no circumstances under which the agreed “except”

provision of Paragraph 18 could apply where field rules provide for spacing alone. Thus,

Conoco’s reading would render the reference to “spacing” in the parties’ agreed

exception meaningless and violate the rules of construction that every provision in a

contract be given effect and that it be construed in light of the surrounding circumstances.

For this reason also, Conoco’s argument fails.

E. Conoco’s argument regarding a presumption against a “limitation on the grant” is not relevant to the question of whether Conoco is obligated to execute a formal release of the Reverted Minerals. Further, the presumption does not apply in the context of Paragraph 18’s clear condition.

Whether the agreed exception constitutes a covenant or a condition is not relevant

to the issue of whether Conoco is required to execute a formal release for all acreage in

excess of 40 acres for each producing and shut-in natural gas well capable of producing

in paying quantities.

Nonetheless, the cases cited by Conoco in support of its argument regarding a

presumption against a limitation do not apply in this case because Paragraph 18 contains

a clear limitation or condition. A distinction is generally drawn between covenants and

conditions in oil and gas leases. See, e.g., Rogers v. Ricane Enterprises, Inc., 772 S.W.2d

76, 79 (Tex. 1989). Breach of a condition results in automatic termination of the

leasehold estate upon the happening of stipulated events. Id. Breach of a covenant does

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 24 not automatically terminate the estate, but instead subjects the breaching party to liability

for damages, or the remedy of a decree of cancellation. Id.

Paragraph 18 specifies the acreage that “shall be held” by Conoco, thus

necessarily also providing for the acreage that shall not be held (i.e., shall revert to

Vaquillas). The agreed exception and the phrase “shall be held” cannot be construed to

be anything other than a condition, breach of which results in termination of the leasehold

estate as to the Reverted Minerals.61

V. CONCLUSION

Conoco has drilled some 208 wells on the leases and retains up to 40 acres for

each well capable of producing in paying quantities. This acreage allows Conoco to

operate these wells and produce them at maximum potential. This case concerns the

remaining 25,000+ acres that Conoco has not developed to the density provided by

Railroad Commission rules for the field. Yet, Conoco wants to hold that acreage and

thereby prevent Vaquillas from having it developed by another operator.

The Leases unequivocally provide in Paragraph 18 that Conoco retains only that

acreage for each well equal to the acreage per unit established by the Railroad

Commission’s spacing rules for the field if those units are different than 640 acres for gas

wells. Conoco does not dispute that the applicable drilling/spacing units – the minimum

amount of acres required to drill a well – established by the Commission field rules are

40 acres per well. Instead, Conoco makes a number of arguments that simply do not fit

with the language of the Leases and would have this Court rewrite that language.

61 See, e.g., Freeman v. Magnolia Petroleum Co., 171 S.W.2d 339, 340 (Tex. 1943).

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 25 Conoco has refused to acknowledge that the undeveloped acres that it elected not

to earn by drilling additional wells has reverted to Vaquillas. And, consistent with this

refusal, Conoco has not provided the formal releases required by the Leases. Vaquillas

simply asks this Court to rectify this situation.

VI. SUMMARY JUDGMENT EVIDENCE

In support of this Motion, Vaquillas relies on the following summary

judgment evidence, which is filed with the Motion and is hereby incorporated as part of

this Motion:

Exhibit A: Affidavit of Alicia R. Ringuet.

Exhibit A-1: Field Rules Display for the Vaquillas Ranch (Lobo Cons.) Field.

Exhibit A-2: Railroad Commission Rule 38 (16 TAC §3.38).

Exhibit A-3: Defendant ConocoPhillips Company’s Response to Numbers 16 and 17 of Plaintiff Vaquillas Unproven Minerals, Ltd.’s First Set of Interrogatories in the above-captioned case.

Exhibit A-4: Proposal For Decision and Final Order in the Texas Railroad Commission, Oil and Gas Docket No. XX-XXXXXXX.

Exhibit A-5: Proposal For Decision and Final Order in the Texas Railroad Commission, Oil and Gas Docket No. XX-XXXXXXX.

Exhibit A-6: Form W-1 filed with Texas Railroad Commission for API No. 42-479-41635.

Exhibit A-7: Special Order Pertaining to Density Development in All Fields Where Standard Proration Units Have Not Been Adopted, Oil and Gas Docket Nos. 108, 124, 125, 126, 128, 129 and 146, August 15, 1955.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 26 Exhibit B: Affidavit of Dino O. Smith.

Exhibit B-1: June 15, 1974 Oil, Gas and Mineral Lease between Vaquillas Ranch Company, Ltd., a limited partnership acting herein through its general partners, J.O. Walker, Jr., Gene S. Walker, Evan B. Quiros and E. Walker Quiros (a/k/a Mary Elizabeth Quiros) and Continental Oil Company for 26,622.79 acres of land, more or less, situated in Webb County, Texas.

Exhibit B-2: November 1, 1987 Oil, Gas and Mineral Lease Amending Oil, Gas and Mineral Lease dated June 15, 1974 (As Amended) between Vaquillas Ranch Company, Ltd.; Vaquillas Unproven Mineral Trust; Vaquillas Proven Mineral Trust; acting by and through its general partners, J. O. Walker, Jr., E. Walker Quiros, Gene S. Walker and Evan B. Quiros, and Conoco, Inc., Lessee for 26,622.79 acres, more or less, situated in Webb County, Texas.

Exhibit B-3: November 1, 1987 Oil, Gas and Mineral Lease between Vaquillas Ranch Company, Ltd.; Vaquillas Unproven Mineral Trust; Vaquillas Proven Mineral Trust; acting by and through its general partners, J.O. Walker, Jr., E. Walker Quiros, Gene S. walker and Evan B. Quiros and Conoco Inc. for 6,740 acres, more or less, situated in Webb County, Texas.

Exhibit B-4: December 19, 1984 Mineral Deed from Vaquillas Ranch Co., Ltd. to J. O. Walker, Jr., et al. a copy of which is recorded in Volume 1097, Pages 66 et seq. of the Deed Records of Webb County, Texas.

Exhibit B-5: December 19, 1984, Mineral Deed from J.O. Walker, Jr., et al. to J.O. Walker et al., as Trustees of the Vaquillas Unproven Minerals Trust, a copy of which is recorded in Volume 1097, Pages 101 et seq. of the Deed Records of Webb County, Texas.

Exhibit B-6: Effective December 31, 1996, Mineral Deed from the Trustees of the Vaquillas Unproven Minerals Trust to Vaquillas Unproven Minerals, Ltd. a copy of which is recorded in Volume 471, Pages 711 et seq. of the Official Public Records of Webb County, Texas.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 27 Pursuant to Rules 201 and 204 of the Texas Rules of Evidence, Vaquillas requests

that the Court take judicial notice of the following:

Exhibit A-4: Proposal For Decision and Final Order in the Texas Railroad Commission, Oil and Gas Docket No. XX-XXXXXXX.

Exhibit A-5: Proposal For Decision and Final Order in the Texas Railroad Commission, Oil and Gas Docket No. XX-XXXXXXX.

Exhibit A-7: Special Order Pertaining to Density Development in All Fields Where Standard Proration Units Have Not Been Adopted, Oil and Gas Docket Nos. 108, 124, 125, 126, 128, 129 and 146, August 15, 1955.

VI. PRAYER

For these reasons, Plaintiff Vaquillas Unproven Minerals, Ltd. asks for judgment

against Defendant ConocoPhillips Company for the following:

A. Judgment granting Vaquillas’s cross-motion for partial summary judgment;

B. Judgment that Conoco has breached the Leases by failing to release all acreage in excess of 40 acres for each producing and shut-in natural gas well capable of producing in paying quantities;

C. Judgment denying Conoco’s motion for summary judgment;

D. All other and further relief to which Plaintiff may be justly entitled.

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 28 Respectfully submitted,

By: /s/Gregg Owens Gregg Owens

Gregg Owens, SBN 15383500 gregg.owens@haysowens.com John R. Hays, Jr., SBN 09303300 john.hays@haysowens.com Alicia R. Ringuet, SBN 24074958 alicia.ringuet@haysowens.com HAYS & OWENS L.L.P. 807 Brazos Street, Suite 500 Austin, Texas 78701 (512) 472-3993 (512) 472-3883 Facsimile

Michael Jung, SBN 11054600 michael.jung@strasburger.com STRASBURGER & PRICE, LLP 901 Main Street, Suite 4400 Dallas, Texas 75202-3794 (214) 651-4724 (214) 651-4330 Facsimile

Armando X. Lopez, SBN 12562400 mandox@rio.bravo.net LAW OFFICES OF ARMANDO X. LOPEZ 1510 Calle Del Norte, Suite 16 Laredo, Texas 78041 (956) 726-0722 (956) 726-6049 Facsimile

Raul Leal, SBN 24032657 rleal@rl-lawfirm.com RAUL LEAL INCORPORATED 5810 San Bernardo, Suite 390 Laredo, Texas 78041 (956) 727-0039 (956) 727-0369 Facsimile

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 29 CERTIFICATE OF SERVICE

I hereby certify that a true copy of this document is being served on the following persons by the means shown on this the 8th day of September, 2014.

Mr. Michael V. Powell via Electronic Mail mpowell@lockelord.com Ms. Elizabeth L. Tiblets etiblets@lockelord.com LOCKE LORD LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776

Mr. Adolfo Campero via Electronic Mail acampero@camperolaw.com CAMPERO & ASSOCIATES, P.C. 315 Calle Del Norte, Suite 207 Laredo, Texas 78041

PLAINTIFF’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESPONSE TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT PAGE 30 Filed 9/8/2014 4:12:20 PM Esther Degollado District Clerk Webb District 2014 CVQ000 438 D4

EXHIBIT

A _________ Exhibit A-5: a true and correct certified copy of the Proposal For Decision and Final Order in the Texas Railroad Commission, Oil and Gas Docket No. XX-XXXXXXX.

Exhibit A-6: a true and correct certified copy of the Form W-1 filed with the Texas Railroad Commission for API No. 42-479-41635.

Exhibit A-7: a true and correct copy of the Special Order Pertaining to Density Development in All Fields Where Standard Proration Units Have Not Been Adopted, Oil and Gas Docket Nos. 108, 124, 125, 126, 128, 129 and 146, August 15, 1955.

Exhibit A-8: Resume of Alicia R. Ringuet."

Further affiant sayeth not.

Subscribed and sworn to before me on this 6 !!::aay of September, 2014.

I ,,,,..,,,,,,, JENN lfER ROGERS f Texas ~~..~~.Y~r~,.;;-,, Notary Public. State o . s f":' ': ~ My commission Expire Not ry lie in and for \...j ......:..~~ March 28, 20 15 - • '~/1'£ Of'\'' ''''111"'' the State of Texas My commission expires:

AFFIDAVIT OF ALICIA R. RINGUET PAGE2 8/25/2014 Field Rules Display

Log In I

Field Rules Display Field Query Previous Query

Field Rules for Field: VAQUILLAS RANCH (LOBO CONS.) Field Number: 93215400 District Name: 04

Oil field Rules: County Regular: N Salt Dome: N field Location: LAND Don't Permit: N Schedule Remarks: UNITIZED TRACT. Comments: SEE REMARKS FOR OPTIONAL RULES Rule Lease Well Acres per Tolerance Diagonal Diagonal Max Depth Type Spacing Spacing Unit Acres Code Length Special All Corner to 467 1200 40.0 0.0 1200 Rules Depths Corner

Gas field Rules: County Regular: N Salt Dome: N field Location: LAND Don't Permii: N Schedule Remarks: NO P-15 OR PLAT REQUIRED. Comments: SEE REMARKS Rule Lease Well Acres per Tolerance Diagonal Diagonal Max Depth Type Spacing Spacing Unit Acres Code Length Special All Rules Depths 467 1200 40.0 0.0 0

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http://webapps.rrc.state.tx.us/DP/fieldSelectAction.do 1/1 RAILROAD COMMISSION OF TEXAS STATE OF TEXAS ·. · · ··· :. COUNTYOFTRAVIS '. ·•· I hereby certify that the information on the reverse side hereof is a true and correct copy of a document on D513 7 i; nuG 25 1t~ file with the Railroad Commission of Texas, and I further certify that ,'t:\ I ,: l ' i :::;I;·, I_·\:. ., 1:" I am the legal Custodian of the records, files and seal of the Rail- ''.f (~· road Commission of Texas. Ii· ~ ;1t"' •-~.l--~-· 1 o& o-~j---.-··-- I

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TITLE 16 ECONOMIC REGULATION PART 1 RAILROAD COMMISSION OF TEXAS CHAPTER 3 OIL AND GAS DIVISION RULE §3.38 Well Densities

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Commission designee--Director of the Oil and Gas Division or any Commission employee designated in writing by the director or the Commission.

(2) Drilling unit--The acreage assigned to a well for drilling purposes.

(3) Proration unit--The acreage assigned to a well for the purpose of assigning allowables and allocating allowable production to the well.

(4) Substandard acreage--Less acreage than the smallest amount established for standard or optional drilling units.

(5) Surplus acreage--Substandard acreage within a lease, pooled unit, or unitized tract that remains unassigned after the assignment of acreage to each applied for, permitted, or completed well in a field, in an amount equaling or exceeding the amount established for standard or optional drilling units. Surplus acreage is distinguished from the term "tolerance acreage,"in that tolerance acreage is defined in context with proration regulation, while surplus acreage is defined by this rule only in context with well density regulation.

(6) Tolerance acreage--Acreage within a lease, pooled unit, or unitized tract that may be assigned to a well for proration purposes pursuant to special field rules in addition to the amount established for a prescribed or optional proration unit.

(b) Density requirements.

(1) General prohibition. No well shall be drilled on substandard acreage except as hereinafter provided.

(2) Standard units.

(A) The standard drilling unit for all oil, gas, and geothermal resource fields wherein only spacing rules, either special, country regular, or statewide, are applicable is hereby prescribed to be the following.

Attached Graphic

(B) The spacing rules listed in subparagraph (A) of this paragraph are not exclusive. If any spacing rule not listed in subparagraph (A) of this subsection is brought to the attention of the commission, it will be given an appropriate acreage assignment. EXHIBIT

A-2 _________ (c) Development to final density. An application to drill a well for oil, gas, or geothermal resource on a drilling unit composed of surplus acreage, commonly referred to as the "tolerance well," may be granted as

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regular when the operator seeking such permit certifies to the commission in a prescribed form the necessary data to show that such permit is needed to develop a lease, pooled unit, or unitized tract to final density, and only in the following circumstances:

(1) when the amount of surplus acreage equals or exceeds the maximum amount provided for tolerance acreage by special or county regular rules for the field, provided that this paragraph does not apply for a lease, pooled unit, or unitized tract that is completely developed with optional units and the special or county regular rules for the field do not have a tolerance provisions expressly made applicable to optional proration units;

(2) if the special or county regular rules for the field do not have a tolerance provision expressly made applicable to optional proration units, when the amount of surplus acreage equals or exceeds one-half of the smallest amount established for an optional drilling unit; or

(3) if the applicable rules for the field do not have a tolerance provision for the standard drilling or proration unit, when the amount of surplus acreage equals or exceeds one-half the amount prescribed for the standard unit.

(d) Applications involving the voluntary subdivision rule.

(1) Density exception not required. An exception to the minimum density provision is not required for the first well in a field on a lease, pooled unit, or unitized tract composed of substandard acreage, when the leases, or the drillsite tract of a pooled unit or unitized tract:

(A) took its present size and shape prior to the date of attachment of the voluntary subdivision rule (§3.37(g) of this title (relating to Statewide Spacing Rule)); or

(B) took its present size and shape after the date of attachment of the voluntary subdivision rule (§3.37(g) of this title (relating to Statewide Spacing Rule)) and was not composed of substandard acreage in the field according to the density rules in effect at the time it took its present size and shape.

(2) Density exception required. An exception to the density provision is required, and may be granted only to prevent waste, for a well on a lease, pooled unit, or unitized tract that is composed of substandard acreage and that:

(A) took its present size and shape after the date of attachment of the voluntary subdivision rule (§3.37(g) of this title (relating to the Statewide Spacing Rule)); and

(B) was composed of substandard acreage in the field according to the density rules in effect at the time it took its present size and shape.

(3) Unit dissolution.

(A) If two or more separate tracts are joined to form a unit for oil or gas development, the unit is accepted by the Commission, and the unit has produced hydrocarbons in the preceding twenty (20) years, the unit may not thereafter be dissolved into the separate tracts with the rules of the commission applicable to each separate tract if the dissolution results in any tract composed of substandard acreage for the field from which the unit produced, unless the Commission approves such dissolution.

(B) The Commission shall grant approval only after application, notice, and an opportunity for hearing.

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The applicant seeking the unit dissolution shall provide a list of the names and addresses of all current lessees and unleased mineral interest owners of each tract within the joined or unitized tract at the time the application is filed. The Commission shall give notice of the application to all current lessees and unleased mineral interest owners of each tract within the joined or unitized tract. Additionally, if one or more wells on the unitized tract has produced from the field within the 12-month period prior to the application, the applicant shall include on the list all affected persons described in subsection (h)(1)(A) of this section, and the Commission shall give notice of the application to these affected persons.

(C) A Commission designee may grant administrative approval if the Commission designee determines that granting the application will not result in the circumvention of the density restrictions of this section or other Commission rules, and if either:

(i) written waivers are filed by all affected persons; or

(ii) no protest is filed within the time set forth in the notice of application.

(e) Application involving unitized areas with entity for density orders. An exception to the minimum density provision is not required for a well in a unitized area for which the commission has granted an entity for density order, if the sum of all applied for, permitted, or completed producing wells in the field within the unitized area, multiplied by the applicable density provision, does not exceed the total number of acres in the unitized area. The operator must indicate the docket number of the entity for density order on the application form.

(f) Exceptions to density provisions authorized. The Commission, or Commission designee, in order to prevent waste or, except as provided in subsection (d)(2) of this section, to prevent the confiscation of property, may grant exceptions to the density provisions set forth in this section. Such an exception may be granted only after notice and an opportunity for hearing.

(g) Filing requirements.

(1) Application. An application for permit to drill shall include the fees required in §3.78 of this title (relating to Fees and Financial Security Requirements) and shall be certified by a person acquainted with the facts, stating that all information in the application is true and complete to the best of that person's knowledge.

(2) Plat. When filing an application for an exception to the density requirements of this section, in addition to the plat requirements in §3.5 of this title (relating to Application to Drill, Deepen, Reenter, or Plug Back) (Statewide Rule 5), the applicant shall attach to each copy of the application a plat that:

(A) depicts the lease, pooled unit, or unitized tract, showing thereon the acreage assigned to the drilling unit for the proposed well and the acreage assigned to all current applied for, permitted, or completed oil, gas, or oil and gas wells in the same field or reservoir which are located within the lease, pooled unit, or unitized tract;

(B) on large leases, pooled units, or unitized tracts, if the established density is not exceeded as shown on the face of the application, outlines the acreage assigned to the well for which the permit is sought and the immediately adjacent wells on the lease, pooled unit, or unitized tract;

(C) on leases, pooled units, or unitized tracts from which production is secured from more than one field, outlines the acreage assigned to the wells in each field that is the subject of the current application;

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(D) corresponds to the listing required under subsection (g)(1)(A) of this section.

(E) is certified by a person acquainted with the facts pertinent to the application that the plat is accurately drawn to scale and correctly reflects all pertinent and required data.

(3) Substandard acreage. An application for a permit to drill on a lease, pooled unit, or unitized tract composed of substandard acreage must include a certification in a prescribed form indicating the date the lease, or the drillsite tract of a pooled unit or unitized tract, took its present size and shape.

(4) Surplus acreage. An application for permit to drill on surplus acreage pursuant to subsection (c) of this section must include a certification in a prescribed form indicating the date the lease, pooled unit, or unitized tract took its present size and shape.

(5) Certifications. Certifications required under paragraphs (3) and (4) of this subsection shall be filed on Form W-1A, Substandard Acreage Certification.

(A) The operator shall file the Form W-1A with the drilling permit application and shall indicate the purpose of filing. The operator shall accurately complete all information required on the form in accordance with instructions on the form.

(B) The operator shall list the field or fields for which the substandard acreage certification applies in the designated area on the form. If there are more than three fields for which the certification applies, the operator shall attach additional Forms W-1A and shall number the additional pages in sequence.

(C) The operator shall file the original Form W-1A with the Commission's Austin office and a copy with the appropriate district office, unless the operator files electronically through the Commission's Electronic Compliance and Approval Process (ECAP) system.

(D) The operator or the operator's agent shall certify the information provided on the Form W-1A is true, complete, and correct by signing and dating the form, and listing the requested identification and contact information.

(E) Failure to timely file the required information on the appropriate form may result in the dismissal of the application.

(h) Procedure for obtaining exceptions to the density provisions.

(1) Filing requirements. If a permit to drill requires an exception to the applicable density provision, the operator must file, in addition to the items required by subsection (g) of this section:

(A) a list of the names and addresses of all affected persons. For the purpose of giving notice of application, the Commission presumes that affected persons include the operators and unleased mineral interest owners of all adjacent offset tracts, and the operators and unleased mineral interest owners of all tracts nearer to the proposed well than the prescribed minimum lease-line spacing distance. The Commission designee may determine that such a person is not affected only upon written request and a showing by the applicant that:

(i) competent, convincing geological or engineering data indicate that drainage of hydrocarbons from the particular tracts subject to the request will not occur due to production from the proposed well; and

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(ii) notice to the particular operators and unleased mineral interest owners would be unduly burdensome or expensive;

(B) engineering and/or geological data, including a written explanation of each exhibit, showing that the drilling of a well on substandard acreage is necessary to prevent waste or to prevent the confiscation of property;

(C) additional data requested by the Commission designee.

(2) Notice of application. Upon receipt of a complete application, the Commission will give notice of the application by mail to all affected persons for whom signed waivers have not been submitted.

(3) Approval without hearing. If the Commission designee determines, based on the data submitted, that a permit requiring an exception to the applicable density provision is justified according to subsection (f) of this section, then the Commission designee may issue the exception permit administratively if:

(A) signed waivers from all affected persons were submitted with the application; or

(B) notice of application was given in accordance with paragraph (2) of this subsection and no protest was filed within 21 days of the notice; or

(C) no person appeared to protest the application at a hearing scheduled pursuant to paragraph (4)(A) of this subsection.

(4) Hearing on the application.

(A) If a written protest is filed within 21 days after the notice of application is given in accordance with paragraph (2) of this subsection, the application will be set for hearing.

(B) If the application is not protested and the Commission designee determines that a permit requiring an exception to the applicable density provision is not justified according to subsection (f) of this section, the operator may request a hearing to consider the application.

(i) Duration. A permit is issued as an exception to the applicable density provision shall expire two years from the effective date of the permit; unless drilling operations are commenced in good faith within the two year period.

Source Note: The provisions of this §3.38 adopted to be effective November 1, 1989, 14 TexReg 5255; amended to be effective April 21, 1997, 22 TexReg 3404; amended to be effective July 10, 2000, 25 TexReg 6487; amended to be effective June 11, 2001, 26 TexReg 4088; amended to be effective February 13, 2002, 27 TexReg 906; amended to be effective September 1, 2004, 29 TexReg 8271

Next Page Previous Page

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6 of 6 9/8/2014 3:17 PM Figure: 16 TAC §3.38(b)(2)(A) http://info.sos.state.tx.us/fids/16_0003_0038-1.html

Figure: 16 TAC §3.38(b)(2)(A)

Acreage Requirement Spacing Rule

(1) 150 - 300 2

1 of 1 9/8/2014 3:18 PM CAUSE NO. 2014CVQ000438 D4

VAQUILLAS UNPROVEN MINERALS, § IN THE DISTRICT COURT OF LTD, § § Plaintiff, § § v. § WEBB COUNTY, TEXAS § CONOCOPHILLIPS COMPANY, § § Defendant. § 406™ JUDICIAL DISTRICT

DEFENDANT CONOCOPHILLIPS COMPANY'S RESPONSE TO PLAINTIFF VAQUILLAS UNPROVEN MINERALS, LTD. 'S FIRST SET OF INTERROGATORIES

Defendant ConocoPhillips Company, acting pursuant to Tex. R. Civ. P. 197, responds to

Plaintiffs First Set of Interrogatories as shown on the attached pages.

By Rule 11 agreement between counsel for Plaintiff and Defendant, ConocoPhillips' time

for responding to these interrogatories was extended to and including July 7, 2014.

ConocoPhillips objects to the "Definitions" set forth on pages 4-5 of Plaintiffs First Set

of Interrogatories as follows:

1. ConocoPhillips objects to the twenty-one "Definitions" in their entirety for the

reason that they consist mainly of boilerplate "definitions," not tailored to Plaintiffs First Set of

Interrogatories. For example, they include instructions "to produce" documents, which is not the

proper function of interrogatories. As another example, the definitions include many words

never used in Plaintiffs interrogatories. ConocoPhillips declines to attempt to comply with

Plaintiffs boilerplate definitions, but instead will comply with the requirements of Tex. R. Civ.

P. 195.

2. ConocoPhillips objects to the definitions of "documents" and "records." This

"definition" was obviously not written to be used with interrogatories because it talks about

A-3 _________ which it relies established units of different sizes from 40 acres for oil wells and 640 acres for gas wells, then that is wrong, and ConocoPhillips denies it.

14. Identify by the Well name(s) used in the Partial Releases and the corresponding API Number each Well you contend entitles you to any Retained Acreage pursuant to the Vaquillas Leases.

ANSWER: Objection: ConocoPhillips objects to this interrogatory because it is vague and ambiguous.

Subject to the foregoing objection, the Partial Releases described in Plaintiffs Definition 19 provide well names and numbers, and ConocoPhillips does not understand what more Plaintiff wants other than API numbers. The API numbers are equally available to Plaintiff from public sources as they are available to ConocoPhillips; but ConocoPhillips will attach, as Exhibit A to these Answers to Interrogatories, a map from which Plaintiffs counsel may derive API numbers.

15. Identify by API Number any Wells located on the acreage covered by the Vaquillas Leases that were not drilled by or for Conoco under the Vaquillas Leases but in which Conoco owns an interest.

ANSWER: Objection: ConocoPhillips objects to this interrogatory because it is incomprehensible, vague, and ambiguous. It asks about "Wells," which Plaintiff defines in its Definition 16 as "wells drilled by or for Conoco," but this interrogatory purports to inquire of wells "not drilled by or for Conoco," so the interrogatory contradicts itself. The interrogatory also appears to ask whether ConocoPhillips owns an interest in Wells on acreage covered by the Vaquillas Leases, but that are not subject to the Vaquillas Leases, yet Plaintiffs definition of "Wells" states they were drilled under the terms of the Vaquillas Leases. ConocoPhillips cannot be required to guess or speculate what Plaintiff is asking.

16. Identify by API Number and rig release date the Final Well completed or abandoned during Conoco's drilling and reworking operations engaged in on and after November 1, 1990 on the 26,622. 79 Acre Lease.

ANSWER: The well was the Vaquillas A-7 249, API No. 42-479-41635.

17. State the date you contend to be the 90th day after completion or abandonment of the Final Well at which time a written release of acreage was to be provided pursuant to Paragraph 18 of the 26,622. 79 Acre Lease.

ANSWER: ConocoPhillips believes the relevant date was June 21, 2012.

18. Identify by API Number and rig release date the Final Well completed or abandoned during Conoco's drilling and reworking operations engaged in on and after November 1, 1990 on the 6, 740 Acre Lease.

