filed - utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng...

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FILED MAR 2 g ZOrS SECRETAHV, EOÆ OF CIIL, GAS & fuIIMNG BEFORE THE BOARD OF OIL, GAS AND MINING DEPARTMENT OF NATURAL RESOURCES STATE OF UTAH IN THE MATTER OF THE REQUEST FOR AGENCY ACTION OF EP ENERGY E&P COMPANY, L.P, FOR AN ORDER POOLING ALL INTERESTS, INCLUDING THE COMPULSORY POOLING OF THE INTERESTS OF MARY ELLEN SLEMAKER BENIEN AND ALAN AND KAY BLOOD LIMITED LIABILITY COMPANY, LLC, IN THE DRILLING UNIT ESTABLISHED FOR THE PRODUCTION OF OIL, GAS AND ASSOCIATED HYDROCARBONS FROM THE LOWER GREEN RTVER-WASATCH FORMATIONS COMPRISED OF ALL OF SECTION 12, TOWNSHIP 3 SOUTH, RANGE 5 WEST, U.S.M., DUCHESNE COUNTY, UTAH PETITIONER'S EXHIBITS Docket No. 2015-014 Cause No. 139-131 Pursuant to Utah Admin. Code Rule R641-105-500, Petitioner EP Energy E&P Company, L.P. ("EPE"), by and through its counsel of record, MacDonald & Miller Mineral Legal Services, PLLC, hereby respectfully submits the following exhibits intended to be offered into evidence in support of its Request for Agency Action ("RAA") at the April 22,2015 hearing on this cause: EXHIBIT (s^)) - EPE's potential witnesses' resumes (collectively 4 pages): . John D. DeV/itt, Jr.- Staff Landman . Michael J. Walcher - Land Advisor . Steven A. Biancardi - Reservoir Engineering Advisor EXHIBIT ((8" - True and correct copies of the Board's Orders entered in Cause Nos. 139-8 and 139-124 (collectively 28 pages).

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Page 1: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

FILEDMAR 2 g ZOrS

SECRETAHV, EOÆ OFCIIL, GAS & fuIIMNG

BEFORE THE BOARD OF OIL, GAS AND MININGDEPARTMENT OF NATURAL RESOURCES

STATE OF UTAH

IN THE MATTER OF THE REQUEST FORAGENCY ACTION OF EP ENERGY E&PCOMPANY, L.P, FOR AN ORDER POOLINGALL INTERESTS, INCLUDING THECOMPULSORY POOLING OF THE INTERESTS

OF MARY ELLEN SLEMAKER BENIEN ANDALAN AND KAY BLOOD LIMITEDLIABILITY COMPANY, LLC, IN THEDRILLING UNIT ESTABLISHED FOR THEPRODUCTION OF OIL, GAS ANDASSOCIATED HYDROCARBONS FROM THELOWER GREEN RTVER-WASATCH

FORMATIONS COMPRISED OF ALL OF

SECTION 12, TOWNSHIP 3 SOUTH, RANGE 5

WEST, U.S.M., DUCHESNE COUNTY, UTAH

PETITIONER'S EXHIBITS

Docket No. 2015-014

Cause No. 139-131

Pursuant to Utah Admin. Code Rule R641-105-500, Petitioner EP Energy E&P

Company, L.P. ("EPE"), by and through its counsel of record, MacDonald & Miller

Mineral Legal Services, PLLC, hereby respectfully submits the following exhibits

intended to be offered into evidence in support of its Request for Agency Action

("RAA") at the April 22,2015 hearing on this cause:

EXHIBIT (s^)) - EPE's potential witnesses' resumes (collectively 4 pages):

. John D. DeV/itt, Jr.- Staff Landman

. Michael J. Walcher - Land Advisor

. Steven A. Biancardi - Reservoir Engineering Advisor

EXHIBIT ((8" - True and correct copies of the Board's Orders entered inCause Nos. 139-8 and 139-124 (collectively 28 pages).

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EXHIBIT "C" - Plat reflecting Young 1-12C5 Well location and oil and gas tracts within the Section 12 drilling unit (1 page).

EXHIBIT "D" - True and correct copies of a Letter dated April 24, 2014 from EPE to Mary Ellen Slemaker Benien providing an opportunity to lease or participate as an unleased working interest owner in the Young l- l 2C5 Well, with attached Election of Options and Approval for Expenditure (but without referenced form of oil and gas lease and joint operating agreement), and of a USPS tracking inquiry confirming delivery (collectively 6 pages).

EXHIBIT "E" - True and correct copies of a Letter dated April 24, 2014 from EPE to Thomas A. Ellison, Personal Representative of the Estate of Alan B. Blood, on behalf of the Devisees of Alan B. Blood, providing an opportunity to lease or participate as an unleased working interest owner in the Young l -l 2C5 Well, with attached Election of Options and Approval for Expenditure (but without referenced form of oil and gas lease and joint operating agreement), and of a USPS tracking inquiry confirming delivery (collectively 6 pages).

EXHIBIT "F" - True and correct copy of the initial AFE for the Young l­l 2C5 Well, included with offers to participate (4 pages).

EXHIBIT "G" - Proposed Joint Operating Agreement (not attached hereto; previously submitted as Exhibit "l" to the RAA).

EXHIBIT "H" - Worksheets reflecting calculation of weighted average fee landowner's royalty over subject Section 12 (2 pages).

EXHIBIT "I" - True and correct copy of the actual cost AFE for the Young l-12C5 Well (1 page).

EXHIBIT "J" - Nearby well and production status plat (as of spud date of the Young l-12C5 Well) (1 page).

2

Page 3: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

1100.17

EXHIBIT "Z" - True and correct copies of return receipts indicating receipt of a copy of the RAA by the compulsory pooled parties identified in the Certificate of Service dated March 12, 2015 (1 page).

Respectfully submitted this 23rd day of March, 2015 .

MACDONALD & MILLER MINERAL LEGAL SERVICES, PLLC

Attorneys for Petitioner EP Energy E&P Company, L.P.

3

Page 4: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT A

Page 5: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

John Davison DeWitt, Jr. 1001 LOUISIANA ST., SUITE 2523D a HOUSTON, TX 77002 a 713.997.2620 m [email protected]

INDUSTRY EXPERIENCE

EP Energy E&P Company, L.P. Ho11sto11, Texas

S taffLa11dma11 51: La11d111a11 La11d111a11

A!tamo11t Asset (]11/y 2013 - Pmmt)

October 2014 - Pme11t November2012 - Oi1ober2014

Ja1111ary 2010-November 2012

11 Perform all Land related functions Oeasing, curative, gross/net revenue calculations) within a portion of EP Energy's leasehold position in the Uintah Basin

11 l'vianage continuous drilling activity in a multiple rig drilling program 11 Negotiate and draft leases, surface agreements, assignments and operating agreements 11 Maintain direct communication with team members, partners, field brokers and land owners 11 Provided Land support to acquire seismic permits covering 46k acres (Cedar Rim 3-D) 11 Proactively seek business opportunities to maximize capital and effectively develop the Altamont Asset

S. LJi11isia11a/Wi!cox Asset (Febmao' 2011 -J11b1 2013) 11 Perform all Land related functions Oeasing, curative, gross/net revenue calculations) 11 Responsible for grass roots leasing of identified prospects within a 234 sq. mi 3D Seismic Set 11 1fanaged aggressive and dynamic leasing program to acquire 20k+ acres 11 Successfully negotiated and divested of a $450k Prospect 11 Actively work with facility and operation engineers to strategically plan infrastructure to support play 11 1faintain direct communicate with team members, partners, field brokers and land owners

Prefessio11a! Developme11t P1Vgra111 (]a1111ary 2010 - Febmary 2011) 11 Rotated through the Haynesville, S. Louisiana/Wilcox, Marketing Assets 11 Gained experience in planning and organizing drilling programs in both conventional and unconventional assets 11 Reviewed title opinions and secured title curative for drilling and division order purposes

La11dman, Intent (S111mmr of '08 a/Id '09) 11 Acquired basic knowledge of Eagle Ford, S. Louisiana/Wilcox and Black \Varrior Basin Assets 11 Assisted and shadowed several Landmen in their daily roles and responsibilities 11 Coordinated field broker activities associated with preparation of ownership and title information

GreyWolf Drilling Company (Precision Drilling) Floor Ha11d - Dli!!i1tg Rig #750 (S11111111er of '07)

• Received hands-on experience of onshore drilling rigs by operating make-up/break-up tongs 11 Gained understanding of how to maintain and operate a drilling rig on a daily basis a Collaborated with my crew members in order to safely and effectively complete each task

PROFESSIONAL ORGANIZATIONS

11 Petroleum Club of Houston; Active Committee Member of the Communications Committee 11 American Association of Professional Landmen (Registered Professional Landman) 11 Houston Association of Professional Landmen 11 \Vest Houston Association of Professional Landmen 11 Museum of Fine Arts, Houston

EDUCATION

Texas Tech University Rawls College of Business (2009)

• Degree: Bachelor of Business Administration (C11111 La11de) 11 Double Major: Energy Commerce; Management

Achievements & Involvement: 11 President's List • Dean's List 11 Student Government Association - Elected Senator (Rawls College of Business) 11 Member of National Society of Collegiate Scholars, National Dean's List and International Scholar Laureate Program

Page 6: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

MICHAEL JOHN WALCH ER, CPL EP Energy E&P Company, L.P.

1001 Louisiana Street Houston, Texas 77002

(713) 997-5476

SUMMARY

Certified Professional Landman with 25 years experience in all facets of oil and gas Land operations in several regions of the onshore United States.

LAND MANAGEMENT RESPONSIBILITIES AND EXPERIENCE

I have been a member of many interdisciplinary teams, as the Landman responsible for mineral leasing and title curative programs, and directing field landmen and title attorneys in those efforts, as well as negotiating, drafting and administering oil and gas and surface leases, surface use agreements, exploration, seismic and joint operating agreements, poolings, farmins and farmouts, pipeline right-of-ways and road easements. I also maintain partner, royalty and surface owner relations, and have secured regulatory orders and made tactical acquisitions and divestitures.

Land Advisor- EP Energy (formerly El Paso E&P Company, L.P.), Houston. Texas 6/2011 - Present " Responsible for all the above Land functions within a portion of EP Energy's Altamont Field (Uintah Basin, Utah), with

particular focus on managing the field leasing program and negotiating joint operating agreements.

Sr. Land Negotiator - BP America Production Company, Houston, Texas 5/2010 - 5/2011 " Responsible for leasing, title curative, pooling, operating agreements, leasing BP minerals, and negotiating joint

ventures in BP's East Texas Haynesville program.

Sr. Land Negotiator - BP America Production Company, Durango, Colorado 9/2007 - 4/201 O • As Director of Infill Land Operations was responsible for hiring, training and managing a team of in-house and field

contractors who acquired the surface agreements (surface use agreements, pipeline and road rights-of-way) and approved title for all new infill drilling locations in BP's San Juan ·North Coal Bed Methane Major Project, La Plata County, Colorado.

Sr. Land Negotiator - BP America Production Company, Houston, Texas 6/2004 - 8/2007 • Managed producing land assets in the Tuscaloosa Trend of South Louisiana, and led new lease acquisition programs

in support of deep Tuscaloosa exploration program. Attracted partners, negotiated and drafted exploration agreements, cured and approved title to $20MM wells.

Sr. Land Negotiator - BP America Production Company, Houston, Texas 11/2000 - 5/2004 • Managed land assets in East Texas and North Louisiana. Negotiated and drafted leases and seismic permits to

encourage third party drilling activity on BP minerals.

Landman - Vastar Resources Inc. Houston Texas 4/94 - 10/2000 • Responsible for land operations in basins located in Oklahoma, Texas, Louisiana and Mississippi. Managed and/or

supported 5 producing property acquisitions that consolidated a North Louisiana gas field under Vastar's operatorship.

Landman -ARCO Oil & Gas Company, Midland, Texas 2/90- 3/94 • Managed the land assets in ARCO's Wilburton Field, Southeastern Oklahoma. Supervised lease plays in the Arkoma

and Ardmore Basins of Eastern Oklahoma. Played a major role in attracting exploration partners and negotiating and administering exploration agreements.

EDUCATION AND CERTIFICATIONS

AAPL Certified Professional Landman, October 1996. B.S. Petroleum Land Studies, California State University Bakersfield, June 1989. B.A. Geography and Cartography, Humboldt State University, Arcata, California, December 1979.

STATE REGULATORY AGENCY TESTIMONY

Accepted as an Expert Witness for Land issues before the Oklahoma Corporation Commission (1991-1996).

