T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein...

15
INSTRUMENT PREPARED BY VIRGINIA GAS ANO OIL BOARD ORDER RECORDED UNDER CODE OF VIRGINIA SECTION 45.1-361.26 V I R G I N I A: BEFORE THE VIRGINIA GAS AND OIL BOARD APPLICANT: EOI5 Resources, Inc. RELIEF SOUGHT: PURSUANT TO VA. CODE $ 45.1-361.21, (1) POOLING OF INTERESTS IN A 160.00 ACRE DRILLING UNIT DESCRIBED ON EXNWT A ATTACHED HERETO AND BEING UNfT PK L-1$ LOCATED IN THE PILORNS ICNSB %AS RELS (HEREIN ~BJECT ORILLING UNIT ) AND SERVED BY PLUM CNSK $5BLL $545 FOR THE PRODUCTION OF GAS OTHER THAN COALBEO METHANE GAS FROM SUBJECT FORMATIONS (heiein iefened to as "Conventional Gas'r "Gas"); and (2) DESONATION OF THE APPLICANT AS THE UNIT OPERATOR FOR THE SUBJECT DRILLING UNIT LEGAL DESCRIPTION: fJNfr PK I:15 PIL~ ISIDB4$AS FIELD PLL$ $eeseaier $$ ILL $M$ TQ BE MILLED fuff TIBl 4CATfON OBfi$Cl%B IN ~ A ATTADNBO NIRETO Pleas Safe T~., L Ji. Pit«a 5ee($t Treat ffe. 2$$2 fferfb ~ Blalrfct flu "~~ Cower, Virginia (the " tibj(rct Lands're more pargcubirly described on W«MWt A «Itaahed hereto and made a pert hereof) REPORT OF THE BOARD FINDINGS AND ORDER ) VIRGINIA GAS ) AND OIL BOARD ) ) ) ) ) DOCKET No. ) VGO84~19-1443 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 1. He«dna Date and Pleas: This matter came on for hearing before the Virginia Gas and Oil Being (hereafter "Board ) at 9:00 a.m. on April 1$ , 2005, at the Soidhwest Virginia

Transcript of T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein...

Page 1: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

INSTRUMENT PREPARED BYVIRGINIA GAS ANO OIL BOARD

ORDER RECORDED UNDER CODEOF VIRGINIA SECTION 45.1-361.26

V I R G I N I A:

BEFORE THE VIRGINIA GAS AND OIL BOARD

APPLICANT: EOI5 Resources, Inc.

RELIEF SOUGHT: PURSUANT TO VA. CODE $ 45.1-361.21,(1) POOLING OF INTERESTS IN A 160.00ACRE DRILLING UNIT DESCRIBED ONEXNWT A ATTACHED HERETO ANDBEING UNfT PK L-1$ LOCATED IN THEPILORNS ICNSB %AS RELS (HEREIN~BJECT ORILLING UNIT ) ANDSERVED BY PLUM CNSK $5BLL $545FOR THE PRODUCTION OF GAS OTHERTHAN COALBEO METHANE GAS FROMSUBJECT FORMATIONS (heiein iefenedto as "Conventional Gas'r "Gas"); and(2) DESONATION OF THE APPLICANTAS THE UNIT OPERATOR FOR THESUBJECT DRILLING UNIT

LEGAL DESCRIPTION:

fJNfr PK I:15PIL~ ISIDB4$AS FIELDPLL$$eeseaier $$ILL $M$ TQ BE MILLEDfuff TIBl 4CATfON OBfi$Cl%B IN~A ATTADNBO NIRETOPleas SafeT~.,LJi.Pit«a 5ee($t Treat ffe. 2$$2fferfb~Blalrfct

flu "~~Cower, Virginia(the "

tibj(rct Lands're more pargcubirlydescribed on W«MWt A «Itaahed heretoand made a pert hereof)

REPORT OF THE BOARD

FINDINGS AND ORDER

) VIRGINIA GAS) AND OIL BOARD))))) DOCKET No.) VGO84~19-1443)))))))))))))))))))))))))

1. He«dna Date and Pleas: This matter came on for hearing before the VirginiaGas and Oil Being (hereafter "Board ) at 9:00 a.m. on April 1$, 2005, at the Soidhwest Virginia

Page 2: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

BilI0620 IBEO I 62Higher Education Center on the campus of Virginia Highlands Community College, Room 240,Abingdon, Virginia.

2. Aaeearances: Tknothy E. Scott appeared for the App5cant and Sharon M. B.Pigeon, Asslstartt Attorney General, was present to advise the Board.