DEFENDANT'S RESPONSE TO PLAINTIFF'S FIRST SET OF lNTERROGATORIES -8 Dated: July 7, 2014 Respectfully submitted,

L-.--"l~~c.4_~~~ Michael State B Email: mpowell@lockelord.com Elizabeth L. Tiblets State Bar No. 24066194 Email: etiblets@lockelord.com LOCKE LORD LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776 Tel: 214-740-8520 Fax: 214-740-8800

Adolfo Campero State Bar No. 00793454 CAMPERO & ASSOCIATES, P.C. 315 Calle Del Norte, Suite 207 Laredo, Texas 78041 Tel: 956-796-0330 Fax: 956-796-0399 Email: acampero@camperolaw.com

DEFENDANT'S RESPONSE TO PLAINTIFF'S FIRST SET OF INTERROGATORIES - 10- CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Defendant's Response to Plaintiffs First Set of Interrogatories was served via email on the following counsel of record for Plaintiff as stated on this 7th day of July 2014:

Gregg Owens Raul Leal Email: gregg.owens@haysowens.com Raul Leal Incorporated Robert G. Hargrove 5810 San Bernardo, Suite 390 Email: rob.hargrove@haysowens.com Laredo, Texas 78041 Hays & Owens L.L.P. Tel: 956.727.0039 807 Brazos Street, Suite 500 Fax: 956.727.0369 Austin, Texas 78701 Email: rleal@rl-lawfirm.com Tel: 512.472.3993 Fax: 512.472.3883

Michael Jung Armando X. Lopez Strasburger & Price, LLP 1510 Calle Del Norte, Suite 16 901 Main Street, Suite 4400 Laredo, Texas 78041 Dallas, Texas 75202-3794 Tel: (956) 726-0722 Tel: 214.651.4724 Fax: (956) 726-6049 Fax: 214.651.4330 (main) mandox@rio.bravo.net Fax: 214.659.4022 (direct) Email: michael.jung@strasburger.com

DEFENDANT'S RESPONSE TO PLAINTIFF'S FIRST SET OF INTERROGATORIES - 11 - - RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL

OIL AND GAS DOCKET NO. XX-XXXXXXX

FINAL ORDER CONSOLIDATING VARIOUS FIELDS INTO A NEW FIELD CALLED THE VAQUILLAS RANCH (LOBO CONS.) FIELD AND ADOPTING FIELD RULES FOR THE VAQUILLAS RANCH (LOBO CONS.) FIELD WEBB COUNTY, TEXAS

The Commission finds that after statutory notice in the above-numbered docket heard on October 8, 1997, 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 the following fields located in Webb County, Texas, are hereby combined into a new field called the Vaquillas Ranch (Lobo Cons.) Field (No. q3~t 5 400 ):

BALTAZAR (LOBO 6 10470) FIELD 05357 400 BARNSLEY (LOBO 10900) FIELD 05791 800 BARNSLEY (LOBO) FIELD 05791 400 BONEBRAKE (LOBO 6) FIELD 10419 500 BONEBRAKE (UPPER LOBO) FIELD 10419 800 GAUCHE CREEK (LOBO) FIELD 14735 225 CARR (LOBO 10100) FIELD 15874 350 CARR (LOBO 8300) FIELD 15874 235 CARR (LOBO 8600) FIELD 15874 250 CARR (LOBO 8700) FIELD 15874 275 CARR (LOBO) FIELD 15874 200 CARR (WILCOX 8200) FIELD 15874 600 CARR (WILCOX 8300) FIELD 15874 700 CARR (WILCOX) FIELD 15874 500 CATTO (LOBO 9900) FIELD 16405 400 CATTO (LOBO 10200) FIELD 16405 500

EXHIBIT A-4 _________ OIL AND GAS DOCKET NO. XX-XXXXXXX PAGE 2

DESPARADO (LOBO 6) FIELD 24394 500 DIAMONDBACK (LOBO 3) FIELD 24574 400 GATO CREEK (9800) FIELD 34238 400 GATO CREEK (LOBO 1) FIELD 34238 300 GATO CREEK (LOBO 1-SEGA) FIELD 34238 325 GATO CREEK (LOBO 3) FIELD 34238 350 GATO CREEK (LOBO 6 SEGMENT A) FIELD 34238 375 GATO CREEK, SE (9800) FIELD 34242 980 GATO CREEK, SE (LOBO 1) FIELD 34242 500 GATO CREEK, SE (UP. LOBO STRAY) FIELD 34242 750 HIRSCH (LOBO 9746) FIELD 41659 075 JURASCHEK (LOBO) FIELD 47740 500 JURASCHEK (WILCOX 11600) FIELD 47740 600 LUNDELL (LOBO 9200) FIELD 55755 180 LUNDELL (LOBO) FIELD 55755 175 MCLEAN (LOBO) FIELD 59725 500 MUJERES CREEK (LOBO 1) FIELD 63668 300 MUJERES CREEK (LOBO 3) FIELD 63668 400 MUJERES CREEK (LOBO 6) FIELD 63668 500 MUJERES CREEK (LOBO) FIELD 63668 250 MUJERES CREEK, SOUTH (LOBO) FIELD 63670 500 NICHOLSON (LOBO 3) FIELD 65469 020 NORDAN (LOBO) FIELD 65934 500 POZO (LOBO) FIELD 72838 500 RANCHO VIEJO, S. (LOBO 6) FIELD 74570 100 RANCHO VIEJO (LOBO 3) FIELD 74568 680 RANCHO VIEJO (LOBO 6) FIELD 74568 700 VAQUILLAS RANCH (LOBO 8100) FIELD 93215 450 VAQUILLAS RANCH (UP. LOBO STRAY) FIELD 93215 600 VAQUILLAS RANCH (WALKER 8300) FIELD 93215 680 VAQUILLAS RANCH (WALKER 8600) FIELD 93215 690 VAQUILLAS RANCH (WALKER, N.) FIELD 93215 670 VAQUILLAS RANCH (WILCOX 11, 100) FIELD 93215 700 VAQUILLAS RANCH (WILCOX 11,600) FIELD 93258 750 VAQUILLAS RANCH (WILCOX 11,900) FIELD 93215 725 VAQUILLAS RANCH (YARSA) FIELD 93258 900 VENADA (9800) FIELD 93436 800 VENADA (LOBO) FIELD 93436 300 VERGARA (LOBO 9300) FIELD 93537 750 VERGARA (LOBO) FIELD 93537 500

It is further ordered that the following rules are adopted for the Vaquillas Ranch (Lobo Cons.) Field: Ji ! l OIL AND GAS DOCKET NO. XX-XXXXXXX PAGE 3

RULE 1: The entire Lobo Formation from the Lobo Unconformity to the top of the Wills Point (Midway Shale) and including the above listed fields in Webb County, Texas, shall be designated as a single reservoir for proration purposes and be designated as the Vaquillas Ranch (Lobo Cons.) Field.

RULE 2: No gas well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be drilled nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applied for, permitted or completed well in the same reservoir on the same lease, pooled unit or unitized tract. The aforementioned distances in the above rule are minimum distances to allow an operator flexibility in locating a well, and the above spacing rule and the other rules to follow are for the purpose of permitting only one well to each drilling and proration unit. Provided however, that the Commission will grant exceptions to permit drilling within shorter distances and drilling more wells than herein prescribed whenever the Commission shall have determined that such exceptions are necessary either to prevent waste or to prevent the confiscation of property. When exception to these rules is desired, application therefore shall be filed and will be acted upon in accordance with the provisions of Commission Statewide Rule 37 and 38, which applicable provisions of said rule are incorporated herein by reference. Provided however, that persons who are presumed to be affected by a request for an exception to the between-well spacing requirement shall be limited to the operators and owners/lessees of tracts, lease or units within one mile or less of the proposed well.

In applying this rule the general order of the Commission with relation to the subdivision of property shall be observed.

RULE 3: The daily allowable production of gas from individual wells completed in the subject field shall be determined by allocating the allowable production, after deductions have been made for wells which are incapable of producing their gas allowables, among the individual wells in the following manner:

TEN percent (10%) of the total field allowable shall be allocated equally among the individual wells producing from this field.

NINETY percent (90%) of the total field allowable shall be allocated among the individual wells in the proportion that the deliverability of such well, as evidenced by the most recent G-10 test filed with the Railroad Commission bears to the summation of the deliverability of all proratable wells producing from this field.

It is further ordered by the Railroad Commission of Texas that the allocation formula for the Vaquillas Ranch (Lobo Cons.) Field be suspended. The allocation formula may be reinstated administratively if the market demand for gas in the Vaquillas Ranch (Lobo Cons.) Field drops below 100% of deliverability. If the market demand for gas in the Vaquillas Ranch (Lobo Cons.) Field drops below 100% of deliverability while the allocation formula is suspended, the operator shall immediately notify the Commission and the allocation formula shall be immediately

jl

J OIL AND GAS DOCKET NO. XX-XXXXXXX PAGE4

reinstated. Failure to give such notice to the Commission may result in a fine (as provided for in Tex. Nat. Res. Code §86.222) for eac day the operators fail to give notice to the Commission.

Effective this ;/,lf ~ay of , 19qg .

COMMISSIO~ a:&ON

:cuNTY OF TRAVIS . . I hereby certify that the i~\ormation on the,' l. ' l ') .. ~::·\r, ··:verse side hereof, and on the securely attached add1t10nal 3 a").·~... ·~ ·'.., ;F ·:J '._;l's identified by certification# J05 3 7 (, ar~ trile .an4 . ,. _ ~· :·::rrcct copies of do<.:uments on file with Railroad Commissio~f'fqc~r, i ......: -~ ·.. ~.. · ·;d I f:1rthcr certify th~t I am the le~al. custodian 0f t.he r~~ds,(; .. ·;y;:-•' '.. } ·. ~ · :s P:d <.·n] of the Ratlroad Commtss10n of Texas. Cl· ,\ \ , : t .,. .. +5 J_ 0 I 1

. ~ ~"~-r- - ...• -·~ <:1-(''.''·'' ~,::,~~-- U U · · " ' L ' -. ' · '

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., ..••. ·w11.;· . , ·~ ~-\; CHARUS R. MATIHEWS, 01AIRMAN LINDIL C. FOWLER, JR., GF.Nf:.RAL COUNSEL BARRY Wll.LlAMSON, COMMISSIONF.R LARRY BOREllA, Am: DIRE<.70R. CAROLE KEETON RYUNDER, COMM/S.tlONF.R OIL & GAS SE.cnON

RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL February 24, 1998

THE APPLICATION OF CONOCO INC. TO CONSIDER CONSOLIDATION OF VARIOUS FIELDS INTO A NEW FIELD CALLED THE VAQUILLAS RANCH (LOBO CONS.) FIELD, WEBB COUNTY

Heard by: Donna K. Chandler on October 8, 1997

Appearances: Representing:

Ron Schultz Conoco Inc. Gary Compton Kerry Pollard Oracio Estrada

James Doherty Sonat Exploration Co.-Houston

Don Rhodes Hurd Enterprises LTD

EXAMINER'S REPORT AND RECOMMENDATION

STATEMENT OF THE CASE

Conoco Inc. requests that 56 fields be consolidated into a new field to be called the Vaquillas Ranch (Lobo Cons.) Field. Conoco further requests that the following rules be adopted for the new field:

1. Designation of the Vaquillas Ranch (Lobo Cons.) Field as the entire Lobo Formation described as the interval from the Lobo unconformity to the Wills Point (Midway Shale);

·'' 2. Well spacing a minimum of 467 feet from lease lines and 1,200 feet between wells. ''

. 3. Allocation based on 90% deliverability and 10% per well.

.. Conoco also requests that the allocation formula in the consolidated field be suspended.

1701 NORTii CONGRESS AVENUE * mo 800-735-2989 OR IDY 512-463-7284 POST OFFICE Box 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL 0PPORTIJNITY EMPLOYER * PHONE: 512/463-6924 FAX: 512/463-6989 http://www.rrc.statc.tx.us I i OIL AND GAS DOCKET NO. XX-XXXXXXX PAGE2

At the hearing, Conoco amended its application to include 4 fields which had not been included in the Notice of Hearing and delete 4 fields which had been included in the Notice of Hearing.

After the hearing, Conoco requested that, in conjunction with the proposed 467 f-1,200' well spacing rule, that persons presumed to be affected by a between-well spacing exception be limited to operators and owners/lessees of tracts, leases or units within one mile or less of the proposed well. Notice of this request was given to all operators in the fields and no objections were received. The examiner recommends approval of the field consolidation, adoption of the proposed field rules and suspension of the allocation formula.

DISCUSSION OF THE EVIDENCE

The fields proposed for consolidation into the Vaquillas Ranch (Lobo Cons.) Field were all discovered after 1981. All aFe Lobo gas reservoirs and most operate under Statewide rules. The allocation formula in each field is currently suspended.

There are currently more than 600 active wells in the 56 fields. Current average production is 320 MCFD per well, with a range from less than 50 MCFD to over 1,200 MCFD. Cumulative production from the fields is over 1 TCF of gas.

It is proposed that the consolidated field interval include the entire Lobo Formation from the base of the Lobo Unconformity to the top of the Wills Point (Midway Shale). The depth interval is generally approxirnate!y 7,200 feet to 9,700 feet.

With consolidation, wells can be produced to a lower economic limit. Conoco estimates that incremental recovery per new well will be a minimum of 25 MMCF. Conoco plans to drill approximately 400 new wells in this area, resulting in additional recovery of 10,000 MMCF.

Because the proposed consolidated field consists of numerous productive zones, a two-factor allocation formula is necessary. The proposed two-factor allocation formula based on 10% per well and 90% deliverability satisfies this requirement.

The allocation formula in each field is currently suspended. It is therefore appropriate to suspend the allocation formula in the consolidated field. ·

FINDINGS OF FACT

1. Notice of this hearing was sent to all affected persons in the _subject area field at least ten (10) days prior to the subject hearing.

2. The 56 fields proposed for consolidation into the Vaquillas Ranch (Lobo Cons.) Field were all discovered after 1980 and are all non-associated Lobo gas reservoirs.

J, OIL AND GAS DOCKET NO. XX-XXXXXXX PAGE 3

3. There are currently more than 600 active wells in the 56 fields and current average production is 320 MCFD per well. Cumulative production from the 56 fields is over 1 TCF of gas.

4. The Lobo Formation in this area is found from approximately 7 ,200 feet to approximately 9,600 feet.

5. It is estimated that a minimum incremental recovery of 25 MMCF per new well will result from the consolidation and approximately 400 new wells are planned for this area.

6. The proposed two-factor allocation formula based on 10% per well and 90% deliverability is a reasonable formula which will protect the correlative rights of mineral owners in the fields.

7. The allocation formula in each field is currently suspended.

CONCLUSIONS OF LAW

1. Proper notice was given to all parties as set out in the provisions of all applicable codes and regulatory statutes.

2. All things have occurred and been accomplished to give the Commission jurisdiction in this matter.

3. Approval of the proposed field consolidation, adoption of the proposed field rules and suspension of the allocation formula will prevent waste and will not harm correlative rights.

EXAMINER'S RECOMMENDATION

Based on the above findings and conclusions of law, the examiner recommends approval of the field consolidation and adoption of the field _rules for the Vaquillas Ranch (Lobo Cons.) Field. It is further recommended that the allocation formula in the consolidated field be su:;pended.

Technical Examiner ,:/.!L,ROAD CO\,i?vl

',,··; ·,· RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL

OIL AND GAS DOCKET IN THE VAQUILLAS RANCH (LOBO NO. XX-XXXXXXX CONS.) FIELD, WEBB COUNTY, TEXAS

FINAL ORDER AMENDING FIELD RULES FOR THE VAQUILLAS RANCH (LOBO CONS.) FIELD WEBB COUNTY, TEXAS The Commission finds that after statutory notice in the above-numbered docket heard on September 23, 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 2 of the field rules adopted in Final Order No. XX-XXXXXXX, effective February 24, 1998, for the Vaquillas Ranch (Lobo Cons.) Field, Webb County, Texas, is amended as hereafter set out:

RULE 2: No well shall hereafter be drilled nearer than FOUR HUNDRED SIXTY SEVEN (467) feet to any property line, lease line or subdivision line and no well shall be drilled nearer than ONE THOUSAND TWO HUNDRED (1,200) feet to any applied for, permitted or completed well in the same reservoir on the same lease, pooled unit or unitized tract. Provided, however, there is no minimum between-well spacing requirement between a well being permitted at least 660 feet from the nearest property line, lease line or subdivision line, and the other wells permitted, drilled or completed on the same lease, pooled unit or unitized tract. A well being permitted at a distance less than SIX HUNDRED SIXTY (660) feet from the nearest property line, lease line or subdivision line must be a minimum of ONE THOUSAND TWO HUNDRED (1,200) feet from any applied for, permitted or completed well in the same reservoir on the same lease, pooled unit or unitized tract, or an exception to Rule 37 must be obtained.

The aforementioned distances in the above rule are minimum distances to allow an operator flexibility in locating a well, and the above spacing rule and the other rules to follow are for the purpose of permitting only one well to each drilling and proration unit. Provided however, that the Commission will grant exceptions to permit drilling within

. ... -~· OIL AND GAS DOCKET NO. XX-XXXXXXX Page 2

shorter distances and drilling more wells than herein prescribed whenever the Commission shall have determined that such exceptions are necessary either to prevent waste or to prevent the confiscation of property. When exception to these rules is desired, application therefore shall be filed and will be acted upon in accordance with the provisions of Commission Statewide Rule 37 and 38, which applicable provisions of said rule are incorporated herein by reference. Provided however, that persons who are presumed to be affected by a request for an exception to the between-well spacing requirement shall be limited to the operators and owners/lessees of tracts, lease or units within one mile or less of the proposed well.

In applying this rule the general order of the Commission with relation to the subdivision of property shall be observed.

(Order approved and signatures affixed by OGC Unprotested Master Order dated November 2, 2010) RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL HEARINGS SECTION

OGC UNPROTESTED MASTER ORDER

NOVEMBER 2, 2010

At a public conference held at its offices in Austin, Texas, the Commission finds that after statutory notice, the below referenced proceedings were heard by the examiners and that no party appeared in protest to the requested relief. The Final Orders for each of the below referenced dockets are incorporated by reference into this order, and by signing this Master Order, the Commission approves each of the Final Orders and adopts the provisions contained therein.

DOCKET NO. APPLICANT LEASE, WELL, OR SITE ORDER • ·TERMS Field Rules XX-XXXXXXX ConocoPhillips B.M.T. (Lobo Cons.) Field; Adopt/ Amend XX-XXXXXXX Benavides (Lobo Cons.) Field; field rules for the XX-XXXXXXX Big Cowboy (Lobo) Field; subject fields XX-XXXXXXX Dix Ranch (Lower Wilcox Lobo) Field; XX-XXXXXXX Exsun (Lobo Cons.) Field; XX-XXXXXXX Jennings Ranch (Lobo Cons.) Field; XX-XXXXXXX Charco (9900) Field; XX-XXXXXXX La Perla (Lobo Cons.) Field, XX-XXXXXXX Roleta (7483) Field; XX-XXXXXXX Roleta (Wilcox Consolidated) Field; XX-XXXXXXX and the Vaquillas Ranch (Lobo Cons.) Field; Webb (Donna Chandler) and Zapata Counties, Texas

XX-XXXXXXX Fasken Oil and Ranch, Ltd. Lowe, West (Strawn) Field, Adopt field rules (Donna Chandler) Andrews County, Texas

SA-0267391 Halliburton Operating Company Hal-Long (Tannehill) Field, Adopt field rules (Donna Chandler) Kent County, Texas

XX-XXXXXXX Jamex, Inc. Starville, East (Travis Peak) Field, Amend filed rules (Donna Chandler) Smith County, Texas OGC UNPROTESTED MASTER ORDER NOVEMBER 2, 2010 CONFERENCE PAGE2

DOCKET NO. APPLICANT LEASE, WELL, OR SITE ORDER TERMS Field Rules (Continued) XX-XXXXXXX Penn Virginia Oil & Gas, LP Woodlawn, SW. (Cotton Valley) Field, Amend field rule (Richard Atkins) Harrison County, Texas No. 2 and adopt field rule No. 5

XX-XXXXXXX Penn Virginia Oil & Gas L.P. Woodlawn (Cotton Valley) Field, Approve field (Andy Trevino) Harrison and Marion Counties, Texas rules

XX-XXXXXXX 3-T Exploration, Inc. Three T Harris Creek (Paluxy) Field, Approve (Andy Trevino) Smith County, Texas temporary field rules for 18 months subject to revision.

8A-0267196 John M. Clark, Inc. Dust Devil (Silurian) Field, Approve (Richard Atkins) Gaines County, Texas Temporary Field rules, subject to review in 18 months

XX-XXXXXXX EOG Resources, Inc. Indian Point (Cheyenne) Field, Amend the field (Richard Atkins) Nueces County, Texas rules

7C-0267392 Paint Rock Operating, L.L.C. Danny Mae (Lower Cisco "A") Field, Approve adopted (Andy Trevino) Menard County, Texas field rules

I 0-0267193 Forest Oil Corporation Buffalo Wallow (Granite Wash) Field, Amend field rules (Andy Trevino) Hemphill and Wheeler Counties, Texas

XX-XXXXXXX Newfield Exploration Company Briscoe Ranch (Eagleford) Field, Amend rules to (Andy Trevino) Dimmit, Maverick, Webb and Zavala provide for Counties, Texas increased the top allowable from 172 BOPD to 800 BOPD and have unlimited casinghead gas limit OGC UNPROTESTED MASTER ORDER NOVEMBER 2, 2010 CONFERENCE PAGE3

DOCKET NO. APPLICANT LEASE, WELL, OR SITE ORDER TERMS Field Consolidation and Field Rules XX-XXXXXXX EOG Resources, Inc. Indian Point (Frio Cons.) Field, Approve field (Richard Atkins) Nueces and San Patricio Counties, Texas consolidation, adopt field rules, and suspend the allocation formula

XX-XXXXXXX Geosouthern Energy Corporation De Witt (Eagle Ford Shale) Field, Approve (Andy Trevino) De Witt County, Texas consolidation and temporary field rules

Net-GOR and MER Authority XX-XXXXXXX Best Petroleum Explorations, Inc. Cozart Lease, Approve MER of (Donna Chandler) Well No. I, I 00 BOPD for the Lost Valley (Caddo) Field, Cozart No. I and Jack County, Texas cancel overproduction

XX-XXXXXXX Samson Lone Star, LLC Huxley (Fredicksburg) Field, Approve (Richard Atkins) Shelby County, Texas increased Net- GOR authority, and cancel overproduction in the field

Statewide Rule 36 XX-XXXXXXX Legado Permian, LLC Goldsmith-Landreth San Andres Unit, Approve Rule 36 (Richard Atkins) Goldsmith Field, authority Ector County, Texas

8A-0267116 Sandridge Tertiary, LLC South Mallet Unit, Slaughter Field, Approve Rule 36 (Andy Trevino) Hockley and Cochran Counties, Texas authority

XX-XXXXXXX O' Ryan Oil and Gas Burnett-Sloan Unit, Approve Rule 36 (Andy Trevino) Well No. B2, authority Trooper (Smackover) Field, Navarro County, Texas OGC UNPROTESTED MASTER ORDER NOVEMBER 2, 2010 CONFERENCE PAGE4

DOCKET NO. APPLICANT LEASE, WELL, OR SITE ORDER TERMS Unitization and Secondary Recovery Authority XX-XXXXXXX Culver & Cain Production LLC Crow Upper Rodessa Waterflood Unit, Approve (Richard Atkins) Crow (Rodessa, Up.) Field, unitization and Wood County, Texas secondary recovery authority

XX-XXXXXXX XTO Energy Inc. Red Oak (Woodbine Dexter) Unit, Approve (Andy Trevino) Red Oak (Dexter) Field, unitization and Leon County, Texas secondary recovery authority

Supercede XX-XXXXXXX Stonegate Operators, Inc. Campbell (I 0085) Lease, Supercede the (James Doherty) Well No. 3, plug only Muscadine (Wilcox 8400) Field, requirements of Tyler County, Texas the Final Order in Enforcement Docket No. 03- 0260491 and approve a change of operator RAILROAD COMMISSION OF TEXAS 3TATE OF TEXAS VICTOR G. CARRILLO, CHAIRMAN LINDIL C. FOWLER, JR., GENERAL COUNSEL ELIZABETH A. JONES, COMMISSIONER COLIN K. LINEBERRY, DIRECTOR MICHAEL L. WILLIAMS, COMMISSIONER HEARINGS SECTION

RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL OIL AND GAS DOCKET NO. XX-XXXXXXX

THE APPLICATION OF CONOCOPHILLIPS COMPANY TO AMEND THE FIELD RULES FOR THE VAQUILLAS RANCH (LOBO CONS.) FIELD, WEBB COUNTY, TEXAS

Heard by: Donna K. Chandler on September 23, 2010

Jamie Nielson ConocoPhillips Company Greg Cloud Tod Lippincott

Glenn Johnson Chesapeake Operating, Inc.

Field rules for the Vaquillas Ranch (Lobo Cons.) Field were adopted on February 24, 1998 in Docket No. XX-XXXXXXX. The rules in effect for the field are summarized as follows:

1. Designation of the field as the correlative interval from the top of the Lobo Unconformity to the top of the Wills Point (Midway Shale);

2. 467'-1,200 well spacing;

3. Allocation based on 90% deliverability and 10% per well.

ConocoPhillips requests that the spacing rule be amended to eliminate the between- well spacing requirement, as long as the well to be permitted is at least 660 feet from a lease line. If the well to be permitted is less than 660 feet from a lease line, then the well must be 1,200 feet from the nearest well on the lease, or a Rule 37 exception must be obtained;

'This application was unprotested and the examiner recommends approval of the re:qlJested field rule change.

1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE Box 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6924 FAX: 512/463-6989 h - · 11 ··--·· --- ·· · · OIL AND GAS DOCKET NO. XX-XXXXXXX Page 2

The Vaquillas Ranch (Lobo Cons.) Field was formed in 1998 with the consolidation of numerous fields. The field is classified as associated-prorated with AOF status. There are 593 gas wells on the current schedule and no oil wells.

The subject field is one of 11 fields in the Wilcox Lobo trend in Webb and Zapata Counties for which a change in spacing rule is being requested. The Wilcox throughout the area is highly faulted and as a result of the very complex geology, it is difficult to develop the many separate fault blocks which comprise the various fields. Recent infill wells are encountering fault blocks which have virgin pressure.

Several fields in the area have already adopted a spacing rule which eliminates the between-well spacing requirement. ConocoPhillips is proposing a between-well spacing rule which is more restrictive. The proposed rule eliminates a between-well spacing requirement as long as the well to be permitted is at lease 660 feet from lease lines. If the proposed well is less than 660 feet from lease lines, then the well would require a Rule 37 exception if it is less than 1,200 feet from the nearest well. This rule would allow operators to exploit interior portions of their leases, while still giving notice of a between-well spacing exception to offsetting operators if the proposed location is less than 660 feet from the lease line. Offset operators will be given an opportunity to protest an application if they believe that such location would encounter a fault block which may extend to their property.

1. Notice of this hearing was given to all persons entitled to notice at least ten days prior to the date of hearing.

2. Field rules for the Vaquillas Ranch (Lobo Cons.) Field provide for a designated interval, 467'-1 ,200' well spacing and allocation based on 90% deliverability and 10% per well.

3. The Vaquillas Ranch (Lobo Cons.) Field is classified as associated-prorated with AOF status. There are 593 gas wells on the current schedule and no oil wells.

4. The Wilcox throughout the area of Webb and Zapata Counties is highly faulted. As a result of the very complex geology, it is difficult to develop the many separate fault blocks which comprise the various fields.

5. Many fields in the Wilcox Lobo trend in Webb and Zapata Counties have rules which eliminate the between-well spacing requirement. OIL AND GAS DOCKET NO. XX-XXXXXXX Page 3

6. The spacing rule proposed by ConocoPhillips eliminates a between-well spacing requirement as long as the well to be permitted is at lease 660 feet from lease lines. The proposed rule will provide for ease of development of interior portions of leases.

1. Proper notice of this hearing was given to all persons legally entitled to notice.

2. All things have occurred or been accomplished to give the Railroad Commission jurisdiction in this matter.

3. Amending the spacing rule for the Vaquillas Ranch (Lobo Cons.) Field is necessary to prevent waste and protect correlative rights.

Based on the above findings and conclusions, the examiner recommends that the spacing rule for the Vaquillas Ranch (Lobo Cons.) Field be amended as proposed by ConocoPhillips.

Donna K. Chandler Technical Examiner RAILROAD COMMISSION OF TEXAS 0TATE OF TEXA S COUNTY OF TRAVIS CERT \C \C:d\01" NO. I 0 5 3 8 h ~UG -7 I 4 I. I I

\- APINo. 42-4 79-41635 RAILROAD COMMISSION OF TEXAS FORMW-1 07/2004 Drilling Permit# OIL & GAS DIVISION 730240 Permit Status: Approved SWR Exception Case/Docket No. APPLICATION FOR PERMIT TO DRILL, RECOMPLETE, OR RE-ENTER This jacsimHe W-1 was generated electronically from data submitted to the RRC. A certification ofthe automated data is available in the RRC's Austin office. 1. RRC Operator No. 2. Operator's Name (as shown on form P-5, Organization Report) 3. Operator Address (include street, city, state, zip): 172232 CONOCOPHILLIPS COMPANY 4. Lease Name

GENERAL INFORMATION VAQUILLAS RANCH A7 I 5. WellNo. 249

6. Purpose of filing (mark ALL appropriate boxes): IXJ NewDrill 0 Recompletion D Reclass D Field Transfer D Re-Enter

_________ Amended as Drilled (BHL) (Also File Form W-ID)

EXHIBIT D Amended D

A-6 7. Wellbore Profile (mark ALL appropriate boxes): D Vertical D Horizontal {Also File Form W-lH) IXJ Directional (Also File Form W-ID) D Sidetrack

8. Total Depth 12150 I 9. Do you have the right to develop the minerals under any right-of-way ? 00 Yes D No I10. Is this well subject to Statewide Rule 36 (hydrogen sulfide area)? D Yes IXI No

SURFACE LOCATION AND ACREAGE INFORMATION 11. RRC District No. 04 112. County WEBB 113. Surface Location [XI Land 0 Bay/Estuary D Inland Waterway D Offshore

14. This well is to be located 10.9 . miles in a NE direction from Aguilares which is the nearest town in the county of the well site.

15. Section 116. Block 117. Survey 118. Abstract No. 119. Distance to nearest lease line: 20. Number of contiguous acres in 259 CCSD&RGNG RR CO A-1137 1066 ft. lease, pooled unit, or unitized tract: 640

21. Lease Perpendiculars: 1166 ft from the WEST line and 1480 ft from the NORTH line.

22. Survey Perpendiculars: 1166 ft from the WEST line and 1480 ft from the NORTH line.

23. Is this a pooled unit? DYes IKJ No 124. Unitization Docket No: 125. Are you applying for Substandard Acreage Field? 0 Yes (attach Form W-lA) IKJ No

FIELD INFORMATION List all fields of anticipated completion includinq Wildcat List one zone per line. 26. RRC 27. Field No. 28. Field Name (exactly as shown in RRC records) 29. Well Type 30. Completion Depth 31. Distance to Nearest 32. Number ofWells on District No. Well in this Reservoir this lease in this Reservoir

04 93215400 VAQUILLAS RANCH (LOBO CONS.) Oil or Gas Well 10650 0.00 1

BOTTOMHOLE LOCATION INFORMATION is required for DIRECTIONAL, HORIZONTAL, AND AMENDED AS DRILLED PERMIT APPLICATIONS (see W-1D attachment) Remarks Certificate: [RRC STAFF Dec 21, 2011 4:40 PM]: Manual review ok for density. I certify that information stated in this application is true and complete, to the best of my knowledge. Christina Gustartis, Sr. Regulatory S~ecialist Dec 19, 2011 Name of filer Date submitted {83224862463 christina.gustartis@2conoco12hilli12s.com RRCUseOnly Data Validation Time Stamp: Dec 21, 20114:44 PM( 'As Approved' Version) Phone E-mail Address (OPTIONAL) Page 1 of2 RAILROAD COMMISSION OF TEXAS Form W-lD 0712004 Permit Status: Approved Supplemental Directional Well Information The RRC has not approved this OIL & GAS DIVISION application. Duplication or distribution of Permit# 730240 information is at the user's own risk. APPLICATION FOR PERMIT TO DRILL, RECOMPLETE, OR RE-ENTER This facsimile W-1 was generated electronically from data submitted to the RRC. Approved Date: Dec 21, 2011 A certification ofthe automated data is available in the RRC's Austin office.

I. RRC Operator No.12. Operator's Name (exactly as shown on form P-5, Organization Report) 13. Lease Name 14. Well No. 172232 CONOCOPHILLIPS COMPANY VAQUILLAS RANCH A7 249 .. . ·lateral Drainhole Lhcation Information . 5. Field as shown on Form W-1 VAQUILLAS RANCH (LOBO CONS.) (Field# 93215400, RRC District 04) 6. Section 259 , 7. Block 18. Survey CCSD&RGNG RR CO I 9. Abstract 1137 I IO. County ofBHL WEBB 11. Botton hole Lease Line Perpendiculars 1066 ft. from the West line.and 1478 ft. from the North line

12. Bottom hole Survey Line Perpendiculars # 1066 ft. from the West line. and 1478 ft. from the North line

"· ... .

