0001193125-14-180344.txt : 20140502 0001193125-14-180344.hdr.sgml : 20140502 20140502170555 ACCESSION NUMBER: 0001193125-14-180344 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 20140502 DATE AS OF CHANGE: 20140502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Memorial Resource Development Corp. CENTRAL INDEX KEY: 0001599222 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 464710769 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-195062 FILM NUMBER: 14810328 BUSINESS ADDRESS: STREET 1: 1301 MCKINNEY STREET STREET 2: SUITE 2100 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 713-588-8300 MAIL ADDRESS: STREET 1: 1301 MCKINNEY STREET STREET 2: SUITE 2100 CITY: HOUSTON STATE: TX ZIP: 77010 S-1/A 1 d658814ds1a.htm FORM S-1/A Form S-1/A
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As filed with the Securities and Exchange Commission on May 2, 2014

Registration No. 333-195062

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 1

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

MEMORIAL RESOURCE DEVELOPMENT CORP.

(Exact name of registrant as specified in its charter)

 

Delaware   1311  

46-4710769

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

1301 McKinney Street, Suite 2100

Houston, Texas 77010

(713) 588-8300

(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)

 

Kyle N. Roane

Vice President, General Counsel and Corporate Secretary

Memorial Resource Development Corp.

1301 McKinney Street, Suite 2100

Houston, Texas 77010

(713) 588-8300

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

With copies to:

John Goodgame

Shar Ahmed

Akin Gump Strauss Hauer & Feld LLP

1111 Louisiana Street, 44th Floor

Houston, TX 77002

(713) 220-5800

 

Douglas E. McWilliams

Vinson & Elkins L.L.P.

1001 Fannin, Suite 2500

Houston, TX 77002

(713) 758-2222

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   x  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of

securities to be registered

 

Proposed maximum

aggregate offering price(1)(2)

  Amount of
registration fee

Common Stock, $0.01 par value per share

  $700,000,000   $90,160

 

(1)   Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2)   Includes shares issuable upon the underwriters’ exercise of its overallotment option.

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MAY 2, 2014

 

PRELIMINARY PROSPECTUS

 

            Shares

 

LOGO

 

Memorial Resource Development Corp.

 

Common Stock

 

$         per share

 

 

 

This is our initial public offering. We are selling              shares of common stock, and MRD Holdings LLC is selling              shares of our common stock. We expect the public offering price to be between $         and $         per share. MRD Holdings LLC has granted the underwriters a 30-day option to purchase up to an additional              shares of common stock. We will not receive any proceeds from the sale of shares by MRD Holdings LLC, including any shares that it may sell pursuant to the underwriters’ option to purchase additional shares of common stock.

 

Currently, no public market exists for our common stock. We have applied to list our common stock on the NASDAQ Global Market under the symbol “MRD.” Following the completion of this offering, we will be a “controlled company” as defined under the NASDAQ listing rules because the group consisting of affiliates of Natural Gas Partners will beneficially own over 50% of our shares of outstanding common stock. See “Principal and Selling Stockholders.”

 

 

 

Investing in our common stock involves risks that are described in the “Risk Factors” section beginning on page 24 of this prospectus.

 

We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012, and as such, we have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings. See “Risk Factors” and “Summary—Emerging Growth Company Status.”

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

 

 

     Per Share      Total  

Initial Public Offering Price

   $                   $               

Underwriting Discounts and Commissions

   $        $    

Proceeds, Before Expenses, to Us

   $         $     

Proceeds, Before Expenses, to MRD Holdings LLC

   $         $     

 

The underwriters expect to deliver the shares of common stock on or about                     , 2014.

 

 

Joint Book-Running Managers

 

Citigroup     Barclays
BofA Merrill Lynch   BMO Capital Markets   Goldman, Sachs & Co.
Raymond James   RBC Capital Markets   Wells Fargo Securities

 

 

Co-Managers

 

Credit Suisse   Morgan Stanley   Scotiabank / Howard Weil
Simmons & Company International   Stephens Inc.   Stifel
UBS Investment Bank     Wunderlich Securities

 

 

 

The date of this prospectus is                     , 2014.


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[Inside cover art to be provided]


Table of Contents

TABLE OF CONTENTS

 

     Page  

SUMMARY

     1   

RISK FACTORS

     24   

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     50   

USE OF PROCEEDS

     52   

DIVIDEND POLICY

     53   

CAPITALIZATION

     54   

DILUTION

     55   

SELECTED HISTORICAL FINANCIAL DATA

     57   

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     60   

BUSINESS

     89   

MANAGEMENT

     123   

PRINCIPAL AND SELLING STOCKHOLDERS

     137   

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     139   

RESTRUCTURING TRANSACTIONS

     144   

DESCRIPTION OF CAPITAL STOCK

     148   

SHARES ELIGIBLE FOR FUTURE SALE

     152   

MATERIAL TAX CONSEQUENCES TO NON-U.S. HOLDERS

     154   

UNDERWRITING

     158   

LEGAL MATTERS

     164   

EXPERTS

     164   

WHERE YOU CAN FIND MORE INFORMATION

     165   

INDEX TO FINANCIAL STATEMENTS

     F-1   

APPENDIX A: GLOSSARY OF OIL AND NATURAL GAS TERMS

     A-1   

APPENDIX B-1: NETHERLAND, SEWELL & ASSOCIATES, INC. SUMMARY OF MEMORIAL RESOURCE DEVELOPMENT LLC PROVED RESERVES

     B-1   

APPENDIX B-2: NETHERLAND, SEWELL & ASSOCIATES, INC. AUDIT LETTER REGARDING MEMORIAL RESOURCE DEVELOPMENT LLC PROBABLE AND POSSIBLE RESERVES

     B-14   

 

 

 

You should rely only on the information contained in this prospectus. Neither we, MRD Holdings LLC, nor the underwriters have authorized any person to provide you with any information or represent anything about us or this offering that is not contained in this prospectus. If given or made, any such other information or representation should not be relied upon as having been authorized by us. Neither we nor MRD Holdings LLC are making an offer in any jurisdiction where an offer or sale is not permitted. The information contained in this prospectus is current only as of its date.

 

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Commonly Used Defined Terms

 

As used in this prospectus, unless we indicate otherwise:

 

   

“the Company,” “we,” “our,” “us” and “our company” or like terms refer collectively to (i) Memorial Resource Development Corp. and its subsidiaries (other than MEMP and its subsidiaries) for periods after the restructuring transactions described below and (ii) our predecessor (as described below) other than MEMP and its subsidiaries for periods prior to the restructuring transactions;

 

   

“Memorial Production Partners,” “MEMP” and “the Partnership” refer to Memorial Production Partners LP individually and collectively with its subsidiaries, as the context requires. Following the restructuring transactions described below, we will own the general partner of MEMP as well as 50% of MEMP’s incentive distribution rights;

 

   

“MEMP GP” refers to Memorial Production Partners GP LLC, the general partner of the Partnership, which we will own following completion of the restructuring transactions described below;

 

   

“MRD Holdings” refers to MRD Holdings LLC, a holding company owned by the Funds that will own          shares of our common stock following completion of the restructuring transactions described below and this offering, assuming that the underwriters do not exercise their option to purchase additional shares from MRD Holdings.

 

   

“MRD LLC” refers to Memorial Resource Development LLC, which has historically owned our predecessor’s business and will be merged into MRD Operating LLC, our subsidiary, after completion of the restructuring transactions described below;

 

   

“WildHorse Resources” refers to WildHorse Resources, LLC and its subsidiaries, which owns our interest in the Terryville Complex and will be our 100% owned subsidiary following completion of the restructuring transactions described below;

 

   

“our predecessor” refers collectively to MRD LLC and its consolidated subsidiaries, consisting of Classic Hydrocarbons Holdings, L.P., Classic Hydrocarbons GP Co., L.L.C., Black Diamond Minerals, LLC, Beta Operating Company, LLC, MEMP GP, BlueStone, MRD Operating LLC, WildHorse Resources and each of their respective subsidiaries, including MEMP and its subsidiaries;

 

   

“the Funds” refers collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively own MRD Holdings;

 

   

“restructuring transactions” means the transactions described beginning on page 13 that will take place in connection with and after the closing of this offering and pursuant to which we will acquire assets of MRD LLC (not including its interests in BlueStone, MRD Royalty, MRD Midstream or Classic Pipeline) that comprise substantially all of the assets of MRD LLC;

 

   

“BlueStone” refers to BlueStone Natural Resources Holdings, LLC, which sold substantially all of its assets in July 2013 for approximately $117.9 million;

 

   

“NGP” refers to Natural Gas Partners, a family of private equity investment funds organized to make direct equity investments in the energy industry, including the Funds;

 

   

“MRD Royalty” refers to MRD Royalty LLC, which owns certain immaterial leasehold interests and overriding royalty interests in Texas and Montana;

 

   

“MRD Midstream” refers to MRD Midstream LLC, which owns an indirect interest in certain immaterial midstream assets in North Louisiana; and

 

   

“Classic Pipeline” refers to Classic Pipeline & Gathering, LLC, which owns certain immaterial midstream assets in Texas.

 

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Industry and Market Data

 

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, government publications or other published independent sources. Some data is also based on our good faith estimates. Although we believe these third-party sources are reliable and that the information is accurate and complete, neither we nor MRD Holdings have independently verified the information.

 

Equivalency

 

This prospectus presents certain production and reserves-related information on an “equivalency” basis. When we refer to oil and natural gas in “equivalents,” we are doing so to compare quantities of oil with quantities of natural gas. In calculating equivalents, we use a generally recognized standard in which one Bbl of oil and/or NGLs is equivalent to six Mcf of natural gas. This calculation is based on an approximate energy equivalency and does not imply or reflect a value or price relationship.

 

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SUMMARY

 

This summary highlights information appearing elsewhere in this prospectus. You should read the entire prospectus carefully, including “Risk Factors” beginning on page 24 and the historical and pro forma financial statements and the related notes to those financial statements. Certain oil and gas industry terms, including the terms proved reserves, probable reserves and possible reserves, used in this prospectus are defined in the “Glossary of Oil and Natural Gas Terms” in Appendix A of this prospectus.

 

Because we control MEMP through our ownership of its general partner, we are required to consolidate MEMP for accounting and financial reporting purposes even though we only own a minority of its limited partner interests. Our financial statements include two reportable business segments: (i) the MRD Segment, which reflects all of our operations except for MEMP and its subsidiaries, and (ii) the MEMP Segment, which reflects the operations of MEMP and its subsidiaries. Except with respect to our consolidated and combined financial statements or as otherwise indicated, the description of our business, properties, strategies and other information in this summary does not include the business, properties or results of operations of BlueStone, MRD Royalty, MRD Midstream and Classic Pipeline (the assets of which are included in our predecessor but will not be conveyed to us in the restructuring transactions) or MEMP. Our proved reserves as of December 31, 2013 have been prepared by Netherland, Sewell & Associates, Inc., our independent reserve engineers (“NSAI”), and our probable and possible reserves as of December 31, 2013 have been prepared by our internal reserve engineers and audited by NSAI, all of which are reflected in our reserve reports (which we collectively refer to as our “reserve report”), summaries of which are included in Appendices B-1 and B-2 of this prospectus.

 

Information expressed on a pro forma basis in this summary gives effect to certain transactions as if they had occurred on December 31, 2013 for pro forma balance sheet purposes and on January 1, 2013 for pro forma statements of operations purposes. For a description of these transactions, please read “Summary Historical Consolidated and Combined Pro Forma Financial Data” and “—Our Structure and Restructuring Transactions.” Where applicable, we have assumed an initial public offering price of              per share, the midpoint of the price range set forth on the cover page of this prospectus.

 

Overview

 

We are an independent natural gas and oil company focused on the exploitation, development, and acquisition of natural gas, NGL and oil properties with a majority of our activity in the Terryville Complex of North Louisiana, where we are targeting overpressured, liquids-rich natural gas opportunities in multiple zones in the Cotton Valley formation. Our total leasehold position is 347,458 gross (205,818 net) acres, of which 60,041 gross (51,522 net) acres are in what we believe to be the core of the Terryville Complex. We are focused on creating shareholder value primarily through the development of our sizeable horizontal inventory. As of December 31, 2013, we had 1,582 gross (1,091 net) identified horizontal drilling locations, of which over 1,431 gross (994 net) identified horizontal drilling locations are located in the Terryville Complex. These total net identified horizontal drilling locations represent an inventory of over 32 years based on our expected 2014 drilling program. We believe our inventory to be repeatable and capable of generating high returns based on the extensive production history in the area, the results of our horizontal wells drilled to date, and the consistent reservoir quality across multiple target formations.

 

As of December 31, 2013, we had estimated proved, probable and possible reserves of approximately 1,126 Bcfe, 800 Bcfe and 1,711 Bcfe, respectively. As of such date, we operated 98% of our proved reserves, 71% of which were natural gas. For the three months ended December 31, 2013, 45% of our pro forma MRD Segment revenues were attributable to natural gas production, 28% to NGLs and 27% to oil. For the year ended December 31, 2013, we generated pro forma MRD Segment Adjusted EBITDA of $159 million and pro forma net income of $       million, and made pro forma total capital expenditures of $203 million, including $70 million

 

 

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for wells coming online in 2014. Please see “—Summary Historical Consolidated and Combined Pro Forma Financial Data—Adjusted EBITDA” for an explanation of the basis for the pro forma presentation and our use of Adjusted EBITDA to measure the MRD Segment’s profitability.

 

Our average net daily production for the three months ended December 31, 2013 was 137 MMcfe/d (approximately 70% natural gas, 22% NGLs and 8% oil) and our reserve life was 23 years. As of December 31, 2013, we produced from 95 horizontal wells and 800 vertical wells. The Terryville Complex represented 83% of our total net production for the three months ended December 31, 2013. Our estimated average net daily production for the period from April 1 through April 30, 2014 was 179 MMcfe/d, of which 73% was from natural gas. Our estimated average net daily production from our properties in the Terryville Complex for the same period was 141 MMcfe/d, or 79% of our total production. In the Terryville Complex, we have completed and brought online six additional horizontal wells since January 1, 2014, bringing our total number of producing horizontal wells to 27 in our primary formations. The 24-hour initial production rates of our four most recent wells averaged 26.6 MMcfe/d.

 

The following chart provides information regarding our production growth and the increasing proportion of our horizontal well production since the beginning of 2012.

 

LOGO

 

Our Properties

 

Cotton Valley—Overview

 

The Cotton Valley formation extends across East Texas, North Louisiana and Southern Arkansas. The formation has been under development since the 1930s and is characterized by thick, multi-zone natural gas and oil reservoirs with well-known geologic characteristics and long-lived, predictable production profiles. Over 21,000 vertical wells have been completed throughout the play. In 2005, operators started redeveloping the

 

 

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Cotton Valley using horizontal drilling and advanced hydraulic fracturing techniques. To date, operators have drilled over 600 horizontal Cotton Valley wells. Some large, analogous redevelopment projects in the Cotton Valley include the Nan-Su-Gail Field in Freestone County, East Texas, where over 40 horizontal wells have been drilled by operators such as Devon Energy Corporation and Marathon Oil Corporation, and the Carthage Complex in Panola County, East Texas, where operators such as ExxonMobil Corporation, ConocoPhillips and Anadarko Petroleum Corporation have drilled over 153 horizontal wells.

 

Cotton Valley—Terryville Complex Horizontal Redevelopment

 

We are currently engaged in the horizontal redevelopment of the Terryville Complex in Lincoln Parish, Louisiana utilizing horizontal drilling and completion techniques similar to those employed at the Nan-Su-Gail Field, Carthage Complex in East Texas and other major resource plays across the United States. We have assembled a largely contiguous acreage position in the Terryville Complex of approximately 60,041 gross (51,522 net) acres as of December 31, 2013. The majority of our current and planned development is focused in and around what we believe to be the core of the Terryville Complex.

 

We entered the Terryville Complex via an acquisition from Petrohawk Energy Corporation in April 2010, with the goal of redeveloping the field with horizontal drilling and modern completion techniques. Since that acquisition, we have completed multiple bolt-on acquisitions and in-fill leases to build our current position. We believe the Terryville Complex, which has been producing since 1954, is one of North America’s most prolific natural gas fields, characterized by high recoveries relative to drilling and completion costs, high initial production rates with high liquids yields, long reserve life, multiple stacked producing zones, available infrastructure and a large number of service providers.

 

After initially drilling eight vertical pilot wells in the Terryville Complex, we commenced a horizontal drilling program in 2011 to further delineate and define our position. In 2013, we shifted our operational focus to full-scale horizontal redevelopment of the Terryville Complex, going from two rigs to four rigs by the end of that year. Additionally, in the fourth quarter of 2013, we moved to drilling on multi-well pads that allow us to more efficiently drill wells and control costs as we develop our stacked pay zones. We intend to dedicate approximately $264 million of our $316 million drilling and completion budget in 2014 to develop multiple zones within the Terryville Complex, where we expect to drill and complete 35 gross (30 net) wells. Our horizontal redevelopment program in the Terryville Complex will be focused on increasing our well performance and recoveries.

 

Within the Terryville Complex, as of December 31, 2013, we had 945 Bcfe, 688 Bcfe and 1,643 Bcfe of estimated proved, probable and possible reserves, respectively, and a drilling inventory consisting of 1,431 gross (994 net) identified horizontal drilling locations, including 91 gross (72 net) drilling locations to which we have attributed proved undeveloped reserves as of December 31, 2013. Since initiating our horizontal drilling program in 2011, we have drilled 27 gross (22.0 net) horizontal wells, growing our gross daily production in the Terryville Complex by 304% from 53.0 MMcfe/d for the three months ended March 31, 2010 to 214.0 MMcfe/d for the month ended April 30, 2014. For the three months ended December 31, 2013, 42% of our revenues from the Terryville Complex were attributable to natural gas, 29% to NGLs and 29% to oil. Within the Terryville Complex, on a proved reserves basis, we operate approximately 99% of our existing acreage and hold an average working interest of approximately 74% across our acreage. Our high operating control allows us to more efficiently and economically manage the redevelopment of this extensive resource.

 

We believe seismic data, as well as information gathered from the results of our existing 275 vertical and 27 horizontal wells throughout the field, support the existence of at least ten stacked pay zones across the Terryville Complex. Our redevelopment program currently targets four of the stacked pay zones in the Cotton Valley formation—zones we term the Upper Red, Lower Red, Lower Deep Pink and Upper Deep Pink, all of which we

 

 

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are developing with horizontal wells through pad drilling. These four zones have an overall thickness ranging from 400 to 890 feet across our acreage position. We believe the overpressured nature of this section of the Cotton Valley formation is highly productive when accessed through horizontal drilling and fracture stimulation technologies. These qualities, when combined with the liquids-rich nature of the natural gas, high initial rates of production and competitive well costs, produce what we believe to be amongst the highest rate of return wells in the nation. Further, there are additional opportunities for redevelopment in the zones above the four main zones. NSAI has allocated over $1 billion PV-10 and 677 Bcfe to our possible reserve category for the redevelopment of these additional zones. Please see “—Reserves.”

 

The table below details certain information on estimated ultimate recoveries and production for the 27 horizontal wells currently producing in the Terryville Complex. Our well results have shown consistency in initial production, decline rates and estimated ultimate recovery. The consistency of these results gives us confidence that the full-scale redevelopment of the Terryville Complex we began in 2013 will be successful as we move from four to five rigs in 2014. Please see “Business—Our Properties—Cotton Valley—Terryville Complex Horizontal Redevelopment” for more detail on our properties in the Terryville Complex and the table on page 92 for more detail on the average EUR and cumulative production of our properties in the Terryville Complex.

 

    Lateral
Length
(Feet)
    Producing Wells     First
Production
    Days
Producing
    Cumulative
Production
(Bcfe)
    Gross Wellhead Flow
Rates After Processing
(MMcfe/d)(3)(4)
       

Well Name (1)

    EUR
(Bcfe)(2)
    EUR
BCFe/
1,000’
          0-30     0-90     91-180     181-360     D&C
($MM)
 

Upper Red Zone

                     

LD Barnett 23H-2

    4,015        13.6        3.4        1/30/2012        821        4.6        14.5        12.0        7.7        5.6        6.7   

Colquitt 20 17H-1

    4,357        11.2        2.6        7/30/2012        639        3.8        17.5        12.6        7.2        5.1        7.7   

Dowling 22 15H-1

    5,376        16.8        3.1        9/22/2012        585        5.1        16.3        15.6        11.1        8.2        8.8   

Nobles 13H-1

    4,216        11.6        2.8        11/17/2012        529        4.2        21.5        16.7        9.9        6.5        7.8   

Sidney McCullin 16 21H-1

    4,604        16.9        3.7        1/19/2013        466        4.4        17.4        14.2        10.8        8.4        8.1   

Wright 14 11 HC-1

    5,250        18.0        3.4        5/27/2013        338        4.4        19.6        18.1        16.1          8.8   

BF Fallin 22 15H-1

    5,122        15.6        3.0        6/17/2013        317        3.1        14.8        13.7        11.8          7.5   

Dowling 20 17H-1

    4,327        8.9        2.1        7/22/2013        282        2.0        15.2        11.0        5.7          10.7   

Gleason 31H-1

    3,692        2.5        0.7        8/12/2013        261        0.5        3.5        2.7        1.8          9.4   

Burnett 26H-1

    2,405        4.2        1.7        9/22/2013        220        0.9        6.9        5.5        3.3          6.6   

Drewett 17 8H-1

    4,010        14.0        3.5        11/13/2013        168        2.6        22.1        18.7            7.7   

Wright 13 12 HC-2

    6,009        18.1        3.0        12/21/2013        130        2.4        22.7        19.3            8.0   

LA Minerals 15 22H-2

    5,814        N/A        N/A        1/21/2014        99        1.6        18.1        16.7            9.3   

TL McCrary 14 11 HC-5

    5,875        N/A        N/A        4/14/2014        16        0.4                7.8   

Wright 13 24 HC-1

    6,678        N/A        N/A       4/14/2014        16        0.4                8.9   

Wright 13 24 HC-3

    6,606        N/A        N/A        4/14/2014        16        0.4                7.6   

Lower Red Zone

                     

TL McCrary 14H-1

    4,544        12.8        2.8        5/1/2012        729        4.0        14.4        11.7        8.3        5.4        7.7   

Nobles 13H-2

    4,060        9.2        2.3        11/17/2012        529        3.1        16.0        11.9        8.4        5.2        7.8   

LA Methodist Orphanage 14H-1

    3,637        12.1        3.3        2/15/2013        439        3.5        13.9        13.0        9.7        6.3        9.1   

Dowling 21 16H-1

    4,590        9.4        2.0        3/18/2013        408        2.5        13.0        10.1        6.5        4.5        6.6   

Drewett 17 8H-2

    3,700        3.7        1.0        11/13/2013        168        0.8        8.7        6.2            6.8   

Wright 13 12 HC-1

    5,409        8.2        1.5        12/21/2013        130        1.3        14.7        11.3            9.1   

LA Minerals 15 22H-1

    5,926        N/A        N/A        1/21/2014        99        1.1        13.8        11.1            8.0   

Wright 13 24 HC-4

    6,518        N/A        N/A        4/14/2014        16        0.3                10.3   

Lower Deep Pink Zone

                     

LA Methodist Orphanage 14H-2

    3,550        12.2        3.4        2/15/2013        439        3.1        14.2        11.6        7.6        5.6        6.1   

Wright 13 12 HC-3

    5,706        6.3        1.1        12/21/2013        130        1.1        12.4        9.3            7.1   

Wright 13 12 HC-4

    5,010        5.0        1.0        12/21/2013        130        1.0        11.8        8.7            6.1   

Averages

                     

All Wells

    4,852        11.0        2.5          301        2.3        14.9        12.2        8.4        6.1        8.0   

Upper Red

    4,897        12.6        2.7          306        2.6        16.2        13.6        8.5        6.8        8.2   

Lower Red

    4,798        9.2        2.2          315        2.1        13.5        10.7        8.2        5.4        8.2   

Lower Deep Pink

    4,755        7.8        1.8          233        1.7        12.8        9.9        7.6        5.6        6.4   

 

(1)   The majority of the wells in this table are included within our proved developed producing reserve category in our reserve report as of December 31, 2013. LA Minerals 15 22H-1, LA Minerals 15 22H-2, TL McCrary 14 II HC-5, Wright 13 24 HC-1, Wright 13 24 HC-3 and Wright 13 24 HC-4 each started producing in 2014 so they have not been included in the year-end reserve report.
(2)   EUR represents the Estimated Ultimate Recovery or sum of total gross remaining reserves attributable to each location in our reserve report and cumulative sales from such location. EUR is shown on a combined basis for oil/condensates, gas and NGLs after the effects of processing.

 

 

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(3)   Production data is as of April 30, 2014 and shown gross on a combined basis after the effects of processing.
(4)   Periodic flow rates start on day 4, with days 1 through 3 used to allow clean up associated with well completion. The 30-day flow rates therefore start on day 4 and continue 30 days to day 33 and the 90-day flow rates go from day 4 to day 93.

 

Recent Drilling Updates

 

During the week of April 14, 2014, we completed four new wells in the Terryville Complex. The combined 24-hour peak production for the four wells is over 95 MMcf per day. Three of the wells were drilled on one pad in the eastern edge of our property, the farthest step out from our core position to date, and produced a combined 24-hour peak production in excess of 75 MMcf per day. These production numbers are before the effects of processing and do not include oil volumes associated with these wells.

 

East Texas

 

We own and operate approximately 54,337 gross (42,894 net) acres as of December 31, 2013 in Texas, where we are currently producing primarily from the Cotton Valley, Travis Peak and Bossier formations and targeting the Cotton Valley formation for future development. From January 1, 2011 through December 31, 2013, we have drilled and completed 28 gross (10.3 net) wells and are operating one rig in East Texas as of December 31, 2013. In 2014, we plan to invest $36 million to drill and complete 8 gross (6 net) wells in East Texas in the Joaquin Field of Panola and Shelby Counties. As of December 31, 2013, we had approximately 108 gross identified horizontal drilling locations in East Texas, including 54 gross (43 net) drilling locations to which we have attributed proved undeveloped reserves as of December 31, 2013. For the three months ended December 31, 2013, our average net daily production from our East Texas properties was 21 MMcfe/d, of which 76% was natural gas. Within our East Texas properties, on a proved reserves basis, we operate approximately 94% of our existing properties.

 

Rockies & Other

 

We own approximately 162,375 gross (66,191 net) acres as of December 31, 2013 in our Rockies & Other region and for the three months ended December 31, 2013 our average net daily production from this region was 1 MMcfe/d. In 2014, we plan to operate one rig and invest $12 million to drill 3 gross (3 net) vertical wells in the Tepee Field of the Piceance Basin targeting the Mancos and Williams Fork formations. We also plan to invest $4 million to participate in 12 gross horizontal wells (1.1 net) operated by SandRidge Energy Inc. in the Mississippian oil play of Northern Oklahoma. As of December 31, 2013, we had approximately 174 gross identified vertical drilling locations in the Tepee Field in our Rockies & Other area.

 

 

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Reserves

 

Our estimates of proved reserves are prepared by NSAI, and our estimates of probable and possible reserves are prepared by our management and audited by NSAI. As of December 31, 2013, we had 1,126 Bcfe, 800 Bcfe and 1,711 Bcfe of estimated proved, probable and possible reserves, respectively. As of this date, our proved reserves were 71% gas and 29% NGLs and oil. Additionally, the PV-10 of our proved reserves was $1,469 million, the PV-10 for our probable reserves was $1,052 million and the PV-10 for our possible reserves was $2,386 million. The following table provides summary information regarding our estimated proved, probable and possible reserves data by area based on our reserve report and our average net daily production by area for the three months ended December 31, 2013:

 

    Proved
Total
(Bcfe)
    % Gas     %
Developed
    Proved
PV-10
(in millions)(1)
    Probable
Total
(Bcfe)(2)
    Probable
PV-10
(in millions)(1)
    Possible
Total
(Bcfe)(2)
    Possible
PV-10
(in  millions)(1)
    Average
Net
Daily
Production
(MMcfe/d)
 

Terryville Complex

    945        71     33   $ 1,341        688      $ 1,032        1,643      $ 2,383        115   

East Texas

    175        75     29     110        109        18        66        3        21   

Rockies & Other

    6        49     100     18        2        2        2        1        1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    1,126        71     33   $ 1,469        800      $ 1,052        1,711      $ 2,386        137   
 

 

 

       

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)   In this prospectus, we have disclosed our PV-10 based on our reserve report. PV-10 is a non-GAAP financial measure and represents the period-end present value of estimated future cash inflows from our natural gas and crude oil reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows and using SEC pricing assumptions in effect at the end of the period. SEC pricing for natural gas and oil of $3.67 per Mcf and $93.42 per Bbl was based on the unweighted average of the first-day-of-the-month prices for each of the twelve months preceding December 2013. PV-10 differs from standardized measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes. Moreover, GAAP does not provide a measure of estimated future net cash flows for reserves other than proved reserves. Because PV-10 estimates of probable and possible reserves are more uncertain than PV-10 and standardized estimates of proved reserves, but have not been adjusted for risk due to that uncertainty, they may not be comparable with each other. Nonetheless, we believe that PV-10 estimates for reserve categories other than proved present useful information for investors about the future net cash flows of our reserves in the absence of a comparable GAAP measure such as standardized measure. Because of this, PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis. In addition, investors should be cautioned that estimates of PV-10 for probable and possible reserves, as well as the underlying volumetric estimates, are inherently more uncertain of being recovered and realized than comparable measures for proved reserves, and that the uncertainty for possible reserves is even more significant. Our PV-10 estimates of proved reserves and our standardized measure are equivalent because, prior to the completion of this offering, we were not subject to entity level taxation. Accordingly, no provision for federal income taxes has been provided because taxable income has been passed through to our equity holders. However, had we not been a tax exempt entity as of December 31, 2013, our estimated discounted future income tax in respect of our proved, probable and possible reserves would have been approximately $401 million, $368 million and $835 million, respectively. After this offering, we will be treated as a taxable entity for federal income tax purposes and our future income taxes will be dependent upon our future taxable income. Neither PV-10 nor standardized measure represents an estimate of fair market value of our natural gas and oil properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of estimated reserves held by companies without regard to the specific tax characteristics of such entities.
(2)   Substantially all of our estimated probable and possible reserves are classified as undeveloped.

 

 

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Drilling Inventory and Capital Budget

 

We intend to develop our multi-year drilling inventory by utilizing our significant expertise in horizontal drilling and fracture stimulation to grow our production, reserves and cash flow. For 2014, we have budgeted a total of $316 million to drill and complete 46 gross (39 net) operated wells and to participate in 12 gross (1.1 net) non-operated wells. We expect to fund our 2014 development primarily from cash flows from operations. The majority of our drilling locations and our 2014 development program are focused on the Terryville Complex, where we plan to invest $264 million on drilling and completing 33 gross (28 net) horizontal wells and 2 gross (2 net) vertical wells. Approximately $5.0 million of our Terryville Complex budget is allocated towards the drilling of vertical wells and routine facilities maintenance. In East Texas, we plan to invest $36 million on drilling and completing 8 gross (6 net) horizontal wells. In our Rockies & Other area we plan to invest $12 million on drilling and completing 3 gross (3 net) vertical wells in the Tepee Field and $4 million to participate in 12 gross (1.1 net) horizontal wells operated by SandRidge Energy Inc. in the Mississippian oil play of Northern Oklahoma.

 

The following table provides information regarding our acreage and drilling locations by area as of December 31, 2013, except for projected 2014 information:

 

    Net
Acreage
    WI%     Gross Horizontal Drilling Locations(1)(2)     Net
Horizontal
Drilling
Inventory
(years)
    2014
Projected
Operated
Net Wells
to be
Drilled(3)
    2014
Projected
Capital
Budget
($MM)
 
     

 

   

 

   

 

   

 

    Total        
      Proved     Probable     Possible     Management     Gross     Net        

Terryville Complex

    96,733        74     91        147        450        743        1,431        994        36        30      $ 264   

East Texas

    42,894        79     54        39        15        —          108        92        15        6        36   

Rockies & Other

    66,191        41     —          23        20        —          43        4        —          3        16   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    205,818        59     145        209        485        743        1,582        1,091        32        39      $ 316   

 

(1)   The above table excludes 192 proved vertical drilling locations in our reserve report in the Terryville Complex and 174 identified vertical locations based on management estimates in the Rockies & Other region.
(2)   Please see “Business—Our Operations—Drilling Locations” for more information regarding the process and criteria through which these drilling locations were identified. The drilling locations on which we actually drill will depend on the availability of capital, regulatory approval, commodity prices, costs, actual drilling results and other factors. Please see “Risk Factors—Risks Related to Our Business—Our identified drilling locations, which are scheduled out over many years, are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.” Proved, probable and possible locations are based on our reserve report. Management locations are based on management estimates of additional identified drilling locations.
(3)   Represents net operated wells only. Excludes 12 gross (1.1 net) non-operated wells to be drilled in our Rockies & Other area in 2014.

 

 

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Our extensive inventory and horizontal drilling program in the Terryville Complex is currently focused on four zones within the Cotton Valley formation—the Upper Red, Lower Red, Lower Deep Pink and Upper Deep Pink. The table below sets forth our drilling locations by zone as of December 31, 2013 along with the average results for the wells we have drilled within each zone. Please see “Business—Our Properties—Cotton Valley—Terryville Complex Horizontal Redevelopment” for more detail on our properties in the Terryville Complex and the table on page 92 for the 30 day initial production rate and EUR condensate volumes.

 

          Average Historical Results(2)  

Lower Cotton

Valley Zone

  Gross Horizontal Drilling Locations(1)     Producing
Wells
Drilled(1)
    EUR
(Bcfe)(3)
    Drilling and
Completion Costs

($MM)
 
  Proved     Probable     Possible     Management     Total        

Upper Red

    47        42        40        313        442        16        12.6      $ 8.2   

Lower Red

    40        40        36        276        392        8        9.2      $ 8.2   

Lower Deep Pink

    4        28        47        79        158        3        7.8      $ 6.4   

Upper Deep Pink

    —          37        42        75        154        —          —          —     

Other Zones

    —         
—  
  
    285       
—  
  
   
285
  
    —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Terryville Complex

    91        147        450       
743
  
    1,431        27        11.0      $ 8.0   

 

(1)   Please see “Business—Our Operations—Drilling Locations” for more information regarding the process and criteria through which these drilling locations were identified. The drilling locations on which we actually drill will depend on the availability of capital, regulatory approval, commodity prices, costs, actual drilling results and other factors. Please see “Risk Factors—Risks Related to Our Business—Our identified drilling locations, which are scheduled out over many years, are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.” Proved, probable and possible locations are based on our reserve report. Management locations are based on management estimates of additional identified drilling locations.
(2)   Relates to the 21 horizontal wells in the Terryville Complex included in our reserve report as proved developed reserves as of December 31, 2013. Drilling and completion costs and producing wells drilled include six additional wells that have come online since year-end.
(3)   EUR represents the Estimated Ultimate Recovery or the sum of total gross remaining reserves attributable to each location in our reserve report and cumulative sales from such location. EUR is shown at the wellhead on a combined basis for oil/condensates and wet gas.

 

Our Terryville horizontal development program in 2014 has an average working interest of 87% and our total horizontal development inventory has an average working interest of 69%.

 

For the Terryville Complex, our 2014 budget assumes an average cost of $8.6 million for gross horizontal wells ($7.5 million per net well) and is based on an average lateral length of 6,270 feet. As part of our long-term development plan, the lateral length of our planned wells is expected to increase and we expect wells within the Terryville Complex to cost on average $9.3 million for gross wells ($8.1 million per net well) drilled with a 7,500 foot lateral length.

 

 

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Business Strategies

 

Our primary objective is to build shareholder value through growth in reserves, production and cash flows by developing and expanding our significant portfolio of drilling locations. To achieve our objective, we intend to execute the following business strategies:

 

Grow production, reserves and cash flow through the development of our extensive drilling inventory.    We believe our extensive inventory of low-risk drilling locations, combined with our operating expertise, will enable us to continue to deliver production, reserve and cash flow growth and create shareholder value. As of December 31, 2013, we had assembled an aggregate drilling inventory of 1,582 gross identified horizontal drilling locations, 90% of which are in the Terryville Complex, representing a drilling inventory of over 36 years based on our expected 2014 drilling program. We believe that the risk and uncertainty associated with our core acreage positions in the Terryville Complex has been largely reduced through our development activity, and because those positions are in areas with extensive drilling and production history. Since initiating our horizontal drilling program with one rig in 2011, we have invested over $288 million in the Terryville Complex through December 31, 2013. With four rigs running in the Terryville Complex as of December 31, 2013, we are one of the most active drillers in the Cotton Valley formation. We intend to dedicate approximately $264 million of our $316 million drilling and completion budget in 2014 to develop the overpressured liquids-rich Terryville Complex through multi-well pad drilling. We believe multiple vertically stacked producing horizons in the Terryville Complex can be developed using horizontal drilling techniques, thus enhancing the economics of this field.

 

Enhance returns through prudent capital allocation and continued improvements in operational and capital efficiencies.    We continually monitor and adjust our drilling program with the objective of achieving the highest total returns on our portfolio of drilling opportunities. We believe we will achieve this objective by (i) minimizing the capital costs of drilling and completing horizontal wells through knowledge of the target formations, (ii) maximizing well production and recoveries by optimizing lateral length, the number of frac stages, perforation intervals and the type of fracture stimulation employed, (iii) targeting specific zones within our leasehold position to maximize our hydrocarbon mix based on the existing commodity price environment and (iv) minimizing operating costs through efficient well management.

 

Exploit additional development opportunities on current acreage.    Our existing asset base provides numerous opportunities for our highly experienced technical team to create shareholder value by increasing our inventory beyond our currently identified drilling locations and ultimately by growing our estimated proved reserves. In the Terryville Complex, we are currently targeting multiple stacked horizons. We also believe our East Texas region has a significant inventory of low-risk, liquids-rich horizontal drilling locations. Finally, we continue to evaluate our leasehold positions in the Rocky Mountains and have preliminarily identified over 170 potential vertical locations.

 

Maintain a disciplined, growth oriented financial strategy.    We intend to fund our growth primarily with internally generated cash flows while maintaining ample liquidity and access to the capital markets. Furthermore, we plan to hedge a significant portion of our expected production to reduce our exposure to downside commodity price fluctuations and enable us to protect our cash flows and maintain liquidity to fund our drilling program. Since approximately 76% of our acreage in the Terryville Complex was held by production as of December 31, 2013 and no significant drilling commitments are needed to hold our remaining acreage in the near term, we are able to allocate capital among projects in a manner that optimizes both costs and returns, resulting in a highly efficient drilling program.

 

Make opportunistic acquisitions that meet our strategic and financial objectives.    We will seek to acquire oil and gas properties that we believe complement our existing properties in our core areas of operation. In

 

 

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addition to our focus on the Terryville Complex, we are pursuing other properties that provide opportunities for the addition of reserves and production through a combination of exploitation, development, high-potential exploration and control of operations. We follow a technology driven strategy to establish large, contiguous leasehold positions in the core of prolific basins and opportunistically add to those positions through bolt-on acquisitions over time. We entered into the Terryville Complex through strategic acquisitions and grassroots leasing efforts, amassing a land position of 96,733 net acres, 51,522 net acres of which we believe to be in the core of the play. We will continue to identify and opportunistically acquire additional acreage and producing assets to complement our multi-year drilling inventory.

 

Competitive Strengths

 

We believe that the following strengths will allow us to successfully execute our business strategies.

 

Large, concentrated position in one of North America’s leading plays.    We own approximately 60,041 gross (51,522 net) acres in what we believe to be the core of the Terryville Complex in Lincoln Parish, which we believe to be one of North America’s most prolific liquids-rich natural gas fields, characterized by consistent and predictable geology and multiple stacked pay formations confirmed by extensive vertical well control. Through December 31, 2013, our drilling program in the Terryville Complex has produced some of the top performing gas wells in the United States in the previous two years, with single horizontal well results having achieved average 30-day initial production rates of 14.9 MMcfe/d, EURs averaging 11.0 Bcfe and average drilling and completion costs of $8.0 million per well. Approximately 76% of our acreage in the Terryville Complex was held by production at December 31, 2013 and there are no significant lease expirations until 2017. Additionally, all of our acreage in this play can be held by running a one rig program over the next 18 months.

 

De-risked acreage position with multi-year inventory of liquids-rich drilling opportunities.    As of December 31, 2013, we had a drilling inventory consisting of 1,582 gross identified horizontal drilling locations, of which approximately 145 are gross proved undeveloped locations. Based on our expected 2014 drilling program and net identified drilling locations, we have over 32 years of liquids-rich drilling inventory. The majority of our drilling activity has been and will continue to be focused in the Terryville Complex, where we produce liquids-rich natural gas from the overpressured Cotton Valley formation. We have used subsurface data from our vertical wells coupled with 3-D seismic data to identify and prioritize our inventory based on returns. This liquids-rich gas formation allows for NGL processing that, when coupled with the condensate produced, results in strong well economics. For the three months ended December 31, 2013, 45% of our pro forma MRD Segment revenues were attributable to natural gas, 28% to NGLs and 27% to oil.

 

Significant operational control with low cost operations.    On a proved reserves basis, we operate 99% of our properties and have operational control of all of our drilling inventory in the Terryville Complex. We believe maintaining operational control will enable us to enhance returns by implementing more efficient and cost-effective operating practices, through the selection of economic drilling locations, opportunistic timing of development, continuous improvement of drilling, completion and stimulation techniques and development on multi-well pads. As a result of the contiguous nature of our leasehold in the Terryville Complex and its geologic continuity, we are able to drill consistently long laterals, averaging over 4,800 lateral feet, which helps us to reduce costs on a per-lateral foot basis and increase our returns. We expect the average lateral length of the 35 gross wells that we expect to drill in the Terryville Complex in 2014 to be 6,400 feet per well. Operating in mature basins in North Louisiana and East Texas allows us to take advantage of the available and extensive midstream infrastructure and accelerate our development plan without encountering significant constraints in either takeaway or processing capacity. Our operational control allows us to focus on operating efficiency, which has resulted in our MRD Segment lease operating costs declining 31% from $0.77 per Mcfe for the year ended December 31, 2012 to $0.53 per Mcfe for the year ended December 31, 2013.

 

 

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Proven and incentivized executive and technical team.    We believe our management and technical teams are one of our principal competitive strengths due to our team’s significant industry experience and long history of working together in the identification, execution and integration of acquisitions, cost efficient management of profitable, large scale drilling programs and a focus on rates of return. Additionally, our technical team has substantial expertise in advanced drilling and completion technologies and decades of expertise in operating in the North Louisiana and East Texas regions. The members of our management team collectively have an average of 22 years of experience in the oil and natural gas industry. John A. Weinzierl, our Chief Executive Officer, has 24 years of oil and natural gas industry experience as a petroleum engineer, a strong commercial and technical background and extensive experience acquiring and managing oil and natural gas properties. Our management team has a significant economic interest in us directly and through its equity interests in our controlling stockholder, MRD Holdings. We believe our management team is motivated to deliver high returns, create shareholder value and maintain safe and reliable operations.

 

Our relationship with MEMP.    We own 0.1% general partner interest in MEMP through our ownership of its general partner as well as 50% of MEMP’s incentive distribution rights. MEMP’s objective as a master limited partnership is to generate stable cash flows, allowing it to make quarterly distributions to its limited partners and, over time, to increase those quarterly distributions. As a result of its familiarity with our management team and our asset base and our track record of prior “drop-down” transactions, we believe that MEMP is a natural purchaser of properties from us that meet its acquisition criteria. We believe this mutually beneficial relationship enhances MEMP’s ability to generate consistent returns on its oil and natural gas properties, provides us with a growing source of cash flow from our partnership interests in MEMP and allows us to monetize producing non-core properties. Since MEMP’s initial public offering, we have consummated “drop-down” transactions with MEMP totaling approximately $376 million. In addition, we may have the opportunity to work jointly with MEMP to pursue certain acquisitions of oil and natural gas properties that may not otherwise be attractive acquisition candidates for either of us individually. While we believe that MEMP would be a preferred acquirer of our mature, non-core assets, we are under no obligation to offer to sell, and it is under no obligation to offer to buy, any of our properties.

 

Financial strength and flexibility.    During 2013, we generated $159 million of pro forma MRD Segment Adjusted EBITDA and made pro forma total capital expenditures of $203 million, including $70 million on wells coming online in 2014. We intend to continue to fund our organic growth predominantly with internally generated cash flows while maintaining ample liquidity for opportunistic acquisitions. We will continue to maintain a disciplined approach to spending whereby we allocate capital in order to optimize returns and create shareholder value. We seek to protect these future cash flows and liquidity levels by maintaining a three-to-five year rolling hedge program. Pro forma as of December 31, 2013 for this offering and the restructuring transactions (including the redemption of the PIK notes for approximately $363 million 30 days after the closing of this offering), we expect our total liquidity, consisting of cash on hand and available borrowing capacity under our new revolving credit facility, to be in excess of $         million.

 

Recent Developments

 

In December 2013, MRD LLC issued $350,000,000 of its 10.00%/10.75% Senior PIK toggle notes due 2018, which we refer to as the PIK notes. MRD LLC used the net proceeds from that issuance to repay outstanding indebtedness, to fund a debt service reserve account for the payment of interest on the PIK notes, to pay a distribution to the Funds, and for general company purposes. In connection with the closing of this offering, we will assume the PIK notes and use a portion of the proceeds of this offering to redeem the PIK notes in their entirety, to pay any applicable premium in connection with such redemption and to pay accrued and unpaid interest, if any, to the date of redemption. MRD Holdings will receive the cash released upon the termination of the debt service reserve account in connection with the redemption of the PIK notes. See “Restructuring Transactions.”

 

 

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In April 2014, we sold approximately 15 Bcfe of proved reserves located in East Texas to MEMP for cash consideration of approximately $34.0 million, subject to customary post-closing adjustments.

 

In connection with the closing of this offering, we intend to enter into a new $2.0 billion revolving credit facility. Immediately prior to the closing of this offering, we will borrow approximately $         million from our new revolving credit facility to pay off and terminate in their entirety WildHorse Resources’ revolving credit facility and second lien term loan, which we refer to collectively as WildHorse Resources’ credit agreements. See “Restructuring Transactions.”

 

Acquisition History

 

We built out our leasehold positions in North Louisiana, East Texas and the Rocky Mountains primarily through the following acquisition activities:

 

   

In November 2007, we acquired interests in the Joaquin Field, which is the core of our East Texas acreage;

 

   

In December 2007, we acquired interests in the Tepee Field in the Piceance Basin in Colorado;

 

   

In April and May 2010, we acquired interests in the Terryville Complex and other North Louisiana fields, which are the core of our North Louisiana acreage;

 

   

In November 2010, we acquired interests in the Spider and E. Logansport Fields in North Louisiana;

 

   

In May 2012, we acquired interests in the Terryville Complex and Double A Field in North Louisiana and East Texas;

 

   

In April 2013, we acquired interests in the West Simsboro and Simsboro Fields of the Terryville Complex in North Louisiana;

 

   

In November 2013, we acquired the remaining equity interests in Classic Hydrocarbons Holdings, L.P., Classic Hydrocarbons GP Co., L.L.C. and Black Diamond Minerals, LLC, which hold oil and natural gas properties in East Texas, North Louisiana and the Rocky Mountains; and

 

   

In February 2014, we repurchased net profits interests in the Terryville Complex from an affiliate of NGP for $63.4 million after customary adjustments. These net profits interests were originally sold to the NGP affiliate upon the completion of certain acquisitions in 2010 by WildHorse Resources.

 

Our Principal Stockholder

 

Our principal stockholder is MRD Holdings, which is controlled by the Funds, which are three of the private equity funds managed by NGP. Upon completion of this initial public offering, MRD Holdings, the selling stockholder in this offering, will own approximately     % of our common stock (or approximately     % if the underwriters’ option to purchase additional shares from MRD Holdings is exercised in full). Pursuant to a voting agreement, MRD Holdings will also have the right to direct the vote of an additional approximately     % of our common stock. The Funds also collectively indirectly own 50% of MEMP’s incentive distribution rights, and at the completion of this offering MRD Holdings will own 5,360,912 subordinated units of MEMP, representing an 8.7% limited partner interest in MEMP. We are also a party to certain other agreements with MRD Holdings, the Funds and certain of their affiliates. For a description of the voting agreement and these other agreements, please read “Certain Relationships and Related Party Transactions.”

 

Founded in 1988, NGP is a family of private equity investment funds, with cumulative committed capital of approximately $10.5 billion since inception, organized to make investments in the natural resources sector. NGP is part of the investment platform of NGP Energy Capital Management, a premier investment franchise in the natural resources industry, which together with its affiliates has managed approximately $13 billion in cumulative committed capital since inception.

 

 

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Our Interest in Memorial Production Partners LP

 

Through our ownership of its general partner, we control MEMP. We also own 50% of its incentive distribution rights. MEMP is a publicly traded limited partnership engaged in the acquisition, exploitation, development and production of oil and natural gas properties in the United States, with assets consisting primarily of producing oil and natural gas properties that are located in Texas, Louisiana, Colorado, Wyoming, New Mexico and offshore southern California. Most of MEMP’s properties are located in large, mature oil and natural gas reservoirs with well-known geologic characteristics and long-lived, predictable production profiles and modest capital requirements. Because we control MEMP, we are required to consolidate MEMP for accounting and financial reporting purposes, even though we and MEMP have independent capital structures.

 

During the year ended December 31, 2013, less than $0.1 million of distributions were made in respect of the MEMP incentive distribution rights during the year ended December 31, 2013. Please see “Business—Relationship with Memorial Production Partners LP” for further information on our interest in MEMP.

 

Risk Factors

 

Investing in our common stock involves risks that include the speculative nature of oil and natural gas exploration, competition, volatile commodity prices and other material factors. For a discussion of these risks and other considerations that could negatively affect us, including risks related to this offering and our common stock, please read “Risk Factors” beginning on page 24 of this prospectus and “Cautionary Note Regarding Forward-Looking Statements.”

 

Our Structure and Restructuring Transactions

 

We are a Delaware corporation formed by MRD LLC to own and acquire oil and natural gas properties. In connection with the closing of this offering, the following transactions, which we refer to as the restructuring transactions, will occur:

 

   

The Funds will contribute all of their interests in MRD LLC to MRD Holdings;

 

   

WildHorse Resources will sell its subsidiary, WildHorse Resources Management Company, LLC (which holds certain immaterial assets related to our WildHorse Resources operations) to an affiliate of the Funds for approximately $3 million in cash, and that subsidiary will enter into a services agreement with WildHorse Resources pursuant to which that subsidiary will provide transition services to WildHorse Resources;

 

   

MRD LLC will contribute to us substantially all of its assets, comprised of:

 

   

100% of the ownership interests in Classic Hydrocarbons Holdings, L.P., Classic Hydrocarbons GP Co., L.L.C., Black Diamond Minerals, LLC, Beta Operating Company, LLC and MRD Operating LLC;

 

   

99.9% of the membership interests in WildHorse Resources, the owner of our properties in the Terryville Complex; and

 

   

MEMP GP (including MEMP GP’s ownership of 50% of MEMP’s incentive distribution rights);

 

   

We will issue          shares of our common stock to MRD LLC, which MRD LLC will immediately distribute to MRD Holdings;

 

   

We will assume the obligations of MRD LLC under the PIK notes, including the obligation to pay interest on the PIK notes if this offering closes before June 15, 2014 or to reimburse MRD LLC for the June 15, 2014 interest payment made on the PIK notes if this offering closes after June 15, 2014;

 

 

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Certain former management members of WildHorse Resources will contribute to us their outstanding incentive units in WildHorse Resources, as well as the remaining 0.1% of the membership interests in WildHorse Resources, and we will issue          shares of our common stock and pay cash consideration of $         to such former management members of WildHorse Resources;

 

   

We will enter into a registration rights agreement and a voting agreement with MRD Holdings and certain former management members of WildHorse Resources;

 

   

We will enter into our new $2.0 billion revolving credit facility and will use approximately $         million in borrowings under that facility to repay all amounts outstanding under WildHorse Resources’ credit agreements, to pay the cash consideration payable to the former management members of WildHorse Resources and, if applicable, to reimburse MRD LLC for the June 15, 2014 interest payment made on the PIK notes;

 

   

Our subsidiary MRD Operating LLC will enter into a merger agreement with MRD LLC pursuant to which (i) after the redemption of the PIK notes as described below, MRD LLC will merge into MRD Operating LLC, (ii) until the date of such merger, MRD LLC will perform under certain ancillary commercial contracts to which it is a party in support of its current operations for our benefit (such as office leases and drilling contracts), (iii) all amounts received under such contracts will be for our benefit and (iv) we will be responsible for all amounts owing under such contracts; and

 

   

We will give notice of redemption to the holders of the PIK notes, which will specify a redemption date of 30 days after the closing of this offering, and we will use a portion of the net proceeds from this offering to redeem all outstanding PIK notes, including paying any applicable premium and accrued and unpaid interest, if any, to the date of redemption. Until the redemption date, or any earlier discharge date as noted below, of the PIK notes, we will use the amount to be paid to the holders of these notes to temporarily reduce amounts outstanding under our new revolving credit facility.