Page 7: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

STEVEN A. BIANCARDI

EP Energy E&P Company, L.P. 1001 Louisiana St

Houston, Texas 77002 (713) 997-1200

SUMMARY

Petroleum Engineer with over 30 years of Operations and Reservoir Engineering experience in several basins and fields of the Onshore United States

Petroleum Engineering Responsibilities and Experience

EP Energy, Houston TX (May 2012 to Present)

Reservoir Engineering Advisor: Altamont Field, Uintah Basin, Utah: Perform Reservoir Engineering and Economic Analysis for EP Energy's Altamont Field Assets to identify and recommend Drilling, Completions, Recompletions, and Workover projects. Prepare development plans including multi-year Drilling and Recompletion Programs. Forecast and monitor performance of existing wells and make recommendations for well intervention when applicable. Identify and evaluate acquisition opportunities.

El Paso Exploration and Production Company, Houston TX (November 1999 to May 2012)

Reservoir Engineering Advisor, Principal/Senior Staff Completions, Production, Reservoir Eng.; Uintah Basin, Utah, East Texas, N. Louisiana, Arkoma, Indiana, Black Warrior Basin

Reservoir Engineering Advisor: (Jan 2008 to May 2012) Senior Staff Reservoir Engineer, (Jan. 2002 to Dec 2007):

Perform Reservoir Engineering and economic analysis for Conventional and Unconventional assets in the Altamont Field, Uintah Basin, Utah, East Texas Minden/Stockman Field, North Louisiana Holly/Bethany Longstreet Field, Indiana, Arkoma and Black Warrior Basin Resource plays. Perform new play entry analysis in the Marcellus and Utica Shale of the Appalachian Basin. Participate in Peer Reviews of other new play entries. Lead Multi-Discipline Business Teams to identify drilling locations and direct multi-rig drilling programs to fully develop EPPC acreage. Perform Pre-Drill evaluation and Post-Drill log analysis to identify productive intervals including "Low Resisitivity Pay" and make recommendations for completion intervals including perf scheme and frac design, to optimize well performance. Evaluate production performance and make recommendations for workovers and/or recompletions when applicable. Identify and evaluate acquisition opportunities.

Principal Completions and Production Engineer, (Nov. 1999 to Dec. 2001): North Louisiana Holly/Bethany Longstreet and Vacherie Dome Field Assets. Design and provide technical support for completions and recompletions. Design formation specific completions utilizing various perf schemes and frac fluids to achieve optimum well performance. Prepare and submit Base Production Forecast and Recompletion Schedules.

Sonat Exploration, Tyler and Houston TX (October 199S to November 1999)

Senior Drilling I Production Engineer Tyler Division - Holly/Bethany-Longstreet I Joaquin, April '98 to Nov. 1999:

Team leader for Sonat's Exploitation efforts in Holly/Bethany-Longstreet and Joaquin producing fields. Prepare drilling, completion and recompletion plan. Design completions and recompletions to fully develop Hosston and Travis Peak reservoirs. Utilize "Prizm" digital log analysis and Limited Entry, Gel and Foam Frac technology to maximize well productivity and performance.

Page 8: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Sonat Exploration, Tyler and Houston TX (October 1995 to November 1999) cont. Tyler, TX; Western Shelf Business Unit - Pinnacle Reef-, Aug. '96 to April '98:

Design Pinnacle Reef completions including casing, perforating, and fracture stimulations. Provide wellsite supervision during all critical operations. Casing program "Monobore" designed utilizing standard, enhanced and CRA materials with proprietary T&C, IJ, and FJ connectors. Casing design engineered utilizing "TDAS" engineering analysis program evaluating tubular and connector performance under varying extreme loads. Perforating schemes designed utilizing both limited entry and point source techniques with the appropriate modular or wireline perforating systems for HTHP H2S environments. Fracture stimulation design utilized HT Cross-Linked fluids and high strength proppants. Quality checked all fluids and materials with breaker and base fluids modified accordingly to ensure fluid performance. Stimulations frequently pumped utilizing intensifiers to achieve design rate and treating pressures. Forced closure technique performed on proppant pac to retain fracture geometry and conductivity.

Houston, TX; Coal Bed Methane Development Team, Oct. '95 to July '96: Perform production, reservoir and facilities engineering to optimize the economic performance of Sonat's Black Warrior Basin Coal bed Methane Assets.

Snyder Oil Corporation (SOCO), Fort Worth, TX: June 1990 to October 1995

Senior Reservoir/Production Engineer, (June '93 to Oct. '95) Giddings Austin Chalk Business Team: Perform reservoir and production engineering analysis for horizontally drilled fractured carbonate reservoirs; Austin Chalk, Buda and Georgetown. Prepare reservoir engineering and economic analysis for drilling proposals and acquisition packages.

Senior Operations Engineer and Business Team Coordinator, (Oct '92 to June '93) Operations Engineer, (June '90 to Oct. '92)

Manage operations of SOCO Operated and OBO properties in Texas, Oklahoma, Louisiana, California, Pennsylvania, and the Rockies. Responsibilities include development, cash flow management, cost reductions, field equipment optimization, acquisition and reservoir engineering.

TXO Production Corp., Fort Smith, AR: (January 1984 to May 1990)

Reservoir Engineer, (May '87 to May '90): Manage regulatory affairs of TXO in Eastern Oklahoma at the Oklahoma Corporation Commission. Prepare applications, perform reservoir studies, and submit expert witness testimony during Technical and OCC hearings. Responsible for Acquisitions within the Arkoma Basin.

Completion and Production Engineer, (Jan '85 to April '87): Res'ponsible for the completion of oil and gas wells. Designed completion procedures including breakdown and fracs utilizing acid, N2 or C02 foam. Designed production equipment for natural gas and oil/gas-condensate production. Designed salt water disposal system and field communication systems. Lease Operator for natural gas wells working with all related field equipment.

Drilling and Completion Foreman, (Jan. '84 to Dec. '84): Air, Mist and Mud drilling. Responsible for all activities at the wellsite.

Pennzoil Exploration & Production, Refugio, TX: (June 1983 to December 1983)

Drilling/Completion-Production Engineer: Design and provide wellsite supervision during drilling, completion and workover operations. Optimize the performance of gas lift wells and monitor performance of compressors at central stations.

EDUCATION AND PROFESSIONAL

B.S. Petroleum Engineering, Texas A&M University, May 1983 Registered Professional Engineer in Texas

EXPERT TESTIMONY

Accepted as an Expert Witness for Petroleum Engineering issues before the Oklahoma Corporation Commission (1987-1990).

Page 9: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT B

Page 10: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

.. {' .,.,. · .

BEFORE THE BOARD OF OIL AND GAS CONSERVATION DEPARTMENT OF NATURAL RESOURCES

IN AND FOR THE STATE OF UTAH

IN THE MATTER OF THE APPLICATION OF SHELL OIL COMPANY FOR AN ORDER EXTENDING PRIOR ORDERS OF THE BOARD IN CAUSE NO: 139, AS EXI'ENDED AND MODIFIED, TO FURTHER DEFINE THE SPACED INTERVAL AND TO COVER AND INCLUDE ADDITIONAL LANDS IN THE ALTAMONT FIELD, DUCHESNE COUNTY, UTAH

) ) ) ) ) ) )

0 RD E R

CAUSE NO. 139- 8

Pursuant to Notice of Hearing dated September 1, 1972, of the Board

of Oil and Gas Conservation, Department of Natural Resources of the State of

Utah, this Cause came on for hearing before said Board at 10:00 o'clock a . m.

on Wednesday, September 20, 1972, in the State Office Building Auditorium,

First Floor - State Office Building, Salt Lake City, Utah. The followi.ng

Board members were present:

Also present:

Delbert M. Draper, Jr., Esq., Chairman, Presiding

Charles R. Henderson

Robert R. Norman

Evart J, Jensen

Cleon B. Feight, Esq., Director, Division of Oil and Gas Conservation

Paul W. Burchell, Chief Petroleum Engineer, Division of Oil and Gas Conservation

Gerald Daniels, United States Geological Survey, Salt Lake City, Utah

Paul E. Reimann, Assistant Attorney General

Appearances were made as follows:

For Shell Oil Company:

For Chevron Oil Company, Western Division:

For Ute Distribution Corporation:

D. F. Gallion, Esq. Denver, Colorado

Gregory Williams, Esq. Salt Lake City, Utah

William M. Balkovatz, Esq. Denver, Colorado

George C. Morris, Esq. Salt Lake City, Utah

NOW, THEREFORE, the Board having considered the testimony adduced,

and the exhibits received at said hearing, and being fully advised in the

premises, now makes and enters the following:

EXHIJ~IT

Page 11: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

FINDINGS

1. Due and regular notice of the time, place and purpose of the

hearing was given to all interested parties in the form and manner and within

the time required by law and the rules and regulations of the Board.

2. The Board has jurisdiction over the matter covered by said Notice

and over all parties interested therein and has jurisdiction to make and

promulgate the order hereinafter set forth.

3. By Orders entered in Consolidated Causes No. 139-3 and No. 139-4

dated June 24, 1971, and Cause No. 139-5 dated November. 17, 1971, the Board

established drilling units comprising each governmental section for the

production of oil, gas and associated hydrocarbons from the interval described

in paragraph No. 7 of said Or4er in Consolidated Causes No. 139-3 and No. 139-4,

common source of supply underlying the lands in the Altamont Area, all as

more particularly described in said Consolidated Causes No. 139-3 and No. 139-4,

and Cause No. 139-5.

4. Further drilling and development operations and the information

and data obtained therefrom, both within and beyond the presently defined

boundaries of spaced lands described in said Orders in Consolidated Causes

No. 139-3 and No. 139-4, and Cause No. 139-5, subsequent to the dates of

said Orders, indicate that the present spaced interval and spaced area as

described in said prior Orders should now be further defined and enlarged

as follows:

(a) The spaced interval for the common source of

supply underlying lands described in paragraph 4(b)

below should be defined as:

The interval from the top of the Lower Green River forma.tion (TGR3 marker) to the base of the Green River-Was'atch formations (top of Cretaceous), which base is defined as the stratigraphic equivalent of the Dual Induction Log depths of 16,720 feet in the Shell, Ute l-18B5 well located in the S~E~ of Section 18, Township 2 South, Range 5 West, U,S,M., and 16,970 feet in the Shell, Brotherson l-11B4 well located in the S~E~ of Section 11, Township 2 South, Range 4 West, U.S.M.

(b) The lands known and believed to be underlain by the

common source of supply from which oil, gas and

associated hydrocarbons can be produced from the

spaced interval of the Green River-Wasatch formations

2.

Page 12: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

in Duchesne County, Utah, as hereinabove defined

in paragraph 4(a), include the following described

lands, which include the lands described in said

Consolidated Causes No, 139-3 and No. 139-4, and

Cause No, 139-5, to wit:

Township Sections Sections Sections

1 South, Range 3 through 10:

15 through 22: 27 through 34:

3 West,,.u,s.M. All/ Al:( All

Township 1 South, Range 4 West, U.S.M, ,,,,,., Sections 1 through 36: All 7

Townshi)2 1 South, Ran!1;e 5 West 2 U.S.M, Sections 10 through 17: !~· Sections 20 thr.ough 36:

Townshi)2 1 South, Range 6 West 2 u.s.M. Sections 25 and 26: All Sections 35 and 36: All

Township 2 South, Range 3 West, u.s.M. Sections 3 through 8: All Sections 17 through 20: All Sections 29 through 32: All

Townshi)2 2 South 2 Ranse 4 West 2 U;S.M. Sections 1 through 36: All

Towns hi Sections

Township 2 South, Range 6 West 2 U. S.M,....· Sections 1 through 36: All 7

Townshi)2 2 South 2 Range 7 West, U. S .M, Section 36: All

TownshiE 3 South 2 Range 3 Westi U.S;M, Sections 5 through 8: All Sections 17 through 20: All Sections 29 through 32: All

Townshi)2 3 South 2 Range 4 ·westi u;s;M. Sections 1 through 36: All

TownshiE 3 South 2 Ranse ·5 West 2 u;s;M. Sections 1 through 36: All

Townshi)2 3 South 1 RanBe 6 West 2 U.S.M. Sections 1 through 6: All · Sections 11 through 14: Al1/ Sections 23 through 26_: All . Sections 35 arid 36: All/

Townshi)2 3 South, Ran Be 7 West; ·u;s;M. Section 1: All

Townshi)2 4 South, Range 3 West 2 U.S.M. Sections 5 and 6: All

3.