Page 2of2 SURVEY 36 c.c.s.D. & R.G.N.G.R.R.CO. ABSTRACT 1036 5URVf:YCD OCTOBER 20, 1879

1, 166' FWL LE'AS£ 1, 166':t FWL SURVEY

CONOCOPHILLIPS COMPANY VAOU/LlAS RANCH Al 249 640.00 ACRES (CALLED)

SURVEY 269 C.C.S.D. & R.G.N.G.R.R.CO. ABSTRACT l137 SURVEYED AUGUST 25, 1885

DFiTAIL: Nor ro SCALE NORTH HALF SURVEY 34 R.O. BARNESLEY ABSTRACT 28' 8 SURVEYED JULY I 2, 1922

\ \ \ Revision 0¢le 12-07-11

low~ GRAPHIC SCALE

Ir \ (INFEET) I It'd! • 1000 n..

VAQUILLAS RANCH A7 249 STATE PlANE COORDINATES - TEXAS SOUTH ZONE - NAO 192.7: PROPOSED BOTTOM HOLE (PBHL) PROPOSED SURFACE LOCATION (PSHL) N: 697090 E: 1841021 N: 697090 E: 1841121 LEASE: 1,066' FWL & 1,478' FNL SURVEY: 1,066'± FWL & 1,478'± FNL : GE.OORAPHIC NAO 27: Loi.: 27'J5'0t" Long.: 98'59'26" GEOG!VJ'HIC NAO 83: Lal.: 27'J5'02" Long.: 98'59'27" ,.. L£'Mt UH£ ELEVATION: 674' ...._ ""'" "'" - ;; SURVF:Y UJ/l . L~E: I, 166' FWL &: 1,480 FNL SURVEY: 1, 166':t FWL & 1,480'± FNL - - - - - - - "' PCRPEHDICUUJ/ ncs HOWLAND ENGINEERING AND SU CONOCOPHILLIPS COMPANY · 7(i{5 N. Borl/e(( Avenu9, Laredo VAQU/LtAS RANCH A7 24g WISE , omm (956) 122-H tr fAX: < 640,00 ACRES CALlF:OJ TOPE f1rm R~Jslrati'on No. F-i097 TBPl.S SlrLJArW IN SU/l\lfY 259, c.c.s.D. & R.G.N.G.R.R. co., ABSTRACr , IJ7 !his Plot r~priiilenfs o WELL LOCATION surv•y gtaund sun·~1. deeds and olher ovaifobfe infi lo b~ a 'buundary ~urvoy, bvl for the sole p Rai!roa Commission l~or. of CON OPHIWPS CO a dtifling permit. Thts NY. FlELO OATE BOOK PAGE s 11-29-11 77 01-02 {!)'"• WEBB COUNTY. TEXAS

• .~ DRAWN BY: JOB No. L.Af. 208J2-ll

~ ~~~ •• » SCALE: r ·~rooo• OUAD NAME: 1/Js Bo1111elf RAILROAD COMMISSION OF TEXAS STATE OF TEXAS COUNTY OF TRAVIS I hereby certify that the information on. the c reverse side hereof, and on the securely attac~dadaltymal~-~-a .. ~-~­ /~.T NO. pages identified by certification# / D 5b 8 [_,___are true and correct copies of documents on file with Railmad Coritmi~~ion ofTcxa'.:, nuc 2:s l 11 ::nd I further certify that I am the cu§todian 0f~he records, : ll es and seal ~ l ' . ,: ~. I ~ ·:· h ·. . ! ·' - ', : Ji'·;,,_· EXHIBIT

A-7 _________ ~t,1~a-et contn.iL_Lnc; 17-ox::r 1-, t~·:(~ ;.V.J.:et{\5 aLtl .::=uJ/l1~e3-Ses Of all -t.hc:rcJn ·t1hat s1J,ch ha~eic J~cfiBc 01.. -11111 u Ghcr t:t·nct. It further proof t;.-; :all.:;d.

_-F1-l01.-'::.-DDD HCAfB\'E;.t, -'.:_ita+, the confio:J(!ti:t.:i ;n c'/-f' :::::roricrtiy, m.-r-:ty grfu1-;,: ~~xcepti-onz to_ sta:f;l~

-1_: ur(-rf;:c't Cl-t~I~:!;{L~n ~ 1 f·:_~~t th.J.r~ ·~nusc be ;~~r<~li.l or;e.n 1

~-~rJ.y ()t~ n~!c 1:~~0.1ur:/.

- -

:)-~ ~t¢J:~~~':_;f~~:0 , - ---· /

-~---- .. -....... ·.:

RAILROAD COMMISSION OF TEXAS STATE OF TEXAS COUNTY OF TRAVIS CERTIFTJ\Tlm,I NO. . I hereby certify that the i~\ormatio~ ~~. the ,, ., . reverse side hereof, and on the securely att~hed addti!9n~J · ·· 'elf· . · · · ... ~ '-li ·', I O5 7 2 0 sEP-4 14 pa ges iden~ified by certification# . u. fJ_-' ~'f!:~n~,.' " . £{( correct copies of documents on file with Railroad ColJlmJ ~!9111;0ITe~s, ~9~ 1 " · '.·I . _: . . .L l_,,J , .1 11, I an d I further certify that I am the legal custodian 9f~ r1 c{rclis, ,..,,,... :J~ : : ri les and seal of the Railroad Commission ofTexa~. oo..\ ;. 1 .JI , , ~ "' :' ~ ) 1. ~ .. rrvi, c '} :/\ "' Date : ~hb.lw'i , ·· Alicia R. Ringuet 807 Brazos Street, Ste. 500, Austin, Texas 78701 ● 512-472-3993 ● alicia.ringuet@haysowens.com

ADMISSIONS Admitted to the Texas Bar in 2010

EDUCATION The University of Texas School of Law, Austin, TX J.D., with honors, received May 2010 ● GPA: 3.81  Order of the Coif  TEXAS LAW REVIEW, member

Louisiana State University, Baton Rouge, LA B.A. summa cum laude in Political Science received May 2007 ● GPA: 4.00

EXPERIENCE Hays & Owens, LLP, Austin, TX Attorney, December 2011 – March 2012 Associate, April 2012 – Present Practice primarily consists of oil and gas regulatory work, oil and gas transactional work, and civil litigation, primarily in the oil and gas area.

Kelly Hart & Hallman, LLP, Austin, TX Associate, September 2010 – November 2011 Worked in the Environmental and Administrative Law section. Practice was focused on energy and environmental regulatory work and civil litigation.

Latham & Watkins, LLP Los Angeles, CA Summer Associate, May – July 2009 Worked in the Environment, Land, & Resources section

Balch & Bingham, LLP, Birmingham, AL Summer Associate, July – August 2008 Worked in the Corporate, Environmental, and Litigation sections

EXHIBIT A-8 _________

Date Prepared: April 14, 2014 Filed 9/8/2014 4:12:20 PM Esther Degollado District Clerk Webb District 2014 CVQ000 438 D4

B _________ to Continental Oil Company and Conoco, Inc. of the oil and gas leases set out below.

BUSINESS RECORDS AFFIDAVIT

4. As a member of the board of Vaquillas LLC and in my capacity of manager of mineral interests of Vaquillas, I have personal knowledge regarding the records and recordkeeping practices of the company and am qualified to attest to the authenticity of the companies' business records.

5. The documents listed below and attached as exhibits to this Affidavit are records from Vaquillas. These records are kept by Vaquillas in the regular course of business, and it was the regular course of business of this company for an employee or representative of the company, with knowledge of the act, event or opinion that was recorded, to make this record or to transmit the information to be included in these records. These records were made at or near the time or reasonably soon after the act, event, condition, opinion, or diagnosis that was recorded. These records are exact duplicates of the originals."

ExhibitB-1: June 15, 1974 Oil, Gas and Mineral Lease between Vaquillas Ranch Company, Ltd., a limited partnership acting herein through its general partners, J.O. Walker, Jr., Gene S. Walker, Evan B. Quiros and E. Walker Quiros (a/k/a Mary Elizabeth Quiros) and Continental Oil Company for 26,622.79 acres of land, more or less, situated in Webb County, Texas.

Exhibit B-2: November 1, 1987 Oil, Gas and Mineral Lease Amending Oil, Gas and Mineral Lease dated June 15, 1974 (As Amended) between Vaquillas Ranch Company, Ltd.; Vaquillas Unproven Mineral Trust; Vaquillas Proven Mineral Trust; acting by and through its general partners, J. 0. Walker, Jr., E. Walker Quiros, Gene S. Walker and Evan B. Quiros, and Conoco, Inc., Lessee for 26,622.79 acres, more or less, situated in Webb County, Texas.

Exhibit B-3: November l, 1987 Oil, Gas and Mineral Lease between Vaquillas Ranch Company, Ltd.; Vaquillas Unproven Mineral Trust; Vaquillas Proven Mineral Trust; acting by and through its general partners, J. 0. Walker, Jr., E. Walker Quiros, Gene S. walker and Evan B. Quiros and Conoco Inc. for 6,740 acres, more or less, situated in Webb County, Texas.

AFFIDAVIT OF DINO 0. SMITH PAGE2 Exhibit B-4: December 19, 1984, Mineral Deed from Vaquillas Ranch Company, Ltd. to J.O. Walker, Jr., et al. a copy of which is recorded in Volume 1097, Pages 66 et seq. of the Deed Records of Webb County, Texas.

Exhibit B-5: December 19, 1984, Mineral Deed from J.O. Walker, Jr., et al. to J.O. Walker et al., as Trustees of the Vaquillas Unproven Minerals Trust, a copy of which is recorded in Volume 1097, Pages 101 et seq. of the Deed Records of Webb County, Texas.

Exhibit B-6: Effective December 31, 1996, Mineral Deed from the Trustees of the Vaquillas Unproven Minerals Trust to Vaquillas Unproven Minerals, Ltd., a copy of which is recorded in Volume 471, Pages 711 et seq. of the Official Public Records of Webb County, Texas.

Subscribed and sworn to before me on this 5th day of September, 2014.

JESSICA MAYELA DEHOYOS MY COMMISSION EXPIRES July7, 2015

AFFIDAVIT OF DINO 0. SMITH PAGE3 i.

, .,. . ... I !· rrlnhn• +:.Ct•11flft•rr Cn.• ll••11tt,,... T ..... i'. ro\UI .. ' . OIL, GAS .AND MINERAL LEASE ;' .. vr.1 4G0 ·P~ic"324 THIS At;nt:t:~u;sT ...... \bi• 15th ,., ., · .:June, " 7 4. ..,._ VAQUILLAS MNCll COMPANY, LTD., a limited partnership acting t1.crcin . through its qcneral partners, J. o. WALKER, JR., GENE" s. WALKER, EVAN D. QUIROS and E .•. NALKER QUIROS (a/k/a Mary Elizabeth Quiros) i..11ort•h•t1.. r~n•ocm•n•l.•ho.. •oidrt1•h : . .P• 0 •. Box 1086, Laredo, Texas 78040 ..... COi'JTINENT/\L OIL COMPANY . ,,., ..... wnNt:m:ru: 1. 1......, In tQnoid...•l•a or TE;N DOLLARS & OTUER .GOOD & VALUABLE CONSIDEl

.... ••Ur a nd uth., fh.ti•I•. ah4 • ., ' nto t ubturtue •h•t•, 1,.rina- r•i1.. lln.H. Lui"inw to«id1, t•n•1. powu 1\alio"'· tt-J1Jrhune Jinn encf oUt.r 1tnw• ,...,.. UMnoR 11111d on, unr ••' HrOtl ,.,,dt ownN or cl•l"'M b' Le'"" &dJAttA\ •nd f'OAllltr.a0\11 tberric.. 10 Pfei4ute. C'are of. trMt, ta••· ,•., • &noo"°" &nd o•D 1&id prod .. 10, &nd bouoln1 Its omploJooa, tlM tollowlnr ct.o~..... ..... Cou1.tJ, To-, .....,,

\ 26,622. 79 acres of land, more or less, situated in .. Webb County, Texas, more fully described in Exhibit "A" annexed hereto and made a part of this lease for all relevant pur- poses, including. limitations upon warranty as specifically set out therein.

"11i~fuW;~~~'i'ri'~~oRA~~~--llM=•~---~F--:UIA•t=a:wm~o:::Do::: ..... ~clinda~......_~.--- littt:-*""-'*'--=-=-•-=·-.. --:a-.io:---..=-ao:::--~~::a.:-::i.,.,_ _ __ ..,_.c ••"' th• 11ur£W'M of taltuletin1 tho rental parmenlt Mreinafltt pro.,Wed for. aakt lafHI h n• •mat.94 t• romprbe 26,622.79 iurn. wbt-.hlf It lth&aUt tomptJM• More or 11-.. Five ( 5) : . !\uHHl 1•1 •h• othH pr1n·t•iDn• h•r•tn tont••nN. thl1 '-•M ahatl ta. fot • lff"' of=1Pit/uar• from '";• da1• fre:J• 4i ..,rirnuy ,.,,...•J and at ' ut111 u,..,,..11., u oil. 1•• Of oth•r mfhnal J1 "'u.SYctJ frt11a aaid lan4 H la"4 wab •hirla M id l•nd i1 f'W'llUl.J twreun•I•• . l . Th r••>•l•if"I 11) I• PAl4 ''' 1...... e:• : tO on o;t, } /hthor ,..al t•tOtluC'. . and 111.vfd hom ehi•I tu~d. th• Hn1• 10 ~ .. d•l in,..,. a1 1h1 •tll• or LO th1 cr..t1L of lA•Wr •nlO I~• lJll"9Ju..1 ht "lurh th• ,,ir1 m•1 be tvt1nf'C'tt'\I: IA•"'" tn•1 ltclf'l1 l1mf' tu tun• 1•1nrh1111# •••1 ruud•1 1oiJ 1n 1U , ...... ,... " ""· a•11r11111 tl''I• nu1rlitl 1•ri. • thPufnr &•O•all111c for lh• fi•IJ •hrrt 11ro.tu11M 0'1 Iha d"t• of 1•1urhaa. : tbl on ¥"'· iru~Jwd.n1 C':t•1119'hf'~•·I wu or l•lhrr IO••••..,•u• •~l·UalJC'f'. i.-t•.Jwt•l flut11 auJ l••1J an.J MJld 1.1r U•11"1I ofl 111• ••rtnii1r-. cir f•1r 01• .. ,1r111rt111n u f •.,,,..11n.. ut uthrr 1•iul11rt ,,,,,.,,.. frr.m, " ·• 1nuawt ••It•• •1 Ch• 1iull uf 1 It:.. th·•f lh• •n 1u .aid or 1.1•...t.=JAGAO=t-.OFtl~ih'.. f'tf..,. 11 • l!illl •tll nf'I thi1 lu11t or on &t'r•nll• t•onltd th•rtw,,h tn•t raa 1• ri••\ l•1nv • ••l•l or u ....1. 1......... W•f 1·•1 ••• P>•llr, 0'1 ,,,. ) ... tur• _ntnr\1 l~U, Ll•J"• "":'' u,. 'l"I• nn whi .. h 11 • ••itl Wlf"ll 11 1hu1 '"· nr <': •_tht 1Mn

•t11d1• \f" I ••I ii• l•ltt 1t1t1•. •n•l thr1r:1ftH nf a1111•,• I ir,••rvnl1 un ur t..·t•••• 111., 111n1u\· • r a1u y ••I th• rt11111e the tn•l l••llfl•·flt •• m11111lr. a 1•11n ..,,...1 l•t lh• a11\u111.1 n f •h• 11n11ual ,.,.h,J . .......1.. in lif'U uf drilJ.n...r OSlf'O•fthn• 1lnhf\IC the 1•rino1t J' lrrm un thf' n11rnlwr or * .. ,..... ··~·'"f'l In ,._., 1....... . th• hm• •11··h 1••)mrn1 i • rn a•I"'. arul if 1urh 1•1onw-11t u fll••lf' or trtul,- r~I. lln• '"".. 1h"lf wll tnnun•z· •rt•I 1t w.11 1..,. , ..n,11t• r•"I ••••I tl' t.• •• t•u1.:: 11r1•llH"•"l hum~ '••• 1..... 1n 1••1 1n1: CJt1•11t1l 1f'• 111111 I··· ••ro all f'i(~1t'r m111 .. n •i• 1n 1hf'•I '"" I nuo~,,.1 .. 1. 1 'Fi.+-h•1l h"' i"' t.~nd m ,.1•11· "' lh• ••H ,.,. Jnih•. al l..-1,... • f' rP't'l l o•n . ~--C:dlQ.mr:m:l :a:hnr::2~Dct:~C.::.tlll:Za;JCD-=-•. . ~sta:Cq~ ~~-Q"2all. JI#~...... lhall hAle.ft•~ u ... 1•f .., 1. If·''· ,,.,..t, •" "''' • n•I • • ' ' ' t r•..n ... uJ •"l f't Crum J,•s.iu '• ••i••. Jur all 01-.r•t •uha h•rr u nJ rr. •n•1 th• t u>·•h 1 Qft 1oe1, a n o gilS -"•IJ a.. """'"'u.-.s •f••t ~.~1u

.I EXHIBIT

B-1 _________ I,

I ~ •• 1.......;., ·'' II• Ulrll•)ll, i1 ; ......+) ..:•H"I• th.: t•.chl "''··I , ... .., '" ..... ,.•• 11t ('lllf1l •i.11r th• • <'rt·...-· ('11\·rr.d h)· ,,_i. . ,....,... ·•t .,., 11111•,. ,,, .~;,._,, ... t() "•i *'•nt .C·••· .,, r11flt•r j,f th1·111. ""•lh '"')' 111h •r l"n'J l'"\f' l4•1 •·~ 1111• It•:.-.•. ruiit: .1r '111' 1111 • II)' oUl•f hu\J, tr«Y\' ur I•~·• u 1 «hP 1m 11.... •uit•· YiC'1n ; t J tt••t..', f h, U\I' l'.\lf"lll .t11·r1·. o .1 ff .,r •t•a •wi11lt•I. •.hrh 111 &.... .,,..,·. Ju11.,c11. r111 1t i• 1u·• .. ••.tt ) ur ,uhn••l• lf' ht J u ao in ur&Hr l•f hl"'' ''> to .. , ,.101 11, .. r '" d••'irh•J' &o d 111·•ra t e e.11ot lr.• •t•I \•trn1.,.,., on . 1·,.m111111 0c·• -. 11h rhr "1· 11u·.t1..: rul•·• "' 1hf' H.,i,.,.·4 t'•onl m1a•:c1n of Tt1'.al. nr ult1•r l ••d111 lt lHh .. r 11.y. "' • tw1i \ o 1lu .., • •'••lJ, lh llitt ~ -..t,;11u•11 l ol j,.,....,..., &•J••tH..\f' lhr '"""'r"\ Hll 11 h .,, u1I • ud "u ''' a114 u11~r •1111 t hat m•,. t ... l •h ..tun•I fr,.n1 .... .i 1•• it111.• ··• U111 t • ,,.,,.., ( 4•( t•l l hC'tC'•IU1l ..1 • II·•'' h •ll 11Uh!il 1t11 t 1.1il) .. \t'n-•I •om·• ··· t"M1' h IH Ulf'.l. • nil u111t• , ...o l rJ fur at•• h•·rf'Lo¥11tf'r •hnU" n ••l • \11+.. IMll ; ;. l l ) .. ......... In a r ra , • •, ",.,,.,. it1h· t1 ''·''' .1 l ••h •flUH'f' •lf 1t•11 &•c·tr ••11\ tl oo: I lh•·1 ...1I, ''' "~'*;"'t lh:.t th11u•1I 11CnU•ln1Uf'llli.I aulhqrjly h,.•·•!:!at J°u r1 ... l1 ftl,, ,. 1.i·t.... 4"'n 1•1' 1.r ,.,.nn 1t U1• rr••11; .. 11 "' utut• l..1.;1•r t11.u1 th 11•t' , , .,...,f1nS. f1•r th .. ih 1l ;11.,,.. " ' , ., ..-r.1111•u 11f "•ttl 11l a n•,.:-1.114'f 1•¥'&1 1nn 11r h •r ·ot +t..i o 11.,. ttu, , 1ruurn ,.;;u • 1&hh· tr• •m ..,n,. "-f'U t•• I•· tiri!:,..1. 1t1 1lh11.,• nr Alr ..1uh Jr d lf'"I. "'' ' " 111 ....... flf'f 1· n·MtMI n111> t1u. fo.-n1 •uli"t ... nl1aU)I ln' t l l't" \111th t h •·... 1•r•·"•' f , l4 ·1 u r 1·•·1 m. u~t hi 11£" (•\rrt1111.-111.1I r r.cu1n1 1..u • . IA·••1• uo .... , ,t,.. l''"~ · "l••11 .. t,.,,.. ,f h utt' l"" 1l ••r •' 11rnt11or ll('rt•tt,(0 ('CJ\t'tt.J lir 1h11 I,.,,.,.. .,, llH)' 1'"•1\ 1 •II Uh·r .- .f .... al 00 1\• 1•ru\11h... I NII l o 101 i ll ..">' t111r ••f tno1 u • fli t fl.ta fl.ti.I " • tu ···•• Ill •fl) 011it ur "'" '• 11tal a . Th• un1l1 f vrn"J ' ' ' \"•11 111.,· "" t... 1u 1> •! 11.lum u r • lftt.f • nf'l"1 11111 , ..;ttortn 111 • .,,. o r At •·11 • 1th llw oru t ••r 01111• Hit" •hH"h lhr It·~ '' l.>t•1l"I ur '"mt11h...,I a.• t•• A1tr .. t hrt • lt" tu1n •ir .,,,,\, ' · "'"' 0 11 uhllt h•1'"l 1111\ r1111 t 111m, "• I•• M/1•M "' rft: ,.· h • u111i11 . 'J h1• , ... .i.11..c 111 t•llt' .,, 111u1 r Out1o1 11r t·• "h"ll nut '°~hft u~t lh• r i,;ill• 1of thr JA'"'"'"' ''''tl'11ll .!••: to l'"• •I 11111 lr11M1 ••r 1.,1rt ,u1.a lht·11.. •f 1111•• ••tlll'r 111uh. IA·11•t,...tu•U f 1ir fut u ..·111•l 1n lh• a1•111 4•&1rtulie rt..·nrdJ uf tJ1f' ('1+1J llt w in • h1d1 ""' 1,.1 ••··I 1•r1:ut1M·t a re t1lH.<1t• .. t on 1t,Pfrt111wr.1 1l1•p• r.l•ll• llC nll•I •••·1111(11 .11 . ot( Uu• •" • •l••I ""' r1·.1,:t" a.11 a , ... ,1 , ..1 1uut: •Hui ,, ,.,,n • u rh , , ., ·<·r~t111 un 1!1t' u 1. 1t • h11o a 1..,. rH ...·11'• "' I•• "U l •nit11•• l1rtt"t11, tl11·1r f1nr•, "un·•·., .. •r•. 41111111 •·~ "1.,; h11 , Hh''"' J·tf'll\r uf •hf"U1rr ur n ••t t he 1u11 t 1• I1ir.f'W1M' r f frt't~\ • 11111 tu • i i uiJ11·r ' '""1,1r• ,,, • u t f •r r , m nif"ri.I, ,.,,11;1). ur hlllf'r ri,cl1ta •n h111•l 111d11dnl 111 • ••··h 4 f•1l. 1,• ..,.~ n 1•1)' •l 1U •l...-11•JO ~• rrc•M· 1i. 1•~.oltt1 ie ut•l aur1 a.·fui r ur .., • •., r•1n 1a,r fl' •f•il 0 1... u1\111n • f11r 11f t1 1D1&•!di11.; kl\ 1111 ur ); IUI "''II 1•n tl1• lr 11,...•I L·rt·11111111•11t, a u d lhl" ll\'Vlt•I UU •l n1•r indu•h -. l 111t it i1 1111\ ft.""11111"1 tu ,11r h~1IC', i"11•I u t 1,...,.,.. Ul·"n " tud\ a .... 1 C"t4L•ul· ~.- ••f L''"•hu·111.i 011 ••t .,..•• 1n Nu 111.i ' l 'U•••lll.t'• h•• thuf'"ti ;r.,, .. l'"'n rum1•lf"t1·4 o r lH"lll •tnd\ 111" nll 11110a f.,, t he d110110,; ol a •c-IJ fo r .., 1 t•r .,;"•1• h"\" 1hr1r111fvrt' 11'\11 r .. mnu·u··...,J, I n l h e f'\r lL I of 111·tr111t1..11• fur 1lni1,n.,. u n vr JH• •i11r\ ih n ,,f f•ll "'lit",. frt1m • ny '"1tl oC " ~,c•1: .....1 unit \11!1;rh 1Ju•llt1lt•• ..,11 ur " 1•n r1«•h Hf th.. la nd tO\o•rt,.J t•)' th1111 Jf'1"""· f toM•r•tll"H of •hf'thf't tuf'h hL111•rkt1un1 f,1r 1h1 ;l 1 11~ •f'l f ('11111111rn1·nt ur o111rh l''''"l1;,·!i·•U "'"" M'l'1~r"I l••l1•f11C" • if Aflrf Ut • f' \1~·11ltun ,., l h 1• H.•trutnt•lll u r the' io•trunir nl 1W11111,1u1t111.,; thl! 14 ... 1t..1 utu t, • u1·h Ol,..fl• l•••IU .. t.all l~ r ..,, ,.,l,.tt'll •• uL..-r1tl h ol1t fu r dn:JiOM "n or L•f'l ..i Lh'ltuU of oil ur w...a fr111•1 l1u 1J ("tl~._,,.,l 111 tb1t lt':Ut' • tit-tht"l or 111··1 u,. •f'll ' ' ' • t't1t 1-e 11.. hl•··l on 111• ••ft•rtllol\'• ("•n,.r'"'t h7 th 11 J.,,, ... '""t 1n t L!r h f \'f'"lll u1•1·t•t ;on• f,,, Jril h n.c 1h.d l t4 1l"'rn"l to havr '"''fl C'umto•·n<'""J 11n • •iii lu n1i • 1th1n 1h .. nw•hi h.,: o f l ·•rtt,CrkL)h C. uC U11 • Ir~..- ; .. nil lhf' ""t1rr Arr f':•..:• r uot t 11 11tin.r t uC"h u n u t•r uu1t•. •• \o oil )Ultl att\.I, ur 1"11h .. r l"f t11,m. n 1 brro-11, ' 'l• •\ ,,t....l, ' t ti1dl l,..• trf'lth"t f11f &IJ L•J(11t1'•-·,, f' \ l't"l'I thr l •ll) mt'lll u f royMhH"f un llf•cl11rt :o n fr.,m th• l•utl... t UOi l , fU If 1tof' llltW Jf' "'f' r• 11il'lu•l1.._I i11 f11111 lf'11llt'. l·'.;r th~ p_u n .. 111t• 111 1·pt111 •uti11,.: lli1• ru)u1t1r11 to 111·h1rA 0 "11,. ra ut r u)· u lt1f!t a11•t 1•t1) Jnrnt11 t uJt cir &• ro-.t on .~in 11 1,11 t1tt:h Cl f tlu• rn 1t1,.IJ 1,.. t'lll.11•..t 1111 , ,, ..1i 1ct~un 11 t 1·11 IUl•I ..:11•. ur 1·11,w r o l lh• ·m , h••m lhl' 1•o11•h..t u1, i1, lt1f'tf' tha ll toe a ll•"'Ml"1 lo t h 1· hu:•I ('0 H'r• d by th11 lt'1tmt! 111;ti irwlti.11•'1 II\ 11 •• 1..t uui\ 1t1r I•• .....·h ••·••• rut,. t rit•·t • :Uuo th" unit 1f t )u • lroiiu <'.,,._.,. w•••U•U• tr•('U • ·ithin t h• u1111t a ••ru ra· " : .. 1rtiun \, f l h• uil Aial ,.:.••. " ' ... :h.. r ••I lhf'fU, ,.,u.1111....s l r" m lh" ,,..,j,,.t u w t 11ftrr •h,lu r1,n,r · thtt.l u~t for u1..-rat auna on Lh• 5..111!.-t un1I . S11rh 11 lhl<".\ti.1n • h 11ll . .. l•t\ kO .. rr r :1.:'" 1..,,.,. · t hat IJ to • ·•)', U "•r• .,hall Lf. 11.:.<"at"I leo l h.- • l' l • hiltt 4"D\'f'tf'lt i•r thi1 It•~ a nri indu1tN in thf' ,,.,..,ft.J ut11t 111r t 1'1 ··:tl'h ..,., • ., .., . t ri..·1 v. :lh111 tt,f' Uhl l it li1i• lt';1"4' t"•nll'r• .,,.,,,.r:1t.• lf"o'l11 \l. ,th10 lhf' Oll il f thfl.I i •ro rut,, l ml"\illt\ of Lhe 11,j a ruJ JCll.I, u r e1'. h f'f ••t \t.f'm, L•f'•l111·r d fr1tm 1t1f' l"'" ':,.,1 1uut "'hi··h th• m1mt ..·r 111 t111tfon• ••·t..:o• 1·11\'••tt"l ••,. 1h.1 l('a•e i()r in f'nrh 1urh u•1•1ul\t• Hftl'I) •w it 111rJu4lc"1 rn tht' i · 1t1:1.. I u n 1l 1.-·.• r• lo 1n.,.1111.d 111,mt.,·r "' ,.urfo,·• 1~· r1•11 ~111'11111 .... 1 w 1t1• i •1>t1h1I 11nit. ltu)·ull u• • h.·r t uhJ•r •hl\IJ a.. C'unu·~h"t en t h• l"•r1;on o f 11ur b s1r•1tl Utt 111 n . wtif' lh.. r i1 .... "'' 1u.1I ··n•. 11r .. ~1twr "' Ow111, .... .,1i...·;1t1..1 tu th('" 1111:.1 ('p\'t•rt.. I 11)' th i• , ..~ ,.. tlllcl it1d1111....1 i n thf' u n il JU•l R• l huu;:h &1Jrh ,I,. ·l11r 1i•lll .. ,.,. lr•1m a irb l.u t•I. ·n ... 1•11'tllJ" t 1••n ' " '"' :1n ~·ii "'' :1 "'d L t.• • t•111;11i1l•·rt'lll n• l H•ul1.rt 111n hotn 1h.ft lf"h~ or t')il ,.,~ 1lt'\l l1n1i fr um .. b ••·h it i11 J , . ..tud 1.111 an•t h ut nl ,,r, ..1 ,.·t. .. n f 11°111 ., .::•• , ,...11..I 0111l ; •tt.I l •l'•• lud .un ' "' " l 14 J.:M• • ..II "" ii\ t-e C"on11ti dt"r... t .,. t'r n.l11ct111n horn lhf' ll"n•r '''Jo:"•• 1~ .. ; ....1 unit fn•tn