 

From the closing date of this offering until the date upon which the PIK notes are redeemed and the PIK notes indenture is terminated, MRD LLC will remain a subsidiary of MRD Holdings. During that time, MRD LLC will distribute to MRD Holdings:

 

   

BlueStone, which sold substantially all of its assets in July 2013 for $117.9 million, MRD Royalty, which owns certain immaterial leasehold interests and overriding royalty interests in Texas and Montana, MRD Midstream, which owns an indirect interest in certain immaterial midstream assets in North Louisiana, and Classic Pipeline, which owns certain immaterial midstream assets in Texas;

 

   

5,360,912 subordinated units of MEMP representing an approximate 8.7% limited partner interest in MEMP; and

 

   

The right to the $50 million of cash to be released from the debt service reserve account in connection with the redemption of the PIK notes (or, if the closing of this offering occurs after June 15, 2014 the right to the amount remaining in such account plus the cash received from us in reimbursement of the interest paid on June 15, 2014 in respect of the PIK notes).

 

The redemption date of the PIK notes will be approximately 30 days after the closing of this offering. We will have the option to pay the full redemption amount (including any applicable premium and accrued and unpaid interest to the redemption date) to the PIK notes trustee at any time before the redemption date. If we deposit that amount with the PIK notes trustee in advance of the redemption date together with irrevocable instructions to use such amount for the redemption on the redemption date, then our obligations under the PIK notes indenture will be discharged on the date of such deposit. We may choose to so deposit that amount with the PIK notes trustee in advance of the redemption date. After the PIK notes indenture is terminated or discharged, as the case may be, MRD LLC will merge into MRD Operating LLC. At that time, MRD LLC’s sole assets will be the commercial contracts noted above, which relate to the businesses owned by us.

 

 

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Please read “Use of Proceeds” and “Restructuring Transactions” for more information about the application of the net proceeds from this offering and the restructuring transactions. For more information regarding BlueStone, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—MRD Segment.” For more information about the services agreement with WildHorse Resources, see “Certain Relationships and Related Party Transactions—Services Agreement.”

 

The following diagram shows our ownership structure after giving effect to the restructuring transactions and this offering, assuming no exercise of the underwriters’ option to purchase additional shares from MRD Holdings and does not give effect to              shares of common stock reserved for future issuance under the Memorial Resource Development Corp. 2014 Long Term Incentive Plan (described in “Management—2014 Long Term Incentive Plan”). For information regarding our ownership structure before giving effect to the restructuring transactions and this offering, see the diagram on page 146 in “Restructuring Transactions.”

 

LOGO

 

(1)   If the underwriters exercise in full their option to purchase additional shares of common stock from MRD Holdings, the ownership interest of the public stockholders will increase to              shares of common stock, representing an aggregate     % ownership interest in us, and MRD Holdings will own              shares of common stock, representing an aggregate     % ownership interest in us.
(2)   As of December 31, 2013.

 

 

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(3)   “The Funds” refer collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively own all of the membership interests in MRD Holdings. Please read “Principal and Selling Stockholders” for information regarding beneficial ownership. The Funds collectively indirectly own 50% of the Partnership’s incentive distribution rights.
(4)   Subsidiaries of MRD Holdings following the restructuring transactions will include BlueStone Natural Resources Holdings, LLC (“BlueStone”), MRD Royalty LLC (“MRD Royalty”), MRD Midstream LLC (“MRD Midstream”) and Classic Pipeline & Gathering, LLC (“Classic Pipeline”) . Also, please see the “Principal and Selling Stockholders” table on page 137 for the beneficial ownership of our shares by our executive officers and directors.
(5)   Includes Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”), and Beta Operating Company, LLC (“Beta Operating”).

 

Corporate Information

 

Our principal executive offices are located at 1301 McKinney St., Suite 2100, Houston, Texas 77010, and our phone number is (713) 588-8300. Our website address is www.memorialrd.com. We expect to make our periodic reports and other information filed with or furnished to the Securities and Exchange Commission, which we refer to as the SEC, available free of charge through our website as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into, and does not constitute a part of, this prospectus.

 

Emerging Growth Company Status

 

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as we are an emerging growth company, unlike other public companies that are not emerging growth companies, we are not required to:

 

   

provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002;

 

   

provide more than two years of audited financial statements and related management’s discussion and analysis of financial condition and results of operations;

 

   

comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the “PCAOB,” requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

 

   

provide certain disclosure regarding executive compensation required of larger public companies or hold shareholder advisory votes on executive compensation required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); or

 

   

obtain shareholder approval of any golden parachute payments not previously approved.

 

We will cease to be an “emerging growth company” upon the earliest of:

 

   

the last day of the fiscal year in which we have $1.0 billion or more in annual revenues;

 

   

the date on which we become a “large accelerated filer” (the fiscal year-end on which the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30);

 

   

the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period; or

 

   

the last day of the fiscal year following the fifth anniversary of our initial public offering.

 

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards, but we have irrevocably opted out of the extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates in which adoption of such standards is required for other public companies.

 

 

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The Offering

 

Common stock offered by us

             shares.

 

Common stock offered by MRD Holdings

             shares (or              shares, if the underwriters exercise in full their option to purchase additional shares).

 

Common stock to be outstanding immediately after the offering

             shares.

 

Option to purchase additional shares

MRD Holdings has granted the underwriters a 30-day option to purchase up to an aggregate of              additional shares of our common stock held by MRD Holdings to cover over-allotments.

 

Common stock voting rights

Each share of our common stock will entitle its holder to one vote.

 

Use of proceeds

We intend to use the estimated net proceeds of approximately $         million from this offering, based upon the assumed initial public offering price of $         per share (the midpoint of the price range set forth on the cover of this prospectus), after deducting underwriting discounts and commissions and fees and expenses associated with this offering and the restructuring transactions, to redeem the PIK notes in their entirety and to pay any applicable premium in connection with such redemption and accrued and unpaid interest, if any, to the date of redemption (which we expect will be 30 days after the closing of this offering); together with borrowings of approximately $         million under our new revolving credit facility, to make a cash payment to certain former management members of WildHorse Resources in connection with their contribution to us of their membership interests and incentive units in WildHorse Resources; to repay borrowings outstanding under WildHorse Resources’ credit agreements; if the closing of this offering occurs after June 15, 2014, to reimburse MRD LLC for interest paid on the PIK notes; and for general corporate purposes. Until the redemption date or any earlier discharge date of the PIK notes, we will use the amount to be paid to the holders of those notes to temporarily reduce amounts outstanding under our new revolving credit facility. See “Use of Proceeds.”

 

  We will not receive any of the proceeds from the sale of shares of our common stock by MRD Holdings, including pursuant to any exercise by the underwriters of their option to purchase additional shares of our common stock. MRD Holdings is deemed under federal securities laws to be an underwriter with respect to the common stock it may sell in connection with this offering.

 

Dividend policy

We currently intend to retain all future earnings, if any, for use in the operation of our business and to fund future growth. The decision whether to pay dividends in the future will be made by our board of directors (our “Board”) in light of conditions then existing, including

 

 

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factors such as our financial condition, earnings, available cash, business opportunities, legal requirements, restrictions in our debt agreements and other contracts and other factors our Board deems relevant. See “Dividend Policy.”

 

Directed Share Program

The underwriters have reserved for sale at the initial public offering price up to         % of the common stock being offered by this prospectus for sale to our employees, executive officers and directors who have expressed an interest in purchasing common stock in the offering. We do not know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. Please read “Underwriting” beginning on page 158.

 

Risk factors

You should carefully read and consider the information set forth under “Risk Factors” beginning on page 24 of this prospectus and all other information set forth in this prospectus before deciding to invest in our common stock.

 

Listing and trading symbol

We have applied to list our common stock on the NASDAQ Global Market (“NASDAQ”) under the trading symbol “MRD.”

 

 

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Summary Historical Consolidated and Combined Pro Forma Financial Data

 

MRD LLC and its consolidated subsidiaries, our accounting predecessor, controls MEMP through its ownership of MEMP GP, the general partner of MEMP. Because MRD LLC controls MEMP through its ownership of the general partner, MRD LLC is required to consolidate MEMP for accounting and financial reporting purposes even though MRD LLC owns a minority of its partner interests and MRD LLC and MEMP have independent capital structures. MRD LLC receives cash distributions from MEMP as a result of its partner interests and incentive distribution rights in MEMP, when declared and paid by MEMP. In connection with the closing of this offering, MRD LLC will contribute substantially all of its existing assets to us in exchange for shares of our common stock. Through our ownership of MEMP GP, we will continue to control MEMP and therefore will continue to consolidate the results of MEMP into our consolidated financial statements in future periods.

 

Our predecessor has two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties:

 

   

MRD—reflects all of MRD LLC’s consolidating subsidiaries except for MEMP and its subsidiaries.

 

   

MEMP—reflects the consolidated and combined operations of MEMP and its subsidiaries.

 

We will continue to have two reportable segments following the completion of this offering. For more information regarding reportable business segments, please see the predecessor’s audited historical financial statements and related notes.

 

The following tables include the summary historical financial data of our predecessor, as well as the MRD Segment as of and for the periods indicated. The summary historical financial data of our predecessor as of and for the years ended December 31, 2013 and 2012 were derived from the audited historical financial statements of our predecessor included elsewhere in this prospectus. The summary historical financial data of the MRD Segment as of and for the years ended December 31, 2013 and 2012 were derived from certain financial information used in the preparation of our predecessor’s audited financial statements.

 

The summary unaudited pro forma data as of and for the year ended December 31, 2013 has been prepared to give pro forma effect to: (i) the exclusion of both BlueStone and Classic Pipeline, the MEMP subordinated units and the debt service reserve account associated with the PIK notes, which are not being conveyed to us in connection with this offering, as well as our payment of (or reimbursement for) the June 15, 2014 interest payment on the PIK notes, (ii) the offering of our shares of common stock contemplated hereby and the use of the net proceeds therefrom as described in “Use of Proceeds,” (iii) incremental federal income tax expense, and (iv) the restructuring transactions.

 

 

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We derived the data in the following tables from, and the following tables should be read together with and is qualified in its entirety by reference to, our predecessor’s historical financial statements and our pro forma financial statements and the accompanying notes included elsewhere in this prospectus. You should also read “Restructuring Transactions,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our pro forma and historical consolidated financial statements, all included elsewhere in this prospectus. Among other things, those historical consolidated and combined financial statements and pro forma financial statements include more detailed information regarding the basis of presentation for the following data.

 

    MRD LLC
(Predecessor)
    Memorial Resource
Development Corp.

Pro Forma
 
    Year Ended
December 31,
    Year Ended
December 31,
 
    2013     2012     2013  
          (unaudited)  
    (in thousands)  

Statement of Operations Data:

     

Revenues:

     

Oil and natural gas sales

  $ 571,948      $ 393,631      $ 553,800   

Other revenues

    3,075        3,237        2,268   
 

 

 

   

 

 

   

 

 

 

Total revenues

    575,023        396,868        556,068   

Costs and expenses:

     

Lease operating

    113,640        103,754        111,988   

Pipeline operating

    1,835        2,114        1,835   

Exploration

    2,356        9,800        2,356   

Production and ad valorem taxes

    27,146        23,624        26,269   

Depreciation, depletion and amortization

    184,717        138,672        174,198   

Impairment of proved oil and gas properties

    6,600        28,871        4,201   

General and administrative

    125,358        69,187        101,098   

Accretion of asset retirement obligations

    5,581        5,009        5,523   

(Gain) loss on commodity derivatives

    (29,294     (34,905     (29,311

(Gain) loss on sale of property

    (85,621     (9,761     3,927   

Other, net

    649        502        649   
 

 

 

   

 

 

   

 

 

 

Total costs and expenses

    352,967        336,867        402,733   
 

 

 

   

 

 

   

 

 

 

Operating income

    222,056        60,001        153,335   
 

 

 

   

 

 

   

 

 

 

Other income (expense)

     

Interest expense, net

    (69,250     (33,238  

Amortization of investment premium

    —          (194     —     

Other, net

    145        535        143   
 

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (69,105     (32,897  

Income tax expense

    (1,619     (107  
 

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 151,332      $ 26,997     
 

 

 

   

 

 

   

 

 

 

Cash Flow Data:

     

Net cash provided by operating activities

  $ 277,823      $ 240,404     

Net cash used in investing activities

    367,443        606,738     

Net cash provided by financing activities

    117,950        361,761     

Balance Sheet Data (at period end):

     

Working capital

  $ 48,256      $ 63,054     

Total assets

    2,829,161        2,459,304     

Total debt

    1,663,217        939,382     

Total equity (including noncontrolling interests)

    858,132        1,276,709     

 

 

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    MRD Segment     MRD Segment
Pro Forma
 
    Year Ended
December 31,
    Year Ended
December 31,
 
    2013     2012     2013  
                (unaudited)  
   

(in thousands)

       

Statement of Operations Data:

     

Revenues:

     

Oil and natural gas sales

    $230,751        $138,032      $ 212,603   

Other revenues

    807        782        —     
 

 

 

   

 

 

   

 

 

 

Total revenues

 

 

231,558

  

 

 

138,814

  

    212,603   

Costs and expenses:

     

Lease operating

    25,006        24,438        23,354   

Exploration

    1,226        7,337        1,226   

Production and ad valorem taxes

    9,362        7,576        8,485   

Depreciation, depletion and amortization

    87,043        62,636        76,524   

Impairment of proved oil and gas properties

    2,527        18,339        128   

General and administrative

    81,758        38,414        57,498   

Accretion of asset retirement obligations

    728        632        670   

(Gain) loss on commodity derivatives

    (3,013)        (13,488     (3,030

(Gain) loss on sale of property

    (82,773)        (2     6,775   

Other, net

    2        364        2   
 

 

 

   

 

 

   

 

 

 

Total costs and expenses

 

 

121,866

  

 

 

146,246

  

    171,632   
 

 

 

   

 

 

   

 

 

 

Operating income

    109,692        (7,432     40,971   
 

 

 

   

 

 

   

 

 

 

Other income (expense)

     

Interest expense, net

    (27,349)        (12,802  

Earnings from equity investments

    1,066        4,880        269   

Other, net

    145        535        143   
 

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (26,138     (7,387  

Income tax (expense) benefit

    (1,311     178     
 

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 82,243      $ (14,641  
 

 

 

   

 

 

   

 

 

 

Cash Flow Data (Unaudited):

     

Net cash provided by operating activities

  $ 83,910      $ 84,172     

Net cash used in investing activities

    5,533        230,471     

Net cash provided by (used in) financing activities

    (38,963     133,271     

Other Financial Data:

     

Adjusted EBITDA (unaudited)

  $ 197,903      $ 132,105      $ 159,239   

Balance Sheet Data (at period end):

     

Working capital (unaudited)

  $ 51,214      $ 2,424     

Total assets

    1,281,134        1,102,406     

Total debt

    871,150        309,200     

Total equity (unaudited)

    279,412        682,644     

 

 

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Adjusted EBITDA

 

Our reportable business segments are organized in a manner that reflects how management manages those business activities.

 

We evaluate segment performance based on Adjusted EBITDA. The definition and calculation of Adjusted EBITDA and the reconciliation of total reportable segments’ Adjusted EBITDA to net income (loss) is included in the notes to our predecessor’s consolidated and combined financial statements found elsewhere in this prospectus.

 

Adjusted EBITDA (either in total or by individual segment) is an important performance measure of the core profitability of our operations. This measure forms the basis of our internal financial reporting and is used by our management in evaluating segment performance. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results.

 

Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss). Our computation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. We believe that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

 

Summary Reserve, Production and Operating Data for the MRD Segment

 

The following tables present summary data with respect to the estimated historical net proved oil and natural gas reserves and production and operating data for the MRD Segment as of the dates presented.

 

The proved reserve estimates presented in the table below were prepared by NSAI, and the probable and possible reserve estimates were prepared by our management and audited by NSAI. Regarding our properties, estimates comprising 100% of the total proved reserves in the reserve report were prepared by NSAI. These reserve estimates were prepared in accordance with current SEC rules regarding oil and natural gas reserve reporting. The following tables also contain certain summary information regarding production and sales of oil and natural gas with respect to such properties.

 

Please read “Business—Our Operations” as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the summaries of our reserve report included herein as Appendix B-1 and Appendix B-2 in evaluating the material presented below.

 

Reserve Data

 

Estimated Proved Reserves

   As of
December 31,
2013
 

Natural gas (MMcf)

     802,254   

Oil/Condensate (MBbls)

     11,311   

NGLs (MBbls)

     42,577   
  

 

 

 

Total estimated net proved reserves (MMcfe)

     1,125,577   
  

 

 

 

Proved developed producing (MMcfe)

     323,351   

Proved developed non-producing (MMcfe)

     44,290   

Proved undeveloped (MMcfe)

     757,936   

Proved developed reserves as a percentage of total proved reserves

     33

PV-10 of proved reserves (in millions)(1)

   $ 1,469   

 

 

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Estimated Probable Reserves(2)   

Natural Gas (MMcf)

     535,185   

Oil/Condensate (MBbls)

     10,480   

NGLs (MBbls)

     33,709   
  

 

 

 

Total estimated net probable reserves (MMcfe)

     800,317   
  

 

 

 

PV-10 of probable reserves (in millions)(1)

   $ 1,052   
Estimated Possible Reserves(2)   

Natural Gas (MMcf)

     1,080,539   

Oil/Condensate (MBbls)

     36,376   

NGLs (MBbls)

     68,686   
  

 

 

 

Total estimated net possible reserves (MMcfe)

     1,710,913   
  

 

 

 

PV-10 of possible reserves (in millions)(1)

   $ 2,386   

 

(1)   PV-10 is a non-GAAP financial measure and differs from standardized measure, the most directly comparable GAAP financial measure. Please see “—Reserves.”
(2)   Substantially all of our estimated probable and possible reserves are classified as undeveloped.

 

Production and Operating Data

 

    Historical MRD
Segment(1)
    MRD Segment
Pro Forma
 
    Year Ended
December 31,
    Year Ended
December 31,
 
    2013     2012     2013  

Production and operating data:

     

Oil (MBbls)

    665        369        523   

NGLs (MBbls)

    1,457        898        1,454   

Natural gas (MMcf)

    34,092        24,130        33,205   
 

 

 

   

 

 

   

 

 

 

Total (MMcfe)

    46,819        31,731        45,066   

Average net production (MMcfe/d)

    128.3        86.7        123.5   

Average sales price:

     

Oil (per Bbl)

  $ 100.76      $ 95.56      $ 100.15   

NGLs (per Bbl)

    36.99        40.78        36.93   

Natural gas (per Mcf)

    3.22        2.74        3.21   
 

 

 

   

 

 

   

 

 

 

Average price per Mcfe

  $ 4.93      $ 4.35      $ 4.73   

Average unit costs per Mcfe:

     

Lease operating expenses

  $ 0.53      $ 0.77      $ 0.52   

Production and ad valorem taxes

  $ 0.20      $ 0.24      $ 0.19   

General and administrative(2)

  $ 1.75      $ 1.21      $ 1.27   

Depletion, depreciation and amortization

  $ 1.86      $ 1.97      $ 1.69   

 

(1)   Includes production and operating data for BlueStone, which will not be contributed to us in connection with the closing of this offering. The MRD Segment Pro Forma production and operating data has been adjusted to exclude the production and operating data for BlueStone.
(2)   Includes $0.92 and $0.30 per Mcfe of incentive unit compensation expense for the historical MRD Segment for the years ended December 31, 2013 and 2012. The pro forma general and administrative expense for the year ended December 31, 2013 includes $0.50 per Mcfe of incentive unit compensation expense.

 

 

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RISK FACTORS

 

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, as well as other information contained in this prospectus, before investing in our common stock. If any of the following risks actually occur, our business, financial condition, operating results or cash flow could be materially and adversely affected.

 

Risks Related to Our Business

 

Oil, natural gas and NGL prices are volatile, due to factors beyond our control, and will greatly affect our business, results of operations, liquidity and financial condition.

 

Our revenues, operating results, profitability, liquidity, future growth and the value of our properties depend primarily on prevailing commodity prices. Historically, oil and natural gas prices have been volatile and fluctuate in response to changes in supply and demand, market uncertainty, and other factors that are beyond our control, including:

 

   

the regional, domestic and foreign supply of oil, natural gas and NGLs;

 

   

the level of commodity prices and expectations about future commodity prices;

 

   

the level of global oil and natural gas exploration and production;

 

   

localized supply and demand fundamentals, including the proximity and capacity of pipelines and other transportation facilities, and other factors that result in differentials to benchmark prices from time to time;

 

   

the cost of exploring for, developing, producing and transporting reserves;

 

   

the price and quantity of foreign imports;

 

   

political and economic conditions in oil producing countries;

 

   

the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;

 

   

speculative trading in crude oil and natural gas derivative contracts;

 

   

the level of consumer product demand;

 

   

weather conditions and other natural disasters;

 

   

risks associated with operating drilling rigs;

 

   

technological advances affecting exploration and production operations and overall energy consumption;

 

   

domestic and foreign governmental regulations and taxes;

 

   

the continued threat of terrorism and the impact of military and other action;

 

   

the price and availability of competitors’ supplies of oil and natural gas and alternative fuels; and

 

   

overall domestic and global economic conditions.

 

These factors and the volatility of the energy markets make it extremely difficult to predict future oil, natural gas and NGL price movements with any certainty. For example, for the five years ended December 31, 2013, the NYMEX-WTI oil future price ranged from a high of $113.93 per Bbl to a low of $33.98 per Bbl, while the NYMEX-Henry Hub natural gas future price ranged from a high of $7.50 per MMBtu to a low of $1.82 per MMBtu. Any substantial decline in commodity prices will likely have a material adverse effect on our operations and financial condition, as well as on our level of expenditures for the development of our reserves.

 

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NGLs comprised 23% of our estimated proved reserves at December 31, 2013 and accounted for 22% of our production on a volume equivalent basis for the three months ended December 31, 2013. Realized NGL prices have decreased recently principally due to significant supply. NGLs are made up of ethane, propane, isobutane, normal butane and natural gasoline, all of which have different uses and different pricing characteristics. A further or extended decline in NGL prices could materially and adversely affect our future business, financial condition and results of operations.

 

The prices that we receive for our oil and natural gas production often reflect a regional discount, based on the location of production, to the relevant benchmark prices, such as NYMEX or ICE, that are used for calculating hedge positions. The prices we receive for our production are also affected by the specific characteristics of the production relative to production sold at benchmark prices. These discounts, if significant, could adversely affect our results of operations and financial condition.

 

We may have difficulty managing growth in our business, which could adversely affect our financial condition and results of operations.

 

As a recently formed company, growth in accordance with our business plan, if achieved, could place a significant strain on our financial, technical, operational and management resources. As we expand our activities and increase the number of projects we are evaluating or in which we participate, there will be additional demands on our financial, technical, operational and management resources. We depend on the services of certain former management members of WildHorse Resources for supervising and managing our drilling operations in the Terryville Complex, and in connection with the closing of the offering, we will enter into a services agreement with an entity managed by them for these same services. See “Certain Relationships and Related Party Transactions—Services Agreement.” Under certain circumstances, this agreement may be terminated by the parties thereto and we may be unable to find replacement services, which could materially and adversely affect our ability to execute our plans for the development of the Terryville Complex. In addition, the failure to continue to upgrade our technical, administrative, operating and financial control systems or the occurrences of unexpected expansion difficulties, including the failure to recruit and retain experienced managers, geologists, engineers and other professionals in the oil and natural gas industry, could have a material adverse effect on our business, financial condition and results of operations and our ability to timely execute our business plan.

 

Unless we replace the oil and natural gas reserves we produce, our revenues and production will decline, which would adversely affect our business, results of operations, liquidity and financial condition.

 

Producing oil and natural gas reservoirs are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Our future oil and natural gas reserves and production and therefore our cash flow and financial condition are highly dependent on our success in efficiently developing and exploiting our current reserves. Our production decline rates may be significantly higher than currently estimated if our wells do not produce as expected. Further, our decline rate may change when we drill additional wells or make acquisitions. We may not be able to develop, find or acquire additional reserves to replace our current and future production on economically acceptable terms, which would adversely affect our business, financial condition and results of operations.

 

If commodity prices decline, a significant portion of our development projects may become uneconomic and cause write downs of the value of our oil and natural gas properties, which may adversely affect our financial condition and liquidity.

 

Significantly lower oil prices, or sustained lower natural gas prices, would render many of our development and production projects uneconomic and result in a reduction of our estimated reserves, which would reduce the borrowing base under our new revolving credit facility and our ability to finance planned or desired capital expenditures or acquisitions.

 

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Deteriorating commodity prices may cause us to recognize impairments in the value of our properties. In addition, if our estimates of development costs increase, production data factors change or drilling results deteriorate, accounting rules may require us to write down, as a non-cash charge to earnings, the carrying value of our properties for impairments. We may incur impairment charges in the future, which could have a material adverse effect on our results of operations in the period taken.

 

Drilling for and producing oil and natural gas are high-risk activities with many uncertainties that may result in a total loss of investment or otherwise adversely affect our business, financial condition or results of operations.

 

Our drilling activities are subject to many risks. For example, we cannot assure you that wells drilled by us will be productive or that we will recover all or any portion of our investment in such wells. Drilling for oil and natural gas often involves unprofitable efforts, not only from dry holes but also from wells that are productive but do not produce sufficient oil or natural gas to return a profit at then-realized prices after deducting drilling, operating and other costs. The seismic data and other technologies we use do not allow us to know conclusively prior to drilling a well that oil or natural gas is present or that it can be produced economically. The costs of exploration, exploitation and development activities are subject to numerous uncertainties beyond our control, and increases in those costs can adversely affect the economics of a project. Further, our drilling and producing operations may be curtailed, delayed, canceled or otherwise negatively impacted as a result of other factors, including:

 

   

unusual or unexpected geological formations;

 

   

loss of drilling fluid circulation;

 

   

loss of well control;

 

   

title problems;

 

   

facility or equipment malfunctions;

 

   

unexpected operational events;

 

   

shortages or delivery delays or increases in the cost of equipment and services;

 

   

reductions in oil, natural gas and NGL prices;

 

   

lack of proximity to and shortage of capacity of transportation facilities;

 

   

the limited availability of financing at acceptable rates;

 

   

delays imposed by or resulting from compliance with environmental and other governmental or regulatory requirements, which may include limitations on hydraulic fracturing or the discharge of greenhouse gases; and

 

   

adverse weather conditions.

 

Any of these risks can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution, environmental contamination or loss of wells and other regulatory penalties.

 

Part of our strategy involves using horizontal drilling and completion techniques, which involve risks and uncertainties in their application.

 

Our operations involve utilizing some of the latest drilling and completion techniques as developed by us and our service providers. Risks that we face while drilling horizontal wells include, but are not limited to, the following:

 

   

landing our wellbore in the desired drilling zone;

 

   

staying in the desired drilling zone while drilling horizontally through the formation;

 

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running our casing the entire length of the wellbore;

 

   

being able to run tools and other equipment consistently through the horizontal wellbore.

 

Risks that we face while completing our wells include, but are not limited to, the following:

 

   

the ability to fracture stimulate the planned number of stages;

 

   

the ability to run tools the entire length of the wellbore during completion operations; and

 

   

the ability to successfully clean out the wellbore after completion of the final fracture stimulation stage.

 

If our drilling results are less than anticipated, the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of unevaluated properties and the value of our undeveloped acreage could decline in the future.

 

Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns.

 

We own a significant amount of unproved property, which we expect to further our development efforts. We intend to continue to undertake acquisitions of unproved properties in the future. Development and exploratory drilling and production activities are subject to many risks, including the risk that no commercially productive reservoirs will be discovered. We acquire unproved properties and lease undeveloped acreage that we believe will enhance our growth potential and increase our results of operations over time. However, we cannot assure you that all prospects will be economically viable or that we will not abandon our investments. Additionally, we cannot assure you that unproved property acquired by us or undeveloped acreage leased by us will be profitably developed, that wells drilled by us in prospects that we pursue will be productive or that we will recover all or any portion of our investment in such unproved property or wells.

 

Our acreage must be drilled before lease expiration, generally within three to five years, in order to hold the acreage by production. In a highly competitive market for acreage, failure to drill sufficient wells to hold acreage may result in a substantial lease renewal cost, or if renewal is not feasible, loss of our lease and prospective drilling opportunities.

 

Leases on oil and natural gas properties typically have a term of three to five years, after which they expire unless, prior to expiration, production is established within the spacing units covering the undeveloped acres. As of December 31, 2013, we had 10,825 gross (6,985 net) acres scheduled to expire in 2014, 20,078 gross (12,015 net) acres scheduled to expire in 2015, 31,215 gross (20,875 net) acres scheduled to expire in 2016 and 28,228 gross (19,649 net) acres scheduled to expire in 2017. The cost to renew such leases may increase significantly, and we may not be able to renew such leases on commercially reasonable terms or at all. Moreover, many of our leases require lessor consent to pool, which may make it more difficult to hold our leases by production. Any reduction in our current drilling program, either through a reduction in capital expenditures or the unavailability of drilling rigs, could result in the loss of acreage through lease expirations. In addition, in order to hold our current leases scheduled to expire in 2014 and 2015, we will need to operate at least a one-rig program. We cannot assure you that we will have the liquidity to deploy these rigs when needed, or that commodity prices will warrant operating such a drilling program. Any such losses of leases could materially and adversely affect the growth of our asset base, cash flows and results of operations.

 

We may incur losses as a result of title defects in the properties in which we invest.

 

The existence of a material title deficiency can render a lease worthless and can adversely affect our results of operations and financial condition. While we typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property.

 

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Our project areas, which are in various stages of development, may not yield oil or natural gas in commercially viable quantities.

 

Our project areas are in various stages of development, ranging from project areas with current drilling or production activity to project areas that consist of recently acquired leasehold acreage or that have limited drilling or production history. At December 31, 2013, 10 gross (9.4 net) wells were in various stages of completion. If the wells in the process of being completed do not produce sufficient revenues to return a profit or if we drill dry holes in the future, our business may be materially affected. From January 2011 through December 31, 2013, we have drilled 83 gross (51.9 net) wells and, out of these wells, 3 gross (1.5 net) wells were dry holes.

 

Our identified drilling locations, which are scheduled out over many years, are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.

 

As of December 31, 2013, we had identified 1,582 gross (1,091 net) horizontal drilling locations on our existing acreage. Only 145 of these gross identified drilling locations had proved undeveloped reserves attributed to them in our reserve report. These drilling locations, including those with attributed proved undeveloped reserves, represent a significant part of our growth strategy. Our ability to drill and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, regulatory changes and approvals, negotiation of agreements with third parties, commodity prices, costs, the generation of additional seismic or geological information, the availability of drilling rigs, drilling results, construction of infrastructure, inclement weather, and lease expirations.

 

Further, our identified potential drilling locations are in various stages of evaluation, ranging from locations that are ready to drill to locations that will require substantial additional analysis of data. We cannot predict in advance of drilling and testing whether any particular drilling location will yield production in sufficient quantities to recover drilling or completion costs or to be economically viable. Even if sufficient amounts of oil or natural gas reserves exist, we may damage the potentially productive hydrocarbon bearing formation or experience mechanical difficulties while drilling or completing the well, possibly resulting in a reduction in production from the well or abandonment of the well. If we drill dry holes in our current and future drilling locations, our drilling success rate may decline and materially harm our business. We cannot assure you that the analogies we draw from available data from other wells, more fully explored locations or producing fields will be applicable to our drilling locations. Further, initial production rates reported by us or other operators in our areas of operations may not be indicative of future or long-term production rates.

 

A majority of our 1,431 gross horizontal drilling locations within the Terryville Complex are identified within four distinct zones, with such gross horizontal drilling locations being roughly evenly distributed amongst such four zones. To date, we have drilled 27 horizontal wells within the key formations in Terryville Complex. Accordingly, we have limited experience in drilling horizontal wells in the zones of the Terryville Complex to which we have ascribed a substantial majority of our gross identified drilling locations. Please see “Business—Our Operations—Drilling Locations” for more information on our gross identified drilling locations.

 

Because of these uncertainties, we do not know if the potential drilling locations we have identified will ever be drilled or if we will be able to produce oil or natural gas reserves from these or any other potential drilling locations. As such, our actual drilling activities may materially differ from those presently identified, which could adversely affect our business, financial condition and results of operations.

 

We have identified drilling, recompletion and development locations and prospects for future drilling, recompletion and development. These drilling, recompletion and development locations represent a significant part of our future drilling and enhanced recovery opportunity plans. Our ability to drill, recomplete and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, regulatory approvals, negotiation of agreements with third parties, commodity prices, costs, the generation of additional seismic or geological information, the availability of drilling rigs, and drilling results. Because of these

 

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uncertainties, we cannot be certain of the timing of these activities or that they will ultimately result in the realization of estimated proved reserves or meet our expectations for success. As such, our actual drilling and enhanced recovery activities may materially differ from our current expectations, which could have a significant adverse effect on our estimated reserves, financial condition and results of operations.

 

The development of our proved undeveloped and unproved reserves may take longer and may require higher levels of capital expenditures than we anticipate and may not be economically viable.

 

Approximately 67% of our total proved reserves at December 31, 2013 were proved undeveloped reserves; those reserves may not be ultimately developed or produced. Recovery of proved undeveloped reserves requires significant capital expenditures and successful drilling operations. Moreover, the development of probable and possible reserves will require additional capital expenditures and such reserves are less certain to be recovered than proved reserves. The reserve data included in our reserve report assumes that substantial capital expenditures are required to develop such undeveloped reserves. We cannot be certain that the estimated costs of the development of these reserves are accurate, that development will occur as scheduled or that the results of such development will be as estimated. Delays in the development of our reserves or increases in costs to drill and develop such reserves will reduce future net revenues of our estimated proved undeveloped reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could cause us to have to reclassify our proved reserves as proved undeveloped reserves.

 

Our acquisition and development operations require substantial capital expenditures.

 

The development and production of our oil and natural gas reserves requires substantial capital expenditures. If our revenues decrease, as a result of lower oil or natural gas prices or for any other reason, we may not be able to obtain the capital necessary to sustain our operations at our current level. In addition, our ability to acquire additional properties will be adversely affected if we are unable to fund such acquisitions from cash flow from operations or other sources.

 

Shortages of rigs, equipment and crews could delay our operations, increase our costs and delay forecasted revenue.

 

Higher oil and natural gas prices generally increase the demand for rigs, equipment and crews and can lead to shortages of, and increasing costs for, development equipment, services and personnel. Shortages of, or increasing costs for, experienced development crews and oil field equipment and services could restrict our ability to drill the wells and conduct the operations that we currently have planned. Any delay in the development of new wells or a significant increase in development costs could reduce our revenues and thus the results of our operations.

 

Our hedging strategy may not effectively mitigate the impact of commodity price volatility from our cash flows, and our hedging activities could result in cash losses and may limit potential gains.

 

We intend to maintain a portfolio of commodity derivative contracts. These commodity derivative contracts include natural gas, oil and NGL financial swaps and collar contracts and natural gas basis financial swaps. The prices and quantities at which we enter into commodity derivative contracts covering our production in the future will be dependent upon oil and natural gas prices and price expectations at the time we enter into these transactions, which may be substantially higher or lower than current or future oil and natural gas prices. Accordingly, our price hedging strategy may not protect us from significant declines in oil and natural gas prices received for our future production. In addition, we expect that our new revolving credit facility will limit our ability to enter into commodity hedges covering greater than 85% of our reasonably anticipated projected production. Many of the derivative contracts to which we will be a party will require us to make cash payments to the extent the applicable index exceeds a predetermined price, thereby limiting our ability to realize the benefit of increases in oil and natural gas prices. If our actual production and sales for any period are less than our hedged production and sales for that period (including reductions in production due to operational delays) or if

 

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we are unable to perform our drilling activities as planned, we might be forced to satisfy all or a portion of our hedging obligations without the benefit of the cash flow from our sale of the underlying physical commodity, which may materially impact our liquidity.

 

Our hedging transactions expose us to counterparty credit risk.

 

Our hedging transactions expose us to risk of financial loss if a counterparty fails to perform under a derivative contract. Disruptions in the financial markets or other unforeseen events could lead to sudden changes in a counterparty’s liquidity, which could impair its ability to perform under the terms of the derivative contract and, accordingly, prevent us from realizing the benefit of the derivative contract.

 

Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.

 

The process of estimating natural gas and oil reserves is complex. It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves.

 

In order to prepare our estimates, we must project production rates and timing of development expenditures. We must also analyze available geological, geophysical, production and engineering data. The extent, quality and reliability of this data can vary.

 

The process also requires economic assumptions about matters such as natural gas prices, oil prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

 

Actual future production, oil prices, natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable reserves will vary from our estimates. Any significant variance could materially affect the estimated quantities and present value of our reserves. In addition, we may adjust our reserve estimates to reflect production history, results of exploration and development, existing commodity prices and other factors, many of which are beyond our control.

 

You should not assume that the present value of future net revenues from our reserves is the current market value of our estimated reserves. We generally base the estimated discounted future net cash flows from our reserves on prices and costs on the date of the estimate. Actual future prices and costs may differ materially from those used in the present value estimate.

 

Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves, which could adversely affect our business, results of operations and financial condition.

 

SEC rules could limit our ability to book additional PUDs in the future.

 

SEC rules require that, subject to limited exceptions, PUDs may only be booked if they relate to wells scheduled to be drilled within five years after the date of booking. This requirement has limited and may continue to limit our ability to book additional PUDs as we pursue our drilling program. Moreover, we may be required to write down our PUDs if we do not drill those wells within the required five-year timeframe.

 

The PV-10 of our estimated proved, probable and possible reserves is not necessarily the same as the current market value of our estimated proved oil and natural gas reserves.

 

The present value of future net cash flows from our proved, probable and possible reserves shown in this report, or PV-10, may not be the current market value of our estimated natural gas and oil reserves. In accordance

 

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with rules established by the SEC and the Financial Accounting Standards Board (“FASB”), we base the estimated discounted future net cash flows from our proved reserves on the 12-month average oil and gas index prices, calculated as the unweighted arithmetic average for the first-day-of-the-month price for each month and costs in effect on the date of the estimate, holding the prices and costs constant throughout the life of the properties. Actual future prices and costs may differ materially from those used in the net present value estimate, and future net present value estimates using then current prices and costs may be significantly less than the current estimate. In addition, the 10% discount factor we use when calculating discounted future net cash flows may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with us or the natural gas and oil industry in general.

 

Our producing properties are concentrated in North Louisiana and East Texas, making us vulnerable to risks associated with operating in one major geographic area.

 

Our producing properties are geographically concentrated in North Louisiana and East Texas. At December 31, 2013, 99% of our total estimated proved reserves and for the three months ended December 31, 2013, 99% of our net average daily production were attributable to properties located in this area. As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages or other drought related conditions or interruption of the processing or transportation of oil, natural gas or NGLs.

 

Expenses not covered by our insurance could have a material adverse effect on our financial position, results of operations and cash flows.

 

Our operations are subject to all of the hazards and operating risks associated with drilling for and production of oil and natural gas, including natural disasters, the risk of fire, explosions, blowouts, surface cratering, uncontrollable flows of natural gas, oil and formation water, pipe or pipeline failures, abnormally pressured formations, casing collapses and environmental hazards such as oil spills, natural gas leaks, ruptures or discharges of toxic gases. In addition, our operations are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. The location of any properties and other assets near populated areas, including residential areas, commercial business centers and industrial sites, could significantly increase the level of damages resulting from these risks. The occurrence of any of these events could result in substantial losses to us due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties, suspension of operations, substantial revenue losses and repairs to resume operations.

 

We maintain insurance coverage against potential losses that we believe is customary in the industry. However, these policies may not cover all liabilities, claims, fines, penalties or costs and expenses that we may incur in connection with our business and operations, including those related to environmental claims. Pollution and environmental risks generally are not fully insurable. In addition, we cannot assure you that we will be able to maintain adequate insurance at rates we consider reasonable. We may elect not to obtain insurance if we believe that the cost of available insurance is excessive relative to the perceived risks presented. A loss not fully covered by insurance could have a material adverse effect on our financial position, results of operations and cash flows.

 

We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may disrupt our business and hinder our ability to grow.

 

In the future we may make acquisitions of businesses that complement or expand our current business. We may not be able to identify attractive acquisition opportunities. Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so on commercially acceptable terms.

 

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Any acquisition involves potential risks, including, among other things:

 

   

the validity of our assumptions about estimated proved reserves, future production, revenues, capital expenditures, operating expenses and costs;

 

   

the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which any indemnity we receive is inadequate;

 

   

an inability to obtain satisfactory title to the assets we acquire; and

 

   

potential lack of operating experience in the geographic market where the acquired assets or business are located.

 

The success of any completed acquisition will depend on our ability to integrate effectively the acquired business into our existing operations. The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. In addition, possible future acquisitions may be larger and for purchase prices significantly higher than those paid for earlier acquisitions. No assurance can be given that we will be able to identify additional suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully acquire identified targets. Our failure to achieve consolidation savings, to integrate the acquired businesses and assets into our existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on our financial condition and results of operations.

 

NGP, the Funds and their affiliates are not limited in their ability to compete with us, which could cause conflicts of interest and limit our ability to acquire additional assets or businesses.

 

Our governing documents provide that NGP and the Funds and their respective affiliates (including NGP and its affiliates’ portfolio investments) are not restricted from owning assets or engaging in businesses that compete directly or indirectly with us. In addition, NGP and the Funds and their respective affiliates may acquire, develop or dispose of additional oil and natural gas properties or other assets in the future, without any obligation to offer us the opportunity to purchase or develop any of those assets.

 

NGP and the Funds are established participants in the oil and natural gas industry, and have resources greater than ours, which factors may make it more difficult for us to compete with them with respect to commercial activities as well as for potential acquisitions. As a result, competition from these affiliates could adversely impact our results of operations.

 

We may be unable to compete effectively with larger companies.

 

The oil and natural gas industry is intensely competitive with respect to acquiring prospects and productive properties, marketing oil and natural gas, and securing equipment and trained personnel. Our ability to acquire additional properties and to discover reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. Many of our larger competitors not only drill for and produce oil and natural gas but also carry on refining operations and market petroleum and other products on a regional, national or worldwide basis, and many of our competitors have access to capital at a lower cost than that available to us. These companies may be able to pay more for oil and natural gas properties and evaluate, bid for and purchase a greater number of properties than our financial, technical or personnel resources permit. In addition, there is substantial competition for investment capital in the oil and natural gas industry. These larger companies may have a greater ability to continue development activities during periods of low oil and natural gas prices and to absorb the burden of present and future federal, state, local and other laws and regulations. Furthermore, we may not be able to aggregate sufficient quantities of production to compete with larger companies that are able to sell greater volumes of production to intermediaries, thereby reducing the realized prices attributable to our production. Any inability to compete effectively with larger companies could have a material adverse impact on our business activities, financial condition and results of operations.

 

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We require substantial capital expenditures to conduct our operations, engage in acquisition activities and replace our production, and we may be unable to obtain needed financing on satisfactory terms necessary to execute our operating strategy.

 

We require substantial capital expenditures to conduct our exploration, development and production operations, engage in acquisition activities and replace our production. We have established a capital budget for 2014 of approximately $316 million and we intend to rely on cash flow from operating activities as our primary sources of liquidity. We also may engage in asset and equity sale transactions to, among other things, fund capital expenditures when market conditions permit us to complete transactions on terms we find acceptable. There can be no assurance that such sources will be sufficient to fund our exploration, development and acquisition activities. If our revenues and cash flows decrease in the future as a result of a decline in commodity prices or a reduction in production levels, however, and we are unable to obtain additional equity or debt financing in the capital markets or access alternative sources of funds, we may be required to reduce the level of our capital expenditures and may lack the capital necessary to replace our reserves or maintain our production levels.

 

Our business depends in part on pipelines, gathering systems and processing facilities owned by us or others. Any limitation in the availability of those facilities could interfere with our ability to market our oil and natural gas production.

 

The marketability of our oil and natural gas production depends in part on the availability, proximity and capacity of pipelines and other transportation methods, gathering systems and processing facilities owned by third parties. The amount of oil and natural gas that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure, physical damage or lack of contracted capacity on such systems. Our access to transportation options can also be affected by U.S. federal and state regulation of oil and natural gas production and transportation, general economic conditions and changes in supply and demand. The curtailments arising from these and similar circumstances may last from a few days to several months. In many cases, we are provided with only limited, if any, notice as to when these circumstances will arise and their duration. Any significant curtailment in gathering system or transportation or processing facility capacity could reduce our ability to market our oil and natural gas production and harm our business.

 

Our use of 2-D and 3-D seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas, which could adversely affect the results of our drilling operations.

 

Even when properly used and interpreted, 2-D and 3-D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures. In addition, the use of 3-D seismic and other advanced technologies requires greater predrilling expenditures than traditional drilling strategies, and we could incur losses as a result of such expenditures. As a result, our drilling activities may not be successful or economical.

 

Conservation measures and technological advances could reduce demand for oil and natural gas.

 

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas. The impact of the changing demand for oil and natural gas services and products may have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

We are subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations.

 

Our natural gas and oil exploration, production, and transportation operations are subject to complex and stringent laws and regulations. To conduct our operations in compliance with these laws and regulations, we

 

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must obtain and maintain numerous permits, approvals and certificates from various federal, state and local governmental authorities. We may incur substantial costs in order to maintain compliance with these existing laws and regulations. In addition, the trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment and thus, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. Failure to comply with laws and regulations applicable to our operations, including any evolving interpretation and enforcement by governmental authorities, could have a material adverse effect on our business, financial condition, and results of operations.

 

Our oil and natural gas development and production operations are also subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of our operations, or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations applicable to our operations including the acquisition of a permit before conducting regulated drilling activities; the restriction of types, quantities and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution resulting from our operations. Numerous governmental authorities, such as the U.S. Environmental Protection Agency, or the EPA, and analogous state agencies have the power to enforce compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve taking difficult and costly compliance measures or corrective actions. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties, the imposition of investigatory or remedial obligations, and the issuance of orders limiting or prohibiting some or all of our operations. In addition, we may experience delays in obtaining or be unable to obtain required permits, which may delay or interrupt our operations and limit our growth and revenue.

 

Certain environmental laws impose strict as well as joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbons, or solid wastes have been stored or released. We may be required to remediate contaminated properties currently or formerly operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of our operations. Moreover, public interest in the protection of the environment has increased dramatically in recent years. The trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability. To the extent laws are enacted or other governmental action is taken that restricts drilling or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, our business, prospects, financial condition or results of operations could be materially adversely affected.

 

Please read “Business—Regulation of Environmental and Occupational Health and Safety Matters” for a further description of the laws and regulations that affect us.

 

Climate change legislation or regulations restricting emissions of “greenhouse gases,” or GHGs could result in increased operating costs and reduced demand for the oil and natural gas that we produce.

 

Recent scientific studies have suggested that emissions of certain gases, commonly referred to as GHGs, including carbon dioxide and methane, may be contributing to warming of the earth’s atmosphere and other climatic changes. In December 2009, the EPA published its findings that emissions of GHGs present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the earth’s atmosphere and other climatic changes. Based on these findings, the EPA adopted regulations under existing provisions of the federal Clean Air Act that establish Prevention of

 

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Significant Deterioration, or PSD, and Title V permit reviews for GHG emissions from certain large stationary sources. Facilities required to obtain PSD permits for their GHG emissions also will be required to meet “best available control technology” standards that will be established by the states or, in some cases, by the EPA on a case-by-case basis. The EPA has also adopted rules requiring the monitoring and reporting of GHG emissions from specified sources in the United States, including, among others, certain oil and natural gas production facilities on an annual basis, which includes certain of our operations. In addition, in August 2012, the EPA established new source performance standards for volatile organic compounds and sulfur dioxide and an air toxic standard for oil and natural gas production, transmission, and storage. The rules include the first federal air standards for natural gas wells that are hydraulically fractured, or refractured, as well as requirements for several other sources, such as storage tanks and other equipment, and limits methane emissions from these sources in an effort to reduce GHG emissions.

 

While Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years. In the absence of such federal climate legislation, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs. If Congress undertakes comprehensive tax reform in the coming year, it is possible that such reform may include a carbon tax, which could impose additional direct costs on operations and reduce demand for refined products. In any event, the Obama administration has announced its Climate Action Plan, which, among other things, directs federal agencies to develop a strategy for the reduction of methane emissions, including emissions from the oil and gas industry. As part of the Climate Action Plan, the Obama Administration also announced that it intends to adopt additional regulations to reduce emissions of GHGs and to encourage greater use of low carbon technologies in the coming years. Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business, any such future laws and regulations that require reporting of GHGs or otherwise limit emissions of GHGs from our equipment and operations could require us to incur costs to monitor and report on GHG emissions or reduce emissions of GHGs associated with our operations, and such requirements also could adversely affect demand for the oil and natural gas that we produce. Finally, it should be noted that some scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts and floods and other climatic events. If any such effects were to occur, they could have an adverse effect on our financial condition and results of operations. Please read “Business—Regulation of Environmental and Occupational Health and Safety Matters” for a further description of the laws and regulations that affect us.

 

The third parties on whom we rely for gathering and transportation services are subject to complex federal, state and other laws that could adversely affect the cost, manner or feasibility of conducting our business.

 

The operations of the third parties on whom we rely for gathering and transportation services are subject to complex and stringent laws and regulations that require obtaining and maintaining numerous permits, approvals and certifications from various federal, state and local government authorities. These third parties may incur substantial costs in order to comply with existing laws and regulations. If existing laws and regulations governing such third-party services are revised or reinterpreted, or if new laws and regulations become applicable to their operations, these changes may affect the costs that we pay for such services. Similarly, a failure to comply with such laws and regulations by the third parties on whom we rely could have a material adverse effect on our business, financial condition and results of operations. See “Business—Regulation of Environmental and Occupational Health and Safety Matters” and “Business—Regulation of the Oil and Natural Gas Industry” for a description of the laws and regulations that affect the third parties on whom we rely.

 

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Derivatives reform legislation and related regulations could have an adverse effect on our ability to hedge risks associated with our business.

 

The July 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, provides for federal oversight of the over-the-counter derivatives market and entities that participate in that market and mandates that the Commodity Futures Trading Commission, or CFTC, adopt rules or regulations implementing the Dodd-Frank Act and providing definitions of terms used in the Dodd-Frank Act. The Dodd-Frank Act establishes margin requirements and requires clearing and trade execution practices for certain market participants and may result in certain market participants needing to curtail or cease their derivatives activities. Although many of the rules necessary to implement the Dodd-Frank Act remain to be adopted, the CFTC has issued a large number of rules to implement the Dodd-Frank Act, including a rule establishing an “end-user” exception to mandatory clearing, referred to herein as the “End-User Exception,” and a rule imposing position limits, referred to herein as the Position Limit Rule.

 

We qualify as a “non-financial entity” for purposes of the End-User Exception and, as such, we will be eligible for and expect to utilize such exception and, as a result, our hedging activity will not be subject to mandatory clearing or the margin requirements imposed in connection with mandatory clearing. However, most if not all of our hedge counterparties will be subject to mandatory clearing in connection with their hedging activities with parties who do not qualify for the End-User Exception. The Position Limit Rule was vacated and remanded to the CFTC for further proceedings by order of the United States District Court for the District of Columbia on September 28, 2012. The Dodd-Frank Act, the rules which have been adopted and not vacated, and, to the extent that a position limit rule is ultimately effected, could significantly increase the cost of derivative contracts (including through requirements to post collateral), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties. If we reduce our use of derivatives as a result of the Dodd-Frank Act and regulations, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures. Finally, the Dodd-Frank Act was intended, in part, to reduce the volatility of oil and natural gas prices, which some legislators attributed to speculative trading in derivatives and commodity contracts related to oil and natural gas. Our revenues could therefore be adversely affected if a consequence of the Dodd-Frank Act and regulations is to lower commodity prices. Any of these consequences could have a material adverse effect on us, our financial condition, and our results of operations.

 

Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays, and adversely affect our production.

 

Hydraulic fracturing is an essential and common practice in the oil and gas industry used to stimulate production of natural gas and/or oil from dense subsurface rock formations. Hydraulic fracturing involves using water, sand, and certain chemicals to fracture the hydrocarbon-bearing rock formation to allow flow of hydrocarbons into the wellbore. We routinely apply hydraulic fracturing techniques in our drilling and completion programs. While hydraulic fracturing has historically been regulated by state oil and natural gas commissions, the practice has become increasingly controversial in certain parts of the country, resulting in increased scrutiny and regulation. For example, the EPA has asserted federal regulatory authority over certain hydraulic-fracturing activities under the Safe Drinking Water Act, or the SDWA, involving the use of diesel fuels and published permitting guidance in February 2014 addressing the use of diesel in fracturing operations. Although the EPA is not the permitting authority for the SDWA’s Underground Injection Control Class II programs in Louisiana, Texas, Wyoming, New Mexico, or Colorado, where we or MEMP maintain operational acreage, the EPA is encouraging state programs to review and consider use of such draft guidance. Also, in October 2011, the EPA announced its plan to propose federal pre-treatment standards for wastewater generated during the hydraulic fracturing process. Hydraulic fracturing stimulation requires the use of a significant volume of water with some resulting “flowback,” as well as “produced water.” If adopted, the new pretreatment rules will require shale gas operations to pretreat wastewater before transferring it to treatment facilities. Proposed

 

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rules are expected sometime in 2014. Moreover, the EPA has indicated that it may develop and issue regulations under the Toxic Substances Control Act to require companies to disclose information regarding the chemicals used in hydraulic fracturing; however, to date, it has taken no action to do so.