3. Ju~ and Notice: Pursuant to Va. Code $ 45.1-361.1et seq., the Boardfinds that it has jurtsdlc5on over the subject matter. Based upon the evidence presented byAppNcant, the Beard also finds that the ppttoannt has (1) exercised due d5tgence in conduc5nga meaningful search of reasonably avaikrbte sources to determine the idengty and whereaboutsof each gas and oil owner, coal owner, or mineral owner having an interest in Subject Drilling

Unit uhdertylrtg «nd comprising the Subject Lands; (2) has represented to ths Board that it hasgiven ao5ce to those paNes (t sreafter somegmes "person(s) whether rfferrtng to indMduals,corportrtlons, pa)tnershtps, associations, companies, businesses, trusts, joint ventures or otherlegal ep55ss) engtted by Va. Code t) 45.14B1.15to nogce of the AppNcatton 5)sd herein; and (3)that the persons set forth in their Applics5on and Notice of Hearing have been identNed byApplicant thrOugh its due diligsnos as Owners or Claimants cf Conven5onal Gas interestsu dsrtytng idtjtfct Drt5tng Unk, iciuding those set out in Sdtgtft 84 who have not heretoforeleasedi sold or voluntarily agreed with the AppScant to pool their Gas t rtereets in Subject DrtBngUnit. Unknown or untocatabte Gas Owners/Claimants in Subject DriNng Unit are listed onExft$4 E. Furtttsr, the Board has caused no5ce of this hearing to be published as rwtutred byVa. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given hereinsatisfy all~ requirements, Board rule requirements, and the minimum standards of dueprocess.

4. Arnendmsnts: None.

5. Dismissals: None.

6. Ra8ef Rsouastad: AppNcant requests that pursuant to Va. Code t) 45.1-361.21,(1)the Board pool the rights, interests, and estates in and to the Conven5onat Gas of the knownand unknown pearons Hated in the athehd EttbfbB S4, and that of their known and unknownheirs, e eadem, administrators, devlsees, trustees, assigns and successors, both immediateand remote, fer ths drtNng and operation, inckrdtng producgon, of Conven5onal Gas from theSubject D Uhtt eetabtkrhed for Subject Formagons underlying and comprised of the SubjectLands, ( sorieihnss col~ idsnNed and refereed to as 'WsN Development and/orOperatkrn in the Subject DrlNng Unit"); and, (2) that the Board designate SOS Reeetaees, Inc.as Unk Operator.

7. Relief Granted: Ths requested relief in this cause shall be and hereby is granted.

7.1 The Board hereby: (1) pursuant to Va. Code jj 45.1-361.21 C 3, designatesEGO Resources, Inc. (hereattar "Unit Opera~ as the Operahv authorized tochill and operate the Plum Creek Watt $$4)5 in the Subject Dr55ng Unit at thelocagon dephhsd on the plat atlached hereto as Rdttblt A to produceConventional Gas from Subject Formatkes, subject to the permit provisionscontained in tr 45.1-361.27et ssq., Code of Virginia, 1950 as amended, to 5 4VAC 25-150 et seq., Gas and Oil Regulations and to 5 4 VAC 25-160 et seq.,Virginia Gas and Oil Board Rsguladons, all as amended from time to time; and

Page 3: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

BOOK0620 l%BEO I 63

(2) pursuant to Va. Code tj 45.1-381.21A, the rights, interests, and estates in

and to the Conventkeal Gas in Subject DriHing Unit including those of the knownand unknown persons listed on ExhBNt 84, aHached hereto and made a parthereof, and their known and unknown heins, executors, administrators, devisees,trustees, successors, and ~, both immediate and remote, be and herebyare pooled in the Subject Formations in the Subject Ddging Unit underlying andobmprlsed of the Subject Lands. Pursuant to Va. Code jj 48.1-381.20,the BoardeetabHshed drilling units for the Pilgrims Knob Gas Field by order entered June 7,1991.

8. ElscHon and ElecHon Period: In the event any Gas owner named in theAppgca5on and No5ce of Hearing has not heretofore reached a voluntary agreement to share in

the operation of the well to be heated in Subject DNHng Unit at a rate of payment mutuallyagreed to by saki Gas owner and the Operator, then, such person may elect one of the optkesset forth in Paragraph 9 below and must give written no5cs of his slec5on of ths optime selectedunder P 9 herein to the designaled Unit Operator at the address shown bekrw within

thirty (30) days from the data of receipt of a copy of this Order. A timely electke shall bedeemed to have been made if, on or before the last day of said Relay pertod, such tHscHngperson had dsHvHmN his written elecHon to the dstHgnatsd Unit Operator at the address shownbelow or has duly postmarked and placed IHs wrt5en ektcHon in first dass UnHed States mail,postage pre pi5d, addressed to the Unit Operalw at the address shown below.