~

Page 13: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

TownshiE 4 South 2 Range 4 West, u.s.M. Sections 1 through 6: All

TownshiE 4 South 2 Range 5 West 1 u.s.M. Sections 1 through 6: All

TownshiE 4 South 2 Range 6 West, u.s.M. Sections 1 and 2: All

5. One well on a governmental section consisting of 640 acres, more

or less, will efficientlX and economically drain the recoverable oil, gas

and associated hydrocarbons from the aforesaid common source of supply under-

lying the lands described in paragraph 4(b) above, and that a governmental

section drilling unit is not larger than the maximum area that can be

efficiently and economically drained by one well.

6. The Orders entered in Consolidated Causes No, 139-3 and No. 139-4,

and Cause No. 139-5 provide that the permitted well for each drilling unit

shall be located in the center of the NE~ of the governmental section comprising

such drilling unit with a tolerance of 660 feet in any direction; provided

that an exception to said tolerance may be granted without a hearing where a

topographical exception is deemed necessary. Such provisions in said prior

orders should continue to apply provided further that exceptions to such

permitted well location and tolerance allowance should be allowed where needed

for wells presently drilling or producing oil, gas and associated hydrocarbons

from the common source of supply in the Altamont Area,

7. Any and all Orders of the Board heretofore promulgated concerning

the Altamont Area, Duchesne County, Utah, which are inconsistent with the

Order hereinafter set forth should be vacated upon the effective date of

this Order.

ORDER

IT IS THEREFORE ORDERED:

A. That 640 acre drilling units be and the same are hereby established

comprising each governmental section, or governmental lots corresponding thereto,

for the development and production of oil, gas and associated hydrocarbons

from the interval described in paragraph 4(a) above, underlying the lands

described in paragraph 4(b) above,

B. That no more than one well shall be drilled on any such unit for

the production of oil, gas and associated hydrocarbons from the common source

of supply, and that the permitted well for each drilling unit shall be located

4.

Page 14: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

-. //

in the center of the NE~of the governmental section comprising such unit,

with a tolerance of 660 fe~t in any direction; provided that an exception

to said tolerance may be granted administratively without a hearing where

a topographical exception is deemed necessary; and provided that exceptions

to the permitted well location and tolerance allowance are hereby allowed

where needed for all wells presently drilling or producing oil, gas and

associated hydrocarbons from the connnon source of supply in the Altamont Area,

and such exception wells shall be the permitted wells· for the drilling units

on which they are located.

C. That any and all Orders of the Board heretofore promulgated

which are inconsistent with this Order are hereby vacated,

D. That this Order is a temporary order and the Board, on its own

motion, or any interested party may file an application requesting a hearing

to present new evidence covering the matters set forth herein.

E. That the Board retains continuing jurisdiction of all matters

covered by this Order and particularly retains continuing jurisdiction to

make further orders as appropriate and authorized by statute and applicable

regulations.

ENTERED .AND EFFECTIVE THIS 20th day of September, 1972.

s.

BOARD OF OIL AND GAS CONSERVATION OF THE STATE OF UTAH

Robert R. Norman

Page 15: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

FI NOV 0 6 2014

SECRETARY, BOARD OF OIL, GAS l MINING

BEFORE THE BOARD OF OIL, GAS AND MINING DEPARTMENT OF NATURAL RESOURCES

STATE OF UTAH

IN THE MATTER OF THE JOINT REQUEST

FOR AGENCY ACTION OF BILL BARRETT

CORPORATION AND EP ENERGY E&P

COMPANY, L.P. FOR AN ORDER MODIFYING THE BOARD'S ORDERS ENTERED IN CAUSE

NOS. 139-84, 139-85, 139-87 AND 139-90 TO

AUTHORIZE ADDITIONAL VERTICAL

AND/OR DIRECTIONALLY DRILLED WELLS

TO ACHIEVE THE EQUIVALENT OF UP TO AN 80-ACRE WELL DENSITY PATTERN FOR

THE PRODUCTION OF OIL, GAS AND

AS SOCIA TED HYDROCARBONS FOR THE

LOWER GREEN RIVER~WASATCH

FORMATIONS ON THE SECTIONAL

DRILLING UNITS COMPRISING THE BLACK TAIL RIDGE, LAKE CANYON AND

PORTIONS OF THE WESTERN ALTAMONT FIELDS, DUCHESNE COUNTY, UTAH

FINDINGS OF FACT, CONCLUSIONS OF LAW AND

ORDER

Docket No. 2014-035

Cause No. 139-124

This Cause came on for hearing before the Utah Board of Oil, Gas and Mining

(the "Board") on Wednesday, October 22, 2014, at approximately 2:00 p.m., in the

Auditorium of the Utah Department of Natural Resources Building in Salt Lake City.

The following Board members were present and participated at the hearing: Chairman

Ruland J. Gill, Jr., Michael R. Brown, Carl F. Kendell, Chris D. Hansen, Susan S. Davis

and Gordon L. Moon. Board Member Kelly L. Payne was unable to attend. At the

commencement of the hearing, Mr. Moon disclosed he owned mineral interests within the

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lands at issue and offered to recuse himself if there were any objections to his

participation, but no objections were voiced and he participated accordingly. The Board

was represented by Michael S. Johnson, Esq., Assistant Attorney General.

Testifying on behalf of Co-Petitioner Bill Barrett Corporation ("BBC") were

David M. Watts - Land Manager, Daniel S. Moore -Asset Development Geologist, and

Anna M. Young - Engineering Manager. Testifying on behalf of Co-Petitioner EP

Energy E&P Company, L.P. ("EPE") were Michael J. Walcher - Land Advisor, and

Ronald L. Schneider - Senior Staff Geologist. Messrs. Moore and Schneider were

recognized by the Board as experts in geology, and Ms. Young was recognized by the

Board as an expert in reservoir engineering, respectively, for purposes of this Cause;

Frederick M. MacDonald, Esq., of and for MacDonald & Miller Mineral Legal Services,

PLLC, appeared as attorney for BBC and EPE.

The Division of Oil, Gas and Mining (the "Division") did not file a staff

memorandum in this Cause but participated in the hearing. Steven F. Alder, Esq.,

Assistant Attorney General, appeared as attorney for the Division. Mr. Alder made a

statement expressing the Division's support for the granting of BBC's and EPE's Joint

Request for Agency Action filed on September 10, 2014 in this Cause (the "Request") as

conformed to the testimony and other evidence provided at the hearing, but with the

2

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caveat and recommendation that the Board not adopt any restrictions on horizontal well

authorization as set forth in the Request.

Two responses to the Request were filed with the Board. The first was filed on

October 8, 2014 by Richard Barton, as Trustee of the Richard Gareth Barton Revocable

Trust, Mark Barton, and Paul Barton, surface owners of lands within the area at issue.

Mr. Richard Barton was present at the hearing but only made a statement to the Board

after BBC's and EPE's and the Division's presentations in chief. The second was filed

on October 14, 2014 by Linda A. Green, an unleased mineral owner in lands within the

area at issue. However, Ms. Green did not appear at the hearing.

At the conclusion of BBC's and EPE's and the Division's presentations in chief,

along with Mr. Barton, Andrew Ketterer, a surface owner, also made a statement to the

Board.

No other party filed a response to the Request and no other party appeared or

participated at the hearing,

The Board, having considered the testimony presented and the exhibits received

into evidence at the hearing, being fully advised, and for good cause, hereby makes the

following findings of fact, conclusions of law and order in this Cause.

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FINDINGS OF FACT

1. BBC is a Delaware corporation with its principal place of business in

Denver, Colorado, and EPE is a Delaware limited partnership with its principal place of

business in Houston, Texas. Both are duly qualified to conduct business in the State of

Utah, and are fully and appropriately bonded with all relevant Federal, Indian and State

of Utah agencies.

2. BBC and EPE are the primary working interest owners in, and operators of

existing wells located on, the following Duchesne County, Utah lands:

Township 2 South, Range 4 West, USM

Sections 19 through 36 inclusive

Township 2 South, Range 5 West, USM

Sections 19 through 36 inclusive

Township 3 South, Range 4 West, USM

Sections 4 through 10, 14 through 21, 23, 27, and 30 through 33

Township 3 South, Range 5 West, USM

Sections 1 through 36 inclusive

Township 3 South, Range 6 West, USM

Sections 1 through 36 inclusive

4

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Township 3 South, Range 7 West, USM

Sections 1 through 36 inclusive

Township 3 South, Range 8 West, USM

Sections 25 and 36

Township 4 South, Range 5 West, USM

Sections 2 through 22, and 30

Township 4 South, Range 6 West, USM

Sections 1 through 36 inclusive

Township 4 South, Range 7 West, USM

Sections 1 through 36 inclusive

Township 4 South, Range ~ V{est, USM

Sections 1, 12, 13, 24, 25, and 36

(collectively the "Subject Lands"). The Subject Lands comprise what BBC refers to as

its "Black Tail Ridge" and "Lake Canyon" fields, and the western portions of what is

commonly referred to as the "Altamont" field.

3. By Order entered on December 30, 2008 in Cause No. 139-84 (the "139-84

Order"), the Board modified numerous previously entered orders applicable to the

Altamont/Bluebell/Cedar Rim fields, which established sectional drilling units for the

5

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production of oil, gas and associated hydrocarbons from the Lower Green River,.. Wasatch

formations (defined with several different stratigraphic equivalents), to allow up to four

(4) producing wells upon each such drilling unit, including the drilling units comprised of

each section of the following Subject Lands:

Township 2 South, Range 4 West, USM

Sections 19 through 33 inclusive

Township 2 South, Range S West, USM

Sections 19 through 36 inclusive

Township 3 South, Range S West, USM

Sections 1 through 12, 16 through 21, and 28 through 33

Township 3 South, Range 6 West, USM

Sections 1 through 36 inclusive

Township 3 South, Range 7 West, USM

Sections 1, 12, 13, 24, 25, and 36

Township 4 South, Range 6 West, USM

Sections 1 through 18 inclusive.

Said wells are to be drilled at the option of the operator and with the operator's full

discretion as to the development of the hydrocarbon resources; provided that each well

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shall be no closer than 1,320 feet from an existing unit well completed and producing

from the formations and no closer than 660 feet from the drilling unit boundary. The

139-84 Order does not specifically address whether the authorized wells are to be just

vertical/directionally drilled wells or may also include horizontal wells.

4. By Order entered on March 11, 2010 in Cause No. 139-85 (the "139,.85

Order"), the Board first established the following Subject Lands as sectional drilling units

for the production of oil, gas and associated hydrocarbons from the Lower Green River-

Wasatch formations, defined as follows

the interval from the top of the Lower Green River formation (TGR3

marker) to the base of the Green River-Wasatch formations (top of Cretaceous), which base is defined as the stratigraphic equivalent of the Dual Induction Log depths of 16,720 feet in the Shell-Ute 1-18B5 well located in the SY2NEY4 of Section 18, Township 2 South, Range 5 West, U.S.M., and 16,970 feet in the Shell-Brotherson 1-11B4 well located in the SY2NEY4 of Section 11, Township 2 South, Range 4 West, U.S.M:

Township 4 South, Range 5 West, USM

Sections 7 through 18 inclusive

Township 4 South, Range 7 West, USM

Sections 1through5, and 8 through 16.

The Board then extended application of the 139-84 Order not only to the lands described

immediately above, but also to the following Subject Lands for which section drilling

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units had been previously established under previous Board orders but were not originally

included in the 139-84 Order:

Township 3 South, Range 5 West, USM

Sections 13 through 15, 22 through 27, and 34 through 36

Township 3 South, Range 7 West, USM

Sections 2 through 11, 14 through 23, 26 through 29, and 32 through 35.

5. By Order entered on December 6, 2011 in Cause No. 139-87 (the "139-87

Order"), the Board first established first established the following Subject Lands as

sectional drilling units for the production of oil, gas and associated hydrocarbons from

the Lower Green River-Wasatch formations, defined in the same manner as under the

139-85 Order:

Township 4 South, Range 5 West, USM

Sections 19 through 22, and 30

Township 4 South, Range 6 West, USM

Sections 19 through 36 inclusive

Township 4 South, Range 7 West, USM

Sections 6, 7, and 17 through 36

Township 4 South, Rarnw 8 West. USM

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Sections 1, 12, 13, 24, 25, and 36.

The Board then extended application of the 139'-84 and 139-85 Orders not only to the

lands described immediately above, but also to the following described Subject Lands for

which sectional drilling units had been previously established under a prior Board order

but were not originally included in the 139-84 or 139-85 Orders:

Township 3 South, Range 7 West, USM

Sections 3 0 and 31

Township 3 South, Range 8West, USM

Sections 25 and 36.

Additionally, the Board expressly clarified that the authorized wells could be all vertical,

all horizontal, or a combination of both, and expressly eliminated any specific quarter

section location requirement for the first well upon such units.