 

In August 2012, the EPA adopted rules that subject oil and natural gas production, processing, transmission, and storage operations to regulation under the New Source Performance Standards, or NSPS, and National Emission Standards for Hazardous Air Pollutants programs. In September 2013, the EPA issued an amendment extending compliance dates for certain storage vessels. The EPA’s final rule includes NSPS standards for completions of hydraulically fractured wells and establishes specific new requirements for emissions from compressors, controllers, dehydrators, storage vessels, natural gas processing plants and certain other equipment. The rule is designed to limit emissions of volatile organic compounds, or VOCs, sulfur dioxide, and hazardous air pollutants from a variety of sources within natural gas processing plants, oil and natural gas production facilities, and natural gas transmission compressor stations. The EPA’s rule requires the reduction of VOC emissions from oil and natural gas production facilities by mandating the use of “green completions” for hydraulic fracturing, which requires the operator to recover rather than vent the gas and natural gas liquids that come to the surface during completion of the fracturing process. Under the rule, green completions will be phased in, and are not mandatory until January 2015. This rule could require a number of modifications to our operations including the installation of new equipment. Compliance with such rules could result in significant costs, including increased capital expenditures and operating costs, and could adversely impact our business.

 

In addition, in May 2013, the federal Bureau of Land Management published a supplemental notice of proposed rulemaking governing hydraulic fracturing on federal and Indian lands that replaces a prior draft of proposed rulemaking issued by the agency in May 2012. The revised proposed rule would continue to require public disclosure of chemicals used in hydraulic fracturing on federal and Indian lands, confirmation that wells used in fracturing operations meet appropriate construction standards, and development of appropriate plans for managing flowback water that returns to the surface.

 

There are also certain governmental reviews either underway or being proposed that focus on environmental aspects of hydraulic fracturing practices. The EPA has commenced a study of the potential environmental effects of hydraulic fracturing on drinking water and groundwater. A draft report is expected to be released for public comment and review in late 2014 with the final report expected to be completed sometime in 2016. The EPA’s study could spur initiatives to further regulate hydraulic fracturing under the SDWA or other regulatory mechanisms. Other governmental agencies, including the U.S. Department of Energy and the U.S. Department of the Interior, have evaluated or are evaluating various other aspects of hydraulic fracturing. These ongoing or proposed studies, depending on their degree of pursuit and any meaningful results obtained, could spur initiatives to further regulate hydraulic fracturing under the federal Safe Drinking Water Act or other regulatory mechanisms.

 

Additionally, Congress from time to time has considered the adoption of legislation to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the hydraulic fracturing process. Certain states, including Texas and Colorado, have adopted, and other states are considering adopting, regulations that could impose more stringent permitting, public disclosure, and well construction requirements on hydraulic-fracturing operations or otherwise seek to ban fracturing activities altogether. For example in May 2013, the Texas Railroad Commission adopted new rules governing well casing, cementing and other standards for ensuring that hydraulic fracturing operations do not contaminate nearby water resources. In addition to state laws, local land use restrictions, such as city ordinances, may restrict or prohibit the performance of well drilling in general and/or hydraulic fracturing in particular. In the event state, local, or municipal legal restrictions are adopted in areas where we are currently conducting, or in the future plan to conduct operations, we may incur additional costs to comply with such requirements that may be significant in nature, experience delays or curtailment in the pursuit of exploration, development, or production activities, and perhaps even be precluded from the drilling of wells.

 

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If these or any other new laws or regulations that significantly restrict hydraulic fracturing are adopted at the state and local level, such laws could make it more difficult or costly for us to perform fracturing to stimulate production from dense subsurface rock formations and, in the event of local prohibitions against commercial production of natural gas, may preclude our ability to drill wells. In addition, if hydraulic fracturing becomes regulated at the federal level as a result of federal legislation or regulatory initiatives by the EPA or other federal agencies, our fracturing activities could become subject to additional permitting requirements and result in permitting delays as well as potential increases in costs. Restrictions on hydraulic fracturing could also reduce the amount of oil and natural gas that we are ultimately able to produce from our reserves.

 

Oil and natural gas producers’ operations, especially those using hydraulic fracturing, are substantially dependent on the availability of water. Restrictions on the ability to obtain water may impact our operations.

 

Water is an essential component of oil and natural gas production during the drilling, and in particular, hydraulic fracturing, process. Our inability to locate sufficient amounts of water, or dispose of or recycle water used in our exploration and production operations, could adversely impact our operations. Moreover, the imposition of new environmental initiatives and regulations could include restrictions on our ability to conduct certain operations such as hydraulic fracturing or disposal of waste, including, but not limited to, produced water, drilling fluids and other wastes associated with the exploration, development or production of natural gas. The Federal Water Pollution Control Act (the “CWA”) imposes restrictions and strict controls regarding the discharge of produced waters and other natural gas and oil waste into navigable waters. Permits must be obtained to discharge pollutants to waters and to conduct construction activities in waters and wetlands. The CWA and similar state laws provide for civil, criminal and administrative penalties for any unauthorized discharges of pollutants and unauthorized discharges of reportable quantities of oil and other hazardous substances. State and federal discharge regulations prohibit the discharge of produced water and sand, drilling fluids, drill cuttings and certain other substances related to the natural gas and oil industry into coastal waters. Also, the EPA has adopted regulations requiring certain natural gas and oil exploration and production facilities to obtain permits for storm water discharges. Compliance with current and future environmental regulations and permit requirements governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic fracturing of wells may increase our operating costs and cause delays, interruptions or termination of our operations, the extent of which cannot be predicted.

 

We are not the only partners in MEMP, and MEMP’s partnership agreement requires it to distribute all available cash to its partners, including public unitholders.

 

MEMP is a publicly traded limited partnership. We own MEMP GP, the sole general partner of MEMP, and are entitled to 50% of any cash distributed in respect of MEMP’s incentive distribution rights. Following the restructuring transactions, MRD Holdings will own 5,360,912 subordinated units representing a 8.7% limited partner interest in MEMP. The remainder of the outstanding limited partner interests in MEMP are common units owned by public unitholders. MEMP’s partnership agreement requires it to distribute, on a quarterly basis, 100% of its available cash to its partners. We receive only our proportionate share of cash distributions from MEMP based on our partner interests in it. The remainder of the quarterly cash distributions is distributed, pro rata, to the public unitholders (and, in the case of 50% of the incentive distribution rights, to the Funds).

 

For MEMP, available cash is generally all cash on hand at the end of each quarter, after payment of fees and expenses and the establishment of cash reserves by its general partner. MEMP GP determines the amount and timing of cash distributions by MEMP and has broad discretion to establish and make additions to MEMP’s reserves in amounts the general partner determines to be necessary or appropriate:

 

   

to provide for the proper conduct of partnership business, which could include, but is not limited to, amounts reserved for capital expenditures, working capital and operating expenses;

 

   

to comply with applicable law, any of MEMP’s debt instruments or other agreements; and

 

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to provide funds for distributions to the unitholders and the general partner for any one or more of the next four calendar quarters.

 

Accordingly, cash distributions we receive on our MEMP partner interests may be reduced at any time, or we may not receive any cash distributions from MEMP.

 

The amount of cash that MEMP will be able to distribute to us principally depends upon the amount of cash it can generate from its oil and natural gas production business.

 

A significant decline in MEMP’s earnings or cash distributions would have a negative impact on its distributions to its partners, including us. The amount of cash that MEMP will be able to distribute to its partners, including us, each quarter principally depends upon the amount of cash it can generate from its oil and natural gas production business. That amount of cash will fluctuate from quarter to quarter based on, among other things:

 

   

the amount of oil, natural gas and NGLs MEMP produces;

 

   

the prices at which MEMP sells its oil, natural gas and NGL production;

 

   

the amount and timing of settlements of its commodity derivatives;

 

   

the level of MEMP’s operating costs, including maintenance capital expenditures and payments to MEMP GP and its affiliates; and

 

   

the level of MEMP’s interest expense, which depends on the amount of its indebtedness and the interest payable thereon.

 

Because of these factors, MEMP may not have sufficient available cash each quarter to continue paying distributions at their current level or at all. In addition, our 50% incentive distribution rights are only entitled to distributions from MEMP in any quarter if MEMP has paid at least $0.54625 on each outstanding common unit and subordinated unit for such quarter. If MEMP reduces its per unit distribution below such amounts, we will receive less cash.

 

Conflicts of interest may arise because the board of directors of MEMP GP has a fiduciary duty to manage the general partner in a manner that is beneficial to the owner of MEMP GP, and at the same time, to manage MEMP in a manner that is beneficial to the MEMP unitholders. Conflicts may also arise because our executive officers have significant equity interests in MEMP.

 

We own MEMP GP, the sole general partner of MEMP. MEMP is a publicly traded limited partnership. The board of directors of MEMP GP owes specified duties to the MEMP unitholders, and also owes specified duties to us as owner of MEMP GP. As a result of these conflicts, the board of directors of MEMP GP may favor the interests of the MEMP public unitholders over our interests.

 

Our executive officers have significant equity interests in MEMP. Mr. Weinzierl, our Chief Executive Officer, owns 359,925 MEMP common units; Mr. Scarff, our President, owns 1,538 MEMP common units; Mr. Cozby, our Vice President and Chief Financial Officer, owns 101,837 MEMP common units; Mr. Forney, our Vice President, Operations, owns 92,447 MEMP common units; Mr. Roane, our Vice President, General Counsel and Corporate Secretary, owns 47,930 MEMP common units; and Mr. Robbins, our Vice President, Corporate Development, owns 53,801 MEMP common units. As a result of our executive officers’ significant holdings of MEMP common units, our executive officers may favor the interests of MEMP over our interests.

 

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If MEMP’s unitholders remove MEMP GP, we would lose our general partner interest and incentive distribution rights in MEMP and the ability to manage MEMP.

 

We currently manage our investment in MEMP through our ownership interest in MEMP GP. MEMP’s partnership agreement, however, gives unitholders of MEMP the right to remove its general partner upon the affirmative vote of holders of 66 2/3% of the MEMP’s outstanding units. If MEMP GP were removed as general partner of MEMP, it would receive cash or common units in exchange for its 0.1% general partner interest and incentive distribution rights and would also lose its ability to manage MEMP. While the cash or common units the general partner would receive are intended under the terms of MEMP’s partnership agreement to fully compensate MEMP GP in the event such an exchange is required, the value of the investments we make with the cash or the common units may not over time be equivalent to the value of the general partner interest and the incentive distribution rights had MEMP GP retained them.

 

Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

 

We have, and after the consummation of this offering will continue to have, a substantial amount of indebtedness. As of December 31, 2013, on a pro forma basis and after giving effect to this offering, the transactions described in “Restructuring Transactions” and the application of the net proceeds therefrom, we would have had aggregate indebtedness of approximately $         million. The terms and conditions governing our indebtedness:

 

   

require us to dedicate a substantial portion of our cash flow from operations to service our existing debt, thereby reducing the cash available to finance our operations and other business activities and could limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate;

 

   

increase our vulnerability to economic downturns and adverse developments in our business;

 

   

limit our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures or acquisitions or to refinance existing indebtedness;

 

   

place restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations;

 

   

place us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and

 

   

limit management’s discretion in operating our business.

 

Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors. We will not be able to control many of these factors, such as economic conditions and governmental regulation. We cannot be certain that our cash flow will be sufficient to allow us to pay the principal and interest on our debt and meet our other obligations. If we do not have enough money, we may be required to refinance all or part of our existing debt, sell assets, borrow more money or raise equity. We may not be able to refinance our debt, sell assets, borrow more money or raise equity on terms acceptable to us, if at all. For example, our existing and future debt agreements will require that we satisfy certain conditions, including coverage and leverage ratios, to borrow money. Our existing and future debt agreements will also restrict the payment of dividends and distributions by certain of our subsidiaries to us, which could affect our access to cash. In addition, our ability to comply with the financial and other restrictive covenants in our indebtedness will be affected by the levels of cash flow from our operations and future events and circumstances beyond our control. Failure to comply with these covenants would result in an event of default under our indebtedness, and such an event of default could adversely affect our business, financial condition and results of operations.

 

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We may not be able to generate enough cash flow to meet our debt obligations and may be forced to take other actions to satisfy our debt obligations which may not be successful.

 

We expect our earnings and cash flow to vary significantly from year to year due to the cyclical nature of our industry. As a result, the amount of debt that we can service in some periods may not be appropriate for us in other periods. Moreover, and subject to certain limitations, we and our subsidiaries may be able to incur substantial additional indebtedness in the future. Additionally, our future cash flow may be insufficient to meet our debt obligations and commitments. Any insufficiency could negatively impact our business. A range of economic, competitive, business and industry factors will affect our future financial performance, and, as a result, our ability to generate cash flow from operations and from our subsidiaries and to pay our debt. Many of these factors, such as oil and natural gas prices, economic and financial conditions in our industry and the global economy or competitive initiatives of our competitors, are beyond our control.

 

If we do not generate enough cash flow from operations and from our subsidiaries to satisfy our debt obligations, we may have to undertake alternative financing plans, such as:

 

   

refinancing or restructuring our debt;

 

   

selling assets;

 

   

reducing or delaying capital investments; or

 

   

seeking to raise additional capital.

 

However, we cannot assure you that undertaking alternative financing plans, if necessary, would allow us to meet our debt obligations. Our inability to generate sufficient cash flow to satisfy our debt obligations or to obtain alternative financing, could materially and adversely affect our ability to make payments on our indebtedness and our business, financial condition and results of operations.

 

Furthermore, our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments, including our new revolving credit facility, may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our existing debt instruments currently restrict, and we expect our new revolving credit facility will restrict, our ability to dispose of assets and our use of the proceeds from such disposition. We may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

 

Risks Relating to this Offering and Our Common Stock

 

There is no existing market for our common stock, and we do not know if one will develop, which could impede your ability to sell your shares and may depress the market price of our common stock.

 

There has not been a public market for our common stock prior to this offering. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the common stock will be determined by negotiations between us, MRD Holdings and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. See “Underwriting.” Consequently, you may be unable to sell our common stock at prices equal to or greater than the price you pay in this offering.

 

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The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of our common stock.

 

MRD Holdings, certain former management members of WildHorse Resources and our directors and executive officers have entered into lock-up agreements with respect to their common stock, pursuant to which they are subject to certain resale restrictions for a period of 180 days following the date of this prospectus. Citigroup Global Markets Inc., at any time, may release all or any portion of the common stock subject to the foregoing lock-up agreements. If the restrictions under the lock-up agreements are waived, then common stock will be available for sale into the public markets, which could cause the market price of our common stock to decline and impair our ability to raise capital.

 

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our common stock or if our operating results do not meet their expectations, our stock price could decline.

 

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover our company downgrades our common stock or if our operating results do not meet their expectations, our stock price could decline.

 

NGP controls more than a majority of our common stock, and its interests may conflict with those of our other stockholders.

 

Upon completion of this offering, NGP, through the Funds, will beneficially own all of MRD Holdings, which will own in the aggregate approximately    % of the combined voting power of our common stock (or approximately     % if the underwriters option to purchase additional shares of common stock from MRD Holdings is exercised in full). In connection with the completion of this offering, MRD Holdings and certain former management members of WildHorse Resources (which former management members will own in the aggregate approximately     % of the combined voting power of our common stock) will enter into a voting agreement, pursuant to which, they will agree, among other things, to vote all of their shares as directed by MRD Holdings. As a result, MRD Holdings and, thus, NGP will be able to control matters requiring stockholder approval, including the election of directors, changes to our organizational documents and significant corporate transactions. This concentration of ownership makes it unlikely that any other holder or group of holders of our common stock will be able to affect the way we are managed or the direction of our business. The interests of NGP with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings and other corporate opportunities and attempts to acquire us, may conflict with the interests of our other stockholders. Given this concentrated ownership, NGP would have to approve any potential acquisition of us. In addition, certain of our directors are currently employees of NGP. These directors’ duties as employees of NGP may conflict with their duties as our directors, and the resolution of these conflicts may not always be in our or your best interest.

 

Many of the directors and all of the officers who have responsibility for our management have significant duties with, and spend significant time serving, entities that may compete with us in seeking acquisitions and business opportunities and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.

 

All of our officers hold similar positions with MRD Holdings and MEMP GP, and many of our directors, who are responsible for managing the direction of our operations and acquisition activities, hold positions of responsibility with other entities (including NGP-affiliated entities) that are in the business of identifying and acquiring oil and natural gas properties. For example, the Funds and their affiliates (including NGP) are in the business of investing in oil and natural gas companies with independent management teams that also seek to

 

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acquire oil and natural gas properties, and MRD Holdings and MEMP are both in the business of acquiring and developing oil and natural gas properties. Mr. Hersh, one of our directors, is a managing partner of NGP; Mr. Gieselman, one of our directors, is a managing director of NGP; Mr. Weber, one of our directors, is a managing partner of NGP and serves as Chief Operating Officer for NGP; and Mr. Weinzierl, our Chief Executive Officer and one of our directors, is the Chief Executive Officer and Chairman of MEMP GP, and was a managing director and operating partner of NGP and continues to hold ownership interests in the Funds and certain of their affiliates. Our officers will continue to devote significant time to the business of MEMP and MRD Holdings and face conflicts in allocating their time on our behalf and on behalf of MEMP GP and MRD Holdings. Our officers have also historically received a significant portion of their overall compensation in MEMP unit awards under the long term incentive plan of MEMP GP. We cannot assure you that any conflicts that may arise between us and our stockholders, on the one hand, and MRD Holdings, MEMP, or the Funds, on the other hand, will be resolved in our favor. The existing positions held by these directors and officers may give rise to fiduciary or other duties that are in conflict with the duties they owe to us. These officers and directors may become aware of business opportunities that may be appropriate for presentation to us as well as to the other entities with which they are or may become affiliated. Due to these existing and potential future affiliations, they may present potential business opportunities to other entities prior to presenting them to us, which could cause additional conflicts of interest. They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated, and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor. For additional discussion of our management’s business affiliations and the potential conflicts of interest of which our stockholders should be aware, see “Certain Relationships and Related Party Transactions.”

 

The corporate opportunity provisions in our amended and restated certificate of incorporation could enable NGP, MRD Holdings or the Funds to benefit from corporate opportunities that might otherwise be available to us.

 

Subject to the limitations of applicable law, our amended and restated certificate of incorporation, among other things:

 

   

permits any of NGP, MRD Holdings, the Funds, their respective affiliates, or our officers or directors to conduct business that competes with us and to make investments in any kind of property in which we may make investments; and

 

   

provides that if NGP, MRD Holdings, the Funds or their respective affiliates or any director or officer of one of our affiliates, NGP, MRD Holdings, the Funds or their respective affiliates who is also one of our officers or directors becomes aware of a potential business opportunity, transaction or other matter, they will have no duty to communicate or offer that opportunity to us.

 

As a result, NGP, MRD Holdings, the Funds or their affiliates may become aware, from time to time, of certain business opportunities (such as acquisition opportunities) and may direct such opportunities to other businesses in which they have invested, in which case we may not become aware of or otherwise have the ability to pursue such opportunity. Further, such businesses may choose to compete with us for these opportunities. As a result, our renouncing our interest and expectancy in any business opportunity that may be from time to time presented to NGP, MRD Holdings or the Funds and their affiliates could adversely impact our business or prospects if attractive business opportunities are procured by such parties for their own benefit rather than for ours. Please read “Description of Capital Stock.”

 

We will be a “controlled company” within the meaning of the NASDAQ rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

 

Upon the closing of this offering, MRD Holdings and certain former management members of WildHorse Resources, as a group, will continue to control a majority of our voting common stock. As a result, we will be a “controlled company” within the meaning of applicable corporate governance standards. Under the NASDAQ

 

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rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

 

   

the requirement that we have a majority of independent directors on our Board;

 

   

the requirement that we have a nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement that we have a compensation committee that is composed entirely of independent directors; and

 

   

the requirement for an annual performance evaluation of the nominating and compensation committees.

 

Following this offering, we intend to utilize the foregoing exemptions from the applicable corporate governance requirements. As a result, we will not have a majority of independent directors and will not have a compensation committee. See “Management.” Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the applicable corporate governance requirements.

 

The price of our common stock may fluctuate significantly and you could lose all or part of your investment.

 

Volatility in the market price of our common stock may prevent you from being able to sell your common stock at or above the price you paid for your common stock. The market price for our common stock could fluctuate significantly for various reasons, including:

 

   

our operating and financial performance and prospects;

 

   

changes in earnings estimates or recommendations by securities analysts who track our common stock or industry;

 

   

market and industry perception of our success, or lack thereof, in pursuing our growth strategy; and

 

   

sales of common stock by us, our stockholders (including the Funds), or members of our management team.

 

In addition, the stock market has experienced significant price and volume fluctuations in recent years. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industries. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with us, and these fluctuations could materially reduce our share price.

 

We currently have no plans to pay regular dividends on our common stock, so you may not receive funds without selling your common stock.

 

We currently have no plans to pay regular dividends on our common stock. Any payment of dividends in the future will be at the discretion of our Board and will depend on, among other things, our earnings, financial condition and business opportunities, the restrictions in our debt agreements, and other considerations that our Board deems relevant. Accordingly, you may have to sell some or all of your common stock in order to generate cash flow from your investment.

 

Future sales or the possibility of future sales of a substantial amount of our common stock may depress the price of shares of our common stock.

 

We may sell additional shares of common stock in subsequent public offerings or otherwise, including to finance acquisitions. Our amended and restated certificate of incorporation which we will adopt in connection

 

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with the closing of this offering will authorize us to issue            shares of common stock, of which              shares will be outstanding upon consummation of this offering. The outstanding share number includes shares that we and MRD Holdings are selling in this offering, which may be resold immediately in the public market. The remaining outstanding shares are restricted from immediate resale under the lock-up agreements with the underwriters described in “Underwriting,” but may be sold into the market in the near future. Following the expiration of the applicable lock-up period, which is 180 days after the date of this prospectus,              shares of our common stock will be freely transferable without restriction or further registration under the Securities Act, except for any such shares which are held or may be acquired by any of our “affiliates” as that term is defined in Rule 144 under the Securities Act, which will be subject to the resale limitations of Rule 144. See “Shares Eligible for Future Sale” for a discussion of the shares of our common stock that may be sold into the public market in the future.

 

MRD Holdings and certain former management members of WildHorse Resources will be party to the Registration Rights Agreement, which will require us to effect the registration of their shares in certain circumstances no earlier than the expiration of the lock-up period contained in the underwriting agreement entered into in connection with this offering. Upon the effectiveness of such a registration statement, all shares covered by the registration statement would be freely transferable without restriction or further registration under the Securities Act, except for any such shares which are acquired by any of our “affiliates” as that term is defined in Rule 144 under the Securities Act, which will be subject to the resale limitations of Rule 144. See “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

 

As soon as practicable after this offering, we intend to file a registration statement with the SEC on Form S-8 providing for the registration of              shares of our common stock issued or reserved for issuance under our Memorial Resource Development Corp. 2014 Long Term Incentive Plan that we plan to adopt prior to the completion of this offering. Subject to the satisfaction of vesting conditions and the expiration of lock-up agreements, shares registered under our registration statement on Form S-8 will be available for resale immediately in the public market without restriction.

 

We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including any shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock.

 

Our organizational documents and the voting agreement may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

 

Provisions of our amended and restated certificate of incorporation, our amended and restated bylaws to be effective upon the completion of this offering and the voting agreement may make it more difficult for, or prevent a third party from, acquiring control of us. These provisions include:

 

   

requiring that certain former management members of WildHorse Resources vote all of their shares of our common stock, including with respect to the election of our directors, as directed by MRD LLC;

 

   

at such time MRD Holdings, NGP or as the Funds no longer beneficially own or control the voting of more than 50% of our outstanding common stock, our Board will be divided into three classes with each class serving staggered three year terms;

 

   

at such time MRD Holdings, NGP or as the Funds no longer beneficially own or control the voting of more than 50% of our outstanding common stock, any action by stockholders may only be taken at an annual meeting or special meeting and may no longer be effected by a written consent of the stockholders, subject to the rights of any series of preferred stock with respect to such rights;

 

   

at such time as MRD Holdings, NGP or the Funds no longer beneficially own or control the voting of more than 50% of our outstanding common stock, special meetings of our stockholders may only be

 

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called by our Board pursuant to a resolution adopted by the affirmative vote of a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships (prior to such time, a special meeting may also be called at the request of stockholders holding a majority of the outstanding shares entitled to vote);

 

   

at such time as MRD Holdings, NGP or the Funds no longer beneficially own or control the voting of more than 50% of our outstanding common stock, the affirmative vote of the holders of at least 75% in voting power of all then outstanding common stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to remove any or all of the directors from office at any time;

 

   

prohibiting cumulative voting in the election of directors; and

 

   

authorizing the issuance of “blank check” preferred stock without any need for action by stockholders.

 

Our issuance of shares of preferred stock could delay or prevent a change in control of us. Our Board has authority to issue shares of preferred stock without stockholder approval in one or more series, designate the number of shares constituting any series, and fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of shares of our preferred stock may have the effect of delaying, deferring or preventing a change in control without further action by the stockholders, even where stockholders are offered a premium for their shares.

 

Together, our amended and restated certificate of incorporation, amended and restated bylaws and the voting agreement could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing provisions, as well as the significant amount of common stock beneficially owned by the Funds following this offering, could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of us, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. See “Description of Capital Stock—Anti-Takeover Effects of Provisions of Our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and Delaware Law.”

 

We have engaged in transactions with our affiliates and expect to do so in the future. The terms of such transactions and the resolution of any conflicts that may arise may not always be in our or our stockholders’ best interests.

 

We have engaged in transactions and expect to continue to engage in transactions with affiliated companies, as described under the caption “Certain Relationships and Related Party Transactions.” The resolution of any conflicts that may arise in connection with any related party transactions that we have entered into with MEMP, NGP, MRD Holdings, the Funds or their affiliates, including pricing, duration or other terms of service, may not always be in our or our stockholders’ best interests because NGP or the Funds may have the ability to influence the outcome of these conflicts. For a discussion of potential conflicts, please read “—NGP controls more than a majority of our common stock, and its interests may conflict with those of our other stockholders.”

 

You will experience an immediate and substantial dilution in the net tangible book deficit of the common stock you purchase.

 

After giving effect to this offering and the other adjustments described in “Dilution,” we expect that our pro forma as adjusted net tangible book deficit as of December 31, 2013 would be $         per share. Based on an assumed initial public offering price of $         per share, the midpoint of the estimated offering range set forth on the cover page of this prospectus, you will experience immediate and substantial dilution of approximately $         per share in net tangible book deficit of the common stock you purchase in this offering. See “Dilution,” including the discussion of the effects on dilution from a change in the price of this offering.

 

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We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

 

Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our Board may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock. See “Description of Capital Stock—Limitation of Liability and Indemnification Matters.”

 

The additional requirements of having a class of publicly traded equity securities may strain our resources and distract management.

 

After the consummation of this offering, we will be subject to additional reporting requirements of the Securities and Exchange Act of 1934 (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act. The Dodd-Frank Act effects comprehensive changes to public company governance and disclosures in the United States and will subject us to additional federal regulation. We cannot predict with any certainty the requirements of the regulations ultimately adopted or how the Dodd-Frank Act and such regulations will impact the cost of compliance for a company with publicly traded common stock. We are currently evaluating and monitoring developments with respect to the Dodd-Frank Act and other new and proposed rules and cannot predict or estimate the amount of the additional costs we may incur or the timing of such costs. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed. We also expect that being a company with publicly traded common stock and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee, and qualified executive officers.

 

The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. These requirements may place a strain on our systems and resources. Under Section 404 of the Sarbanes-Oxley Act, we will be required to include a report of management on our internal control over financial reporting in our Annual Reports on Form 10-K beginning with the Form 10-K for the year ending December 31, 2014. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight will be required. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. If we are unable to conclude that our disclosure controls and procedures and internal control over financial reporting are effective, or if we are no longer an emerging growth company and our independent public accounting firm is unable to provide us with an unqualified report on our internal control over financial reporting in future years, investors may lose confidence in our financial reports and our stock price may decline.

 

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We will remain an “emerging growth company” for up to five years. After we are no longer an “emerging growth company,” we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with those requirements applicable to companies that are not “emerging growth companies,” including Section 404 of the Sarbanes-Oxley Act. Please read “—We will incur increased costs as a result of being a public company, which may significantly affect our financial condition.”

 

We will incur increased costs as a result of being a public company, which may significantly affect our financial condition.

 

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will incur costs associated with our public company reporting requirements. We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and the Financial Industry Regulatory Authority. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” We also expect these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board or as executive officers.

 

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

 

We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

We will cease to be an “emerging growth company” upon the earliest of (i) the last day of the fiscal year in which we have $1.0 billion or more in annual revenues, (ii) the date on which we become a “large accelerated filer” (the fiscal year-end on which the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30), (iii) the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period, or (iv) the last day of the fiscal year following the fifth anniversary of our initial public offering.

 

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, but we have irrevocably opted out of the extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates in which adoption of such standards is required for other public companies.

 

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

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If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, our shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common stock.

 

Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We cannot be certain that our efforts to maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of the Sarbanes Oxley Act of 2002. Any failure to maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains “forward-looking statements.” Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this prospectus, are forward-looking statements. When used in this prospectus, the words “could,” “should,” “will,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “plan,” “potential,” “pursue,” “target,” “project,” “forecast,” the negative of such terms, or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words.

 

Forward-looking statements may include statements about:

 

   

our business strategy;

 

   

our estimated reserves and the present value thereof;

 

   

our technology;

 

   

our cash flows and liquidity;

 

   

our financial strategy, budget, projections and future operating results;

 

   

realized commodity prices;

 

   

timing and amount of future production of reserves;

 

   

availability of drilling and production equipment;

 

   

availability of pipeline capacity;

 

   

availability of oilfield labor;

 

   

the amount, nature and timing of capital expenditures, including future development costs;

 

   

availability and terms of capital;

 

   

drilling of wells, including statements made about future horizontal drilling activities;

 

   

competition;

 

   

government regulations;

 

   

marketing of production;

 

   

exploitation or property acquisitions;

 

   

costs of exploiting and developing our properties and conducting other operations;

 

   

general economic and business conditions;

 

   

competition in the oil and natural gas industry;

 

   

effectiveness of our risk management activities;

 

   

environmental and other liabilities;

 

   

counterparty credit risk;

 

   

taxation of the oil and natural gas industry;

 

   

developments in other countries that produce oil and natural gas;

 

   

uncertainty regarding future operating results;

 

   

plans and objectives of management; and

 

   

plans, objectives, expectations and intentions contained in this prospectus that are not historical.

 

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These types of statements, other than statements of historical fact included in this prospectus, are forward-looking statements. These forward-looking statements may be found in “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this prospectus. These statements discuss future expectations, contain projections of results of operations or of financial condition or include other “forward-looking” information. These forward-looking statements involve risks and uncertainties. Important factors that could cause our actual results or financial condition to differ materially from our expectations include, but are not limited to, the following risks and uncertainties:

 

   

variations in the market demand for, and prices of, oil, natural gas and NGLs;

 

   

uncertainties about our estimated reserves;

 

   

the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity under our new revolving credit facility;

 

   

general economic and business conditions;

 

   

risks associated with negative developments in the capital markets;

 

   

failure to realize expected value creation from property acquisitions;

 

   

uncertainties about our ability to replace reserves and economically develop our current reserves;

 

   

drilling results;

 

   

potential financial losses or earnings reductions from our commodity price risk management programs;

 

   

adoption or potential adoption of new governmental regulations;

 

   

the availability of capital on economic terms to fund our capital expenditures and acquisitions;

 

   

risks associated with our substantial indebtedness; and

 

   

our ability to satisfy future cash obligations and environmental costs.

 

The forward-looking statements contained in this prospectus are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this prospectus are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or that the events or circumstances described in any forward-looking statement will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in the “Risk Factors” section of this prospectus and elsewhere in this prospectus. All forward-looking statements speak only as of the date on which they are made. We do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

 

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USE OF PROCEEDS

 

Assuming an initial public offering price of $         per share, the midpoint of the range set forth on the cover page of this prospectus, we estimate that we will receive net proceeds from this offering of approximately $         million, after deducting underwriting discounts and commissions and fees and expenses associated with this offering and the restructuring transactions of $         million payable by us.

 

The following table illustrates our use of proceeds of this offering and borrowings under our new revolving credit facility:

 

Sources of Cash (In millions)

    

Uses of Cash (In millions)

 

Net proceeds from this offering

   $               

Redemption of PIK notes(1)

   $            

Borrowings under our new revolving credit facility

     

Cash consideration to certain former management members of WildHorse Resources(2)

  
     

Repayment of outstanding borrowings under WildHorse Resources’ credit agreements(2)

  
     

Reimbursement to MRD LLC for June 15 interest payment on the PIK notes(2)

  
     

General corporate purposes

  
  

 

 

       

 

 

 

Total

   $        

Total

   $     
  

 

 

       

 

 

 

 

(1)   Includes the payment of principal plus any applicable premium and accrued and unpaid interest, if any, to the date of redemption, which we expect will be 30 days after the closing of this offering. Until such redemption date or any earlier discharge date, we will use the amount to be paid to the holders of the PIK notes to temporarily reduce amounts outstanding under our new revolving credit facility.
(2)   Please see “Restructuring Transactions” for additional discussion of the cash consideration that will be paid to certain former management members of WildHorse Resources and the reimbursement to MRD LLC and “Management Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements—MRD Segment—WildHorse Resources Revolving Credit Facility and Second Lien Facility (To Be Terminated at Closing)” for a description of the repayment of outstanding borrowings under WildHorse Resources’ credit agreements that will be made in connection with the restructuring transactions.

 

We will not receive any proceeds from the sale of shares of our common stock by MRD Holdings, including pursuant to any exercise by the underwriters of their option to purchase additional shares of our common stock. MRD Holdings is deemed under federal securities laws to be an underwriter with respect to the common stock it may sell in connection with this offering.

 

Each $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) the net proceeds to us from this offering by $         million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us. An increase (decrease) of 1,000,000 in the number of shares we are offering would increase (decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us, by approximately $         million, assuming the initial public offering price per share remains the same.

 

The PIK notes bear interest at the rate of 10.00% per annum if paid in cash and 10.75% per annum if paid as PIK interest and mature on December 15, 2018. MRD LLC used the net proceeds from the offering of the PIK notes after paying offering expenses to repay all amounts outstanding under its senior secured credit facility, to fund a debt service reserve account for the payment of interest on the PIK notes, to pay a distribution to the Funds and for general company purposes. In connection with the closing of this offering, we will enter into a new revolving credit facility and use a portion of the borrowings under that agreement to repay outstanding borrowings under WildHorse Resources’ credit agreements, which will be terminated upon repayment. Borrowings under WildHorse Resources’ credit agreements were used to acquire assets, to make capital expenditures and for other general corporate purposes. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements—MRD Segment.”

 

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DIVIDEND POLICY

 

We do not anticipate declaring or providing any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain all future earnings, if any, for use in the operation of our business and to fund future growth. The decision whether to pay dividends in the future will be made by our Board in light of conditions then existing, including factors such as our financial condition, earnings, available cash, business opportunities, legal requirements, restrictions in our debt agreements, and other contracts and other factors our Board deems relevant.

 

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CAPITALIZATION

 

The following table shows our predecessor’s cash and cash equivalents and our predecessor’s capitalization as of December 31, 2013:

 

   

on an actual basis; and

 

   

on an as adjusted basis to give effect to (i) the restructuring transactions described under “Restructuring Transactions,” (ii) borrowing $         million under our new revolving credit facility to repay outstanding borrowings under WildHorse Resources’ credit agreements, and (iii) the issuance and sale of             shares of common stock in this offering by us and our application of the net proceeds as described under “Use of Proceeds.”

 

You should read this table together with “Restructuring Transactions,” “Use of Proceeds,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the pro forma and historical consolidated financial statements included elsewhere in this prospectus. For a description of the pro forma adjustments, please read our Unaudited Pro Forma Combined Financial Statements.

 

     At December 31, 2013
     Actual      As Adjusted

Cash and cash equivalents(1)

   $ 77,721      

Restricted cash(2)

     50,000      

Long-term debt:

     

MRD Segment:

     

WildHorse Resources revolving credit facility

     203,100      

WildHorse Resources second lien term loan

     325,000      

MRD senior secured revolving credit facility

     —        

10.00%/10.75% Senior PIK Toggle Notes due 2018

     343,050      

MEMP Segment:

     

MEMP revolving credit facility

     103,000      

7.625% senior notes due 2021

     689,067      
  

 

 

    

 

Total long-term debt

     1,663,217      

Members’ equity:

     

MRD LLC members’ equity

     277,517      

Stockholders’ equity:

     

Common stock, $0.01 par value, 1,000 shares authorized, 100 shares issued and outstanding (historical);              shares authorized,              shares issued and outstanding

     —        

Additional paid-in capital

     —        

Accumulated deficit

     —        
  

 

 

    

 

Total Memorial Resource Development Corp. stockholders’ equity

     

Noncontrolling interest

     580,615      
  

 

 

    

 

Total capitalization

     2,521,349      
  

 

 

    

 

 

(1)   Includes $13.1 million of cash and cash equivalents related to MEMP and its subsidiaries.
(2)   Represents the $50 million of restricted cash held in the debt service reserve account related to, including as security for payment of interest and certain other payments on, the PIK notes of which $32.8 million (net of approximately $17.2 million to be used to pay accrued interest on the PIK notes on June 15, 2014 if this offering does not close by such date) is to be retained by MRD LLC in the restructuring transactions and released to MRD Holdings upon redemption of the PIK notes (which we expect will be 30 days after the closing of this offering). We will reimburse MRD LLC for the approximately $17.2 million interest payment, or, if this offering closes before June 15, 2014, we will make such interest payment with borrowings under our new revolving credit facility.

 

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DILUTION

 

Dilution is the amount by which the offering price paid by the purchasers of the common stock to be sold in this offering exceeds the net tangible book value (deficit) per share of common stock after the offering. Net tangible book value per share is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of common stock deemed to be outstanding at that date. There will be shares of our common stock reserved for future awards under the Memorial Resource Development Corp. 2014 Long Term Incentive Plan as of the consummation of this offering.

 

Our net tangible book value as of December 31, 2013 was $         million, or $         per share. After giving effect to the receipt of approximately $         million of estimated net proceeds from our sale of             shares of common stock in this offering at an assumed offering price of $         per share, which represents the midpoint of the range set forth on the front cover of this prospectus, our as adjusted net tangible book deficit as of December 31, 2013 would have been approximately $         million, or $         per share. This represents an immediate decrease in our net tangible book deficit of $         per share to our existing stockholders and an immediate dilution of $         per share to new investors purchasing shares of common stock in the offering. The following table illustrates this substantial and immediate per share dilution to new investors:

 

     Per Share  

Assumed initial public offering price per share

   $                

Net tangible book value (deficit) before the offering

  

Increase per share attributable to investors in the offering

  

As adjusted net tangible book value (deficit) after the offering

  

Dilution per share to new investors

   $     

 

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would decrease (increase) our as adjusted net tangible book value (deficit) by $         million, or $         per share, and increase (decrease) the dilution per share to new investors in this offering by $        , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us.

 

The following table summarizes on an as adjusted basis as of December 31, 2013, giving effect to:

 

   

the total number of shares of common stock purchased from us;

 

   

the total consideration paid to us, assuming an initial public offering price of $         per share (before deducting the estimated underwriting discount and commissions and offering expenses payable by us in connection with this offering); and

 

   

the average price per share paid by our existing stockholders and by new investors purchasing shares in this offering:

 

     Shares Purchased     Total Consideration     Average Price
Per Share
 
     

Number

   Percent     Amount    Percent    

Existing stockholders(1)

                           $            

Investors in the offering

                          

Total

        100        100   $     

 

(1)   The number of shares disclosed for the existing stockholders includes             shares that may be sold by MRD LLC in this offering, including pursuant to any exercise of the underwriters’ option to purchase additional shares of common stock.

 

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share (the midpoint of the range set forth on the cover page of this prospectus) would increase (decrease) total consideration paid by

 

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new investors, total consideration paid by all stockholders and the average price per share by $         million, $         million and $        , respectively, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.

 

The tables and calculations above also assume no exercise of the underwriters’ option to purchase             additional shares from MRD Holdings. If the underwriters exercise their option to purchase             additional shares in full, then the number of shares held by new investors will be increased to             , or approximately     % of our outstanding shares of common stock.

 

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SELECTED HISTORICAL FINANCIAL DATA

 

MRD LLC and its consolidated subsidiaries, our accounting predecessor, controls MEMP through its ownership of MEMP GP, the general partner of MEMP. Because MRD LLC controls MEMP through its ownership of the general partner, MRD LLC is required to consolidate MEMP for accounting and financial reporting purposes even though MRD LLC owns a minority of its partner interests and MRD LLC and MEMP have independent capital structures. MRD LLC receives cash distributions from MEMP as a result of its partner interests and incentive distribution rights in MEMP, when declared and paid by MEMP. In connection with the closing of this offering, MRD LLC will contribute substantially all of its existing assets to us in exchange for shares of our common stock. Through our ownership of MEMP GP, we will continue to control MEMP and therefore will continue to consolidate the results of MEMP into our consolidated financial statements in future periods.

 

Our predecessor has two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties:

 

   

MRD—reflects all of MRD LLC’s consolidating subsidiaries except for MEMP and its subsidiaries.

 

   

MEMP—reflects the consolidated and combined operations of MEMP and its subsidiaries.

 

We will continue to have two reportable segments following the completion of this offering. For more information regarding reportable business segments, please see the predecessor’s audited historical financial statements and related notes.

 

The following tables include the selected historical financial data of our predecessor, as well as the MRD Segment as of and for the periods indicated. The selected historical financial data of our predecessor as of and for the years ended December 31, 2013 and 2012 were derived from the audited historical financial statements of our predecessor included elsewhere in this prospectus. The selected historical financial data of the MRD Segment as of and for the years ended December 31, 2013 and 2012 were derived from certain financial information used in the preparation of our predecessor’s audited financial statements.

 

The selected unaudited pro forma data as of and for the year ended December 31, 2013 has been prepared to give pro forma effect to: (i) the exclusion of both BlueStone and Classic Pipeline, the MEMP subordinated units and the debt service account associated with the PIK notes, which are not being conveyed to us in connection with this offering, as well as our payment of (or reimbursement for) the June 15, 2014 interest payment on the PIK notes, (ii) the offering of our shares of common stock contemplated hereby and the use of the net proceeds therefrom as described in “Use of Proceeds,” (iii) incremental federal income tax expense, and (iv) the restructuring transactions.

 

We derived the data in the following tables from, and the following tables should be read together with and is qualified in its entirety by reference to, our predecessor’s historical financial statements and our pro forma financial statements and the accompanying notes included elsewhere in this prospectus. You should also read “Restructuring Transactions,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our pro forma and historical consolidated financial statements, all included elsewhere in this prospectus. Among other things, those historical consolidated and combined financial statements and pro forma financial statements include more detailed information regarding the basis of presentation for the following data.

 

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     MRD LLC (Predecessor)     Memorial Resource
Development Corp.

Pro Forma
 
     Year Ended December 31,     Year Ended
December 31,
 
     2013     2012     2013  
                 (unaudited)  
     (in thousands)        

Statement of Operations Data:

      

Revenues:

      

Oil and natural gas sales

   $ 571,948      $ 393,631      $ 553,800   

Other revenues

     3,075        3,237        2,268   
  

 

 

   

 

 

   

 

 

 

Total revenues

     575,023        396,868        556,068   

Costs and expenses:

      

Lease operating

     113,640        103,754        111,988   

Pipeline operating

     1,835        2,114        1,835   

Exploration

     2,356        9,800        2,356   

Production and ad valorem taxes

     27,146        23,624        26,269   

Depreciation, depletion and amortization

     184,717        138,672        174,198   

Impairment of proved oil and gas properties

     6,600        28,871        4,201   

General and administrative

     125,358        69,187        101,098   

Accretion of asset retirement obligations

     5,581        5,009        5,523   

(Gain) loss on commodity derivatives

     (29,294     (34,905     (29,311

(Gain) loss on sale of property

     (85,621     (9,761     3,927   

Other, net

     649        502        649   
  

 

 

   

 

 

   

 

 

 

Total costs and expenses

     352,967        336,867        402,733   
  

 

 

   

 

 

   

 

 

 

Operating income

     222,056        60,001        153,335   
  

 

 

   

 

 

   

 

 

 

Other income (expense)

      

Interest expense, net

     (69,250     (33,238  

Amortization of investment premium

     —          (194     —     

Other, net

     145        535        143   
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (69,105     (32,897  

Income tax expense

     (1,619     (107  
  

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 151,332      $ 26,997     
  

 

 

   

 

 

   

 

 

 

Cash Flow Data:

      

Net cash provided by operating activities

   $ 277,823      $ 240,404     

Net cash used in investing activities

     367,443        606,738     

Net cash provided by financing activities

     117,950        361,761     

Balance Sheet Data (at period end):

      

Working capital

   $ 48,256      $ 63,054     

Total assets

     2,829,161        2,459,304     

Total debt

     1,663,217        939,382     

Total equity (including noncontrolling interests)

     858,132        1,276,709     

 

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     MRD Segment     MRD Segment
Pro Forma
 
     Year Ended December 31,     Year Ended
December 31,
 
     2013     2012     2013  
           (unaudited)  
    

(in thousands)

       

Statement of Operations Data:

      

Revenues:

      

Oil and natural gas sales

     $230,751        $138,032      $ 212,603   

Other revenues

     807        782        —     
  

 

 

   

 

 

   

 

 

 

Total revenues

  

 

231,558

  

 

 

138,814

  

    212,603   

Costs and expenses:

      

Lease operating

     25,006        24,438        23,354   

Exploration

     1,226        7,337        1,226   

Production and ad valorem taxes

     9,362        7,576        8,485   

Depreciation, depletion and amortization

     87,043        62,636        76,524   

Impairment of proved oil and gas properties

     2,527        18,339        128   

General and administrative

     81,758        38,414        57,498   

Accretion of asset retirement obligations

     728        632        670   

(Gain) loss on commodity derivatives

     (3,013)        (13,488     (3,030

(Gain) loss on sale of property

     (82,773)        (2     6,775   

Other, net

     2        364        2   
  

 

 

   

 

 

   

 

 

 

Total costs and expenses

  

 

121,866

  

 

 

146,246

  

    171,632   
  

 

 

   

 

 

   

 

 

 

Operating income

     109,692        (7,432     40,971   
  

 

 

   

 

 

   

 

 

 

Other income (expense)

      

Interest expense, net

     (27,349)        (12,802  

Earnings from equity investments

     1,066        4,880        269   

Other, net

     145        535        143   
  

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (26,138     (7,387  

Income tax (expense) benefit

     (1,311     178     
  

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 82,243      $ (14,641  
  

 

 

   

 

 

   

 

 

 

Cash Flow Data (Unaudited):

      

Net cash provided by operating activities

   $ 83,910      $ 84,172     

Net cash used in investing activities

     5,533        230,471     

Net cash provided by (used in) financing activities

     (38,963     133,271     

Other Financial Data:

      

Adjusted EBITDA (unaudited)

   $ 197,903      $ 132,105      $ 159,239   

Balance Sheet Data (at period end):

      

Working capital (unaudited)

   $ 51,214      $ 2,424     

Total assets

     1,281,134        1,102,406     

Total debt

     871,150        309,200     

Total equity (unaudited)

     279,412        682,644     

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and related notes included elsewhere in this prospectus. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences are described under the heading “Risk Factors” included elsewhere in this prospectus. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. Also see “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this prospectus.

 

Overview

 

We are a Delaware corporation formed by Memorial Resource Development LLC (“MRD LLC”) in January 2014 to own and acquire oil and natural gas properties in North America. MRD LLC is a Delaware limited liability company formed on April 27, 2011 by Natural Gas Partners VIII, L.P. (“NGP VIII”), Natural Gas Partners IX, L.P. (“NGP IX”) and NGP IX Offshore Holdings, L.P. (“NGP IX Offshore”) (collectively, the “Funds”) to own, acquire, exploit and develop oil and natural gas properties. The Funds are private equity funds managed by Natural Gas Partners (“NGP”).

 

In connection with the closing of this offering, MRD LLC and its consolidated subsidiaries, which is our accounting predecessor, will contribute to us substantially all of its assets, comprised of the following, in exchange for shares of common stock: (1) 100% of its ownership interests in Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”), Beta Operating Company, LLC (“Beta Operating”), MRD Operating LLC (“MRD Operating”) and Memorial Production Partners GP LLC (“MEMP GP”), which owns a 0.1% general partner interest and 50% of the incentive distribution rights in Memorial Production Partners LP (“MEMP”), and (2) its 99.9% membership interest in WildHorse Resources, LLC (“WildHorse Resources”). In addition, certain former management members of WildHorse Resources will contribute to us the remaining 0.1% membership interest in WildHorse Resources as well as exchange their incentive units in exchange for shares of common stock and cash consideration. At that time, we will be majority-owned by the group consisting of MRD Holdings and certain former management members of WildHorse Resources.

 

Following the completion of the offering, MRD LLC will retain and distribute to MRD Holdings (i) its interest in BlueStone Natural Resources Holdings, LLC (“BlueStone”), MRD Royalty LLC (“MRD Royalty”), MRD Midstream LLC (“MRD Midstream”) and Classic Pipeline & Gathering, LLC (“Classic Pipeline”), (ii) the MEMP subordinated units and (iii) the $32.8 million in cash (net of approximately $17.2 million to be used to pay PIK note interest on June 15, 2014) to be released from its debt service reserve account in connection with the redemption of the PIK notes (which we expect will be 30 days after the closing of this offering). We will reimburse MRD LLC for the approximately $17.2 million interest payment, or if this offering closes before June 15, 2014, we will make such interest payment, with borrowings under our new revolving credit facility.

 

After the closing of the redemption of the PIK notes and the termination of the PIK notes indenture (which will occur approximately 30 days after the closing date of this offering unless discharged earlier), MRD LLC will merge into MRD Operating LLC. Until the date of such merger, MRD LLC will perform under its current commercial contracts for our benefit, all amounts received under such contracts will be for our benefit and we will be responsible for all amounts owing under such contracts. At the time MRD LLC merges into MRD Operating LLC, MRD LLC’s sole assets will be commercial contracts entered into in the ordinary course of business and relating to the businesses owned by us.

 

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Prior to this offering MRD LLC controlled, and after this offering we will control, MEMP through the ownership of MEMP GP. MEMP is a publicly traded limited partnership engaged in the acquisition, production and development of oil and natural gas properties in the United States. Due to MRD LLC’s control of MEMP through the ownership of its general partner, MRD LLC is required to consolidate MEMP for accounting and financial reporting purposes. Although consolidated for accounting and financial reporting, MRD LLC and MEMP have independent capital structures. MRD LLC receives cash distributions from MEMP as a result of its partner interests and incentive distribution rights in MEMP, when declared and paid by MEMP.

 

Business Segments

 

MRD LLC has two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties:

 

   

MRD—reflects all of MRD LLC’s consolidating subsidiaries except for MEMP and its subsidiaries.

 

   

MEMP—reflects the consolidated and combined operations of MEMP and its subsidiaries.

 

Our reportable business segments are organized in a manner that reflects how management manages those business activities. We evaluate segment performance based on Adjusted EBITDA. For additional information regarding this financial measure, see “Summary Historical Consolidated and Combined Pro Forma Financial Data—Adjusted EBITDA.” For additional information regarding our predecessor’s reportable business segments, see the notes to our predecessor’s consolidated and combined financial statements found elsewhere in this prospectus.

 

Segment financial information has been retrospectively revised for the following common control transactions between MEMP and MRD LLC for comparability purposes:

 

   

acquisition by MEMP of all the outstanding membership interests in Tanos Energy, LLC (“Tanos”) for a purchase price of approximately $77.4 million on October 1, 2013;

 

   

acquisition by MEMP of all the outstanding membership interests in Prospect Energy, LLC for a purchase price of approximately $16.3 million on October 1, 2013;

 

   

acquisition by MEMP of all the outstanding membership interests in WHT Energy Partners LLC (“WHT”) for a purchase price of approximately $200.0 million on March 28, 2013;

 

   

acquisition by MEMP of certain assets from Classic in East Texas in May 2012 for a purchase price of approximately $27.0 million; and

 

   

acquisition by MEMP of certain assets from Tanos in East Texas in April 2012 for a purchase price of approximately $18.5 million.

 

The MRD Segment is focused on the exploitation, development, and acquisition of natural gas, NGL and oil properties mainly in the Cotton Valley formation in North Louisiana and East Texas as well as the Rocky Mountains. These properties consist primarily of assets with extensive production histories, high drilling success rates, and significant horizontal redevelopment potential. The MRD Segment is focused on maintaining and growing its production and cash flow primarily through the development of its sizeable inventory.

