JERRY L. CANFIELD, P.A.THOMAS A. DAILY, P.A.WYMAN R. WADE, JR., P.A.DOUGLAS M. CARSON, P.A.C. MICHAEL DAILY, P.A. † !COLBY T. ROEMICHAEL LAFRENIER

† Also Licensed in Oklahoma! Also Licensed in Wyoming & North Dakota

DAILY & WOODSA PROFESSIONAL LIMITED LIABILITY COMPANY

ATTORNEYS AT LAW

KMW BUILDING58 SOUTH SIXTH STREET

P.O. BOX 1446FORT SMITH, AR 72902

TELEPHONE (479) 782-0361FAX (479) 782-6160

______________

Writer’s Direct Dial No. (479) 242-3968Writer’s e-mail: TDaily@dailywoods.com

JAMES E. WESTROBERT R. BRIGGS

OF COUNSEL_______

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

BEN CORE (1924-2007)

July 7, 2015

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

Re: ORDER REFERENCE NO. 088-2015-07

Application of SWN Production (Arkansas), LLC for Authority to produce itsLeonard 8-13 #14-7H13 Well, pursuant to Arkansas Oil and Gas CommissionGeneral Rule B-43(o), and to share the costs of such well and the natural gasproduced therefrom between the working interest owners and royalty owners ofthe existing units composed of Section 7, Township 8 North, Range 13 West andSections 12 and 13, Township 8 North, Range 14 West, Faulkner County, basedupon the sharing formula set out in detail below, as well an exceptional locationfor such well.

Commissioners:

SWN Production (Arkansas), LLC, 10000 Energy Drive, Spring, TX 77389, herebyapplies to the Arkansas Oil and Gas Commission as follows:

1. The Applicant is the operator and Applicant and its participating partners aremajority leasehold working interest owners in Section 7, Township 8 North, Range 13West and Sections 12 and 13, Township 8 North, Range 14 West, Faulkner County.The Applicant has drilled and completed, but not produced, a cross unit horizontal wellfrom a surface location in the Southwest Quarter of Section 7, Township 8 North,Range 13 West with a bottom hole location in the Southeast Quarter of Section 13,Township 8 North, Range 14 West, in the Fayetteville Shale Formation. The well has aperforated horizontal section of approximately 6078 feet. The proposed allocation ofcost, expense and production is depicted on Exhibit “C”. Geological maps depicting theFayetteville structure and thickness are enclosed with this application as Exhibits “D”and “E,” respectively.

2. The Applicant proposes to make an allocation of cost for the well betweenSection 7, Township 8 North, Range 13 West, and Sections 12 and 13, Township 8North, Range 14 West, Faulkner County, based upon an area in acres (“allocationarea”) defined by an exterior boundary 560 feet perpendicular to both sides of the

perforated well bore and a radius extending 560 feet from the first perforation (toe) andlast perforation (heel) of the well bore. The Applicant states that the total allocationarea encompassing the perforated well bore is 178.62 acres. 10.70 acres or 5.99% ofthe total area is within Section 7, Township 8 North, Range 13 West, 59.46 acres or33.29% of the total area is within Section 12, Township 8 North, Range 14 West, and108.46 acres or 60.72% of the total area is within Section 13, Township 8 North, Range14 West.

3. The Applicant proposes that the above allocation of 5.99% to Section 7,Township 8 North, Range 13 West, 33.29% to Section 12, Township 8 North, Range 14West, and 60.72% to Section 13, Township 8 North, Range 14 West, be applicable toall actual costs for the drilling of the well through and including the setting of productioncasing. Operations will be conducted under the terms of an Arkansas Oil and GasCommission model form operating agreement. The agreement the will provide for a400% penalty for a non-consent election for the drilling of the proposed well.

4. Applicant states that the perforated lateral of the Leonard 8-13 #14-7H13 Well is120 feet, which is closer than the allowed 560 feet, from the toe perforation of theBryant J 8-14 #3-12H Well. The Applicant requests that it be granted a locationexception to enable it to produce the Leonard 8-13 #14-7H13 Well notwithstandingsuch encroachment.

5. The Applicant has requested spacing waivers from all of the persons who havethe right to drill within Section 7, Township 8 North, Range 13 West, but has not yetobtained a waiver from every such owner.

6. The Applicant states that the granting of this application will be protective of thecorrelative right of all interested parties and will prevent waste of the natural gas bypermitting the most efficient method of developing the resource within the twogovernmental section which are the subject of this application.

7. The parties listed on Exhibit “A” are the interested parties in this proceeding andare the parties who should be given notice. Applicant requests that the Arkansas Oiland Gas Commission issue an order to the mineral leasehold working interest ownersto (a) join as a working interest owner in the drilling of the proposed well based uponthe allocation proposed above or, in the alternative, (b) elect to be a non-consentingworking interest owner under the terms of the operating agreement which governs theunit in which their leasehold or mineral interest is located. Any owner of leaseholdworking interest who fails to timely elect either alternative should be deemed to haveelected alternative (b) above.

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

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

Very truly yours,

Thomas A. Dailyjmt

Working Interest Owners

Leonard 8-13 14-7H18 Faulkner County, Arkansas

Westerly Exploration Inc 2803 Buffalo Speedway Houston, TX 77098 Xto Energy Attn: Braden White 810 HOUSTON ST STE 2000 FORT WORTH, TX 76102-6298 BP America Production Company 501 Westlake Park Blvd. Houston, Texas 77079 Attn: Jordan Haverly CRAIG L EMMANUEL PO BOX 86 LARAMIE, WY 82073-0086 IDLEWILD RESOURCES INC PO BOX 280235 LAKEWOOD, CO 80226 Wolf Point Exploration LLC 215 W Oak Street STE 900 Fort Collins, CO 805211 Katz & Jammers LLC PO Box 4289 Durango, CO 81302

Emmy Jake LLC 9322 Notts CT Lone Tree, CO 80124 Steele Creek Investment CO 31 Meadow Brook Place Houston, TX 77002 SILVERTREE OIL & GAS INC PO BOX 260498 LAKEWOOD, CO 80226 JUBAL OIL & GAS PROPERTIES LLC C/O B KOLE KILLION PO BOX 285 FORT WORTH, TX 76101 TRILOGY OIL & GAS LLC PO BOX 260498 LAKEWOOD, CO 80226 BHP Billiton Petroleum (Fayetteville), LLC 1360 Post Oak Blvd. Houston, Texas 77056 Attn: Fayetteville Joint Interest Land

As Drilled Allocation

30,682© Southwestern Energy.

5,113.7

1:NAD_1927_UTM_Zone_15N

Feet5,113.70 2,556.84

Scale

8N-13W-7

Section

8N-14W-12

8N-14W-13

10.70 ac.

Area Buffer Length (2D)

59.46 ac.

108.46 ac.

5.99 %

33.29 %

60.72 %

2290.4 ft.

3780.2 ft.

June 16, 2015

Legend

Created On:

LEONARD 8-13 14-7H13

560 ft.Buffer Size:

Well Name:

Length (3D): 6078 ft. County: FAULKNER

Surveyed Sections 560ft Offset

Surveyed Sections

First & last Perf Locations

Surface Hole

Bottom Hole

Perforated Interval

LETTER APPLICATIONLeonard 8-13 14-7H13_Working Interest Owners with section 7As Drilled AllocationLEONARD 8-13 14-7H13 FINAL 06-24-2015-Usable