I • ·h :"h .1 1• 1•r • ..h ;l·111.: t.t11I n ..t f1t•lh ••• oi1 '".,:... J uf",; l. 'fh,. fu u nutiun tif •nY uuit h•·tt•lntl•r 11h11l1 n Ql hA\'ft t h«> eft.-~l o f C'h&nj.(tl+a." lft• 1l•r.ruh•11 ,1f any olc:1t) 1rr.1. d 11r ,.hi.it· in ,,,,.,tu r~wn rt•) ult t v.h1d1 mit)' l 14'1·umf' ' '" )"1,1dt' u11dtor th1 • lt-ut'. It thi• )1•;, lf> n1•W or hf'tP1'flitr r n\'f'U '"'~ :1J Kl f" tr .. rtfl , n•• , .....,iin.- tit unl::.1:Htl••h uf ,..,,..,:1y '111:rrl'•t •• l"':•t...n "''' MUf"h .,.~·a rail# 1r1u•1a. i• i ntr11ttf"t1 or •hfl ll t.,. im11l1ed or r.-•ult n 1tritl1 trrim 1h• 1nrh111111n u t •1.t .. n •••11;.,r;,1e lra•"I• "''ilh•n this l1•a""" 1011' l.c·"' ll4-C ai11all r.~\f"flhf':r~• h11\"• lh.- r 11lht •o pt.1111&I11rnv1d..J . t ...n·e- with fUhll«'llUtnt •Ur..ati11n '>f fl"...lucl1 n n •• alio\'f l•rrn j,1,..1. As u,., .. t 1n thi• l·'•'""'°'''b .fi, t hf' 'rnr1l111 ··,.•·l•l\U1lf tr11rt'' m"~•n an1 lrart w it h ru1alt7 o .. nt'ra.h ip d 1fCuin•. no w llr h.rrAf l #t, •alhH u tu &;•rt i.. or •mnu11h, lrum th•l al l u ""' cthtr i•arl ol the lra11o1....1 i •rt mi~. . 6. It 1•1...·ri•ti11n• f.1r 1lrllli ni: nr• nol r onim.. nr..d on u.id l&nd or on acre:tJCO pooltd th•r•whh u aho\'e [lroviJN ~I\ or Wfor• onr. >P.lr frr-m thi1 d;1I•, th• lf'aw "hall tl1rn h!rminatt u lo Loth pattiu, \mlna on CH' Wtore aut'h anniveuar7 dat• LrtHe ahaU &JA.7 or l#ndu (or •h..U ma~• a Lona fide ott•m~t ID'"''"' «nd«r, in .µ.!l~.QJl.. .N.?.lJ.iQr!~. l ..I3.~l') }< .. 9.f ....~A ?:".~do aa herolnafttr ot•l•dl to 1At1or or to the I• 1••1·ab le hu.un•lor r•~ardl<.. ~ tld''"'2 ijiflUn"iPof oaiJ land or U.1 rontal•I the 1um otf'.Or.t y-~ ~ gh t Thou sa nd E1gh t Hundred Eleven/1>o11ar• .. '18, 811. 2 6 .... ), (h.rtin rnllrJ rrntAI•). •hi .-h .t•• 11 llh'o t.h" r1. 111nh·r1r•·nu· ra o f .tr ill;n;r 0Jlt'rati11n1 ni•1 1.,. fu rlhl"r- 1leofrrrf'd ! 1lr IUf't"t"fl~h·e 1'f'riod& of 1• ·•lwe (1:) mont h ' ~t"h dur . n•· th~ 1•r1m ar7 '''» lllt'lil • or t• nilrra ·

t•rrn. 'l'h• 1•11.)·m .. nt •·r t•·r11lo·r of r1·n l " I u n•l.-t th i• f1•roticr.1J1h 11.n J of ro y.1h r urn1rr s••r•J.:"nph 3 " " an7 a n • wr11 f r••m •hirh al•• i " t ot t... in .: 1Mrl c,t Ul't-.1 tn;\t t~ rn:11lr t•)' tt1l" irhrri· f i t 1inh Of J,....,.:i;.f!!P Jn,"liltJ o r dr)i\'Nrd to \he fl"rtirt entt\ lf'd thf"ff'IO n r l u r.nitl t11lf1k n n r-r t ... ft11 p lhf' 1l 1t~ f' of i•Afmt•r,I . U 1o~Jl' h h11u l.. 1 r.r :u1y 11111'1"..•i;ur ' ""'M~ ·-.tiould f• il, liquidnC• o r 1.. aUf'<"t•"l~t 111 ft nnt hflr hnnk, nr f••r' any rc-t1ll'nn Intl 11 r rr:'u"'" '" Arrf"p t '"'nllt.I. 1.. .. ~ ••, .. hnll n ••l I•• twr.l in tl1•f.-uh for f 11il11r• lo Ut1•L.•· 'iurh 1•1umrnt or t rn•l••r of r"ntAI un ti l tMrir t3 il) 111\yl Af1.,.r lA"•.,~·r l"""""'' a 1.r1o;·1·r t-r~11r•h l • l1· j , 1..1rumr11l un1nifl.C 11.n.. tl1•·r li:1t1k 11• fll.'.rh1 1n rrc·rh·r 111111r h 1•111yMrn1t ,, r t•tL t\f"rt . It f.,r• ~ eh"ll· " ll t'lll' I •lrre • .,.,, 1.11 ni• •• "II d ..: ;, ... , to

~··r ..40 11:.1... 1nNl .. n 1... ,.,, l 111f' lt.lh•ni1•l to,... , or ol1' l"'"'; l r r 11 t 1tl tu " ''"" 'r 1· utit !1..t ehf'r..Co 1u·r 1111l;n.t 10 14'•"•"' • rtot"•,fth •'T I' •" l .. "'"' t , •h•' · \ •rt••r \o • 11d1 11t ll ,.111H••I 1•a)' lnf'l1l 1or .1 .., ..., i1. h tH• ,: i¥rr. 1;111......, nCtl•('r. i n a1·•'ut1lunt"tt ~· i1h aul 1u .. nt 1•rO\' i•u•fl• n f th ·• !"ll 'f'. c•f h i• r i.:h1 I' r "<'r i•·r n-n t .d, •.r 0 - ....

a n~I i f , .,.-h l•h)'U.•·nl 11f •l•'S"•"i l . •htt.11 inrtff'l·ti\'t> u r f'rr11n•.,1u1 i n Rll)' "''.!:t.r1l, 1....... ~~ .,hM ll h.• unf'.m1litin11• 1ly ,.t.li i::-.11....1 h1 l 'l'\,. I·• • u ·h r.,..... ,, 1!\.- f ••n1 11I J•ruJ o·r: , ,,., ,.,.1,1,. f u r II·• r 1·:11~J l •rt•o.t ln~·11h·1,I. nu.I th i• lra,... •hnU not l••rmi rrnt• lou t •hi.11 l>f' f'U1\inl•i•\t"11t in thf' 1:oim1• m ahn·•t 11• if •:Id\ 11·rrc1n1'"'"" ur ,1wff,.,·t i\' • rrntl\I 1•11)'rnPnt or dt•ltt••ir luul l...·n 1•ro1"frl7 nuutt', 11T•ni1lflll thnt thf' rrtonf'Ou• nr l nrffl"l'l iY• t f' nl ni 1•:•)"h lt rH nr rlr1")'°i1 No c-orrrr1 . ..1 .,..it ti:n :)(, d .1r• alt r r ,.,, .. it1C 117 l..i·"""' of wri l •rn nol ire frum •udi (..,., ,.,o r o l aurh f"tn>t aC'romr1m:e'1 toy auC'h ltu t rum .. n :a " ' ·~r f' r .,...... ..1try (1• •n.,.Me l•·P~rf' ''' h1'4ke 11ro11 .. t I'·'~"'""' · 1't1.. du.-n C'hah ' '"r1n •11t i1 .-11n•i1if'r;\hon for t h ie litn~ •rcor-l in .r t•• it•· l•rmt •n•I •ha. ii l\l"C loe ..::.1C'•f1-.t ... " llH·t• r•1.1.-1I f o ,. • r..-rir.I. i.. ..~ m•T at any t imf' o r linw• ,,...,.."'" •n il dr lh·•r to Lr~.or or co th" df'('Olitnt'J ah.n ·.,. n1ut11..1 '1r 1•1.tu nl rf'1"11rfl A felr11i.e nr , ..: ...'l!>i"t , ,f lhi"' lt.":l•f' u to "'H or anr Jll'rt of t h ,. nt. ,vt.drArrit..;.d Jlrtmi"""•· or o f anr m i ntra1 <'!' hnr ii nn und"r a H <'r •n r ·Pflln thrMf. •rid thrrf'••Y t• Trlw~ro.l o f all oltli'R111t1ona •• to lh.. h":t'aM-.I land or l11t .. rr.'it. U t hi• 1f'"M i• r"lu ..,.t •• to atl minPrAlt and h o ri ron& u nrl.-r a i•ttrt :on ol •he land '''""t'"'' ,,,,lhi• I••~. thr rf'nl&l• and oth,r J•nrn\•nu comri111tod tn • ctnr1lanre th•rt•it.h aAall U\•r~upon be r ...,ur"'S h\ t~•• prn1"'n to" th.t 1he n11rnh.r of 1wrface &l'~a • i lhin. l\.lrb fltl•ueJ portioo bear• to tbt totaJ number of 11.1tfate s.crte wbSt'b ••• ('nY•rfld ht thia Jc ..• imm4'11a t•lr prior '° aut'b ,.1..... 4GO . I Vnt. 4Gn r·.~r 326· I . If a1r Jor f •\ 1li•··•t\rl' " " '' L''""l11r ll11n or ulf. " " " 1•r ••tli•·r mt1oN" I ,,,, • l\l•I l"rnl 1•r un lll"trtt~'" ,.,,,,J,.,I tl1f'rtiwi1h. J , .._.,,.., •••·,ulit 1lr1. I '' olr y J,,,;. h·•I•·• l l•"••·,111. "' If " ' ' • r •l•h u\ 1•rr- lllt••I 11r 1..t11<"l 11•11 t • ( 1111, ) '.k• ••t ••1fo••r 111110 r 11I. llu• &•lt"llurJiun r11•·rt•• f ..h1111 l•I 1 • ; u.tt f1 •111' n11\' , " ''""'· 111 .. fr1o••• •11..U flf h ••l 1.-r111lh HI" 1f I 1·••1·r • ••011111•11r,·• 1111•·f11t 111r1• Cu r 1lull11tlo' or r•·• ·.,1!.111..: "-"1ll111\ .,,,t 1.;11 > 1l n.t·• l1, 1•1t'.1f h· r 11r 1f il 1.. • 1tt. : 11 1!,,. 1•r, 11o: •r v 1' 1111, ,. .,,,.. ' """ .."• u r 1e· 1111111·• lhl' 1•1H t11•·"' t•r l••111l4·r ": r•·ul a l• or t'o111u11rHl"f'• u1..-1,..c1on• fut dr; H1nt1 ur r1•.. 11rlo111j( ••n ur llf'f•u" th" r •·t•l• I , ;,.,.,. •' •l nlft n,..,, • n• o11··· 11(h·r 11... . . ,I 'll · · ····· ,,, ,.; , 1 )' j·h~· "••In''·''" ur 1"'u11,1d ..r1un .. , ~1r.- f111I·· .., ,.,.......1iun fl( . ..., ......,....,,.. II at •II)' 1 1111• • •1l···•.. j•1••11t .,, .. . .. , ,,,., 11.1• • , ..... r '" 11,.. •·• 1·1111 .. 11.: ••f 1l1f> l;1•t ~1·;, f ••f 1111' 11r11u"f J' l1•rr11 111111 l •f~ur 1o th" 11,.,,.,,,.,,1 of r•il , 1::•• •1r 11•tu·r 11111wrnl t111 • .1119 l•t111I. '• ' ••n .nt'f•·•· •~• , .. ,.,Jt<,t 1111·1""'''11. I .. .. ~. ,. "'h"1~l·6 1lr.1l" 1lry 1, ..lf" Owt(..111, nu n ·11tnJ l'IU'lllt'fll ur 111••·rati11ru1 ure 11t•1·1•, ,, afJ Ill u11h·r ln ••·1"'11 11,.. 11•;1~" in f• f"'" dor1nJ( 1 In• f1·111a.r1·\•·r "' ! t .. • I'' 111<1• )' lo·• Ill . Ir lit lh•· ,. 'jllft1li111t "' I hf'I l•l lll)lllY I 1·'1n, tnJ. ··.a• ••r ,., ...., u11111·t11 I '" r111l tl-f'i n 1~ ,., ...a.,... ·I t1'1 ,. ... t I i.1111. 1.r ,,., 11r•r:H·• ,., .. 1),,t tl1f"1•·\\llh. ~ dlt l.r· ..•• I• t!1••11 l'U•'.•t1~1'il 1n •hill1ni.: ur T11\\.,.r., 111.i u&•1•f:1l1uUt llH•n·••ll or •111111 lu1~• t'ntlll•f,.1111 "oll'v 11"!" tJ11·f• "H 11111htn ••\I~ ,1~u 1 11:1 •1111 1111••r lo 1~1 • rn•I u( the 11ricn :,rr h•rm, th• l•neo •l1n.ll r1•m;1in i t1 f11r•'f" 1r11 lnn• 11• 011rrfllf111n11 ''" •:•uJ w•ll cir f•.r tlrill1t1.1t ••r r •·• ·111 lrntf uf """ 11ol•l111 .. uul l\f"ll "''"' l'l""''#°u1,..& "'•Ill Ill• 4"1"";'''"11 u f 111.. r• lh.11• •1 \t\I 1 ~11, '"'"'".. rutivir ilitY•. a m l i f 11.... , rf'•11ll 01 ft1.i \ •t••l11t'ti .. h " ' *>11, -'"" nt o t! w r n 1111.•1.1I, ' '' l" Hil lt1•·r,. .• h 1•r AS 111 J, J::l• P r 1ttJ1t' t' 1111n('thl i • l '•"•h1t••i f~ u111 r a i,I l.1hd r.r Al'rt·11.r• ,,.,,,:t"'ll U1C"r.. ...-i1h, ,Ar. / 1~~ .1, .. 1 ,,,,it •I•-. .::' •"' '"'' L, 1.,..,..,-c i rl a r r 1r1l.t1.rr • 11 h lli • t..ru.e h•tf"l•f mny t .. d .u11h-f'CI f,r 0 J..,.,,,.,.. l1r i 11,lnlf11f'nl f .i r"'t tor , ..,.,.,,) ;,. Ott! 1tt11ro1•ri-.t•· r•·1·•n .h u( rt1" • •1LJht1 1n •hiC' h Ch• 1... ,, ...1 1•fr 111,,.r, 111.ro 1 11u"t~I al "nr 11i1o., after t t1 ~ r11m t•le·lnlll 11f a dr1 h•1lr u t th4 f't•11111:1ti1 •n to( 1•r• " lurr1 .. n 11n ~ ..1.J 11111! 111 1J,,. ...:.. 1ot • """" "' ' '"• : le 1•rol•1o .11,.: ••ii ••r " " • 1n 1•:1)"111w ~·11,nl it 1re 111loold 1.,. l rn11whl in nf'I • •IJllirf'nl ••mJ-=-ftft:;..mwt~"1Ro:fi>tAili'~=t1t;:tr, :r.r.:11q: r;."':q "'"t 1tra.ln i nw- 0

lh1· lr.u•-.I l''' ''""' •. ,,, orf•·••"•' ' "·ml...6 lhtrt•1th. IA·U~<' •.cn1·• to ..anu tu•:h ttflM:l •f"ll• u a rt'11 M•n11My ,.,,,,,IC"f1t o,~ratot • hlll•I tltiU \u ..ln th., •Aln• 11r 1.1111:ar ,,,,·.-11.•10111·4·' ·

1. '"""'.'I'·• fllh:dl h:i\,. 1t1- ri~·ht ftl aov lime flurinll ()r "''"'\ht f!'11irat~on n f thi• Jt11'6 to rf'n\O\'• all l1fnl•l"r!J fth•I fhturl"I 1•r1v•·•t b, f.it1""t n" Mi1I lnwt, ~11rh111Lu~· Ill•• 1ud1l lo 1lrnw a111l n•m11\·f' ftll ciuin;c. \\'lit>n r<'ltlfirr1l 111 [A'c"nr, i.,..,.". wHI t111rr Rll L'il •'" lin•'ll t ..·luw or1lin•ry (•l 11w dot&1lh, a n•I .,,, ..·rU .. t ml l 1•• 1lritr1.. l "-ill.in l •'U huo+frN 1:.!u~> f•"f't of Al'\J rH1dt'ru-• or l1iun 11uw un •n~J l:u1•J • ·i\hout J.1·,.,,\11r'• r1111t-••nt. P.. Tl1e r ;..:!•U 11f t•i! h··r l•"rrv ht-trnnit.. r m•j 11111! 1111ui.rn,..1 In whhle or •n r•ttr1. •nrt t he rrn ¥i1io'11 h,.,,..,, 1h;,U ,.,,,•tul to tbrir f1..i n . 11 tJuM ... •1rt •n·t "~~:.·ra ; 111: 1 110 1·h a !..... 11r •li vi1.:i1n io o"nt·nhiJ• uf thit l::uul . rf't1tnl• or r u >nlt i1·•· · h ·••t•\'f'r •rrt1rn11:i•l1f'1I, a hall •'C·•' r 1'1r tu 1·td:1fJ"'t th,. ••t,J;..:;i~ t1·in• flt .t1t111n: •h fi•'"'" •" ,....,. •..,. : l tt f> ,_n,f· flO ("h :\fll'.I' nr 1t1 v1J1l•' ll In •11r>t ....... n.·r11f1 i p el1nll 1><" h ind111i.: ''" J.--,.~ t1 rit i l t l1 Jrl \' , :11') 1 t la; 11 nf ~rr r.....11... •h:1:1 n .1n• t• r n f •11 t ii ..h· .. l t.,. u·;•1· : rrf"ll \J. S. tn;ul nl f 1!1<\f•1•'• s•rinri1 ·ul a•lal"'r ol ' "'"i11rM •·ith • 1·f'r t if i•"I n 111v " ' ,,.,.,,,d•··I in ~i111 ri1o·:u "' u 1• 1r 11· ffl••llt• ··~· ••t..1u·1t1·· "'!lfllO'. 111 1 :~·· 1'\"1°l1l nf "lliti ..:urnr z.t ~l rtro( ' n !i\holf' or in 11:ul. li:d.iti l)• for tirrat"h or n nr ol1ti1::ilf11n ''"''" Ul.t .. r "'""u (t4t .. ,..i... ,1\t'l7 11:•••r1 lh.. tm11rr ,,(th.~ i, ._, ~,. ''' <1f n 11••rt.,•t1 1twu.. 1( v.· hn r1•n11u111 •u•·h t.r..:u·h. Jn the t'\rflt " ' lht 1l1·:1tb ••f #llt\y i·•·r111°11 f" nt;tl•"I \• • r•·ntAIJ her.-. UIL•l1•f', IA·o; '1.'t' 111.1v C•ll)' t1r !f•h•lt·r 11u.-h rr11 t:lla tn lh1t rtf"•l•t fl( ll1f' d"e":l'••l ••r thf' 4'1 t-ud1 I f'rt•m't ••r tn ttitit J":r1t ru.. lit in t tu· 1l••l"••i1 " r)' nanll··I hurin; or, al 1...... ._,..,·1 1•lr r l iun, the 1•rt11 ~1rti11n:-i1.- l•:t.rl n ( 111ai1I , ..111Al't tu .-hirh 1":1."h l• :l~li"'il1!'t11 t i~ f'"1tit1f 1j tn"J

I •·• 1•:1111 nf tr n•l1·1t·•I lo t1 im 'w1•;11 ,1111..; , f\r to hi• •wl•MHlf' rr...t :l in • aid dl"t" •~ttur, : ~~--llNIS~U·mtmr=la:mqc:~a:uc~D:icpldlila::.C::Ole m:da:i::mmumm:ac:us:: aui:bmo:t.:::imdaA:a~1JaA:;im::la4J,u.c; ln f'n•n!. 111 "'"'"i~ nmrut of th i1 t..:i.. f' h~ to • &r~r.-.cat ""l 11u n i11n ••l ""i 1 l"rul, ih1 · ' " " ::.:• ~·":tul1.• hrr,·u n ct•· r •hAll lit' n t•L" Jfl 1unnl·lir •a l)tlt.,·rrn thr ~ \·rral lf'.U·• ·h n r.t uwnrr• ratnl.ly •rrorJ1mt to thr • •irfar• a r1·a nf . ......., . • •t•I .1.... h 111t rn rrf'lt11.I 1•u)' mtM l1r 1111fl ahnll not "'''"d the riwhta ~r o' hr-t ).,n1oP.h nl1I ownt rt h.-rf'ttnder. If 1i' o r tnon 1tlltJH l«1;rnt t n! it lflltt to ro1 n lrJ tlrt~U n•trr, .i...._,,.,.., '"">' • i 1hho1d Jl:l)'tntnt tJ1crtuf u cdt-,.1 •At.I unl il furni11bt'Ci with • n curtJ:1i.l1!1 inttrumr.1t u:ttul~t lt1 all 1udl , .aui1·1 dni1:notin1 an • .;t"nt 'o rC'C"t'i\·e ua1m"nl for all. · · 9. The brr:1rh tir Lr"!'"f' of 1t.nr ul.liw-"I inn ar•~irur: htr~un1t .. r 111hAll nt•l 'f>•lrk a torftitur~ or termlnntion of 1hi1 lt:u~ nnr r;·uiPe a 1..rrninl\linn o r fl"\·rr111tin 111 til•• f'!llt:lt4e C'rP'Lfrd hf'r•t•y nur •~ i.;rnornl• lrtr C'l1nrrlhition h..,t.. 1f in 111·h11l11t or In ln,rt. Jn lhe l'\'tnt lrnur t"IJlllitlf'fl U :1t 11r14•rnti•>n• are n11l al ar11 t 1tnt t"'m.: ·C'flOliurl""1 in rom1•linntt with th l1 :1r11I 111r1· \l•·H l ·•' I" ,; J·• ;.,., ,... I h.~ 11!1 a rr.. nt:t l1)lt"ru1.r• ru1t t n rint'\t IO';i of ''O M'rfl of th1 ar~• reulnect htrtundu and ca 1 al.I• of 11ruilutin• 1 11:•• or oth•t m ineral in ,.;,y iHlt qu1an1itin. lo. J.r-."''" hl'rtt1.7 ..-arru nte and •~rt'l'S to dt"f•nd the title to uld 1an•t and "Krttl thitl IAHH at lt1 011tion m11)' ttl&C"hnnre •tior tA>. mc1rt11:h'e or •lthr1 l1 rtn 11t••n • n icl lnn1I, •lth,;r ln •hOI• ur in s•nrt. ""'I In. •vtnl Ltott •l•lf'I • 1>, it 1h11ll 1.. 111l1ru~l\h•d to •urh lilfn ""·~th ri.,;ht •o f'rilr.n• •:lnir •hd 0 "''l'I' rr111:d1 1u•.1 r u)' flh14·' "nruin.h htrt•u111lf"r Inward ••lilf.t· lhM Hmf'. Wi1h11ut im111tim,ent of IAUl'f' t ri..ihtl \lndrr tt1r -.·nrra111r I" •1rnt n f h11u"r hf lat!,., H I• tl,:ri ... t thl\l 1f thit l"n"~ t"11\'f'r• • ,,.,., inter••t in the oi l. •••· euft1hur. or other minu•I• in all or •n1 L)art of 1.• id l•n'-* lh•n l hr- t'nlir .. 11n•I 111. .i i,,·l.i. ..1 f~ 111inwl• H lntt '"'hPlhH 1Aa1tOr'• int..rC"U Je hn•in •1•eorlfi"'I or not), o r no lnlHHl th•rtJn, thN1 ihr. r e na 111·1, . . .JC P~~S::...ZIR:lncmca 1tr1·ruinac froru an1 11ut a1 W • ·hkh 1hi1 lr-ue tuvf'r1 ff"U rh•n aur h full inlHHI. 1haU 1.,. 1•ai1I ••nlv ir1 tn• 111111 ..•1 \iun

~:.,~~·~·f,.~t~r:·'!';~~:. ~i~tie i~~~. •;; !~:~i·~·.:~~·~ =~,i~~:i'~~i~.t~~'ti!~'p:::;l:r ~~~l;;~~-~~~~. ~b~ 0

·htrtun•l.. r ahal1 not iowat r the ri•ht of l..t11N to ttllute ror•lliH. :=. •h1rh thP i1;:,., .... t it.1•u •1n, if a 11r. C't.\'f'tf'1t h1 thi1 ltklf', Wu1 t •t lh• wholit •ntt undi,·idf'1I (ff 1imrl1 Ht&t• thrte~n. All rn)·11.lt1 lnh·r.-.. t ""'"t'rf'!lt l•r . ~F::f!:. n~t •t;.,i;:r:;:~~~~,. !,:!~'1'~ai4 ll . .Shoulot a.... ~.,. I"" flrP \f'nt rd f mm complrin• wi;1h •nr ir•,1t.a• nr im~l i !Pd C"ov•nant of thi1 ll'Aa.t, f'1>m f'nnduC'linw drillinw nr r••otldn• OJ•f'rallu••• thrr ,... •n of hum irr oo.lurini{ nil or M'M tt1•'l'f'lrom tir r•""-'" of a1·nrri1J <"If or in•t.llity lo nbtain or ll) UfN! .,qu'i11mcf)t or m \lr:ial , or br oprn1tm'h nt ft1 r1·• maw11rir. ""1 ... tdrtal or flt•t• J•w ur Ah)' nrd•r. NI• ,-.r rf'l(Ul:oi1iun uf ~ovu·nm•ntal •uthor•tr. tll•n .,.hilr .o 11r•·u"' '"·I. IA'HN'•

- nld•.:ncu•n to r11111:•lt' "'•lh •urh rnunant 1h11.lt 1.• •ujl1•f' rut,..1. •nd l.ru~ 1hall not l•f' tiAtde in d•mawH for failure lO C'.tmplr tht1•'""11h : a r.d thie t.,"..,. .. t.:111 1.. "''' "'1di.. t ""hile An•t eu l••h• •• '""'"'""• i • 1·rrv•n tf'd t•r an1 tu.("h cau~ from C'nnd" '"t in • dri.111n• or nwn rk;nw oJt4"r"tl"' • 'n n r trorn ''''·•hu· .r. ~ ui t o r .r11• ff nm th«" lf'l\M'd 11ru11tw1: an,J the tun• •hil• IAHH i• 10 prev.nttd 1haU hot be cuunttd a1•in1t IA11•"· anf\h10,: Ira thi1 k&lll ' __ LO the t '1Ulrarr n1,ta·1lh•tuwlin11.

·- ---, - - --- · .. ,_,_-.,,; , ......... -

··.

l ·' 1:

I 12. It is mutually agreed, notwith~tanding any other provision . '

herein contained, as follows: . ·-· · (a)__ Should Lessee be prevented from complying with covenants of . this lea~o by reason of conditions or acts set forth in paragraph '11 1 . hereof, then Lessee agrees annually to pay to Lessor an amount equal to the delay rentals herein provided for during such period of pre-· vention, whether same be during or subsequent to the primary term, and such payment shall be made at the end of each year of prevention either to Lessor or to the depository above named for credit to tile account of Lessor.

(b) This lease does not ·cover or include any righ~~r privilege of hunting or fishing on any part of the above described land, and Lessee ayrccs with Lessor that neither he nor his assigns.or agents or c~~loyees of his assiqns, will bring firearms or dogs upon the leased premises, and should this provision against hunting and fish- ing be violated by any agents, servants, employees or contractors of Lessee's assigns, any such person so violating same shall have no further right . to enter upon the leased premises, and such person shall be regarded as and shall be a trespasser on the premises of Lessor and be subject to the penalties imposed upon trespassers under the laws of the State of Texas.

I (c) It is expressly agreed and understood that after production of oil and gas in commercial quantities is obtained from the leased premises, the minimum annual income to Lessor from payment of rentals, shut-in royalty and royalty on production shall be a sum of :iot lc!;s than 1~o ($2.00) Dollars per acre on the total acreage retained and then covered by this lease, but this provision shall not impair th

I .' f ., ·I" '' :•~i !.:>t:·.1i L!lst.:ir..;!:.1; .1ny .:.1r.h~c · p:-ovi.sion lv:cC?in conc.:iir.~•J, thi •~s not i:-,-=J.u~~ r.l1n·.? C.ll.:.i or:h~: c.~ .. ' : ~ ~. ' .: l:,, ~;i..! !:Ul;J:l~= Jad i:ti :""• .::: .1~ !.; :,:-o·J·..:cnci u1:.~ oil .!:ti ';cl..;, ...a~ £. ·.!~· .. v= .-: ~:· :~~ c ~;.;.:;l1~._:~s iro::i !:!h.: 1·:.::.: .> ,:: i.Ji~ .~ st :ii:c ~ ~ r~'- n 'i~ .:: n t:~ ·.!, ..1~ G. r•! : ;·! : ·:~:i '.. :'.::':..) h!. ,"'..Z:!l(, hi~ f.~it' S ..ir,ci J~ !.i if:-.:.i, 1'! l ~ mi n ..:?!" .ll ::.t Gt:-:~r t h .ln (JI! o:.!. , ;~ : . 1~~ ~~!~~u:- .:i~~ ~i~~r.:il~ t~.:ic ~~1 =a prod~ccd w1ch oil and ~l~, !,:- ; .~ i-: i.i ..~:·~?:~s5ly aq:-~~d t~~:: '<;,?s' ll5 U.:ied h~rai:i inclu~cs <;! .:.;. co~~~n~ac~, aistillat~ a:- anv other aJ~eous subst.Jr.cc or any oth~c oin~ r3l pro~uced with oil .:i n~ q~s, i~cludin; sulphur .