 

The MEMP Segment is engaged in the acquisition, exploitation, development and production of oil and natural gas properties, with assets consisting primarily of producing oil and natural gas properties that are principally located in East Texas/North Louisiana, the Permian Basin, offshore Southern California, the Rockies, the Eagle Ford and South Texas. Most of the MEMP Segment’s properties are located in large, mature oil and natural gas reservoirs with well-known geologic characteristics and long-lived, predictable production profiles and modest capital requirements. The MEMP Segment is focused on generating stable cash flows, to allow MEMP to make quarterly cash distributions to its unitholders and, over time, to increase those quarterly cash distributions.

 

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Recent Developments

 

MRD Segment

 

   

On February 28, 2014, WildHorse Resources repurchased net profits interests from an affiliate of NGP for $63.4 million after customary adjustments. These net profits interests were originally sold to the NGP affiliate upon the completion of certain acquisitions in 2010 by WildHorse Resources. The repurchase of the net profits interests was accounted for as a combination of entities under common control at historical cost in a manner similar to the pooling of interest method and our consolidated and combined financial statements presented herein have been retrospectively revised. As WildHorse Resources is the operator of the properties and sold the net profits interest to the affiliate of NGP in 2010, these net profits interests are accounted for as working interests in our consolidated and combined financial statements.

 

   

On April 1, 2014, WildHorse Resources sold certain oil and natural gas properties in East Texas to MEMP for approximately $34.0 million in cash consideration, subject to customary post-closing adjustments.

 

MEMP Segment

 

   

On March 25, 2014, MEMP acquired certain oil and natural gas properties in the Eagle Ford trend from Alta Mesa Holdings, LP for a purchase price of $173.0 million, subject to customary purchase price adjustments. The acquired properties are 100% non-operated.

 

   

On April 1, 2014, MEMP acquired certain oil and natural gas properties in East Texas from WildHorse Resources for approximately $34.0 million in cash consideration, subject to customary post-closing adjustments.

 

Sources of Revenues

 

Both the MRD Segment’s and the MEMP Segment’s revenues are derived from the sale of natural gas and oil production, as well as the sale of NGLs that are extracted from natural gas during processing. Production revenues are derived entirely from the continental United States. Natural gas, NGL and oil prices are inherently volatile and are influenced by many factors outside their control. In order to reduce the impact of fluctuations in natural gas and oil prices on revenues, or to protect the economics of property acquisitions, both segments intend to periodically enter into derivative contracts with respect to a significant portion of their estimated natural gas and oil production through various transactions that fix the future prices received. These transactions may include price swaps whereby the applicable segment will receive a fixed price for production and pay a variable market price to the contract counterparty. Additionally, either segment may enter into costless collars, whereby the applicable segment receives the excess, if any, of the fixed floor over the floating rate or pay the excess, if any, of the floating rate over the fixed ceiling price. At the end of each period the fair value of these commodity derivative instruments are estimated and, because hedge accounting is not elected, the changes in the fair value of unsettled commodity derivative instruments are recognized in earnings at the end of each accounting period.

 

Principal Components of Cost Structure

 

   

Lease operating expenses.    These are the day to day costs incurred to maintain production of our natural gas, NGLs and oil. Such costs include utilities, direct labor, water injection and disposal, materials and supplies, compression, repairs and workover expenses. Cost levels for these expenses can vary based on supply and demand for oilfield services.

 

   

Production and ad valorem taxes.    These consist of severance and ad valorem taxes. Production taxes are paid on produced natural gas, NGLs and oil based on a percentage of market prices and at fixed per unit rates established by federal, state or local taxing authorities. Both the MRD and MEMP Segments take full advantage of all credits and exemptions in the various taxing jurisdictions where they operate. Ad valorem taxes are generally tied to the valuation of the oil and natural properties; however, these valuations are reasonably correlated to revenues, excluding the effects of any commodity derivative contracts.

 

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Exploration expense.    These are geological and geophysical costs and include seismic costs, costs of unsuccessful exploratory dry holes and unsuccessful leasing efforts.

 

   

Impairment of unproved and proved properties.    For unproved properties, these primarily include costs associated with lease expirations. Proved properties are impaired whenever the carrying value of the properties exceed their estimated undiscounted future cash flows.

 

   

Depreciation, depletion and amortization.    Depreciation, depletion and amortization, or DD&A, includes the systematic expensing of the capitalized costs incurred to acquire, explore and develop natural gas, NGLs and oil. As a “successful efforts” company, all costs associated with acquisition and development efforts and all successful exploration efforts are capitalized, and these costs are allocated to each unit of production using the units of production method.

 

   

General and administrative expense.    These costs include overhead, including payroll and benefits for employees, costs of maintaining headquarters, costs of managing production and development operations, compensation expense associated with incentive units, franchise taxes, audit and other professional fees, and legal compliance expenses. Certain of our and our predecessor’s employees hold incentive units in MRD LLC and/or, prior to the restructuring transactions, certain subsidiaries of MRD LLC, that may, upon vesting, entitle the holders to a disproportionate share of future distributions by MRD LLC to its members after all of the members that have made capital contributions to MRD LLC and/or certain subsidiaries have received cumulative distributions in respect of their membership interest equal to specified rates of return.

 

   

Interest expense.    Both the MRD and MEMP Segments finance a portion of their working capital requirements and acquisitions with borrowings under revolving credit facilities and senior note issuances. As a result, both the MRD and MEMP Segments incur substantial interest expense that is affected by both fluctuations in interest rates and financing decisions. We expect to continue to incur significant interest expense as we continue to grow.

 

   

Income tax expense.    MRD LLC, our predecessor, is a limited liability company not subject to federal income taxes. Accordingly, no provision for federal income taxes has been provided for in our historical results of operations because taxable income was passed through to MRD LLC’s members. Although we are a corporation under the Internal Revenue Code, subject to federal income taxes at a statutory rate of 35% of pretax earnings, we do not expect to report any income tax benefit or expense until the consummation of this offering.

 

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Results of Operations

 

Consolidated

 

Selected consolidated and combined results of operations for the years ended December 31, 2013 and 2012 are presented below and have been derived from our predecessor’s consolidated and combined financial statements included elsewhere in this prospectus. Also see our predecessor’s consolidated and combined financial statements and related notes included elsewhere in this prospectus for a description of our predecessor’s “previous owners.”

 

    For Year
Ended December  31,
 
    2013     2012  
    (in thousands)  
             

Oil & natural gas sales

  $ 571,948      $ 393,631   

Lease operating

    113,640        103,754   

Exploration

    2,356        9,800   

Production and ad valorem taxes

    27,146        23,624   

Depreciation, depletion, and amortization

    184,717        138,672   

Impairment of proved oil and natural gas properties

    6,600        28,871   

General and administrative

    125,358        69,187   

(Gain) loss on commodity derivative instruments

    (29,294     (34,905

(Gain) loss on sale of properties

    (85,621     (9,761

Interest expense, net

    69,250        33,238   

Net income (loss)

    151,332        26,997   

 

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

 

Our predecessor recorded net income of $151.3 million in 2013 compared to net income of $27.0 million in 2012. The increase in net income was primarily due to increases in revenues and gains on the sale of properties, partially offset by increases in DD&A, general and administrative expenses and interest expense.

 

   

Oil and natural gas revenues were $571.9 million, an increase of $178.3 million from 2012. Production increased 28,062 MMcfe (approximately 37%) while the average realized sales price increased $0.31 per Mcfe. Production increases were primarily due to acquisitions and drilling activities in North Louisiana and East Texas. The favorable volume variance contributed to a $147.2 million increase in revenues and the favorable pricing variance contributed to a $31.1 million increase in revenues.

 

   

The $46.0 million increase in DD&A expense was primarily due to increased production volumes related to acquisitions and drilling activities in North Louisiana and East Texas. Increased production volumes increased DD&A expense by $51.8 million, while a 3% decrease in the DD&A rate between periods decreased DD&A expense by $5.8 million.

 

   

During 2013, BlueStone sold its remaining interests in certain properties in East Texas to a third party and recognized a gain of $89.5 million. This gain was partially offset by a loss of $6.8 million recorded by Black Diamond on the sale of certain of its Wyoming properties. During 2012, the previous owners of oil and gas properties acquired by MEMP recognized a gain of approximately $9.8 million related to the sale of properties in West Texas.

 

   

Interest expense was $69.3 million in 2013, an increase of $36.0 million from 2012. The increase in interest expense was primarily due to higher levels of indebtedness as debt outstanding was $939.4 million at December 31, 2012 compared to $1,663.2 million at December 31, 2013.

 

Please see segment discussion below for further information regarding changes in other line items on a segment basis.

 

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MRD Segment

 

The MRD Segment’s consolidated and combined results of operations for the years ended December 31, 2013 and 2012 presented below have been derived from our predecessor’s consolidated and combined financial statements included elsewhere in this prospectus. Please see the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for information regarding business segments. The comparability of the results of operations among the periods presented is impacted by the following significant transactions:

 

   

the sale by BlueStone of substantially all of its assets in July 2013 for approximately $117.9 million, which resulted in the recognition of a $89.5 million gain;

 

   

the acquisition of oil and gas properties by WildHorse Resources in Louisiana in March 2013 for approximately $67.1 million; and

 

   

the acquisition by WildHorse Resources of oil and gas properties in East Texas and North Louisiana in May 2012 for a net purchase price of approximately $77.5 million.

 

In addition to the transactions affecting comparability of the results of operations of the MRD Segment among the periods presented, the results of operations of the MRD Segment following the completion of this offering will be affected by incremental public company expenses and general and administrative costs.

 

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In connection with the closing of this offering and the restructuring transactions, we will acquire substantially all of MRD LLC’s assets other than BlueStone, MRD Royalty, MRD Midstream, Classic Pipeline, the MEMP subordinated units and the remaining cash held in the debt service reserve account established in connection with the issuance of the PIK notes. At December 31, 2013, BlueStone’s total assets were less than 1% of both our consolidated and MRD Segment total assets. BlueStone’s total revenues were approximately 3% of our consolidated total revenues and 7% of the MRD Segment’s total revenues for the year ended December 31, 2013. BlueStone’s production volumes were approximately 2% of our consolidated production volumes and 4% of the MRD Segment’s production volumes for the year ended December 31, 2013.

 

     For Year
Ended December  31,
 
         2013             2012      
     (in thousands)  
              

Oil & natural gas sales

   $ 230,751      $ 138,032   

Lease operating

     25,006        24,438   

Exploration

     1,226        7,337   

Production and ad valorem taxes

     9,362        7,576   

Depreciation, depletion, and amortization

     87,043        62,636   

Impairment of proved oil and natural gas properties

     2,527        18,339   

General and administrative

     81,758        38,414   

(Gain) loss on commodity derivative instruments

     (3,013     (13,488

(Gain) loss on sale of properties

     (82,773     (2

Interest expense, net

     27,349        12,802   

Net income (loss)

     82,243        (14,641

Natural gas and oil revenue:

    

Oil sales

   $ 66,961      $ 35,264   

NGL sales

     53,881        36,611   

Natural gas sales

     109,909        66,157   
  

 

 

   

 

 

 

Total natural gas and oil revenue

   $ 230,751      $ 138,032   
  

 

 

   

 

 

 

Production Volumes:

    

Oil (MBbls)

     665        369   

NGLs (MBbls)

     1,457        898   

Natural gas (MMcf)

     34,092        24,130   
  

 

 

   

 

 

 

Total (MMcfe)

     46,819        31,731   
  

 

 

   

 

 

 

Average net production (MMcfe/d)

     128.3        86.7   
  

 

 

   

 

 

 

Average sales price:

    

Oil (per Bbl)

   $ 100.76      $ 95.56   

NGL (per Bbl)

     36.99        40.78   

Natural gas (per Mcf)

     3.22        2.74   
  

 

 

   

 

 

 

Total (Mcfe)

   $ 4.93      $ 4.35   
  

 

 

   

 

 

 

Average unit costs per Mcfe:

    

Lease operating expense

   $ 0.53      $ 0.77   

Production and ad valorem taxes

   $ 0.20      $ 0.24   

General and administrative expenses

   $ 1.75      $ 1.21   

Depletion, depreciation, and amortization

   $ 1.86      $ 1.97   

 

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Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

 

The MRD Segment recorded net income of $82.2 million in 2013 compared to a net loss of $14.6 million in 2012. The increase in net income was primarily due to gains on sales of properties and increased production.

 

   

Oil and natural gas revenues were $230.8 million in 2013, an increase of $92.7 million from 2012. Production increased 15,088 MMcfe (approximately 48%) while the average realized sales price increased $0.58 per Mcfe. Production volume increases were primarily due to acquisitions and drilling activities in the Cotton Valley formation in North Louisiana and East Texas. The favorable volume variance contributed to a $65.6 million increase in revenues, and the favorable pricing variance contributed to a $27.1 million increase in revenues.

 

   

Lease operating expenses were $25.0 million in 2013, an increase in $0.6 million from 2012. This increase was primarily due to acquisitions and drilling activities in the Cotton Valley formation in North Louisiana and East Texas. However, on a per Mcfe basis, lease operating expenses decreased by $0.24 per Mcfe as certain items, such as direct labor and materials and supplies, generally remain relatively fixed across broad production volume ranges.

 

   

The $24.4 million increase in DD&A expense was primarily due to increased production volumes related to acquisitions and drilling activities in the Cotton Valley formation in North Louisiana and East Texas. Increased production volumes increased DD&A expense by $29.8 million, while a 6% decrease in the DD&A rate between periods decreased DD&A expense by $5.4 million. On a per Mcfe basis, DD&A expense decreased by $0.11 per Mcfe from 2012 to 2013. An increase in proved reserve volumes more than offset the impact of increases to the depletable cost base.

 

Generally, if reserve volumes are revised up or down, then the DD&A rate per unit of production will change inversely. However, if the depletable base changes, then the DD&A rate moves in the same direction. Absolute or total DD&A, as opposed to the rate per unit of production, generally moves in the same direction as production volumes.

 

   

During 2013 and 2012, the MRD Segment recorded impairments of $2.5 million and $18.3 million, respectively, primarily related to certain fields in East Texas. For these impairments, the estimated future cash flows expected from properties in these fields were compared to their carrying values and determined to be unrecoverable. Downward revisions due to performance and declines in natural gas prices triggered the 2013 and 2012 impairments, respectively.

 

   

General and administrative expenses were $81.8 million in 2013, an increase of $43.3 million from 2012. The increase in general and administrative expenses was primarily due to growth in employees as a result of acquisitions and development activities and incentive unit compensation expense. General and administrative expenses during 2013 included recognition of approximately $43.3 million of compensation expense related to an incentive unit payments to certain key management members of certain MRD LLC subsidiaries compared to approximately $9.5 million recorded in 2012.

 

   

Gains on commodity derivative instruments of $3.0 million were recognized during 2013, of which $12.2 million consisted of cash settlements received. Gains on commodity derivative instruments of $13.5 million were recognized during 2012, of which $30.2 million consisted of cash settlements received. The decrease in cash settlements received was primarily due to higher natural gas prices.

 

Given the volatility of commodity prices, it is not possible to predict future changes in fair value or cash settlements that will ultimately be realized upon settlement of the open positions in future years. If commodity prices at settlement are lower than the prices of the settled positions, the derivative contracts are expected to mitigate the otherwise negative effect on earnings of lower oil, natural gas and NGL prices. However, if commodity prices at settlement are higher than the prices of the settled positions, the derivative contracts are expected to dampen the otherwise positive effect on earnings of higher oil, natural gas and NGL prices and will, in this context, be viewed as having resulted in an opportunity cost.

 

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During 2013, BlueStone entered into an agreement with a publicly traded third party to sell its remaining interest in certain properties in the Mossy Grove Prospect in Walker and Madison Counties located in East Texas and recognized a gain of $89.5 million. This gain was offset by a loss of $6.8 million recorded by Black Diamond on the sale of certain of its Wyoming oil and gas properties. During 2012, gains of less than $0.1 million were recognized by the MRD Segment.

 

   

Net interest expense during 2013 was $27.3 million, including amortization of deferred financing fees of approximately $2.5 million and losses on interest rate swaps of $0.2 million. Net interest expense during 2012 was $12.8 million, including amortization of deferred financing fees of approximately $1.6 million and losses on interest rate swaps of $1.2 million. The increase in net interest expense is primarily the result of higher level of indebtedness during 2013 compared to 2012.

 

MEMP Segment

 

The MEMP Segment’s consolidated and combined results of operations for the years ended December 31, 2013 and 2012 presented below have been derived from MRD LLC’s consolidated and combined financial statements included elsewhere in this prospectus.

 

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The comparability of the results of operations among the periods presented is impacted by the following significant transactions:

 

   

two separate third party acquisitions by MEMP of assets in East Texas in May and September 2012, respectively, for a net purchase price of approximately $126.9 million;

 

   

the acquisition of working interests, royalty interests and net revenue interests located in the Permian Basin in July 2012 for a net purchase price of approximately $74.7 million; and

 

   

multiple acquisitions of operated and non-operated interests in certain oil and natural gas properties primarily located in the Permian Basin for an aggregate net purchase price of $75.9 million.

 

     For Year
Ended December  31,
 
         2013             2012      
     (in thousands)  
              

Oil & natural gas sales

   $ 341,197      $ 255,608   

Lease operating

     88,893        80,116   

Exploration

     1,130        2,463   

Production and ad valorem taxes

     17,784        16,048   

Depreciation, depletion, and amortization

     97,269        76,036   

Impairment of proved oil and natural gas properties

     54,362        10,532   

General and administrative

     43,495        30,342   

(Gain) loss on commodity derivative instruments

     (26,281     (21,417

(Gain) loss on sale of properties

     (2,848     (9,759

Interest expense, net

     41,901        20,436   

Net income

     20,268        46,518   

Natural gas and oil revenue:

    

Oil sales

   $ 171,095      $ 145,103   

NGL sales

     51,215        26,647   

Natural gas sales

     118,887        83,858   
  

 

 

   

 

 

 

Total natural gas and oil revenue

   $ 341,197      $ 255,608   
  

 

 

   

 

 

 

Production Volumes:

    

Oil (MBbls)

     1,764        1,519   

NGLs (MBbls)

     1,632        745   

Natural gas (MMcf)

     35,924        29,744   
  

 

 

   

 

 

 

Total (MMcfe)

     56,303        43,329   
  

 

 

   

 

 

 

Average net production (MMcfe/d)

     154.3        118.4   
  

 

 

   

 

 

 

Average sales price:

    

Oil (per Bbl)

   $ 96.98      $ 95.54   

NGL(per Bbl)

     31.38        35.75   

Natural gas (per Mcf)

     3.31        2.82   
  

 

 

   

 

 

 

Total (Mcfe)

   $ 6.06      $ 5.90   
  

 

 

   

 

 

 

Average unit costs per Mcfe:

    

Lease operating expense

   $ 1.58      $ 1.85   

Production and ad valorem taxes

   $ 0.32      $ 0.37   

General and administrative expenses

   $ 0.77      $ 0.70   

Depletion, depreciation, and amortization

   $ 1.73      $ 1.75   

 

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

 

MEMP recorded net income of $20.3 million in 2013 compared to income of $46.5 million 2012.

 

   

Oil and natural gas revenues were $341.2 million in 2013, an increase of $85.6 million from 2012. Production increased 12,974 MMcfe (approximately 30%) while the average realized sales price increased

 

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$0.16 per Mcfe. The favorable volume variance contributed to a $76.6 million increase in revenues, whereas the favorable pricing variance contributed to a $9.0 million decrease in revenues.

 

   

Lease operating expenses were $88.9 million in 2013, an increase of $8.8 million from 2012. Production and ad valorem taxes were $17.8 million in 2013, an increase of $1.7 million from 2012. Both lease operating expenses and production and ad valorem taxes increased primarily due to increased production volumes associated with properties acquired during both 2012 and 2013 and increased drilling activities.

 

   

The increase in DD&A expense was primarily due to increased production volumes related to acquisitions in 2012 and 2013 and increased drilling activities. Increased production volumes caused DD&A expense to increase by $22.8 million, while a 1% change in the DD&A rate between periods caused DD&A expense to decrease by $1.5 million. An increase in proved reserve volumes more than offset the impact of increases to the depletable cost base.

 

   

During 2013, MEMP recorded $54.4 million of impairments consisting of $50.3 million related to certain properties in East Texas and $4.1 million related to certain properties in South Texas. For the East Texas properties, the estimated future cash flows expected from these properties were compared to their carrying values and determined to be unrecoverable as a result of downward revisions of estimated proved reserves based upon updated well performance data. In South Texas, the estimated future cash flows expected from these properties were compared to their carrying values and determined to be unrecoverable as a result of a downward revision of estimated proved reserves based on pricing terms specific to these properties. During 2012, MEMP recorded impairments of $10.5 million primarily related to properties in the Permian Basin. The 2012 impairments were a result of downward revisions of estimated proved reserves due to unfavorable drilling results in the area.

 

   

General and administrative expenses were $43.5 million in 2013, an increase of $13.2 million. The increase in general and administrative expenses was primarily due to growth in employees as a result of acquisitions and drilling activities. General and administrative expenses for 2013 included $3.6 million of non-cash unit-based compensation expense and $6.7 million of acquisition-related costs. General and administrative expenses for 2012 were $30.3 million and included $1.4 million of non-cash unit-based compensation expense and $4.1 million of acquisition-related costs.

 

   

Net gains on commodity derivative instruments of $26.3 million were recognized during 2013, of which $19.9 million consisted of cash settlements. Net gains on commodity derivative instruments of $21.4 million were recognized during 2012, of which $44.1 million consisted of cash settlements. The decrease in cash settlements was primarily due to higher natural gas prices.

 

   

During 2013, a gain of approximately $2.8 million was recorded due to the sale of certain non-operated properties in East Texas. During 2012, a gain of approximately $9.8 million was recognized related to the sale of properties in Garza and Ector Counties in Texas.

 

   

Net interest expense during 2013 was $41.9 million, including amortization of deferred financing fees of approximately $5.8 million and gains on interest rate swaps of $1.5 million. Net interest expense during 2012 was $20.4 million, including amortization of deferred financing fees of approximately $0.6 million and losses on interest rate swaps of $4.0 million. The increase in net interest expense is primarily the result of higher level of indebtedness during 2013 compared to 2012.

 

Liquidity and Capital Resources

 

Although results are consolidated for financial reporting, the MRD and MEMP Segments operate with independent capital structures. With the exception of cash distributions paid to the MRD Segment by the MEMP Segment related to MEMP partnership interests held by MRD LLC, the cash needs of each segment have been met independently with a combination of operating cash flows, asset sales, credit facility borrowings and the issuance of equity. We expect that the cash needs of each of the MRD Segment and the MEMP Segment will continue to be met independently of each other with a combination of these funding sources.

 

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MRD Segment

 

Historically, the primary sources of liquidity have been through borrowings under credit facilities, capital contributions from NGP and certain members of management, borrowings under a second lien term loan facility, asset sales, including dropdowns to MEMP, and net cash provided by operating activities. The primary use of cash has been for the exploration, development and acquisition of natural gas, NGLs and oil properties. As we pursue reserve and production growth, we continually monitor what capital resources, including equity and debt financings, are available to meet future financial obligations, planned capital expenditure activities and liquidity requirements. The future success in growing proved reserves and production will be highly dependent on the capital resources available. As of December 31, 2013, we had 1,582 identified gross potential horizontal well locations, which will take many years to develop. Additionally, the proved undeveloped reserves will require an estimated $1.3 billion of development capital over the next five years according to our reserve report as of December 31, 2013. A significant portion of this capital requirement will be funded out of operating cash flows. However, we may be required to generate or raise significant capital to conduct drilling activities on these identified potential well locations and to finance the development of proved undeveloped reserves.

 

We expect that the primary sources of liquidity and capital resources after the consummation of this offering will be cash flows generated by operating activities and borrowings under revolving credit facilities. We will also have the ability to issue additional equity and debt as needed through private or public offerings.

 

After the completion of this offering, we believe our cash flows provided by operating activities and availability under our revolving credit facility will provide us with the financial flexibility and wherewithal to meet our cash requirements, including normal operating needs, and pursue our currently planned 2014 development drilling activities. However, future cash flows are subject to a number of variables, including the level of natural gas production and prices, and significant additional capital expenditures will be required to more fully develop our properties and acquire additional properties. We cannot assure you that operations and other needed capital will be available on acceptable terms, or at all.

 

Capital Budget

 

During 2013, we invested approximately $190 million of capital at the MRD Segment to drill 31 gross (21.3 net) wells. A substantial portion of our development program is focused on horizontal drilling of liquids rich wells in the Terryville Complex, where we spent approximately $163 million in capital expenditures to drill 15 gross (12.1 net) horizontal wells during 2013.

 

In 2014, we have budgeted a total of $316 million to drill and complete 46 gross (39 net) operated wells and to participate in 12 gross (1.1 net) non-operated wells. We expect to fund our 2014 development primarily from cash flows from operations. The majority of our drilling locations and our 2014 development program are focused on the Terryville Complex, where we plan to invest $264 million on drilling and completing 33 gross (28 net) horizontal wells and 2 gross (2.0 net) vertical wells. We plan to run four to five rigs during 2014 targeting primarily our four primary zones within the Cotton Valley — the Upper Red, Lower Red, Lower Deep Pink and Upper Deep Pink. Total vertical depth of these zones ranges from 8,200 to 11,200 feet.

 

In our East Texas properties in the Joaquin Field, we plan to spend development capital of $36 million running one rig to drill 8 gross (6 net) horizontal wells targeting the Cotton Valley formation at vertical depths of 6,000 to 10,000 feet.

 

In our Rockies & Other area, we plan to spend $12 million of development capital, primarily in the Tepee Field in the Piceance Basin in Colorado focused on completing 3 wells drilled in fourth quarter of 2013 and running 1 rig to drill an additional 3 operated wells. We also plan to spend an additional $4 million to participate in 12 horizontal wells operated by SandRidge Energy in the Mississippian oil play of Northern Oklahoma.

 

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Cash Flows from Operating, Investing and Financing Activities

 

The following tables summarize both consolidated/combined and segment cash flows from operating, investing and financing activities for the periods indicated. For information regarding the individual components of our cash flow amounts, see the Statements of Consolidated and Combined Cash Flows included elsewhere in this prospectus.

 

Consolidated & Combined

 

     For Year
Ended December 31,
 
     2013      2012  
               

Net cash provided by operating activities

   $ 277,823       $ 240,404   

Net cash used in investing activities

     367,443         606,738   

Net cash provided by financing activities

     117,950         361,761   

 

MRD Segment

 

     For Year
Ended December 31,
 
           2013               2012      
     (unaudited)  

Net cash provided by operating activities

   $ 83,910      $ 84,172   

Net cash used in investing activities

    

Acquisition of oil and gas properties

   $ (67,098   $ (83,055

Additions to oil and gas properties

     (198,340     (165,203

Additions to other property and equipment

     (2,432     (1,267

Equity investments in MEMP Segment

     (521     (206

Distributions received from MEMP Segment related to partnership interests

     26,006        19,263   

Additions to restricted cash

     (49,347     —     

Proceeds from the sale of oil and gas properties to third parties

     151,187        —     

Proceeds from the sale of MEMP common units

     135,012        —     

Other

     —          (3
  

 

 

   

 

 

 

Net cash used in investing activities

   $ (5,533   $ (230,471
  

 

 

   

 

 

 

Net cash provided by financing activities

    

Advances on revolving credit facilities

   $ 174,400      $ 228,450   

Payments on revolving credit facilities

     (280,500     (129,750

Borrowings under second lien term loan

     325,000        —     

Proceeds from the issuance of PIK notes

     343,000        —     

Loan origination fees

     (20,267     (1,276

Purchase of noncontrolling interests in consolidated subsidiaries

     (13,865     —     

Contribution from NGP affiliate

     —          7,033   

Contributions from MEMP Segment

     180,260        29,280   

Distributions to noncontrolling interests

     (7,446     —     

Distributions to MEMP Segment

     —          (1,900

Distributions to Funds

     (732,362     —     

Distributions made by previous owners

     (2,590     (2,317

Other cash transfers from MEMP Segment

     —          3,751   

Other

     (4,593     —     
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

   $ (38,963   $ 133,271   
  

 

 

   

 

 

 

 

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

 

Operating Activities.    Net cash flows provided by operating activities were $83.9 million in 2013 compared to $84.2 million in 2012. Although production volumes increased 15,088 MMcfe (approximately 48%), net cash flows from operating activities were impacted by $43.3 million of compensation expense recognized in 2013 related to incentive unit payments, which was an increase of $33.8 million from 2012.

 

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Investing Activities.    Cash used in investing activities was $5.5 million during 2013 compared to $230.5 million in 2012. Cash used for the acquisition of oil and gas properties was $67.1 million in 2013 compared to $83.1 million in 2012. The 2013 acquisition was for certain properties located in Louisiana that were purchased in March 2013. The 2012 acquisitions consisted primarily of properties located in East Texas and North Louisiana.

 

Cash used for additions to oil and gas properties was $198.3 million in 2013 compared to $165.2 million in 2012. The additions in both 2013 and 2012 consisted primarily of drilling and completion activities focused on the Cotton Valley formation in North Louisiana and East Texas.

 

Distributions of $26.0 million were received in 2013 from MEMP related to the common and subordinated units owned by MRD LLC as compared to $19.3 million received in 2012. In November 2013, MRD LLC sold 7,061,294 MEMP common units in a public offering, which generated net proceeds of $135.0 million.

 

Proceeds from the sale of oil and gas properties totaled $151.2 million in 2013. In May 2013, Black Diamond sold certain of its Wyoming properties for approximately $33.0 million. In July 2013, BlueStone sold its interest in certain properties located in Walker and Madison Counties in East Texas for approximately $117.9 million. There were no sales of oil and gas properties in 2012.

 

Additions to restricted cash totaled $49.3 million and were primarily related to the $50.0 million debt service reserve established in connection with the issuance of the PIK notes in December 2013.

 

Financing Activities.    Cash used in financing activities was $39.0 million in 2013 compared to cash provided by financing activities of $133.3 million in 2012. Net payments under revolving credit facilities were $106.1 million in 2013 compared to net borrowings of $98.7 million in 2012. In June 2013, WildHorse Resources received gross proceeds of $325.0 million under its second lien term loan and in December 2013, MRD LLC received gross proceeds of $343.0 million related to the issuance of the PIK notes. Deferred financing costs were $20.3 million in 2013 compared to $1.3 million in 2012. The increase in deferred financing costs was primarily due to the WildHorse second lien term loan and the PIK notes.

 

In November 2013, MRD LLC purchased the noncontrolling interests in Black Diamond, Classic GP and Classic for $13.9 million of consideration.

 

Cash received from the MEMP Segment in 2013 related to the sale of assets from the MRD Segment to the MEMP Segment was $180.3 million compared to $29.3 million.

 

Distributions to the Funds during 2013 were $732.4 million. From time to time, MRD LLC has made distributions of cash to the Funds. The timing and amount of these cash distributions is within the discretion of the board of managers of MRD LLC and is based, in part, upon available cash, the performance of its business, and other relevant factors. In 2013, substantially all of the cash distributed to the Funds was sourced from long term borrowings or sales of assets or equity in MEMP. The sources to fund these distributions primarily included $225.0 million from the WildHorse second lien term loan, $210.0 million from the December 2013 PIK notes, $63.8 million from the sale of properties to third parties, $125.0 million from the sale of properties to MEMP and $105.0 million from the sale of 7,061,294 MEMP common units that MRD LLC owned. Distributions to noncontrolling interests and previous owners totaled $15.9 million in 2013 compared to $2.3 million in 2012.

 

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MEMP Segment

 

     For Year
Ended December  31,
 
             2013                     2012          
     (unaudited)  

Net cash provided by operating activities

   $ 193,697      $ 156,844   

Net cash used in investing activities:

    

Acquisition of oil and natural gas properties

   $ (38,664   $ (277,623

Additions to oil and gas properties

     (161,675     (107,789

Additions to other property and equipment

     (238     (1,748

Additions to restricted investments

     (5,361     (4,599

Proceeds from the sale of oil and gas properties

     4,525        34,521   

Other

     —          29   
  

 

 

   

 

 

 

Net cash used in investing activities

   $ (201,413   $ (357,209
  

 

 

   

 

 

 

Net cash provided by financing activities

    

Advances on revolving credit facilities

   $ 958,355      $ 391,000   

Payments on revolving credit facilities

     (1,485,537     (121,819

Proceeds from the issuances of senior notes

     688,563        —     

Loan origination fees

     (20,908     (2,225

Contributions from previous owners

     7,233        44,072   

Contribution from NGP affiliate

     2,013        38,125   

Contribution from general partner

     521        206   

Contributions from MRD Segment

     —          1,900   

Net proceeds from public equity offering

     490,138        194,304   

Distributions to partners

     (96,643     (34,436

Distributions to MRD Segment

     (180,260     (29,280

Distributions to NGP affiliates

     (355,495     (242,174

Distributions made by previous owners

     (2,552     (26,455

Other cash transfers to MRD Segment

     —          (3,751

Other

     (9,013     (646
  

 

 

   

 

 

 

Net cash provided by financing activities

   $ (3,585   $ 208,821   
  

 

 

   

 

 

 

 

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

 

Operating Activities.    Key drivers of net operating cash flows are commodity prices, production volumes and operating costs. Net cash flows provided by operating activities increased during 2013 primarily due to an increase in production volumes as a result of acquisitions and increased drilling activities. Cash flows provided by operating activities at the MEMP Segment are used primarily to fund distributions to its partners and additions to oil and gas properties. The previous owners primarily used cash flows provided by operating activities to fund its exploration and development expenditures.

 

Investing Activities.    Cash used in investing activities during 2013 was $201.4 million, of which $38.7 million was used to acquire oil and gas properties located in Wyoming and East Texas and $161.7 million was used for additions to oil and gas properties. Cash used in investing activities during 2012 was $357.2 million, of which $277.6 million was used to acquire oil and gas properties and $107.8 million was used for additions to oil and gas properties. The 2012 acquisitions included $126.9 million of acquisitions in East Texas and $150.7 million of acquisitions in the Permian Basin.

 

Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with the offshore Southern California oil properties. For the years ended December 31, 2013 and 2012, additions to restricted investments were $5.4 million and $4.6 million, respectively.

 

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Proceeds from the sale of oil and gas properties were $4.5 million in 2013 compared to $34.5 million in 2012. The 2013 sales primarily consisted of certain non-operated properties in East Texas while the 2012 sales primarily consisted of certain properties in Garza and Ector counties located in West Texas.

 

Financing Activities.    Cash used in financing activities was $3.6 million in 2013 compared to cash provided by financing activities of $208.8 million in 2012.

 

MEMP generated total net proceeds of $490.1 million from two separate equity offerings in 2013 compared to $194.3 million in 2012. In March 2013, MEMP issued 9,775,000 common units to the public at an offering price of $18.35 per unit generating net proceeds of approximately $171.8 million. In October 2013, MEMP issued 16,675,000 common units to the public at an offering price of $19.90 per unit generating net proceeds of approximately $318.3 million. In December 2012, MEMP generated net proceeds of $194.3 million from a public offering of common units.

 

MEMP completed a private placement of 7.625% senior notes due 2021 (the “Senior Notes”) with two additional issuances during 2013. MEMP issued $300.0 million aggregate principal amount of the Senior Notes at 98.521% of par in April 2013, an additional $100.0 million aggregate principal amount at 102.0% of par in May 2013 and an additional $300.0 million aggregate principal amount at 97.0% of par in October 2013. Total proceeds, net of discounts, from the issuance of the Senior Notes were $688.6 million during 2013.

 

Distributions to partners were $96.6 million during the year ended December 31, 2013 compared to $34.4 million during the year ended December 31, 2012 due to increases in both declared distribution rates per unit and increases in the number of outstanding units. Distributions to the MRD Segment totaled $180.3 million in 2013 compared to $29.3 million in 2012. These distributions were primarily associated with the acquisition of assets by MEMP from the MRD Segment. Distributions to NGP affiliates were $355.5 million in 2013 compared to $242.2 million in 2012. The 2013 distribution was associated with the acquisition of assets by MEMP from certain affiliates of NGP in October 2013. The 2012 distribution was associated with the acquisition of assets located offshore Southern California from an affiliate of NGP.

 

The previous owners received contributions of $7.2 million during 2013 compared to $44.1 million during 2012. Distributions made by the previous owners totaled $2.6 million in 2013 compared to $26.5 million in 2012.

 

MEMP had net payments of $527.2 million during 2013 related to revolving credit facilities. Borrowings under revolving credit facilities were used primarily to fund distributions associated with acquisitions of oil and gas properties from affiliates of NGP. Proceeds from the issuance of the Senior Notes and common unit public equity offerings were used to repay borrowings under MEMP’s revolving credit facility. During 2012, MEMP had net borrowings of $269.2 million related to revolving credit facilities. These borrowings were primarily used to fund distributions associated with acquisitions of oil and gas properties from affiliates of NGP. Deferred financing costs of $20.9 million were incurred during 2013 associated with both the Senior Notes and MEMP’s revolving credit facility compared to $2.2 million incurred in 2012 related to revolving credit facilities.

 

Debt Agreements—MRD Segment

 

New Revolving Credit Facility

 

Concurrently with the closing of this offering, we anticipate that we will enter into a             -year $2.0 billion senior secured revolving credit facility with an initial borrowing base of $         million. We intend to redeem the PIK notes and repay all outstanding indebtedness under WildHorse Resources’ credit agreements (discussed below) with net proceeds generated from this offering and borrowings under our new credit agreement.

 

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MRD LLC Revolving Credit Agreement (Terminated) & PIK Notes (To Be Redeemed 30 Days After Closing)

 

On July 13, 2012, MRD LLC entered into a two-year $50.0 million senior secured revolving credit facility with an initial borrowing base of $35.0 million. MRD LLC pledged 7,061,294 MEMP common units and 5,360,912 MEMP subordinated units as security under the credit facility as well as its oil and gas properties and certain other assets of MRD LLC. On November 20, 2012, MRD LLC entered into a first amendment to its credit agreement, which among other things: (i) increased the aggregate maximum credit to $1.0 billion (ii) increased the borrowing base to $120.0 million and (iii) extended the maturity date to November 20, 2016. On April 25, 2013, MRD LLC entered into a second amendment to its credit agreement, which among other things: (i) increased the borrowing base to $170.0 million and (ii) designated Tanos together with its consolidating subsidiaries as additional guarantors.

 

On October 1, 2013, Tanos and its consolidating subsidiaries were removed as guarantors and the borrowing base was reduced to $120.0 million. On November 1, 2013, MRD LLC entered into a third amendment to its credit agreement, which among other things: (i) designated Black Diamond together with its consolidating subsidiaries as additional guarantors, (ii) reduced the borrowing base to $100.0 million, and (iii) permitted second lien indebtedness. On November 22, 2013, the borrowing base was automatically reduced to $60.0 million upon MRD LLC’s sale of 7,061,294 MEMP common units in a secondary offering. On December 18, 2013, indebtedness then outstanding under the revolving credit facility of $59.7 million and all accrued interest were paid off in full and the revolving credit facility was terminated in connection with the issuance of the PIK notes discussed below.

 

On December 18, 2013, the MRD Issuers completed a private placement of $350.0 million in aggregate principal amount of the PIK notes. The PIK notes were issued at 98% of par and will mature on December 15, 2018. Net proceeds from the private offering were used: (i) to repay all indebtedness then outstanding under MRD LLC’s then-existing revolving credit facility, (ii) to establish a cash reserve of $50.0 million for the payment of interest on the PIK notes, (iii) to pay a $210.0 million distribution to the Funds, and (iv) for general company purposes.

 

Interest on the PIK notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2014. Subject to conditions in the indenture governing the PIK notes, MRD LLC is required to pay interest on the PIK notes in cash or through issuing additional notes (such an issuance, “PIK Interest”). The interest rate on the PIK notes is 10.00% per annum for interest paid in cash or 10.75% per annum for PIK Interest. Any PIK Interest will be paid by issuing additional notes having the same terms as the PIK notes. PIK notes are subject to optional redemption at prices specified in the indenture plus accrued and unpaid interest, if any. The MRD Issuers may also be required to repurchase the PIK notes upon a change of control.

 

At the time the PIK notes were issued, all of MRD LLC’s subsidiaries other than MEMP and BlueStone and each of their respective subsidiaries were designated as restricted subsidiaries. The indenture governing the PIK notes contains customary covenants and restrictive provisions that apply to both MRD LLC and its restricted subsidiaries, many of which will terminate if at any time no default exists under the indenture and the PIK notes receive an investment grade rating from both of two specified ratings agencies. The PIK notes are fully and unconditionally guaranteed on a senior unsecured basis by all of MRD LLC’s restricted subsidiaries, except MEMP GP and WildHorse Resources.

 

WildHorse Resources is party to credit arrangements (discussed below) consisting of a credit agreement and a second lien term loan, which credit arrangements impose significant restrictions on WildHorse Resources, including limitations on WildHorse Resources’ ability to distribute cash to MRD LLC. For example, distributions from WildHorse Resources to MRD LLC are subject to certain conditions under WildHorse Resources’ credit arrangements and are limited to the lesser of (i) 50% of WildHorse Resources’ net income from July 1, 2013 together with, among other things, capital contributions and returns on investments and (ii) the lesser of (x) 50%

 

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of WildHorse Resources’ net income for the four fiscal quarters preceding any such distribution and (y) $45,000,000. WildHorse Resources’ credit arrangements also include other restrictions, including restrictions on WildHorse Resources’ ability to enter into transactions with its affiliates, including MRD LLC.

 

The indenture also provides for customary and other events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency, all outstanding PIK notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding PIK notes may declare all the PIK notes to be due and payable immediately.

 

Contemporaneous with the closing of this offering, we will issue a redemption notice to the holders of the PIK notes pursuant to which we will redeem all outstanding PIK notes 30 days after the delivery of such notice. On the redemption date, we will pay all principal and any applicable premium and accrued and unpaid interest on such notes with a portion of the net cash proceeds of this offering. Until the redemption date or any earlier discharge date of the PIK notes, we will use the amount to be paid to the holders of those notes to temporarily reduce amounts outstanding under our new revolving credit facility. We will be subject to the provisions of the PIK notes indenture until the redemption date or any earlier discharge date. If the closing of this offering occurs after June 15, 2014, we will reimburse MRD LLC for the approximately $17.2 million of interest paid by MRD LLC in respect of the PIK notes on June 15th.

 

WildHorse Resources Revolving Credit Facility and Second Lien Facility (To Be Terminated At Closing)

 

On May 12, 2010, WildHorse Resources entered into a revolving credit facility. Borrowings under the amended revolving credit facility are secured by liens on substantially all of WildHorse Resources’ properties, but in any event, not less than 80% of the total value of the WildHorse Resources’ oil and natural gas properties.

 

On April 3, 2013, WildHorse Resources entered into an amended and restated credit agreement. The new revolving credit facility provides for aggregate maximum credit amounts at any time of $1.0 billion, consisting of borrowings and letters of credit and has an initial borrowing base of $300.0 million. The new revolving credit facility matures on April 13, 2018. The borrowing base is subject to redetermination on at least a semi-annual basis. Borrowings under the revolving credit facility are secured by liens on substantially all of WildHorse Resources’ properties, but in any event, not less than 80% of the total value of the WildHorse Resources’ oil and natural gas properties.

 

On June 13, 2013, WildHorse Resources entered into a $325.0 million second lien term loan agreement that matures on December 13, 2018. No amount of second lien term loans once repaid may be reborrowed. Borrowings bear interest, at the borrower’s option, at either: (i) the Alternative Base Rate (as defined within each credit facility) plus 5.25% per annum or (ii) the applicable LIBOR plus 6.25% per annum. Borrowings under the second lien term loan agreement are secured by second-priority liens on substantially all of WildHorse Resources’ properties, but in any event, not less than 80% of the total value of the WildHorse Resources’ oil and natural gas properties. The priority of the security interests in the collateral and related creditors’ rights is set forth in an intercreditor agreement. The second lien term loan agreement contains customary affirmative and negative covenants, restrictive provisions and events of default.

 

On June 13, 2013, WildHorse Resources borrowed $325.0 million under its second lien term loan agreement and used such borrowings to reduce outstanding indebtedness under its revolving credit facility and to pay a one-time special $225.0 million distribution to MRD LLC. This $225.0 million distribution was subsequently distributed to the Funds.

 

In connection with the closing of this Offering, we anticipate that the WildHorse Resources’ revolving credit facility and second lien term loan will be repaid in full and terminated.

 

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Black Diamond Revolving Credit Facility (Terminated)

 

On July 27, 2011, the Black Diamond entered into a second amended and restated revolving credit facility, which extended the maturity date of the original agreement to May 9, 2015. Borrowings under the revolving credit facility are collateralized by Black Diamond’s oil and natural gas properties. On November 1, 2013, the Black Diamond revolving credit facility was terminated. There was no indebtedness outstanding or accrued interest payable on such date.

 

Debt Agreements—MEMP Segment

 

MEMP Revolving Credit Facility & Senior Notes

 

On December 14, 2011, Memorial Production Operating LLC (“OLLC”), a wholly-owned subsidiary of MEMP, entered into multi-year $1.0 billion senior secured revolving credit facility with an initial borrowing base of $300.0 million. A sixth amendment to the credit agreement was entered into on September 26, 2013, which among other things: (i) increased the facility from $1.0 billion to $2.0 billion and (ii) increased the borrowing base from $480.0 million to $920.0 million upon the closing of MEMP’s $603.0 million acquisition that closed October 1, 2013. On October 10, 2013, borrowing base was automatically reduced by $75.0 million in conjunction with the issuance of additional senior notes as discussed below in accordance with the terms of the credit facility. Borrowings under the revolving credit facility are secured by liens on substantially all of MEMP’s properties, but in any event, not less than 80% of the total value of MEMP’s oil and natural gas properties, and all of MEMP’s equity interests in OLLC and any future guarantor subsidiaries (other than San Pedro Bay Pipeline Company) and all of MEMP’s other assets including personal property. Additionally, borrowings under the revolving credit facility bear interest, at MEMP’s option, at: (i) the Alternative Base Rate defined as the greatest of (x) the prime rate as determined by the administrative agent, (y) the federal funds effective rate plus 0.50%, and (z) the one-month adjusted LIBOR plus 1.0% (adjusted upwards, if necessary, to the next 1/100th of 1%), in each case, plus a margin that varies from 0.50% to 1.50% per annum according to the borrowing base usage (which is the ratio of outstanding borrowings and letters of credit to the borrowing base then in effect), (ii) the applicable LIBOR plus a margin that varies from 1.50% to 2.50% per annum according to the borrowing base usage, or (iii) the applicable LIBOR Market Index plus a margin that varies from 1.75% to 2.75% per annum according to the borrowing base usage. The unused portion of the borrowing base will be subject to a commitment fee that varies from 0.375% to 0.50% per annum according to the borrowing base usage.

 

On April 17, 2013, MEMP and Finance Corp. completed a private placement of $300.0 million aggregate principal amount of 7.625% senior unsecured notes due 2021 (the “Senior Notes”). The Senior Notes were issued at 98.521% of par and are fully and unconditionally guaranteed (subject to customary release provisions) on a joint and several basis by all of the MEMP’s subsidiaries (other than Finance Corp., which is co-issuer of the Senior Notes, and certain immaterial subsidiaries). On May 23, 2013, the Issuers issued an additional $100.0 million aggregate principal amount of the Senior Notes at 102% of par. The Senior Notes will mature on May 1, 2021 with interest accruing at a rate of 7.625% per annum and payable semi-annually in arrears on May 1 and November 1 of each year, commencing November 1, 2013. The Senior Notes are governed by an indenture. The Senior Notes are subject to optional redemption at prices specified in the indenture plus accrued and unpaid interest, if any. The Issuers may also be required to repurchase the Senior Notes upon a change of control. The indenture contains customary covenants and restrictive provisions, many of which will terminate if at any time no default exists under the indenture and the Senior Notes receive an investment grade rating from both of two specified ratings agencies. The indenture also provides for customary and other events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to either of the Issuers, all outstanding Senior Notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding Senior Notes may declare all the Senior Notes to be due and payable immediately. The Issuers have agreed pursuant to registration rights agreements to file an exchange offer registration statement or, under certain circumstances, a shelf registration statement with respect to the Senior Notes no later than April 17, 2014.

 

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Previous Owner Revolving Credit Facilities (Terminated)

 

On October 1, 2013, the debt balance then outstanding under the Boaz and Crown revolving credit facilities and all accrued interest was paid off in full and these revolving credit facilities were terminated. On October 1, 2013, the debt balance then outstanding under the Stanolind and Propel Energy revolving credit facilities and all accrued interest was paid off in full by MEMP on behalf of Stanolind and Propel Energy, respectively.

 

Contractual Obligations

 

In the table below, we set forth MRD LLC’s consolidated and combined contractual obligations as of December 31, 2013. The contractual obligations that will actually be paid in future periods may vary from those reflected in the table because the estimates and assumptions are subjective.

 

     Payments Due by Period (in thousands)  

Contractual Obligations

   Total      2014      2015 - 2016      2017 - 2018      Beyond
2018
 

Revolving credit facility(1)

              

MRD Segment

   $ 203,100       $ —         $ —         $ 203,100       $ —     

MEMP Segment

     103,000         —           —           103,000         —     

Estimated interest payments(2)

              

MRD Segment

     20,242         4,671         9,342         6,229         —     

MEMP Segment

     14,227         3,348         6,695         4,184         —     

Notes and Second Lien Term Loan(3)

              

MRD Segment

     973,500         59,700         119,400         794,400         —     

MEMP Segment

     1,100,313         53,375         106,750         106,750         833,438   

Asset retirement obligations(4)

              

MRD Segment

     12,150         90         1,818         2,775         7,467   

MEMP Segment

     99,619         —           1,878         6,373         91,368   

Decommissioning Trust Agreement(5)

              

MRD Segment

     —           —           —           —           —     

MEMP Segment

     12,392         2,042         10,350         —           —     

Operating leases

              

MRD Segment

     16,340         1,840         4,153         5,091         5,256   

MEMP Segment

     3,985         549         976         410         2,050   

Compression services

              

MRD Segment

     583         572         11         —           —     

MEMP Segment

     6,507         6,507         —           —           —     

Drilling services

              

MRD Segment

     20,323         20,323         —           —           —     

MEMP Segment

     —           —           —           —           —     

Processing Plant Demand Fees

              

MRD Segment

     118,182         19,347         51,606         47,229         —     

MEMP Segment

     —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 2,704,463       $ 172,364       $ 312,979       $ 1,279,541       $ 939,579   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)   Represents the scheduled future maturities of principal amounts outstanding for the periods indicated. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for information regarding our revolving credit facilities.
(2)  

Estimated interest payments are based on the principal amount outstanding under revolving credit facilities at December 31, 2013. In calculating these amounts, we applied the weighted-average interest rate during 2013 associated with such debt. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for the weighted-average variable interest rate charged during 2013 under these credit facilities. In addition, the estimate of payments for interest gives effect to interest rate swap agreements that were in place at December 31, 2013.

 

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(3)   Represents the scheduled future interest payments and principal payments on the PIK notes, the Senior Notes and the WildHorse Resources second lien term loan. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for information regarding debt agreements.
(4)   Asset retirement obligations represent estimated discounted costs for future dismantlement and abandonment costs. These obligations are recorded as liabilities on our December 31, 2013 balance sheet. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for additional information regarding our asset retirement obligations.
(5)   Pursuant to a Bureau of Ocean Energy Management decommissioning trust agreement, the Partnership is required to fund a trust account to comply with supplemental regulatory bonding requirements related to decommissioning obligations for the offshore Southern California production facilities. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for additional information.

 

Critical Accounting Policies and Estimates

 

Natural Gas and Oil Properties

 

We use the successful efforts method of accounting to account for our natural gas and oil properties. Under this method, costs of acquiring properties, costs of drilling successful exploration wells, and development costs are capitalized. The costs of exploratory wells are initially capitalized pending a determination of whether proved reserves have been found. At the completion of drilling activities, the costs of exploratory wells remain capitalized if a determination is made that proved reserves have been found. If no proved reserves have been found, the costs of each of the related exploratory wells are charged to expense. In some cases, a determination of proved reserves cannot be made at the completion of drilling, requiring additional testing and evaluation of the wells. The costs of such exploratory wells are expensed if a determination of proved reserves has not been made within a twelve-month period after drilling is complete. Exploration costs such as geological, geophysical, and seismic costs are expensed as incurred.

 

As exploration and development work progresses and the reserves on these properties are proven, capitalized costs attributed to the properties are subject to depreciation and depletion. Depletion of capitalized costs is provided using the units-of-production method based on proved natural gas and oil reserves related to the associated field. Capitalized drilling and development costs of producing natural gas and oil properties are depleted over proved developed reserves and leasehold costs are depleted over total proved reserves.

 

On the sale or retirement of a complete or partial unit of a proved property or pipeline and related facilities, the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and any gain or loss is recognized.

 

Proved Natural Gas and Oil Reserves

 

The estimates of proved natural gas and oil reserves utilized in the preparation of the consolidated and combined financial statements are estimated in accordance with the rules established by the SEC and the FASB. These rules require that reserve estimates be prepared under existing economic and operating conditions using a trailing 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. We intend to use NSAI to prepare a reserve report as of December 31 of each year for a vast majority of our proved reserves and to prepare internal estimates of our proved reserves as of June 30 of each year.