6. By Order entered on May 9, 2012 in Cause No. 139-90 (the "139;.90

Order"), the Board extended application ofthe 139-84 Order to the following Subject

Lands for which sectional drilling units had been previously established under a prior

Board order but were not originally included in the 139-84 Order:

Township 2 South, Ran~e 4 West, USM

Sections 34 through 36 inclusive

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Township 3 South, Range 4 West, USM

Sections 4 through 10, 14 through 21, 23, 27,

and 30 through 33.

Additionally, the Board expressly clarified that the authorized wells could be all vertical,

all horizontal, or a combination of both, and expressly eliminated any specific quarter

location requirement for the first well upon such units.

7. BBC and EPE have drilled numerous wells upon the Subject Lands,

including horizontal wells targeting specific members of the Lower Green River-Wasatch

formations to assess their viability for field-wide application. Data developed from these

wells suggested that a four well density may not adequately be recovering all of the

Lower Green River-Wasatch resources within each drilling unit.

8. As a consequence, BBC petitioned for, and the Board granted and

authorized, two pilot programs to test the viability of an equivalent 80-acre well density.

Specifically, by Order entered on April 16, 2012 in Cause No. 139-89 and on June 7,

2012 in Cause No. 139-91, the Board authorized, on a pilot basis, additional wells upon

the drilling units comprised of Sections 12 and 13, T4S, R6W, USM, and of Section 5,

T3S, RSW, USM, respectively, to achieve the equivalent of an approximate 80-acre well

density thereon; provided no productive interval of any well so authorized may be closer

10

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than 660 feet to a sectional boundary or 990 feet to another producing well in the Lower

Green River-Wasatch formations without an exception location approval. In addition, the

Board required BBC to report back to the Board within two years of the respective dates

of entry of said Orders on the success or failure of the pilots. EPE subsequently elected

to participate with BBC in the Section 5 pilot.

9. In accordance with the Board's mandate, the pilot test results for Sections

12 and 13, T4S, R6W, USM, were filed on April 17, 2014 but were initially classified as

confidential under the provision of the Utah Governmental Records Access and

Management Act. BBC drilled five (5) pilot wells, the first four of which were drilled on

an equivalent 80-acre density pattern in relation to other wells. The data from these wells

and the existing producing wells located in these sections reflect:

a) The Wasatch Formation is primarily comprised of discontinuous lenticular sands many of which cannot be correlated between wells on 80-acre density~ The following reservoir characterization and well communication description used to establish 160-acre (four) well density can be applied to 80-acre (eight) well density as well:

Production occurs from a complex series of isolated and discontinuous beds randomly distributed vertically over a several thousand .foot interval. The low matrix permeability and the nature of the natural fracture components of the reservoir reduce the effect of communication with the sand bodies that do correlate and does not allow for efficient drainage of the hydrocarbon resource;

11

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b) Cased Hole Dynamics Test~r ("CHDT") pressure tests show that wells with a NE-SW or NW-SE offset represent an optimal orientation. The optimal oriented wells have consistent and normal reservoir pressures and show little to no depletion. These results indicate little to no communication between wells with 80-acre density and thus representing optimal well orientation. Wells with a north-south orientation have less consistent pressure and are more depleted in the Wasatch Formation indicating a moderate level of communication relative to the optimal orientation. These pressure tests indicate optimal well orientation is critical for future development on 80-acre density;

c) Hydraulically fracturing in the Wasatch and Lower Green River Formations take place relatively close to the wellbore with the fracturing events taking place further out in the Wasatch indicating a more brittle reservoir rock resulting in a more complex fracture network. Fracture orkntation was N05°E with average length of 360' to the north and 280' to the south. Fracture height averaged 200' with no overlap of height growth between adjacent stages. The most events and the events furthest from the wellbore took place in the middle of each stage. Hydraulic fracturing creates non­overlapping drainage ellipses for each 80-acre well as long as wells have the optimal orientation of NE-SW or NW-SE offsets. It is essential to avoid direct North-South spacing to account for the N05°E fracture orientation and subsequent drainage ellipses indicated by the CHDT tests;

d) Production on 80-acre spacing for wells with the optimal orientation is consistent with the average EUR type curve established by wells on minimum 160-acre density spacing. The wells with a north-south orientation perform below the type curve due to overlap of the drainage ellipses indicated by the apparent depletion seen from the CHDT testing. As seen on the production logs, production contribution by formation is the essentially the same for 80-acre and 160-acre density indicating consistent reservoir properties and a lack of communication between wells. Once again, it is essential to avoid north-south well orientation;

e) Chemical tracers were pumped during hydraulic fracturing in three intervals for each well; Black Shale Facies-Uteland Butte, Uteland Butte-Wasatch, Wasatch-Total Depth. Samples were then collected from each well to

12

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determine which tracers from which well by interval were present Where a tracer is found in a neighboring well communication is present. Communication was greater in the Wasatch than in the Lower Green River Formation and communication between wells on a north-south orientation was considerably greater than what was seen with the optimal orientation. This is interpreted to mean there exists little to no communication between wells with optimal orientation and moderate communication between wells with a north-south orientation. Once again, it is essential to avoid north­south well orientation;

f) The production forecast for the average production from the optimal 80-acre wells in the pilot study is also representative of the other 160-acre wells drilled in the immediate area, proving that infill drilling is economic and provides sufficient reserves if drilled on an offset pattern; and

g) Fitting a forecast to the current average production for the non-optimal wells (with N-S offsets) does not meet the payout threshold and such wells are therefore uneconomic. The economic results further illustrate that infill wells should not be drilled in a direct North-South orientation.

10. In accordance with the Board's mandate, the pilot test results for Section 5,

T3S, RSW, USM, were filed on April 28, 2014 but were initially classified as

confidential under the provisions of Utah Governmental Records Access and

Management Act. BBC, with EPE's participation, drilled seven (7) pilot wells on an

equivalent 80-acre density pattern in relation to the other wells. The data from these

wells reflect:

a) The Wasatch Formation is primarily comprised of discontinuous lenticular sands many of which cannot be correlated between wells on 80-acre density. The following reservoir characterization and well communication description used to establish 160-acre (four) well density can be applied to 80-acre (eight) well density as well:

13

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Production occurs from a complex series of isolated and discontinuous beds randomly distributed vertically over a several thousand foot interval. The low matrix permeability and the nature of the natural fracture components of the reservoir reduce the effect of communication with the sand bodies that do correlate and does not allow for efficient drainage of the hydrocarbon resource;

b) Fracturing events in the Wasatch and Lower Green River take place relatively close to the wellbore and do not overlap between wells. These fractures create non-overlapping drainage ellipses for each 80-acre well as long as wells are oriented NE-SW or NW-SE relative to each other. Fracture orientation was N24°E with average length of 270' to the north and255' to the south and average fracture network width of 225'. Fracture height averaged 200' with no overlap of height growth between adjacent stages. It is essential to avoid direct North-South spacing to account for the N24°E fracture orientation and subsequent parallel drainage ellipse;

c) Production on 80-acre spacing is consistent with analogous 160-acre well production in the area;

d) Oil production by formation is similar for all wells completed over the entire interval indicating consistent reservoir characteristics. If communication were present, reservoir characteristics would vary resulting in an inconsistent production profile;

e) Chemical tracers were pumped during hydraulic fracturing in two intervals for each well; Castle Peak-Uteland Butte and Uteland Butte-Total Depth. Samples were then collected from each well to determine which tracers from which well by interval were present. Where a tracer is found in a neighboring well communication is present. Where present, communication between wells averaged one part per billion of tracer present. This is interpreted to mean that virtually no communication exists between wells. Data was taken relatively quickly after fracking so it does not account for fracture closure with time which would decrease communication; and

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f) Fitting a forecast to the current average production data for the seven pilot wells provides sound economic returns and prolific reserves for this previously undeveloped area.

11. The exhibits and testimony received into evidence reflect the pilot results

may be properly extrapolated to all of the Subject Lands.

12. Establishing a 990-ft. setback from other wells producing in the Lower

Green River-Wasatch formations, and maintaining the 660-ft. setback from a sectional

drilling unit boundary, should minimize if not eliminate communication between wells

and is protective of correlative rights. However, a well may be located closer than 990

feet to an existing horizontal well so long as it is not perforated and completed in the

same zone from which the horizontal well produces.

13. The producing formations are roughly 2,000 vertical feet with low

permeability confining beds above and below the numerous isolated reservoirs.

Horizontal development targets specific reservoirs while bypassing all hydrocarbons

in-between the horizontal production zones. BBC and EPE have represented that the

most efficient and economical way to produce all of the hydrocarbons from the Subject

Lands is through vertical/directionally drilled well development on 80-acre density so

that the entire production interval can be accessed and completed.

14. Notwithstanding Findings of Fact No. 13 above, the Board does not deem it

appropriate to place any restrictions on potential horizontal well development within the

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existing sectional drilling units. Based on the evidence and testimony, the wells

authorized hereby may be either all vertical/directional, all horizontal, or a combination

of both, maintaining the same 660-ft. setback from the sectional drilling unit boundary

and 990-ft. setback between wells producing in the same zone. This will ensure all

potential development schemes are available to maximize resource recovery from each

drilling unit without waste and protect correlative rights,

15. A copy of the Request was mailed, postage pre-paid, certified with return

receipt requested, and properly addressed to all working interest owners, including

unleased owners, within the Subject Lands, and to the Bureau of Indian Affairs, Utah

School and Institutional Trust Lands Administration, Utah Division of Forestry, Fire and

State Lands and the Bureau of Land Management as the governmental agencies having

jurisdiction over portions of the oil and gas estates in the Subject Lands. The mailings

were made, to the best of BBC's and EPE's knowledge, to the last addresses of said

parties as disclosed by a search of the Agencies' and Duchesne County realty records.

16. Notice of the filing of the Request and of the hearing thereon was duly

published in the Salt Lake Tribune and the Deseret Morning News on October 5, 2014

and the Uintah Basin Standard on October 7, 2014.

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17. The vote of the Board Members present and participating in the hearing on

this Cause was unanimous ( 6-0) in favor of granting the Request, with the modification

as outlined in Finding of Fact No. 14 above.

CONCLUSIONS.OF LAW

1. Due and regular notice of the time, place and purpose of the hearing was ·

properly given to all parties whose legally protected interests are affected by the Request

in the form and manner as required by law and the rules and regulations of the Board and

Division.

2. The Board has jurisdiction over all matters covered by the Request and all

interested parties therein, and has the power and authority to render the order herein set

forth pursuant to Utah Code Ann. §§ 40-6-5(3)(b) and 40-6-6 and Utah Admin. Code

Rule R649-2-1(2).

3. The Board takes judicial notice of the Pilot Results Reports filed on April

17, 2014 in Cause No. 139-89 and on April 28, 2014 in Cause No. 139-91 pursuant to

Utah Code Ann.§ 63G-4-206(l)(b)(iv).

4. Up to eight (8) wells, vertically or directionally drilled on an optimum

NW-SE or NE-SW orientation, or horizontally, or a combination of both, are required to

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efficiently and economically drain each existing sectional Lower Green River-Wasatch

formation drilling unit and to prevent waste (by leaving resources in the ground).

5. Correlative rights will be protected by virtue of the setbacks outlined

below.

6. The Board has the authority under Utah Admin. Code Rule R649-2-1(2) to

modify the requirement of Utah Admin. Code Rules R649-3-3 and R649-3-1 l(l.1).

7. BBC and EPE have demonstrated good cause as to why Utah Admin. Code

Rules R649-3-3 and R649-3-11(1.1) should be deemed inapplicable so long as the initial

intersection with the Lower Green River-Wasatch formations, all productive intervals,

and the bottom hole location of a directionally drilled well are all within the above

described setbacks, and that BBC and EPE (or their successor operators) will provide to

the Division, along with an application for permit to drill relating to such a well, a self­

certification that no perforations above the top of the Lower Green River will be made

without an exception location approval and consents as circumstances may require under

said regulations.

8. Neither Respondent provided credible evidence rebutting any of the

Findings of Fact made above.

9. The relief granted hereby will result in consistent and orderly development

and the greatest recovery of oil, gas and associated hydrocarbons from the Lower Green

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River-Wasatch formations and underlying the Subject Lands, prevent waste and

adequately protect the correlative rights of all affected parties.

10. BBC and EPE have sustained their burden of proof, demonstrated good

cause, and satisfied all legal requirements for granting of the Request.

ORDER

Based upon the Request, testimony and evidence submitted, and the findings of

fact and conclusions of law stated above, the Board hereby orders:

I. The Request in this cause is granted.

2. The 139-84, 139-85, 139-87 and 139-90 Orders are hereby modified to

authorize additional wells for the production of oil, gas and associated hydrocarbons from

the Lower Green River-Wasatch formations to achieve an equivalent 80-acre well density

on each of the existing sectional drilling units comprising the Subject Lands (as defined

above). Said wells may be all vertically/directionally drilled, all horizontal, or a

combination of both.