Elac5on Oo5ons:

9.1 Ontion 1 —To PaNchate In The Develooment and OoeraHon of theDNlinc Unit Any Gas Owner or Claimant named in ~54 who hasnot reached a voluntary agreement wHh the Operator may elect topartldpate in the Well Development and Operation on the Subject DNIingUnit (~"PeNcipa5ng Operator') by agreeing to pay the estimateof such PaNtHpa5ng Operator's propoNonale part of the actual andreasonable coals, inckaHng a reasonatHs supervision fse, of the WellDevelopment and Opera5cn, and mere paNcularly set forth in VirginiaGas and Oil Board RegukNon 4 VAC 25-180-100 (herein "Completed-for-ProducHon Costs ). Further, a Partidpa5ng Operator agrees to pay thess5mate of such Pertictpa5ng ~s propoNonate part of theEsHmated, Compiled-for-P oducHon Costs as set forth behw to the UnitOperator wkhin forty-five (48) days from the later of the date cf maiHng orthe date of recording of this Order. The estimated Cornpleled-for-Producbon Costs for the Subject DrlHing Unit are as follows:

Estimated, Completed-for-ProducHon Costs: 33$8~ILOO

Any gas owner and/or claimants named in ExhQrit 84, who elects thisoptke (Op5on 1) understands and agrees that their Ini5al payment underthis option is for their propoNonate share cf the Applicant's estimate ofactual costs and expenses. It is also understood by aH persons elec5ngthis option that they are~ to pay their proportionate share of theactual costs and expenses as determined by the operator named in thisBoard Order.

Page 4: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

HIIN0620 l%8EO I 64

A Participating Operator's proportionate cost hereunder shaN be the resultobtained by muNiplying the ParNdpaNng Operator's "Percent of Unit"

times the Completed-for-PioducNon Costs set forth above. Provkkid,however, that in the event a ParNcipaNng Operator elects to participateand fails or refuses to pay the esNmate of his proportioixae part of theComplelecWor~uctke Costs as set forth above, all wkhin the time setforth herein and in the manner prescribed in Paragiaph 8 of this Order,then such ParHcipeNng Operakx shall be deemed to have elected not toparNdpete and to have ekicted compensaNon in lieu of parNcipationpursuant to Paragraph 9.2 herein.

9,2 OoNon 2 - To Recce A Cash Bonus Considenethn: In lieu ofparNcipaNng in the WeN DevtHopment and OperaNon of Subject Drilling

Unit under Paragraph 9.1 above, any Gas Owner or CkNmant named in

KxhBNt 84 in the unit who has not reached a voluntary agreement with

the Operator may ehct to accept a cash bonus consideraNon ofQ pernet mkieral aee owned by such person, commendng upon entry of thisOrder and conNnuing annuaNy unNI commencement of producNon fromSubject DrINng Unit, and thereahw a royaNy of 1/8th of 8/INhs (twelve andonekalf percent (12.5%)] of the net proceeds reosived by the UnitOperalor for the ixNe of the Gas produced from any Well Developmentand OperaNon coveted by this Order muNipNed by the Gas owner'spercentage Inkxest Within Unit as set forth in the AppNcaNon and NoNceof Hearing (for purposes of thki Onfer, net proceeds shaN be actualproceeds received less post~roducthn coats incurred downstream of theweNhead, inckxNng, but not limNed to, gathering, compessskxi, treating,transportaNon, and msrlaiting costs, whether peribrmed by Unit Operateor a third person) as fair, reasonable and equNable compensalion to bepakl to saki Gas owner. The inNal cash bonus shall become due andowkig when so ekxxad and shall be tendered, paki or escrcaxid withinone hundred twenty (120) days of reconling of this Order. Thereafter,annual cash bonuses, if any, shaN become due and owing on eachanniversary of the date of~of this order in the event productionfram Subject DrNNng Urkt has nct tixxalofore commenced, and once due,shall be tendered, paid or escnxived within sixty (80) days of sakianniversary date. Once the inNal cash bonus and the annual cashbonuses, if any, are so paid or escrowed, saki payment(s) shall be~on in full for the dght, inkxesls, and ckNms of such elecNng Gasowner in and to the Gas pnxkiced from Subject Formalke in the SubjectLands, except, however, for lhe 1/Sh royaNes due hereunder.

Subject to a final legal determinaNon of ownership, the ekicNon madeunder this Paragraph 9.2, when so made, shall be sathsfaclm in full forthe right, interests, and claims of such elecNng person in any WellDevelopment and Operation covered hereby and such electing personshall be deemed to and hereby does lease and assign its itght, interests,and daims in and to the Gas produced from Subject Formatkn in theSubject Drilling Unit to the AppNcant.