 

Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. Oil and gas properties are depleted by field using the units-of-production method. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, future gross revenues, the amount of natural gas and oil reserves, the remaining estimated lives of natural gas and oil properties, or any combination of the above may be increased or reduced. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates.

 

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A decline in proved reserves may result from lower market prices, which may make it uneconomical to drill for and produce higher cost fields. In addition, a decline in proved reserve estimates may impact the outcome of our assessment of oil and gas producing properties for impairment.

 

Impairments

 

Proved natural gas and oil properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties, such as a downward revision of the reserve estimates, less than expected production, drilling results, higher operating and development costs, or lower commodity prices. The estimated undiscounted future cash flows expected in connection with the property are compared to the carrying value of the property to determine if the carrying amount is recoverable. If the carrying value of the property exceeds its estimated undiscounted future cash flows, the carrying amount of the property is reduced to its estimated fair value using Level 3 inputs. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties.

 

Asset Retirement Obligations

 

An asset retirement obligation associated with retiring long-lived assets is recognized as a liability on a discounted basis in the period in which the legal obligation is incurred and becomes determinable, with an equal amount capitalized as an addition to natural gas and oil properties, which is allocated to expense over the useful life of the asset. Generally, oil and gas producing companies incur such a liability upon acquiring or drilling a well. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value. Upon settlement of the liability, a gain or loss is recognized to the extent the actual costs differ from the recorded liability.

 

Incentive Units

 

The governing documents of MRD LLC and certain of MRD LLC’s subsidiaries, including WildHorse Resources and BlueStone, provide for the issuance of incentive units. The incentive units are subject to performance conditions that affect their vesting. Compensation cost is recognized only if the performance condition is probable of being satisfied at each reporting date.

 

WildHorse Resources, BlueStone and MRD LLC have each granted incentive units to certain of its members who were key employees at the time of grant. Holders of incentive units are entitled to distributions ranging from 10% to 31.5% when declared, but only after cumulative distribution thresholds (payouts) have been achieved. Payouts are generally triggered after the recovery of specified members’ capital contributions plus a rate of return.

 

Vesting of incentive units is generally dependent upon an explicit service period, a fundamental change as defined in the respective governing document, and achievement of payout. All incentive units not vested are forfeited if an employee is no longer employed. All incentive units will be forfeited if a holder resigns whether the incentive units are vested or not. If the payouts have not yet occurred, then all incentive units, whether or not vested, will be forfeited automatically (unless extended).

 

Revenue Recognition

 

Revenue from the sale of natural gas and oil is recognized when title passes, net of royalties due to third parties. Natural gas and oil revenues are recorded using the sales method. Under this method, revenues are recognized based on actual volumes of natural gas and oil sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. An asset or a liability is recognized to the extent that we have an

 

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imbalance in excess of our proportionate share of the remaining recoverable reserves on the underlying properties.

 

Derivative Instruments

 

Commodity derivative financial instruments (e.g., swaps, floors, collars, and put options) are used to reduce the impact of natural gas and oil price fluctuations. Interest rate swaps are used to manage exposure to interest rate volatility, primarily as a result of variable rate borrowings under credit facilities. Every derivative instrument is recorded in the balance sheet as either an asset or liability measured at its fair value. Changes in the derivative’s fair value are recognized currently in earnings as we have not elected hedge accounting for any of our derivative positions.

 

Income Tax

 

Our predecessor is organized as a pass-through entity for federal income tax purposes. As a result, members are responsible for federal income taxes on their share of our taxable income. Certain of our predecessor’s consolidated subsidiaries are taxed as corporations and subject to federal income taxes. Our predecessor is also subject to the Texas margin tax and certain aspects of the tax make it similar to an income tax as the tax is assessed on 1% of taxable margin apportioned to operations in Texas. Deferred taxes arise due to temporary differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis.

 

Our predecessor must recognize the tax effects of any uncertain tax positions it may adopt if the position taken is more likely than not sustainable based on its technical merits. If a tax position meets such criteria, the tax effect that would be recognized by us would be the largest amount of benefit with more than a 50% chance of being realized. There were no uncertain tax positions that required recognition in the financial statements at December 31, 2013 or 2012.

 

Upon closing of the offering, we will be treated as a taxable C corporation and will be subject to federal and certain state income taxes. Accordingly, a pro forma income tax provision has been disclosed as if our predecessor was a taxable corporation for all periods presented. A pro forma effective tax rate of 36.06% and 35.39% was used for the years ended December 31, 2013 and 2012, respectively. If MRD LLC had affected the change in tax status on December 31, 2013, MRD LLC would have recognized a deferred tax liability of approximately $114.9 million primarily related to the tax basis of its long-lived assets being less than its book basis in those assets. MRD LLC would not have recognized any material deferred tax assets.

 

Unaudited Pro Forma Earnings Per Share

 

MRD LLC has presented pro forma earnings per share for all periods presented. Pro forma net income (loss) per basic and diluted share is determined by dividing the pro forma net income (loss) by the number of common shares expected to be outstanding immediately following the Offering.

 

Off–Balance Sheet Arrangements

 

As of December 31, 2013, we had no off–balance sheet arrangements.

 

Recently Issued Accounting Pronouncements

 

For a discussion of recent accounting pronouncements that will affect us, see the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus.

 

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Emerging Growth Company

 

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, but we have irrevocably opted out of the extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates in which adoption of such standards is required for other public companies.

 

Quantitative and Qualitative Disclosures About Market Risk

 

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risk. The term “market risk” refers to the risk of loss arising from adverse changes in natural gas and oil prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of how we view and manage our ongoing market risk exposures. All of our market risk sensitive instruments were entered into for hedging purposes, rather than for speculative trading.

 

Commodity Price Risk

 

Our cash flow from operations is subject to many variables, the most significant of which is the volatility of natural gas and oil prices. Natural gas and oil prices are determined primarily by prevailing market conditions, which are dependent on regional and worldwide economic activity, weather and other factors beyond our control. Our future cash flow from operations will depend on the prices of natural gas and oil and our ability to maintain and increase production through acquisitions and exploitation and development projects.

 

To reduce the impact of fluctuations in natural gas and oil prices on our revenues, or to protect the economics of property acquisitions, we periodically enter into derivative contracts with respect to a portion of our projected natural gas and oil production through various transactions that fix the future prices received. These transactions may include price swaps, whereby we will receive a fixed price for our production and pay a variable market price to the contract counterparty. Additionally, we may enter into collars, whereby we receive the excess, if any, of the fixed floor over the floating rate or pays the excess, if any, of the floating rate over the fixed ceiling price. These hedging activities are intended to support natural gas and oil prices at targeted levels and to manage our exposure to natural gas and oil price fluctuations. We do not enter derivative contracts for speculative trading purposes. Our revolving credit facility contains various covenants and restrictive provisions which, among other things, limit our ability to enter into commodity price hedges exceeding a certain percentage of production.

 

For additional information regarding the volumes of our production covered by commodity derivative contracts and the average prices at which production is hedged as of December 31, 2013 and December 31, 2012, see the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus as well as the tables below.

 

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At December 31, 2013, the MRD Segment had the following open commodity positions:

 

     2014     2015     2016     2017  

Natural Gas Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (MMBtu)

     1,190,000        880,000        670,000        520,000   

Weighted-average fixed price

   $ 4.10      $ 4.19      $ 4.32      $ 4.45   

Collar contracts:

        

Average Monthly Volume (MMBtu)

     330,000        130,000        —          —     

Weighted-average floor price

   $ 4.09      $ 4.00      $ —        $ —     

Weighted-average ceiling price

   $ 5.24      $ 4.64      $ —        $ —     

Basis swaps:

        

Average Monthly Volume (MMBtu)

     270,000        180,000        220,000        200,000   

Spread

   $ (0.07   $ (0.09   $ (0.08   $ (0.08

Crude Oil Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (Bbls)

     18,000        6,000        —          —     

Weighted-average fixed price

   $ 91.66      $ 88.50      $ —        $ —     

Collar contracts:

        

Average Monthly Volume (Bbls)

     8,000        2,000        —          —     

Weighted-average floor price

   $ 85.00      $ 85.00      $ —        $ —     

Weighted-average ceiling price

   $ 117.50      $ 101.35      $ —        $ —     

NGL Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (Bbls)

     18,000        —          —          —     

Weighted-average fixed price

   $ 64.27        —          —          —     

 

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At December 31, 2013, the MEMP Segment had the following open commodity positions:

 

    2014     2015     2016     2017     2018     2019  

Natural Gas Derivative Contracts:

           

Fixed price swap contracts:

           

Average Monthly Volume (MMBtu)

    2,575,458        2,145,278        2,342,442        2,230,067        2,060,000        1,814,583   

Weighted-average fixed price

  $ 4.34      $ 4.30      $ 4.42      $ 4.31      $ 4.52      $ 4.77   

Collar contracts:

           

Average Monthly Volume (MMBtu)

    340,000        350,000        —          —          —          —     

Weighted-average floor price

  $ 4.93      $ 4.62      $ —        $ —        $ —        $ —     

Weighted-average ceiling price

  $ 6.12      $ 5.80      $ —        $ —        $ —        $ —     

Call spreads(1):

           

Average Monthly Volume (MMBtu)

    120,000        80,000        —          —          —          —     

Weighted-average sold strike price

  $ 5.08      $ 5.25      $ —        $ —        $ —        $ —     

Weighted-average bought strike price

  $ 6.31      $ 6.75      $ —        $ —        $ —        $ —     

Basis swaps:

           

Average Monthly Volume (MMBtu)

    2,822,083        —          —          —          —          —     

Spread

  $ (0.09   $ —        $ —        $ —        $ —        $ —     

Crude Oil Derivative Contracts:

           

Fixed price swap contracts:

           

Average Monthly Volume (Bbls)

    136,444        148,281        142,313        130,600        122,000        40,000   

Weighted-average fixed price

  $ 95.82      $ 93.07      $ 86.85      $ 85.96      $ 85.62      $ 85.00   

Collar contracts:

           

Average Monthly Volume (Bbls)

    23,000        5,000        —          —          —          —     

Weighted-average floor price

  $ 82.83      $ 80.00      $ —        $ —        $ —        $ —     

Weighted-average ceiling price

  $ 105.31      $ 94.00      $ —        $ —        $ —        $ —     

Basis swaps:

           

Average Monthly Volume (Bbls)

    57,292        57,500        —          —          —          —     

Spread

  $ (9.21   $ (9.73   $ —        $ —        $ —        $ —     

NGL Derivative Contracts:

           

Fixed price swap contracts:

           

Average Monthly Volume (Bbls)

    118,500        112,800        —          —          —          —     

Weighted-average fixed price

  $ 36.23      $ 35.04      $ —        $ —        $ —        $ —     

 

(1)   These transactions were entered into for the purpose of eliminating the ceiling portion of certain collar arrangements, which effectively converted the applicable collars into swaps.

 

 

At December 31, 2012, the MRD Segment had the following open commodity positions:

 

     2013     2014     2015  

Natural Gas Derivative Contracts:

      

Fixed price swap contracts:

      

Average Monthly Volume (MMBtu)

     961,000        540,000        210,000   

Weighted-average fixed price

   $ 4.08      $ 3.96      $ 4.09   

Collar contracts:

      

Average Monthly Volume (MMBtu)

     661,000        430,000        130,000   

Weighted-average floor price

   $ 4.61      $ 4.18      $ 4.00   

Weighted-average ceiling price

   $ 5.56      $ 5.10      $ 4.64   

Basis swaps:

      

Average Monthly Volume (MMBtu)

     230,000        230,000        390,000   

Spread

   $ (0.09   $ (0.09   $ (0.09

 

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     2013      2014      2015  

Crude Oil Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (Bbls)

     6,000         —           —     

Weighted-average fixed price

   $ 98.44       $ —         $ —     

Collar contracts:

        

Average Monthly Volume (Bbls)

     22,750         14,000         2,000   

Weighted-average floor price

   $ 84.66       $ 87.86       $ 85.00   

Weighted-average ceiling price

   $ 108.89       $ 111.34       $ 101.35   

NGL Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (Bbls)

     28,500         2,000         —     

Weighted-average fixed price

   $ 54.12       $ 84.00       $ —     

 

At December 31, 2012, the MEMP Segment had the following open commodity positions:

 

     2013     2014     2015      2016      2017      2018  

Natural Gas Derivative Contracts:

               

Fixed price swap contracts:

               

Average Monthly Volume (MMBtu)

     1,017,672        1,462,125        1,156,112         1,113,275         1,020,067         900,000   

Weighted-average fixed price

   $ 4.35      $ 4.38      $ 4.28       $ 4.53       $ 4.30       $ 4.75   

Collar contracts:

               

Average Monthly Volume (MMBtu)

     1,014,000        340,000        350,000         —           —           —     

Weighted-average floor price

   $ 4.76      $ 4.93      $ 4.62       $ —         $ —         $ —     

Weighted-average ceiling price

   $ 5.82      $ 6.12      $ 5.80       $ —         $ —         $ —     

Call spreads(1):

               

Average Monthly Volume (MMBtu)

     430,000        120,000        80,000         —           —           —     

Weighted-average sold strike price

   $ 4.59      $ 5.08      $ 5.25       $ —         $ —         $ —     

Weighted-average bought strike price

   $ 5.84      $ 6.31      $ 6.75       $ —         $ —         $ —     

Basis swaps:

               

Average Monthly Volume (MMBtu)

     813,432        1,318,750        —           —           —           —     

Spread

   $ (0.11   $ (0.09   $ —         $ —         $ —         $ —     

Crude Oil Derivative Contracts:

               

Fixed price swap contracts:

               

Average Monthly Volume (Bbls)

     70,632        35,102        12,031         11,013         10,000         —     

Weighted-average fixed price

   $ 103.32      $ 94.27      $ 90.29       $ 90.39       $ 88.30       $ —     

Collar contracts:

               

Average Monthly Volume (Bbls)

     36,750        52,158        50,000         44,000         42,000         —     

Weighted-average floor price

   $ 84.73      $ 90.51      $ 89.00       $ 85.00       $ 85.00       $ —     

Weighted-average ceiling price

   $ 108.07      $ 107.03      $ 103.31       $ 103.40       $ 99.00       $ —     

Call contracts:

               

Average Monthly Volume (Bbls)

     10,000        —          —           —           —           —     

Weighted-average fixed price

   $ 115.00      $ —        $ —         $ —         $ —         $ —     

NGL Derivative Contracts:

               

Fixed price swap contracts:

               

Average Monthly Volume (Bbls)

     30,805        16,300        —           —           —           —     

Weighted-average fixed price

   $ 53.19      $ 58.91      $ —         $ —         $ —         $ —     

 

(1)   These transactions were entered into for the purpose of eliminating the ceiling portion of certain collar arrangements, which effectively converted the applicable collars into swaps.

 

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Interest Rate Risk

 

Periodically, we enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates such as those in our credit agreement to fixed interest rates. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for additional information regarding fixed-for-floating interest rate swap open positions as of December 31, 2013 and December 31, 2012 as well as the tables below.

 

At December 31, 2013, we had the following interest rate swap open positions:

 

Credit Facility

  2014     2015     2016  

MEMP:

     

Average Monthly Notional (in thousands)

  $ 173,958      $ 280,833      $ 150,000   

Weighted-average fixed rate

    1.306     1.416     1.193

Floating rate

    1 Month LIBOR        1 Month LIBOR        1 Month LIBOR   

WildHorse Resources:

     

Average Monthly Notional (in thousands)

  $ 118,750      $ 100,000      $ —    

Weighted-average fixed rate

    0.773     0.758     —    

Floating rate

    1 Month LIBOR        1 Month LIBOR        —    

 

At December 31, 2012, we had the following interest rate swap open positions:

 

Credit Facility

   2013     2014     2015     2016  

MEMP:

        

Average Monthly Notional (in thousands)

   $ 162,500      $ 150,000      $ 150,000      $ 150,000   

Weighted-average fixed rate

     1.148     1.193     1.193     1.193

Floating rate

     1 Month LIBOR        1 Month LIBOR        1 Month LIBOR        1 Month LIBOR   

WildHorse Resources:

        

Average Monthly Notional (in thousands)

   $ 150,667      $ 118,750      $ 100,000      $ —     

Weighted-average fixed rate

     0.779     0.773     0.758     —     

Floating rate

     1 Month LIBOR        1 Month LIBOR        1 Month LIBOR        —     

Tanos:

        

Average Monthly Notional (in thousands)

   $ 30,000      $ —        $ —        $ —     

Weighted-average fixed rate

     1.362     —          —          —     

Floating rate

     1 Month LIBOR        —          —          —     

WHT:

        

Average Monthly Notional (in thousands)

   $ 75,000      $ 25,000      $ —        $ —     

Weighted-average fixed rate

     1.510     1.510     —          —     

Floating rate

     1 Month LIBOR        1 Month LIBOR        —          —     

Previous Owners:

        

Average Monthly Notional (in thousands)

   $ 11,500        5,750      $ —        $ —     

Weighted-average fixed rate

     0.500     0.500     —          —     

Floating rate

     1 Month LIBOR        1 Month LIBOR        —          —     

 

Counterparty and Customer Credit Risk

 

Our principal exposures to credit risk are through receivables resulting from commodity derivatives and the sale of our oil and gas production, which we market to energy companies.

 

By using derivative instruments that are not traded on an exchange to hedge exposures to changes in commodity prices, we expose ourselves to the credit risk of our counterparties. Credit risk is the potential failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty is expected to owe us, which creates the credit risk. To minimize the credit risk in derivative instruments, it is our policy to enter into derivative contracts only with counterparties that are

 

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creditworthy financial institutions deemed by management as competent and competitive market-makers. The creditworthiness of our counterparties is subject to periodic review. As of December 31, 2013, all of our derivative contracts are with major financial institutions who are also lenders under our revolving credit facilities. See the Notes to the Consolidated and Combined Financial Statements included elsewhere in this prospectus for additional information.

 

We are also subject to credit risk due to the concentration of our natural gas and oil receivables with several significant customers. We do not require our customers to post collateral, and the inability of our significant customers to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.

 

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BUSINESS

 

MRD LLC has two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties:

 

   

MRD—reflects all of MRD LLC’s consolidating subsidiaries except for MEMP.

 

   

MEMP—reflects the consolidated and combined operations of MEMP.

 

Because we control MEMP through our ownership of its general partner, its business and operations are consolidated with ours for financial reporting purposes, even though we own a minority of its partner interests. As a result, our financial statements and notes thereto included elsewhere in this prospectus consolidate MEMP’s business and assets with ours. However, except where expressly noted to the contrary, the following discussion of our business, operations and assets and the use of the terms “we”, “our” and “us” excludes MEMP’s business, operations and assets. See “—MEMP” for information regarding MEMP’s business and assets. In addition, because BlueStone will not be included in the assets that MRD LLC will contribute to us in connection with the restructuring transactions, unless stated otherwise, the information in this section does not include BlueStone.

 

We are an independent natural gas and oil company focused on the exploitation, development, and acquisition of natural gas, NGL and oil properties with a majority of our activity in the Terryville Complex of North Louisiana, where we are targeting overpressured, liquids-rich natural gas opportunities in multiple zones in the Cotton Valley formation. Our total leasehold position is 347,458 gross (205,818 net) acres, of which 60,041 gross (51,522 net) acres are in what we believe to be the core of the Terryville Complex. We are focused on creating shareholder value primarily through the development of our sizeable horizontal inventory.

 

MEMP is engaged in the acquisition, exploitation, development and production of oil and natural gas properties, with assets consisting primarily of producing oil and natural gas properties that are principally located in East Texas/North Louisiana, the Permian Basin, offshore Southern California, the Rockies, the Eagle Ford and South Texas. Most of MEMP’s properties are located in large, mature oil and natural gas reservoirs with well-known geologic characteristics and long-lived, predictable production profiles and modest capital requirements. MEMP is focused on generating stable cash flows, to allow MEMP to make quarterly cash distributions to its unitholders and, over time, to increase those quarterly cash distributions.

 

MRD

 

Overview

 

As of December 31, 2013, we had 1,582 gross (1,091 net) identified horizontal drilling locations, of which over 1,431 gross (994 net) identified horizontal drilling locations are located in the Terryville Complex. These total net identified horizontal drilling locations represent an inventory of over 32 years based on our expected 2014 drilling program. We believe our inventory to be repeatable and capable of generating high returns based on the extensive production history in the area, the results of our horizontal wells drilled to date, and the consistent reservoir quality across multiple target formations. As of December 31, 2013, we had estimated proved, probable and possible reserves of approximately 1,126 Bcfe, 800 Bcfe and 1,711 Bcfe, respectively. As of such date, we operated 98% of our proved reserves, 71% of which were natural gas. For the three months ended December 31, 2013, 45% of our pro forma MRD Segment revenues were attributable to natural gas production, 28% to NGLs and 27% to oil. For the year ended December 31, 2013, we generated pro forma MRD Segment Adjusted EBITDA of $159 million and pro forma net income of $     million, and made pro forma total capital expenditures of $203 million, including $70 million for wells coming online in 2014. Please see “—Summary Historical Consolidated and Combined Pro Forma Financial Data—Adjusted EBITDA” for an explanation of the basis for the pro forma presentation and our use of Adjusted EBITDA to measure the MRD Segment’s profitability.

 

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Our average net daily production for the three months ended December 31, 2013 was 137 MMcfe/d (approximately 70% natural gas, 22% NGLs and 8% oil) and our reserve life was 23 years. As of December 31, 2013, we produced from 95 horizontal wells and 800 vertical wells. The Terryville Complex represented 83% of our total net production for the three months ended December 31, 2013. Our estimated average net daily production for the period from April 1 through April 30, 2014 was 179 MMcfe/d, of which 73% was from natural gas. Our estimated average net daily production from our properties in the Terryville Complex for the same period was 141 MMcfe/d, or 79% of our total production. In the Terryville Complex, we have completed and brought online six additional horizontal wells since January 1, 2014, bringing our total number of producing horizontal wells to 27 in our primary formations. The 24-hour initial production rates of our four most recent wells averaged 26.6 MMcfe/d.

 

The following chart provides information regarding our production growth and the increasing proportion of our horizontal well production since the beginning of 2012.

 

LOGO

 

Our Properties

 

Cotton Valley—Overview

 

The Cotton Valley formation extends across East Texas, North Louisiana and Southern Arkansas. The formation has been under development since the 1930s and is characterized by thick, multi-zone natural gas and oil reservoirs with well-known geologic characteristics and long-lived, predictable production profiles. Over 21,000 vertical wells have been completed throughout the play. In 2005, operators started redeveloping the Cotton Valley using horizontal drilling and advanced hydraulic fracturing techniques. To date, operators have drilled over 600 horizontal Cotton Valley wells. Some large, analogous redevelopment projects in the Cotton Valley include the Nan-Su-Gail Field in Freestone County, East Texas, where over 40 horizontal wells have been drilled by operators such as Devon Energy Corporation and Marathon Oil Corporation, and the Carthage Complex in Panola County, East Texas, where operators such as ExxonMobil Corporation, ConocoPhillips and Anadarko Petroleum Corporation have drilled over 153 horizontal wells.

 

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Cotton Valley—Terryville Complex Horizontal Redevelopment

 

We are currently engaged in the horizontal redevelopment of the Terryville Complex in Lincoln Parish, Louisiana utilizing horizontal drilling and completion techniques similar to those employed at the Nan-Su-Gail Field, Carthage Complex in East Texas and other major resource plays across the United States. We have assembled a largely contiguous acreage position in the Terryville Complex of approximately 60,041 gross (51,522 net) acres as of December 31, 2013. The majority of our current and planned development is focused in and around what we believe to be the core of the Terryville Complex.

 

We entered the Terryville Complex via an acquisition from Petrohawk Energy Corporation in April 2010, with the goal of redeveloping the field with horizontal drilling and modern completion techniques. Since that acquisition, we have completed multiple bolt-on acquisitions and in-fill leases to build our current position. We believe the Terryville Complex, which has been producing since 1954, is one of North America’s most prolific natural gas fields, characterized by high recoveries relative to drilling and completion costs, high initial production rates with high liquids yields, long reserve life, multiple stacked producing zones, available infrastructure and a large number of service providers.

 

After initially drilling eight vertical pilot wells in the Terryville Complex, we commenced a horizontal drilling program in 2011 to further delineate and define our position. In 2013, we shifted our operational focus to full-scale horizontal redevelopment of the Terryville Complex, going from two rigs to four rigs by the end of that year. Additionally, in the fourth quarter of 2013, we moved to drilling on multi-well pads that allow us to more efficiently drill wells and control costs as we develop our stacked pay zones. We intend to dedicate approximately $264 million of our $316 million drilling and completion budget in 2014 to develop multiple zones within the Terryville Complex, where we expect to drill and complete 35 gross (30 net) wells. Our horizontal redevelopment program in the Terryville Complex will be focused on increasing our well performance and recoveries.

 

Within the Terryville Complex, as of December 31, 2013, we had 945 Bcfe, 688 Bcfe and 1,643 Bcfe of estimated proved, probable and possible reserves, respectively, and a drilling inventory consisting of 1,431 gross (994 net) identified horizontal drilling locations, including 91 gross (72 net) drilling locations to which we have attributed proved undeveloped reserves as of December 31, 2013. Since initiating our horizontal drilling program in 2011, we have drilled 27 gross (22.0 net) horizontal wells, growing our gross daily production in the Terryville Complex by 304% from 53.0 MMcfe/d for the three months ended March 31, 2010 to 214.0 MMcfe/d for the month ended April 30, 2014. For the three months ended December 31, 2013, 42% of our revenues from the Terryville Complex were attributable to natural gas, 29% to NGLs and 29% to oil. Within the Terryville Complex, on a proved reserves basis, we operate approximately 99% of our existing acreage and hold an average working interest of approximately 74% across our acreage. Our high operating control allows us to more efficiently and economically manage the redevelopment of this extensive resource.

 

We believe seismic data, as well as information gathered from the results of our existing 275 vertical and 27 horizontal wells throughout the field, support the existence of at least ten stacked pay zones across the Terryville Complex. Our redevelopment program currently targets four of the stacked pay zones in the Cotton Valley formation—zones we term the Upper Red, Lower Red, Lower Deep Pink and Upper Deep Pink, all of which we are developing with horizontal wells through pad drilling. These four zones have an overall thickness ranging from 400 to 890 feet across our acreage position. We believe the overpressured nature of this section of the Cotton Valley formation is highly productive when accessed through horizontal drilling and fracture stimulation technologies. These qualities, when combined with the liquids-rich nature of the natural gas, high initial rates of production and competitive well costs, produce what we believe to be amongst the highest rate of return wells in the nation. Further, there are additional opportunities for redevelopment in the zones above the four main zones. NSAI has allocated over $1 billion PV-10 and 677 Bcfe to our possible reserve category for the redevelopment of these additional zones. Please see “—Reserves.”

 

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The table below details certain information on estimated ultimate recoveries and production for the 27 horizontal wells currently producing in the Terryville Complex. Our well results have shown consistency in initial production, decline rates and estimated ultimate recovery. The consistency of these results gives us confidence that the full-scale redevelopment of the Terryville Complex we began in 2013 will be successful as we move from four to five rigs in 2014.

 

   

 

    Producing Wells                

 

    Gross Wellhead Flow Rates
After Processing
       
    Lateral
Length
(Feet)
    EUR(2)     EUR
Bcfe/
1,000’
    First
Production
    Days
Producing
    CumulativeProduction     (MMcfe/d)(3)(4)     D&C
($MM)
 

Well Name(1)

    Bcfe     %Gas     %NGL     %Oil           Bcfe     %Gas     %NGL     %Oil     0-30     0-90     91-180     181-360    

Upper Red Zone

                                 

LD Barnett 23H-2

    4,015        13.6        69     27     4     3.4        1/30/2012        821        4.6        71     24     5     14.5        12.0        7.7        5.6        6.7   

Colquitt 20 17H-1

    4,357        11.2        80     18     2     2.6        7/30/2012        639        3.8        82     17     2     17.5        12.6        7.2        5.1        7.7   

Dowling 22 15H-1

    5,376        16.8        75     23     2     3.1        9/22/2012        585        5.1        80     18     3     16.3        15.6        11.1        8.2        8.8   

Nobles 13H-1

    4,216        11.6        66     23     11     2.8        11/17/2012        529        4.2        66     21     13     21.5        16.7        9.9        6.5        7.8   

Sidney McCullin 16 21H-1

    4,604        16.9        75     22     2     3.7        1/19/2013        466        4.4        81     16     3     17.4        14.2        10.8        8.4        8.1   

Wright 14 11 HC-1

    5,250        18.0        68     26     6     3.4        5/27/2013        338        4.4        65     28     8     19.6        18.1        16.1          8.8   

BF Fallin 22 15H-1

    5,122        15.6        73     24     3     3.0        6/17/2013        317        3.1        74     22     4     14.8        13.7        11.8          7.5   

Dowling 20 17H-1

    4,327        8.9        73     25     2     2.1        7/22/2013        282        2.0        77     20     3     15.2        11.0        5.7          10.7   

Gleason 31H-1

    3,692        2.5        92     8            0.7        8/12/2013        261        0.5        92     8            3.5        2.7        1.8          9.4   

Burnett 26H-1

    2,405        4.2        71     25     4     1.7        9/22/2013        220        0.9        70     26     4     6.9        5.5        3.3          6.6   

Drewett 17 8H-1

    4,010        14.0        67     23     10     3.5        11/13/2013        168        2.6        61     28     11     22.1        18.7            7.7   

Wright 13 12 HC-2

    6,009        18.1        69     23     8     3.0        12/21/2013        130        2.4        78     10     12     22.7        19.3            8.0   

LA Minerals 15 22H-2

    5,814        N/A        N/A        N/A        N/A        N/A        1/21/2014        99        1.6        NA        NA        NA        18.1        16.7            9.3   

TL McCrary 14 11 HC-5

    5,875        N/A        N/A        N/A        N/A        N/A        4/14/2014        16        0.4        NA        NA        NA                7.8   

Wright 13 24 HC-1

    6,678        N/A        N/A        N/A        N/A        N/A        4/14/2014        16        0.4        NA        NA        NA                8.9   

Wright 13 24 HC-3

    6,606        N/A        N/A        N/A        N/A        N/A        4/14/2014        16        0.4        NA        NA        NA                7.6   

Lower Red Zone

                                 

TL McCrary 14H-1

    4,544        12.8        70     27     3     2.8        5/1/2012        729        4.0        73     23     4     14.4        11.7        8.3        5.4        7.7   

Nobles 13H-2

    4,060        9.2        70     25     5     2.3        11/17/2012        529        3.1        69     22     8     16.0        11.9        8.4        5.2        7.8   

LA Methodist Orphanage 14H-1

    3,637        12.1        70     24     6     3.3        2/15/2013        439        3.5        70     22     8     13.9        13.0        9.7        6.3        9.1   

Dowling 21 16H-1

    4,590        9.4        77     21     1     2.0        3/18/2013        408        2.5        84     14     2     13.0        10.1        6.5        4.5        6.6   

Drewett 17 8H-2

    3,700        3.7        69     24     7     1.0        11/13/2013        168        0.8        64     29     7     8.7        6.2            6.8   

Wright 13 12 HC-1

    5,409        8.2        68     22     10     1.5        12/21/2013        130        1.3        77     10     13     14.7        11.3            9.1   

LA Minerals 15 22H-1

    5,926        N/A        N/A        N/A        N/A        N/A        1/21/2014        99        1.1        NA        NA        NA        13.8        11.1            8.0   

Wright 13 24 HC-4

    6,518        N/A        N/A        N/A        N/A        N/A        4/14/2014        16        0.3        NA        NA        NA                10.3   

Lower Deep Pink Zone

                                 

LA Methodist Orphanage 14H-2

    3,550        12.2        68     24     8     3.4        2/15/2013        439        3.1        68     21     10     14.2        11.6        7.6        5.6        6.1   

Wright 13 12 HC-3

    5,706        6.3        69     23     8     1.1        12/21/2013        130        1.1        79     10     12     12.4        9.3            7.1   

Wright 13 12 HC-4

    5,010        5.0        69     22     9     1.0        12/21/2013        130        1.0        78     10     12     11.8        8.7            6.1   

Averages

                                 

All Wells

    4,852        11.0        72 %      23 %      5 %      2.5          301        2.3        74 %      19 %      7 %      14.9        12.2        8.4        6.1        8.0   

Upper Red

    4,897        12.6        73 %      22 %      5 %      2.7          306        2.6        75 %      20 %      6 %      16.2        13.6        8.5        6.8        8.2   

Lower Red

    4,798        9.2        71 %      24 %      5 %      2.2          315        2.1        73 %      20 %      7 %      13.5        10.7        8.2        5.4        8.2   

Lower Deep Pink

    4,755        7.8        69 %      23 %      9 %      1.8          233        1.7        75 %      14 %      11 %      12.8        9.9        7.6        5.6        6.4   

 

(1)   The majority of the wells in this table are included within our proved developed producing reserve category in our reserve report as of December 31, 2013. LA Minerals 15 22H-1, LA Minerals 15 22H-2, TL McCrary 14 11 HC-5, Wright 13 24 HC-1, Wright 13 24 HC-3 and Wright 13 24 HC-4 each started producing in 2014 so they have not been included in the year-end reserve report.
(2)   EUR represents the Estimated Ultimate Recovery or sum of total gross remaining reserves attributable to each location in our reserve report and cumulative sales from such location. EUR is shown on a combined basis for oil/condensates, gas and NGLs, after the effects of processing.
(3)   Production data is as of April 30, 2014 and shown gross on a combined basis after the effects of processing.
(4)   Periodic flow rates start on day 4, with days 1 through 3 used to allow clean up associated with well completion. The 30-day flow rates therefore start on day 4 and continue 30 days to day 33 and the 90-day flow rates go from day 4 to day 93.

 

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East Texas

 

We own and operate approximately 54,337 gross (42,894 net) acres as of December 31, 2013 in Texas, where we are currently producing primarily from the Cotton Valley, Travis Peak and Bossier formations and targeting the Cotton Valley formation for future development. From January 1, 2011 through December 31, 2013, we have drilled and completed 28 gross (10.3 net) wells and are operating one rig in East Texas as of December 31, 2013. In 2014, we plan to invest $36 million to drill and complete 8 gross (6 net) wells in East Texas in the Joaquin Field of Panola and Shelby Counties. As of December 31, 2013, we had approximately 108 gross identified horizontal drilling locations in East Texas, including 54 gross (43 net) drilling locations to which we have attributed proved undeveloped reserves as of December 31, 2013. For the three months ended December 31, 2013, our average net daily production from our East Texas properties was 21 MMcfe/d, of which 76% was natural gas. Within our East Texas properties, on a proved reserves basis, we operate approximately 94% of our existing properties.

 

Rockies & Other

 

We own approximately 162,375 gross (66,191 net) acres as of December 31, 2013 in our Rockies & Other region and for the three months ended December 31, 2013 our average net daily production from this region was 1 MMcfe/d. In 2014, we plan to operate one rig and invest $12 million to drill 3 gross (3 net) vertical wells in the Tepee Field of the Piceance Basin targeting the Mancos and Williams Fork formations. We also plan to invest $4 million to participate in 12 gross horizontal wells (1.1 net) operated by SandRidge Energy Inc. in the Mississippian oil play of Northern Oklahoma. As of December 31, 2013, we had approximately 174 gross identified vertical drilling locations in the Tepee Field in our Rockies & Other area.

 

Reserves

 

Our estimates of proved reserves are prepared by NSAI, and our estimates of probable and possible reserves are prepared by our management and audited by NSAI. As of December 31, 2013, we had 1,126 Bcfe, 800 Bcfe and 1,711 Bcfe of estimated proved, probable and possible reserves, respectively. As of this date, our proved reserves were 71% gas and 29% NGLs and oil. Additionally, the PV-10 of our proved reserves was $1,469 million, the PV-10 for our probable reserves was $1,052 million and the PV-10 for our possible reserves was $2,386 million. The following table provides summary information regarding our estimated proved, probable and possible reserves data by area based on our reserve report and our average net daily production by area for the three months ended December 31, 2013:

 

    Proved
Total
(Bcfe)
    % Gas     %
Developed
    Proved
PV-10
(in millions)(1)
    Probable
Total
(Bcfe)(2)
    Probable
PV-10
(in millions)(1)
    Possible
Total
(Bcfe)(2)
    Possible
PV-10
(in millions)(1)
    Average
Net

Daily
Production
MMcfe/d
 

Terryville Complex

    945        71     33   $ 1,341        688      $ 1,032        1,643      $ 2,383        115   

East Texas

    175        75     29     110        109        18        66        3        21   

Rockies & Other

    6        49     100     18        2        2        2        1        1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    1,126        71     33   $ 1,469        800      $ 1,052        1,711      $ 2,386        137   
 

 

 

       

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  

In this prospectus, we have disclosed our PV-10 based on our reserve report. PV-10 is a non-GAAP financial measure and represents the period-end present value of estimated future cash inflows from our natural gas and crude oil reserves, less future development and production costs, discounted at 10% per annum to reflect timing of future cash flows and using SEC pricing assumptions in effect at the end of the period. SEC pricing for natural gas and oil of $3.67 per Mcf and $93.42 per Bbl was based on the unweighted average of the first-day-of-the-month prices for each of the twelve months preceding December 2013. PV-10 differs from standardized measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes. Moreover, GAAP does not provide a measure of estimated future net cash flows for reserves other than proved reserves. Because PV-10 estimates of probable and possible reserves are more uncertain than PV-10 and standardized estimates of proved reserves, but have not been adjusted for risk due to that uncertainty, they may not be comparable with each other. Nonetheless, we believe that PV-10 estimates for reserve categories other than proved present useful information for investors about the future net cash flows of our reserves in the absence of a comparable GAAP measure such as standardized measure. Because of this, PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis. In addition, investors should be

 

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cautioned that estimates of PV-10 for probable and possible reserves, as well as the underlying volumetric estimates, are inherently more uncertain of being recovered and realized than comparable measures for proved reserves, and that the uncertainty for possible reserves is even more significant. Our PV-10 estimates of proved reserves and our standardized measure are equivalent because, prior to the completion of this offering, we were not subject to entity level taxation. Accordingly, no provision for federal income taxes has been provided because taxable income has been passed through to our equity holders. However, had we not been a tax exempt entity as of December 31, 2013, our estimated discounted future income tax in respect of our proved, probable and possible reserves would have been approximately $401 million, $368 million and $835 million, respectively. After this offering, we will be treated as a taxable entity for federal income tax purposes and our future income taxes will be dependent upon our future taxable income. Neither PV-10 nor standardized measure represents an estimate of fair market value of our natural gas and oil properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of estimated reserves held by companies without regard to the specific tax characteristics of such entities.

(2)   Substantially all of our estimated probable and possible reserves are classified as undeveloped.

 

Drilling Inventory and Capital Budget

 

We intend to develop our multi-year drilling inventory by utilizing our significant expertise in horizontal drilling and fracture stimulation to grow our production, reserves and cash flow. For 2014, we have budgeted a total of $316 million to drill and complete 46 gross (39 net) operated wells and to participate in 12 gross (1.1 net) non-operated wells. We expect to fund our 2014 development primarily from cash flows from operations. The majority of our drilling locations and our 2014 development program are focused on the Terryville Complex, where we plan to invest $264 million on drilling and completing 33 gross (28 net) horizontal wells and 2 gross (2 net) vertical wells. Approximately $5.0 million of our Terryville Complex budget is allocated towards the drilling of vertical wells and routine facilities maintenance. In East Texas, we plan to invest $36 million on drilling and completing 8 gross (6 net) horizontal wells. In our Rockies & Other area we plan to invest $12 million on drilling and completing 3 gross (3 net) vertical wells in the Tepee Field and $4 million to participate in 12 gross (1.1 net) horizontal wells operated by SandRidge Energy Inc. in the Mississippian oil play of Northern Oklahoma.

 

The following table provides information regarding our acreage and drilling locations by area, as of December 31, 2013, except for projected 2014 information:

 

                Gross Horizontal Drilling Locations(1)(2)     Net
Horizontal
Drilling
Inventory
(years)
    2014
Projected
Operated
Net Wells
to be
Drilled(3)
    2014
Projected
Capital
Budget
($MM)
 
  Net
Acreage
    WI%           Total        
      Proved     Probable     Possible     Management     Gross     Net        

Terryville Complex

    96,733        74     91        147        450        743        1,431        994        36        30      $ 264   

East Texas

    42,894        79     54        39        15        —          108        92        15        6        36   

Rockies & Other

    66,191        41     —          23        20        —          43        4        —          3        16   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    205,818        59     145        209        485        743        1,582        1,091        32        39      $ 316   

 

(1)   The above table excludes 192 proved vertical drilling locations in the reserve report in the Terryville Complex and 174 identified vertical locations based on management estimates in the Rockies and Other region.
(2)   Please see “Business—Our Operations—Drilling Locations” for more information regarding the process and criteria through which these drilling locations were identified. The drilling locations on which we actually drill will depend on the availability of capital, regulatory approval, commodity prices, costs, actual drilling results and other factors. Please see “Risk Factors—Risks Related to Our Business—Our identified drilling locations, which are scheduled out over many years, are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.” Proved, probable and possible locations are based on our reserve report. Management locations are based on management estimates.
(3)   Represents net operated wells only. Excludes 12 gross (1.1 net) non-operated wells to be drilled in our Rockies & Other area in 2014.

 

Our extensive inventory and horizontal drilling program in the Terryville Complex is currently focused on four zones within the Cotton Valley formation—the Upper Red, Lower Red, Lower Deep Pink and Upper Deep Pink. The table below sets forth our drilling locations by zone as of December 31, 2013 along with the average

 

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results for the wells we have drilled within each zone. Please see “Business—Our Properties—Cotton Valley–Terryville Complex Horizontal Redevelopment” for more detail on our properties in the Terryville Complex.

 

    Gross Horizontal Drilling Locations(1)     Average Historical Results(2)  

Lower Cotton

Valley Zone

    Producing
Wells  Drilled(1)
    30  Day
Initial
Production

(MMcfe/d)
    EUR(3)     Drilling
and
Completion

Costs
($MM)
 
  Proved     Probable     Possible     Management     Total         (Bcfe)     % Gas     % NGL     % Oil    

Upper Red

    47        42        40        313        442        16        16.2        12.6        73     22     5   $ 8.2   

Lower Red

    40        40        36        276        392        8        13.5        9.2        71        24        5        8.2   

Lower Deep Pink

    4        28        47        79        158        3        12.8        7.8        69        23        9        6.4   

Upper Deep Pink

    —          37        42        75        154        —          —          —          —          —          —          —     

Other Zones

    —          —          285        —          285        —          —          —          —          —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Terryville Complex

    91        147        450        743        1,431        27        14.9        11.0        72     23     5   $ 8.0   

 

(1)   Please see “Business—Our Operations—Drilling Locations” for more information regarding the process and criteria through which these drilling locations were identified. The drilling locations on which we actually drill will depend on the availability of capital, regulatory approval, commodity prices, costs, actual drilling results and other factors. Please see “Risk Factors—Risks Related to Our Business—Our identified drilling locations, which are scheduled out over many years, are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.” Proved, probable and possible locations are based on our reserve report. Management locations are based on management estimates.
(2)   Relates to the 21 horizontal wells in the Terryville Complex included in our reserve report as proved developed reserves as of December 31, 2013. Drilling and completion costs and producing wells drilled include six additional wells that have come online since year-end.
(3)   EUR represents the Estimated Ultimate Recovery or the sum of total gross remaining reserves attributable to each location in our reserve report and cumulative sales from such location. EUR is shown at the wellhead on a combined basis for oil/condensates and wet gas.

 

Our Terryville horizontal development program in 2014 has an average working interest of 87% and our total horizontal development inventory has an average working interest of 69%.

 

For the Terryville Complex, our 2014 budget assumes an average cost of $8.6 million for gross horizontal wells ($7.5 million per net well) and is based on an average lateral length of 6,270 feet. As part of our long-term development plan, the lateral length of our planned wells is expected to increase and we expect wells within the Terryville Complex to cost on average $9.3 million for gross wells ($8.1 million per net well) drilled with a 7,500 foot lateral length.

 

Business Strategies

 

Our primary objective is to build shareholder value through growth in reserves, production and cash flows by developing and expanding our significant portfolio of drilling locations. To achieve our objective, we intend to execute the following business strategies:

 

Grow production, reserves and cash flow through the development of our extensive drilling inventory.    We believe our extensive inventory of low-risk drilling locations, combined with our operating expertise, will enable us to continue to deliver production, reserve and cash flow growth and create shareholder value. As of December 31, 2013, we had assembled an aggregate drilling inventory of 1,582 gross identified horizontal drilling locations, 90% of which are in the Terryville Complex, representing a drilling inventory of over 36 years based on our expected 2014 drilling program. We believe that the risk and uncertainty associated with our core acreage positions in the Terryville Complex has been largely reduced through our development activity, and because those positions are in areas with extensive drilling and production history. Since initiating our horizontal drilling program with one rig in 2011, we have invested over $288 million in the Terryville Complex through December 31, 2013. With four rigs running in the Terryville Complex as of December 31, 2013, we are one of the most active drillers in the Cotton Valley formation. We intend to dedicate approximately $264 million of our $316 million drilling and completion budget in 2014 to develop the overpressured liquids-rich Terryville Complex through multi-well pad drilling. We believe multiple vertically stacked producing horizons in the Terryville Complex can be developed using horizontal drilling techniques, thus enhancing the economics of this field.

 

 

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Enhance returns through prudent capital allocation and continued improvements in operational and capital efficiencies.    We continually monitor and adjust our drilling program with the objective of achieving the highest total returns on our portfolio of drilling opportunities. We believe we will achieve this objective by (i) minimizing the capital costs of drilling and completing horizontal wells through knowledge of the target formations, (ii) maximizing well production and recoveries by optimizing lateral length, the number of frac stages, perforation intervals and the type of fracture stimulation employed, (iii) targeting specific zones within our leasehold position to maximize our hydrocarbon mix based on the existing commodity price environment and (iv) minimizing operating costs through efficient well management.

 

Exploit additional development opportunities on current acreage.    Our existing asset base provides numerous opportunities for our highly experienced technical team to create shareholder value by increasing our inventory beyond our currently identified drilling locations and ultimately by growing our estimated proved reserves. In the Terryville Complex, we are currently targeting multiple stacked horizons. We also believe our East Texas region has a significant inventory of low-risk, liquids-rich horizontal drilling locations. Finally, we continue to evaluate our leasehold positions in the Rocky Mountains and have preliminarily identified over 170 potential vertical locations.

 

Maintain a disciplined, growth oriented financial strategy.    We intend to fund our growth primarily with internally generated cash flows while maintaining ample liquidity and access to the capital markets. Furthermore, we plan to hedge a significant portion of our expected production to reduce our exposure to downside commodity price fluctuations and enable us to protect our cash flows and maintain liquidity to fund our drilling program. Since approximately 76% of our acreage in the Terryville Complex was held by production as of December 31, 2013 and no significant drilling commitments are needed to hold our remaining acreage in the near term, we are able to allocate capital among projects in a manner that optimizes both costs and returns, resulting in a highly efficient drilling program.

 

Make opportunistic acquisitions that meet our strategic and financial objectives.    We will seek to acquire oil and gas properties that we believe complement our existing properties in our core areas of operation. In addition to our focus on the Terryville Complex, we are pursuing other properties that provide opportunities for the addition of reserves and production through a combination of exploitation, development, high-potential exploration and control of operations. We follow a technology driven strategy to establish large, contiguous leasehold positions in the core of prolific basins and opportunistically add to those positions through bolt-on acquisitions over time. We entered into the Terryville Complex through strategic acquisitions and grassroots leasing efforts, amassing a land position of 96,733 net acres, 51,522 net acres of which we believe to be in the core of the play. We will continue to identify and opportunistically acquire additional acreage and producing assets to complement our multi-year drilling inventory.

 

Competitive Strengths

 

We believe that the following strengths will allow us to successfully execute our business strategies.

 

Large, concentrated position in one of North America’s leading plays.    We own approximately 60,041 gross (51,522 net) acres in what we believe to be the core of the Terryville Complex in Lincoln Parish, which we believe to be one of North America’s most prolific liquids-rich natural gas fields, characterized by consistent and predictable geology and multiple stacked pay formations confirmed by extensive vertical well control. Through December 31, 2013, our drilling program in the Terryville Complex has produced some of the top performing gas wells in the United States in the previous two years, with single horizontal well results having achieved average 30-day initial production rates of 14.9 MMcfe/d, EURs averaging 11.0 Bcfe and average drilling and completion costs of $8.0 million per well. Approximately 76% of our acreage in the Terryville Complex was held by production at December 31, 2013 and there are no significant lease expirations until 2017. Additionally, all of our acreage in this play can be held by running a one rig program over the next 18 months.

 

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De-risked acreage position with multi-year inventory of liquids-rich drilling opportunities.    As of December 31, 2013, we had a drilling inventory consisting of 1,582 gross identified horizontal drilling locations, of which approximately 145 are gross proved undeveloped locations. Based on our expected 2014 drilling program and net identified drilling locations, we have over 32 years of liquids-rich drilling inventory. The majority of our drilling activity has been and will continue to be focused in the Terryville Complex, where we produce liquids-rich natural gas from the overpressured Cotton Valley formation. We have used subsurface data from our vertical wells coupled with 3-D seismic data to identify and prioritize our inventory based on returns. This liquids-rich gas formation allows for NGL processing that, when coupled with the condensate produced, results in strong well economics. For the three months ended December 31, 2013, 45% of our pro forma MRD Segment revenues were attributable to natural gas, 28% to NGLs and 27% to oil.

 

Significant operational control with low cost operations.    On a proved reserves basis, we operate 99% of our properties and have operational control of all of our drilling inventory in the Terryville Complex. We believe maintaining operational control will enable us to enhance returns by implementing more efficient and cost-effective operating practices, through the selection of economic drilling locations, opportunistic timing of development, continuous improvement of drilling, completion and stimulation techniques and development on multi-well pads. As a result of the contiguous nature of our leasehold in the Terryville Complex and its geologic continuity, we are able to drill consistently long laterals, averaging over 4,800 lateral feet, which helps us to reduce costs on a per-lateral foot basis and increase our returns. We expect the average lateral length of the 35 gross wells that we expect to drill in the Terryville Complex in 2014 to be 6,400 feet per well. Operating in mature basins in North Louisiana and East Texas allows us to take advantage of the available and extensive midstream infrastructure and accelerate our development plan without encountering significant constraints in either takeaway or processing capacity. Our operational control allows us to focus on operating efficiency, which has resulted in our MRD Segment lease operating costs declining 31% from $0.77 per Mcfe for the year ended December 31, 2012 to $0.53 per Mcfe for the year ended December 31, 2013.

 

Proven and incentivized executive and technical team.    We believe our management and technical teams are one of our principal competitive strengths due to our team’s significant industry experience and long history of working together in the identification, execution and integration of acquisitions, cost efficient management of profitable, large scale drilling programs and a focus on rates of return. Additionally, our technical team has substantial expertise in advanced drilling and completion technologies and decades of expertise in operating in the North Louisiana and East Texas regions. The members of our management team collectively have an average of 22 years of experience in the oil and natural gas industry. John A. Weinzierl, our Chief Executive Officer, has 24 years of oil and natural gas industry experience as a petroleum engineer, a strong commercial and technical background and extensive experience acquiring and managing oil and natural gas properties. Our management team has a significant economic interest in us directly and through its equity interests in our controlling stockholder, MRD Holdings. We believe our management team is motivated to deliver high returns, create shareholder value and maintain safe and reliable operations.

 

Our relationship with MEMP.    We own a 0.1% general partner interest in MEMP through our ownership of its general partner as well as 50% of MEMP’s incentive distribution rights. MEMP’s objective as a master limited partnership is to generate stable cash flows, allowing it to make quarterly distributions to its limited partners and, over time, to increase those quarterly distributions. As a result of its familiarity with our management team and our asset base and our track record of prior “drop-down” transactions, we believe that MEMP is a natural purchaser of properties from us that meet its acquisition criteria. We believe this mutually beneficial relationship enhances MEMP’s ability to generate consistent returns on its oil and natural gas properties, provides us with a growing source of cash flow from our partnership interests in MEMP and allows us to monetize producing non-core properties. Since MEMP’s initial public offering, we have consummated “drop-down” transactions with MEMP totaling approximately $376 million. In addition, we may have the opportunity to work jointly with MEMP to pursue certain acquisitions of oil and natural gas properties that may not otherwise be attractive acquisition candidates for either of us individually. While we believe that MEMP

 

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would be a preferred acquirer of our mature, non-core assets, we are under no obligation to offer to sell, and it is under no obligation to offer to buy, any of our properties.

 

Financial strength and flexibility.    During 2013, we generated $159 million of pro forma MRD Segment Adjusted EBITDA and made pro forma total capital expenditures of $203 million, including $70 million on wells coming online in 2014. We intend to continue to fund our organic growth predominantly with internally generated cash flows while maintaining ample liquidity for opportunistic acquisitions. We will continue to maintain a disciplined approach to spending whereby we allocate capital in order to optimize returns and create shareholder value. We seek to protect these future cash flows and liquidity levels by maintaining a three-to-five year rolling hedge program. Pro forma as of December 31, 2013 for this offering and the restructuring transactions (including the redemption of the PIK notes for approximately $363 million 30 days after the closing of this offering), we expect our total liquidity, consisting of cash on hand and available borrowing capacity under our new revolving credit facility, to be in excess of $         million.