(c l The right to pool un~er parac;ra?h '4 • o f this oil, gas anc! n:~e :~l lease sh~ll be limited to lease or leases on land belonqirig c~ ~~'sor herein, or in which Lessor owns an interest in the oil, ga~ ~··· ~r:~ other minerals. - \ I (fl Commencement of operations for drilling of a well for oil or gls to a depth of 5,000 feet or less shall entitle Lessee to· a credit o~ the rentalsmquired under paraqraph '5' hereof only in the ~~dunt of s1,zao.oo, but if operations for drilling are conducted to a depth belcw 5 ,COO feet, such credit shall be increased from $1,280.00 to ~2.560.CO and Lessee shall, by an instrt;111ent to be filed fc~ rcco:d ir: i:.~H? office of the County Cle rk of Webb County, select and describe . u40 contig~ous acres as to which rentals are to .be credited if tho ~~:1 is drilled to a depth of 5,000 feet or less, or select and describe i,i co contiguous acres to, which rentals are to be credited if a w~ll CO i5 drilled bdlow depth ot 5,000 feet, and pay~ent of. delay rentals or ~ ?rocuction of oil, c;as and other minerals is to be required in o=dc r ~ to ~cntinue the lease in force and effect as to the remaining acreage, ~ ~nd su=h payment or production shall elir.tinate requirement to select deres in accord.tnce with above provisions . (gl ht the end of the primary term hereof, Lessee covenants an~ ~q:ees to execute and deliver to Le ssor a written release of any a ~ d ~11 portions or this lease which have not been drilled to a densi: ~ of ~~ least 40 acres for each producing oil well and 640 acres ror each ?r~=~ci~g or shut-in gas well, except that in case any rule a~optoc

I by th~ Railroad Cor.unission o f Texas or other regulating autho:it;• ! or any field on this lease provides for a spacing or proration establ i sh• inc; dif:'erent units of acreage per well, then such estanc!o:\.-::ent c: ~.::a .:i::;:il ·.; .:~.: • ..i~ wh ich ti.:::e. Le saee :;hall exec~t:e a cd ci~li«•ar co ~ :o!s:;o: :;aid ~ric~ 0 n ·~~~1se, ral~asinq all porcio::s of the 13&se not t he:: so ~ ~v~ loped.

(hl It ls ayre!~ d that where the Lessee hereunder enters into a •;t1?rmi nation lie made a t intervals no greater th.m two ( :.! ) ye."lrs .1part.

I ( il 1.1:s:ion.:il property u f l..tii;uu r, V.1')uil l .1i; r-----------~------ .................... .·' ~

nanch Company, r.t.•l., ricc<1Rioncd by°, arising out of, or resulting .from operations by Lessee, his agents, employees or independent contractor!; on the land hereby lca.scd to Lessee. Lessee also agrees, when rcqucs t 1·d in writin

IN WITNESS ~IEREOF, this instrument is executed on the date first aL0·1c writ ten;

VAQUILLAS RANCll COMPANY, LTD.

BY:~4::-...c.;*-!~~.c;~'-4~..:_~--,.- J y.,;11era l partner

,.. ~- ... ,. !. partner . ,. ""' ~...r • ;..:,2 ' t: ~

lt ,., lf'I .' , .. ...."' ·~

L ;_. -:··· ...... ··' BY: t. ((Ja1../Ptl ~Lna E. WALKER QUIROS, general :i; .. \ · · partner

STATE OF TEXAS

COUNTY OF WEBB I . UEFORE ME, the undersigned authority, on this day personally appeared J. O. Ii/ILK ER, JR., EV/IN B. QUIROS and E. WALKER QUI ROS, members of th£· partnership firm of V/\QUILLAS RANCH COMPANY, LTD., known to me to be the persons whose names are subscribed to the foregoing instrument, and :1ck- nowledged to me that they executed the same as the act of VAOUILLAS IU'NCll COMPANY, LTD., a limited partnership, for the purposes and consideration therein cx.~:i;esse

ojvE~ -lmoF.!(1MY 0

II/IND AND SEAL OF OFFICE, this the HtL day of June,1974.

.,, ' ' c __..- .==? -4'~ ~ -~otary Public, Webb County, Texas

.. , ,

S'fll'l'E OF TEXAS

COUNTY OF, WEBB

BEFORE MF., the undersigned authority, on this day personally appeared GEm: s. ~11\LKCR, a member of the partnership .•'.irm of VAQUILLAS RANCH COMPANY, LTD., known to me to be the person whose name is subscribed to j the for.q'going instrument, and acknowledged to me that he executed the .~ sarue as the act of VAOUILLAS RANCll COMPANY, LTD., a limited partnership, for ~he pucpos6s and consideration therein expressed, and in tho capacity therein state~. 1

GIVEN U\IDER.: MY HAND AND SEAL OF OFFICE, this the JP1fday of JUll•·, 1974, .· .. ~-.-~ -· Notary Publ lc, c~ --~ Webb County, 'l'cxas .~-:tf- .Cf3 EXHIBIT "A" - ~ ABSTRACT CERTIFICATE GRANTEE ACRES

ti . l.:it 161i9 1651 1652 1661 16(,3 1633 11)34 1665 1110 . 1117 2876 1122 1123 1323 2252 112i. 1158 1159 1159 1161f 1165 4/808 4/808 . 1166 CCSD & llGNC CCSO & RGNG W. H. Taylor CCSD & RGNG CCSD & RCNG CC & SF GC & SF CCSD & RGNG 61iO.O 640.0 6'-·:>.0 6i.o . o 6J.O . O 61i0.0 659.96 640.0 S.1/2 1666 2253 1166 CCSO & RGNC J28 . ]') N.1/2 1666 3142 1166 CCSO & RGNG 328 . 7') 468 2255 236 AB & H 659. 111 467 799 236 AB. & H 61iO.O 1635 1797 17 TC Ry. 6J.O.O .-.- 865 1'438 12/2541 H & GN 640.0 1683 1115 ·1175 CCSD & RGNG 640.0 1691 1267 5446 GC t Sf 640.0 1696 1'418 54'48 CC & SF 640 .0 1695 1268 I 5448 CC & SF 640 . 0 279 (pt_. only) . 1353 3702 CC & SF i.sa. 2 1004 2421 2/105 J . Poltevent 634 . Sll GC & SF 61 J.Oli 0 1692 2419 5li46 M 1693 1269 51i117 CC& SF 640 .0 M 2112 2~20 t 1925 631 B. F. James 627 . 12 tr. 3700 GC & SF ··64o.n ~ 276 .... ·2552 228 ' 2550 I )i.11 CCSD & RGNG - 636 . 93 0 227,, 1133• 1344 CCSD & RGNG 640.0 u::> 988 2593 2/103 J. Po I tevent 637. 10 ~

98]'\ . 206'1 2/103 J. Poi tevent 64fJ .0 273 ~ - 1141 ·1336 131f9 3700 CCSO & RGNG GC & SF 6'40.0 61i0 . 0 . ~ 275'\ 277* - 1337 3701 CCSD & RGNG 640 . 0 CCSD & RGNG 320.0- • S. 112 .JI, Bh>ck 2 . 25, Block 2 I 043- I Oli2 453 '452 CCSO & RGNG 640.0 (""' E N.1/2 .232 '1 233..... 51, e :ock 2 259 (pt. only) '1955 211+8 1117 1045 1137 1328 1346 13'47 460 1074 4526 CCSO f. RGNG CCSD & RGNG CCSO & RGNG CCSD & RGNC GC t SF 462.70 455 - 9 - • 320.0 600.D 640.0 ""0 -~

~: ... , '>' . :·· . .. 302 CCSO & RGNG 652. 2; 2057 985 ~· ' 2060 -!pt. only) 3329·30 303 CT f. H 41i0,0 ~ ,,, 303 CT& H 321>. 0 ' ~'"T" .. . E.1/2 · 2059 . 984 . -..,, I I

E. I /2 •I 9S3"' 1329 4527 GC& SF 320. 0 - 1627 {pt . only) 1324 li683 GC & SF 160.0 C(j 1• ·' . .1629 irt. only) w.112 ~ 1662 E.1/2 161i8 1275 2230 2441 4682 116'4 1157 GC & Sf CCSO & RGNG CCSO f. RGNG 292 . 6·i . . 329.3'' 325. 7!; ..do: > .. :

. ..· : :.-. W.1/2 1648 3301 1157 CCSD & RGNC 325.7~ -· -26, .uock . 2 '~ 452 R. O. Barnsley 640. D. . .-'.'.\ -~~ ~· . 2335 3025 School W. Brown 27 . 3 . ! · ..:. ~-· . . E.1/2 . 19SU'' 2~60 li526 GC & SF 327. )L ....:-. -.... ~.

Lessor's warrant? hereunder as to all of Surveys 987, 273, 275, 277 , 26, the E.1/2 .of 1 ~53, E. 1/2 of 1956 ~~ ~ 401 .9 acres out of Survey 233 (all except 5li acres out.of SW corner of said Sur. 233) is ex;Kessly llmlteC: to 1/2 of the executive rights In the oil and gas .rights In · and undcf said l~nds, and as to all of Survey 23 2 is expressly limit~d to 4/5 or the ~xcc utive rl•1ht~ in tht> 9i: .ind gas right s.

The ro l lo.ilng p.u

(I) The 5£ I/Ii of SW 1/4: SW 1/4 of NE I/Ii (80 acs.) and N 1/2 of SW 1/4 and SW I/Ii o f SW 1/4 (120 acs . ) of CT&H Survey . 2060.

(2) Thl· W. 3/4 of GC&Sf Survey 1627 described In O&G Lsc. to. Daniel A. Pedrotti dat•··I 51'ptcmbcr 24, J'.)7), ilS il411Clldcd,

(}) A11y p.ut of J \urvcy ll\l1:d herein not l11d uJcd within any s11uclflc fr.1c:tlonol '"' " '"""' pr .. .:.,tlln•Jthe \urvo•y reference. (11) Tl"' NC IC.O .>ere'> of GC&SF Surv,•y '/79. (~I lll ..c.k II ilS per thu E.O.Cli1!l•1ctt Sul.Kllvhlon of n•cord 2 Plat ll··~11 rJ •, 2'1, Wo:bb r .... 111v, rnn t a inl 119 40 .1crc'i , bcln9 1111• NII I/Ii of SE 1/1+· of C:CSD ~ KGNf. S111\i1·y ? '·'I . (6) 1111 of th•: W. }20 .1 crc ' uf S•il,v· ..... 16/9

...... I ~- Pri>duccn U {140 ?o,~lnllnt ~ Sii1lon1r1 Co •• llou110~, T,~11 • ·\.. ·• ·~.,ViJi UO Acr.1 Po0ll11r- Pr:ovl1lo11 •. I if• ,. OIL, GAS AND MiitJt'RAL LEASE AMENDING OIL·, GAS AND''ntNERAL_ LEASE DATED JUNE 15, 1974 (AS AMENDED) BJ;TWEEN LESSOR-AND LESSEE HEREIN

26,622.79-acres of land, more or less, situated' in Webb County, Texas more fully described in Exhibit "A11 attaclted···he·reto Bnd made a part Of thiS Lease for all relevant purposes, including limitations upon warranty as specifically set out therei~.

"""""' For lli• 11urww of cakul.ilnr th• nntaJ 111:rra1nt1.1i•rdn.ti..r pnivl~td for, uld Ind lo utlm11..i 10 coaiprlM .... ?.~_,_6~-~ ..:.?..9 .... ··-··---·-----;--...acr.. ,_ ":h•lll•r It 1dul': ~prlw1 mor• or,, I~•.. . .five t. Svbh•:t to Ill• othr proYhl11111 bu•h1 oontah1.!!, thh' In.. 1h1.ll ~- for & 111111 Gf Wtt 7Uro from. \bit due (olltd "prL'"1r7 tum.-) and ~.J?,- llitnt!i..r .u oil, ,u or oUl_\f" "''"'~I .h.11~11od frolll '"'1 I•. nd or lan.d wl!21_ •IJJcll nld l1nd 11 ~loci b.,oundoc. 'il'>h~eri)i~M! ~ !l..rtgt.J.P~?L.~2-~. t.f-olf~1f~~~-li~not!ib.P'lf4~~.~ Mi .-U-1i=~J!1R~\!1, 1l~t..0Jllrv'°;~.~t ~. 1 · ••II• or "' tlit credit ot Woo~ 111'° Ult p/PtllllH. 10 •1ilc11 t.b1 -.1r. =•r bt unnt-=i..d 1 Lt•-.al ·J..tf.. 111.,. fro.r.a llnit 10 Lime purdl1M .,.,. ror1llr oil Jn Ju P01 ... 11lon, P•rlnr·the"nnrht Prln th1t1for"'11r.hllln ·-tor th• neld •h•ro · roducod on· lb• dcte·ot·pyrchHU (\I)

EXHIBIT B-2 _________ Jgl .'b-' '"l· . 0.

---------·-·-·---- STATE 01'------------·} TB:LU StNGL& J.CKNOWLEDOM&HT

COUNTY OF.-..- - - - - - - - - - - - - pen.ot1all1 1p~1rtd .•. _ _ __

---------··----------------------------------------- 1tnow11 i.o m1 to 1H th1 Pinon •• whou 11....,L_, _ _ _ ,__..111b1erlti.d l.O U.1 roroio\111 l11rtNm1n\, a11d acllnowlld1td l.O m1 I.hat _.b ..... u.c:u~ th• 111JJ11 for \bt PllrPOltl and aontld.r1Uo11 \bt.rli11 UPrthld, · Olnn undu 1117 hlml and ual of autet, \hll tht-----.d•7 1 1 f - - - - - - · - - . - - - - · - - - · A. !;), 11---· Nota'7 Publll In 1114 tor--------Cou11tr, - - - - - -

STATt O F - - . - · - · - - - - - - - - · - · - } TEXAS lOINT ACKNOWU:OCM&HT

COUNTY O F - - - · - - - - - - - - Stfort mt, U.t 11nd1nl1ntd, 1 Not&rr Public 111 and for nld Collnt1 and S\1\4, on \.bh du- 1>troonal17

C\011 11ndu in1 b&M and Hal of oUlct, \bl.• \ht..-----d17 ol--

No~U'f P11bllc In .ad for---··-----·-Co

• •r r ~ . 1' ••• l. II f ' ~ 0 •l,• fI ~ .' :I

•• f [ 'l • l" \ "::li:i.. l: r I '[ •l ! ..i!' i • ~ • f p '~ I f. •' -e • l. } • r f. I I I t i

ADDENDUM TO AMENDED OIL AND GAS LEASE From Vaguillas Ranch Co., Ltd. et al To Conoco Inc., Oated November l, 1987

12. Should Lessee be prevented from complying with covenants of this lease by reason of conditions or acts set forth in Paragraph 1 11 1 hereof, then Lessee agrees annually to pay to Lessor an amount equal to the delay rentals herein provided for during such period of prevention, whether same be during or subsequent to the primary term, and such payment shall be made at the end of each year of prevention either to Lessor or to the depository above named for credit to the account of Lessor.

13. This lease does not cover or include any right or privilege of hunting or fishing on any part of the above described land, and Lessee agrees with Lessor that neither he nor his assigns or agents or employees of his assigns, will bring fireanns or dogs upon the leased premises, and should this provision against hunting and fishing be violated by any agents, servants, employees or contractors of Lessee's assigns, any such person so violating same shall have no further right to enter upon the leased prem1 ses, and such person sha 11 be regarded as and sha 11 be a trespasser on the premises of Lessor and be subject to the penalties imposed upon trespassers under the laws of the State of Texas.

14. It ls expressly agreed and understood that after production of

oil and gas in commercial quantities is obtained from the leased premises, the minimum annual income to Lessor from payment of renta 1s, shut-in royalty and royalty on production shall be sum of not less than Two ($2.00) Dollars per acre on the total acreage retained and then covered by this lease, but this provision shall not impair the right and privilege of Lessee, his successors and assigns, to release and surrender any part of the above described leased premises as herein provided. Lessee, his successors and assigns, shall detennine within 90 days from the expiration of any lease year during which royalties have been paid on actual production the amount of any deficiency, and shall within said 90-day period pay such deficiency to Lessor or deposit same to Lessor's credit at

' -·- 1··• I the depository hereinabove designated. Default in the payment of such deficiency shall r.ot operate to tenninate this lease or any part hereof, but Lessee, his successors and assigns, agrees to personally pay such deficiency to Lessor at Laredo in Webb County, Texas, together with any reasonable costt including attorney's fees, incurred by Lessor in

collecting such deficiency if not paid within the 90-day period hereinabove provided for.

15. Nothwithstanding any other provision herein contained, this oil, gas and mineral lease is limited to oil, gas and sulphur and minerals produced with oil and gas, and does not include minerals other than oil, gas and sulphur and minerals produced with oil and gas, as Lessor herein excludes from the leasehold estate herein granted, and reserves unto himself, his heirs and assigns, all minerals other than oil, gas and

sulphur and minerals that may be produced with oil and gas, but it is expressly agreed that 'gas' as used herein includes gas, condensate, distillate or any other gaseous substance or any other mineral produced with oil and gas, including sulphur.

16. The right to pool under Paragraph '4' of this oil, gas and mineral lease shall be limited to lease or leases on land belonging ·to Lessor herein, or in which lessor owns an interest in the oil, gas and other minerals.

17. For the purposes of the annual rental payments due under paragraph 5, Lessor and Lessee agree that said payments have been timely

paid and received, and that this Lease is perpetuated, without the necessity of further delay rental payments, until the expiration of the primary term.

18. On November 1, 1990, Lessee covenants and agrees to execute and deliver to Lessor a written release of any and all portions of this lease which have not been drilled to a density of at least 40 acres for each producing oil well and 640 acres for each producing or shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this lease provides for a

-2- GWB2/dm 130(1) spacing or proration establishing different units of acreage per well, then such established different units shall be held under this lease by such production, in lieu of the 40 and 640-acre units above mentioned; provided, however, that if at such date lessee is engaged in drilling or reworking

operations the date for the execution and delivery of such release shall be postponed and the entire lease shall remain in force so long ·as operations on said well or wells are prosecuted with reasonable diligence, and if,

after the completion or abandonment of any such well lessee commences the drilling of an additional well within Ninety (90) days from the completion or abandonment of the preceding well, or continuously conducts drilling

operations in good faith and with reasonable diligence on said lease without any cessation for longer than Ninety (90) days, said lease shall remain in full force and effect during such drilling operations and until the end of Ninety (90) days after the completion or abandonment of the final well, at which time lessee shall execute and deliver to lessor said written release, releasing all portions of the lease not then so developed. Each retained unit shall contain at least one (1) well producing or capable of producing oil or gas in paying quantities, and the acreage within a unit shall be contiguous.

If, after the date the partial release called for under this Paragraph 18 takes affect, all production from a retained unit around a well or wells cease to produce oil or gas in commercial or in paying quantities, Lessee shall have one hundred eighty (180) days thereafter within which to commence operations to establish or re-establish production therein in conmercial or paying quantities, whether such production be from the same wellbore or other wellbore. If such operations result in commercial production, then this lease, as it applies to such unit sha 11 continue until such corrmercial or paying production again ceases. However, if such operations do not result in convnercial production, then Lessee shall have ninety (90) days after completion of such operations within which to commence drilling or reworking operations within such unit, and this lease, as it applies to said unit, shall remain in force so long as operations on said well or for drilling or reworking of any additional well therein are prosecuted with no cessation of more than ninety (90) consecutive days, and if they result in the production of oil or gas therein, so long thereafter

-3- GWB2/dm 130(1) as oil or gas is produced from said unit. As to any unit upon which commercial production may periodically terminate, the above right to timely resume operations and continue this lease as to such unit shall be reoccurring right.

The stipulation above as to the size of retained tracts around wells shall never be construed as a satisfaction of Lessee's right, duty and obligation to reasonably develop the leasehold held by Conoco or its successors or assigns. After November 1, 1990, Lessee agrees to drill such additional wells on the leased premises or such portions thereof as may be in force

and effect from time to time, as may be necessary to reasonable develop the same for the production of oil and/or gas as a reasonable prudent operator.

19. A portion of paragraph 3 has been deleted and the following is in lieu thereof.

(b) ,on gas, including casinghead gas or other gaseous substances,

produced from said land, the Lessors royalty shall be calculated and paid as follows:

a) Sales To Non-Affiliated Third Parties: In the event Lessee enters into a gas sales contract with a non-affiliated third party, Lessor's royalty shall be one-sixth (l/6) of the gross proceeds received by Lessee from the sale of such gas.

b) Sales To Related Or Affiliated Entities For Resale: In the event Lessee enters into a gas sales contract to sell gas to a related or affiliated entity, then Lessor's royalty shall be computed on the greater of the following: l. One-sixth (1/6) of the gross proceeds received by Lessee or any affiliate or related entity from the sale of such gas to the first non-affiliated entity, or

2. One-sixth (1/6) of the highest price reasonably obtainable for gas by Lessee and other producers or operators in the

-4- GWB2/dm 130(1) east one-fourth of Webb County, Texas, who are producing gas

In this regard, it is understood that the "highest price reasonably obtainable" may be equal to, but is not necessarily, the h1ghest price then being obtained by other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of 11ke kind, qual1ty and quantity.

c) Taking, Selling Or Delivery Of Gas To Lessee Or Its Related Or Affil lated Entities For Use (Not For Resale): In the event Lessee takes gas for its own use, or sells or

transfers gas to a related or affiliated entity for use, then Lessor's royalty shall be computed on tbe greater of the following:

1. One-sixth ( 1/6) of the highest price reasonably ob ta i nab 1e for gas by Lessee and other producers OI" operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

In this regard; it is understood that the "highest price reasonably obtainable" may be equal to but is not necessarily the highest price then being obtained by other producers or operators in the east one-fourth of Webb

2. One-sixth (1/6) of the quarterly weighted average of the prices being paid by "purchasers" (as hereinafter defined) in the east one-fourth of Webb County, Texas, who are purchasing gas of 1i ke kind and qua 1i ty. For the purposes

of calculating the average price under this Paragraph c2, prices paid shall be those as reported in the Energy Planning Book publication or as reported to the State of

-5- GW82/dm 130(1) 11 Texas for severence tax purposes. Purchasers 11 shall mean the. three largest purchasers based on volume of gas purchased for such calendar quarter, in the east one-fourth of Webb County, Texas. For an example of the calculation of the quarterly weighted average of such price, see Exhibit 11511

Lessor and Lessee shall meet within eleven (11)· months after the end of each calander year. At least thirty (30) days prior to such meeting, Lessee should furnish to Lessor a statement or other documentation of the basis upon which royalties accrued to lessor under the terms of the Lease for the previous calender year. Any additional royalties calculated by Lessee to be due, if any, shall be paid at such meeting. Within one (1) year from delivery of the above referred to statement or other documentation, lessor shall notify Lessee of any discrepancies. Failure to notify Lessee timely of any discrepancies shall constitute final acceptance of royalty payments as covered by such s~atements or other documentation. The first period for which Lessee shall prepare such statements or other documentation shall begin on April 1, 1988 and end on December 31, 1988. Nothing in this paragraph shall preclude Lessor from claiming any royalty which Lessor is entitled to as a result of mistake in computation, oversight in computation, or error in computation of royalty or which may result from the subsequent disclosure of a discrepancy.

LESSOR'S royalty shall be without deduction for any costs, such as, but not limited to, costs of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting and otherwise making the oil, gas and associated substances ready for sale or use, except for a) severance and related taxes, and b) reasonable transportation expenses which may be necessary to be paid to non-affiliated third parties or entities to get Lessor 1 s gas to a market or point of sale off the leased premises and which sale or sales will result in a net price equal to or higher than if said gas had been sold at the wellhead.

LESSOR'S royalty on all production from depths below the stratigraphic equivalent of the top of the Cretaceous System as seen at 12,810 feet

--------- ICOP 0012151 I -6- GWB2/dm 130( 1) in the electric log of the Vaquillas #7 Well located 260' FNL and 1,700' FWL of Survey 987, A2061, Webb County, Texas, under the lands now held by Lessee under this Lease shall be one-fifth (1/5) instead of one-sixth (1/6).

LESSEE may submit a copy of a proposed gas sales contract to Lessor which is acceptable to Lessee and request that Lessor approve same for royalty computation purposes. Lessor shall have thirty (30) days after receipt of a gas contract to approve same. If lessor approves same or does

not timely dee 1ine to do so, then Lessor• s royalty on gas sold under such gas sales contract shall be based on the gross proceeds received under said contract.

GAS contracts with a term in excess of three (3) years shall contain a provision for price redetermination no later than the end of the 3rd year and subsequent price redeterminations thereafter at intervals no greater than two (2) years apart.

20. Lessee agrees to fill all slush pits and level the same when they have ceased to be used and to restore the land to as near its original state as is practicable and to pay for damages to the surface of the land and the improvements, water wells, growing crops and livestock thereon, and to any other personal property of Lessor, Vaquillas Ranch Company, Ltd., occasioned by, arising out of, or resulting from operations by Lessee, his agents, employees or independent contractors on the land hereby leased to Lessee. Lessee also agrees, when requested in writing by Lessor, to divulge to Lessor true and correct infonnation as requested by Lessor as to all drilling, producing and marketing operations conducted under this lease and to furnish to lessor copies of all electric well logs taken hereunder; provf ded, however, Lessee sha 11 not be ob 1i gated to re 1ease such information until it has been released to the industry.

21. Lessee hereby agrees to ensure that the two exit gates on F.M. 2895 (Forest Gate and Reynolds Gate) are guarded in an efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Lessee and Lessor. As to the exit

-7- GWB2/dm 130( I) gate on the north side of U.S. Highway 59, Lessee agrees to use its best efforts to work out an arrangement with other exploration companies using such gate to ensure that it is guarded in an efficient and prudent manner during drilling, reworking or plugging operations and other times as mutually agreed to by Conoco and Lessor. Further, Lessee agrees to use its best efforts to work out an arrangement with TransAmerican Natural Gas Corporation or its successors or assigns to ensure that the exit gate located 9 miles north of Aguilares, Texas, on F.M. 2895 is guarded in an

efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Lessee and lessor. In regard to gates used by Lessee and other exploration companies, Lessee agrees to pay its share of the cost of guarding such gates when such gate guards are required under this agreement. Lessee shall not be obligated to furnish a gate guard on any gate which has been abandoned or is not being used by Lessee.

22. Lessee agrees that before abandoning any well drilled on said lease for oil or gas purposes, it will notify the owner or the surface estate in person or by telephone of its intention to do so, and it will allow said owner of the surface estate a reasonable time, not exceeding twenty-four (24) hours thereafter, within which to elect to take over the hole for the purpose of attempting to make and complete a water well. Lessee agrees to consult with such surface owner as to the location of a potential water zone, without any liability or warranty for such consultation. Upon the owner of the surface estate election, within the specified time, to attempt to complete the well as a water well and complying with all rules and regulations of the Railroad Commission of Texas and applicable statutes, Lessee will, at its expense, set all plugs to just below the designated water sand as may be required by the Railroad Corrmi ss ion and thereafter deliver the we 11 to said owner of the surface estate, leaving in such well all surface casing and such intermediate casing as may have been run and set to at least the depth of the designated water sand and thereafter the owner of the surface state shall own the well and shall be responsible for all subsequent matters in connection with the well and for compliance with the applicable statutes and regulations of all regulatory agencies having jurisdiction. Lessee shall have no liability to

-- Lessor in connection with any of the operations which may be conducted by the owner of the surface estate who shall thereafter bear all responsibility and liability with respect thereto. It is expressly understood that Lessee shall not be required to furnish any additional casing or other equipment for any well plugged back at the request of the owner of the surface estate under this paragraph. Should the owner of the surface estate elect not to attempt to make a producing water well out of any such hole, Lessee shall plug the well in accordance with all applicable rules, regulations and statutes.

23. It is expressly agreed and understood that for the purposes of this lease the following definitions shall apply:

11 Corranences 11 - A well shall be deemed commenced on the date which the drilling bit enters the earth for the drilling of a well. 11 Abandoned 11 - A well shall be deemed abandoned on the day when it ls finally plugged as a dry hole. ''Completed" - A well shall be deemed completed thirty (30) days after the day the Lessee sets production casing. 24. Lessor and Lessee agree to 1 imit the commencement of actual

drilling during deer hunting season to 1) those wells drilled in areas which would not disturb deer hunting, and 2) offset wells. If Lessee must commence a well during deer hunting season to perpetuate said lease, then Lessor will either a) not object to the drilling of such well during deer hunting season or b) agree to extend the commencement date for such well to a mutually agreeable date after deer hunting season ends. For the purposes of this paragraph 11 deer hunting season 11 shall be that period defined by

25. Nothwlthstanding anything contained herein to the contrary, the Lessor at any time and from time to time, upon not less than ninety (90) days notice to the holder of this lease, may elect to require the payment of any royalties accruing to such royalty owner under this lease to be made in kind; provided that any expenses incident to the exercise of such election shall be borne by Lessor and such election shall be for periods of not less than twelve (12) months. Lessor shall only be allowed to take in

-9- GW82/dm 130(1) kind when Lessee is producing for his own account. In the event of such an election by Lessor, Lessee shall cooperate fully with Lessor in allowing Lessor to take their royalty in kind, including permitting Lessor to use Lessee's wellhead equipment and, to the extent that Lessee has assignable rights, the use of Lessee's purchaser's transportation facilities in good faith and not to exceed prevailing charges for similar services in the industry at the time if Lessee or its affiliates are transporting the gas, but if Lessee has a third party contract for the transport of said gas, Lessor will be bound by said contract. Should Lessee desire to enter into a gas purchase contract having a term of more than one (1) year, then (a) Lessee shall include in such contract a provision that allows Lessor to elect to take its gas in kind and be released from such contract one hundred twenty (120) days after notice, or (b) Lessor may approve of such contract in writing, in which event, Lessor may elect to take its gas in kind either at the end of such gas contact or one (1) year after notice to Lessee, whichever happens sooner. Any equipment installed by Lessor necessary to take in kind must be approved by lessee and maintained according to Lessee's specifications.

If Lessee is unable to obtain a more favorable gas contract because of Lessor s reservation of this election to take in kind, then Lessee may 1

elect to give notice of its intention to sign a gas contract acceptable to Lessee and request that lessor join in signing same, and if Lessor elects to sign same, then Lessor's royalty share of revenue shall be bound by such contract and Lessor may not elect to take its royalty in kind during the term of such gas purchase contract.

26. This Amendment is applicable to only that leasehold interest presently owned and held by Conoco Inc. Nothing contained herein shall in any way inure to the benefit of or be applicable to third parties who hold or claim any interest in said 26,622.79 acre lease or who claim an undivided interest therin either jointly or separately with Conoco. Nothing herein shall in any way prejudice any claim, demand or cause of action which Vaquillas may have or assert against third parties holding any leasehold interests in Vaquillas lands. Nothing herein shall be construed as a release or modification of any right, claim or cause of action which

-10- i'COP.~lsSI GWB2/dm 130(1) ---~------- Vaquillas may have aga_inst third parties who claim any interest in said 26,622.79 acre lease or any other Vaquillas lease.