Page 5: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

BOOK0620 PNEO I 65

9.3 Ootion 3 - To Share In The Davelooment And OoeraNon As A Non-PartlcioaNno Person On A Carded Basis And To ftacehm ConsideraNonIn LIsu Of Cash: In Neu of partkHpaNng in the Well Devtdopment andOperagon of Subject DrHHng Unit under Paragraph 9.1 above and in lieucf receiving a cash bonus conskferagon under Paragraph 9.2 above, anyGas Owner or Qaknant named in Bxhtbk $4 hereto who does not reacha voluntary agreement wNh the Operator may shet to share in the WellDevelopment and Operation of Subject DrNNng Unit on a canted basis (as a "Carried WeN ~~ ) so that the proportionate part of theCompleted-for-Production Costs hereby agocabh to such Carried WellOperator's interest is chtaged against such Carried Well ~s shareof producNon from Subject DrNHng Unit. Such Catried Well Operator'srights, intenets, and claims in and to the Gas in Subject DrHHng Unit shallbe deemed and hereby are assigned to the Unit Operakx unNI theproceed from the stde of such Carried Well Operator's share ofpnxlucNon from Subject DrHHng Unit (exdustve of any royaNy, excess oroverrkgng royaNy, or oNter n~peragng or non cost+earing burdenresetved in any lease, assignmtmt thereof or agreement rektNng theretocovering such Interest) equals three hundred percent (300%) lbr a leasedinterest or two hundred percent (200%) for an urdeased Interest(whichever is appNcable) of such Carried Weg Operator's share of theComplelsd4or&nxfucgon Cosbr aHocable to the interest of such CantedWell Operator. Any Gas Owner and/or Claimant named in BxbtbB $4who elects this opNon (OpNon 3) unde+tends and agrees thatCompletedfor&roductkm Costs are the Operator's actual, costs for welldevelopment and opens. When the Unit OpersHor mcoups andrecovers from such Carried Well Operator's assigned interest theamounts provided for above, then, the assigned interest of such CarriedWell Operator shall autonutNcaHy revert back to such Carried WellOperator, and fnxn and after such revendon, such Canted WeN Operateshall be treated as if it had pargctpatsd inNally under Paragraph 9.1above; and thereafter, such parNtHpaNng person shaH be charged withsnd shall pay his proporNonate part of aN further cosls of such well

development.

Subject to final legal detsrmlnatke cf ownersINp, the elecHon made underthis Paragraph 9.3, when so made, shaN be saNsfactkm in full for theright, interests, and dalms of such elecNng person in any welldevelopment and operate covered hereby and such electing ptxsonshall be deemed to have and hereby does assign his dght, Interests, andclaims in and to the Gas peduad from Subject FormaHon in the SubjectDrIHing Unit to the Unit Operator for the penod of time during which hisinterest is carried as above provided prtor to Ns reversion back to suchelecNng person.

Page 6: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

II0620emol6610. FaNure to Prooerlv Elect: In the event a person named in Exhibit ~ hereto

does not reach a voluntary agreement wNh the AppNcant and fails to do so within the time, in themanner, and in accordance wNh the tenne of this Order one of the altemaNves set forth in

Paragraph 9 above for which his interest quaNNes, then such person shall be deemed to haveelecHHd not to pargctpate in the propoed WeH DevtNopment and Opera5on in Subject DrNNng

Unit and shaN bp deemed, subject to any final legal delarmlna5on of owrterstHp, to have electedto accept aa sa5sfaction in full for such person's right, Interests, and ckHms in and lo the Gasthe cons~ provided in Paragraph 9.2 above for which Ns interest quaNHes and shall bedeemed to have leased andlor assign@ his right, inkxests, and claims in and to &e in theSubjebt DrHNng Unit to the Unit Operator. Persons who fail to properly elect shaN be deemed tohave accepts the compensatke and kmns set forth herein at Paragraph 9.2 in saNsfacthn in

full for the right, Interests, and jaime of such person in and to the Gas produced from SubjectFormagon udeteykthg Subject Lands.

11. DafauN Bv Partidoattno Panxxr. In the event a person named in Exidbk S4elects to par5ctpsae under Paragral& 9.1,but fags or refuses to pay, to secure the payment or tomake an arrangement with Ihe Unit Operator for the payment of such person's proportionatepart of the ENNmtaad Completed-for-PnxfucNon costs as set forth herein, aN wNhh the Nme andin the maww'a prescribed in this Order, then such person shall be deemed to have wNhdrawn

his eleONon tc participate and shaN be deemed to have elected to accept as saNsfaction in full

for sudh pardon% dght, interests, and dakns in and to the Gas the conekfetagon provided inP~ 9.2 above for wIHch his intetest qualies depending on the excess burdens aNachedto such inlerest. Wheteupon, any cash bonus consideration due as a result of such deemedelecNon shaN'e tendered, paid or escrowed by Unit Operslw wI55n one hurxked twenty (120)days aller Nte last day on which such defauiNng person under this Order should have ptN hispropo atei patt of such cost or should have made sagsfactory arrangements for the paymentNtetetk When such cash bonus conskleration is paid or escrowed, it shaN be satiefacNon in full

for the dght, Interests, and ck5ms of such person in an to the Gas u derlying Subject DrHNng

Unit in the ~Lands covered hereby, except, however, for any 1/8th ~whhh wouklbecome due puntuant to Paragraph 9.2 hereof.