 

Acquisition History

 

We built out our leasehold positions in North Louisiana, East Texas and the Rocky Mountains primarily through the following acquisition activities:

 

   

In November 2007, we acquired interests in the Joaquin Field, which is the core of our East Texas acreage;

 

   

In December 2007, we acquired interests in the Tepee Field in the Piceance Basin in Colorado;

 

   

In April and May 2010, we acquired interests in the Terryville Complex and other North Louisiana fields, which are the core of our North Louisiana acreage;

 

   

In November 2010, we acquired interests in the Spider and E. Logansport Fields in North Louisiana;

 

   

In May 2012, we acquired interests in the Terryville Complex and Double A Field in North Louisiana and East Texas;

 

   

In April 2013, we acquired interests in the West Simsboro and Simsboro Fields of the Terryville Complex in North Louisiana;

 

   

In November 2013, we acquired the remaining equity interests in Classic Hydrocarbons Holdings, L.P., Classic Hydrocarbons GP Co., L.L.C. and Black Diamond Minerals, LLC, which hold oil and natural gas properties in East Texas, North Louisiana and the Rocky Mountains; and

 

   

In February 2014, we repurchased net profits interests in the Terryville Complex from an affiliate of NGP for $63.4 million after customary adjustments. These net profits interests were originally sold to the NGP affiliate upon the completion of certain acquisitions in 2010 by WildHorse Resources.

 

2013 and 2014 Capital Budget

 

During 2013, we invested approximately $190 million of capital to drill 31 gross (21.3 net) wells. A substantial portion of our development program is focused on horizontal drilling of liquids rich wells in the Terryville Complex, where we spent approximately $163 million in capital expenditures to drill 15 gross (12.1 net) horizontal wells during 2013.

 

In 2014, we have budgeted a total of $316 million to drill and complete 46 gross (39 net) operated wells and to participate in 12 gross (1.1 net) non-operated wells. We expect to fund our 2014 development primarily from cash flows from operations. The majority of our drilling locations and our 2014 development program are focused on the Terryville Complex, where we plan to invest $264 million on drilling and completing 33 gross (28 net) horizontal wells and 2 gross (2.0 net) vertical wells. We plan to run four to five rigs during 2014

 

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targeting primarily our four primary zones within the Cotton Valley—the Upper Red, Lower Red, Lower Deep Pink and Upper Deep Pink. Total vertical depth of these zones ranges from 8,200 to 11,200 feet.

 

In our East Texas properties in the Joaquin Field, we plan to spend development capital of $36 million running one rig to drill 8 gross (6 net) horizontal wells targeting the Cotton Valley formation at vertical depths of 6,000 to 10,000 feet.

 

In our Rockies & Other area, we plan to spend $12 million of development capital, primarily in the Tepee Field in the Piceance Basin in Colorado focused on completing 3 wells drilled in fourth quarter of 2013 and running 1 rig to drill an additional 3 operated wells. We also plan to spend an additional $4 million to participate in 12 horizontal wells operated by SandRidge Energy in the Mississippian oil play of Northern Oklahoma.

 

Our Equity Owners

 

Our principal stockholder is MRD Holdings, which is controlled by the Funds, which are three of the private equity funds managed by NGP. Upon completion of this initial public offering, MRD Holdings, the selling stockholder in this offering, will own approximately     % of our common stock (or approximately     % if the underwriters’ option to purchase additional shares from MRD Holdings is exercised in full). The Funds also collectively indirectly own 50% of MEMP’s incentive distribution rights. We are also a party to certain other agreements with MRD Holdings, MRD LLC, the Funds and certain of their affiliates. For a description of these agreements, please read “Certain Relationships and Related Party Transactions.”

 

Additionally, upon the closing of this initial public offering, certain former management members of WildHorse Resources will own approximately     % of our common stock. Upon completion of this offering, we will enter into a services agreement with WildHorse Resources Management Company, LLC, which will be a subsidiary of WildHorse Resources II, LLC. NGP and certain former management members of WildHorse Resources own WildHorse Resources II, LLC. For a description of this services agreement, please read “Certain Relationships and Related Party Transactions.”

 

Founded in 1988, NGP is a family of private equity investment funds, with cumulative committed capital of approximately $10.5 billion since inception, organized to make investments in the natural resources sector. NGP is part of the investment platform of NGP Energy Capital Management, a premier investment franchise in the natural resources industry, which together with its affiliates has managed approximately $13 billion in cumulative committed capital since inception.

 

Relationship with Memorial Production Partners LP

 

Through our ownership of its general partner, we control MEMP, a publicly traded limited partnership. In addition to the general partner interest, we also own 50% of MEMP’s incentive distribution rights.

 

MEMP is engaged in the acquisition, exploitation, development and production of oil and natural gas properties in the United States, with assets consisting primarily of producing oil and natural gas properties that are located in East Texas/North Louisiana, the Permian Basin, offshore Southern California, the Rockies, the Eagle Ford and South Texas. Most of MEMP’s properties are located in large, mature oil and natural gas reservoirs with well-known geologic characteristics and long-lived, predictable production profiles and modest capital requirements. As of December 31, 2013:

 

   

MEMP’s total estimated proved reserves were approximately 1,015 Bcfe, of which approximately 60% were natural gas and 61% were classified as proved developed reserves; and

 

   

MEMP produced from 2,866 gross (1,663 net) producing wells across its properties, with an average working interest of 58%.

 

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In accordance with MEMP’s limited partnership agreement, incentive distribution rights represent the right to receive an increasing percentage of quarterly distributions of MEMP’s available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. The minimum quarterly distribution is $0.4750 ($1.90 on an annualized basis) per unit. MEMP GP owns 50% of the incentive distribution rights, which are freely transferable under the MEMP limited partnership agreement. After the closing of this offering, we will own 100% of the voting and economic interests in MEMP GP, and MEMP GP will own 50% of the MEMP incentive distribution rights. The incentive distribution rights are payable as follows:

 

If for any quarter:

 

   

MEMP has distributed available cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and

 

   

MEMP has distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;

 

then, MEMP will distribute any additional available cash from operating surplus for that quarter among the unitholders and the general partner in the following manner:

 

   

first, 99.9% to all unitholders, pro rata, and 0.1% to the holders of the incentive distribution rights (50% of which are owned by MEMP GP), until each unitholder receives a total of $0.54625 per unit for that quarter;

 

   

second, 85.0% to all unitholders, pro rata, and 15.0% to the holders of the incentive distribution rights (50% of which are owned by MEMP GP), until each unitholder receives a total of $0.59375 per unit for that quarter;

 

   

thereafter, 75.0% to all unitholders, pro rata, and 25.0% to the holders of the incentive distribution rights (50% of which are owned by MEMP GP).

 

Since December 2011, MEMP has increased its quarterly cash distribution from $0.4750 ($1.90 on an annualized basis) per unit to $0.5500 ($2.20 on an annualized basis) per unit, which is its most recently announced distribution.

 

MRD LLC currently provides and, following the closing of this offering, we will provide management, administrative, and operations personnel to MEMP under an omnibus agreement. Pursuant to that omnibus agreement, MEMP will be required to reimburse us for all expenses incurred by us (or payments made on MEMP’s behalf) in conjunction with our provision of general and administrative services to MEMP, including its public company expenses and an allocated portion of the salary and benefits of the executive officers of MEMP’s general partner and our other employees who perform services for MEMP or on MEMP’s behalf. Please read “Certain Relationships and Related Party Transactions—Omnibus Agreement” for more information about the omnibus agreement.

 

We view our relationship with MEMP as a part of our strategic alternatives, and we believe that MEMP will be incentivized to acquire additional suitable assets from us and to pursue acquisitions jointly with us in the future. However, MEMP will regularly evaluate acquisitions and may elect to acquire properties in the future without offering us the opportunity to participate in those transactions. Moreover, after this offering, MEMP will continue to be free to act in a manner that is beneficial to its interests without regard to ours, which may include electing not to acquire additional assets from us. Although we believe MEMP will desire to acquire properties from us for purchase, MEMP will not have any obligation to acquire properties from us. If MEMP chooses not to acquire properties from us, then our ability to monetize our proved developed properties may be impaired, which could adversely affect our cash flow and net income.

 

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Our Operations

 

Preparation of Reserve Estimates

 

Oil and natural gas reserve engineering is inherently a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured exactly. The accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and judgment. Accordingly, reserve estimates may vary from the quantities of oil and natural gas that are ultimately recovered. For a discussion of risks associated with reserve estimates, please read “Risk Factors—Risks Related to Our Business—Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in our reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.”

 

Evaluation and Review of Estimated Reserves.    Our historical proved reserve estimates and MEMP’s historical proved reserve estimates were prepared by NSAI, our independent petroleum engineers. The technical persons responsible for preparing our proved reserve estimates meet the requirements with regard to qualifications, independence, objectivity and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers. NSAI does not own an interest in any of our properties, nor is it employed by us on a contingent basis. A copy of NSAI’s summary reserve report regarding our proved reserves as of December 31, 2013 is included as Appendix B-1 to this prospectus. A copy of NSAI’s audit letter regarding the management report of our probable and possible reserves as of December 31, 2013 is included as Appendix B-2 to this prospectus. A copy of NSAI’s summary reserve report regarding the MEMP proved reserves as of December 31, 2013 (the “MEMP Reserve Report”) is included as Exhibit 99.3 to the registration statement of which this prospectus forms a part.

 

Our historical probable and possible reserve estimates were prepared by us and audited by NSAI. We maintain an internal staff of petroleum engineers and geoscience professionals who work closely with our independent reserve engineers to ensure the integrity, accuracy and timeliness of the data used to calculate our estimated reserves and MEMP’s proved reserves. Our technical team meets regularly with NSAI reserve engineers to review properties and discuss the assumptions and methods used in the reserve estimation process. We provide historical information to NSAI for our properties and MEMP’s properties, such as ownership interest, oil and natural gas production, well test data, commodity prices and operating and development costs.

 

Internal Engineers.    John D. Williams is our technical person at MRD LLC primarily responsible for liaison with and oversight of our and MEMP’s third-party reserve engineers, NSAI, which prepared the reserve report for our properties and MEMP’s properties, as of December 31, 2013. Mr. Williams has been practicing petroleum engineering at MRD LLC since March 2012. Mr. Williams is a Registered Professional Engineer in the State of Texas with over 17 years experience in the estimation and evaluation of reserves. From April 2005 to March 2012, he held various positions at Southwestern Energy Company, most recently as Reservoir Engineering Manager. From August 1998 to April 2005, he served in various capacities at Ryder Scott Company, which culminated in his serving as Vice President. Mr. Williams is a graduate of the University of Texas at Austin with a Bachelor of Science Degree in Petroleum Engineering and with a Master of Science Degree in Petroleum Engineering.

 

NSAI is an independent oil and natural gas consulting firm. No director, officer, or key employee of NSAI has any financial ownership in us, MRD LLC, the Funds, or any of their respective affiliates. NSAI’s compensation for the required investigations and preparation of its report is not contingent upon the results obtained and reported. NSAI has not performed other work for us, MRD LLC, the Funds, or any of their respective affiliates that would affect its objectivity. The estimates of proved reserves at December 31, 2013 presented in the NSAI reports were overseen by Mr. Justin S. Hamilton; Mr. David E. Nice; Mr. Richard B. Talley, Jr.; Mr. Philip S. (Scott) Frost; Mr. Joseph J. Spellman; Mr. Eric J. Stevens; Mr. Craig H. Adams; Mr. Nathan C. Shahan; Mr. J. Carter Henson, Jr., Mr. Allen E. Evans, Jr. and Mr. William J. Knights.

 

 

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Justin Hamilton has been practicing consulting petroleum engineering at NSAI since 2004. Mr. Hamilton is a Licensed Professional Engineer in the State of Texas (License No. 104999) and has over 13 years of practical experience in petroleum engineering, with over 13 years of experience in the estimation and evaluation of reserves. He graduated from Brigham Young University in 2000 with a B.S. in mechanical engineering and from the University of Texas in 2007 with an M.B.A.

 

David Nice has been practicing consulting petroleum geology at NSAI since 1998. Mr. Nice is a Licensed Professional Geoscientist in the State of Texas (License No. 346) and has over 28 years of practical experience in petroleum geosciences, with over 15 years of experience in the estimation and evaluation of reserves. He graduated from University of Wyoming in 1982 with a B.S. in geology and in 1985 with an M.S. in geology.

 

Richard Talley has been practicing consulting petroleum engineering at NSAI since 2004. Mr. Talley is a Licensed Professional Engineer in the State of Texas (License No. 102425) and in the State of Louisiana (License No. 36998) and has over 15 years of practical experience in petroleum engineering, with over 9 years of experience in the estimation and evaluation of reserves. He graduated from University of Oklahoma in 1998 with a B.S. in mechanical engineering and from Tulane University in 2001 with an M.B.A.

 

Scott Frost has been practicing consulting petroleum engineering at NSAI since 1984. Mr. Frost is a Licensed Professional Engineer in the State of Texas (License No. 88738) and has over 30 years of practical experience in petroleum engineering, with over 30 years of experience in the estimation and evaluation of reserves. He graduated from Vanderbilt University in 1979 with a B.E. in mechanical engineering and from Tulane University in 1984 with an M.B.A.

 

Joseph Spellman has been practicing consulting petroleum engineering at NSAI since 1989. Mr. Spellman is a Licensed Professional Engineer in the State of Texas (License No. 73709) and has over 30 years of practical experience in petroleum engineering, with over 30 years of experience in the estimation and evaluation of reserves. He graduated from University of Wisconsin-Platteville in 1980 with a B.S. in civil engineering.

 

Eric Stevens has been practicing consulting petroleum engineering at NSAI since 2007. Mr. Stevens is a Licensed Professional Engineer in the State of Texas (License No. 102415) and has over 11 years of practical experience in petroleum engineering, with over 11 years of experience in the estimation and evaluation of reserves. He graduated from Brigham Young University in 2002 with a B.S. in mechanical engineering.

 

Craig Adams has been practicing consulting petroleum engineering at NSAI since 1997. Mr. Adams is a Licensed Professional Engineer in the State of Texas (License No. 68137) and has over 29 years of practical experience in petroleum engineering, with over 17 years of experience in the estimation and evaluation of reserves. He graduated from Texas Tech University in 1985 with a B.S. in petroleum engineering.

 

Nathan Shahan has been practicing consulting petroleum engineering at NSAI since 2007. Mr. Shahan is a Licensed Professional Engineer in the State of Texas (License No. 102389) and has over 12 years of practical experience in petroleum engineering, with over 7 years of experience in the estimation and evaluation of reserves. He graduated from Texas A&M University in 2002 with a B.S. in petroleum engineering and in 2007 with a M.E. in petroleum engineering.

 

Allen Evans has been practicing consulting petroleum geology at NSAI since 1996. Mr. Evans is a Licensed Professional Geoscientist in the State of Texas (License No. 1286) and has over 30 years of practical experience in petroleum geosciences, with over 30 years of experience in the estimation and evaluation of reserves. He graduated from Old Dominion University in 1981 with a B.S. in geology and in 1987 with a M.S. in geology.

 

Carter Henson has been practicing consulting petroleum engineering at NSAI since 1989. Mr. Henson is a Licensed Professional Engineer in the State of Texas (License No. 73964) and has over 30 years of practical experience in petroleum engineering, with over 25 years of experience in the estimation and evaluation of reserves. He graduated from Rice University in 1981 with a B.S. in mechanical engineering.

 

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William Knights has been practicing consulting petroleum geology at NSAI since 1991. William is a Licensed Professional Geoscientist in the State of Texas (License No. 1532) and has over 30 years of practical experience in petroleum geosciences, with over 30 years of experience in the estimation and evaluation of reserves. He graduated from Texas Christian University in 1981 with a B.S. in geology and in 1984 with a M.S. in geology.

 

All eleven technical principals meet or exceed the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers; all eleven are proficient in applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserves definitions and guidelines.

 

Estimation of Proved Reserves.    Under SEC rules, proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. If deterministic methods are used, the SEC has defined reasonable certainty for proved reserves as a “high degree of confidence that the quantities will be recovered.” All of our proved reserves and MEMP’s proved reserves as of December 31, 2013 were estimated using a deterministic method. The estimation of reserves involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and natural gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance with the definitions established under SEC rules. The process of estimating the quantities of recoverable oil and natural gas reserves relies on the use of certain generally accepted analytical procedures. These analytical procedures fall into four broad categories or methods: (1) production performance-based methods; (2) material balance-based methods; (3) volumetric-based methods; and (4) analogy. These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the quantities of reserves. Reserves for proved developed producing wells were estimated using production performance methods for the vast majority of properties. Certain new producing properties with very little production history were forecast using a combination of production performance and analogy to similar production, both of which are considered to provide a relatively high degree of accuracy. Non-producing reserve estimates, for developed and undeveloped properties, were forecast using either volumetric or analogy methods, or a combination of both. These methods provide a relatively high degree of accuracy for predicting proved developed non-producing and proved undeveloped reserves for our properties, due to the mature nature of the properties targeted for development and an abundance of subsurface control data.

 

To estimate economically recoverable proved reserves and related future net cash flows, NSAI considered many factors and assumptions, including the use of reservoir parameters derived from geological, geophysical and engineering data which cannot be measured directly, economic criteria based on current costs and the SEC pricing requirements and forecasts of future production rates.

 

Under SEC rules, reasonable certainty can be established using techniques that have been proven effective by actual production from projects in the same reservoir or an analogous reservoir or by other evidence using reliable technology that establishes reasonable certainty. Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. To establish reasonable certainty with respect to our estimated proved reserves, the technologies and economic data used in the estimation of our proved reserves have been demonstrated to yield results with consistency and repeatability, and include production and well test data, downhole completion information, geologic data, electrical logs, radioactivity logs, core analyses, available seismic data and historical well cost and operating expense data.

 

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Estimation of Probable and Possible Reserves.    Estimates of probable reserves are inherently imprecise. When producing an estimate of the amount of oil and natural gas that is recoverable from a particular reservoir, an estimated quantity of probable reserves is an estimate of those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered. Estimates of probable reserves are also continually subject to revisions based on production history, results of additional exploration and development, price changes and other factors.

 

When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates. Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir. Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.

 

Estimates of possible reserves are also inherently imprecise. When producing an estimate of the amount of oil and natural gas that is recoverable from a particular reservoir, an estimated quantity of possible reserves is an estimate that might be achieved, but only under more favorable circumstances than are likely. Estimates of possible reserves are also continually subject to revisions based on production history, results of additional exploration and development, price changes and other factors.

 

When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates. Possible reserves may be assigned to areas of a reservoir adjacent to probable reserve where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir. Possible reserves also include incremental quantities associated with a greater percentage of recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.

 

Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.

 

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Estimated Reserves

 

The table below identifies our reserves per our reserve report for our three areas:

 

     Oil (MBbl)      Natural
Gas
(MMcf)
     NGLs
(MBbl)
     Total
(MMcfe)
 

Proved Developed

           

Terryville Complex

     2,933         220,588         12,050         310,484   

East Texas

     165         40,435         1,678         51,492   

Rockies & Other

     306         2,774         176         5,665   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Proved Developed

     3,403         263,797         13,905         367,641   

Proved Undeveloped

           

Terryville Complex

     7,585         448,123         23,402         634,049   

East Texas

     323         90,334         5,270         123,887   

Rockies & Other

     —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Proved Undeveloped

     7,908         538,457         28,672         757,936   

Total Proved

           

Terryville Complex

     10,518         668,711         35,452         944,533   

East Texas

     487         130,769         6,948         175,379   

Rockies & Other

     306         2,774         176         5,665   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Proved Reserves

     11,311         802,254         42,577         1,125,577   

Probable(1)

           

Terryville Complex

     10,041         453,902         29,056         688,486   

East Texas

     285         79,765         4,653         109,392   

Rockies & Other

     153         1,519         —           2,439   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Probable Reserves

     10,480         535,185         33,709         800,317   

Possible(1)

           

Terryville Complex

     36,098         1,031,112         65,869         1,642,911   

East Texas

     172         48,299         2,817         66,239   

Rockies & Other

     106         1,128         —           1,762   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Possible Reserves

     36,376         1,080,539         68,686         1,710,913   

 

(1)   Substantially all of our estimated probable and possible reserves are classified as undeveloped.

 

Proved Undeveloped Reserves

 

As of December 31, 2013, we had 758 Bcfe of proved undeveloped reserves, comprised of 8 MMBbls of oil, 538 Bcf of natural gas and 29 MMBbls of NGLs. None of our PUDs as of December 31, 2013 are scheduled to be developed on a date more than five years from the date the reserves were initially booked as PUDs. PUDs will be converted from undeveloped to developed as the applicable wells begin production.

 

Changes in PUDs that occurred during 2013 were due to:

 

   

Reclassifications of 20.2 Bcfe into proved developed reserves for implementation of drilling projects; and

 

   

Reduction of 5.2 Bcfe after giving effect to 66.9 Bcfe of additions from the Terryville Complex due to proving up additional drilling locations.

 

During the year ended December 31, 2013, we spent $69.0 million to convert PUDs to proved developed reserves. As of December 31, 2013 per the reserve report, future development costs relating to the development of PUDs for the years 2014, 2015, 2016, 2017 and 2018 are estimated at approximately $248 million, $358 million,

 

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$282 million, $264 million and $160 million, respectively, to capture the balance of drilling the PUD reserves within a five-year timeframe. Approximately 84%, or $1.1 billion, of the future development costs over the next five years are related to development of PUD reserves in the Terryville Complex. As we continue to develop our properties and have more well production and completion data, we believe we will continue to realize cost savings and experience lower relative drilling and completion costs as we convert PUDs into proved developed reserves in the upcoming years. All of our PUD locations are scheduled to be drilled prior to the end of December 31, 2018. Based on our current expectations of its cash flows, we believe that we can fund the drilling of our current PUD inventory and our expansions in the next five years from our cash flow from operations.

 

Production, Revenues and Price History

 

The following table sets forth information regarding our production, revenues and realized prices and production costs for the years ended December 31, 2013 and 2012.

 

     Year Ended December 31, 2013  
     Terryville      East
Texas
     Rockies
& Other
     Total  

Production Volumes:

           

Oil (MBbls)

     475         165         25         665   

NGLs (MBbls)

     1,243         177         37         1,457   

Natural gas (MMcf)

     27,398         6,249         445         34,092   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (MMcfe)

     37,705         8,297         817         46,819   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average net production (MMcfe/d)

     103.3         22.8         2.2         128.3   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average sales price (excluding commodity derivatives):

           

Oil (per Bbl)

   $ 100.57       $ 102.06       $ 95.78       $ 100.76   

NGL(per Bbl)

   $ 37.69       $ 31.33       $ 40.68       $ 36.99   

Natural gas (per Mcf)

   $ 3.10       $ 3.79       $ 2.91       $ 3.22   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (Mcfe)

   $ 4.76       $ 5.54       $ 6.39       $ 4.93   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average unit costs per Mcfe:

           

Lease operating expense

   $ 0.33       $ 1.24       $ 1.91       $ 0.53   

 

     Year Ended December 31, 2012  
     Terryville      East
Texas
     Rockies
& Other
     Total  

Production Volumes:

           

Oil (MBbls)

     273         67         29         369   

NGLs (MBbls)

     702         85         111         898   

Natural gas (MMcf)

     14,028         8,917         1,185         24,130   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (MMcfe)

     19,874         9,832         2,025         31,731   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average net production (MMcfe/d)

     54.3         26.9         5.5         86.7   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average sales price (excluding commodity derivatives):

           

Oil (per Bbl)

   $ 95.78       $ 97.98       $ 88.05       $ 95.56   

NGL(per Bbl)

   $ 40.52       $ 39.08       $ 43.71       $ 40.78   

Natural gas (per Mcf)

   $ 2.53       $ 3.13       $ 2.32       $ 2.74   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (Mcfe)

   $ 4.53       $ 3.84       $ 5.02       $ 4.35   
  

 

 

    

 

 

    

 

 

    

 

 

 

Average unit costs per Mcfe:

           

Lease operating expense

   $ 0.61       $ 0.99       $ 1.24       $ 0.77   

 

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Productive Wells

 

The following table sets forth certain information regarding productive wells in each of our areas at December 31, 2013.

 

Area

   Gross      Net      Operated  

Terryville Complex

     626         396         499   

East Texas

     123         92         95   

Rockies & Other(1)

     146         20         1   
  

 

 

    

 

 

    

 

 

 

Total

     895         508         595   

 

(1)   Includes the Mississippian oil play of Northern Oklahoma.

 

Acreage

 

The following table sets forth certain information regarding the developed and undeveloped acreage in which we own an interest as of December 31, 2013.

 

    Developed Acres         Undeveloped
Acres
        Total Acreage              
    Gross     Net          Gross     Net          Gross     Net     HBP     WI  

Terryville Complex

    106,374        73,875            24,372        22,858            130,746        96,733        76     74

East Texas

    37,109        30,335            17,228        12,559            54,337        42,894        71     79

Rockies & Other(1)

    5,659        3,147            156,716        63,044            162,375        66,191        5     41
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

   

 

 

   

 

 

 

Total

    149,142        107,357          198,316        98,461          347,458        205,818        52     59

Terryville Complex Core(2)

    35,749        28,743          24,292        22,778          60,041        51,552        56     86

 

(1)   Includes the Mississippian oil play of Northern Oklahoma.
(2)   The substantial majority of what we believe to be the Terryville Complex Core is located in Lincoln Parish, Louisiana and is where we will focus the majority of our future development.

 

Undeveloped Acreage Expirations

 

The following table sets forth the gross and net undeveloped acreage in our core operating areas as of December 31, 2013 that will expire over the next three years unless production is established within the spacing units covering the acreage or the lease is renewed or extended under continuous drilling provisions prior to the primary term expiration dates. There are no reserves attributable to our expiring acreage.

 

     2014      2015      2016  

Area

   Gross      Net      Gross      Net      Gross      Net  

Terryville Complex

     2,407         2,180         2,487         2,390         3,633         3,420   

East Texas

     5,212         2,606         2,027         748         —           —     

Rockies & Other(1)

     3,206         2,199         15,564         8,878         27,582         17,455   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     10,825         6,985         20,078         12,015         31,215         20,875   

 

(1)   Includes the Mississippian oil play of Northern Oklahoma.

 

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Drilling Activity

 

The following table summarizes our drilling activity for the years ended December 31, 2013, 2012 and 2011. Gross wells reflect the sum of all wells in which we own an interest. Net wells reflect the sum of our working interests in gross wells. At December 31, 2013, 10 gross (9.2 net) wells were in various stages of completion.

 

     Years ended December 31,  
     2013      2012      2011  
     Gross      Net      Gross      Net      Gross      Net  

Development wells:

                 

Productive

     22.0         13.3         11.0         10.2         4.0         3.9   

Dry

     —           —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total development wells

     22.0         13.3         11.0         10.2         4.0         3.9   

Exploratory wells:

                 

Productive

     9.0         8.0         7.0         5.6         27.0         9.4   

Dry

     —           —           —           —           3.0         1.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total exploratory wells

     9.0         8.0         7.0         5.6         30.0         10.9   

Total wells drilled

     31.0         21.3         18.0         15.8         34.0         14.8   

 

Drilling Locations

 

All of our 1,582 gross horizontal locations are attributable to acreage that is currently held by production and approximately 9% are attributable to proved undeveloped reserves as of December 31, 2013. In making these assessments, we include properties in which we hold operated and non-operated interests, as well as redevelopment opportunities. Once we have identified acreage that is prospective for the targeted formations, well placement is determined primarily by the regulatory spacing rules prescribed by the governing body in each of our operating areas. Wells drilled in the Cotton Valley formation in the Terryville Complex adhere to 180-acre spacing.

 

Our identified horizontal drilling locations are scheduled to be drilled over many years. The ultimate timing of the drilling of these locations will be influenced by multiple factors, including oil, natural gas and NGL prices, the availability and cost of capital, drilling and production costs, the availability of drilling services and equipment, drilling results, lease expirations, gathering systems, processing, marketing and pipeline transportation constraints, regulatory approvals and other factors. For a discussion of the risks associated with our drilling program, see “Risk Factors—Risks Related to Our Business—Our identified drilling locations, which are scheduled out over many years, are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.”

 

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MEMP

 

The following table summarizes information about MEMP’s proved oil and natural gas reserves by geographic region as of December 31, 2013 and its average net production for the three months ended December 31, 2013:

 

     Estimated Total Proved Reserves                
     Total
(Bcfe)
     % Gas     %
Oil &
NGLs
    %
Developed
    Standardized
Measure

(in
millions)(1)
     Average
Net

Daily
Production

(MMcfe/d)
     R/P
Ratio(2)
(years)
 

East Texas/North Louisiana

     598         69     31     54   $ 688         110.2         15   

Permian Basin

     108         8     92     45     362         13.3         22   

California

     86         0     100     70     344         9.3         25   

Rockies

     61         83     17     84     78         11.5         15   

South Texas

     162         85     15     82     137         23.4         19   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Total

     1,015         60     40     61   $ 1,609         167.7         17   
  

 

 

          

 

 

    

 

 

    

 

(1)   Standardized measure is calculated in accordance with Accounting Standards Codification, or ASC, Topic 932, Extractive Activities—Oil and Gas. Because MEMP is a limited partnership, it is generally not subject to federal or state income taxes and thus makes no provision for federal or state income taxes in the calculation of its standardized measure. Standardized measure does not give effect to commodity derivative contracts.
(2)   The reserve-to-production ratio is calculated by dividing our estimated proved reserves as of December 31, 2013 by average net daily production for the three months ended December 31, 2013 on an annualized basis.

 

Estimated Proved Reserves

 

The following table presents the estimated net proved oil and natural gas reserves attributable to MEMP’s properties and the standardized measure amounts associated with the estimated proved reserves attributable to MEMP’s properties as of December 31, 2013, based on MEMP’s reserve report.

 

     Oil (MBbl)      Natural
Gas
(MMcf)
     Natural
Gas
Liquids
(MBbl)
     Total
(MMcfe)
 

Estimated Proved Reserves

           

Total Proved Developed

     22,265         387,548         15,959         616,893   

Total Proved Undeveloped

     16,884         219,591         12,887         398,212   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Proved Reserves

     39,149         607,139         28,846         1,015,105   

 

Development of Proved Undeveloped Reserves

 

As of December 31, 2013, MEMP had 398,212 MMcfe of proved undeveloped reserves, comprised of 16,884 MBbls of oil, 219,591 MMcf of natural gas and 12,887 MBbls of NGLs. None of MEMP’s PUDs as of December 31, 2013 are scheduled to be developed on a date more than five years from the date the reserves were initially booked as PUDs. PUDs will be converted from undeveloped to developed as the applicable wells begin production.

 

Changes in PUDs that occurred during 2013 were due to:

 

   

Reclassifications of 69.5 Bcfe into proved developed reserves for implementation of drilling projects; and

 

   

Increases of 72.3 Bcfe primarily due to reserve additions and price revisions.

 

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During the year ended December 31, 2013, MEMP spent $103.4 million to convert PUDs to proved developed reserves. As of December 31, 2013 per the MEMP Reserve Report, future development costs relating to the development of PUDs for the years 2014, 2015, 2016, 2017 and 2018 are estimated at approximately $185 million, $178 million, $179 million, $72 million and $7 million, respectively, to capture the balance of drilling the PUD reserves within a five-year timeframe. As MEMP continues to develop its properties and have more well production and completion data, MEMP believes it will continue to realize cost savings and experience lower relative drilling and completion costs as we convert PUDs into proved developed reserves in the upcoming years. All of MEMP’s PUD locations are scheduled to be drilled prior to the end of December 31, 2018. Based on MEMP’s current expectations of its cash flows, MEMP believes that it can fund the drilling of its current PUD inventory and its expansions in the next five years from its cash flow from operations.

 

Production, Revenue and Price History

 

The following tables summarize MEMP’s average net production, average sales prices by product and average production costs for the years ended December 31, 2013 and 2012, respectively:

 

     Year Ended December 31,  
         2013              2012      

Production Volumes:

     

Oil (MBbls)

     1,764         1,519   

NGLs (MBbls)

     1,632         745   

Natural gas (MMcf)

     35,924         29,744   
  

 

 

    

 

 

 

Total (MMcfe)

     56,303         43,329   

Average net production (MMcfe/d)

     154.3         118.4   

Average Sales Price (Excluding Commodity Derivatives):

     

Oil (per Bbl)

   $ 96.98       $ 95.54   

NGL (Per Bbl)

     31.38         35.75   

Natural Gas (per Mcf)

     3.31         2.82   
  

 

 

    

 

 

 

Total (per Mcfe)

   $ 6.06       $ 5.90   

Average Unit Costs per Mcfe:

     

Lease operating expense

   $ 1.58       $ 1.85   

 

Productive Wells

 

Productive wells consist of producing wells and wells capable of production, including natural gas wells awaiting pipeline connections to commence deliveries and oil wells awaiting connection to production facilities. Gross wells are the total number of producing wells in which MEMP owns an interest, and net wells are the sum of MEMP’s fractional working interests owned in gross wells. The following table sets forth information relating to the productive wells in which MEMP owned a working interest as of December 31, 2013.

 

     Oil      Natural Gas  
     Gross      Net      Gross      Net  

Operated(1)

     489         441         1,432         1,063   

Non-operated

     43         8         902         151   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     532         449         2,334         1,214   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)   Includes wells operated by MRD LLC on MEMP’s behalf.

 

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Developed Acreage

 

Acreage related to royalty, overriding royalty and other similar interests is excluded from this summary. As of December 31, 2013, substantially all of MEMP’s leasehold acreage was held by production. The following table sets forth information as of December 31, 2013 relating to MEMP’s leasehold acreage.

 

     Developed Acreage(1)  

Region

   Gross(2)      Net(3)  

East Texas/North Louisiana

     142,118         55,593   

Permian

     33,832         24,675   

Rockies

     133,664         48,910   

South Texas

     85,027         70,629   
  

 

 

    

 

 

 

Total

     394,641         199,807   
  

 

 

    

 

 

 

 

(1)   Developed acres are acres spaced or assigned to productive wells or wells capable of production.
(2)   A gross acre is an acre in which MEMP owns a working interest. The number of gross acres is the total number of acres in which MEMP owns a working interest.
(3)   A net acre is deemed to exist when the sum of MEMP’s fractional ownership working interests in gross acres equals one. The number of net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof.

 

Undeveloped Acreage

 

The following table sets forth information as of December 31, 2013 relating to MEMP’s undeveloped leasehold acreage.

 

     Undeveloped
Acreage
 

Region

   Gross(1)      Net(2)  

East Texas/North Louisiana

     14,385         5,254   

Permian

     16,717         13,599   

Rockies

     73,422         50,802   

South Texas

     1,658         1,658   
  

 

 

    

 

 

 

Total

     106,182         71,313   
  

 

 

    

 

 

 

 

(1)   A gross acre is an acre in which MEMP owns a working interest. The number of gross acres is the total number of acres in which MEMP owns a working interest.
(2)   A net acre is deemed to exist when the sum of MEMP’s fractional ownership working interests in gross acres equals one. The number of net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof.

 

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Drilling Activities

 

MEMP’s drilling activities consist entirely of development wells. The following table sets forth information with respect to wells drilled and completed by MEMP, its predecessor, or the previous owners during the periods indicated. The information should not be considered indicative of future performance, nor should a correlation be assumed between the number of productive wells drilled, quantities of reserves found or economic value.

 

     Year Ended December 31,  
     2013      2012      2011  
     Gross      Net      Gross      Net      Gross      Net  

Development wells:

                 

Productive

     45.0         32.6         38.0         24.4         14.0         10.7   

Dry

     —           —           1.0         1.0         1.0         1.0   

Exploratory wells:

                 

Productive

     —           —           —           —           —           —     

Dry

     —           —           —           —           —           —     

Total wells:

                 

Productive

     45.0         32.6         38.0         24.4         14.0         10.7   

Dry

     —           —           1.0         1.0         1.0         1.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     45.0         32.6         39.0         25.4         15.0         11.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

For purposes of the table above, MEMP’s predecessor refers collectively to (a) BlueStone and its wholly-owned subsidiaries and certain oil and natural gas properties owned by Classic Hydrocarbons Holdings, L.P. for periods prior to the closing of MEMP’s initial public offering on December 14, 2011 and (b) for periods after April 8, 2011 through the closing of MEMP’s initial public offering, certain oil and natural gas properties owned by WHT Energy Partners LLC. MEMP’s previous owners refers collectively to (a) certain oil and natural gas properties that MEMP acquired from MRD LLC in April and May 2012 for periods after common control commenced through their respective acquisition dates and (b) Rise Energy Operating, LLC and its wholly-owned subsidiaries (except for Rise Energy Operating, Inc.) from February 3, 2009 (inception) through December 11, 2012.

 

Delivery Commitments

 

MEMP has no commitments to deliver a fixed and determinable quantity of our oil or natural gas production in the near future under our existing contracts.

 

Marketing and Major Customers

 

We market the majority of production from properties we and MEMP operate for both our account and the account of the other working interest owners in our operated properties. We sell substantially all of our production to a variety of purchasers under contracts ranging from one month to several years, all at market prices. We normally sell production to a relatively small number of customers, as is customary in the exploration, development and production business. During the year ended December 31, 2013, Energy Transfer Equity, L.P. and subsidiaries accounted for 77% of our revenues and Phillips 66 accounted for 15% of MEMP’s revenues. If we were to lose any one of our customers, the loss could temporarily delay production and sale of a portion of our oil and natural gas in the related producing region. If we were to lose any single customer, we believe we could identify a substitute customer to purchase the impacted production volumes.

 

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Title to Properties

 

We believe that we and MEMP have satisfactory title to all of our producing properties in accordance with generally accepted industry standards. As is customary in the industry, in the case of undeveloped properties, often cursory investigation of record title is made at the time of lease acquisition. Investigations are made before the consummation of an acquisition of producing properties and before commencement of drilling operations on undeveloped properties. Individual properties may be subject to burdens that we believe do not materially interfere with the use or affect the value of the properties. Burdens on properties may include customary royalty interests, liens incident to operating agreements and for current taxes, obligations or duties under applicable laws, development obligations under natural gas leases, or net profits interests.

 

Oil and Natural Gas Leases

 

The typical oil and natural gas lease agreement covering our properties and MEMP’s properties provides for the payment of royalties to the mineral owner for all oil and natural gas produced from any wells drilled on the leased premises. The lessor royalties and other leasehold burdens on our properties generally range from 12.5% to 25%, resulting in a net revenue interest to us generally ranging from 87.5% to 75%. 52% of our leasehold acreage is held by production.

 

Seasonality

 

Demand for oil and natural gas generally decreases during the spring and fall months and increases during the summer and winter months. However, seasonal anomalies such as mild winters or mild summers sometimes lessen this fluctuation. In addition, certain natural gas users utilize natural gas storage facilities and purchase some of their anticipated winter requirements during the summer. This can also lessen seasonal demand fluctuations. These seasonal anomalies can increase competition for equipment, supplies and personnel during the spring and summer months, which could lead to shortages and increase costs or delay our operations or MEMP’s operations.

 

Competition

 

The oil and natural gas industry is intensely competitive, and we and MEMP compete with other companies in our industry that have greater resources than we do, especially in our focus areas. Many of these companies not only explore for and produce oil and natural gas, but also carry on refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive natural gas properties and exploratory locations or define, evaluate, bid for and purchase a greater number of properties and locations than our financial or human resources permit, and may be able to expend greater resources to attract and maintain industry personnel. In addition, these companies may have a greater ability to continue exploration activities during periods of low natural gas market prices. Our larger competitors may be able to absorb the burden of existing, and any changes to, federal, state and local laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory locations and producing natural gas properties.

 

Hydraulic Fracturing

 

We and MEMP use hydraulic fracturing as a means to maximize the productivity of almost every well that we drill and complete. Hydraulic fracturing is a necessary part of the completion process because our properties are dependent upon our ability to effectively fracture the producing formations in order to produce at economic rates. Nearly all of our proved non-producing and proved undeveloped reserves associated with future drilling,

 

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recompletion, and refracture stimulation projects, or approximately 71.3% of our total estimated proved reserves as of December 31, 2013 and approximately 37.6% of MEMP’s total estimated proved reserves as of December 31, 2013, require hydraulic fracturing.

 

We have and continue to follow applicable industry standard practices and legal requirements for groundwater protection in our and MEMP’s operations which are subject to supervision by state and federal regulators (including the Bureau of Land Management on federal acreage). These protective measures include setting surface casing at a depth sufficient to protect fresh water zones as determined by regulatory agencies, and cementing the well to create a permanent isolating barrier between the casing pipe and surrounding geological formations. This aspect of well design essentially eliminates a pathway for the fracturing fluid to contact any aquifers during the hydraulic fracturing operations. For recompletions of existing wells, the production casing is pressure tested prior to perforating the new completion interval.

 

Injection rates and pressures are monitored instantaneously and in real time at the surface during our hydraulic fracturing operations. Pressure is monitored on both the injection string and the immediate annulus to the injection string. Hydraulic fracturing operations would be shut down immediately if an abrupt change occurred to the injection pressure or annular pressure.

 

Certain state regulations require disclosure of the components in the solutions used in hydraulic fracturing operations. Approximately 99% of the hydraulic fracturing fluids we use are made up of water and sand. The remainder of the constituents in the fracturing fluid are managed and used in accordance with applicable requirements.

 

Hydraulic fracture stimulation requires the use of a significant volume of water. Upon flowback of the water, we dispose of it in a way that minimizes the impact to nearby surface water by disposing into approved disposal or injection wells. We currently do not discharge water to the surface.

 

For information regarding existing and proposed governmental regulations regarding hydraulic fracturing and related environmental matters, please read “—Regulation of Environmental and Occupational Health and Safety Matters—Hydraulic Fracturing.”

 

Regulation of the Oil and Natural Gas Industry

 

Our and MEMP’s operations are substantially affected by federal, state and local laws and regulations. In particular, natural gas production and related operations are, or have been, subject to price controls, taxes and numerous other laws and regulations. All of the jurisdictions in which we own or operate producing oil and natural gas properties have statutory provisions regulating the exploration for and production of oil and natural gas, including provisions related to permits for the drilling of wells, bonding requirements to drill or operate wells, the location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, sourcing and disposal of water used in the drilling and completion process, and the abandonment of wells. Our operations are also subject to various conservation laws and regulations. These include the regulation of the size of drilling and spacing units or proration units, the number of wells which may be drilled in an area, and the unitization or pooling of crude natural gas wells, as well as regulations that generally prohibit the venting or flaring of natural gas, and impose certain requirements regarding the ratability or fair apportionment of production from fields and individual wells.

 

Failure to comply with applicable laws and regulations can result in substantial penalties. The regulatory burden on the industry increases the cost of doing business and affects profitability. Although we believe we are in substantial compliance with all applicable laws and regulations, such laws and regulations are frequently amended or reinterpreted. Therefore, we are unable to predict the future costs or impact of compliance. Additional proposals and proceedings that affect the natural gas industry are regularly considered by Congress, the states, FERC, and the courts. We cannot predict when or whether any such proposals may become effective.

 

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We believe we and MEMP are in substantial compliance with currently applicable laws and regulations and that continued substantial compliance with existing requirements will not have a material adverse effect on our financial position, cash flows or results of operations. However, current regulatory requirements may change, currently unforeseen environmental incidents may occur or past non-compliance with environmental laws or regulations may be discovered.

 

Regulation of Production of Oil and Natural Gas

 

The production of oil and natural gas is subject to regulation under a wide range of local, state and federal statutes, rules, orders and regulations. Federal, state and local statutes and regulations require permits for drilling operations, drilling bonds and reports concerning operations. All of the states in which we and MEMP own and operate properties have regulations governing conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum allowable rates of production from oil and natural gas wells, the regulation of well spacing, and plugging and abandonment of wells. The effect of these regulations is to limit the amount of oil and natural gas that we can produce from our wells and to limit the number of wells or the locations at which we can drill, although we can apply for exceptions to such regulations or to have reductions in well spacing. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and natural gas liquids within its jurisdiction. We own interests in properties located onshore in different U.S. states. These states regulate drilling and operating activities by requiring, among other things, permits for the drilling of wells, maintaining bonding requirements in order to drill or operate wells, and regulating the location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled and the plugging and abandonment of wells. The laws of these states also govern a number of environmental and conservation matters, including the handling and disposing or discharge of waste materials, the size of drilling and spacing units or proration units and the density of wells that may be drilled, unitization and pooling of oil and natural gas properties and establishment of maximum rates of production from oil and natural gas wells. Some states have the power to prorate production to the market demand for oil and natural gas. The failure to comply with these rules and regulations can result in substantial penalties. Our competitors in the oil and natural gas industry are subject to the same regulatory requirements and restrictions that affect our operations.

 

Regulation of Environmental and Occupational Health and Safety Matters

 

Our and MEMP’s operations are subject to numerous stringent federal, state and local statutes and regulations governing the discharge of materials into the environment or otherwise relating to protection of the environment or occupational health and safety. Numerous governmental agencies, such as the U.S. Environmental Protection Agency (“EPA”), issue regulations, which often require difficult and costly compliance measures that carry substantial administrative, civil and criminal penalties and may result in injunctive obligations for failure to comply. These laws and regulations may require the acquisition of a permit before drilling commences, restrict the types, quantities and concentrations of various substances that can be released into the environment in connection with drilling, production and transporting through pipelines, govern the sourcing and disposal of water used in the drilling, completion and production process, limit or prohibit drilling activities in certain areas and on certain lands lying within wilderness, wetlands, frontier and other protected areas, require some form of remedial action to prevent or mitigate pollution from current or former operations such as plugging abandoned wells or closing earthen pits, result in the suspension or revocation of necessary permits, licenses and authorizations, require that additional pollution controls be installed and impose substantial liabilities for pollution resulting from operations or failure to comply with regulatory filings. In addition, these laws and regulations may restrict the rate of production. The strict and joint and several liability nature of such laws and regulations could impose liability upon us regardless of fault. Public interest in the protection of the environment has increased dramatically in recent years. The trend of more expansive and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability. Changes in environmental laws and regulations occur frequently, and to the extent laws are enacted or other governmental

 

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action is taken that restricts drilling or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, our business and prospects, as well as the oil and natural gas industry in general, could be materially adversely affected.

 

Hazardous Substance and Waste Handling

 

Our and MEMP’s operations are subject to environmental laws and regulations relating to the management and release of hazardous substances, solid and hazardous wastes and petroleum hydrocarbons. These laws generally regulate the generation, storage, treatment, transportation and disposal of solid and hazardous waste and may impose strict and, in some cases, joint and several liability for the investigation and remediation of affected areas where hazardous substances may have been released or disposed. The Comprehensive Environmental Response, Compensation, and Liability Act, as amended, referred to as CERCLA or the Superfund law, and comparable state laws, impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons deemed “responsible parties.” These persons include current owners or operators of the site where a release of hazardous substances occurred, prior owners or operators that owned or operated the site at the time of the release or disposal of hazardous substances, and companies that disposed or arranged for the disposal of the hazardous substances found at the site. Under CERCLA, these persons may be subject to strict and joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA also authorizes the EPA and, in some instances, third parties to act in response to threats to the public health or the environment and to seek to recover the costs they incur from the responsible classes of persons. It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Despite the “petroleum exclusion” of Section 101(14) of CERCLA, which currently encompasses natural gas, we may nonetheless handle hazardous substances within the meaning of CERCLA, or similar state statutes, in the course of our ordinary operations and, as a result, may be jointly and severally liable under CERCLA for all or part of the costs required to clean up sites at which these hazardous substances have been released into the environment. In addition, we may have liability for releases of hazardous substances at our properties by prior owners or operators or other third parties.

 

The Oil Pollution Act of 1990 (the “OPA”) is the primary federal law imposing oil spill liability. The OPA contains numerous requirements relating to the prevention of and response to petroleum releases into waters of the United States, including the requirement that operators of offshore facilities and certain onshore facilities near or crossing waterways must maintain certain significant levels of financial assurance to cover potential environmental cleanup and restoration costs. Under the OPA, strict, joint and several liability may be imposed on “responsible parties” for all containment and cleanup costs and certain other damages arising from a release, including, but not limited to, the costs of responding to a release of oil to surface waters and natural resource damages, resulting from oil spills into or upon navigable waters, adjoining shorelines or in the exclusive economic zone of the United States. A “responsible party” includes the owner or operator of an onshore facility. The OPA establishes a liability limit for onshore facilities of $350 million. These liability limits may not apply if: a spill is caused by a party’s gross negligence or willful misconduct; the spill resulted from violation of a federal safety, construction or operating regulation; or a party fails to report a spill or to cooperate fully in a clean-up. We are also subject to analogous state statutes that impose liabilities with respect to oil spills.

 

We also generate solid wastes, including hazardous wastes, which are subject to the requirements of the Resource Conservation and Recovery Act (“RCRA”), as amended, and comparable state statutes. Although RCRA regulates both solid and hazardous wastes, it imposes strict requirements on the generation, storage, treatment, transportation and disposal of hazardous wastes. Certain petroleum production wastes are excluded from RCRA’s hazardous waste regulations. It is possible, however, that these wastes, which could include wastes currently generated during our operations, could be designated as “hazardous wastes” in the future and, therefore, be subject to more rigorous and costly disposal requirements. Indeed, legislation has been proposed from time to time in Congress to re-categorize certain oil and gas exploration and production wastes as “hazardous wastes.”

 

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Any such changes in the laws and regulations could have a material adverse effect on our maintenance capital expenditures and operating expenses.

 

We believe that we and MEMP are in substantial compliance with the requirements of CERCLA, RCRA, OPA and related state and local laws and regulations, and that we hold all necessary and up-to-date permits, registrations and other authorizations required under such laws and regulations. Although we believe that the current costs of managing our wastes as they are presently classified are reflected in our budget, any legislative or regulatory reclassification of oil and natural gas exploration and production wastes could increase our costs to manage and dispose of such wastes.

 

Water and Other Waste Discharges and Spills

 

The Federal Water Pollution Control Act, as amended, also known as the Clean Water Act, the Safe Drinking Water Act (“SDWA”), the OPA and comparable state laws impose restrictions and strict controls regarding the discharge of pollutants, including produced waters and other natural gas wastes, into federal and state waters. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or the state. The discharge of dredge and fill material in regulated waters, including wetlands, is also prohibited, unless authorized by a permit issued by the U.S. Army Corps of Engineers. The EPA has also adopted regulations requiring certain oil and natural gas exploration and production facilities to obtain individual permits or coverage under general permits for storm water discharges. Costs may be associated with the treatment of wastewater or developing and implementing storm water pollution prevention plans, as well as for monitoring and sampling the storm water runoff from certain of our facilities. Some states also maintain groundwater protection programs that require permits for discharges or operations that may impact groundwater conditions. The underground injection of fluids is subject to permitting and other requirements under state laws and regulation. Obtaining permits has the potential to delay the development of oil and natural gas projects. These same regulatory programs also limit the total volume of water that can be discharged, hence limiting the rate of development, and require us to incur compliance costs. These laws and any implementing regulations provide for administrative, civil and criminal penalties for any unauthorized discharges of oil and other substances in reportable quantities and may impose substantial potential liability for the costs of removal, remediation and damages. Pursuant to these laws and regulations, we may be required to obtain and maintain approvals or permits for the discharge of wastewater or storm water and the underground injection of fluids and are required to develop and implement spill prevention, control and countermeasure plans, also referred to as “SPCC plans,” in connection with on-site storage of significant quantities of oil. We and MEMP maintain all required discharge permits necessary to conduct our operations, and we believe we and MEMP are in substantial compliance with their terms.

 

Hydraulic Fracturing

 

We and MEMP use hydraulic fracturing extensively in our operations. Hydraulic fracturing is an essential and common practice in the oil and gas industry used to stimulate production of natural gas and/or oil from low permeability subsurface rock formations. Hydraulic fracturing involves using water, sand, and certain chemicals to fracture the hydrocarbon-bearing rock formation to allow flow of hydrocarbons into the wellbore. While hydraulic fracturing has historically been regulated by state oil and natural gas commissions, the practice has become increasingly controversial in certain parts of the country, resulting in increased scrutiny and regulation. For example, the EPA has asserted federal regulatory authority over certain hydraulic-fracturing activities under the SDWA involving the use of diesel fuels and published permitting guidance in February 2014 addressing the use of diesel in fracturing operations. Also, the EPA has indicated that it may develop and issue regulations under the Toxic Substances Control Act to require companies to disclose information regarding the chemicals used in hydraulic fracturing; however, to date, it has taken no action to do so. In addition, Congress has from time to time considered legislation to amend the SDWA, including legislation that would repeal the exemption for hydraulic fracturing from the definition of “underground injection” and require federal permitting and regulatory control of hydraulic fracturing, as well as legislative proposals to require disclosure of the chemical constituents of the

 

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fluids used in the fracturing process. Also, in the near future we may be subject to regulations that restrict our ability to discharge water produced as part of our production operations, and the ability to use injection wells as a disposal option not only will depend on federal or state regulations but also on whether available injection wells have sufficient storage capacities. The EPA is currently developing effluent limitation guidelines that may impose federal pre-treatment standards on all oil and gas operators transporting wastewater associated with hydraulic fracturing activities to publicly owned treatment works for disposal. The EPA plans to propose such standards by late 2014. In addition, in May 2013, the federal Bureau of Land Management published a supplemental notice of proposed rulemaking governing hydraulic fracturing on federal and Indian lands that replaces a prior draft of proposed rulemaking issued by the agency in May 2012. The revised proposed rule would continue to require public disclosure of chemicals used in hydraulic fracturing on federal and Indian lands, confirmation that wells used in fracturing operations meet appropriate construction standards, and development of appropriate plans for managing flowback water that returns to the surface.