27. Lessor does further RATIFY, CONFIRM and ADOPT all of the terms, provisions and conditions of said June 15, 1974 Lease, as amended and as it applies to those rights held by Conoco Inc. thereunder, and that such lease, as amended and as it applies to Conoco Inc. is in full force and effect as of this date. Further, nothing contained herein shall in any way inure to the benefit of or be· applicable to any interest held by third parties in and to the June 15, 1974 Oil and Gas lease.

DATED this ~~day of January, 1988. VAQUILLAS RANCH COMPANY, LTD. VAQUILLAS UNPROVEN MINERAL TRUST

. Wal er, Jr,, rustee ;µBy: ~·f~~~-Jl(~ By: 6: '~OJ*~ &~'ti~ E. er uiros, I ru tee )

1649 1°110 1158 CCSD & RGNG 640;0 1651 1112 1159 CCSD & RGNG 640.0 1652 2876 1159 \/, H. Taylor 640.0 1661 1122 1164 CCSD & RGNG 640.0 1663 1123 1165 CCSD & RGNG 640.0 1633 1323 4/808 GC & SF 640.0 1634 2252 4/808 GC & SF 659.96 1665 1124 1166 CCSO & RGNG 640.0 S.1/2 1666 2253 1166 CCSD & RGNG 328.75 N.1/2 1666 3142 1166 CCSD & RGNG 328.79 468 2255 236 AB & H 659. 14 467 799 236 AB & H 640.0 1635 1797 17 TC Ry. 640.0 865 1438 12/2541 H & GN 640.0 1683 1115 1175 CCSD & RGNG 640.0 1691 1267 5446 GC & SF 640.0 1696 2418 5448 GC & SF 640.0 1695 1268 5448 GC & SF 640.0 279 (pt. only) 1353 3702 GC & SF 458.2 1004 2421 2/105 J. Poi tevent 634,58 1692 2419 5446 GC & SF . 613.04 1693 1269 5447 GC& SF 640.0 2112 2420 & 1925 63] B.~F. James 627 .12 276 i552 3'/00 GC & SF 640.23 228 2550 134~ ·.. CCSli .& 'RGNG 636.93 ·227 1133 1344°~ CCSD & RGNG 640.0 988 2593 2/103 J. ·Pol tevent 637 .10 987• 2061 . 2/1.93' J .. Poltevent 640.0 2n• 1 141 13~9. CCSD & RGNG 640.0 275* 1336 3700. . ·GC »·& ..SF . 640.0 ·27H · 1337 3l01 cqo & RGNG 640;0 :~·. v~ ·31, Bl9ck 2 I 043 453 ..cc so:.,• .~GNG 320.0 . 25, Block 2 l 042 ~52 . CCSO i. RGNG 640.0 ·232• 2148 1346 CCSO & RGNG 462. 70 ·233• 1117 1347 CCSD & RGNG 4~5.9 N.:fi2 51, Block 2 1045 460 . CCSD & RGNG 320.0 .259 (pt. only) 1137 1074 CCSO & RGNG 600.0 1955 1328 4526 GC & SF 640.0 2057 985 302 CCSD & RGNG 652.25 2060 (pt. only) 3329-30 303 CT & H 440.0 E. I /2 2059 984 303 CT& H 320.0 E.1/2 1953• 1329 4527 GC& SF 320.0 1627 (pt. only) 1324 4683 GC & SF 160.0 1629 (pt. only) 1275 4682 GC & SF 292.65 W.1/2 1662 2230 1164 CCSD & RGNG E.1/2 1648 329.31 24'1 1157 CCSD & RGNG 325. 75 W.1/2 1648 3301 1157 CCSD & RGNG 26, Block 2n 325.75 452 R. O.. Barnsley 640.0 2335 3025 School W. Brown 27.3 E.1/2 1956• 2560 4526 GC & SF 327.34 Lessor's.warranty hereunder as to all of Survey$ 987, 273, 275, 277, 26, the E.1/2 of 1953, E.l/2 of 1956 and ~Ol.9 acres out of Survey 233 (all except 54 acres out of SW corner of said Sur. 233) Is expressly llmlted to 1/2 of the executive rights In the oil. and gas rights In and under said lands, and as to all of Survey 232.-l~:e)!:pressly limited to 4/S of the executive rights In the oil.and gas rights. · · ·

The following parts of surveys are expressly excluded.Jieief~om, viz.·:.

{ 1) The SE 1/4 of Sii 11", Sii 1/4 of HE 1/4 (80 acs.),'and N »1/2 of Sii I/~ and SW 1/4 of SI/ 1/4 (120 acs.) of CT&H Survey 2060. ··' .,,_.,. · ·.. '··

(2) the W. 3/4 or GC&SF Survey 1627 described tn O&G lse. to Daniel A. Pedrotti dutcd September 24 1 1973, as a~ended.

(3) Any part of a survey listed herein not included within any specific fraction<:il reference preceding the su.rvcy reference. (4) The HE 160 acres of GC&SF Survey 279, (5) -Block 11 as per the E.D.Clugget.t Subdivision of record 2 Plat Records 29, \.lcbh County, cont<>inlng ~O acre~, l1~ing the N\.I 1/lf of SE J/l; of CC:SO i RGNG Survl·~· 259. (6) All of the \J, 320 :i.:r~·::. of Survey 1629 d<.•scribi?d and included In O&G Lsc. tu ();1nlel A. Pedrotti dated Sc-j'\.-;:1h1.•r 2~. 1973, a,s amcndi:d.

C1lcul1tlon of toy1lty to bt SNld on t•• d•~l't'•r•d to L••••• or Afftll•t•• far u11 (Ind nn for renltl tn •ccard1nc1 'llth p1r111r1ph 19.

'tlnclp1h '•Y L111or roy1lty bind on th• 11r11t1r of the v1l;ht1d 1v1r1;1 ptlc• peld by th1 thr11 l1r1111t vol\ldtrtc p1Jrcb111ra for th• c1l1nd1r quarter In th• 111t q\llrttr of Vtbb COl.lntY or the v1l11httd 1v1r1;• of the prlc•• us1d by tilt L"•or for roy1L tY pt)'Mnt p1.1rpo11• a

0111 sources rntrVY Pl.nnlnv loot publtc1tlon or 11 r1parud to th• State of t11t11 h1r 11v1r1nc1 tu purpo••••

Utp 1. r1lcul1t1 tht v1l9ht1d 1v1r1111 prtc1 for th• .onth for 11ch of thv thr•• llr11si volumt P'lrch1111 far tit qu1rt1r tr- th• tax r1c:ord1.

Lt••t 1 100,000 z.oo 200,1163 Unit 14 ao,ooo 1.51 120,eoo ?yrehnet frO!!I Cp•p•ny I

291,733 1110,1121 '·" TOTAL Unftltd T1x11 360,tlZI C1lc:ul1t1 613,396 Tren••l••ton

Monthly V1l11ht1d Av1r1111 Price 61J,396/l60,t121 • S1.70/MKitu.

t1p11t procedure for r11111lnln11 two 11onth1 for thh purch111r ind for re1111tnlnt t110 purch111r1.

Step 2. C1lcul1t1 tht v1hht1d 1v1r1111 price of the thr11 t1r;est volu1111trlc purch111r1 for th1 qu1rt1r using JllOnthly v1lun fro• lttp t.

Montb•J1ny1ry \9!! Month • Februuv 12aa Hon th ' March l?IU!

?mb.WL VolUM Prlca Extanslon Vo\\nlt Prlc:a Extant Ion Vol~t Price Extension

"' .S/HCf • "' S/HCF • "' S/MCF • Unltad TIXll 360,1121 1.70 61J,J96 397, t:SO t.5a 627 ,465 :S20,J06 t.5a 506,0!:S Traru11ls1lon

Tot1l1 400,m ill..222 Lil t, 136,044 1.55 620,346 ~ = 350,723

WI. 561, 157 lli.m soo,126 1.55 775,195 :i.!!!...222•'~·'~''---''~"""''~··· 1,673,255 I, 121,432 1,756,158

sup l. C1lcul1t1 wal;htad avar191 prlca U.td by Lat••• to calculatt roy1lty p1y11111nt1 on 111 d1ltv1rtd to L11111 or l1ftlht11 and not for rn1le.

Voh.-1 Pr I ca Extension Voluma Price Extension Vol1o1111e Prlc1 Exunalon

"" S/llCf • "' S/HCf • "' $/HCf • 155,000 1.60 248,000 140,000 1.62 Z26,!00 155,000 t.5e 244,900

'II' gt vo1y..., Sypi 9t E11un1ton1 Velghsrd &ysrpgs rcie•

IUp 4, CIO'lplra 111l9httd 1v1ra91 price ctlculattd In Sup Z to tha walthtad 1var•t• \111a1 prlc1 c:1lc:ul1tad In •t•p J.

Sl.60/HCF 11 1n1t1r than S1,59/KCf ao no addltlon1l roy1lty p1y111ent1 1ra required 1or thh qVlrt1r,

VOIU1111 and prlcu u11d In thh u:1111pla tra ua1d for lllunrulon and 111y not b1 rtflactlvt of 1c:tu1l condltlona. THE STATE OF TEXAS § § COUNTY OF WEBB § '-{iL This instrument was acknowledged before me on the q day of January, 1988, by J. 0. WALKER, JR., General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

~ . µA,. *~o,,°}-- Notary Public in an or The State of Texas. My Co1T111ission Expires 7-3- o 1

THE STATE OF TEXAS § § COUNTY OF WEBB § oY--L This instrument was acknowledged before me on the I day of January, 198B, by E. WALKER QUIROS, General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

This instrument was acknowledged before me on the 9~day of January, 1988, by GENES. WALKER, General Partner of Vaqu111as Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

oar): ub~in and for The State of Texas. My Corrrnission Expires ,_ 7- 3- '1 oq ,l_,11012.A GA usvl Printed/stamped name of Notary.

This instrument was acknowledged before me on the CJ~ day of January, 1988, by EVAN B. QUIROS, General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

d.,j,a ~,J(1,,'}- Notary Public in and for The State of Texas. My CDITllliss1on Expires '7-3-J"

'-~ • AA. ·~fi. O.u.if Notary frublic in a~for The State of Texas. oa My Conmission Expires: 7-o- 6 1

THE STATE OF TEXAS § § COUNTY OF WEBB § ~ This instrument was acknowledged before me on the '=t day of January, 1988, by E. WALKER QUIROS, Trustee for the Vaquillas Unproven Mineral Trust.

~··~4~~ Notary Pu lie in and for The State of Texas. My Conmission Expires: 7-:3- ?9 .IJA vv 811 LLEvJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § n'fL This instrument was acknowledged before me on the -, day of January, 1988, by GENE S. WALKER, Trustee of the Vaquillas Unproven Mineral Trust.

~" 94~'" OOr,,t ~Pub le in and for The State of Texas My Commission Expires: '1-3- J'? l.,,,11uR.A "£5,.,, LlsvJ Printed/stamped name of Notary.

This instrument was acknowledged before me on the day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Unproven Minera 1 Trust. ~ "

~Y - ~ !! ), a, 4-11Q,"9-' Public in and for The State of Texas My Commission Expires: '7-3-11'! lc.u/(A 1J,.,, Lle:vJ Printed/stamped name of Notary.

This instrument was acknowledged before me on the CJ fl--, day of January, 1988, by J. 0. WALKER, JR., Trustee of Vaquillas Proven Mineral Trust.

NOtarY ic in and for The State of Texas " My Corranission Expires: 7-3- i?{ LAJ~A 12,,q l..LG vJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § y.LJ the 9 day of January, 1988, by E. Proven Mineral Trust.

This instrument was acknowledged the 9 ~ day of January, 1988, by GENE S.WALKER, Trust Proven Mineral Trust.

otary ub 1c 1n an for The State of Texas My Commission Expires: 7- .3- 'g"f L.4 J)/(A BA LL;;;vJ Printed/stamped name of Notary.

on the This instrument was acknowledged before me 9 L day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquil 1as Proven Mineral Trust.

Notary Public in and for The State of Texas My Commission Expires: 7-3-:>!j 0AuRA S-4 LLev-1 Printed/stamped name of Notary.

This instrument was acknowledged before me on the 'l-J-b day of January, 1988, by l ci c. • .So..el er . Attorney-in-Fact for CONO~ INC., ali aware corporation, on behalf of said corporation.

NotlU~in?fk'~ The State of Texas My Commission Expires: 9-!&'· f?g' LJ e.fl«- !/la. r Ke. rt- Printed/stamped name of Notary.

·r...,,.... . ., •

"i • itu1d11uu U (1 .. 0 ;. iJ:I UD Acf• l'oollns Pro.-bi..11

• OIL, GAS AND MINERAL LEASE TBIS AGltEEKENT mat. lbb._!~ .. ------·l!&T of. Novemb~L--------·--···--··--·-···11~?._, b.t..._11 Vaguillas RancQSoml?fil}Y.t,_Ltd.; Vaguill~.Y.9.P.roven_Mingal Tn,ist i ...Y!9..'!!.+1.~!..9.Y.~D. _ _2!!!.l~ral_!~ust..;_l!f:.S.'!!!~nd thr.g.H.&h....!~f!....&.fil!.i:nLPJ!t..t.~ ....-h..-Q.,_B!J..lc.er. Jr~·-·---···­ -~. Wal~r_gu_!~.l!.i....£~~~!!s~L~M-~<'!!!-Jb.. ...Q.\!ill.~ - . ---·-···-·----··· ;::·~:~ Oii• ~ inon>. • " - add ..... lu- ·- P..!.~O:B-~;1086:-~p Texa! 7B04Ji=~===-====-~ and __G..?.!!~~.£:..z.Y-~-~ox 219L__~o'!~!Q..l!.t._'.t~!!P_-1.1.£?_~-----·--·-·---·• r..-. WITNESS!:THi - 1• t.NoJ- 111 ccmaw...,i.101> ot......!en Do l la r..§..!!E.!!. •.9.~-1!~_99_0_4....rul!LY.~.!..1.@bl t;:_~..QJ!§.!~.E~!!P.!L.--.-- ...»oll&r• 11.J: 0•00 )Jn b.nd paMt. of Lh• roJalU11 bu.In Pf'llYIW, •11d Of U.. &pMmuts ol I.Maw banln toat.IMd, berebr sraa.ta. kuM u.4 J.tt.o u:clual"'1' viii,;'L.'.... tor tb• InUpoM of h1n•Ua1U11s, t:Xpl.orl111', pro.p1atl11s, drUlh•s U>d minlnl' for a11d Pf'Odud.ns oll, I'll 1.1\d all otbar mir.1rals, C011d1Ktlns p;plora~n. noloslc and ctoph111c&I 111rYirJ'I b7 ~a»b, oora Ullo sn.'Pi&;J and 111asn.tlu• -".~:~~· au, watu an.s ~sr t111lda. and air lnto aubnrl1q Hrat.. 1.,.1,... pfoe Un•, bulldf•s ~ 1 lmnita, ~ 1t1Llo11a, te 1. _ nM 111 - . - 1tn1oo hlAI thtr91111 11111. 011, o\'tr •nd uzw1 Ind.I DWlll

6,740 acres of land, more or less, situated in Webb County, Texas, more fully described in Exhibit "A'1 attached hereto and made a part of this Lease for all relevant purposes, including limitations upon warranty as specifically set out therein,

B-3 _________ .·

The attached addendum dated November 1, 1987 1 is attached hereto and made a part hereof -™···a1r--·1nterits·anapiirposes:--·--·---·-- ··-··-··-----···----·-·-··-·-··-.. . --............................. ------------------·-··--- ____________ ___..____............... ,,

lrAn: or . ClOVNTY OF----· _} ~ aii'*"'1~-------------------------------·---- =--~ '(:, ':._.bt ~~ ~-iii;;;ii~...nbMrlbed to the forqolq hllbislunt, Md .d!llO'Wiedp;!, to m. tbat _be.. .. aecut«I

GI"" ull411 1111' Jiud al'ld llhl or ornoe.. ttii. U...----4&7 ol--·-----------------· A. D, 11---·-··· ------·----..... Not&Q J>ubllv h~ f.lld for ----°"'"'~· ------ ITATZ 07__

, II ~ ~ l ~ " ~ 0 ~~ ol l f ~ • ·f .]::: 0, •! 1 l ( I ~ ~ i: la • I, ~ • • fF l I l ~ k ' l ! [ i' i p,.

• I i • • ADDENDUM TO OIL AND GAS LEASE From Vaquillas Ranch Co., Ltd. et al To Conoco Inc., Dated November 1, 1987

12. Should Lessee be prevented from complying with covenants of this lease by reason of conditions or acts set forth in Paragraph '11' hereof, then Lessee agrees annually to pay to Lessor an amount equal to the delay rentals herein provided for during such period of prevention, whether same be during or subsequent to the primary term, and such payment shall be made at the end of each year of prevention either to Lessor or to the depository above named for credit to the account of Lessor.

13. This lease does not cover or include any right or privilege of hunting or fishing on any part of the above described land, and Lessee agrees with Lessor that neither he nor his assigns or agents or employees of his assigns, will bring firearms or dogs upon the leased premises, and should this provision against hunting and fishing be violated by any agents, servants, employees or contractors of Lessee 1 s assigns, any such • person so violating same shall have no further right to enter upon the leased prem1 ses, and such person sha 11 be regarded as and sha 11 be a

trespasser on the premises of Lessor and be subject to the penalties imposed upon trespassers under the laws of the State of Texas.

14. It is expressly agreed and understood that after production of ., oil and gas in corrmercial quantities is obtained from the leased premises, ~C'I

the minimum annual income to Lessor from payment of rentals, shut-in c)1)

royalty and royalty on production shall be sum of not less than Two_($2.00) Dollars per acre on the total acreage retained and then covered by this lease, but this provision shall not impair the right and privilege of Lessee, his successors and assigns, to release and surrender any part of the above described leased premises as herein provided. Lessee 1 hfs successors and assigns, shall detennine within 90 days from the expiration of any lease year during which royalties have been paid on actual production the amount of any deficiency, and shall within said 90-day period pay such deficiency to lessor or deposit same to Lessor's credit at

the depository hereinabove designated. • Default in the payment of such deficiency shall not operate to terminate this lease or any part hereof, but Lessee, his successors and assigns, agrees to personally pay such deficiency to Lessor at Laredo in Webb County, Texas, together with any reasonable cost, including attorney's fees, incurred by Lessor in

collecting such deficiency if not paid within the 90-day period hereinabove provided for.

15. Nothwlthstanding any other provision herein contained, this oil, gas and mineral lease is limited to oil, gas and sulphur and minerals produced with oil and gas, and does not include minerals other than oil, gas and sulphur and minerals produced with oil and gas, as Lessor herein excludes from the leasehold estate herein granted, and reserves unto

himself, his heirs and assigns, all minerals other than oil, gas and sulphur and mi nera 1s that may be produced with oil and gas, but it is 1 expressly agreed that gas 1 as used herein includes gas, condensate,

distillate or any other gaseous substance or any other mineral produced

16. The right to pool under Paragraph '4' of this oil, gas and minera 1 lease sha 11 be 1imi ted to 1ease or 1eases on 1and belonging to Lessor herein, or in which Lessor owns an interest in the oil, gas and

17. For the purposes of the annual rental payments due under paragraph 5, Lessor and lessee agree that said payments have been timely paid and received, and that this Lease is perpetuated, without the necessity of further delay rental payments, until. the expiration of the primary term.

18. At the end of the primary tenn hereof, Lessee covenants and L D? agrees to execute and deliver to Lessor a written release of any and all

portions of this lease which have not been drilled to a density of at least

40 acres for each producing oil well and 640 acres for each producing or

shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this

GWB2/dm 124(7) • • lease provides for a spacing or proration establishing different units of acreage per well, then such established different units shall be held under ~e~se by-su~h production, in lieu of the 40 and 640-acre units above mentioned; provided, however, that if at such date lessee is engaged in

drilling or reworking operations the date for the execution and delivery of such release shall be postp~n;d a~d the entire lease shall remain in force so long as operations on said well or wells are prosecuted with reasonable diligence, and if, after the completion or abandonment of any such well ~.): Lessee commences the drilling of an additional well within Ninety (90) days from the comPlet1on or abandonment of the preceding well, or continuously conducts drilling operations in good faith and with reasonable diligence on said lease without any .ces_s.atjon for longer than Ninety (90) days, said lease shall remain in full force and effect during such drilling operations and until the end of Ninety {90) days after the completion or abandonment of the final well, at which time Lessee shall execute and deliver to Lessor said written release, releasing all portions of the lease not then so developed, Each retained unit shall contain at least one (1) well producing or capable of producing oil or gas in paying quantities, and the acreage within a unit shall be contiguous.

lf, after the date the partial release called for under this Paragraph 18 talces affect, all production from a retained unit around a well or wells

cease to produce oil or gas in commercial or in paying quantities, Lessee

shall have one hundred eighty (180) days thereafter within which to commence operations to establish or re-establish production therein in

cormnercial or paying quantities, whether such production be from the same

wellbore or other wellbore. If such operations result in commercial

production, then this 1ease, as it applies to such unit sha 11 continue

until such corrmercial or paying production again ceases. However, if such

operations do not result in corrmercial production, then Lessee shall have

ninety ( 90) days after completion of such operations within which to commence drilling ·-or reworking operations within such unit, and this lease,

as it applies to said unit, shall remain in force so long as operations on

said well or for drilling or reworking of any additional well therein are

prosecuted with no cessation of more than ninety {90} consecutive days, and

if they result in the production of 011 or gas therein, so long thereafter

• as oil or gas is produced from said unit. • As to any unit upon which cornnercial production may periodically terminate, the above right to timely resume operations and continue this lease as to such unit shall be reoccurring right.

The stipulation above as to the size of retained tracts around wells shall never be construed as a satisfaction of Lessee's right, duty and obligation to reasonably develop the leasehold held by Conoco or its successors or assigns. After November I, 1990, Lessee agrees to dri 11 such add it i ona 1 we 11 s on the leased premises or such port i ans thereof as may be in force and effect from time to time, as may be necessary to reasonable develop the same for the production of oil and/or gas as a reasonable prudent operator.

19. A portion of paragraph 3 has been deleted and the following Is in lieu thereof.

(b) on gas, including casinghead gas or other gaseous substances, produced from said land, the Lessors royalty shall be calculated and paid as follows:

a) Sales To Non-Affiliated Third Parties: In the event Lessee enters into a gas sales contract with a non-affiliated third party, Lessor's royalty shall be one-fifth (1/5) of the gross proceeds received by Lessee from the sale of such gas.

b) Sales To Related Or Affiliated Entities For Resale: Jn the event Lessee enters into a gas sales contract to sell gas to a related or affiliated entity, then Lessor s royalty shall be 1

computed on the greater of the following: I. One-fifth (1/5) of the gross proceeds received by Lessee or any affiliate or related entity from the sale of such gas to the first non-affiliated entity, or

2. One-fifth (1/5) of the highest price reasonably obtainable for gas by lessee and other producers or operators in the

-4- GWB2/dm 124(7) • • east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

reasonably obtainable" may be equal to, but is not necessarily, the highest price then being obtained by other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

c) Taking, Selling Or Delivery Of Gas To Lessee Or Its Related Or Affiliated Entities For Use (Not For Resale): In the event Lessee takes gas for its own use, or sells or

transfers gas to a related or affiliated entity for use, then Lessor's royalty shall be computed on the greater of the following:

!. One-fifth (1/5) of the highest price reasonably obtainable for gas by Lessee and other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity.

In this regard, it is understood that the "highest price reasonably obtainable" may be equal to but is not

necessarily the highest price then being obtained by other producers or operators in the east one-fourth of Webb County, Texas, who are producing gas of like kind, quality and quantity, or

2. One-fifth (1/5) of the quarterly weighted average of the prices being paid by "purchasers" (as hereinafter defined) in the east one-fourth of Webb County, Texas, who are purchasing gas of like kind and quality. For the purposes of calculating the average price under this Paragraph c2,

prices paid shall be those as reported in the Energy Planning Book publication or as reported to the State of

-5- GWB2/dm 124(7) • Texas for severence tax purposes. the three largest purchasers • "Purchasers 11 sha 11 mean based on volume of gas purchased for such calendar quarter, in the east one-fourth of Webb County Texas. 1 For an example of the calculation of the quarterly weighted average of such price, see Exhibit

Lessor and Lessee shall meet within eleven (11) months after the end of each calander year. At least thirty (30) days prior to such meeting, Lessee should furnish to Lessor a statement or other documentation of the basis upon which royalties accrued to Lessor under the terms of the Lease for the previous calender year. Any additional royalties calculated by Lessee to be due, if any, shall be paid at such meeting. Within one (1) year from delivery of the above referred to statement or other documentation, Lessor shall notify Lessee of any discrepancies. Failure to notify Lessee timely of any discrepancies shall constitute final acceptance of royalty payments as covered by such statements or other documentation. The first period for which Lessee shall prepare such statements or other documentation shall begin on April 1, 1988 and end on December 31, 1988. Nothing in this paragraph shall preclude Lessor from claiming any royalty which Lessor is entitled to as a result of mistake in computation, oversight in computation, or error in computation of royalty or which may result from the subsequent disclosure of a discrepancy.

LESSOR'S royalty shall be without deduction for any costs, such as, but not limited to, costs of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting and otherwise making the oil, gas and associated substances ready for sale or use, except for a) severance and related taxes, and b) reasonable transportation expenses which may be necessary to be paid to non-affiliated third parties or entities to get Lessor's gas to a market or point of sale off the leased premises and which sale or sales will result in a net price equal to or r' <. I" I higher than if said gas had been sold at the wellhead.

LESSEE may submit a copy of a proposed gas sales contract to Lessor which is acceptable to Lessee and request that Lessor approve same for

• royalty computation purposes. • Lessor sha 11 have thirty (30) days after receipt of a gas contract to approve same. If Lessor approves same or does not timely decline to do so, then Lessor's royalty on gas sold under such gas sales contract shall be based on the gross proceeds received under said contract.

GAS contracts with a term in excess of three (3) years shall contain a provision for price redetermination no later than the end of the 3rd year and subsequent price redeterminations thereafter at intervals no greater than two (2) years apart.

20. Lessee agrees to fill all slu~h pits and level the same when they have ceased to be used and to restore the land to as near 1ts original state as is practicable and to pay for damages to the surface of the land and the improvements, water wells, growing crops and livestock thereon, and to any other personal property of Lessor, Vaquillas Ranch Company, Ltd., occasioned by, arising out of, or resulting from operations by Lessee, his agents, employees or independent contractors on the land hereby leased to Lessee. Lessee also agrees, when requested in writing by Lessor. to divulge to Lessor true and correct information as requested by Lessor as to all drilling, producing and marketing operations conducted under this lease and to furnish to Lessor copies of all electric well logs taken hereunder; provided, however, lessee shall not be obligated to release such information until it has been released to the industry.

21. Lessee hereby agrees to ensure that the two exit gates on F.M. 2895 (Forest Gate and Reynolds Gate) are guarded in an efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Lessee and Lessor. As to the exit gate on the north side of U.S. Highway 59, Lessee agrees to use its best efforts to work out an arrangement with other exploration companies using such gate to ensure that it is guarded in an efficient and prudent manner during drilling, reworking or plugging operations and other times as mutually agreed to by Lessee and Lessor. Further, Lessee agrees to use its best efforts to work out an arrangement with TransAmerican Natural Gas Corporation or its successors or assigns to ensure that the exit gate

located 9 miles north of Aguilares, Texas, on F.M. 2895 is guarded in an efficient and prudent manner during drilling, reworking or plugging operations and at other times as mutually agreed to by Conoco and Lessor. In regard to gates used by lessee and other exploration companies, Lessee

agrees to pay its share of the cost of guarding such gates when such gate guards are required under this agreement. Lessee shall not be obligated to

furnish a gate guard on any gate which has been abandoned or is not being

22. Lessee agrees that before abandoning any well drilled on said ;j'., '0 ':) lease for oil or gas purposes, it will notify the owner or the surface estate in person or by telephone of its intention to do so, and it will allow said owner of the surface estate a reasonable time, not exceeding

twenty-four (24) hours thereafter, within which to elect to take over the hole for the purpose of attempting to make and complete a water well. Lessee agrees to consult with such surface owner as to the location of a potential water zone, without any liability or warranty for such consultation. Upon the owner of the surface estate election, within the specified time, to attempt to complete the well as a water well and complying with all rules and regulations of the Railroad Co"'11ission of Texas and applicable statutes, Lessee will, at its expense, set all plugs to just below the designated water sand as may be required by the Railroad Convnission and thereafter deliver the well to said owner of the surface estate, leaving in such well all surface casing and such intennediate

casing as may have been run and set to at least the depth of the designated water sand and thereafter the owner of the surface state shall own the well and shall be responsible for all subsequent matters in connection with the

well and for compliance with the applicable statutes and regulations of all

regulatory agencies having jurisdiction. Lessee shall have no liability to Lessor in connection with any of the operations which may be conducted by the owner of the surface estate who shall thereafter bear all responsibility and liability with respect thereto. It is expressly understood that lessee shall not be required to furnish any additional casing or other equipment for any well plugged back at the request of the owner of the surface estate under this paragraph. Should the owner of the surface estate elect not to attempt to make a producing water well out of

-8- GWB2/dm 124(7) .... • any such hole, Lessee shall plug the well in accordance with all applicable rules, regulations and statutes.

23. It is expressly agreed and understood that for the purposes of this lease the following definitions shall apply:

11 Cormnences 11 - A well shall be deemed corranenced on the date which the drilling bit enters the earth for the drilling of a well. 11 Abandoned 11 - A well shall be deemed abandoned on the day when it is finally plugged as a dry hole. 11 Completed 11 - A well shall be deemed completed thirty (30) days after the day the Lessee sets production casing. 24. Lessor and Lessee agree to limit the conrnencement of actual Ao~ drilling during deer hunting season to 1) those wells drilled in areas which would not disturb deer hunting, and 2) offset wells. If Lessee must

co1T1J1ence a well during deer hunting season to perpetuate said lease, then

Lessor will either a) not object to the drilling of such well during deer hunting season orb) agree to extend the commencement date for such well to a mutually agreeable date after deer hunting season ends. For the purposes of this paragraph "deer hunting season" shall be that period defined by State law.