12. Aaalonmant of Intassst: In the event a person named in ExhENt 54 is unable toreach 5 oiunlary agreement to share in the Well Development and Openttion contempktted bythis at a rakr of payment agnted to~by said Owner or Qaimant and the AppHcant,and said person 5ktcts or faNs to elect to do other than parNctpats under Paragraph 9.1 above inthe Wall Devsjepment and Operagon in Subject DrlNng Unit, then such person shaN be deemedto have and sfs5I have assigned unto AppHcant such person's right, interests, and daims In andto sakliweH, in Subject Formatkxts in Subject DNlng Unit, and other share in and to Gasproduction lo whioh suoh person may be en55ed by reason of any elecNon or deemed ehdkehereunder in accordance with the provktions of this Order governing sIHd ekcNons.

13. Unk Qesratm for Oasraterk EG Recourses, Inc., shall be and hereby isdesignated as Unit~augxxlasd lo drNI and operate Pktm Cteek Weg $545 in SubjectForma5bns in Subject DrNNng Unit, aH subject to the permit provisions contained in Va. Code II45.1-381.27et'saq., Itj 4 VAC 25-150 et seq., Gas and ON Regulations and 55 4 VAC 25-180 etseq., Virginia Gas and ON Board Regulatkes, aH as amended from time to time, and aN

elecNona requked by this Order shaN be communicated to Unit Operator in wriHng at theaddress shown bstow:

Page 7: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

W60620%0l67EatH IHsaeac~ lac.~- --- ---Nsaa1.~~.BaBs 380

r ------"- -- SLSIlHHY.~J I I IIXI%

fras ~ fHNIBH= —'—

14. Coromenownant of OoaraNons: UnN Operator shall commence or cause toccxnmence opcs»Nor» for the drNNng of the well covered hereby within seven hundred and thirty

730) )toys from the dale of this Order and shaN prosecute the same wHh due dNgence. If Unit

Operator shaN not have so commenced and/or prosecuted the drHkng of the wsN, then thisOrder shaH twsnweeihb, excep't fof any cash sums becomktg payable hereunder, olherwlse,unless sooner tpmdnalsd by Order of the Board, this Order shall expire at 12:00 P.M. on thedate dn whjph lhe well covered by this Otder is permanenNy abandoned and plugged.However, in the levant en apPeal is taken from ttds Order, then the One between the fNng of thePeNion for Appeal end the Nnal Order of the Circuit Court shall be excluded in cahulaNng thetwo-year ported toHsronced herein.

15. Oinsrstor's Ltsn: Unit Operator, in addNon to the other rights agorded hereunder,shali have a Nen and a right of set olf on the Gas etdates, rights, and irrtsrests owned by anypersoni subject keroto who elects to pargctpate under Paragraph 9.1 in the Subject DrNNng Unkto the Oxtsnt theist costs Incuned in the drlNng or operaHon on the Subject DrNNng Unit are achaSe agaktat auoh person's interest Such Hens and dght of set olf shall be stk- —~as toeach saparaW p8rson ahd shaN romakt Hens unN the Unit Operator driNng or~the wellcovered hereby ltas been pakl in full amounts due under the tsm» of thkr Order.

16. Escrow Provisions: AppNcant has represented to the Boenl that thee arounknown ancktlr unlooalable Oas owners in the subject DrHHng Unit whose interocss aro subjectto the escrow roguttomenkr of Paragraph 16.1;and, the Appgoant has represented to the Boardthat there alolwe conlNCNng clsknants In Subject DrNNng Unit whose payments we subject lo theprovtslcr» of 16.2 hereof. Thewfore, by this Order and unk»s and unN ogterwisemisted by the, the Escrow Agent ls requkod to~ an interest+earing escrowaccount for thb Sttbject DrNNng Unit.

Wachovla BankCorporale Trust PA1 328123 South Broad StreetPhiladelphia, PA 19109-1199Attn: Rachel Raiferty

18.1 Escrow Pmvlsions for Unknown or Unhcatatde Persons: If any payment ofbcxtus, myaNy payment or other payment due and owing cannot be madebecause the penen enNNed thereto cannot be keeled or is unknown, then suchcash bonus, royaNy payment, or other payment shall not be comnsngled with anyfunds of the Unit Operator and shaN, pursuant to Va. Code 5 45.1-361.21D, bedeposNad by the Operator into the Escrow Account, commencing within onehurtdrod twenty (120) days of ocording of this Order, and conNnulng heroalteron a monthly basis with each deposit to be made by a date which is no later than

Page 8: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

SODK0620 I%GEO I 68

sixty (50) days after the last day of the month being reported and/or for whichfunds are subject to deposit. Such funds shall be held for the exclusive use of,and sole benefit of the person enlNed therelo until such funds can be paid tosuch person(s) or unBI the ENxew Agent relinquished such funds as required bylew or pursuant to order of the Board in acconfsnce with Vs. Coda 5 45.1-3B1.21D.