 

Further, in April 2012, the EPA released final rules that subject all oil and gas operations (production, processing, transmission, storage and distribution) to regulation under the new source performance standards (“NSPS”) and the National Emission Standards for Hazardous Air Pollutants (“NESHAPS”) programs. These rules became effective October 2012. The rules include NSPS standards for completions of hydraulically-fractured gas wells. The standards include the reduced emission completion techniques, or “green completions,” developed in the EPA’s Natural Gas STAR program along with pit flaring of gas not sent to the gathering line. “Green completions” for hydraulic fracturing will require the operator to recover rather than vent the gas and NGLs that come to the surface during completion of the fracturing process. The standards will be applicable to newly drilled and fractured wells and wells that are refractured on or after January 1, 2015. Further, the rules under NESHAPS include Maximum Achievable Control Technology (“MACT”) standards for glycol dehydrators and storage vessels at major source of hazardous air pollutants not currently subject to MACT standards. In September 2013, the EPA issued an amendment extending compliance dates for certain storage vessels. The rule is designed to limit emissions of volatile organic compounds (“VOC”), sulfur dioxide, and hazardous air pollutants from a variety of sources within natural gas processing plants, oil and natural gas production facilities, and natural gas transmission compressor stations. This rule could require a number of modifications to our operations including the installation of new equipment. Compliance with such rules could result in significant costs, including increased capital expenditures and operating costs, and could adversely impact our business. Additionally, in December 2012, seven states submitted a notice of intent to sue the EPA to compel the agency to make a determination as to whether standards or performance limiting methane emissions from oil and gas sources is appropriate and if so, to promulgate performance standards for methane emissions from existing oil and gas sources.

 

Several states have adopted, or are considering adopting, regulations that could restrict or prohibit hydraulic fracturing in certain circumstances and/or require the disclosure of the composition of hydraulic fracturing fluids. For example, Texas requires oil and natural gas operators to publicly disclose the chemicals used in the hydraulic fracturing process. Regulations require that well operators disclose the list of chemical ingredients subject to the requirements of the Occupational Safety and Health Act, as amended (“OSHA”) for disclosure on an internet website and also file the list of chemicals with the Texas Railroad Commission with the well completion report. The total volume of water used to hydraulically fracture a well must also be disclosed to the public and filed with the Texas Railroad Commission. Furthermore, in May 2013, the Texas Railroad Commission issued a “well integrity rule,” which updates the requirements for drilling, putting pipe down, and cementing wells. The rule also includes new testing and reporting requirements, such as (i) the requirement to submit cementing reports after well completion or after cessation of drilling, whichever is later, and (ii) the imposition of additional testing on wells less than 1,000 feet below usable groundwater. The “well integrity rule” took effect in January 2014. We believe that we follow applicable standard industry practices and legal requirements for groundwater protection in our hydraulic fracturing activities. Nonetheless, if new or more stringent federal, state, or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development, or production activities, and perhaps even be precluded from drilling wells.

 

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Certain governmental reviews have been conducted or are underway that focus on environmental aspects of hydraulic fracturing practices, which could lead to increased regulation. For example, the White House Council on Environmental Quality is coordinating an administration-wide review of hydraulic fracturing practices. The EPA has also commenced a study of the potential environmental effects of hydraulic fracturing on drinking water and groundwater, with a first progress report outlining work currently underway by the agency released on December 21, 2012, and a final report drawing conclusions about the potential impacts of hydraulic fracturing on drinking water resources expected to be available for public comment and peer review by late 2014. Other governmental agencies, including the U.S. Department of Energy, have evaluated or are evaluating various other aspects of hydraulic fracturing. These ongoing or proposed studies could spur initiatives to further regulate hydraulic fracturing under the SDWA or other regulatory mechanisms, and could ultimately make it more difficult or costly for us to perform fracturing and increase our costs of compliance and doing business.

 

A number of lawsuits and enforcement actions have been initiated across the country alleging that hydraulic fracturing practices have adversely impacted drinking water supplies, use of surface water, and the environment generally. If new laws or regulations that significantly restrict hydraulic fracturing are adopted, such laws could make it more difficult or costly for us to perform fracturing to stimulate production from tight formations as well as make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater. In addition, if hydraulic fracturing is further regulated at the federal or state level, our fracturing activities could become subject to additional permitting and financial assurance requirements, more stringent construction specifications, increased monitoring, reporting and recordkeeping obligations, plugging and abandonment requirements and also to attendant permitting delays and potential increases in costs. Such legislative changes could cause us to incur substantial compliance costs, and compliance or the consequences of any failure to comply by us could have a material adverse effect on our financial condition and results of operations. At this time, it is not possible to estimate the impact on our business of newly enacted or potential federal or state legislation governing hydraulic fracturing, and any of the above risks could impair our ability to manage our business and have a material adverse effect on our operations, cash flows and financial position.

 

Air Emissions

 

The federal Clean Air Act, as amended, and comparable state laws restrict the emission of air pollutants from many sources, including compressor stations, through the issuance of permits and the imposition of other requirements. These laws and regulations may require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with stringent air permit requirements or utilize specific equipment or technologies to control emissions of certain pollutants. The need to obtain permits has the potential to delay the development of oil and natural gas projects. Over the next several years, we may be required to incur certain capital expenditures for air pollution control equipment or other air emissions related issues. For example, in August 2012, the EPA published final rules under the Clean Air Act that subject oil and natural gas production, processing, transmission and storage operations to regulation under the NSPS and NESHAPS programs. With regards to production activities, these final rules require, among other things, the reduction of volatile organic compound emissions from three subcategories of fractured and refractured gas wells for which well completion operations are conducted: wildcat (exploratory) and delineation gas wells; low reservoir pressure non-wildcat and non-delineation gas wells; and all “other” fractured and refractured gas wells. All three subcategories of wells must route flow back emissions to a gathering line or be captured and combusted using a combustion device such as a flare after October 15, 2012. However, the “other” wells must use reduced emission completions, also known as “green completions,” with or without combustion devices, after January 1, 2015. These regulations also establish specific new requirements regarding emissions from production-related wet seal and reciprocating compressors, effective October 15, 2012, and from pneumatic controllers and storage vessels, effective October 15, 2013. The EPA received numerous requests for reconsideration of these rules from both industry and the environmental community, and court challenges to the rules were also filed. The EPA issued revised rules in 2013 responding to these requests. For example, on April 12, 2013, the EPA published a proposed amendment

 

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extending compliance dates for certain storage vessels, and on September 23, 2013, the EPA issued a press release announcing that it had finalized the proposed amendment.

 

We may be required to incur certain capital expenditures in the next few years for air pollution control equipment in connection with maintaining or obtaining operating permits addressing other air emission related issues, which may have a material adverse effect on our operations. Obtaining permits also has the potential to delay the development of oil and natural gas projects. We believe that we and MEMP currently are in substantial compliance with all air emissions regulations and that we and MEMP hold all necessary and valid construction and operating permits for our current operations.

 

Regulation of “Greenhouse Gas” Emissions

 

In response to findings that emissions of carbon dioxide, methane and other greenhouse gases (“GHGs”) present an endangerment to public health and the environment, the EPA has adopted regulations under existing provisions of the federal Clean Air Act that, among other things, establish Prevention of Significant Deterioration (“PSD”) construction and Title V operating permit reviews for certain large stationary sources that are potential major sources of GHG emissions. As part of these efforts, the EPA issued a final rule (the “Tailoring Rule”), effective January 1, 2011, that established emissions thresholds such that only these large stationary sources are subject to GHG permitting. On October 15, 2013, the U.S. Supreme Court announced it will review aspects of the Tailoring Rule in 2014. In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified onshore and offshore oil and gas production sources in the United States on an annual basis, which include certain of our operations.

 

In addition, in August 2012, the EPA established NSPS for VOCs and sulfur dioxide and an air toxic standard for oil and natural gas production, transmission, and storage. The rules include the first federal air standards for natural gas wells that are hydraulically fractured, or refractured, as well as requirements for several other sources, such as storage tanks and other equipment, and limits methane emissions from these sources in an effort to reduce GHG emissions. These requirements could adversely affect our operations by requiring us to make significant expenditures to ensure compliance with the NSPS.

 

While Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years. In the absence of such federal climate legislation, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs. If Congress were to undertake comprehensive tax reform in the coming year, it is possible that such reform may include a carbon tax, which could impose additional direct costs on operations and reduce demand for refined products. In any event, the Obama administration has announced its Climate Action Plan, which, among other things, directs federal agencies to develop a strategy for the reduction of methane emissions, including emissions from the oil and gas industry. As part of the Climate Action Plan, the Obama Administration also announced that it intends to adopt additional regulations to reduce emissions of GHGs and to encourage greater use of low carbon technologies in the coming years. For example, in September 2013, the EPA re-issued proposed NSPS for GHG emissions from Electric Utility Generating Units. Finally, it should be noted that some scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods and other climatic events; if any such effects were to occur, they could have an adverse effect on our exploration and production operations.

 

Restrictions on GHG emissions that may be imposed in various states could adversely affect the oil and natural gas industry. Any GHG regulation could increase our costs of compliance by potentially delaying the receipt of permits and other regulatory approvals; requiring us to monitor emissions, install additional equipment or modify facilities to reduce GHG and other emissions; purchase emission credits; and utilize electric driven

 

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compression at facilities to obtain regulatory permits and approvals in a timely manner. While we are subject to certain federal GHG monitoring and reporting requirements, our operations are not adversely impacted by existing federal, state and local climate change initiatives and, at this time, it is not possible to accurately estimate how potential future laws or regulations addressing GHG emissions would impact our business.

 

Occupational Safety and Health Act

 

We are also subject to the requirements of the OSHA and comparable state laws that regulate the protection of the health and safety of employees. In addition, OSHA’s hazard communication standard requires that information be maintained about hazardous materials used or produced in our operations and that this information be provided to employees, state and local government authorities and citizens. We believe that our and MEMP’s operations are in substantial compliance with the OSHA requirements.

 

National Environmental Policy Act

 

Oil and natural gas exploration and production activities on federal lands are subject to the National Environmental Policy Act (“NEPA”). NEPA requires federal agencies, including the Departments of Interior and Agriculture, to evaluate major agency actions having the potential to significantly impact the environment. In the course of such evaluations, an agency prepares an environmental assessment to evaluate the potential direct, indirect and cumulative impacts of a proposed project. If impacts are considered significant, the agency will prepare a more detailed environmental impact study that is made available for public review and comment. All of our current exploration and production activities, as well as proposed exploration and development plans, on federal lands require governmental permits that are subject to the requirements of NEPA. This environmental impact assessment process has the potential to delay the development of oil and natural gas projects. Authorizations under NEPA also are subject to protest, appeal or litigation, which can delay or halt projects.

 

Endangered Species Act

 

The Endangered Species Act (“ESA”) was established to protect endangered and threatened species. Pursuant to the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species’ habitat. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act. We conduct operations on federal oil and natural gas leases in areas where certain species that are listed as threatened or endangered and where other species, such as the sage grouse, potentially could be listed as threatened or endangered under the ESA exist. The U.S. Fish and Wildlife Service may designate critical habitat and suitable habitat areas that it believes are necessary for survival of a threatened or endangered species. A critical habitat or suitable habitat designation could result in further material restrictions to federal land use and may materially delay or prohibit land access for oil and natural gas development. If we were to have a portion of our leases designated as critical or suitable habitat, it could cause us to incur additional costs or become subject to operating restrictions or bans in the affected areas, which could adversely impact the value of our leases.

 

Summary

 

In summary, we believe we and MEMP are in substantial compliance with currently applicable environmental laws and regulations. Although we have not experienced any material adverse effect from compliance with environmental requirements, there is no assurance that this will continue. We did not have any material capital or other non-recurring expenditures in connection with complying with environmental laws or environmental remediation matters in 2012 or 2013.

 

Employees

 

As of December 31, 2013, we had 332 full-time employees. Our future success will depend partially on our ability to attract, retain and motivate qualified personnel. We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages. We consider our relations with our employees to be satisfactory.

 

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Our Offices

 

Our executive offices are located at 1301 McKinney St., Suite 2100, Houston, TX 77010, and the phone number at this address is (713) 588-8300.

 

Legal Proceedings

 

From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we have insurance coverage. As of the date hereof, neither we nor MEMP are party to any material legal proceedings.

 

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MANAGEMENT

 

Directors and Executive Officers

 

The following table provides information regarding our current executive officers and directors as of May 1, 2014.

 

Name

  

Age

    

Position

Tony R. Weber

     51     

Chairman

John A. Weinzierl

     46       Chief Executive Officer and Director

William J. Scarff

     58      President

Andrew J. Cozby

     47       Vice President and Chief Financial Officer

Larry R. Forney

     56       Vice President, Operations

Kyle N. Roane

     34       Vice President, General Counsel and Corporate Secretary

Gregory M. Robbins

     35       Vice President, Corporate Development

Dennis G. Venghaus

     32       Chief Accounting Officer

Scott A. Gieselman

     51       Director

Kenneth A. Hersh

     51       Director

 

Set forth below is a description of the backgrounds of our executive officers and directors.

 

Tony R. Weber has served as Chairman of our board since our formation and as a member of MRD LLC’s board of managers and MEMP GP’s board of directors since September 2011. Mr. Weber currently serves as Managing Partner and Chief Operating Officer for NGP. Prior to joining NGP in December 2003, Mr. Weber was the Chief Financial Officer of Merit Energy Company from April 1998 to December 2003. Prior to that, he was Senior Vice President and Manager of Union Bank of California’s Energy Division in Dallas, Texas from 1987 to 1998. In his role at NGP, Mr. Weber serves on numerous private company boards as well as industry groups, IPAA Capital Markets Committee and Dallas Wildcat Committee. He currently serves on the Dean’s Council of the Mays Business School at Texas A&M University and was a founding member of the Mays Business Fellows Program.

 

The board believes that Mr. Weber’s extensive corporate finance, banking and private equity experience bring substantial leadership skill and experience to the Board.

 

John A. Weinzierl has served as our Chief Executive Officer since our formation, and the Chief Executive Officer of MRD LLC and the Chief Executive Officer and Chairman of MEMP GP since January 2014. Previously, Mr. Weinzierl served as President and Chief Executive Officer of MRD LLC and President, Chief Executive Officer and Chairman of MEMP GP since April 2011. Prior to the completion of the Partnership’s initial public offering in December 2011, Mr. Weinzierl was a managing director and operating partner of NGP from December 2010. From July 1999 to December 2010, Mr. Weinzierl worked in various positions at NGP, where he became a managing director in December 2004. Mr. Weinzierl was appointed a venture partner of NGP from February 2012 to February 2013. From October 2006 until November 2011, Mr. Weinzierl was a director of Eagle Rock Energy G&P, LLC, the indirect general partner of Eagle Rock Energy Partners, L.P., a (i) natural gas gathering, processing and transportation company and (ii) developer of oil and natural gas properties, where he also served on the compensation committee. Mr. Weinzierl is a registered professional engineer in Texas.

 

The board believes Mr. Weinzierl’s degree and experience in petroleum engineering and his M.B.A. education, as well as his investment and business expertise honed at NGP, bring valuable strategic, managerial and analytical skills to the board and us.

 

William J. Scarff has served as our President since our formation, and the President of MRD LLC and MEMP GP since January 2014. From 2000 through January 2014, Mr. Scarff has served as President and Chief

 

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Executive Officer of several private exploration and production companies sponsored by Natural Gas Partners. Since October 2010, Mr. Scarff has served as President and Chief Executive Officer of Propel Energy, LLC. Prior to that, he was President and Chief Executive Officer of Seismic Ventures, Inc. from 2006 to 2009. Since February 2005, Mr. Scarff has served as President and Chief Executive Officer of Proton Operating Company, LLC and from 1999 to 2005, he was President and Chief Executive Officer of Proton Energy, LLC and its affiliates. From 1978 to 1999, Mr. Scarff held a variety of positions of increasing responsibility in Marathon Oil Company, Anadarko Production Company, Burlington Resources, Texas Meridian Resource Corporation and Hilcorp Energy Company.

 

Andrew J. Cozby has served as our Vice President and Chief Financial Officer since April 2014, the Vice President and Chief Financial Officer of MEMP GP since February 2012 and the Vice President, Finance of MRD LLC since April 2011. From February 2011 to April 2011, Mr. Cozby served as Senior Vice President and Chief Financial Officer of Energy Maintenance Services (EMS Global). Prior to that, he was Chief Financial Officer of Greystone Oil & Gas LLP and Greystone Drilling LP from May 2006 to December 2010. From 2000 to May 2006, Mr. Cozby was Director of Finance for Enterprise Products Partners LP and held various corporate finance positions with its affiliates GulfTerra Energy Partners, LP and El Paso Energy Partners, LP. Prior to that, Mr. Cozby held positions with J.P. Morgan from 1998 to 2000.

 

Larry R. Forney has served as our Vice President, Operations since April 2014 and the Vice President and Chief Operating Officer of MRD LLC and MEMP GP since January 2013. Previously, he served as Vice President of Operations and Asset Management of MRD LLC and MEMP GP from August 2011 to January 2013. From August 2008 to August 2011, Mr. Forney served as President of Mossback Management LLC, a private entity providing contract operating and engineering consulting services, including managing all operations and related business functions for Hungarian Horizon Energy, Ltd and Central European Drilling, Ltd in Budapest, Hungary from July 2010 to August 2011. From July 2004 to July 2008, Mr. Forney served as Vice President of Operations for Greystone Oil & Gas LLP and Managing Director of Greystone Drilling LP. Mr. Forney served as Vice President of Operations for Greystone Petroleum LLC from 2002 until 2004. Mr. Forney was Vice President and Treasurer of Goldrus Producing Company from 1997 to 2002. From 1990 to 1997, Mr. Forney held various positions for the Kelley Oil companies, which culminated in his serving concurrently as Vice President of Operations for Kelley Oil Corporation and Vice President of Concorde Gas Marketing. Prior to 1990, Mr. Forney held various drilling, production and facility construction positions with Pacific Enterprises Oil Corporation and Kerr-McGee Corporation. Mr. Forney is a registered professional engineer in Texas.

 

Kyle N. Roane has served as our Vice President, General Counsel and Corporate Secretary since our formation, and the Vice President, General Counsel and Corporate Secretary of MRD LLC and MEMP GP since January 2014. Previously, Mr. Roane served as the General Counsel and Corporate Secretary of MRD LLC and MEMP GP since February 2012. From 2005 to February 2012, Mr. Roane practiced corporate and securities law at Akin Gump Strauss Hauer & Feld L.L.P.

 

Gregory M. Robbins has served as our Vice President, Corporate Development since April 2014 and the Vice President of Corporate Development of MRD LLC and MEMP GP since January 2013. Previously, he served as Treasurer of MRD LLC and MEMP GP from June 2011 to April 2012 and Director of Corporate Development from April 2012 to January 2013. From October 2010 to April 2011, Mr. Robbins served as Vice President and Controller of Quality Electric Steel Castings, LP. Prior to that, he was a Vice President with Guggenheim Partners, LLC from April 2006 to September 2010. Mr. Robbins worked for Wells Fargo Energy Capital, LLC from 2004 to March 2006 and Comerica Bank, Inc. from 2002 to 2004.

 

Dennis G. Venghaus has served as our Chief Accounting Officer since our formation, and the Controller of MRD LLC and MEMP GP since January 2012. Prior to joining MRD LLC and MEMP GP, Mr. Venghaus was with Opportune LLP from June 2010 to January 2012 as a Manager in the Complex Financial Reporting group. From September 2004 through June 2010, he held various positions in the audit practice at PricewaterhouseCoopers LLP in Houston, TX, primarily serving energy clients. Mr. Venghaus is a Certified Public Accountant.

 

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Scott A. Gieselman has served as a member of our board since our formation and as a member of MRD LLC’s board of managers and MEMP GP’s board of directors since September 2011. Mr. Gieselman has been a managing director of NGP since April 2007. Mr. Gieselman has served as a member of the board of directors of Rice Energy, Inc. since January 2014. From 1988 to April 2007, Mr. Gieselman worked in various positions in the investment banking energy group of Goldman, Sachs & Co., where he became a partner in 2002.

 

The board believes that Mr. Gieselman’s considerable financial and energy investment banking experience, as well as his experience on the boards of numerous private energy companies bring important and valuable skills to the Board.

 

Kenneth A. Hersh has served as a member of our board since our formation and as a member of MRD LLC’s board of managers and MEMP GP’s board of directors since April 2011. Mr. Hersh is the Chief Executive Officer of NGP Energy Capital Management and a managing partner of NGP and has served in those or similar capacities since 1989. He currently serves as a director of NGP Capital Resources Company, a business development company that focuses on the energy industry. Mr. Hersh served as a director of Resolute Energy Corporation from September 2009 to March 2012, as a director of Eagle Rock Energy G&P, LLC, the indirect general partner of Eagle Rock Energy Partners, L.P., from March 2006 until June 2011 and Energy Transfer Partners, L.L.C., the indirect general partner of Energy Transfer Partners, L.P., a natural gas gathering and processing and transportation and storage and retail propane company, from February 2004 through December 2009, and served as a director of LE GP, LLC, the general partner of Energy Transfer Equity, L.P., from October 2002 through December 2009. Mr. Hersh currently serves on the Dean’s Council of the Harvard Kennedy School and on the Advisory Councils of the Graduate School of Business at Stanford University and The Bendheim Center for Finance at Princeton University. He is also a member of the World Economic Forum where he has been a featured speaker at its annual meeting held in Davos, Switzerland.

 

The board believes that Mr. Hersh brings extensive knowledge to the board and us through his experiences in the energy industry as an investor, involvement in complex energy-related transactions and his position as Chief Executive Officer of NGP Energy Capital Management and co-manager of NGP’s investment portfolio. Mr. Hersh also brings a wealth of industry-specific transactional skills, entrepreneurial ideas and a personal network of public and private capital sources that the board believes will bring us opportunities that we may not otherwise have.

 

Board Composition

 

Upon the closing of this offering, it is anticipated that we will have five directors. Assuming that the group consisting of MRD Holdings and certain former management members of WildHorse Resources management continue to control more than 50% of our common stock, we intend to avail ourselves of the “controlled company” exception under NASDAQ rules, which eliminates the requirements that we (i) have a majority of independent directors, (ii) maintain a compensation committee or (iii) maintain an independent nominating function. We will be required, however, to have an audit committee comprised entirely of independent directors within the permitted “phase-in” period under NASDAQ rules.

 

As a result of the size of that group’s ownership of our common stock, that group will be able to control matters requiring stockholder approval, including the election of directors, changes to our organizational documents and significant corporate transactions.

 

If at any time we cease to be a “controlled company” under NASDAQ rules, the Board will take all action necessary to comply with the NASDAQ rules, including appointing a majority of independent directors to the Board and ensuring we have a compensation committee and a nominating and corporate governance committee, each composed entirely of independent directors, subject to a permitted “phase-in” period. We will cease to qualify as a “controlled company” once that group ceases to control a majority of our voting stock.

 

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Initially, our board of directors will consist of a single class of directors each serving one year terms. After a group including MRD Holdings and/or the Funds no longer beneficially owns or controls the vote of more than 50% of our issued and outstanding common stock, our board of directors will be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three year terms, and such directors being removable only for “cause.”

 

In evaluating director candidates, our Board will assess whether a candidate possesses the integrity, judgment, knowledge, experience, skill and expertise that are likely to enhance the ability of the Board to manage and direct our affairs and business, including, when applicable, to enhance the ability of committees of the board to fulfill their duties. We have no minimum qualifications for director candidates. In general, however, our Board will review and evaluate both incumbent and potential new directors in an effort to achieve diversity of skills and experience among our directors and in light of the following criteria:

 

   

experience in business, government, education, technology or public interests;

 

   

high-level managerial experience in large organizations;

 

   

breadth of knowledge regarding our business or industry;

 

   

specific skills, experience or expertise related to an area of importance to us, such as energy production, consumption, distribution or transportation, government, policy, finance or law;

 

   

moral character and integrity;

 

   

commitment to our stockholders’ interests;

 

   

ability to provide insights and practical wisdom based on experience and expertise;

 

   

ability to read and understand financial statements; and

 

   

ability to devote the time necessary to carry out the duties of a director, including attendance at meetings and consultation on company matters.

 

Although we do not have a policy in regard to the consideration of diversity in identifying director nominees, qualified candidates for nomination to the board are considered without regard to race, color, religion, gender, ancestry or national origin.

 

Director Independence

 

Our Board has determined that, under NASDAQ listing standards and taking into account any applicable committee standards and rules under the Exchange Act,          is an independent director. Within 90 days of our listing on the NASDAQ, we will appoint at least one additional independent director. Within one year of the date of effectiveness of the registration statement of which this prospectus is a part, we will appoint a third independent director.

 

Audit Committee

 

Prior to the listing of our common stock on the NASDAQ, we intend to have an Audit Committee and may have such other committees as the Board shall determine from time to time. The Audit Committee will have the composition and responsibilities described below.

 

                 will serve as the initial member of our Audit Committee. Within 90 days of our listing on the NASDAQ we will appoint another independent director to our Audit Committee. Within one year of the date of effectiveness of the registration statement of which this prospectus is a part, we will appoint another independent director to our Audit Committee and we will have an Audit Committee composed entirely of independent directors. Our Board has determined that                      is an Audit Committee financial expert as defined by the

 

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SEC. Each member of the Audit Committee meets or will meet criteria for independence of Audit Committee members set forth in Rule 10A-3(b)(1) under the Exchange Act.

 

The principal duties of the Audit Committee are to assist the Board in fulfilling its responsibility to oversee management regarding:

 

   

systems of internal control over financial reporting and disclosure controls and procedures;

 

   

the integrity of the financial statements;

 

   

the qualifications, engagement, compensation, independence and performance of the independent auditors and our internal audit function;

 

   

compliance with legal and regulatory requirements;

 

   

review of material related party transactions; and

 

   

compliance with and adequacy of the code of business and ethics, review and, if appropriate, approve any requests for written waivers sought with respect to any executive officer or director under, the code of business and ethics.

 

Code of Conduct

 

In connection with the closing of this offering, our Board will adopt a code of business conduct and ethics (the “Code of Conduct”) that will apply to all directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. Upon the closing of this offering, the Code of Conduct will be available in the Corporate Governance section of our website at www.memorialrd.com. The contents of our website are not incorporated by reference herein or otherwise a part of this prospectus. The purpose of the Code of Conduct is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by us; and to promote compliance with all applicable rules and regulations that apply to us and our officers.

 

Executive Compensation

 

Although we were formed in January 2014 and have not incurred any cost or liability with respect to compensation, management incentive or retirement benefits for our executive officers for the fiscal year ended December 31, 2013 or for any prior periods, we present historical executive compensation information for our predecessor below.

 

Structure

 

MRD LLC’s “named executive officers” identified below have also historically served as executive officers of MEMP GP. The compensation information described in this section and contained in the tables that follow reflects all compensation received by the named executive officers for the services they provide to MRD LLC as well as for the services they provide to MEMP GP and MEMP for the years covered. However, MEMP reimburses MRD LLC for costs and expenses incurred for its or MEMP GP’s benefit pursuant to the terms of the omnibus agreement. See “Certain Relationships and Related Party Transactions—Omnibus Agreement” for more information about the omnibus agreement.

 

Named Executive Officers

 

We are currently considered an emerging growth company for purposes of the SEC’s executive compensation disclosure rules. In accordance with such rules, we are required to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year End Table, as well as limited narrative

 

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disclosures. Further, our reporting obligations extend only to the individuals serving as our chief executive officers, and our two other most highly compensated executive officers and only for the two most recently completed fiscal years. MRD LLC’s named executive officers for 2013 were:

 

Name

  

Principal Position

John A. Weinzierl

   Chief Executive Officer

Andrew J. Cozby

   Vice President, Finance

Larry R. Forney

   Vice President, Operations & Asset Management

 

Employment Agreements

 

Our predecessor was not party to any employment, severance or change in control agreements with any of its named executive officers. We intend to enter into change in control agreements with our executive officers in connection with the closing of this offering. Please see “—Compensation Following this Offering—Change in Control Agreements.”

 

Summary Compensation Table

 

The following table includes the compensation earned by our predecessor’s named executive officers for the years ended December 31, 2013 and 2012.

 

Name and Position

 

Year

   

Salary

   

Bonus

   

Unit

Awards (2)

   

Option

Awards (3)

 

All Other

Compensation (4)

   

Total (5)

 

John A. Weinzierl

    2013      $ 187,500      $ 518,750      $ 2,249,996      N/A   $ 2,618,171      $ 5,574,417   

(Chief Executive Officer) (1)

    2012        100,000        —         2,500,735      —       202,119        2,802,854   

Andrew J. Cozby

    2013      $ 250,000      $ 259,375      $ 1,207,885      N/A   $ 1,293,509      $ 3,010,769   

(Vice President, Finance)

    2012        250,000        148,364        703,661      —       65,837        1,167,862   

Larry R. Forney

    2013      $ 250,000      $ 259,375      $ 1,231,255      N/A   $ 1,281,549      $ 3,022,179   

(Vice President, Operations & Asset Management)

    2012        250,000        125,000        508,088      —       50,522        933,610   

 

(1)   Mr. Weinzierl also served as President from April 2011 until January 2014.
(2)   Reflects the aggregate grant date fair value of restricted unit awards in accordance with FASB ASC Topic 718 granted under the Memorial Production Partners GP LLC Long-Term Incentive Plan calculated by multiplying the number of restricted units granted to each executive by the closing price of MEMP common units on the date of grant. For information about assumptions made in the valuation of these awards, see Note 10 of the Notes to Consolidated and Combined Financial Statements.
(3)   Each of the named executive officers received a grant of incentive units from MRD LLC in June 2012. We believe that, despite the fact that the incentive units do not require the payment of an exercise price, they are most similar economically to stock options, and as such, they are properly classified as “options” under the definition provided in Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature.” Amounts reflected in this column reflect a grant date fair value of the incentive units in accordance with FASB ASC Topic 718 of $0. Because the performance conditions related to these awards were not deemed probable at the time of grant in 2012, no amounts have been reported in 2012 for purposes of this table.
(4)  

Amounts include (i) matching contributions under funded, qualified, defined contribution retirement plans, (ii) one-time performance bonus, (iii) the dollar value of life insurance premiums paid on behalf of such officer and (iv) the dollar value of short and long term disability insurance premiums paid on behalf of such officer.

 

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(5)   Includes, in addition to the grant date fair value of MEMP unit awards described in footnote 2, amounts reimbursed by MEMP for portions of compensation allocated to MEMP. The following supplemental table presents the amounts reimbursed by MEMP to MRD LLC for compensation allocated to MEMP for each named executive officer for the years ended December 31, 2013 and 2012:

 

Name

  

    Year    

  

MEMP

    Reimbursement    

 

John A. Weinzierl

   2013    $ 372,192   
   2012      17,349   

Andrew J. Cozby

   2013    $ 261,281   
   2012      66,527   

Larry R. Forney

   2013    $ 261,281   
   2012      62,789   

 

Narrative Disclosure to Summary Compensation Table

 

The following supplemental table presents the components of “All Other Compensation” for each of our predecessor’s named executive officers for the years ended December 31, 2013 and 2012:

 

Name

   Year      One-Time
Performance
Bonus
     Quarterly
Distributions
Paid On
Unit Awards
     Matching
Contributions
401(k)
     Other      Total
All  Other
Compensation
 

John A. Weinzierl

     2013      $ 2,293,200      $ 316,564       $ 5,917       $ 2,490       $ 2,618,171   
     2012        —           193,690        6,000         2,429         202,119   

Andrew J. Cozby

     2013      $ 1,146,600      $ 129,419       $ 15,000       $ 2,490       $ 1,293,509   
     2012        —           48,408         15,000         2,429         65,837   

Larry R. Forney

     2013      $ 1,146,600      $ 117,459       $ 15,000       $ 2,490       $ 1,281,549   
     2012        —           33,093         15,000         2,429         50,522   

 

Outstanding Equity Awards

 

The awards reported here reflect the outstanding restricted MEMP common unit awards and incentive units issued to our predecessor’s named executive officers as of December 31, 2013. In connection with the restructuring transactions, the MRD LLC incentive units will be exchanged for substantially identical incentive units in MRD Holdings.

 

    

Restricted MEMP Common

Unit Awards

    

Option Awards

(Incentive Unit Awards)

 
     Vesting
Date (1)
     Number
of Units
That  Have
Not Vested
(#)
     Market Value
of  Units
That Have
Not Vested
($) (2)
     Number of
Securities
Underlying
Unexercised
Options,
Unexercisable
(#)(3)
     Number of
Securities
Underlying
Unexercised
Options,
Exercisable
(#)(3)
     Option
Exercise

Price
($)(3)
     Option
Expiration
Date(3)
 

John A. Weinzierl

     Various         209,647      $ 4,599,655         410         0         N/A         N/A   

Andrew J. Cozby

     Various         90,416        1,983,727         120         0         N/A         N/A   

Larry R. Forney

     Various         84,673        1,857,726         120         0         N/A         N/A   

 

(1)   One-third vests on the first, second, and third anniversaries of each date of grant. Of the 384,736 non-vested restricted MEMP common unit awards presented in the table, approximately 150,809 vest in each of 2014 and 2015 and 83,113 vest in 2016. There were 57,013 restricted MEMP common units that vested on January 9, 2014.
(2)  

Amounts derived by multiplying the total number of restricted MEMP common unit awards outstanding for each named executive officer by the closing price of the MEMP common units at December 31, 2013 of $21.94 per unit.

 

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(3)   Despite the fact that profits interests such as the incentive units do not require the payment of an exercise price, we believe that these awards are economically similar to stock options due to the fact that they have no value for tax purposes at grant and will obtain value only as the price of the underlying security rises, and as such, should be reported in this table as an “Option” award. The incentive units vest ratably over a three year period, although vesting will be fully accelerated upon the occurrence of an event which results in the Funds no longer owning a majority of the interests in, or possessing the right to appoint a majority of, the board of managers of, MRD LLC. All of the incentive units issued to the named executive officers were issued in June 2012. All incentive units that have not vested according to their original vesting schedule at the time a named executive officer’s employment with MRD LLC is terminated for any reason or no reason, including by involuntary termination, resignation, death or disability, will be automatically forfeited without payment. In addition, all incentive units (whether vested or unvested) will be automatically forfeited without payment if the executive officer is terminated for cause (as defined in the MRD LLC agreement) or the executive officer resigns. The restructuring transactions described in this prospectus are not expected to constitute a change in control resulting in the automatic vesting of the incentive units under the MRD LLC limited liability company agreement. For a description of how and when the incentive units could obtain value and receive payment, see the discussion below.

 

Narrative to the Outstanding Equity Awards Table

 

Our predecessor granted incentive units to each of the named executive officers in order to provide them with the ability to benefit from the growth in MRD LLC’s operations and business. A payout on the incentive units will occur only if, and then after, a specified level of cumulative cash distributions has been received by the Funds. Once this cumulative cash distributions threshold is achieved, all of the incentive unit holders will collectively share 10% of all further cash distributions made by MRD LLC to its members.

 

Potential Payments Upon Termination or Change in Control

 

Awards under the Memorial Production Partners GP LLC Long-Term Incentive Plan may vest and/or become exercisable, as applicable, upon a “change of control” of MRD LLC or MEMP GP, as determined by the plan administrator. Under the Memorial Production Partners GP LLC Long-Term Incentive Plan, a “change of control” will be deemed to have occurred upon one or more of the following events (i) the managers of MRD LLC appointed by the Funds or their affiliates do not constitute a majority of the board of managers of MRD LLC; (ii) MRD LLC, the Funds or any of their affiliates do not have the right to appoint or nominate a majority of the board of directors of MEMP GP; (iii) the members of MEMP GP approve and implement, in one or a series of transactions, a plan of complete liquidation of MEMP GP; (iv) the sale or other disposition by MEMP GP of all or substantially all of its assets in one or more transactions to any person or entity other than MEMP GP or an affiliate of MEMP GP or the Funds; or (v) a person or entity other than MEMP GP or an affiliate of MEMP GP or the Funds becomes the general partner of MEMP. The consequences of the termination of a grantee’s employment, consulting arrangement or membership on the board of managers or directors will be determined by the plan administrator in the terms of the relevant award agreement.

 

As described above, the vesting of the incentive units will be fully accelerated upon the occurrence of an event which results in the Funds no longer owning a majority of the interests in, or possessing the right to appoint a majority of the board of managers of, MRD LLC.

 

In connection with the closing of this offering, we will adopt the Memorial Resource Development Corp. 2014 Long Term Incentive Plan, as further described in “—Compensation Following this Offering—2014 Long Term Incentive Plan,” and will enter into change in control agreements with our executive officers, as further described in “—Compensation Following this Offering—Change in Control Agreements.”

 

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Manager Compensation

 

None of MRD LLC’s managers, whether or not employed by MRD LLC, received compensation for services to MRD LLC as a manager for the year ended December 31, 2013.

 

Compensation Following This Offering

 

We expect that our named executive officers will also serve as executive officers of MEMP GP. MEMP will reimburse us for costs and expenses incurred for its or MEMP GP’s benefit pursuant to the terms of the omnibus agreement, including an allocated portion of each such executive’s compensation. See “Certain Relationships and Related Party Transactions— Omnibus Agreement” for more information about the omnibus agreement. We will have sole responsibility and authority for compensation-related decisions for our executive officers and other personnel.

 

We expect to employ a compensation philosophy that will emphasize pay-for-performance, which will be based on a combination of our performance and the individual’s impact on our performance and will place the majority of each officer’s compensation at risk. We expect that the future compensation of our executive and non-executive officers will include a significant component of incentive compensation based on our performance. The performance metrics governing incentive compensation will not be tied in any way to the performance of entities other than us. We believe this pay-for-performance approach generally aligns the interests of our executive officers with that of our stockholders, and at the same time enables us to maintain a lower level of base overhead in the event our operating and financial performance fails to meet expectations.

 

We will design our executive compensation to attract and retain individuals with the background and skills necessary to successfully execute our business model in a demanding environment, to motivate those individuals to reach near-term and long-term goals in a way that aligns their interest with that of our stockholders, and to reward success in reaching such goals. We expect that we will use three primary elements of compensation to fulfill that design—salary, cash bonus and long-term equity incentive awards. Cash bonuses and equity incentives (as opposed to salary) represent the performance driven elements. They are also flexible in application and can be tailored to meet our objectives. The determination of specific individuals’ cash bonuses reflects their relative contribution to achieving or exceeding annual goals, and the determination of specific individuals’ long-term incentive awards is based on their expected contribution in respect of longer term performance objectives.

 

We do not intend to establish a defined benefit or pension plan for our executive officers because we believe such plans primarily reward longevity rather than performance. We will provide a basic benefits package generally to all employees, which includes a 401(k) plan and health, disability and life insurance.

 

We expect that our named executive officers for the year ended December 31, 2014 will be the following:

 

Name

  

Principal Position

John A. Weinzierl

   Chief Executive Officer

William J. Scarff

   President

Andrew J. Cozby

   Vice President and Chief Financial Officer

 

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The following table sets forth the expected base salaries and expected annual target bonus opportunities for our named executive officers for 2014:

 

Name

  

2014 Base Salary

  

2014 Target Bonus
Opportunity (% of Base
Salary) (1)

John A. Weinzierl

  

$                     

  

    %

William J. Scarff

     

    %

Andrew J. Cozby

     

    %

 

(1)   Actual bonus amounts may range from     % to     % of target.

 

Director Compensation

 

Our officers or employees who also serve as our directors will not receive additional compensation for their service as a director. Our directors who are not our officers or employees will receive compensation as “nonemployee directors.” We expect that each non-employee director will receive an annual retainer and an additional retainer for service as the chair of the audit committee. We also expect to grant equity-based awards to non-employee directors upon appointment to the board or as of the completion of this offering and on an annual basis. The amount and form of such compensation has not yet been determined. Non-employee directors will be reimbursed for all out-of-pocket expenses incurred in connection with attending board or committee meetings. Each director will be indemnified for his actions associated with being a director to the fullest extent permitted under Delaware law.

 

Change in Control Agreements

 

We will enter into change in control agreements with our executive officers in connection with the closing of this offering. The change in control agreements will continue in effect until the earlier of (i) a separation from service other than on account of a “qualifying termination” (as defined below), (ii) the Company’s satisfaction of all of our obligations under the change in control agreement, or (iii) the execution of a written agreement between the Company and the executive officer terminating the change in control agreement.

 

Under the terms of each change in control agreement, if an executive’s employment is terminated on account of a qualifying termination, then subject to such executive’s signing and not revoking a separation agreement and release of claims, then such executive will be entitled to:

 

   

receive a lump sum payment of             % of such executive’s (a) annual base salary and (b) target bonus, in each case, at the highest rate in effect during the twelve month period prior to the date in which the qualifying termination occurs;

 

   

the vesting of all outstanding unvested awards previously granted to such executive under the Memorial Resource Development Corp. 2014 Long Term Incentive Plan;

 

   

reimbursement for the amount of COBRA continuation premiums (less required co-pay) until the earlier of (a) twelve months following the qualifying termination and (b) such time as such executive is no longer eligible for COBRA continuation coverage;

 

   

financial counseling services for twelve months following the qualifying termination, subject to a maximum benefit of $30,000; and

 

   

outplacement counseling services for twelve months following the qualifying termination, subject to a maximum value of $30,000.

 

For purposes of the above, “qualifying termination” means, as to any executive, the separation of service on account of (i) an involuntary termination by the Company without cause or (ii) such executive’s voluntary

 

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resignation for good reason, in each case, within six months prior to, or twenty-four months following, a change in control. The term “cause” means (a) such executive’s commission of, conviction for, plea of guilty or nolo contendere to a felony or a crime involving moral turpitude; (b) engaging in conduct that constitutes fraud, gross negligence or willful misconduct that results or would reasonably be expected to result in material harm to the Company or our business or reputation; (c) breach of any material terms of such executive’s employment, including any of our policies or code of conduct; or (d) failure to perform such executive’s duties for the Company. The term “good reason” means the occurrence of one of the following without an executive’s express written consent (i) a material reduction of such executive’s duties, position or responsibilities, or such executive’s removal from such position and responsibilities, unless such executive is offered a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation, title and status); (ii) a material reduction by the Company of such executive’s base compensation (base salary and target bonus) as in effect immediately prior to such reduction; or (iii) such executive is requested to relocate (except for office relocations that would not increase such executive’s one way commute by more than 50 miles). The term “change in control” has the meaning ascribed to such term in the Memorial Resource Development Corp. 2014 Incentive Award Plan and is described in the discussion below under “—2014 Long Term Incentive Plan—Merger, recapitalization or change in control.”

 

In the event that the board determines that payments to be made to an executive under the change in control agreement would constitute excess parachute payments subject to excise tax under Section 4999 of the Internal Revenue Code, then the amount of such payments shall either (i) be reduced so that such payments will not be subject to such excise tax or (ii) paid in full, whichever results in the better net after tax position for the executive.

 

2014 Long Term Incentive Plan

 

We intend to adopt the Memorial Resource Development Corp. 2014 Long Term Incentive Plan (the “Plan”) for the employees of the Company and our directors. The description of the Plan set forth below is a summary of the material features of the Plan. This summary is qualified in its entirety by reference to the Plan, a copy of which has been filed as an exhibit to this registration statement. The purpose of the Plan is to provide a means to attract and retain individuals to serve as our directors and employees by affording such individuals a means to acquire and maintain ownership of awards, the value of which is tied to the performance of our common stock. We have not yet made decisions regarding the type of award or the amounts of equity-based awards that will be appropriate for our employees or directors following this offering. The restricted stock units granted in connection with the closing of this offering described below should be not be interpreted as representative of the Plan awards that may be granted in the future.

 

The Plan will provide for potential grants of: (i) incentive stock options qualified as such under U.S. federal income tax laws (“incentive options”); (ii) stock options that do not qualify as incentive stock options (“nonstatutory options,” and together with incentive options, “options”); (iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock units (“RSUs”); (vi) bonus stock; (vii) dividend equivalents, (viii) performance awards; (ix) annual incentive awards; and (x) other stock-based awards (collectively referred to as “awards”).

 

Administration

 

Our Board will administer the Plan pursuant to its terms and all applicable state, federal or other rules or laws, and may delegate its duties and responsibilities as Plan administrator to a committee composed of two or more directors, subject to certain limitations. The Plan administrator will have the power to determine to whom and when awards will be granted, determine the amount of awards (measured in cash or in shares of our common stock), proscribe and interpret the terms and provisions of each award agreement (the terms of which may vary), make determinations of fair market value, accelerate the exercise terms of an option, delegate duties under the Plan, terminate, modify or amend the Plan in certain cases and execute all other responsibilities permitted or required under the Plan. The Plan administrator shall be limited in its administration of the Plan only in the event

 

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that a performance award or annual incentive award intended to comply with section 162(m) of the Code requires the Board to be composed solely of “outside” directors at a time when not all directors are considered “outside” directors for purposes of section 162(m) of the Code; at such time any director that is not qualified to grant or administer such an award will recuse himself from the Board’s actions with regard to that award.

 

Securities to be Offered

 

The maximum aggregate number of shares of common stock that may be issued pursuant to any and all awards under the Plan shall not exceed              shares, subject to adjustment due to recapitalization or reorganization, or related to forfeitures or the expiration of awards, as provided under the Plan.

 

If common stock subject to any award is not issued or transferred, or ceases to be issuable or transferable for any reason, including (but not exclusively) because shares are withheld or surrendered in payment of taxes or any exercise or purchase price relating to an award or because an award is forfeited, terminated, expires unexercised, is settled in cash in lieu of common stock or is otherwise terminated without a delivery of shares, those shares of common stock will again be available for issue, transfer or exercise pursuant to awards under the Plan to the extent allowable by law.

 

   

Options. We may grant options to eligible persons including: (i) incentive options (only to our employees or those of our subsidiaries) which comply with section 422 of the Code; and (ii) nonstatutory options. The exercise price of each option granted under the Plan will be stated in the option agreement and may vary; however, the exercise price for an option must not be less than the fair market value per share of common stock as of the date of grant (or 110% of the fair market value for certain incentive options), nor may the option be re-priced without the prior approval of our stockholders. Options may be exercised as the Board determines, but not later than ten years from the date of grant. The Board will determine the methods and form of payment for the exercise price of an option (including, in the discretion of the Board, payment in common stock, other awards or other property) and the methods and forms in which common stock will be delivered to a participant.

 

Stock appreciation rights (“SARs”) may be awarded in connection with an option (or as SARs that stand alone, as discussed below). SARs awarded in connection with an option will entitle the holder, upon exercise, to surrender the related option or portion thereof relating to the number of shares for which the SAR is exercised. The surrendered option or portion thereof will then cease to be exercisable. Such SAR is exercisable or transferable only to the extent that the related option is exercisable or transferable.

 

   

SARs. A SAR is the right to receive a share of common stock, or an amount equal to the excess of the fair market value of one share of the common stock on the date of exercise over the grant price of the SAR, as determined by the Board. The exercise price of a share of common stock subject to the SAR shall be determined by the Board, but in no event shall that exercise price be less than the fair market value of the common stock on the date of grant. The Board will have the discretion to determine other terms and conditions of a SAR award.

 

   

Restricted stock awards. A restricted stock award is a grant of shares of common stock subject to a risk of forfeiture, performance conditions, restrictions on transferability and any other restrictions imposed by the Board in its discretion. Restrictions may lapse at such times and under such circumstances as determined by the Board. Except as otherwise provided under the terms of the Plan or an award agreement, the holder of a restricted stock award will have rights as a stockholder, including the right to vote the common stock subject to the restricted stock award or to receive dividends on the common stock subject to the restricted stock award during the restriction period. The Board shall provide, in the restricted stock award agreement, whether the restricted stock will be forfeited and reacquired by us upon certain terminations of employment. Unless otherwise determined by the Board, common stock distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, will be subject to restrictions and a risk of forfeiture to the same extent as the restricted stock award with respect to which such common stock or other property has been distributed.

 

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Restricted stock units. RSUs are rights to receive common stock, cash, or a combination of both at the end of a specified period. The Board may subject RSUs to restrictions (which may include a risk of forfeiture) to be specified in the RSU award agreement, and those restrictions may lapse at such times determined by the Board. Restricted stock units may be settled by delivery of common stock, cash equal to the fair market value of the specified number of shares of common stock covered by the RSUs, or any combination thereof determined by the Board at the date of grant or thereafter. Dividend equivalents on the specified number of shares of common stock covered by RSUs may be paid on a current or deferred basis, as determined by the Board on or following the date of grant.

 

   

Bonus stock awards. The Board will be authorized to grant common stock as a bonus stock award. The Board will determine any terms and conditions applicable to grants of common stock, including performance criteria, if any, associated with a bonus stock award.

 

   

Dividend equivalents. Dividend equivalents are rights to receive cash, stock, other awards, or other property equal in value to dividends paid with respect to a specified number of shares of common stock. Dividend equivalents may be awarded on a free-standing basis or in connection with another award. The Board may provide that dividend equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional common stock, awards, or other investment vehicles, and be subject to such restrictions on transferability and risks of forfeiture, as determined by the Board.

 

   

Performance awards and annual incentive awards. The Board may designate that certain awards granted under the Plan constitute “performance” awards. A performance award is any award the grant, exercise or settlement of which is subject to one or more performance standards. An annual incentive award is an award based on a performance period of the fiscal year, and is also conditioned on one or more performance standards. One or more of the following business criteria for the company, on a consolidated basis, and/or for specified subsidiaries, may be used by the Board in establishing performance goals for such performance awards or annual incentive awards that are intended to meet the “performance-based compensation” criteria of section 162(m) of the Code: (i) earnings per share; (ii) increase in revenues; (iii) increase in cash flow; (iv) increase in cash flow from operations; (v) increase in cash flow return; (vi) return on net assets; (vii) return on assets; (viii) return on investment; (ix) return on capital; (x) return on equity; (xi) economic value added; (xii) operating margin; (xiii) contribution margin; (xiv) net income; (xv) net income per share; (xvi) pretax earnings; (xvii) pretax operating earnings after interest expense and before incentives, service fees and extraordinary or special items; (xviii) pretax earnings before interest, depreciation and amortization; (xix) total stockholder return; (xx) debt reduction; (xxi) market share; (xxii) change in the fair market value of the common stock; (xxiii) operating income; or (xxiv) lease operating expenses. The Board may exclude the impact of any of the following events or occurrences which the Board determines should appropriately be excluded: (i) asset write-downs; (ii) litigation, claims, judgments or settlements; (iii) the effect of changes in tax law or other such laws or regulations affecting reported results; (iv) accruals for reorganization and restructuring programs; (v) any extraordinary, unusual or nonrecurring items as described in the Accounting Standards Codification Topic 225, as the same may be amended or superseded from time to time; (vi) any change in accounting principles as defined in the Accounting Standards Codification Topic 250, as the same may be amended or superseded from time to time; (vii) any loss from a discontinued operation as described in the Accounting Standards Codification Topic 360, as the same may be amended or superseded from time to time; (viii) goodwill impairment charges; (ix) operating results for any business acquired during the calendar year; (x) third party expenses associated with any acquisition by us or any subsidiary; and (xi) to the extent set forth with reasonable particularity in connection with the establishment of performance goals, any other extraordinary events or occurrences identified by the Board. The Board may also use any of the above goals determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Board including, but not limited to, the Standard & Poor’s 500 stock index or a group of comparable companies.

 

   

Other stock-based awards. The Board is authorized, subject to limitations under applicable law, to grant such other awards that may be denominated or payable in, valued in whole or in part by reference to, or

 

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otherwise based on, or related to, our common stock, as deemed by the Board to be consistent with the purposes of the Plan. These other awards could include convertible or exchangeable debt securities, other rights convertible or exchangeable into common stock, purchase rights for common stock, awards with value and payment contingent upon performance of the Company or any other factors designated by the Board, and awards valued by reference to the book value of our common stock or the value of securities of or the performance of specified subsidiaries of the Company. The Board shall determine the terms and conditions of these awards.

 

Performance awards or annual incentive awards granted to eligible persons who are deemed by the Board to be “covered employees” pursuant to section 162(m) of the Code shall be administered in accordance with the rules and regulations issued under section 162(m) of the Code. The Board may also impose individual performance criteria on the awards, which, if required for compliance with section 162(m) of the Code, will be approved by our stockholders. In any calendar year, a covered employee may not be granted an award of more than                  of our shares of stock, or cash-based award having a value of more than $                .