25. Nothwithstanding anything contained herein to the contrary, the lessor at any time and from time to time, upon not less than ninety {90)

days notice to the holder of this lease, may elect to require the payment

of any royalties accruing to such royalty owner under this lease to be made in kind; provided that any expenses incident to the exercise of such

election shall be borne by Lessor· and such election shall be for periods of not less than twelve (12) months. Lessor shall only be allowed to take in kind when lessee is producing for his own account. In the event of such an

election by Lessor, lessee shall cooperate fully with Lessor in allowing Lessor to take their royalty in kind, including permitting lessor to use

Lessee 1 s wellhead equipment and, to the extent that Lessee has assignable

rights, the use of Lessee's purchaser 1 s transportation facilities in good

faith and not to exceed preva i 1 i ng charges for s imi 1ar services in the

industry at the time if Lessee or its affiliates are transporting the gas,

•• but if Lessee has a third party contract for the transport of said gas, Lessor will be bound by said contract. Should Lessee desire to enter into a gas purchase contract having a tenn of more than one (1) year, then (a) Lessee shall include in such contract a provision that allows Lessor to elect to take its gas in kind and be released from such contract one hundred twenty (120) days after notice, or (b) Lessor may approve of such contract in writing, 1n which event, Lessor may elect to take its gas in kind either at the end of such gas contact or'one (1) year after notice to Lessee, whichever happens sooner. Any equipment installed by Lessor necessary to take in kind must be approved by Lessee and maintained according to Lessee 1 s specifications.

If Lessee is unable to obtain a more favorable gas contract because of Lessor's reservation of this election to take in kind, then Lessee may elect to give notice of its intention to sign a gas contract acceptable to Lessee and request that Lessor join in signing same, and if Lessor elects to sign same, then Lessor's royalty share of revenue shall be bound by such contract and Lessor may not elect to take its royalty in kind during the term of such gas purchase contract.

VAQUILLAS RANCH COMPANY, LTD. VAQUILLAS UNPROVEN MINERAL TRUST

By~~4 rif1 By: -'l.fd:::;:f;f

·1652 2876 1159 w. a. TAYLOR 6 40 .o -1661 1122 1164 CCSD & RGNG 640. 0 -1663 1123 1165 CCSD & RGNG 640. 0 ~ .Y ~---:i,_63"3. 1323 4/808 GC & SF 640.0 , -'"1634 225_7_______ 4/.B.Oil____ GC L~F- __ ..-___ . __ 6_59__,_96_, =-r665 1124 1166 CCSD & RGNG 640.0 ""~ -~ i::.16.3.5_ 17 97 17 TC RY; 6 40 , 0-.., - 2060 (SE/4 3329-30 ·- · 303 · - ···--cT--&·M · -- ----y-6·0":-o·· only) -1953 (E 1/2) 1329 4527 GC & SF 320. 0 1627 (pt. 1324 4683 GC & SF 160.0 only) -1629 (pt. 1275 4682 GC & SF 264.65 only) 1662 (W 1/2) 2230 1164 CCSD & RGNG 329.31 1648 (E 1/2) 2441 1157 CCSD &- RGNG 325. 7 5 1648 (W 1/2) 3301 1157 CCSD & RGNG 325.75 2335 3025 SCHOOL w. BROON 27.3 • 1956 (E 1/2) 2560 4526 GC & SF 327.34

The following parts of surveys are expressly excluded herefrom, viz.: (1) The SE 1/4 of SW 1/4, SW 1/4 of NE 1/4 (80 acs.) and N 1/2 of SW 1/4 and SW 1/4 of SW 1/4 (120 acs.) of €T & M Survey 2060. (2) The W. 3/4 of GC & SF Survey 1627 described in O&G Lease to Daniel A. Pedrotti dated September 24, 1973, as amended. (3) All of the W. 320 ~cres of Survey 1629 described and included in O&G Lease to Daniel A. Ped~otti dated September 24, 1973, as amended. • lXlllllt I

c 1tculitlon of roy1lty n bt p1ld on gu dtllvtrtd to Lttnt or Affllhtn for \llt C•nd not for r111lt) In 1ccord1nct vllh p1r1tr1ph 19.

''Y Ln1ot roy1lty ~tnd on th• 1ru•nr of • tht v1l9httd tYttlOt prlct ptlcl by tl11 thrtt hr11n YOlll9ettle pur~tfttl for th• ctltnd.r qu1rttr In th• 1111 11,u1rur of lltbb Co\11\tY or tbt 111t9bt1d 1v1r111 of th• prl;n Uttd by th• LUIOt tor royalty pt)'lltnt P'Jt'J)OllH

C1lcu\1tlon: 01t1,..ln1 1ddltlon1l roy1\ty p1y111nt1, If 1ny,

in1r1r PhMlnt loot publlcatlon or 11 rep11rt1d to th• Stitt of Ju.11 for ttYtttl"ICt Ull purpo111.

Slip \, Ctlcuhu tht vtllbttd ntt111 prlct for th• aonth tor 11ch of tht tht•• l1r91n vol\.at purch11u for 1111 qu1rt1r fro. tht ttx r1cord1.

"'' .. 1 100,000 z.oo Z00,A6J Unit 14 ao,ooo 1.s1 tzo,aoo ru1"ch11n fc2111 cg111ppny I

Monthly ll•hht•d AYttlf! ,,,,, 61l,l26/J6o,a:n • s1,10/M1t1i~.

11put proc:1d11r1 for n111\nln; tvo •ontht for thl• purc:h111r t.ml toe c11ulnln; two purch111r1.

$l1p z. t1\c:ul1u tht v1t;ht1d 1v1r191 prlu of tht thrtt \1r11n vo\U111tric purch111r1 for th• qv1rt1r v1ln9 aonth\y v1\u11 froa sup 1.

Month·Juiy•ry 1211 t!ontb • ••bOJuy 1211 t!opth ~ t11rch 12§0

~ Volva• Prlc:t !xuntlon Volu111 Prlc1 !xitn•lon Vo\111111 Pr let E11nn1lon

"' l/Mtf • "" 1/MCf • "" .S/t!Cf • Unltsd T1;ii:11 360,tZI 1.10 613,396 391, 130 1,58 627,465 :n.o,Jo6 1,51 506,0ISl

UJIAOC 400,ZZl \,5S 6ZO,l46 561,157 soo,126 1.ss 775,125 South Cul f l!L.W. L.U w...w. '""'~'--'~7u5c.>J5a,.o Ul...2.22 lotllt 1,136,044 1,IJJ,74Z 1,047,009 1,67J,ZS5 1, IZ1,4JZ 1,756,858

SU- of V!!IYIHI Su,. 2f [!ltt"'ton1 V1!9bt1d Av1c991 Prier

Sttp J, C1\c:11l1tt v1l9bttd 1v1r1111 pclc:t 1111d by Ltnt• to c1lc11l1u roy1lty p1y111nu on 1111 dtllvtrtd to Lt11u or 1ftlllnt1 tnd not for r11111,

Volu.1 Prlc:• E:r.t1ntlon Yolu111 Prlc• h:t1n1ion Yolu.111 Price Extrn1lon

1n,ooo 1.60 241,0DO 1'0,0DO \,62 U6,&00 155,000 1.sa 2U,900

ll•P ' · Cffip•rt 111lthnd 1Y1r1111 prlct c1lcul1t1d In sup z to the vthht•d •v1r191 ~"''' pcl;e ;1Lc:ul1od In :sup J,

S1.60/MCr 11 ' ' ' " ' ' Hllfl Sl.50/MCf 10 M 1ddltl2n.1l roy1tty P•Y••l\U lfl r1q.1.lr•d for thh qu1rt1r,

llOUt Vol"'-"• UICI prlcu uud In thl1 1x19f!l• 1r1 u11d for l\\uttrnlon and ••Y not b1 r1H1nlvt of 1c:t111I c~hlona, ' .. ' ' . THE STATE OF TEXAS COUNTY OF WEBB • § § § • This instrument was acknowledged before me on the 9y.f-_,day of January, 1988, by J. O. WALKER, JR., General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership,

i-- ~ .. ....';·.· .· ·. ·- ....... ._\.:. " ..•. -·· ·· ......... ~·~ otarY ~600•. s- ~le in and for !~:~ .. ._ The State of Texas. \ : My Coomission Expires .LA (J/?Jj BA LLi::v.J 7- B -'89 ·• '"'· ~ ....... -~. ___ ..... Printed/stamped name of Notary.

This instrument was acknowledged before me on the 9'1+- day of January, 1988, by E. WALKER QUIROS, General Partner of Vaqu1llas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

• f • ~)i~aQ_Q,,[Y :...~~"',· • _:':!-. ..,. otal'Yublic in and for § ~i The State of Texas. My Co11111ission Expires '7-:3- o0 9 •, ~A-oJRA ~ LlEW \. -~~·:--..... -· Printed/stamped name of Notary.