Escrow Provishns for Conlic5no Claimants: If any payment of bonus, royaltypayment, proceeds in excess of ongcktg operational expenses, or other paymentdue and owing under Ns Order cannot be made because the iderNty of theperson en55«d thereto cannot be made certain due to confNcgng datms ofoWneiship and/or a delisct or doud on the BBe, then such cash bonus, royaltypayment, proceeds in excess of ongohg operagonal expenses, or other~, teyethw wkh Participating Operator's Proportionate Costs paid to Unit~pursuant to Paragraph 9.1 hereof, if any, (1) shall not be commingledvjkh «ny funds of the Unit ~ and (2) shaN, pursuant to V«. Code 5 545.1-351.22 A 2, 45.1-3B1.22A 3 and 45.1M1.22 A 4, be deposited by theQperekw into the Escrow Account wkhin one hundred bssnly (120) days ofrecording of this Onfer, and cengnuing th--~- on a menBNy basis wllh eachd4fxxtk to be made by a date whkh is no lehr than sixty (50) days «her the ktatd«y of the month bektg reported and/or for whkh funds are subject to deposk.Such funds shsN be held for the exckelve use and sole ben«lit cf the personerNBed thereto ungi such funds can be paid to such person(s) or unt5 the Escrow~ reNnqukrhes such funds as requked by Iaw or pursuant to Onfer cf the

Sesdsl Findines: The Board specBIcally and specially finds:

Applicant is EOIB ~~, lnc. Ppplkxtnt is duly a thorized and qu«Ned totransact busktess in the Commonwealth cf Virginia;

Applicant MG Resources, lnc. is an operator in the Commonwsallh of Virginia,and has s«B«5ed the Soanl's requirements for oper«gone in Virginia;

Appikxtnt ECKI Rseewms, Inc. ckNms ownership of Gas leases on 72~~percent of Subject DrNng Unit and the right to explore for, develop, and pnxfuceGas from same;

Apjdkxtnt has proposed the drNSng of the Pkaa Creek Wel 554IB to a depth of5~ feet on the Subject Driging Unit «t the locagon depkaed on EaWbk A todeVelep the pool of Gas in Subject Form«Nona, and to compkas and operatePkka Creek W«N $$4IB for the purpose of producing Convengonal Gas.

The esgmaled producgon of the life of the proposed Pkan Creek Wsl 854IB is500 IMCF.

With this Appiicauon, notice was provkted to everyone cbeing an ownershipinterest native to the producfion of convendonal gas in the Subject Ddiitng Unit.Set forth in Exhibit B4, is the name and last known address of each Owner or

Page 9: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

jjjjm0620 pe 0 ~ 6g

Claimant identified by the Applicant as Gas owners in Subject Drilling Unit whohas not, in wrNng, leased to the Applicant or the Unit Operakx or agreed tovoluntaltly pool hts intwests in Subject DrNing Unit for ils development. Gasinterests urdeased to the Operator and litded in ExhSR 84 represent27.040880% percent of Subject DrINng Unit;

17.7 Applicant's evkkmce established that the fair, reasonable, and equitablecompensadon to be paid to any person in lieu of the right to par8cipate in the'Cells are those options provided in Paragraph 9 above;

17.8 The Subject DrINng Unit does not consdtute an unreasonable or arbitraryexerckut of App8cant's right to explore for or produce Gas;

17.9 The rtNef requesled and granied is Just and reasonable, is supported bysabstarNal evidence and will afford each person lkded and named in ExidbR B-3 hereto the opportunity to reosver or receive, wllhout unnecessary expense,such person's just and fair share of the production from Subject Dri@ng Unit. Thegqm8ng of the Applicagon and relief requested therein wN ensure to the extentpdsstble the greatest uNmats recovery of Conventkeal Gas, prevent or assist in

preventing the varkes types cf wash< prohibited by sbduls and protect or assistin proteclng the correh8vs rights of aN persons in Ihe subject common sourcescf supply in the Subject Lands. Therefore, the Scant is enlering an Ordergnsngng the re8ef herein set forth.

18. Ida8ino Of Order And Filtno Of ANdsvtL Applicant or Its Attorney shall file anaf8davtt with the '8eeietary of the Board wNhln sixty (80) days after the date of recording cf thisOrder t)tatktg ~that a bue and correct copy of saki Order was mailed within seven (7) days fromthe of Its by the Unit Operakx to each Respondent named in ExhOR $4 pookxi bythis and address is known.

19. A a8abNtv of Unit Raeotch: The Dkector shall provkle all persons not subject toa lease with reasenable access to all records for Subject DrINng Unit which are submtbsd by theUnit Operalw to said Director and/or his Inspector(s).