3. Each additional well so authorized may neither be drilled closer than 660

feet to a sectional boundary, nor, subject to the provisions of (4) and (5) below, 990 feet

to another well producing in the Lower Green River-Wasatch formations without an

exception location approval in accordance with Utah Admin. Code Rule R649-3-3 (or

subsequently enacted similar regulation}

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4. So long as the initial intersection with the Lower Green River-Wasatch

formations, all productive intervals, and the bottom hole location of a directionally drilled

well so authorized are all within the setbacks set forth under (3) above, no additional

exception location approval or consents under Utah Admin. Code Rules R649-3-3 and

R649:..3-ll(l) are required. With respect thereto, BBC and EPE (or their successor

operators) will provide to the Division, along with an application for permit to drill

relating to such a well, a self-certification that no perforations above the top of the Lower

Green River will be made without an exception location approval and consents as

circumstances may require under said regulations.

5. Any additional well so authorized may be located closer than 990 feet to an

existing horizontal well only if it is not perforated in and does not produce from the same

zone from which the horizontal well produces.

6. All existing wells from the Subject Lands are deemed to be at lawful

locations notwithstanding the relief granted under this Order.

7. Pursuant to Utah Admin. Code Rules R64 l and Utah Code Ann. § 63G-4-

204 to 208, the Board has considered and decided this matter as a formal adjudication.

8. This Order is based exclusively on evidence of record in the adjudicative

proceeding or on facts officially noted, and constitutes the signed written order stating the

Board's decision and the reasons for the decision, all as required by the Administrative.

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Procedures Act, Utah Code Ann.§ 630-4-208 and Utah Administrative Code Rule R641-

109.

9. Notice re: Right to Seek Judicial Review by the Utah Supreme Court Qr _to

Request Board Reconsideration: As required by Utah Code Ann. § 630-4-208(e) - (g),

the Board hereby notifies all parties in interest that they have the right to seek judicial

review of this final Board Order in this formal adjudication by filing a timely appeal with

the Utah Supreme Court within 30 days after the date that this Order issued. Utah Code

Ann. §§ 630-4-401(3)(a) and 403. As an alternative to seeking immediate judicial

review, and not as a prerequisite to seeking judicial review, the Board also hereby notifies

parties that they may elect to request that the Board reconsider this Order, which

constitutes a final agency action of the Board. Utah Code Ann. § 630-4-302, entitled,

"Agency Review-Reconsideration," states:

(1 )(a) Within 20 days after the date that an order is issued for which review by the agency or by a superior agency under Section 630-4-301 is unavailable, and if the order would otherwise constitute final agency action, any party may file a written request for reconsideration with the agency, stating the specific grounds upon which relief is requested.

(b) Unless otherwise provided by statute, the filing of the request is not a prerequisite for seeking judicial review of the order.

(2) The request for reconsideration shall be filed with the agency and one copy shall be sent by mail to each party by the person making the request.

21

Page 36: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

(3)(a) The agency head, or a person designated for that purpose, shall issue a written order granting the request or denying the request.

(b) If the agency head or the person designated for that purpose does not issue an order within 20 days after the filing of the request, the request for reconsideration shall be considered to be denied.

Id. The Board also hereby notifies the parties that Utah Admin. Code Rule R641-l l0-

100, which is part of a group of Board rules entitled, "Rehearing and Modification of

Existing Orders," states:

Any person affected by a final order or decision of the Board may file a petition for rehearing. Unless otherwise provided, a petition for rehearing must be filed no later than the 1 oth day of the month following the date of signing of the final order or decision for which the rehearing is sought. A copy of such petition will be served on each other party to the proceeding no later than the 15th day of the month.

Id. See Utah Admin. Code Rule R641-110-200 for the required contents of a petition for

Rehearing. Ifthere is any conflict between the deadline in Utah Code Ann. § 630-4-302

and the deadline in Utah Admin. Code Rule R641-1l0-100 for moving to rehear this

matter, the Board hereby rules that the later of the two deadlines shall be available to any

party moving to rehear this matter. If the Board later denies a timely petition for

rehearing, the party may still seek judicial review of the Order by perfecting a timely

appeal with the Utah Supreme Court within 30 days thereafter.

22

Page 37: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

The Board retains continuing jurisdiction over all the parties and ovet the subject

matter of this cause, except to the extent said jurisdiction may be divested by the filing of

a timely appeal to seek judicial review of this order by the Utah Supreme Court.

For all purposes, the Chairman's signature on a faxed copy of this Order shall be

deemed the equivalent of a signed original.

DATED this 6th day ofNovember, 2014

STATE OF UTAH BOARD OF OIL, GAS AND MINING

1000.32/1100.12

23

Page 38: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT C

Page 39: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

~ m -()

N EP ENERGY.t.. MINERAL INTEREST TRACT PLAT

WELL LOCATION: YOUNG 1-2C5 WELL HEAD/BOTTOM LOCATION: NE 1/4 OF THE NE 1/4 OF SECTION 12, T.3S., R.5W., U.S.B.&M.

s

FOUND BRASS CAP N89° 54' 52"E 2642.64'

DUCHESNE COUNTY.UTAH

FOUND REBAR

N89° 54' 52"E 2642.64'

FOUND BRASS CAP

I I

I

YOUNG 1-12C5 Directional Well

Date of 1st Prod.: 2/21/2014 Cum. Oil Prod.: 41,545 Bbls

(2/21/14 - 3/1/15)

I 1050'

FOUND PIPE

FOUND REBAR

Cx:l N c) lf') <.D N

-- --

1

I

I

~1-----------...... ~-----~---+~ ~ '/ //// ~ / , I I . '//~ /~ z

~!~~~ S89° 45' 16"W 2649.53'

1~S20° 12' 34'W 0 419.13'

-- -- -- 1-------------1 ~

S89° 47' 31"W 2649.48'

:;-,,. "" Ln

0 Cl)

~

0

0 Cl)

FOUND PK NAIL

FOUND SPIKE FOUND COUNTY ALUMINUM CAP

NOTES: 1. WELL FOOTAGES ARE MEASURED AT RIGHT ANGLES TO THE SECTION LINE. 2. ALL BEARINGS AND DISTANCES ARE MEASURED UNLESS OTHERWISE NOTED. 3. BEARINGS ARE DERIVED FROM G.P.S. OBSERVATIONS AND EQUIPMENT. 4.THE GENERAL LAND OFFICE G.L.O. PLAT WAS USED FOR REFERENCE

OUTLAW

> (

(

LEGEND

=TRACT I (40.00 ACRES)

=TRACT II (40.00 ACRES)

=TRACT Ill (TRIBAL 160.00 ACRES)

=TRACT IV (200.00 ACRES)

=TRACT V (40.00 ACRES)

=TRACT VI (80.00 ACRES) INCLUDES THE PARTIES TO BE COMPULSORY POOLED

~ • 0

= FOUND SECTION CORNER

=WELL HEAD

=BOTTOM HOLE LOCATION

= TRACT VII (2.88 ACRES)

=TRACT VII I (77.12 ACRES)

E!NGINlllEIRING INC. P.O. BOX 1800

ROOSEVELT, UTAH 84066 (435) 232-4321

EP ENERGY.t.. MINERAL INTEREST TRACT PLAT

WELL LOCATION: YOUNG 1-12C5 WELL HEAD/BOTTOM HOLE: NE 1/4 NE 1/4, SECTION 12,

T. 3 S., R. 5 W., U.S.B.&M.

t"N=A=0=8~3 =S=U.:..:.RF:..:;A=C=E~L=O=C~AT~IO=N~-------t NAO 83 TARGET BOTTOM HOLE LATITUDE= 40°14'24.00406"N (40.240001°) LATITUDE= 40°14'20.11792"N (40.238922°) LONGITUDE= 110°23'34.88250"W (-110.393023°) LONGITUDE= 110°23'36.74774"W (-110.393541°)

l"N'-"'A=0-=2_,_7 ..,,S"'U.:..:.RF,_,A,,__,C:o=Ec.=Lo-=O=C,....AT.:..:.IO""N=--------t NAO 27 TAR ET B M H LE LATITUDE= 40°14'24.16162"N (40.240045°) LATITUDE= 40°14'20.27541"N (40.238965°) LONGITUDE = 110°23'32.32172"W (-110.392312°) LONGITUDE = 110°23'34.18698"W (-110.392830°)

Sr 10

1

00

HORIZONTAL

DUCHESNE COUNTY, UTAH

DATE SURVEYED: BJ 1-

s_u_RV_E_Y_ED_s_v_: -------! SHEE1T NO. DRAWN: MARCH 20, 2015

DRAWN: JLW

SCALE: 1" = 1000'

Page 40: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT D

Page 41: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EP April 24, 2014

VIA CERTIFIED MAIL# 9314 7699 0430 0002 4317 86

Mary Ellen Slemaker Benien P.O. Box 701407 Tulsa, Oklahoma 74170

RE: Election to Lease or Participate Young 1-12C5 Section 12, Township 3 South, Range 5 West Duchesne County, Utah

Dear Ms. Benien:

This Election to Lease or Participate letter ("Election Letter"), dated April 24, 2014, shall hereby serve as a formal, written offer by EP Energy E&P Company, L.P. ("EP Energy"), a Delaware limited pattnership, with a notice address of 1001 Louisiana Street, Suite 2400, Houston, Texas 77002, to Mary Ellen Slemaker Benien, with a notice address of P.O. Box 701407, Tulsa, Oklahoma 74170, to make an election to either (i) execute the mutually acceptable form of oil and gas lease ("Lease") attached hereto as Exhibit "B"; or (ii) participate in the drilling and completion of the Young 1-12CS (API # 43-013-51957) ("Well") being situated in Section 12, Township 3 South, Range 5 West, Duchesne County, Utah, by executing the Approval for Expenditure ("AFE") attached hereto as Exhibit "C"; or (iii) elect to neither execute the Lease nor participate in the cost and risk associated with drilling and completing said Well.

In accordance with the rules and regulations of the State of Utah, the Utah Division of Oil, Gas & Mining approved the Application for Permit to Drill on April 9, 2013. As operator, EP Energy spudded the Well on December 21, 2013, and drilled to a depth of 12,300 feet to test, including, but not limited to, the Lower Green River and Wasatch formations. EP Energy initiated completion operations on February 17, 2014 and first oil sales began on February 24, 2014.

According to instruments of record, you may be the owner of an estimated Zero and 44/ I 00 (0.44) unleased net mineral acres, more or less, within the lands described below:

Township 3 South, Range 5 West, USM Section 12: S!iiSW1/4

(collectively, "Lands"); provided, however, EP Energy makes no asse1tion regarding the validity of any ownership or claim you may have in and to the minerals or mineral rights in said Lands.

EP Energy E&P Company. L.P. 1001 Louisiana Street. Suite 2400, Houston, Texas 77002 Main: 713.997.1000

EXHIBIT D

Page 42: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

In order to accommodate the drilling and completion of the Well, EP Energy respectfully requests that you, as an unleased mineral owner, consider leasing your mineral interest to EP Energy based on the terms specified below by executing the enclosed Lease and depositing the enclosed draft with your bank for collection. If a check is preferred, please contact me and I will anange to have a check delivered.

EP Energy's offer is as follows:

1. Lease Term: 2. Bonus Per Acre: 3. Minimal Bonus: 4. Royalty Interest:

1 Year $500.00/acre $500.00 3/l 6ths

EP Energy is prepared to close this Lease purchase with you immediately. If the lease terms above are unacceptable, please consider participating as a working interest owner. Our records indicate your proportionate share of working interest in the Well to be 0.0699815%. Per the AFE, EP Energy spent approximately $5,184,221.00 drilling and completing the Well. If you elect to participate, your share of costs would be approximately $10,626.15, being due to EP Energy within thirty (30) days after receipt of this Election Letter. You will also be asked to execute a model form operating agreement which further defines your rights and obligations as a participating working interest owner. The operating agreement, among other things, provides that your payment shall be held in escrow pending confirmation of your title. In the event your title fails, any applicable payments will be refunded within thirty (30) days of said determination.

In the event you elect to neither execute the Lease nor pat1icipate in the Well, or if your election is not received within thirty (30) days after receipt of this Election Letter, EP Energy will continue operating the Well pursuant to its rights as mineral cotenant and as provided by Utah law. In addition, EP Energy reserves all rights including, but not limited to, to file a petition with the Utah Board of Oil, Gas and Mining to force pool any unleased, non-pat1icipating mineral interests, subject to risk penalties ranging from 150% to 300%, or greater, as provided under Utah Code Ann.§ 40-6-6.5. Futiher, EP Energy shall have the option to carry your proportionate share of the AFE costs until one hundred percent (100%) of the same has been recouped out of production as provided under Utah law. After your proportionate share of AFE costs are recouped, you would back-in as a working interest owner in the Well which means you would then be (i) responsible to pay your propot1ionate share of costs in the Well, and (ii) entitled to your proportionate share of proceeds as a working interest owner.