This instrument was acknowledged before me on the 't'ff- day of January, 1988, by GENES. WALKER, General Partner of Vaqui11as Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

~~~~,,;)--' NOtarYUbfc in allor The State of Texas. My Co11111ission Expires 7-3-89 LAat

THE STATE OF TEXAS § § COUNTY OF WEBB § 'fk_ This instrument was acknowledged before me on the CJ day of January, 1988, by EVAN B. QUIROS, General Partner of Vaquillas Ranch Co., Ltd., A Texas Limited Partnership, on behalf of said partnership.

~ ublic in and for The State of Texas. 7-.B-89 My Co11DT1ission Expires LA uRA b'-4 LL,;;vJ Printed/stamped name of Notary. -12- GWB2/dm 130(1) • :

\ •. .. - • . THE STATE OF TEXAS COUNTY OF WEBB • § § § • This instrument was acknowledged before me on the 9+L day of January, 1988, by J. 0. WALKER, JR., Trustee for The Vaquillas Unproven Mineral Trust.

~·~ ~a~Q,,,'}- Ofu'YPuiC in anCFfOr The State of Texas. My Conmlssion Expires: 7- 3-a00I LA~R-A /?,.., LLe"J Printed/stamped name of Notary.

This instrument was acknowledged before me on the g i-R_, day of January, 1988, by E. WALKER QUIROS, Trustee for the Vaquil las Unproven Mineral Trust.

l ;:_[ i ... .· - .. ~~~~~ The State of Texas. My Conmission Expires: '7-:3- 8 9 ~ ~. ·. ·.......... .. . •, L11uRA BALLEvJ Printed/stamped name of Notary. ~,.

This instrument was acknowledged before me on the 9 -r/:_; day of January, 1988, by GENE S. WALKER, Trustee of the Vaquillas Unproven Mineral Trust.

Notary Pu ~in and for The State of Texas My Commission Expires: 7-3- ?/ LA ORA B,o L.LE:vJ Printed/stamped name of Notary.

THE STATE OF TEXAS § § COUNTY OF WEBB § '-HU This instrument was acknowledged before me on the Cf day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Unproven Mineral Trust •

. _,,~ ~c~n~,')--' The State of Texas a My Commission Expires: 7-3-f? f JvMR/i »A LlevJ Printed/stamped name of Notary.

. ' THE STATE OF TEXAS § COUNTY OF WEBB • § § . • o~ This instrument was acknowledged before me on the t day of January, 1988, by J. 0, WALKER, JR, , Trustee of Va qui ~i1ra~s-'-,.P~ro_v_e_n-'Mi nera 1 Trust.

.•' c_:-' :; ~ j ~ ~a Q(b_,f}--- {~(:/. ·-,·<; atarYtJiC';n and for The State of Texas My Coomission Expires: '7'-:3- 'f?9 ~ ~:..,,.·...~ -----·· LA ul2A ~ UBvJ ~ Printed/stamped name of Notary. -

This instrument was acknowledged before me on the 'fl_, day of 9 January, 1988, by E. WALKER QUIROS, ~: Vaqu~ Proven Mineral Trust.

_. t, - · · ;, · Notary PubM in The State of Texas an~ My Commission Ex pi res: 7- 3- tJ00f L110R,q l3'4 LlHvJ Printed/stamped name of Notary.

This instrument was acknowledged before me on the 9-fV day of January, 1988, by GENE S,WALKER, Trustee of Vaquillas Proven Mineral Trust.

}'--· ~. -~ ~~ici~~«Y The State of Texas "' . My Commission Expires: 7-3-!?'1 i..JAol2A BA LL~vJ ·--:. . ·. Printed/stamped name of Notary. -.

THE STATE OF TEXAS § § COUNTY OF WEBB § y.J__,' This instrument was acknowledged before me on the 9 day of January, 1988, by EVAN B. QUIROS, Trustee of Vaquillas Proven Minera 1 Trust.

~uh

This instrument 'l c/,.. day of Attorney· in-Fact corporation.

The State of Texas My Commission Expires: 9-/8'-yi( L)e//«- /?1<>.. Y'A-'ert" Printed/Stamped name of Notary.

·15- GWB2/dm 130(1) : I

I '330158 I MINERAL DEED 1 STATE OF TEXAS s . . S KNOW ALL MEN BY THESE PR~SENTS1 COUNTIES OF STARR WEBB s . AND ZAPATA

THAT VAQUILLAS RANCH CO., LTD., a Texas Limited Partnership, for and in consideration of the sum of Ten Dollars ($10.00}) and other qood and valuable consideration to it in hand paid by the grantees hereinafter named, does hereby BARGAIN, SELL, TRANSFER, ASSIGN and CONVEY unto the following, to-witi J o. WALKER, JR. an und-ivided • r628 interestJ $

JAMES n. WALKER an undivide4 .0853 interest1 NANCY J. WALKER BRICE an undivided .0853 interest1 EVAN B. QUIROS an undivided .0814 interest1 £, WALKER QUIROS an undivided ,0814 interest! EVAN J, QUIROS an undivided .05686 interest; SADIE DIANE GYURKO an undivided .05686 interest1 QUINLAN QUIROS SMITH-SAAB an undivided .05686 interest7 GENE s. WALKER an undivided .1628 interest; GENE s. WALKER, JR. an undivided .042605 interestJ Il ,...'. JAMES PATRICK WALKER an undivided .042605 interest; ELIZABETH WALKER an undivided .042605 interest1 and KATHLEEN WALXER an undivided .042605 interest,

I in and to all of·its right, title and interest in and to all of the oil, gas and other minerals in and under the.following land& 100,403.93 acres of land, more or less, commonly known as the VAQUILLAS RANCH, in Webb and Zapata Counties, Texas, said land beinq fully described on Exhibit l which is attached hereto and incorporated herein for all purposes and 102.35 acres of land in Starr County, said land being fully described in Exhibit 2 which is attached hereto and incorporated herein for all purposes. TO HAVE AND TO HOLD the respective interest hereby conveyed unto each of the said 9rantees, his or her heirs and assigns, EXHIBIT forever. This assignment shall be effective as of November 1, 1984 at 7100 A,M, tl. .J.t.:::..... EXECUTED this day of December, 1984, B-4 _________

~ ~~~ VAQUILLAS ~· ~ '1::.i~ ... ~

~ ~·= Bya•tf.A KE~, JR., - ~;i • O. W .,., .... - 33 ~co -., 11"' General Pattner

·~ .!IC,_ .... ·-~ . ' " Byt !7) k4t.LQ~ ~ /} General Partn~

~· Byr €- UJ~ Jl 1btu2 , WALKER QUl S, 1

General Partner ~ . &u,s: I Byt 'U?lf_A-.) GENE S • WALKER, General Partner

The mailing address of each ot the grantees isi J. o. Walker, Jr. Quinlin Quiros Smith-Saab · P.O. Box 342· 8308 Wi~ningham Laredo, TX 78040 Houston~ TX 77055 James o. Walker Gene S, Walker 111 Inwood Road P.O. Box S Laredo, TX 78041 Aguilares, TX 78369 Nancy J. Walker Brice Genes. Walker, Jr, P.O. Box 716 P,O, Box 39 Hebbronville, TX 78361 Mirando City, TX 78369 Evan B. Quiros James Patrick Walker· 2102 Galveston P.O. Box 4 Laredo, TX 78040 Aguilares, TX 78369 E. Walker Quiros Eli~abeth Walker 2102 Galveston P.O. Box 5 Laredo, TX 78040 Aguilaree, TX 78369 Evan J. Quiros Kathleen Walker 2105 Galveston Street P.O. Box 5 Laredo, TX 78040 Aguilaree, TX 78369 Sadie Diane Gyurko 2105 Galveston Laredo, TX 78040

STATE OF TEXAS S COUNTY OF _.((,..J,_({_..8'-'fl..__ _ _ _ S This instrument wa(Jaoknowledqed before me on /21! Z>nrmb&r t

. ...... ,..,.._.r... ......\ .. ~.

---- -- --·---- ·---------.. ---·· -·· General Partner on beh~lf

·'... Pr nted Na.me of Notary ,, I, My Commission Expire81 Q,S:.03· l'I' s STATE OF TEXAS

COUNTY OF (1Je'88 s i I ary Pub c n and or I the State of ~exas

l.!orH.a tl Ud/qrr~o.f t )' Printed Na.me of Notary My Cornmiss.ion Expires1 Q[.. Qf\"a4 I STATE OF TEXAS 5

COUNTY OF _,lt.,tu:Rw/3"""13'---- S ~his instrument was acknowledqed before me on Ge~1ratll~i~Tef'o~ tin!it of VA~fi1~i.J~~Hog~~? 5Lrro. I . ..: , 1-·" -. Wota(J.t'J!fffrl

COUNTY OF .-W~!1"--~L'!..!!i..__ _ _ _ S S My CommiHion Expires• i?f-0'1·

I t.l.'rh~ inetrum'ent wasroknowledqed before me on. /9w J'

----~~--- ..... . . ...; ...___-:.-.... i·-------·-·

oary 1c.nan or the state of Texas Mo.r/ha U (j,·flatr~f

4 . :t:-?~~ . •/"::; ~''' - _.; ... ------- ----------·- .. ( EXHIBIT l ( To Deed from Vaquillas Ranch Company, Ltd. to J. o. Walker, Jr., et al~

100,403.93 acres, more or less, known aa The Vaquillas Ranch, and beinq comprised of the following lands in Webb and Zapata Counties, Texass ' SVRVEY I ABSTR ACRES CERT. NAME 9 3168 640.00 H&GN 10 . 477 646.67 H&GN 11 53 640.00 HGNRR 12 400 640.00 P. BENAVIDES 14 447 647.15 HG&N 16 525 640.00 MR. PENA 18 24 2136 2134 640.00 647.40 HG&N CCSD-RGNG .,.. 25 1042 640.00 CCSD&RGNG 26 2133 640.00 F.R. FEVILLE • N/2 S/2 31 31 1043 1043 320.00. 320.00 CCSD&RGNG CCSD&RGNG F2 32 33 2682 1044 640.00 640.00 C.R. DAVIS CCSD&RGNORR ~ ~ ~ \\ N/2 34 2186 326.00 CCSD-RGNG r- S/2 34 2605 335.48 E.N. GASSER en N/2 51 1045 320.00 CCSD-RGNG 0 S/2 51 1045 ,,,..; 320.00 • CCSD-RGNG 52 2606 640.00 E.N. GASSER ~ 56 1224 157.00 A. GARZA 57 1211 108.60 D. GAMBOA 67 1834 319. 71 G.A. TEAL 112 475 643.77 J.H. GIBSON 114 492 648.44 J.H. GIBSON 116 472 655.05 J.H. GIBSON 124 2180 643.84 BS&F I 125 1748' 590;00 SK&K 125 84 42.00 SK&K W/2 135 1774 320.00 E/2 W/2 135 U6 1774 320.00 T&NO T&NO r 2322 320.00 J. JUAREZ E/2 136 t 2322 320.00 J. JUAREZ 182 490 640.00 CC&FR co. E/S 197 563 8856.00 W/S W/V 197 197 209 563 8856.00 320.00 J • V. BORREGO J.V. BORREGO J. V, BORREGO • E/V 197 563 160,00 J, V. BORREGO v 197 563 5109,50 J,V. BORREGO p 197 563 1132,00 p J.V. BORREGO 197 563 722.22 J, V. BORREGO W/2 227 1133 320.00 CCSD&RGNG E/2 227 1133 320.00 CCSD&RGNG W/2 228 B/2 228 2550 2550 318,47 318.48 CCSD&RGNG CCSDUGNG l Exhibit l, Paqe l J r -----····

•.. S/2 1666 2253 328,75 GC&SF 1683 1115 640.00 CCSD&RGNG E 1684 2910 160,00 CCSD&RGNG w 1684 2910 400.00 CCSD&RGNG N 1684 2698 80.00 CCSD&RGNG 1691 1267 640.00 GC&SF 1692 2419 613,04 GC&SF 1693 1269 640.00 CC&SF 1695 1268 640.00 GC&SF 1696 2418 640,00 GC&SF 1838 2187 67.00 P,H, SUTTON 1928 2474 430.27 '!'EX MEX W/2 1953 1329 320.00 GC&SF E/2 1953 1329 320,00 GC&SF 1955 1328 640,00 GC&SF 1956 2560 327.34 GC&SF 1987 1988 2057 1809 2475 14.82 8.05 '!'EX MEX '!'EX MEX .,. 985 652.25 CCSD&RGNG 2058 2880 652,25 CT&MC W/2 2059 E/2 2059 984 984 320.00 320.00 C&MRR C&MRR i=2 2060 3210 200.00 C&MCRR 2060 3329 160.00 C'l'&MCRR ~ 2060 2941 80.00 CT&MCRR r- 2060 3332 120.00 CT&MCRR 2060 2112 2267 3331 2420 1888 80.00 S, SYNDER 672.12 • B,A. JAMES °' 0 ........ 6 53.30 A. WARD ~ 2335 3025 27.30 W. BROWN .J N/2 2336 3167 14.00 W, BROWN S/2 2336 3167 16.3() W. BROWN 2342 3335 14.74 FROS'!' BANK 2367 3333 91,34 F.R. FEVILLE 52/53 P/80 *52.35* JO DeLaGARZA

'l'OTAL 100403,93

Exhibit l, Pa~e 4

........................ ;.~·····; ....... . --- ... "- .J ----- ~· ·~-~- ~-

EXHIBIT 2

DEED PROM VAQUILLAS RANCH COMPANY, LTD, TO

J. O. WALJ(ER, JR., BT AL

102.35 Acree, more or leas~ beinq comprised of the following land.in Starr County, Texaa1 · Share No. 52 out of Porciion No. 80 as allocated to A. L. Shawl by Decree of the District Court of Starr County, Texae, in Cause No. 941, recorded in Volume G, page 205, of the Deed Records of Starr county, Texas.

i . I"·.. ..'

.~

._ .... ; .-\. ··~ ~. ! · -~ ~-· ·- -· - • -- - -- ···- · - ; ............ ·.·::·.:- .

Fh.£D ~301G1

I MINERAL DEED fflHll.)' FUa.n 03.~R~ WEBll W .11,:-t. li:X4S pv !lcl'UTY STATE OF TEXAS s S lrnOW ALL MEN BY TH!SB PRESEN'l'S1 COUNTIES OF STARR, WEBB s AND ZAPATA

THAT J, 0, WALKER, JR., JAMES PATJUCP: WAUER, NANCY J ,

I WALXER BRICE, EVAN B. QUIROS, E, WALKER QUIROS, EVAN J, QUIROS, SADIE DIANE GYUIU

I TRUST, created by agreement entered into November 1, 19S4, their successors and assigns, sub'ject to the exception hereinafter made, all of their right, title and interest in and to all of the"'"' oil, gas and other minerals in and under the following land: ~ 100,4·03.93 acres of land,· more or less, colM\only known as the Vaquillas Ranch, in Webb and Zapata Coun~ies, Texas, said land i l being fully described on Exhibit 1 which is attached hereto and incorporated herein for all purposes and 102.35 acres of land, E;j more or less, in Starr County, Texas, said land being fully 0~ !· described as Exhioll 2 which is incorporated herein for all

- purposes. ~

There is excepted from this conveyance, however, and not conveye d hereby, all of grantors' right, title and interest in and to all of the royalty from production of oil and gas from the wells described in certain assignments of even date herP.With executed by J, o. WALKER, JR., JAMES o. WALKER, NANCY J. WALKER BP.ICE1 EVAN B, QUIROS, E. WALKER QUIROS1 EVAN J. QUIROS, SADIE DIANE GYURKO, QUINLAN QUIROS SMITH-SAAB, GENE S. WALKER, GENE S, WALKER, JR. , JAMES PATRICK WALKER, ELIZABETH WALKER and KATHLEEN WALKER to J, O. WALKER, JR,, EVAN B. QUIROS AND GENES. WALKER, as TRUSTEES OF THE VAQUILLAS PROVEN MINERAL TRUST, created by inotrument entered into November 1, 1984 , such assignments and their record in Webb and Zapata Counties, Texas, being here referred to for all pertinent purposes, including the descriptions of the wells covered thereby . TO HAVE AND TO HOLD the interest hereby conveyed unto the said J. o. WALKER, JR,, EVAN B. QUIROS and GENE s. WALKER, TRUSTEES OF THE VAQUILLAS PROVEN MINERAL TRUST, created by agreement dated November 1, 1984, their successors and assigns

l ~

~"- ~

forever. Thi• aasiqnment shall be effective as of November l, 1984 at 7i00 A.M. Execute~ thi• J.!..!!:.... day of December, 1994. t I

~((?,dt/flic& I i ~ : O. WALKER, JR. I

! I

[:

N 0 II I

~ I

r- ~ ~ I O') 0 v, . ~ 15 __.~

The mailin9 address of each of th6 grantees iaa c/o Vaquillas Ranch Co., Ltd. P.O. Box 1086 Laredo. TX 78040 I ............

2 ~- . !•

t

..... · .If ~ .·.:...·.. STATE OF TEXAS 5 coUNTY OF _xW=e.;.W,.;_____ s

'l'h~instrument wa~acknowled9ed before me on /ctfA.. .llew:nbtY l'tb. by J. o. WALKER

or

.·: My Commission Expiress 0f~03,.9J> . ~ ••: . · 1: .

STATE OF "TEXAS S

COUNTY OF -:W=a.Jrlr=----- S

S'l'A'l'E OF TEXAS 5 COUNTY OF -"'ll.)~g/J=(r:.- ____ S

ary ~c n an or State of Texas /J.ar.fha U U:l/nrr

r I .r 3

l .i• . . STATE OF TEXAS S COUNTY OF _..l

'Jlhl8 inatX'Ulllent wai/a acknowledged . ('"t~_QeumW(l {9d_ before me on by EVJ\N B. QUIROS •

....:··~.u'f" l~ ~ !l .· -~~:~··:·· ..f-.:· ; , .. • .·. N~and tile State of Texas for ( I

:

< , : - -.

:.!:/~ ,s ·..) ·,;; '.'.. //· t ·•·•

.: !..lar!ha u u,·/lorrea.f Printed Name of Notary ! I

\~~<·{;;· ..~~/?'°:.. \ ... STATE OF .TEXAS COUNTY OF _...W...Jllrlr....._....__ _ _ _ s S My Commissio~ Expiress CIS~D3-ll It !

'l'h~ inatrwnent was :cltnowledqed before me on /t:f i!I '..D.f'cembct /q,f

";jt':.•.'·:'.. .1·._ ·~····· (" .~:· • N~'#and the State of Texas for

'°'( ~;;; r ~·:· .~ Jllo1f00 ~ Udlof(ea ( : ·~l1:. ~ .s.) .' Printed Name o Notary · .:.:~~~~.. ...·:) My Commission Expireai cQf-<.)3~IP . ..... ., i1J' STATE OF 'l'EXAS s COUNTY OF W elrfr- ~ s

N ary l.n an for t ·e State of Texas ll.ar/.Aq ~ Notary Printed Name o (}/dauea {

My ConudHion ~xpires: ()f"--03""'6

, ,. I-- .

:.: .. : .. , .. :_:. -::._ _; :, . \ ' ~SUL\TF. O!" 111:! l:NITEO STATtS OF "1El\!CA /~¥.iif ·' ~wror.o, ~.\!'.'.:l .. --~-:... ~.~ ~ • .· ~._r BEFORE THE AMERICAN CONSULATE s

STATE OF TEXAS COUNTY OF _w"""'...e....b_,,b.._____ s .. · ,

/t:Jm ll T~ instrument ...QecrmbPr t!}'t.. ::s !eknowled9ed before me on by QUINLAN QUIROS SMITH-°SAAB •

. '.'.) \~:.:·. . :: . .. . ~ =7'':-t"-FP:::::;=:::;:=:*'-__,.--...-,,------ ·~:.·"· ' ·. · N p a I C n and for , ,'t/ ·: · · . _, the State of Texas '··~,\. (t...s.'_)· ,: llor/J,a U Ud(orr~f . /·.,. · PrFnted Name of Notary ··:..· :=-'. \·::· '.;'. :_:;>-' My Commis!3ion Expires; ~.l- 03-Jlcf STATE OF TEXAS s couNTY OF Welde- s ,_-: ,J>Th).JJ instrument waa !cknowledged before J!le on / C\ . /)ece,m hev 19J

,/ .;;'.",;·,. ,, ./ ·~·~··"··":\· ·.':···,, N~and for tll State of Texas ·' •.·. { "f ·-· · I .. ' , ..: ._, · I! J..latfhq l1 U:l/at{fO I · '•'<: ..-(L._,j. ·) · .· Printed Name of Notary ·. /~· .-·· . . ·-.. My Commission Expiress 05;03-1~ .;:-· ,·)--_.:.. • ,.· )."·

. ~ ...._.. .. : . .- . ~ - ' •· ........ ). . . · ~· ,. .. ,." STATE OF TEXAS S COUNTY OF -'{...,1J...,,C.ub._.b'----- S

~h:2:) instrument was acknowledged before me on /'I tA evmhcr (qJy by GENE s. WALKER, JR.

,.·, Prlited Name of Notary / My Co111111ission Expires1 OS D3· II STATE OF TEXAS S

fc____ S COUNTY OF _...{..,.LJ'"""£..._&....

JT~ instrument was !'cknowledged before me on /&f YM _Dpcernb

::>· · N~f~~and the State of Texas for ~- - -- --... ,, Jl at /.Aa U UJ{orua.f Printed Name of Notuy My Commission Expireiu O[·O~ •,P>' (.0 ·' STATE OF TEXAS s ~ COUNTY OJI' _(l)_IAfr_fr____ S

N ry Public n and for the State of Texas

... Q.·'S·) µor !Ao ~· U//lo.rnal Printed Name oNotary My Commiuion Expirea1 QS~oa-11

I 6 - - - - · - · - · - · ·· ·

S'l'ATE OF TEXAS S

COUNTY 01" --.1!..::P::.:e.::.:b:=.ib"------ S

r-y-J?u in an or e State of Texas I\' Ua dfta 0 fJ.-!loumf .,.·" C:·'S·)

·'!

------------"------------·---·-- - ----···· ..-·------·1 EXHIBIT 1 To Deed from J, o. Walker, Jr., et al. to J. O. Walke'r , Jr., Evan B. Quiros and Gene s. Walker, Trustees of the Vaquillas Unproven Mineral Trust l00,403.93 acres, more or less, known as The Vaquillas Ranch, and beinq comprised of the followin9 lands in Webb and Zapata Counties, Texas1

SURVE~ t ABSTR ACRES CERT. NAME t 9 10 ~168 477 640.00 646.67 H&GN H&GN I 11 53 640.00 HGNRR 12 400 640.00 P. BENAVIDES 14 447 525 647.15 640.00 HG&N MR. PENA t 16 18 2136 640.00 HG&N iI 24 2134 647 .,.40 CCSD-RGNG I

25 1042 640,"00 CCSD&RGNG 26 2133 .. 640,00 F.R. FEVILLE N/2 31 1043 320.00 CCSD&RGNG S/2 31 1043 320 .00 CCSD&RGNG 32 2682 640.00 C.R. DAVIS 33 1044 640.00 CCSO&RGNOR.R co 0 N/2 S/2 34 34 2186 2605 326.00 335.48 CCSO-RGNG E.N, GASSER ... ....... ... ~ N/2 51 1045 320.00 CCSO-RGNG S/2 51 52 1045 2606 320. 00 • CCSO-RGNG 640.00 E.N. GASSER r- 0) 5.6.~ 1224 157 . 00 A. GARZA 0 57 1211 188.60 D. GAMBOA ~ ..j

67 1834 319 . 71 G.A. TEAL ~ 112 475 643.77 J,H, GIBSON 114 492 648 . 44 J,H. GIBSON 116 472 655.05 J.H. GIBSON 124 2180 643.84 BS&F 125 1'748 598.00 SK&K 125 84 42.00 SK&K W/2 135 1774 320,00 T&NO E/2 135 1774 320.00 T&NO W/2 136 2322 320 , 00 J. JUAREZ E/2 136 2322 320.00 J, JUAREZ 182 490 640,00 CC&FR CO. E/S 197 563 8856,00 J.V , BORREGO W/S 197 209 8856,00 J,V, BORREGO W/V 197 563 320.00 J.V , BORREGO E/V 197 563 160.00 J.v. BORREGO v 197 563 5109.50 J.V . BORREGO p 197 563 1132.00 J.V. BORREGO p 197 563 722. 22 J.V, BORREGO W/2 227 1133 320.00 CCSO,RGNG E/2 227 1133 320.00 CCSD&RGNG - W/2 228 2550 318.47 CCSO,RGNG E/2 228 2550 318.48 CCSDUGNG

EXhibit l, Paqe l

--- - - . --- ----- .. .. - ·-··- -·-- · .. ·· -· ------ --- --·· .·. ::~?~??;~;~ .~ :.~:-~f:t;:r . --•;•:· :~ :'--- 232 2149 462.70 CCSD&RGNG 232 2148 *184.l* CCSD&RGNG 233 1117 *455.9* CCSD&RGNG 233 1117 *455,9* CCSD&RGNG 233 1117 455.90 CCSD&RGNG 259 1137 600.00 CCSD&RGNG Bkll 259 1137 40.00 CCSD&RGNG 260 2607 640.00 CCSO&RGNG 264 3302 482.30 F.E. PROYOR 265 1142 618.80 CCSD&RGNG 266 2948 154,80 CCSD&RGNG 'W/2 266 2131 318.35 CCSD&RGNG 267 1134 553.60 CCSO&RGNG 267 1134 40,00 CCSD&RGNG 268 2132 605.49 CCSD&RGNG W/2 273 1141 320 .00 CCSD& RGNG E/2 273 1141 320 .00 CCSD&RGNG 274 2551 640 .00 CCSD&RGNG .r · W/2 275 1336 320.00 CCSD& RGNG E/2 275 1336 3 20 .00 CCSD&RGNG 276 2552 640.23 GC&SC 277 1337 640.00 . CCSD&RGNG NE 279 1353 160,00 GC&GF C7l 279' SW ~ 1353 463.65 GC&GF 307 309 474 1908 966.52 425.40 F.M. McKING J.J. WRIGHT .... 335 1424 63,92 H&GN :! W/2 461 E/2 461 1286 1286 335.60 • GC&SF 335.60 GC&Sf' r; 462 464 2104 1715 649.80 731.50 GC&SF HE&WT ~... C> 467 799 640.00 ASli.H .. ~ ~

468 2255 659.14 GC&SF 469 1474 664.20 HE&WT •;o 2612 663 .50 HE&WT 471 UBS 666,40 ELRR 472 2613 655.20 ELRR 475 972 622.40 C&M -176 3132 650 . 95 S&M 542/2 3131 330.17 AB&M 575 910 648.17 BS&F 576 2473 639.55 RT 590 2599 573.40 GC&SF 593 1484 468. o·o HE&WT 593 1484 40.00 HE&WT 593 1484 107.56 HE&WT 594 2611 666.90 HE&l'IT 595 1189 642.10 ELRR · 596 2610 650.70 ELRR 598 2598 649,30 CCSD&RGNG 603 970 663.50 C&M 604 2181 693.00 C&M N/2 613 422 6 22.84 P . BENAVIDES S/2 613 .422 667.24 MARTHA HALL

Exhibit l, Page 2

- - -- ·· I --- --· ··--··- ... ·- --··- -·· -· - . .. -~ · -- -- -- · · · · ···

. :,; ::- ..~,·.· . .. • • 1, • • •

~:.r.·;,:_:.-·..:.:,'· -.. :~.,,,: S/2 1666 2253 328.75 GC&SF "' -~,,...

1683 1115 640 . 00 CCSD&RGNG E 1684 2910 160.00 CCSD&RGNG w 1684 2910 400,00 CCSD&RGNG N 1684 2698 80.00 CCSD&RGNG 1691 1267 640.00 GC&SF 1692 2419 613.04 GC&SF 1693 1269 640.00 CC&SF 1695 1268 640.00 GC&SF 1696 2418 640.00 GC&SF 1838 2187 67.00 P.H. SUTTON 1928 2474 430.27 'l'EX MEX H/2 1953 1329 320.00 GC&SF E/2 1953 1329 320 . 00 GC&SF 1955 1328 640.00 GC&SF 1956 2560 327.34 GC&SF 1987 1809 14 . 82 TEX MEX 1988 2475 8,.P5 TEX MEX 2057 985 652.'25 CCSD&RGNG 2058 2880 .. 652.25 CT&MC W/2 2059 98 4 320.00 C&MRR E/2 2059 984 320.00 2060 3'110 200.00 C&MRR C&MCRR _. -t 2060 2060 3329 2941 160.00 80 . 00 CT&MCRR CT&MCRR ...... ... 2060 3332 120.00 CT&MCRR ~ 2060 3331 80.00 s. SYNDER r-... 2112 2420 672 .12 • B.A. JAMES O:> 2267 1888 53.30 A. WARD 0 2335 3025 27.30 w. BROWN ~ N/2 2336 Sf7~ 336 3167 14.00 w . BROWN <:;) > 2342 3167 16.30 w. BROWN 3335 14.74 FROS'l' BANK 2367 3333 91.34 F.R. FEVILLE 52/53 P/80 *52,35• JO DeLaGARZA

TOTAL 100403.93 1 ' .!

Exhibit 1, Page 4 .· . : :I

l ..·. ---- -~·---- - -. 'i I

I

.,.. . " "'";" J EXHIBIT 2

DEED FROM J. O. WALKER, JR., ET AL TO J . O. WALKER, JR., EVAN B. QUIROS AND GENE S. WALKER, 1RUSTEES OF THE VAQUILLAS UNPROVEN MINERAL TRUST

102.35 Acres, more or leas, being comprised of the following land in Starr County, Texas1 Share No. 52 out of ~orcion 7No . 80 aa allocated to A~ L. Shawl by Decree of the Diatrict Court of Starr County, Texas, in Cause No. 941, recorded in Volume G, paq• 205, of t.he Deed Records of Starr County, Texas. _________ B-6 I EXHIBIT MINERAL DEED

State of Texas § § Know All Men By These Presents: Counties of Webb, Zapata and Starr §

That, the undersigned TRUSTEES OF THE v AQUILLAS UNPROVEN MINERALS TRUST' for and in consideration of the sum of TEN AND No/100 DOLLARS ($10.00) and other good and valuable consideration to the undersigned paid by the Grantee herein named, the receipt of which is hereby acknowledged, have GRANTED, SOLD AND CONVEYED, and by these presents DO GRANT, SELL-AND CONVEY unto vAQUILLAS UNPROVEN MINERALS, LTD.' a Texas limited partnership, all of the following described real property in Webb, Zapata, and Starr Counties, Texas, to wit: All of the right, title and interest owned by v AQUILLAS UNPROVEN MINERALS TRUST in and to all of the oil, gas and other minerals in and under the following land: 100,403.93 acres, more or less, commonly known as the Vaquillas Ranch in Webb and Zapata Counties, Texas, said land being fully described on Exhibit A which is attached hereto and incorporated herein for an purposes and 102.35 acres, more or less, in Starr County, Texas, said land being fully described as Exhibit B which is incorporated herein for all purposes.

This conveyance is made and accepted subject to all matters, conditions, restrictions, and reservations, if any, relating-to the above described property which are recorded or apparent on said property, but only to the extent that the same are still in force and effect. To HAVE AND To HOLD the above described mineral interests, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Grantee, its successors and as~igns forever; and Granters do hereby bind themselves, their successors and assigns to WARRANT AND FOREVER DEFEND, all and singular, the said premises unto the said Grantee, its successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

EXECUTED to be effective the 31st day of December, 1996.

V AQUJLLAS UNPROVEN MINERALS TRUST

By: ~£~ Gene S. Walker, Trustee

By: u • on tcu &YUH, P/ITI'-SON 8 AYCOC:l A RQUS.$1~\. COl.POIAllON 112 lASt ttCAH !TlkUt SIJIU U00 \.\N ANTONIO. nSAl 78'1Cle

.... .. - By:

Grantees' Address:

Vaquillas Unproven Minerals, Ltd. 5810 San Bernardo Avenue, Suite 490 Laredo, Tuxas 78041

STATBOFTEXAS § § COUNTY OF WEBB, ZAPAT~ AND STARR §

THIS INSTRUMENT WAS ACKNOWLEDGED before me on the J:!!!.. by GENE S. WAl.KER, 1hlstee of the Vaquillas Unproven Minerals Trust. day of January, 1997'

Printed or Stamped Name of Notary, with Date of Commission Expiration

-2- STATE OF TEXAS § § COUNTY OF WEBB, ZAPATA AND STARR §

THIS INSTRUMENT WAS ACKNOWLEDGED before me on the 1111 day of January, 1997, by JAMES D. WALKER, Trustee of the Vaquillas Unproven Minerals Trust.

Printed or Stamped Name of Notary, with Date of Commission Expiration

STATE OF TEXAS § § COUNTY OF WEBB, ZAPATA-AND STARR §

THIS INSTRUMENT WAS ACKNOWLEDGED before me on the ;111i day of January; 1997, by EVAN I. QUIROS 1 Trustee of the Vaquillas Unproven Minerals Trust.

Printed or Stamped Name of Notary, with Date of Commission Expiration

-3- 100,403.93 acres, more or less, known as The Vaquillas Ranch, , and being comprised of the following lands in Webb and Zapata Counties, Texas:

SURVEY i ABS TR ACRES CERT. NAME 9 3168 640.00 H&GN 10 477 646.67 H&GN 11 53 640.00 HGNRR 12 400 640.00 P. BENAVIDES 14 447 647.15 HG&N 16 525 640.00 MR. PENA 18 2136 640.00 HG&N 24 2134 647.40 CCSD-RGNG 25 1042 640.00 CCSD&RGNG 26 ·2133 640.00 F.R. FEVILLE N/2 31 1043 320.00 CCSD&RGNG S/2 31 1043 320.00 CCSD&RGNG 32 2682 640.00 C.R. DAVIS 33 1044 640.00 CCSD&RGNORR ~ N/2 34 2186 326.00 CCSD-RGNG -2 S/2 34 2605 335.48 E.N. GASSER ~ N/2 51 1045 320.00 CCSD-RGNG S/2 51 1045 320.00 · CCSD-RGNG 52 2606 640.00 E.N. GASSER -2 56 1224 157.00 A. GARZA ....... ~ 57 1211 188.60 D. GAMBOA 67 1834 319.71 G.A. TEAL 112 475 643.77 J.H. GIBSON 114 492 648.44 J.H. GIBSON 116 472 655.05 J.H. GIBSON 124 2180 643.84 BS&F / 125 1749 598.00 SK&K 125 84 42.00 SK&K W/2 135 1774 320.00 T&NO E/2 135 1774 320.00 T&NO W/2 136 2322 320.00 J. JUAREZ E/2 136 2322 320.00 J. JUAREZ 182 490 640.0.0 CC&FR CO. E/S 197 563 8856.00 J. V. BORREGO W/S 197 209 8856.00 J.V. BORREGO W/V 197 563 320.00 J.V. BORREGO E/V 197 563 160.00 J.V. BORREGO v 197 563 5109.50 J.V. BORREGO p 197 563 1132. 00 J.V. BORREGO p 197 563 722.22 J.V. BORREGO W/2 227 1133 320.00 CCSO&RGNG E/2 227 1133 320.00 CCSD&RGNG W/2 228 2550 318.47 CCSD&RGNG E/2 228 2550 318.48 CCSD&RGNG

Exhibit "A" Page 1of4 232 2148 462.7'o CCSD&RGNG 232 2148 *184.l* CCSD&RGNG 233 1117 *455.9* CCSD&RGNG 233 1117 *455.9* CCSD&RGNG 233 1117 455.90 CCSD&RGNG 259 1137 600.00 CCSD&RGNG Bkll 259 1137 40.00 CCSD&RGNG 260 2607 640.00 CCSD&RGNG 264 3302 482.30 F.E. PROYOR 265 1142 618.80 CCSD&RGNG 266 2948 154.80 CCSD&RGNG W/2 266 267 2131 318.35 CCSD&RGNG I 267 1134 1134 553.60 40.00 CCSD&RGNG CCSD&RGNG l 268 W/2 273 2132 1141 605.49 320.00 CCSD&RGNG CCSD&RGNG I E/2 273 274 1141 2551 320 . 00 640.00 CCSD&RGNG CCSD&RGNG l W/2 275 E./2 275 1336 1336 320.00 320.00 CCSD&RGNG CCSD&RGNG I 276 2552 640 . 23 GC&SC 277 1337 640.00 CCSD&RGNG NE 279 1353 160.00 GC&GF SW 279 1353 463.65 GC&GF ~ 307 474 966.52 F.M. McKING -.l 309 1908 425.40 J.J. WRIGHT ~ 335 1424 63.92 H&GN W/2 461 1286 335.60 • GC&SF E/2 461 1286 335.60 GC&SF -.1 462 2104 649.80 GC&SF r- 464 1715 731.50 HE&WT t.11 467 799 640.00 AB&N 468 2 2 55 659.14 GC&SF 469 1474 664.20 HE&WT 470 2612 663.50 HE&WT 471 1188 666.40 ELRR 472 2613 655.20 ELRR 475 9 72 6 2 2.40 C&M 476 3132 650.95 S&M 542/2 3131 330.17 AB&M 575 910 648.17 BS&F 5 76 2473 639.55 RT 590 2599 573.40 GC&SF 59 3 1484 4 68. o·o HE&WT 593 1484 40.00 HE&WT 593 1484 107.56 HE&WT 594 2611 666.90 HE&WT 5 95 1189 642.10 ELRR 596 2610 650.70 ELRR 598 2598

II 649.30 CCSD&RGNG 603 97 0 663.50 C&M 604 2181 693.00 C&M N/2 613 42 2 622.84 P. BENAVIDES S/2 613 422 667.24 MARTHA HA~L ; ! Exhibit "A" Page2of4 I ! ' l

I ! I I

I 733 1276 639.~0 GC&SF I I

N/2 734 1276 348.00 GC&SF I S/2 734 735 2901 1322 352.00 238.60 GC&SF GC&SF . I 736 2233 642.00 GC&SF 744 2595 639.84 GC&SFR CO. I 770 770 1959 1959 893.40 320.00 T.F. PICKETT T.F. PICKETT I 781 1361 211. 50 GS&SF I 782 865 2997 1438 209.30 640.00 R. PENA H&GN I W/2 E/2 987 987 2061 2061 320 .00 320.00 J. POITEVENT J. PO!TEVENT I W/2 E/2 988 988 2593 2593 318.50 J. POITEVENT I 318.50 .J. POITEVENT 1004 2421 634.58 P.B. REYNOLDS 1011 1846 640.00 CCSD&RGNG 1012 2489 *40.00* S.V. VELA 1012 2489 640.00 S.V. VELA 1113 1407 79.99 E.H. 1172 1405 160.00 B. HERRERA 1184 1673 160.00 R. ROYAL 1194 3·207 682.30 GC&SF W/2 1627 1324 320.00 GC&SF ~ W/E 1627 1324 160.00 GC&SF -.:! E/E 1627 1324 160.00 GC&SF >--- W/2 1629 1275 306.32 GC&SF E/ '2 1629 1275 306.33 · GC&SF 1630 2254 621.00 GC&SF -.:! W/2 1631 1317 320.00 GC&SF ~

~2 1631 1317 320.00 O':> GC&SF 1632 2140 92.00 GC&SF 1633 1323 640.00 GC&SF 1634 2252 640.00 GC&SF 1635 1797 548.00 TCRR 1643 1162 104.79 JOSEFA CUELLAR 1635 1797 *92.00* TCRR N/2 1645 1111 320.00 CCSD&RGNG S/2 1645 1111 320.00 CCSO&RGNG 1646 2396 640.00 CCSD&RGt-:G W/2 1647 1101 320.00 CCSD&RGNG E/2 1647 1101 320.00 CCSD&RGNG W/2 1648 3301 325.75 DA&FA E/2 1648 3301 325 .75 CCSD&RGNG 1649 1110 640.00 CCSD&RGNG 1650 2444 609 . 95 C.M . SAMY ER 1651 1112 640.00 CCSD&RGNG 1652 2876 640.00 W.H. TAYLOR W/2 1661 1662 1122 2230 640.00 329 .31 CCSD&RGNG R.E. PARR ! ~l E/2 1662 3094 320.00 A.F. CARROLL ! 1663 1123 640.00 CCSD&RGNG ~ 1665 1124 640.00 CCSD&RGNG N/2 1666 3142 328.79 CCSD&RGNG

Exhibit "A" t

Page 3 of 4

I t S/2 1666 2253 328.75 GC&SF 1683 1115 640.00 CCSD&RGNG E 1684 2910 160.00 CCSD&RGNG w 1684 2910 400.00 CCSD&RGNG N 1684 2698 80.00 CCSD&RGNG 1691 1267 640.00 GC&SF 1692 2419 613.04 GC&SF 1693 1269 640.00 CC&SF 1695 1268 640.00 GC&SF 1696 2418 640.00 GC&SF 1838 2187 67.00 P.H. SUTTON 1928 2474 430.27 TEX MEX W/2 1953 1329 320.00 GC&SF E/2 1953 1329 320.00 GC&SF 1955 1328 640.00 GC&SF 1956 2560 327.34 GC&SF 1987 1809 14.82 TEX MEX 1988 2475 8.05 TEX MEX 2057 985 652.25 CCSD&RGNG 2058 2880 652.25 CT&MC W/2 2059 984 320.00 C&MRR E/2 2059 984 320.00 C&MRR 2060 3210 200.00 C&MCRR ~ 2060 3329 160.00 CT&MCRR -.:z 2060 2941 80.00 CT&MCRR ~ 2060 3332 120.00 CT&MCRR 2060 3331 80.00 S. SYNDER 2112 2420 672.12 • B .A. JAMES -.:z ~ 2267 1888 53.30 A. WARD -:i 2335 3025 27.30 W. BROWN ""tr/2 2336 3167 14.00 W. BROWN S/2 2336 3167 16.30 W. BROWN 2342 3335 14.74 FROST BANK 2367 3333 91. 34 F.R. FEV!LLE 52/53 P/80 *52.35* JO DeLaGARZA

TOTAL 100403.93

Exhibit "A" Page 4 of 4 102.35 Acres, more or less, being comprised of the following land in Starr County, Texas: Share No. 52 out of Porcion No. 80 as allocated to A. L. Shawl by Decree of the District Court of Starr County, Texas, in Cause No. 941, recorded in Volume G, page 205, of the Deed Records of Starr County, Texas.

:_ .. \

I <:'

Exhibit "B" Page 1of1 Tab 4 VAQUlLLAS UNPROVEN MINERALS, § LTD, § Plaintiff, § § v. § WEBB COUNTY, TE

~t-DlClAL DIS § CONOCOPHILLIPS COMP ANY, § Defendant

PLAINTIFF'S ORCGINAL PETITION

Vaquillas Unproven Minerals, Ltd. ("Vaquillas"), Plaintiff, complains of

ConocoPhillips Company ("Conoco"), Defendant, and respectfully shows:

I. DISCOVERY CONTROL PLAN

l. Plaintiff affirmatively pleads that discovery should be conducted in

accordance with Texas Rule of Civil Procedure 190.4 (Level 3).

II. PARTIES

2. PlaintiffVaquillas is a Texas Limited Partnership with its principal place of

business in Laredo, Webb County, Texas.

3. Defendant Conoco is a Delaware Corporation with its principal place of

business in Houston, Texas. It may be served through its registered agent: United States

Corporation Company, 211 E. 7th Street, Suite 620, Austin, Texas 78701-3218. Service

of process is requested at this time.

PLAINTIFF'S ORIGINAL PETJ1'10N Page I III. JURISDICTION AND VENUE

4. The District Courts of the Stale of Texas have jurisdiction over these claims

and these parties. Conoco's principal offices are in Houston, Texas, and its Texas oil and

gas operations are the subject of this cause.

5. This suit involves a dispute over two oil and gas leases which relate to real

property in Webb County, Texas. Venue is therefore proper (and mandatory) in Webb

County, Texas, under Sections 15.002(a) (1) and 15.011 of the Texas Civil Practice &

Remedies Code.

IV. RELIEF SOUGHT

6. Vaquillas seeks a release of acreage previously the subject of an oil and gas

lease, specific performance, and monetary relief over $1,000,000.

v. FACTS

7. Conoco has violated a covenant and agreement between the parties by

refusing to execute and deliver to Vaquillas a written release of the portions of certain

leased property that reverted to Vaquillas as a matter of law.

8. The following properties (the "Subject Property") are the subject of this

lawsuit:

26,622.79 acres of land, more or less, situated in Webb County, Texas more fully described in the Oil, Gas and Mineral Lease dated June 15, 1974 (as amended) between Vaquillas Ranch Company, Ltd. et al., as Lessor, and Conoco Inc., as Lessee, a copy of which is recorded in Volume 460, Pages

PLAINTIFF'S ORIGINAL PETITION Page2 324-330 of the Webb County Deed Records (hereinafter the "26,622.79 acre lease"); and

6,740 acres of land, more or less, situated in Webb County, Texas more fully described in the Oil, Gas and Mineral Lease, dated effective November I, 1987, and entered into by and between Vaquillas Ranch Company, Ltd., Vaquillas Unproven Mineral Trust, and Vaquillas Proven Mineral Trust, as Lessor, and Conoco Inc., as Lessee, a Memorandum of which is recorded in Volume 1303, Pages 886 et seq. of the Webb County Real Property Records (hereinafter the "6, 740 acre lease").

9. Plaintiff Vaqui!las is successor-in-interest to the Lessor(s) with respect to

both oil and gas leases described above. Defendant Conoco is the successor-in-interest to

the Lessee(s) with respect to both oil and gas leases described above.

10. Both leases described in Paragraph 8 above have been amended and

supplemented a number of times. On or about November 1, 1987, both the 26,622.79

acre lease and the 6, 740 acre lease were amended to include a Paragraph 18, which

allows Conoco to postpone execution and delivery to Lessor of a written release of the

portions of the lease not drilled to the required density by engaging in a continuous

drilling program. In order to be engaged in a continuous drilling program, Conoco must

commence the drilling of a new well within 90 days after the completion of each well.

At the end of the continuous drilling program (i.e. when Conoco ceases to commence the

drilling of new wells within the 90 day period(s)), Conoco is allowed to maintain its

leases of the Subject Property onlv as to an amount of acreage surrounding each well it

drilled. Both leases require Conoco to execute and deliver to Vaquillas a written release

of any acreage not earned by drilling operations.

PLAIN71FF'S ORIGINAL PETITION Page 3 , l l. Under Paragraph 18 of both oil and gas leases, un-earned acreage reverted

to Vaquillas 90 days after Conoco ceased drilling wells under the continuous drilling

clause. In this case, that date occurred no later than June 3 0, 2012 ("Release Date").

111is is the date ninety days after Conoco's Vaquillas Ranch A-7 No. 249 Well was

completed. On information and belief, Conoco's Vaquillas Ranch A-7 No. 249 Well was

the last well it drilled on the Subject Property.

12. Conoco takes the position that it is not obligated to release any acreage

back to Vaquillas, as it claims to have earned 40 acres per oil well and 640 acres per gas

well. Conoco's position is not correct as to gas wells because it disregards an important

provision of both leases.

13. Paragraph 18 of both leases controls how much acreage surrounding each

well Conoco is allowed to retain. Paragraph 18 states that if the Railroad Commission of

Texas adopts a rule for the field that provides for a spacing establishing units of acreage

per well different than 40 acres for oil wells or 640 acres for gas wells, Conoco may

retain only the acreage provided by the units established by virtue of the spacing provided

by the Commission's rule:

... Lessee covenants and agrees to execute and deliver to Lessor a written release of any and al I portions of this lease which have not been drilled to a density of at least 40 acres for each producing oil well and 640 acres for each producing or shut-in gas well, except that in case any rule adopted by the Railroad Commission of Texas or other regulating authority for any field on this lease provides for a spacing or proration establishing different units of acreage per well, then such established different units shall be held under this lease by such production, in lieu of the 40 and 640-acre units above mentioned. (Emphasis supplied).

PLAINTIFF'S ORIGINAL PETITION Page4 14. After the November I, 1987 alllendment to the two leases, the Railroad

Commission did adopt a rule for the Vaquillas Ranch (Lobo Cons.) Field that provided

for spacing that established 40 acre units of acreage for each gas well rather than 640

acres. Therefore, Conoco is not allowed to retain more than 40 acres for each of the gas

wells it drilled on the Subject Property. The acreage to be released will hereafter be

referred to as the "Reverted Minerals."

15. Without waiver of its right to do so at a later time and 1·etaining all of its

rights under the two leases in question, Vaquillas does not challenge by this cause

Conoco's rights or interest in the weils it drilled on the Subject Property and producing in

paying quantities at the Release Date.

VI. CAUSES OF ACTION

16. The foregoing Paragraphs 1 to 15, which are incorporated by reference

herein as ifrecited verbatim, support the following causes of action and claims:

17. Breach of Contract: At the Release Date, the Reverted Minerals

automatically reverted to Vaquillas. Conoco was required to provide Vaquillas with a

fully executed and recordable release of Reverted Minerals under the 26,622. 79 acre

lease and the 6, 740 acre lease, but Conoco has failed and refused to provide Vaquillas

with this formal release. Vaquillas has suffered direct and foreseeable indirect or

consequential damages from these breaches of contract in excess of the minimum

jurisdictional amount.

PLAINTIFF'S ORIGINAL PETITION Page 5 l 8. Specific Performance: Conoco has failed to provide Vaquillas with a

formal release of acreage as provided for in the leases. Conoco should be ordered to

specifically perform this obligation to provide to Vaquillas such release of the Reverted

Minerals.

19. Alternatively, Removal of Cloud and Action to Quiet Title: As is set

out above, the 26,622.79 acre lease and the 6,740 acre lease terminated as of the Release

Date as to the Reverted Minerals. Vaquillas would show that after making the oil and gas

leases of the Subject Property it was the owner of the reversionary interest in the mineral

estate in the Subject Property. On the Release Date, the mineral interest in the Reve1ied

Minerals reverted to Vaquillas. By Conoco's refusal to provide the required written

release of the Reve11ed Minerals, the two oil and gas leases constitute a cloud on

Vaquillas' title to the Reverted Minerals, forcing Vaquillas to seek judicial confirmation

of Vaquillas' interest in the Reverted Minerals and judgment quieting title to the

Reverting Minerals in Vaquillas.

20. Attorneys' Fees: As set out above, Conoco has breached (and continues to

breach) its obligation under the 26,622.79 acre lease and the 6,740 acre lease to execute

and deliver to Vaquillas a written release of all portions of the Subject Property it did not

earn through continuous drilling. Vaquillas' claims have been presented to Conoco and

Conoco has failed to release the acreage in question within 30 days after presentment.

Accordingly, Vaquillas is entitled to its reasonable and necessary attorneys' fees with

respect to this action. TEX. CJV. PRAC. & REM. CODE §38.001.

PLAINTIFF'S OIUGINAL PETITION Page6 21. Conditions Precedent: All conditions precedent to the bringing of these

claims has been performed or has occurred.

VII. REQUEST FOR DISCLOSURES

22. Pursuant to Texas Rule of Civil Procedure 194, Plaintiff request that

Defendant disclose within 50 days of the service of this request the information and

material required by Rule 194.2.

PRAYER

23. For these reasons, Plaintiff Vaquillas Unproven Minerals, Ltd. asks for

judgment against Defendant ConocoPhillips Company for the following:

L judgment ordering Conoco to execute a written release of the Reverted Minerals; JJ. damages, both direct and indirect or consequential in excess of the minimum jurisdictional amount; iii. judgment that the oil and gas leases in question have terminated as to all acreage described in such leases except 40 acres around the well bore of each gas well drilled by Conoco; iv. reasonable and necessary attorneys' fees; v. prejudgment interest as provided by law; vi. post-judgment interest as provided by law; vii. costs of suit; and viil. all other relief to which Plain ti ff deems itself entitled.

PLAINTIFF'S ORIGINAL PETITION Page 7 HAYS & OVlENS L.L.P. Gregg Owens, SBN 15383500 gregg.mvens@haysowens.com Robe11 G. Hargrove, SBN 24032391 rob.hargrove@haysowens.com 807 Brazos Street, Suite 500 Austin, Texas 7870 I (512) 472-3993 (512) 472-3883 Facsimile

Raul Leal Incorporated Attn: Raul Leal, SBN 24032657 rleal@rl-lawfirm.com 5810 San Bernardo, Suite 390 Laredo, Texas 7804 I (956) 727-0039 - Phone (956) 727-0369 -Fax

Michael Jung, SBN 11054600 Strasburger & Price, LLP 90 l Main Street, Suite 4400 Dallas, TX 75202-3794 (214) 651-4724-Phone (214) 651 4330 fax

PLAINTIFF'S ORJGINAL PETITION Page8