20. Conckahn: Therefore, the requaAsd re8ef and all terms and provisions set forthabove be and hereby are granted and IT IS SO ORDERED.

21. Aaoeah: Appeals of this Order are governed by the prcvtsions of Va. Code Ann.tj 45.1-381.9whi4h provides that any order or deckdon of the Board may be appealed to theappropriate ctrbuii court.

22. Effeodve Dale: This Order shall be ~ as of the date of the Board'sapprovai of this Applicagon, which is set forth at Paragraph 1 above.

Page 10: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

II0620 18EO I 70DONE AND EXECUTED this I> day of

majority of the Virginia Gas and Oil Board.

CI4irman, Bann)ft)fiiampler /

, 2005, by a

DONE AND PERFORMED this /7+ day ofof this Beard.

, 2005, by Order

Prlndpal Executive To The StaffVirginia Gas and Oil Board

STATE OF VIRGINIA )COUNTY OF ':: a."..

'r~e

Acknewiedged on this M~ day of ~,2005, personaiy beforeme a notary pubic in and for the Commonweal of Virginia, appeared Benny Wampkrr, beingduly sworn dkl depose and say that he is Chairman of the Virginia Gas and Oil Board, that heexecu'he same and was authorized to do so.

My commission expires: g.gi.>e

Notary Pubic

STATE OF VIRGINIA )COUNTY OF WASHINGTON)

Acimowladged on this J0 day of Qi~, 2005, personally beforeme a notary public in and for the CommonweaN)f6f Virginia, appeared B. R. Wilson, being dulyswam dkl depose and say that he is Prtncipal E%eartive to the Stalf of the Virginia Gas and OilBoard, that he eweuM the same and was authorized to do so.

Mycammwmexpiras: 9~/D5[c:/mewwd2000leog.pooling.plum creek¹5-05.enter]

Notary Public

10

Page 11: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

IIA tf A rt as+a m a .6790''f~M

remV f l,fLatitu

aerials.111smse141

/

/

125.50AC. - 69.,75%Op 150AC. /

51StFACL pm',~PtflM Cfish TftdSSNtkftCS, LP.

I

I

I

I

I

I

I

Ares sfUslt-tSL90 bases%ALL LOMBÃ% PLAT

SOO ]tSSOtfftCftS WaS lfame or Nmnber PQltd CSSSKCM

~tt . PLU55C5ma~ Qeedren5te XRTZSRSCtt

WsR Coordtaates tVtttsbde Sbaelptared N: $71,655.96 Slt 999,699.59

Eemattote 90aG 95 Mstbadueed to~~ Tria, lersdsftam OFS dertrad ~Sordo; 1"e

noh'erstrMsLtosoraLrs

'Ibis piet is e new piet X;en epdatsd pter ; or e deal locadon pt 'Dsnotce tbe hesdtsniof eiwsS oe CnBed Itatm ~~maps, actde 1 to,000,letitede and~Sties bsts5 rapmaented by border+me as~Q~~.+ j~ks—

Forro DGO-GO-7 /sA. e o

Page 12: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

ssm0620%0 I 72

PLUM CREEK 0545 WELLPILORMS KNOB OAS FIELD UNIT PK L-10

PAWfNS WITH WHOM APPUCANT HAS NOT RNACHRO AOIKEMENT

TRACT STATUS

INTERESTWITHINQNIT

GROSSACREAGE

IN UNIT

Buchentm Columbia Natural Resources, LLC Og and GssRealty 908 Pennsylvania Ave. LesseeTr. 4 Chartestsn, WV 25302

18.770000%

Total: Buchanan Realty Tr. 4 18.770000%

C.L. RgterLumberCompanyTract 15

Hard Rock Exploration, inc.P..O. Bett 13089C~~i, WV 25380

endCarter OI 8 Gas, inc.881 Best Byrtf Bt., Bube 110~,Vtrgktht 23219

Oil and GssLessee

0.930000

Totak C.L. RNer Tr. 15 0.930000

Buchanan Cctumt¹a Nekssl Resources, LLC Oil and GasRealty 900 Penneytvsnis Ave. LesseeTr. 3 Charleston, WV 25302

0.080000% 0.140000

Total: Buchanan Realty Tr. 3 0.140000

~rBuchanan Columbks Nstlt¹ Resources, LLC Oil snd GssRealty 900 Pennsylvania Ave. LesseeTr. 5 Caerte¹on, WV 25302

1.140000

Total: Buchanan Realty Tr. 5 1.140000

Psge1of2

VIRGINIA: In the Clerk's Office of the Circuit Court of Buchanan County. The foregoing instrumentwas this day presented in the ofBce afottmid and is, together with the ccrtificate of acknowledgment annexed,admitted to record this ulsInsg day of Cl~~~, 20 CIS I '.BD P M.Deed Book No. ds~k-'t and Page No. Ifaf r. ~TB: x n James M. Bevins, Jr., ClerkReturned to: D& rkt8