Please signify your concurrence and agreement with this Election Letter by checking the appropriate box on Exhibit "A" attached hereto and return the executed original to EP Energy at the address shown below.

If you have any further questions, please do not hesitate to contact me.

2

Page 43: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Very tru~'\. • • . '

(;~.q. John DeWitt, Jr.

EP Energy E&P Company, L.P. Sr. Landman 1001 Louisiana Street, Suite 2523D Houston, Texas 77002 Office: (713) 997-2620 E-mail:[email protected]

Enclosures: Exhibit "A" - Election of Options Exhibit "B" - Form of Oil and Gas Lease Exhibit "C" - Approval for Expenditure

3

Page 44: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT "A"

ELECTION OF OPTIONS

Young l-12C5 Section 12, Township 3 South, Range 5 West Duchesne County, Utah

The undersigned hereby elects the option marked below (only one option may be selected):

D I elect to execute the Lease attached hereto and made a part hereof as Exhibit "8," in favor of EP Energy, as lessor, covering those Lands owned or claimed by you for a primary term of one ( l) year, bonus consideration of Five Hundred and No/100 Dollars ($500.00) per net mineral acre, and providing for three-sixteenths (3/161hs) royalty.

D I elect to participate in the cost and risk of developing and operating the proposed Well by executing and returning the Authorization for Expenditure attached hereto and made a part hereof as Exhibit "C," thereby agreeing to pay my proportionate share of all drilling costs and by executing a Model Form Operating Agreement, which will be sent under separate cover upon EP Energy's receipt of my election.

D I do not elect to (i) execute the Lease; or (ii) participate in the cost and risk of developing and operating the proposed Well. By electing this option, I fully understand EP Energy has the rights including, but not limited to, to file a petition to force pool any unleased mineral interests and imposing a risk penalty as provided under Utah law.

AGREED TO AND ACCEPTED THIS DAYOF ______ ,2014.

UNLEASED MINERAL INTEREST OWNER:

MARY ELLEN SLEMAKER BENIEN

By:

Name: ____________ _

Title:

4

Page 45: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EP t / , 1A. J - i I Approval for Expenditure

Project Name YOUNG 1-12C5 Project Type: DEVOR

Operator: EP ENERGY E&P COMPANY, L.P. Budget ID: DEVOR

Field Name: ALTAMONT FIELD Project No.: 159946

Property Name: YOUNG 1-12C5 Property No.: 10010769

Division: AL TAM ONT BUSINESS AREA Budgeted.: y

Requested By: Griffin.Ingrid S Requested Date.: 1116/2014

Project Description: Budgeted Year: 2012

This AFE requests funds to drill, complete and put on production the Young 1-12C5 12,000' Wasatch well

Section 12, Township 3S, Range 5W, Duchesne county, Ulah

Working Interests

QQmpoiov QQde QQmpaov Name WJ..%. Qdgina1 S1.1ppl1imeol

654 EP Energy E&P Company, 46.998249 S2.436,493.09 $0.00 L.P.

Olher BILL BARRETT 19.923498 S1 ,032,878.17 $0.00 CORPORATION

Olher CRESCENT POINT 19.923498 $1,032,878.17 so.oo ENERGY US CORP

Olher CROFF OIL COMPANY, 1.607013 S83,311 .11 SO.OD INC.

Other KAISER-FRANCIS OIL .697674 $36,168.96 $0.00 COMPANY

Olher QEP ENERGY COMPANY .629833 $32,651 .93 $0.00

Olher INTERNATIONAL .450000 $23,328.99 $0.00 PETROLEUM, L.L.C

Olher MAW Olive Tree, LLC 4.687500 $243,010.36 $0.00

Olher McNeil Land 3.125000 $162,006.91 SO.OD

Other Pittencrieff America, Inc. 1.226381 $63,578.30 $0.00

Other James C. Reeder .625000 $32.401 .38 $0.00

Olher Mary Ellen Slemaker Benien .069982 $3,628.02 $0.00

Other Davisaas of Alan B. Blood .036337 $1,883.79 $0.00

Other J.D. Rowe .000035 $1 .81 $0.00

100.000000 $5, 184,221 .00 $0 .00

Partoer Approvals i;p t;necgv A121m:ival :

Accepted & Agreed

Company:

Date:

Approved By:

Title:

This authorization fo r Expenditure (AFE) constitutes a contract between the non­opcrator s igning 1hc AFE and the operator whereby the non-operator hereby promises and agrees to pay to operator, within thirty (30) days aficr billing, its proport ionate share of all reasonable expenditures on the described operations until such time as an operating agreement is executed.

Tul.aJ

$2,436,493.09

$1 ,032,878.17

$1,032,878.17

$83,311 .11

S36,168.96

$32,651 .93

$23,328.99

$243,010.36

$162,006.91

$63,578.30

$32,401 .38

$3,628.02

$1,883.79

$1 .81

$5,184,221 .00

Page 46: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

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EXHIBIT E

Page 48: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EP April 24, 2014

VIA CERTIFIED MAIL# 9314 7699 0430 0002 4316 25

Devisees of Alan B. Blood c/o Thomas A. Ellison, Personal Representative 2257 Country Club Dr. Salt Lake City, Utah 84109

RE: Election to Lease or Parlicipate Young 1-12C5 Section 12, Township 3 South, Range 5 West Duchesne County, Utah

Dear Mr. Ellison:

This Election to Lease or Participate letter ("Election Letter"), dated April 24, 2014, shall hereby serve as a formal, written offer by EP Energy E&P Company, L.P. ("EP Energy"), a Delaware limited paitnership, with a notice address of 1001 Louisiana Street, Suite 2400, Houston, Texas 77002, to Devisees of Alan B. Blood c/o Thomas A. Ellison, Personal Representative, with a notice address of 2257 Country Club Dr., Salt Lake City, Utah 84109, to make an election to either (i) execute the mutually acceptable form of oil and gas lease ("Lease") attached hereto as Exhibit "B"; or (ii) participate in the drilling and completion of the Young 1-12CS (API # 43-013-51957) ("Well") being situated in Section 12, Township 3 South, Range 5 West, Duchesne County, Utah, by executing the Approval for Expenditure ("AFE") attached hereto as Exhibit "C"; or (iii) elect to neither execute the Lease nor participate in the cost and risk associated with drilling and completing said Well.

In accordance with the rules and regulations of the State of Utah, the Utah Division of Oil, Gas & Mining approved the Application for Permit to Drill on April 9, 2013. As operator, EP Energy spudded the Well on December 21, 2013, and drilled to a depth of 12,300 feet to test, including, but not limited to, the Lower Green River and Wasatch formations. EP Energy initiated completion operations on February 17, 2014 and first oil sales began on February 24, 2014.

According to instruments of record, you may be the owner of an estimated Zero and 23/100 (0.23) unleased net mineral acres, more or less, within the lands described below:

Township 3 South, Range S West, USM Section 12: S!liSWY-i

(collectively, "Lands"); provided, however, EP Energy makes no assertion regarding the validity of any ownership or claim you may have in and to the minerals or mineral rights in said Lands.

EP Energy E&P Company. L.P. 1001 Louisiana Slreet. Suite 2400. Houston. Texas 77002 Main: 713.997.1000

EXHI ITE

Page 49: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

In order to accommodate the drilling and completion of the Well, EP Energy respectfully requests that you, as an unleased mineral owner, consider leasing your mineral interest to EP Energy based on the terms specified below by executing the enclosed Lease and depositing the enclosed draft with your bank for collection. If a check is preferred, please contact me and I will arrange to have a check delivered.

EP Energy's offer is as follows:

1. Lease Term: 1 Year 2. Bonus Per Acre: $500.00/acre 3. Minimum Bonus: $500.00 3. Royalty Interest: 3/l6111

s

EP Energy is prepared to close this Lease purchase with you immediately. If the lease terms above are unacceptable, please consider pa11icipating as a working interest owner. Our records indicate your proportionate share of working interest in the Well to be 0.03633725%. Per the AFE, EP Energy spent approximately $5,184,221.00 drilling and completing the Well. If you elect to participate, your share of costs would be approximately $5,517.53, being due to EP Energy within thirty (30) days after receipt of this Election Letter. You will also be asked to execute a model form operating agreement which further defines your rights and obligations as a participating working interest owner. The operating agreement, among other things, provides that your payment shall be held in escrow pending confirmation of yom title. In the event your title fails, any applicable payments will be refunded within thitiy (30) days of said determination.

In the event you elect to neither execute the Lease nor paiiicipate in the Well, or if your election is not received within thirty (30) days after receipt of this Election Letter, EP Energy will continue operating the Well pursuant to its rights as mineral cotenant and as provided by Utah law. In addition, EP Energy reserves all rights including, but not limited to, to file a petition with the Utah Board of Oil, Gas and Mining to force pool any unleased, non-participating mineral interests, subject to risk penalties ranging from 150% to 300%, or greater, as provided under Utah Code Ann. § 40-6-6.5. Further, EP Energy shall have the option to carry your proportionate share of the AFE costs until one hundred percent (100%) of the same has been recouped out of production as provided under Utah law. After your proportionate share of AFE costs are recouped, you would back-in as a working interest owner in the Well which means you would then be (i) responsible to pay your proportionate share of costs in the Well, and (ii) entitled to your proportionate share of proceeds as a working interest owner.

Please signify your concurrence and agreement with this Election Letter by checking the appropriate box on Exhibit "A" attached hereto and retum the executed original to EP Energy at the address shown below.

If you have any further questions, please do not hesitate to contact me.

2

Page 50: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

John DeWitt, Jr.

EP Energy E&P Company, L.P. Sr. Landman 1001 Louisiana Street, Suite 25230 Houston, Texas 77002 Office: (713) 997-2620 E-mail:[email protected]

Enclosures: Exhibit "A" - Election of Options Exhibit "B" - Form of Oil and Gas Lease Exhibit "C" - Approval for Expenditure

3

Page 51: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT "A"

ELECTION OF OPTIONS

Young 1-12C5 Section 12, Township 3 South, Range 5 West Duchesne County, Utah

The undersigned hereby elects the option marked below (only one option may be selected):

D I elect to execute the Lease attached hereto and made a part hereof as Exhibit "B," in favor of EP Energy, as lessor, covering those Lands owned or claimed by you for a primary term of one (1) year, bonus consideration of Five Hundred and No/100 Dollars ($500.00) per net mineral acre, and providing for three-sixteenths (3/l 61hs) royalty.

D I elect to participate in the cost and risk of developing and operating the proposed Well by executing and returning the Authorization for Expenditure attached hereto and made a pati hereof as Exhibit "C," thereby agreeing to pay my proportionate share of all drilling costs and by executing a Model Form Operating Agreement, which will be sent under separate cover upon EP Energy's receipt of my election.

D I do not elect to (i) execute the Lease; or (ii) participate in the cost and risk of developing and operating the proposed Well. By electing this option, I fully understand EP Energy has the rights including, but not limited to, to file a petition to force pool any unleased mineral interests and imposing a risk penalty as provided under Utah law.

AGREED TO AND ACCEPTED THIS _DAY OF------• 2014.

UNLEASED MINERAL INTEREST OWNER:

DEVISEES OF ALAN B. BLOOD C/O THOMAS A. ELLISON, PERSONAL REPRESENTATIVE

By:

Name: ~~~~~~~~~~~~-

Title:

4

Page 52: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

, . . <A. - I j Approval for Expenditure

Project Name YOUNG 1-12C5 Project Type:

Operator: EP ENERGY E&P COMPANY, L.P. Budget ID:

Field Name: ALTAMONT FIELD Project No.:

Property Name: YOUNG 1-12C5 Property No.:

Division: ALTAMONT BUSINESS AREA Budgeted.:

Requested By: Griffin,lngrid S Requested Date.:

Project Description: Budgeted Year:

DEVOR

DEVOR

159946

10010769

y

1/16/2014

2012

This AFE requests funds to drill, complete and put on production the Young 1-12C5 12,000· Wasatch well

Section 12, Township 3S, Range 5W, Duchesne county, Utah

Working Interests

Compaoy Code Compaoy l':lame WI.% Qrigirutl S!.!PPlemeol

654 EP Energy E&P Company, 46.998249 $2,436,493.09 $0.00 LP.

Other BILLBARRETI 19.923498 $1,032,878.17 $0.00 CORPORATION

Olher CRESCENT POINT 19.923498 $1,032,878.17 $0.00 ENERGY US CORP

Other CROFF OIL COMPANY, 1.607013 $83,311 .11 $0.00 INC.

Other KAISER-FRANCIS OIL .697674 $36,168 .96 $0.00 COMPANY

Other QEP ENERGY COMPANY .629833 $32,651 .93 $0.00

Other INTERNATIONAL .450000 $23,328.99 $0.00 PETROLEUM, L.L.C

Other MAW Olive Tree, LLC 4.687500 $243,010 .36 SO.OD

Other McNeil Land 3.125000 $162,006 .91 $0.00

Other Pillencrieff America, Inc. 1.226381 $63,578.30 $0.00

Other James C. Reeder .625000 $32,401.38 $0.00

Other Mary Ellen Slemaker Benien .069982 $3,628.02 $0.00

Olher DAvisAAS of Alan B. Blood .036337 $1,883.79 $0.00

Other J.D. Rowe .000035 $1.81 $0.00

100.000000 $5, 184,221 .00 $0.00

Partner Approvals f P Energy Approval:

Accepted & Agreed

Company:

Date:

Approved By:

Title:

This authorization for Expenditure (AFE) constitutes a contract between the non­opcrator signing the Al'E and lhc operator whereby the non·opcrator hereby promises and agrees lo pay to operator, within lhirly (30) days afler billing, its proportionate share of all reasonable expenditures on the described operations until such time as an operating agreement is cxcctotcd.

Tu1al

$2,436,493.09

$1,032,878.17

$1,032,878.17

$83,311.11

$36,168.96

$32,651.93

$23,328.99

$243,010.36

$162,006.91

$63,578.30

$32,401.38

$3,628.02

$1 ,883.79

$1.81

$5, 184,221 .00

Page 53: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

USPS.com® - USPS Tracking™

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Tracking Number: 9314769904300002431625

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Page 54: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT F

Page 55: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

AUTHORIZATION FOR EXPENDITURE - ID# 50219

Well or Project Name: YOUNG 1-12C5 Project Type Code: DEVOR

Operator: EP ENERGY E&P COMPANY, Budget ID Code: DEV DR L.P.

Country: UNITED STATES Project(AFE) No.: 159946

County: DUCHESNE Supplement No.: 0.0000

State: UTAH Company No.: 654

Sec-Tsp-Rge/Survey/Blk: Property No.: 10010769

Field Name/Area: ALTAMONT FIELD Budgeted Y/N: Yes

Division: ALTAMONT BUSINESS AREA Prepared By/Dept: Cearley, Ginger M.

Date Prepared: 11/5/2013

Cost Code Cost Descrigtion Drill Comgletion Facilities Total

105 Land and Legal Services $125,000.00 $0.00 $0.00 $125,000.00

111 Location Preparation $75,000.00 $5,000.00 $0.00 $80,000.00

112 Location Restoration $30,000.00 $0.00 $0.00 $30,000.00

115 Mobilization $231,375.00 $0.00 $0.00 $231,375.00

116 INTLONL Y-lmport/Export Duties $0.00 $0.00 $0.00 $0.00

120 Top Drive/Power Swivel Rental $0.00 $0.00 $0.00 $0.00

121 Footage/Turnkey $48,000.00 $0.00 $0.00 $48,000.00

122 Heater/Boiler $23,500.00 $0.00 $0.00 $23,500.00

123 Camp and Catering $0.00 $0.00 $0.00 $0.00

124 Tools Lost in Hole $0.00 $0.00 $0.00 $0.00

125 Drilling/Service Rig - Dayrate $405,000.00 $63,000.00 $0.00 $468,000.00

126 Coil Tubing $0.00 $70,000.00 $0.00 $70,000.00

127 Snubbing Unit/ HWO $0.00 $0.00 $0.00 $0.00

128 Lift Boat - Day Rate $0.00 $0.00 $0.00 $0.00

129 Air I Nitrogen Package $0.00 $0.00 $0.00 $0.00

130 Swab Unit $0.00 $0.00 $0.00 $0.00

131 Fuel $91,800.00 $25,000.00 $0.00 $116,800.00

132 Disposal - Cuttings, Fluids $0.00 $35,000.00 $0.00 $35,000.00

133 Water $13,500.00 $45,000.00 $0.00 $58,500.00

134 Frac Tank Rental $5,875.00 $50,000.00 $0.00 $55,875.00

141 Mud and Chemicals $160,000.00 $3,000.00 $0.00 $163,000.00

142 Solids Control Rental Equipment $0.00 $0.00 $0.00 $0.00

143 Shaker Screens $4,500.00 $0.00 $0.00 $4,500.00

144 Mud Diesel $0.00 $0.00 $0.00 $0.00

151 Drillstring/Workstring Rental $31,000.00 $5,000.00 $0.00 $36,000.00 Equipment

152 Directional Tools and Services $90,600.00 $0.00 $0.00 $90,600.00

153 Fishing Tools and Services $0.00 $20,000.00 $0.00 $20,000.00

154 Well Control Rentals $21,600.00 $17,000.00 $0.00 $38,600.00

155 Office, Sewage and Misc Rentals $23,500.00 $18,000.00 $0.00 $41,500.00

156 Monitoring Equipment $18,000.00 $0.00 $0.00 $18,000.00

157 Safety/Medical $6,300.00 $10,000.00 $0.00 $16,300.00

161 Cement and Services $120,000.00 $0.00 $0.00 $120,000.00

162 Pumping Services $0.00 $42,000.00 $0.00 $42,000.00

163 Plugs and Packers $0.00 $25,000.00 $0.00 $25,000.00

171 Bits $44,500.00 $2,000.00 $0.00 $46,500.00

2

Page 56: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Cost Code Cost Description Drill Completion Facilities Total

172 Stabilizers and Reamers $4,000.00 $0.00 $0.00 $4,000.00

181 Open Hole Logging (Incl. SW Cores $65,000.00 $0.00 $0.00 $65,000.00 & RFTs)

182 MWD Services $0.00 $0.00 $0.00 $0.00

183 Mud Logging $18,200.00 $0.00 $0.00 $18,200.00

184 Conventional Coring and DSTs $0.00 $0.00 $0.00 $0.00

185 Contract Geo/Paleo $0.00 $0.00 $0.00 $0.00

191 Cased Hole Logging $0.00 $35,000.00 $0.00 $35,000.00

192 Perforating $0.00 $88,000.00 $0.00 $88,000.00

193 Stimulation (Acid. I Frac. I Grav. Pk) $0.00 $1,007,800.00 $0.00 $1,007,800.00

194 Slickline I Braided Line $0.00 $5,000.00 $0.00 $5,000.00

195 Prod. Well Testing Equip./ Service $0.00 $30,000.00 $0.00 $30,000.00

201 Land Transportation $62,600.00 $10,000.00 $0.00 $72,600.00

202 Marine Transportation $0.00 $0.00 $0.00 $0.00

203 Air Transportation $0.00 $0.00 $0.00 $0.00

211 Supervision - Company $0.00 $0.00 $5,000.00 $5,000.00

212 Supervision - Contract $99,314.00 $19,200.00 $0.00 $118,514.00

214 Shore Base Expense $0.00 $0.00 $0.00 $0.00

215 Divers $0.00 $0.00 $0.00 $0.00

241 Other Contract Labor $30,550.00 $25,000.00 $20,000.00 $75,550.00

242 BOP/Wellhead Testing $12,000.00 $5,000.00 $0.00 $17,000.00

251 Casing Crews & Equip & Tong $60,000.00 $0.00 $0.00 $60,000.00 Services

252 Laydown/Pickup Services $0.00 $3,000.00 $0.00 $3,000.00

253 Tubular Testing, Inspection $8,000.00 $0.00 $0.00 $8,000.00

254 Drillstring/Workstring Inspection $5,000.00 $0.00 $0.00 $5,000.00

255 Communication $7,402.00 $0.00 $0.00 $7,402.00

262 Purchased Supplies $5,405.00 $0.00 $0.00 $5,405.00

Total Intangibles $1,946,522.00 $1,663,000.00 $25,000.00 $3,634,522.00

291 Casing Sub-Total: $430,700.00 $0.00 $0.00 $430,700.00

Conductor #1 $21,000.00 $0.00 $0.00 $21,000.00

Conductor #2 $0.00 $0.00 $0.00 $0.00

Surface $87,500.00 $0.00 $0.00 $87,500.00

Intermediate #1 $253,800.00 $0.00 $0.00 $253,800.00

Intermediate #2 $0.00 $0.00 $0.00 $0.00

Liner #1 $0.00 $0.00 $0.00 $0.00

Liner #2 $0.00 $0.00 $0.00 $0.00

Production Casing $0.00 $0.00 $0.00 $0.00

Production Liner $68,400.00 $0.00 $0.00 $68,400.00

301 Tubing Sub-Total: $0.00 $65,000.00 $0.00 $65,000.00

Tubing 1 $0.00 $65,000.00 $0.00 $65,000.00

Tubing 2 $0.00 $0.00 $0.00 $0.00

311 Cementing Equipment $78,000.00 $0.00 $0.00 $78,000.00

321 Wellhead Equipment $35,000.00 $5,000.00 $0.00 $40,000.00

331 Artificial Lift Equipment $0.00 $325,000.00 $0.00 $325,000.00

341 Subsurface Equipment $0.00 $125,000.00 $0.00 $125,000.00

351 Prod Equip & Pipe Install - Materials $0.00 $2,000.00 $371,000.00 $373,000.00

352 Production Equipment $0.00 $5,000.00 $108,000.00 $113,000.00

3

Page 57: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Cost Code Cost Description Drill Completion Facilities Total

Total Tangibles $543,700.00 $527,000.00 $479,000.00 $1,549,700.00

Subtotal Tangibles & Intangibles $2,490,221.00 $2, 190,000.00 $504,000.00 $5, 184,221.00

Contingency $0.00 $0.00 $0.00 $0.00

Total Cost Estimate $2,490,221.00 $2, 190,000.00 $504,000.00 $5, 184,221.00

4

Page 58: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT G

Page 59: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

SEE EXHIBIT ''1'' TO THE REQUEST FOR AGENCY ACTION

EXHIBIT ''G''

Page 60: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT H

Page 61: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Exhibit "H"

I

Section 12 Average Weighted Fee Ro:yaltv Calculations I I

Tracts Tract Land Description Acreage i

1 NEl/iNEl/i 40 2 SEl/iNEl/i 40 3 WYzEYz 160 •(Tribally owned; not included in A WR) 4 NWl/i and NEl/iSWl/i 200 5 NWl/iSWl/i 40 6 SYzSWl/i 40 7 A 2.88-acre metes & bounds tract in the EYzSEl/i (underlying 2.88 (State owned; not included in A WR)

HwyU-87) 8 EYzSEl/i less Tract 7 above 77.12

Total Acreage= 640 (less Tribal Acreage) <160>

i (less State Acreage) <2.88> I

Ap_plicable Revised Total Acreage= 477.121

Ori!!inal Tract Particination Factor Tract % Leased x Acreage = Original TPF

1 100% x 40/477.12 = 8.383635% 2 100% x 40/477.12 = 8.383635% 4 100% x 200/477.12 = 41.918176% 5 100% x 40/477.12 = 8.383635% 6 99.14945% x 80/477.12 = 16.624656% 1 (unleased % owned by Ms. Benien

I (0.850550% unleased) (0.559852%) and Blood (0.290698%),

parties to be compulsory pooled)

8 100% x 77.12/477.12 16.163649% Total= 99.857386%

Page 62: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Eaualized Tract Particioation Factor Tract Eaualized TPF

1 8.383635%/99.857386% = 8.395608% 2 8.383635%/99.857386% = 8.395608% 4 41.918176%/99.857386% = 41.978043% 5 8.383635%/99.857386% = 8.395608% 6 16.624656%/99.857386% = 16.648399% 8 16.163649%/99.857386% = 16.186734%

Total= 100% I

! I

Eaualized AveraQe WeiQhted Fee Rovaltv Tract Mineral Ownership x Royal!Y Rate x Equalized TPF = Weighted Royal!Y

1 71.875% x 1/6 x 8.395608% = 1.005724% I

I 28.125% x 3/16 x 8.395608% 0.442737% i

2 30% x 3/16 x 8.395608% = 0.472253% I 70% x 1/6 8.395608% = 0.979488%

4 I 62.5% x 3116 x 41.978043% = 4.919302%

I 37.5% x 1/6 x 41.978043% = 2.623628% 5 I 100% x 3/16 x 8.395608% = 1.574177% 6 22.359379% x 20% x 16.648399% = 0.744496%