Page 13: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

IIO620 IIO I 72Egg~ 84

IsLgg~~WE'LLIsIL~ KNOI GAS FIELD IjNIT Isw L-18

Is~tIIBIAf WHOM ~AWf HAS NOT RIMCHIIS AQRIKNKNT

TRACT STATUS

INTERESTWITHIN@NIT

GROSSACREAGE

IN UNIT

~4BuchananRealtyTr. 4

~Nurtural Resources, LLC868 Penhsytwsnia Avs.Caartesttm, trtnr 25m

Oil and GasLessee

18.770000% 33.780000

Totak Buchlsnsn Realty Tr. 4 18.770000% 33.780000

C.L. RitterLumberCompanyTract 15

tltard Reek gxpkrratton, Inc.P.O. Barr 13059geaa~s, ttttrV 26360

andiCsrler ON 8 IQas, Inc.

Kaat Byrd Bt., Butte 110, Vlrglnts 23219

Oil and GasLessee

0.930000

total: C.L. Ritter Tr. 15 0.520000% 0.930000

BuchananReekyTr. 3

t4rtumbB Ntsturat Resources, LLC Oil and Gas

p PertnsytsstleAve. Lessee0.080000% 0.140000

Total: BwAsrwn Realty Tr. 3 0.080000% 0.140000

E2RealtyTr. 5

tkrtumbB Rtrturat Resources, LLC800 Pennsyhrania Ave.Chsrleskrn, VIV 26302

Oil and GasLessee

0.630000% 1.140000

Total: Btuchanan Realty Tr. 5 1.140000

Page 1 or 2

Page 14: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

INO620 NITRO I 73

PILQWMS KNOS OAS UNT PK L-1B

PA%i%1 WFTH WHQN APPUCANT HAS HOT REACH%9 T

TRACT STATUS

INTERESTWITHIN~UN T

GROSSACREAGE

IN UNIT

M. LouBowenKrohEshae30.88acreTr.

CNX Qas Company LLCBox 947Btuegsld, VA 24805

M. Lou BoWen NellEehde Umhed UabBtyUmhsd s-mmeesm slp

Attsngen: Charles W. Hart3121NestiMeln Sheet, Coal Bldg.Teasweh, Vhghde 24851

Possible

ON and GasLessee

14.298320

Marish Lau Bowen KroN Heirs,DeWttass, Successrss andAssigns

Anha L thresectcse Hshs

105 NE 71"SheetMiami, FL 33138

Emma Jean Qrceectose51 g 82 SheetHtateah, FL 33013

Jacht ~Adrhese Unhnown

Unleased 0.000510%

0.000300%

0.000310%

0.000310%

0.000920

0.000552

0.000552

0.000552

Unleased 0.000310%

Unloosed 0.000810% 0.000552

Toad: M. Lou Bowen KrcN Eslale 30.88Acre Tr.

TCITAL

Ic:hnswonl200$ sc94sNNn94Sumcra505.exb3-1]

7.940000%

27.940000%

14.300000

Page2of2

Page 15: T~.,€¦ · Va. Code 5 45.1-351.19.8.Whereupon, the Board hereby 5nds that the nogces given herein satisfy all ~ requirements, Board rule requirements, and the minimum standards

BOOK0620 ISEQ I 74

EXHIBIT EPLUII CREEK SS45WELL

PILGRIIS lQIOB GAS FIELD UNIT PK L-16

INTERESTS AS TO WHICH PROCEEDS SHOULD BE PLACED IN ESCROW

TRACT STATUS

INTEREST GROSSWITHIN ACREAGEUNIT IN UNIT

Tr. 8M. LouBowenKrdlEstate30.88acre

Marish hou Bowen Kroll Heirs,Deviseea, Successors, andAssigns

Anita L. Groeschm HeirsJack GrosectoseAddress Unknown

Paul Daniel GrosedoseAddress Unknown

Jesse GrosedoseAddress Unknown

Daniel G oslsdoseAddress Unknown

Unleased

Unieased

Unleased

Unleased

0.000310%

0.000310%

0.000310%

0.000310%

0.000552

0.000552

0.000552

Total: Tr.g Unlocated Interests 0.001240% 0.002208

[c:tin~iong.pooling.plumcrAS(S.exe]

VIRGINIA: In the Clerk's Office of the Circuit Cour( of Buchanan County. The foregoing instrumentwas this day presented in the office aforesaid and is, together with the certificate of acknowledgment annexed,admitted to record this eIeIrrttf day of Clx~, 20 OS I:Brt gs M.Deed Book No. fsr@O and Page No. ffef r. ~TB: l . 0 4mesIrt. Bevins, Ir., ClerkReturned to: Dies rat re TB$TSL~ I i „~~~put