40.972483% x 3/16 x 16.648399% = 1.278987% 35.817588% x 1/6 x 16.648399% = 0.993842%

8 11.4325% x 20% x 16.186734% = 0.370110% 58.03125% x 3116 x 16.186734% = 1.761256% I 30.53625% x 1/6 x 16.186734% = 0.823804% i

AVERAGE FEE WEIGHTED ROYALTY= 17.989804%

2

Page 63: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT I

Page 64: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Young 1-12C5 Actuals (as of March 3, 2015)

Cost Description Gross AFE Gross Actual ACTUALS versus ACTUALS versus

Cost Estimate (WIP) Costs Booked AFE Estimate $ AFE Estimate %

Contingency $0.00 $0.00 $0.00 0.00%

51 PURCHASE PRICE - ROW $0.00 $2,400.00 $2,400.00 0.00%

52 ACQUISITION - ROW $0.00 $27,525.00 $27,525.00 0.00%

105 LAND & LEGAL $125,000.00 $133,196.31 $8,196.31 6.55%

111 LOCATION PREP & RESTORE $80,000.00 $102,856.30 $22,856.30 28.57%

112 LOCATION RESTORATION $30,000.00 $18,317.52 ($11,682.48) -38.94%

115 Ml/MO & RU/RD $231,375.00 $235,796.88 $4,421.88 1.91%

116 IMPORT/EXPORT $0.00 $0.00 $0.00 0.00%

120 Top Drive/Power Swivel Rental $0.00 $0.00 $0.00 0.00%

121 RIG-FOOTAGE/TURNKEY $48,000.00 $42,130.40 ($5,869 .60) -12.22%

122 BOILER AND STEAMERS $23,500.00 $16,500.00 ($7,000.00) -29.78%

123 CAMP AND CATERING $0.00 $0.00 $0.00 0.00%

124 Tools Lost in Hole $0.00 $0.00 $0.00 0.00%

125 RIG-DA VRATE $468,000.00 $467,081.25 ($918.75) -0.19%

126 COILED TUBING UNIT $70,000.00 $51,707.98 ($18,292.02) -26.13%

127 SNUBBING UNIT $0.00 $0.00 $0.00 0.00%

128 Lift Boat - Day Rate $0.00 $0.00 $0.00 0.00%

129 Air I Nitrogen Package $0.00 $0.00 $0.00 0.00%

130 Swab Unit $0.00 $0.00 $0.00 0.00%

131 FUEL& WATER $116,800.00 $218,942.45 $102,142.45 87.45%

132 SALT WATER DISPOSAL $35,000.00 $12,449.85 ($22,550.15) -64.42%

133 WATER $58,500.00 $60,218.35 $1,718.35 2.93%

134 FRAC TANKS-RENTAL $55,875.00 $29,952.63 ($25,922.37) -46.39%

141 MUD & CHEMICALS $163,000.00 $190,621.89 $27,621.89 16.94%

142 MUD RENTAL EQUIPMENT $0.00 $0.00 $0.00 0.00%

143 SHAKER SCREENS $4,500.00 $0.00 ($4,500.00) -100.00%

144 Mud Diesel $0.00 $0.00 $0.00 0.00%

151 RENTAL TOOLS $36,000.00 $37,118.54 $1,118.54 3.10%

152 DIRECTIONAL TOOLS $90,600.00 $92,267.50 $1,667.50 1.84%

153 FISHING TOOLS $20,000.00 $13,008.27 ($6,991.73) -34.95%

154 WELL CONTROL RENTALS $38,600.00 $42,300.80 $3,700.80 9.58%

155 OFFICE,SEWAGE&MISC.RENTAL $41,500.00 $63,319.38 $21,819.38 52.57%

156 MONITORING EQUIPMENT $18,000.00 $16,423.06 ($1,576.94) -8.76%

157 SAFETY/MEDICAL $16,300.00 $14,894.94 ($1,405.06) -8.62%

161 CEMENTING & SERVICE $120,000.00 $108,893.87 ($11,106.13) -9.25%

162 PUMPING SERVICES $42,000.00 $30,246.59 ($11,753.41) -27.98%

163 PLUGS & PACKERS $25,000.00 $32,706.01 $7,706.01 30.82%

171 BITS & REAMERS $46,500.00 $44,431.53 ($2,068.47) -4.44%

172 STABILIZERS,UNDERREAMERS $4,000.00 $6,671.60 $2,671.60 66.79%

181 OPEN HOLE LOGGING $65,000.00 $41,357.03 ($23,642.97) -36.37%

182 MWD/SERVICE $0.00 $0.00 $0.00 0.00%

183 MUD LOGGING $18,200.00 $0.00 ($18,200.00) -100.00%

184 MECH CORING & DST $0.00 $0.00 $0.00 0.00%

EXHIBIT J_

Page 65: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

Young 1-12C5 Actuals (as of March 3, 2015)

Gross AFE Gross Actual ACTUALS versus ACTUALS versus Cost Description

Cost Estimate (WIP) Costs Booked AFE Estimate $ AFE Estimate %

185 CONTRACT GEO/PALEO $0.00 $0.00 $0.00 0.00%

190 UNKNOWN $0.00 $316.25 $316.25 0.00%

191 CASED HOLE LOGGING $35,000.00 $22,029.24 ($12,970. 76) -37.05%

192 PERFORATING $88,000.00 $70,700.00 ($17,300.00) -19.65%

193 STIMULATION $1,007,800.00 $881,868.37 ($125,931.63) -12.49%

194 WIRELINE WORI< $5,000.00 $2,576.72 ($2,423.28) -48.46%

195 WELL TESTING EQUIP & SVCS $30,000.00 $34,021.46 $4,021.46 13.40%

201 TRUCKING $72,600.00 $54,821.76 ($17,778.24) -24.48%

202 MARINE TRANS $0.00 $0.00 $0.00 0.00%

203 AIR TRANS $0.00 $0.00 $0.00 0.00%

211 SUPV- COMPANY $5,000.00 $0.00 ($5,000.00) -100.00%

212 SUPV - CONTRACT $118,514.00 $115,260.46 ($3,253.54) -2.74%

214 SHORE BASE EXPENSE $0.00 $0.00 $0.00 0.00%

215 DIVERS $0.00 $0.00 $0.00 0.00%

216 LABOR-DRILLING $0.00 $5,420.25 $5,420.25 0.00%

220 LABOR-EXPENSE PROJECT $0.00 $87.82 $87 .82 0.00%

241 CONTRACT LABOR(OTHER) $75,550.00 $61,260.94 ($14,289.06) -18.91%

242 BOP/WELLHEAD TESTING $17,000.00 $18,428.55 $1,428.55 8.40%

251 CSG CREWS & INSPECTION $60,000.00 $55,567.33 ($4,432.67) -7.38%

252 LAYDOWN/PICl<UP SERVICES $3,000.00 $1,595.25 ($1,404.75) -46.82%

253 TUBULAR TESTNG,INSPECTION $8,000.00 $10,568.60 $2,568.60 32.10%

254 DRLSTRNG/WRl<STRNG INSPECT $5,000.00 $5,081.45 $81.45 1.62%

255 COMMUNICATION $7,402.00 $6,604.63 ($797.37) -10.77%

259 CAP ACCRUALS (PP&E ONLY) $0.00 $0.00 $0.00 0.00%

262 PURCHASED SUPPLIES $5,405.00 $9,820.81 $4,415 .81 81.69%

265 WATER GATHERING MATERIALS $0.00 $2,511.60 $2,511.60 0.00%

266 WATER GATHERING LABOR $0.00 $33,188.50 $33,188.50 0.00%

268 ELECTRIC POWER LABOR $0.00 $37,000.00 $37,000.00 0.00%

289 CONSTRUCTION ENGINEERING $0.00 $2,867.28 $2,867.28 0.00%

291 CASING $430, 700.00 $467,603.36 $36,903.36 8.56%

301 TUBING $65,000.00 $64,112 .72 ($887.28) -1.36%

302 UNKNOWN $0.00 $0.00 $0.00 0.00%

311 CEMENTING EQUIP $78,000.00 $60,577.72 ($17,422.28) -22.33%

321 WELLHEAD EQUIPMENT $40,000.00 $49,189.98 $9,189.98 22.97%

331 ARTIFICIAL LIFT EQUIP $325,000.00 $312,403.46 ($12,596.54) -3 .87%

341 SUB-SURFACE EQUIP $125,000.00 $0.00 ($125,000.00) -100.00%

345 COMMUNICATIONS EQUIPMENT $0.00 $41,226.13 $41,226.13 0.00%

351 SURF PROD EQUIP/INSTALL $373,000.00 $222,641.54 ($150,358.46) -40.31%

352 TANI< EQUIP/INSTALL $113,000.00 $91,552.30 ($21,447.70) -18.98%

354 FLOWLINES/PPL & INSTALL $0.00 $3,245.34 $3,245.34 0.00%

355 SEP,TREATOR,PROD U., LACT $0.00 $72,149 .55 $72,149.55 0.00%

358 UNKNOWN $0.00 $1,883 .96 $1,883.96 0.00%

$5,184,221.00 $4,971,519.26 ($212,701.74) -4.10%

Page 66: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT J

Page 67: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

34

UTE 1-2C5 (P&A) Cum Production: 49,089 Bbls (- 8/1/1977- 9/1/~ 992) 0 .. ..

03

.. .. ..

35

.. .. ... 02

.. ... ... .. .. .. ... 9

... o.?<1e, .. ... ... ..

36

PAI UTE WALKER 1-7 (P&A) Cum Production: 29,943 Bbls (11/1/1989 - 8/1/1994)

01

Q \ \

' ' \ \

, , ,

31

, , ,

,' 06 ,

, ' Young 4-6C4 ' , ' .. '-:'.: "°"" Cum Production: 25,675 Bbls .. ~ ~

.. .. \CJ). , (9/1/2013 -12/1/2013) ... , . ... \ , , . '.. ' ' , ~' - - HEWETT 2-6C4 .. , x ~ s o'\9~ - -

32

05

EP ENERGYA WELL & PRODUCTION

STATUS YOUNG 1-12C5

SPUD DATE: 12/3/2013

LEGEND

• EXISTING OIL WELL

Q PLUGGED &ABANDONED OIL WELL

- - DISTANCE TO NEARBY WELL

PROIECTION: NAO 83 UTM ZONE 12N

SCALE: 1" = 2000' --===--==""'

AUTH OR: BWH

DRAWN: 3/19/2015

500 1,000 1,500 2,000

OUTLAW ENCilNEERINCi INC.

P.O. BOX 1800 ROOSEVELT, UTAH 84066

(435)232-4321

... ... ' , ?')s,' __ - ~ - Cum 1Production: 63,019 Bbls

... \ , l ~~~~~~~~~~~---i;-~~~~-1 1-------------l-------- ---------l---------...::. .. ~---t---T'-<-ttt-T'---~---=-"-----------(3/-1I201'3 · - ·11./1l2013) .. , I , - - - y 2 7C4 .. ... , , , , I __ - oung -

' ... ' ,;_,_ - .. i7~6_.__ Cum Production: 43,244 Bbls

- - - - - - ;--,,-:.-:.:. - -- (2/1/2013-12/1/2013) ---- , ~ ---------18]3~ - - - - - , ... -5~ 03.- - - - -0

-__ - - Young 1-12C5 ' , '

- - - - - Spud Date 12/3/2013 0 ------ . l ,cum Production: 25,810 Bbls BLUE BENC~ UTE 1-7C4 (P&A)

Cum Production: 120,680 Bbls (-9/1/1972 - 5/1/1989)

FORTUNE UTE 1-11C5 (P&A) Cum Produttion: 361,585 Bbls 11

10 (-2/1/1977 ! 9/1/1999)

, , (1/1/2014 - 8/1/2014) ...... , ... , 12 ...

07 , ... , ... , ... ,, ~

~, ~d' '\. '?!, -..7' , ... , ... , ... , ... , ... , ... , ... , ...

08 09

, '~·~~~~~~-!.~~~~~~~~~~~~~~~~~--t~~~~~~1 1-------------4-----------~-----,.!i---~-------------Jt------------' ,

15

cJ SMITH 1-14C5 (P&A)

, , , , ,

Cum Production: 72,231 Bbls 14 (10/1/1984 - 2/1/1992)

13 18

... ... ... ... .... Wilson 1-18C4 Cum Production: 70,612 Bbls (3/1 /2013 - 12/1 /2013)

17 16

SHEET

XHIBtT J

Page 68: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

EXHIBIT Z

Page 69: FILED - Utah · 2015. 3. 23. · filed mar 2 g zors secretahv, eoÆ of ciil, gas & fuiimng before the board of oil, gas and mining department of natural resources state of utah in

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