 

Tax withholding. At our discretion, subject to conditions that the Board may impose, a participant’s minimum statutory tax withholding with respect to an award may be satisfied by withholding from any payment related to an award or by the withholding of shares of common stock issuable pursuant to the award based on the fair market value of the shares.

 

Merger, recapitalization or change in control. If any change is made to our capitalization, such as a stock split, stock combination, stock dividend, exchange of shares or other recapitalization, merger or otherwise, which results in an increase or decrease in the number of outstanding shares of common stock, appropriate adjustments will be made by the Board in the shares subject to an award under the Plan. We will also have the discretion to make certain adjustments to awards in the event of a change in control, such as accelerating the exercisability of options or SARs, requiring the surrender of an award, with or without consideration, or making any other adjustment or modification to the award we feel is appropriate in light of the specific transaction.

 

A “change in control” is defined in the Plan to mean (i) subject to certain exceptions, the acquisition by a person or group of more than 50% of shares of our outstanding common stock or the total combined voting power of our outstanding securities, (ii) individuals who constitute our incumbent board cease for any reason to constitute at least a majority of the Board, (iii) a merger, consolidation, reorganization or business combination or the sale or other disposition of all or substantially all of our assets or an acquisition of assets of another entity unless following such transaction, (a) our stockholders continue to own more than 50% of the voting power of the resulting entity, (b) no person (excluding any entity controlled by or under common control with NGP Energy Capital Management, L.L.C.) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock or common equity interests of the resulting entity or the combined voting power of the then outstanding voting securities to the extent that such ownership results solely from ownership of the Company prior to the transaction or event and (c) a majority of the members of the board of directors of the resulting entity were members of our incumbent board at the time of the action of our Board providing for such transaction or event or (iv) approval by our stockholders of the Company’s complete liquidation or dissolution.

 

Awards To Be Granted Following This Offering

 

Following the consummation of this offering, we expect that our Board will approve an award of restricted stock units under the Plan to certain of our key employees, including each of our executive officers. We currently expect that these awards will contain a combination of time and performance-based vesting conditions, with a three-year annual vesting schedule. However, the number of shares subject to the awards and the precise terms and conditions of the restricted stock units have not yet been finally determined or approved.

 

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PRINCIPAL AND SELLING STOCKHOLDERS

 

The following table provides certain information regarding the beneficial ownership of our outstanding capital stock as of                     , 2014, and after giving effect to the offering and the restructuring transactions, for:

 

   

each person who then will beneficially own more than 5% of the then outstanding capital stock on a fully diluted basis;

 

   

each of our directors and director nominees;

 

   

each of our named executive officers; and

 

   

all of our directors, director nominees and executive officers as a group.

 

The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote and in the next paragraph, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise noted, the mailing address of each person or entity named in the table is 1301 McKinney Street, Suite 2100, Houston, Texas 77010.

 

Upon the closing of this offering, the group consisting of MRD Holdings, Messrs. Bahr and Graham, and certain other former management members of WildHorse Resources will continue to control a majority of our voting common stock. As a result, we will be a “controlled company” within the meaning of the NASDAQ listing rules. However, the number of shares reflected in the table below as beneficially owned by each of the members of that group does not include shares held by the other members of that group that are subject to the terms of the voting agreement pursuant to which, among other things, such group members have agreed to vote as directed by MRD Holdings.

 

MRD Holdings has granted the underwriters the option to purchase up to an additional             shares of common stock and will sell such shares only to the extent such option is exercised. MRD Holdings is deemed under federal securities laws to be an underwriter with respect to the common stock it may sell in connection with this offering. The number of shares being offered by MRD Holdings in the table below assumes no exercise of the underwriters’ option to purchase additional shares of common stock from MRD Holdings.

 

The table does not reflect any common stock that directors and named executive officers may purchase in this offering through the directed share program described under “Underwriting.”

 

    Shares beneficially owned
prior to offering
    Shares
being
offered
    Shares beneficially
owned after offering
 

Name of beneficial owner

  Number   Percentage       Number   Percentage  

MRD Holdings LLC (“MRD Holdings”)(1)

                       

Kenneth A. Hersh(2)

               —                

Anthony Bahr(3)

               —                

Jay Graham(3)

               —                

Tony R. Weber

               —                

John A. Weinzierl

               —                

Scott A. Gieselman

               —                

William J. Scarff

               —                

Andrew J. Cozby

               —                

Larry R. Forney

               —                

All executive officers, directors and director nominees as a group (10 persons)

               —                

 

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(1)   The board of managers of MRD Holdings has voting and dispositive power over these shares. The board of managers of MRD Holdings consists of John A. Weinzierl, Kenneth A. Hersh, Scott A. Gieselman and Tony R. Weber, none of whom individually have voting and dispositive power over these shares. Each such person expressly disclaims beneficial ownership over these shares, except to the extent of any pecuniary interest therein. MRD LLC is owned by Natural Gas Partners VIII, L.P. (“NGP VIII”), Natural Gas Partners IX, L.P. (“NGP IX”) and NGP IX Offshore Holdings, L.P. (“NGP IX Offshore”). NGP VIII, NGP IX and NGP IX Offshore may be deemed to share voting and dispositive power over the reported securities; thus, each may also be deemed to be the beneficial owner of these securities. Each of NGP VIII, NGP IX and NGP IX Offshore disclaims beneficial ownership of the reported securities in excess of such entity’s respective pecuniary interest in the securities. G.F.W. Energy VIII, L.P., GFW VIII, L.L.C., G.F.W. Energy IX, L.P. and GFW IX, L.L.C. may be deemed to beneficially own the shares held by Memorial Resource Development LLC that are attributable to NGP VIII, NGP IX and NGP IX Offshore by virtue of GFW VIII, L.L.C. being the sole general partner of G.F.W. Energy VIII, L.P. (which is the general partner of NGP VIII) and GFW IX, L.L.C. being the sole general partner of G.F.W. Energy IX, L.P. (which is the general partner of NGP IX and NGP IX Offshore). Kenneth A. Hersh, one of our directors and who is an Authorized Member of each of GFW VIII, L.L.C. and GFW IX, L.L.C., may also be deemed to share the power to vote, or to direct the vote, and to dispose, or to direct the disposition, of those shares. Mr. Hersh does not own directly any shares.
(2)   G.F.W. Energy VIII, L.P., GFW VIII, L.L.C., G.F.W. Energy IX, L.P. and GFW IX, L.L.C. may be deemed to beneficially own the shares held by Memorial Resource Development LLC that are attributable to NGP VIII, NGP IX and NGP IX Offshore by virtue of GFW VIII, L.L.C. being the sole general partner of G.F.W. Energy VIII, L.P. (which is the general partner of NGP VIII) and GFW IX, L.L.C. being the sole general partner of G.F.W. Energy IX, L.P. (which is the general partner of NGP IX and NGP IX Offshore). Kenneth A. Hersh, one of our directors and who is an Authorized Member of each of GFW VIII, L.L.C. and GFW IX, L.L.C., may also be deemed to share the power to vote, or to direct the vote, and to dispose, or to direct the disposition, of those shares. Mr. Hersh does not own directly any shares.
(3)   The address for these beneficial owners is 9805 Katy Freeway, Suite 400, Houston, TX 77024.

 

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

Corporate Restructuring

 

In connection with our corporate restructuring, we will engage in transactions with certain affiliates and our existing equity holders. See “Restructuring Transactions” for a description of these transactions.

 

Historical Transactions with Affiliates

 

MRD LLC was formed in April 2011 and capitalized in connection with the December 2011 initial public offering of MEMP. The limited liability company agreement of MRD LLC provides for a number of different classes of units, all of which are currently owned by the Funds. In June 2012, MRD LLC issued incentive units to certain of its officers and employees. These incentive units only participate in distributions upon liquidation events meeting certain requisite financial return thresholds. Before the closing of this offering, the Funds will contribute all of their ownership of MRD LLC to MRD Holdings and the owners of incentive units in MRD LLC will exchange those interests for substantially identical incentive units in MRD Holdings.

 

Voting Agreement

 

In connection with the closing of this offering, MRD Holdings will enter into a voting agreement with certain former management members of WildHorse Resources that are contributing their ownership of WildHorse Resources to us in the restructuring transactions. Among other things, the voting agreement will provide that those former management members of WildHorse Resources will vote all of their shares of our common stock as directed by MRD Holdings. The voting agreement will also prohibit the transfer of any shares of our common stock by the former management members of WildHorse Resources until after the termination of the services agreement described below.

 

Further, so long as the services agreement is in effect, the former management members of WildHorse Resources will have the right to appoint two board observers, Anthony Bahr and Jay Graham (or their respective designees), to attend all meetings of our Board in a non-voting, observer capacity. No board observer will have a vote on our Board. The members of the Board can exclude any board observer from any board meeting so that the members of the Board may meet in executive session, to protect attorney-client privilege, or in connection with a conflict of interest.

 

The voting agreement will also provide MRD Holdings with the right to designate up to three nominees to our Board, provided that such number of nominees shall be reduced to two, one and zero if the Funds and their affiliates collectively own less than 35%, 15% and 5%, respectively, of the outstanding shares of our common stock. The voting agreement will also require the stockholders party thereto to take all necessary actions, to the fullest extent permitted by applicable law (including with respect to any fiduciary duties under Delaware law), including voting their shares of our common stock, to cause the election of the nominees designated by MRD Holdings. In addition, the voting agreement will provide that for so long as MRD Holdings has the right to designate two directors to the board, we will cause any committee of our board to include in its membership at least one director designated by MRD Holdings, except to the extent that such membership would violate applicable securities laws or stock exchange rules.

 

Registration Rights Agreement

 

In connection with the closing of this offering, we will enter into a registration rights agreement with MRD Holdings and former management members of WildHorse Resources, Jay Graham (“Graham”) and Anthony Bahr (“Bahr”). Pursuant to the registration rights agreement, we have agreed to register the sale of shares of our common stock under certain circumstances.

 

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Demand Rights

 

At any time after the 180 day lock-up period, as described in “Underwriting,” and subject to the limitations set forth below, each of MRD Holdings, Graham and Bahr (or their permitted transferees) has the right to require us, by written notice, to prepare and file a registration statement registering the offer and sale of a certain number of their shares of common stock. Generally, we are required to provide notice of the request within five business days following the receipt of such demand request to all other holders of registrable securities, who may, in certain circumstances, participate in the registration. Subject to certain exceptions, we will not be obligated to effect a demand registration within 90 days after the closing of any underwritten offering of shares of our common stock. Further, we are not obligated to effect, (i) at the request of MRD Holdings, more than a total of three demand registrations through December 31, 2016 or, after January 1, 2017, more than one demand registration per calendar year; and (ii) any demand registrations at the request of either Graham or Bahr before the termination of the services agreement described below or, after the termination of the services agreement, more than two demand registrations at the request of each of Graham or Bahr.

 

We are also not obligated to effect any demand registration in which the anticipated aggregate offering price included in such offering is less than $50 million. Once we are eligible to effect a registration on Form S-3, any such demand registration may be for a shelf registration statement. We will be required to use all commercially reasonable efforts to maintain the effectiveness of any registration statement until all shares covered by such registration statement have been sold.

 

In addition, each of MRD Holdings, Graham and Bahr (or their permitted transferees) has the right to require us, subject to certain limitations, to effect a distribution of any or all of their shares of common stock by means of an underwritten offering. In general, any demand for an underwritten offering (other than the first requested underwritten offering made in respect of a prior demand registration and other than a requested underwritten offering made concurrently with a demand registration) shall constitute a demand request subject to the limitations set forth above.

 

Piggyback Rights

 

Subject to certain exceptions, if at any time we propose to register an offering of common stock or conduct an underwritten offering, whether or not for our own account, then we must notify MRD Holdings, Graham and Bahr (or their permitted transferees) of such proposal at least five business days before the anticipated filing date or commencement of the underwritten offering, as applicable, to allow them to include a specified number of their shares in that registration statement or underwritten offering, as applicable.

 

Conditions and Limitations; Expenses

 

These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration and our right to delay or withdraw a registration statement under certain circumstances. We will generally pay all registration expenses in connection with our obligations under the registration rights agreement, regardless of whether a registration statement is filed or becomes effective.

 

Omnibus Agreement

 

On December 14, 2011, in connection with the closing of MEMP’s initial public offering, MRD LLC entered into an omnibus agreement with MEMP and its general partner. When the restructuring transactions are completed, we will succeed to all of MRD LLC’s duties and obligations under the omnibus agreement.

 

Pursuant to the omnibus agreement, MEMP is required to reimburse us for all expenses incurred by us (or payments made on MEMP’s behalf) in conjunction with our provision of general and administrative services to

 

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MEMP, including, but not limited to, public company expenses and an allocated portion of the salary and benefits of the executive officers of MEMP’s general partner and our other employees who perform services for MEMP or on MEMP’s behalf. MEMP is also obligated to reimburse us for insurance coverage expenses we incur with respect to MEMP’s business and operations and with respect to director and officer liability coverage for the officers and directors of MEMP’s general partner.

 

Pursuant to the omnibus agreement, we will indemnify MEMP’s general partner and MEMP against (i) title defects and (ii) income taxes attributable to pre-closing ownership or operation of the assets we contributed to MEMP in connection with MEMP’s initial public offering, including any income tax liabilities related to such contribution occurring on or prior to the closing of MEMP’s initial public offering.

 

Our indemnification obligation will survive until December 2014 with respect to title defects and (ii) for sixty days after the expiration of the applicable statute of limitations with respect to income taxes. All title claims are subject to a $25,000 per claim de minimus exception and an aggregate $2,000,000 deductible.

 

Pursuant to the omnibus agreement, MEMP must indemnify us for any liabilities incurred by us attributable to the operating and administrative services provided to MEMP under the omnibus agreement, other than liabilities resulting from our bad faith, fraud, gross negligence or willful misconduct. In addition, we must indemnify MEMP for any liability MEMP incurs as a result of our bad faith or willful misconduct in providing operating and administrative services under the omnibus agreement. We may terminate the omnibus agreement in the event that we cease to be an affiliate of MEMP and may also terminate the omnibus agreement in the event of MEMP’s material breach of the agreement, including failure to pay amounts due thereunder in accordance with its terms.

 

Under the omnibus agreement, none of the parties thereto nor any of their respective affiliates have any obligation to offer, or provide any opportunity to pursue, purchase or invest in, any business opportunity to any other party or their affiliates. Furthermore, the omnibus agreement does not restrict any of the parties thereto and their respective affiliates from competing with either us, MEMP or MEMP’s general partner.

 

Beta Management Agreement

 

On December 12, 2012, MRD LLC entered into a management agreement with its wholly-owned subsidiary, Beta Operating Company, LLC pursuant to which MRD LLC agreed to provide management and administrative oversight with respect to the services provided by such subsidiary under certain operating agreements with a subsidiary of MEMP, in exchange for an annual management fee. When the restructuring transactions are completed, we will succeed to this management agreement and we will receive approximately $0.4 million from MEMP annually under that agreement.

 

Services Agreement

 

Upon the closing of this offering, we will enter into a services agreement with WildHorse Resources and WildHorse Resources Management Company, LLC (“WHR Management”), pursuant to which WHR Management Company will provide operating and administrative services to us for twelve months relating to the Terryville Complex. In exchange for such services, we will pay a monthly management fee to WHR Management.

 

WHR Management may only terminate the services agreement by providing 90-days prior written notice to the Company after the six-month anniversary of the date of the agreement. We may terminate the services agreement at any time by providing written notice to WHR Management. The services agreement may only be assigned by either party with the other party’s consent. Upon the closing of this offering, WHR Management will be a subsidiary of WildHorse Resources II, LLC, an affiliate of MRD LLC and the Company. NGP and certain former management members of WildHorse Resources own WildHorse Resources II, LLC.

 

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Gas Processing Agreement

 

On March 17, 2014, WildHorse Resources, which will become our wholly-owned subsidiary in connection with the restructuring transactions to be entered into in connection with the completion of this offering, entered into a gas processing agreement with PennTex North Louisiana, LLC (“PennTex”). PennTex is a joint venture among certain affiliates of NGP in which MRD Midstream LLC owns a minority interest. Once PennTex’s processing plant becomes operational, it will process natural gas produced from wells located on certain leases owned by WildHorse Resources in the state of Louisiana. The agreement has a 15-year primary term, subject to one year extensions at either party’s election. WildHorse Resources will pay PennTex a monthly fee, subject to an annual inflationary escalation, based on volumes of natural gas delivered and processed. Once the plant is declared operational, WildHorse Resources will be obligated to pay a minimum processing fee equal to approximately $18.3 million on an annual basis, subject to certain adjustments and conditions. The gas processing agreement requires that the processing plant be operational no later than November 1, 2015.

 

Repurchase of Net Profits Interests

 

On February 28, 2014, WildHorse Resources, which will become our wholly-owned subsidiary in connection with the restructuring transactions to be entered into in connection with the completion of this offering, repurchased net profits interests from an affiliate of NGP for $63.4 million after customary adjustments. These net profits interests were originally sold to the NGP affiliate upon the completion of certain acquisitions in 2010 by WildHorse Resources.

 

Dispositions of Oil and Natural Gas Producing Properties to the Partnership

 

We have divested long-lived producing oil and natural gas properties to the Partnership through the following drop down transactions:

 

   

In April 2012, we sold 22 Bcfe of proved reserves located in East Texas to the Partnership for cash consideration of approximately $18.5 million;

 

   

In May 2012, we sold an additional 28 Bcfe of proved reserves in East Texas to the Partnership for a final purchase price of approximately $27.0 million;

 

   

In March 2013, we sold 162 Bcfe of proved reserves located in East Texas to the Partnership for cash consideration of approximately $200.0 million;

 

   

In October 2013, we sold 99 Bcfe of proved reserves located in East Texas and the Rocky Mountains to the Partnership for cash consideration of approximately $96.3 million; and

 

   

In April 2014, we sold approximately 15 Bcfe of proved reserves located in East Texas to the Partnership for cash consideration of approximately $34.0 million, subject to customary post-closing adjustments.

 

Procedures for Approval of Related Party Transactions

 

Prior to the closing of this offering, we have not maintained a policy for approval of related party transactions. A “related party transaction” is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A “related person” means:

 

   

any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors;

 

   

any person who is known by us to be the beneficial owner of more than 5% of our common stock;

 

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any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our common stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our common stock; and

 

   

any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

 

We anticipate that our Board will adopt a written related party transactions policy prior to the completion of this offering. Pursuant to this policy, we expect that our Audit Committee will review all material facts of all related party transactions.

 

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RESTRUCTURING TRANSACTIONS

 

We are a Delaware corporation recently formed by MRD LLC. As part of the corporate restructuring that will occur in connection with the closing of this offering, MRD LLC and former WildHorse Resources management will contribute equity interests in certain entities to us in exchange for cash and shares of our common stock. See “Description of Capital Stock” for additional information regarding the terms of our amended and restated certificate of incorporation and amended and restated bylaws as will be in effect upon the closing of this offering.

 

The corporate restructuring will consist of the following steps, to be taken on or before the closing date of this offering:

 

   

The Funds will contribute all of their interests in MRD LLC to MRD Holdings and the members of our management who own incentive units in MRD LLC will exchange those incentive units for substantially identical incentive units in MRD Holdings, after which MRD Holdings will own 100% of MRD LLC;

 

   

WildHorse Resources will sell its subsidiary, WildHorse Resources Management Company, LLC (which holds certain immaterial assets related to our WildHorse Resources operations), to an affiliate of the Funds for approximately $3 million in cash, and that subsidiary will enter into a services agreement with WildHorse Resources pursuant to which that subsidiary will provide transition services to WildHorse Resources;

 

   

MRD LLC will contribute to us substantially all of its assets, comprised of:

 

   

100% of the ownership interests in Classic Hydrocarbons Holdings, L.P., Classic Hydrocarbons GP Co., L.L.C., Black Diamond Minerals, LLC, Beta Operating Company, LLC and MRD Operating LLC;

 

   

99.9% of the membership interests in WildHorse Resources, the owner of our properties in the Terryville Complex; and

 

   

MEMP GP (including MEMP GP’s ownership of 50% of MEMP’s incentive distribution rights);

 

   

We will issue             shares of our common stock to MRD LLC, which MRD LLC will immediately distribute to MRD Holdings;

 

   

We will assume the obligations of MRD LLC under the PIK notes, including the obligation to pay interest on the PIK notes if this offering closes before June 15, 2014 or to reimburse MRD LLC for the June 15, 2014 interest payment made on the PIK notes if this offering closes after June 15, 2014;

 

   

Certain former management members of WildHorse Resources will contribute to us their outstanding incentive units in WildHorse Resources, as well as the remaining 0.1% of the membership interests in WildHorse Resources, and we will issue             shares of our common stock and pay cash consideration of approximately $             to such former management members of WildHorse Resources;

 

   

We will enter into a registration rights agreement and a voting agreement with MRD Holdings and certain former management members of WildHorse Resources;

 

   

We will enter into our new $2.0 billion revolving credit facility and will use approximately $             million in borrowings under that facility to repay all amounts outstanding under WildHorse Resources’ credit agreements, to pay the cash consideration payable to the former management members of WildHorse Resources and, if applicable, to reimburse MRD LLC for the June 15, 2014 interest payment made on the PIK notes;

 

   

Our subsidiary MRD Operating LLC will enter into a merger agreement with MRD LLC pursuant to which (i) after the redemption of the PIK notes as described below, MRD LLC will merge into MRD Operating LLC, (ii) until the date of such merger, MRD LLC will continue to perform under certain ancillary commercial contracts to which it is a party in support of its current operations for our benefit (such as office leases and drilling contracts), (iii) all amounts received under such contracts will be for our benefit and (iv) we will be responsible for all amounts owing under such contracts; and

 

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We will give notice of redemption to the holders of the PIK notes, which will specify a redemption date of 30 days after the closing of this offering, and we will use a portion of the net proceeds from this offering to redeem all outstanding PIK notes, including paying any applicable premium and accrued and unpaid interest, if any, to the date of redemption. Until the redemption date or any earlier discharge date of the PIK notes, we will use the amount to be paid to the holders of these notes to temporarily reduce amounts outstanding under our new revolving credit facility.

 

From the closing date of this offering until the date upon which the PIK notes are redeemed and the PIK notes indenture is terminated, MRD LLC will remain a subsidiary of MRD Holdings. During that time, MRD LLC will distribute to MRD Holdings:

 

   

BlueStone, which sold substantially all of its assets in July 2013 for $117.9 million, MRD Royalty, which owns certain immaterial leasehold interests and overriding royalty interests in Texas and Montana, MRD Midstream, which owns an indirect interest in certain immaterial midstream assets in North Louisiana, and Classic Pipeline, which owns certain immaterial midstream assets in Texas;

 

   

5,360,912 subordinated units of MEMP representing an approximate 8.7% limited partner interest in MEMP; and

 

   

The right to the $50 million of cash to be released from the debt service reserve account in connection with the redemption of the PIK notes (or, if the closing of this offering occurs after June 15, 2014, the right to the amount remaining in such account plus the cash received from us in reimbursement of the interest paid on June 15, 2014 in respect of the PIK notes).

 

The redemption date of the PIK notes will be approximately 30 days after the closing of this offering. We will have the option to pay the full redemption amount (including any applicable premium and accrued and unpaid interest to the redemption date) to the PIK notes trustee at any time before the redemption date. If we deposit that amount with the PIK notes trustee in advance of the redemption date together with irrevocable instructions to use such amount for the redemption on the redemption date, then our obligations under the PIK notes indenture will be discharged on the date of such deposit. We may choose to so deposit that amount with the PIK notes trustee in advance of the redemption date. After the PIK notes indenture is terminated or discharged, as the case may be, MRD LLC will merge into MRD Operating LLC. At that time, MRD LLC’s sole assets will be the commercial contracts noted above and relating to the businesses owned by us.

 

Limited Liability Company Agreement of MRD Holdings

 

In connection with the completion of this offering, the members of MRD Holdings, including the Funds and certain members of our management team, will enter into a limited liability company agreement of MRD Holdings, or the LLC Agreement. Among other things, the LLC Agreement will provide the mechanism by which MRD Holdings will vote the shares of our common stock that it holds and the circumstances in which distributions will be made to the members of MRD Holdings.

 

The LLC Agreement will provide that the board of directors of MRD Holdings will consist of:

 

   

our Chief Executive Officer; and

 

   

three directors appointed by the Funds.

 

In addition, the LLC Agreement will provide that MRD Holdings and its members will agree to vote the shares of our common stock held by MRD Holdings in favor of the election of these four directors to our Board.

 

Under the LLC Agreement, the board of directors of MRD Holdings has the authority to cause MRD Holdings to vote its shares of our common stock in its discretion. See “Principal and Selling Stockholders” for a description of the ownership of the voting interests of MRD Holdings and the Funds.

 

The LLC Agreement will provide that MRD Holdings will make distributions to its members in certain circumstances, including in connection with a change of control of us and any secondary sales of our common

 

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stock by MRD Holdings. In addition, on a date to be determined in accordance with the LLC Agreement, MRD Holdings may distribute all remaining shares of our common stock to its members based on a valuation at such time. The number of shares that members of our management team receive will increase to the extent that the return on investment ultimately realized by the Funds, or their successors as members of MRD Holdings, increases.

 

The following diagram shows our ownership structure before giving effect to the restructuring transactions and this offering.

 

LOGO

 

(1)   “The Funds” refer collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively own all of the membership interests in MRD LLC. Please read “Principal and Selling Stockholders” for information regarding beneficial ownership. The Funds collectively indirectly own 50% of the Partnership’s incentive distribution rights.
(2)   MRD LLC owns 99.9% of the membership interests in WildHorse Resources; former management members of WildHorse Resources own the remaining 0.1%.
(3)   Includes Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”), Beta Operating Company, LLC (“Beta Operating”), BlueStone Natural Resources Holdings, LLC (“BlueStone”), MRD Royalty LLC (“MRD Royalty”), MRD Midstream LLC (“MRD Midstream”) and Classic Pipeline & Gathering, LLC (“Classic Pipeline”).
(4)   As of December 31, 2013.

 

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The following diagram shows our ownership structure after giving effect to the restructuring transactions and this offering, assuming no exercise of the underwriters’ option to purchase additional shares from MRD Holdings and does not give effect to              shares of common stock reserved for future issuance under the Memorial Resource Development Corp. 2014 Long Term Incentive Plan (described in “Management—2014 Long Term Incentive Plan”).

 

LOGO

 

(1)   If the underwriters exercise in full their option to purchase additional shares of common stock from MRD Holdings, the ownership interest of the public stockholders will increase to              shares of common stock, representing an aggregate     % ownership interest in us, and MRD Holdings will own              shares of common stock, representing an aggregate     % ownership interest in us.
(2)   As of December 31, 2013.
(3)   “The Funds” refer collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively own all of the membership interests in MRD Holdings. Please read “Principal and Selling Stockholders” for information regarding beneficial ownership. The Funds collectively indirectly own 50% of the Partnership’s incentive distribution rights.
(4)   Subsidiaries of MRD Holdings following the restructuring transactions will include BlueStone Natural Resources Holdings, LLC (“BlueStone”), MRD Royalty LLC (“MRD Royalty”), MRD Midstream LLC (“MRD Midstream”) and Classic Pipeline & Gathering, LLC (“Classic Pipeline”). Also, please see the “Principal and Selling Stockholders” table on page 137 for the beneficial ownership of our shares by our executive officers and directors.
(5)   Includes Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”) and Beta Operating Company, LLC (“Beta Operating”).

 

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DESCRIPTION OF CAPITAL STOCK

 

Upon completion of this offering, our authorized capital stock will consist of              shares of common stock, $          par value per share, of which              shares will be issued and outstanding, and              shares of preferred stock, $          par value per share, of which no shares will be issued and outstanding.

 

The following summary of our capital stock, our amended and restated certificate of incorporation and our amended and restated bylaws do not purport to be complete and are qualified in their entirety by reference to the provisions of applicable law and to our amended and restated certificate of incorporation and amended and restated bylaws, forms of which are filed as exhibits to the registration statement of which this prospectus is a part and which will become effective at or around the effective time of such registration statement.

 

Common Stock

 

Except as provided by law or in a preferred stock designation, holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, will have the exclusive right to vote for the election of directors and do not have cumulative voting rights. Except as otherwise required by law, holders of common stock are not entitled to vote on any amendment to the amended and restated certificate of incorporation (including any certificate of designations relating to any series of preferred stock) that relates solely to the terms of any outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the amended and restated certificate of incorporation (including any certificate of designations relating to any series of preferred stock) or pursuant to the DGCL. Subject to prior rights and preferences that may be applicable to any outstanding shares or series of preferred stock, holders of common stock are entitled to receive ratably in proportion to the shares of common stock held by them such dividends (payable in cash, stock or otherwise), if any, as may be declared from time to time by our Board out of funds legally available for dividend payments. All outstanding shares of common stock are fully paid and non-assessable, and the shares of common stock to be issued upon completion of this offering will be fully paid and non-assessable. The holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in our assets in proportion to the shares of common stock held by them that are remaining after payment or provision for payment of all of our debts and obligations and after distribution in full of preferential amounts to be distributed to holders of outstanding shares of preferred stock, if any.

 

Preferred Stock

 

Our amended and restated certificate of incorporation authorizes our Board, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time one or more classes or series of preferred stock, par value $          per share, covering up to an aggregate of              shares of preferred stock. Each class or series of preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the Board, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of stockholders.

 

Anti-Takeover Effects of Provisions of Our Amended and Restated Certificate of Incorporation, Our Amended and Restated Bylaws and Delaware Law

 

Some provisions of Delaware law and our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that could make the following transactions more difficult: acquisitions of us by means of a tender offer, a proxy contest or otherwise; or removal of our incumbent officers

 

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and directors. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions that might result in a premium over the market price for our shares.

 

These provisions are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection and our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

 

Delaware Law

 

Upon completion of this offering, we will be subject to the provisions of Section 203 of the DGCL, which regulates corporate takeovers. In general, those provisions prohibit a Delaware corporation, including those whose securities are listed for trading on the NASDAQ, from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

 

   

the business combination or transaction in which the person became interested is approved by the Board before the date the interested stockholder attained that status;

 

   

upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced other than, for purposes of determining the voting stock outstanding (but not the outstanding stock owned by the interested stockholder), shares owned by persons who are directors and also officers of us and by certain employee stock plans; or

 

   

on or after such time the business combination is approved by the Board and authorized at a meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

 

Section 203 defines “business combination” to include the following:

 

   

certain mergers or consolidations involving the corporation and the interested stockholder;

 

   

any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation to or with the interested stockholder;

 

   

subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

 

   

subject to certain exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

 

   

the receipt by the interested stockholder of the benefit of loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

 

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any of these entities or persons. Since the Funds will have owned their equity in us at the time we complete our corporate formation, the Funds will not be subject to the restrictions of Section 203.

 

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Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

 

Provisions of our amended and restated certificate of incorporation and amended and restated bylaws may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock.

 

Among other things, our amended and restated certificate of incorporation and amended and restated bylaws will:

 

   

establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. Our amended and restated bylaws specify the requirements as to form and content of all stockholders’ notices. These requirements may preclude stockholders from bringing matters before the stockholders at an annual or special meeting;

 

   

provide our Board the ability to authorize undesignated preferred stock. This ability makes it possible for our Board to issue, without stockholder approval, preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company;

 

   

provide that the authorized number of directors may be changed only by an affirmative vote of a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships;

 

   

provide that all vacancies, including newly created directorships, may, except as otherwise required by law or, if applicable, the rights of holders of a series of preferred stock then outstanding, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

 

   

at any time after a group including MRD Holdings and/or the Funds or their respective affiliates no longer collectively beneficially own more than 50% of the outstanding shares of our common stock:

 

   

provide that any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders, subject to the rights of the holders of any series of preferred stock with respect to such series (prior to such time, such actions may be taken without a meeting by written consent of holders of common stock having not less than the minimum number of votes that would be necessary to authorize such action at a meeting);

 

   

provide our certificate of incorporation and bylaws, subject to certain exceptions, may be amended by the affirmative vote of the holders of not less than 66  2/3% of our then outstanding common stock (prior to such time, our certificate of incorporation and bylaws may be amended by the affirmative vote of the holders of not less than 50% majority of our then outstanding common stock);

 

   

provide that special meetings of our stockholders may only be called by the Board pursuant to a resolution adopted by the affirmative vote of a majority of the total number of directors whether or not there exist any vacancies in previously authorized directorships, (prior to such time, a special meeting may also be called at the request of stockholders holding a majority of the outstanding shares entitled to vote);

 

   

provide for our Board to be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three year terms, other than directors which may be elected by holders of preferred stock, if any, and that directors may only be removed for cause. This system of

 

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electing and removing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors; and

 

   

provide that the affirmative vote of the holders of at least 75% in voting power of all then outstanding common stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to remove any or all of the directors from office and such removal may only be for cause.

 

Limitation of Liability and Indemnification Matters

 

Our amended and restated certificate of incorporation limits the liability of our directors for monetary damages for breach of their fiduciary duty as directors, except for liability that cannot be eliminated under the DGCL. Delaware law provides that directors of a company will not be personally liable for monetary damages for breach of their fiduciary duty as directors, except for liabilities:

 

   

for any breach of their duty of loyalty to us or our stockholders;

 

   

for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

 

   

for unlawful payment of dividend or unlawful stock repurchase or redemption, as provided under Section 174 of the DGCL; or

 

   

for any transaction from which the director derived an improper personal benefit.

 

Any amendment, repeal or modification of these provisions will be prospective only and would not affect any limitation on liability of a director for acts or omissions that occurred prior to any such amendment, repeal or modification.

 

Our amended and restated certificate of incorporation and amended and restated bylaws also provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law. We intend to enter into indemnification agreements with each of our current and future directors and officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liability that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We believe that the limitation of liability provision in our amended and restated certificate of incorporation and the indemnification agreements will facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.

 

Corporate Opportunity

 

Under our amended and restated certificate of incorporation, to the fullest extent permitted by law:

 

   

MRD Holdings, NGP, the Funds and their affiliates have the right to, and have no duty to abstain from, exercising such right to, conduct business with any business that is competitive or in the same line of business as us, do business with any of our clients or customers, or invest or own any interest publicly or privately in, or develop a business relationship with, any business that is competitive or in the same line of business as us;

 

   

if MRD Holdings, NGP, the Funds or their affiliates acquires knowledge of a potential transaction that could be a corporate opportunity, they have no duty to offer such corporate opportunity to us; and

 

   

we have renounced any interest or expectancy in, or in being offered an opportunity to participate in, such corporate opportunities.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock is                     .

 

Listing

 

We have applied to list our common stock on the NASDAQ Global Market under the symbol “MRD.”

 

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SHARES ELIGIBLE FOR FUTURE SALE

 

There has not been a public market for our common stock prior to this offering. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the common stock will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. See “Underwriting.” Consequently, you may be unable to sell our common stock at prices equal to or greater than the price you pay in this offering.

 

Sale of Restricted Shares

 

Upon completion of this offering, we will have an aggregate of            shares of our common stock outstanding. Of these            shares, shares of our common stock to be sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares which may be acquired by any of our “affiliates” as that term is defined in Rule 144 under the Securities Act, which will be subject to the resale limitations of Rule 144. The remaining shares of our common stock outstanding will be restricted securities, as that term is defined in Rule 144, and may in the future be sold pursuant to an effective registration statement or under the Securities Act to the extent permitted by Rule 144 or any other available exemption under the Securities Act. All of the shares beneficially owned by MRD Holdings and certain former management members of WildHorse Resources following this offering will be restricted securities.

 

Memorial Resource Development Corp. 2014 Long Term Incentive Plan

 

Following the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act with the SEC to register            shares of our common stock issued or reserved for issuance under the Memorial Resource Development Corp. 2014 Long Term Incentive Plan. Subject to the expiration of any lock-up restrictions as described below and following the completion of any vesting periods, shares of our common stock issued under the Memorial Resource Development Corp. 2014 Long Term Incentive Plan, issuable upon the exercise of options granted or to be granted under the plan, will be freely tradable without restriction under the Securities Act, unless such shares are held by any of our affiliates.

 

Lock-up Agreements

 

Executive officers, directors and our stockholders, including MRD Holdings and certain former management members of WildHorse Resources, have agreed not to sell or transfer any shares of our common stock for a period of 180 days from the date of this prospectus, subject to certain exceptions and extensions. See “Underwriting” for a description of these lock-up provisions.

 

Rule 144

 

In general, under Rule 144 under the Securities Act, a person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

 

All of our outstanding common stock before this offering is held by affiliates. A person who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months would be entitled to sell within any three-month period a number of shares (when aggregated with sales by certain related parties) that does not exceed the greater of 1% of the then outstanding shares of our common stock

 

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(            shares following this offering) or the average weekly trading volume of our common stock reported through the applicable stock exchange during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.

 

Rule 701

 

In general, under Rule 701, any of our employees, directors, officers, consultants or advisors who purchases shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering is entitled to sell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period requirement of Rule 144 and, in the case of non-affiliates, without having to comply with the public information, volume limitation or notice filing provisions of Rule 144. The SEC has indicated that Rule 701 will apply to typical stock options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus.

 

Registration Rights

 

Pursuant to the Registration Rights Agreement we will enter into in connection with the closing of this offering, MRD Holdings and former management members of WildHorse Resources, Jay Graham and Anthony Bahr, will have customary rights to demand that we file a resale shelf registration statement or, in certain circumstances, conduct an underwritten offering of shares held by MRD Holdings, Jay Graham and Anthony Bahr. In addition, the agreement will grant MRD Holdings, Jay Graham and Anthony Bahr customary rights to participate in certain underwritten offerings of our common stock that we may conduct. See “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

 

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MATERIAL TAX CONSEQUENCES

TO

NON-U.S. HOLDERS

 

Introduction

 

The following is a discussion of certain U.S. federal income tax considerations applicable to Non-U.S. Holders (as defined below) arising from the acquisition, ownership and disposition of shares of our common stock. This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a Non-U.S. Holder as a result of the acquisition, ownership and disposition of shares of our common stock. In addition, this summary does not take into account the individual facts and circumstances of any particular Non-U.S. Holder that may affect the U.S. federal income tax considerations applicable to such holder. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any Non-U.S. Holder. Moreover, this summary is not binding on the Internal Revenue Service, or the IRS, or the U.S. courts, and no assurance can be provided that the conclusions reached in this summary will not be challenged by the IRS or will be sustained by a U.S. court if so challenged. We have not requested, and we do not intend to request, a ruling from the IRS or an opinion from U.S. legal counsel regarding any of the U.S. federal income or other tax considerations of the acquisition, ownership and disposition of shares of our common stock. Each Non-U.S. Holder should consult its own tax advisor regarding the acquisition, ownership and disposition of shares of our common stock.

 

Scope of This Disclosure

 

Authorities

 

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (final, temporary, and proposed), U.S. court decisions, published IRS rulings and published administrative positions of the IRS, that are applicable and, in each case, as in effect and available, as of the date of this prospectus. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive basis and could affect the U.S. federal income tax considerations described in this summary.

 

Non-U.S. Holders

 

For purposes of this summary, a “Non-U.S. Holder” is a beneficial owner of shares of our common stock that is not a partnership or other entity classified as a partnership for U.S. federal income tax purposes and that is not: (a) an individual who is a citizen or resident of the U.S., (b) a corporation, or other entity classified as a corporation for U.S. federal income tax purposes, that is created or organized in or under the laws of the U.S. or any state in the U.S., including the District of Columbia, (c) an estate if the income of such estate is subject to U.S. federal income tax regardless of the source of such income, or (d) a trust if (i) such trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes or (ii) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of such trust.

 

Non-U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

 

This summary does not address the U.S. federal income tax considerations of the acquisition, ownership and disposition of shares of our common stock by Non-U.S. Holders that are subject to special provisions under the Code, including the following Non-U.S. Holders: (a) Non-U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) Non-U.S. Holders that are financial institutions, insurance companies, real estate investment trusts, or regulated investment companies or that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-

 

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market accounting method; (c) Non-U.S. Holders that have a “functional currency” other than the U.S. dollar; (d) Non-U.S. Holders that own shares of our common stock as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (e) Non-U.S. Holders that acquire shares of our common stock in connection with the exercise of employee stock options or otherwise as compensation for services; (f) Non-U.S. Holders that hold shares of our common stock other than as a capital asset within the meaning of Section 1221 of the Code; (g) Non-U.S. Holders who are U.S. expatriates or former long term residents of the United States; and (h) Non-U.S. Holders that have or now own, directly, indirectly, or by attribution, 5% or more, by voting power or value, of the outstanding shares of our common stock. Non-U.S. Holders that are subject to special provisions under the Code, including but not limited to Non-U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S. federal, U.S. state and local, and foreign tax and other tax considerations of the acquisition, ownership and disposition of shares of our common stock.

 

If a partnership or other entity that is classified as a partnership for U.S. federal income tax purposes holds shares of our common stock, the U.S. federal income tax considerations to such partnership and the partners of such partnership generally will depend on the activities of the partnership and the status of such partners (or owners). Partnerships or other entities that are classified as partnerships for U.S. federal income tax purposes and their owners should consult their own tax advisors regarding the U.S. federal income tax considerations of the acquisition, ownership and disposition of shares of our common stock.

 

Tax Considerations Other Than U.S. Federal Income Tax Considerations Not Addressed

 

This summary does not address any state, local, alternative minimum, estate and gift, foreign, or other tax considerations other than U.S. federal income tax considerations that may be relevant to Non-U.S. Holders in connection with the acquisition, ownership and disposition of shares of our common stock. Each Non-U.S. Holder should consult its own tax advisors regarding any state, local, estate and gift, foreign, and any other tax considerations that may be relevant to such holder in connection with the acquisition, ownership and disposition of shares of our common stock.

 

Dividends

 

In general, if dividends with respect to shares of our common stock are made, such dividends would be treated as dividends to the extent of our current or accumulated earnings and profits as determined under the Code. Any portion of a dividend that exceeds our current or accumulated earnings and profits will first be applied to reduce the Non-U.S. Holder’s basis in shares of our common stock, and, to the extent such portion exceeds the Non-U.S. Holder’s basis, the excess will be treated as gain from the disposition of shares of our common stock, the tax treatment of which is discussed below under the heading “—Gain on Sale or Other Disposition of Shares of our Common Stock.”

 

Generally, dividends paid in respect of shares of our common stock to a Non-U.S. Holder will be subject to U.S. withholding tax at a 30% rate, subject to the two following exceptions:

 

   

Dividends effectively connected with a trade or business of a Non-U.S. Holder within the U.S. generally will not be subject to withholding if the Non-U.S. Holder complies with applicable IRS certification and disclosure requirements and generally will be subject to U.S. federal income tax on a net income basis at regular U.S. federal income tax rates (in the same manner as a U.S. person) on its U.S. trade or business income. In the case of a Non-U.S. Holder that is a corporation, such effectively connected income also may be subject to the branch profits tax at a 30% rate (or such lower rate as may be prescribed by an applicable tax treaty).

 

   

The withholding tax might not apply, or might apply at a reduced rate, under the terms of an applicable tax treaty. Under Treasury Regulations, to obtain a reduced rate of withholding under a tax treaty, a Non-U.S. Holder generally will be required to satisfy applicable certification and other requirements. A Non-

 

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U.S. Holder of shares of our common stock eligible for a reduced rate of U.S. withholding tax may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for refund with the IRS.

 

Gain on Sale or Other Disposition of Shares of Our Common Stock

 

Except as described in the discussion below under the heading “Information Reporting; Backup Withholding Tax,” a Non-U.S. Holder generally will not be subject to U.S. federal income tax, including withholding tax, in connection with the receipt of proceeds from the sale, exchange, or other taxable disposition of shares of our common stock, unless:

 

   

the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States and, if subject to an applicable tax treaty, is attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the U.S.;

 

   

in the case of an individual, the Non-U.S. Holder has been present in the U.S. for at least 183 days or more in the taxable year of disposition (and certain other conditions are satisfied); or

 

   

we are or have been a “U.S. real property holding corporation,” or USRPHC, for U.S. federal income tax purposes (that is, a domestic corporation whose trade or business and real property assets consist primarily of “U.S. real property interests”) at any time during the shorter of the five-year period ending on the date of disposition and the Non-U.S. Holder’s holding period for its shares of our common stock and, if shares of our common stock are “regularly traded on an established securities market,” the Non-U.S. Holder held, directly or indirectly, at any time during such period, more than 5% of our issued and outstanding common stock.

 

Income that is effectively connected with the conduct of a U.S. trade or business by a Non-U.S. Holder generally will be subject to regular U.S. federal income tax in the same manner as if it were realized by a U.S. Holder. In addition, if such Non-U.S. Holder is a corporation, such gain may be subject to a branch profits tax at a rate of 30% (or such lower rate as is provided by an applicable income tax treaty).

 

If an individual Non-U.S. Holder is present in the U.S. for at least 183 days during the taxable year of disposition, the Non-U.S. Holder may be subject to a flat 30% tax on any U.S.-source gain derived from the sale, exchange, or other taxable disposition of shares of our common stock (other than gain effectively connected with a U.S. trade or business), which may be offset by U.S.-source capital losses.

 

It is likely that we will be a USRPHC. As a result, any gain recognized by a Non-U.S. Holder on the sale, exchange, or other taxable disposition of our common stock may be subject to U.S. federal income tax in the same manner as gain recognized by a U.S. Holder, or the FIRPTA Tax. In addition, a Non-US. Holder may under certain circumstances be subject to withholding in an amount equal to 10% of the gross proceeds on the sale or disposition; if the Non-U.S. Holder files a U.S. federal income tax return, any amounts so withheld will generally be credited against, and refunded to the extent in excess of, any FIRPTA Tax such Non-U.S. Holder owes.

 

However, so long as our common stock is considered to be “regularly traded on an established securities market,” or regularly traded, at any time during the calendar year, a Non-U.S. Holder generally will not be subject to FIRPTA Tax on any gain recognized on the sale or other disposition of our common stock unless the Non-U.S. Holder owned (actually or constructively) shares of our common stock with a fair market value of more than 5% of the total fair market value of our common stock at any time during the applicable period described in the third bullet point above. No withholding is required under these rules upon a sale or other taxable disposition of our common stock if it is considered to be regularly traded. If, on the other hand, our common stock is not considered to be regularly traded, a Non-U.S. Holder will be subject to FIRPTA Tax on any gain recognized on your sale or other taxable disposition of our common stock, and withholding on the gross proceeds thereof, regardless of such Non-U.S. Holder’s percentage ownership of our common stock.

 

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Recent Law Changes Affecting U.S. Federal Income Tax Withholding

 

Legislation enacted in 2010 and recent administrative guidance will require withholding at a rate of 30% on dividends paid on or after July 1, 2014 (and gross proceeds from the sale of shares of our common stock paid on or after January 1, 2017) to certain foreign financial institutions (including investment funds), unless such institution enters into an agreement with the Secretary of the Treasury to, among other things, report, on an annual basis, information with respect to accounts with or shares in the institution held by certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by United States persons, and to withhold on payments made to certain account holders. Accordingly, the entity through which shares of our common stock is held will affect the determination of whether such withholding is required. Similarly, dividends in respect of, and gross proceeds from the sale of, shares of our common stock held by an investor that is a non-financial foreign entity will be subject to withholding at a rate of 30% if such entity or another non-financial foreign entity is the beneficial owner of the payment, unless, among other things, the beneficial owner or the payee either (i) certifies to the withholding agent that such entity does not have any “substantial United States owners” or (ii) provides certain information regarding the entity’s “substantial United States owners” to the withholding agent, which the withholding agent will in turn provide to the Secretary of the Treasury. Non-U.S. holders are encouraged to consult with their tax advisors regarding the possible implications of the legislation on their investment in shares of our common stock.

 

Information Reporting; Backup Withholding Tax

 

A Non-U.S. Holder generally will not be subject to information reporting or backup withholding with respect to payments of dividends on, or gross proceeds from the disposition of, shares of our common stock that are made within the United States or though certain U.S.-related financial intermediaries, provided that the Non-U.S. Holder certifies as to its foreign status or otherwise establishes an exemption.

 

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a Non-U.S. Holder’s U.S. federal income tax liability, and a Non-U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information. Non-U.S. Holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them in their particular circumstances.

 

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UNDERWRITING

 

Citigroup Global Markets Inc. is acting as book-running manager of the offering and as representative of the underwriters. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has severally agreed to purchase, and we and MRD LLC have agreed to sell to that underwriter, the number of shares set forth opposite the underwriter’s name.

 

Underwriter

   Number of
Shares

Citigroup Global Markets Inc.

  

Barclays Capital Inc.

  

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

  

BMO Capital Markets Corp.

  

Goldman, Sachs & Co.

  

Raymond James & Associates, Inc.

  

RBC Capital Markets, LLC

  

Wells Fargo Securities, LLC

  

Credit Suisse Securities (USA) LLC

  

Morgan Stanley & Co. LLC

  

Scotia Capital (USA) Inc.

  

Simmons & Company International

  

Stephens Inc.

  

Stifel, Nicolaus & Company, Incorporated

  

UBS Securities LLC

  

Wunderlich Securities, Inc.

  

Total

  
  

 

 

The underwriting agreement provides that the obligations of the underwriters to purchase the shares included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all the shares (other than those covered by the underwriters’ option to purchase additional shares described below) if they purchase any of the shares.

 

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount from the initial public offering price not to exceed $         per share. If all the shares are not sold at the initial offering price, the underwriters may change the offering price and the other selling terms. The representative has advised us that the underwriters do not intend to make sales to discretionary accounts.

 

If the underwriters sell more shares than the total number set forth in the table above, MRD LLC has granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to                 additional shares at the public offering price less the underwriting discount. The underwriters may exercise the option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional shares approximately proportionate to that underwriter’s initial purchase commitment. Any shares issued or sold under the option will be issued and sold on the same terms and conditions as the other shares that are the subject of this offering.

 

We, our officers and directors, MRD LLC and certain former management members of WildHorse Resources have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of Citigroup Global Markets Inc. dispose of or hedge any shares or any securities convertible into or exchangeable for our common stock. Citigroup Global Markets Inc. in its sole discretion may release any of the securities subject to these lock-up agreements at any time, which, in the case of officers and directors, shall be with notice.

 

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The underwriters have reserved for sale at the initial public offering price up to             % of the common stock being offered by this prospectus for sale to our employees, executive officers and directors who have expressed an interest in purchasing common stock in the offering. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares. Any shares sold in the directed share program to directors and executive officers will be subject to the 180-day lock-up agreements described above.

 

Prior to this offering, there has been no public market for our shares. Consequently, the initial public offering price for the shares was determined by negotiations among us and the representative. Among the factors considered in determining the initial public offering price were our results of operations, our current financial condition, our future prospects, our markets, the economic conditions in and future prospects for the industry in which we compete, our management, and currently prevailing general conditions in the equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the shares will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our shares will develop and continue after this offering.

 

We have applied to have our shares listed on the Nasdaq Global Market under the symbol “MRD.”

 

The following table shows the underwriting discounts and commissions that we and MRD LLC are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option.

 

     Paid by the Company  
     No Exercise      Full Exercise  

Per share

   $                    $                

Total

   $         $     

 

     Paid by MRD LLC  
     No Exercise      Full Exercise  

Per share

   $                    $                

Total

   $         $     

 

We estimate that our portion of the total expenses of this offering will be $         (excluding underwriting discounts and commissions).

 

In connection with the offering, the underwriters may purchase and sell shares in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the underwriters’ option to purchase additional shares, and stabilizing purchases.

 

   

Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the offering.

 

   

“Covered” short sales are sales of shares in an amount up to the number of shares represented by the underwriters’ option to purchase additional shares.

 

   

“Naked” short sales are sales of shares in an amount in excess of the number of shares represented by the underwriters’ option to purchase additional shares.

 

   

Covering transactions involve purchases of shares either pursuant to the underwriters’ option to purchase additional shares or in the open market in order to cover short positions.

 

   

To close a naked short position, the underwriters must purchase shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

 

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To close a covered short position, the underwriters must purchase shares in the open market or must exercise their option to purchase additional shares. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the underwriters’ option to purchase additional shares.

 

   

Stabilizing transactions involve bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum.

 

Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the shares. They may also cause the price of the shares to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the Nasdaq Global Market, in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

 

Relationships

 

The underwriters are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The underwriters and their respective affiliates have in the past performed commercial banking, investment banking and advisory services for us from time to time for which they have received customary fees and reimbursement of expenses and may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. In addition, affiliates of certain of the underwriters are lenders, and in some cases agents or managers for the lenders, under WildHorse Resources’ revolving credit facility and we expect affiliates of certain of the underwriters will be lenders under the new revolving credit facility we will enter into in connection with the closing of this offering. Certain of the underwriters or their affiliates that have a lending relationship with us routinely hedge their credit exposure to us consistent with their customary risk management policies. A typical such hedging strategy would include these underwriters or their affiliates hedging such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

 

We and MRD Holdings have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

 

Notice to Prospective Investors in the European Economic Area

 

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of shares described in this prospectus may not be made to the public in that relevant member state other than:

 

   

to any legal entity which is a qualified investor as defined in the Prospectus Directive;

 

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to fewer than 100 or, if the relevant member state has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by us for any such offer; or

 

   

in any other circumstances falling within Article 3(2) of the Prospectus Directive,

 

provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

 

For purposes of this provision, the expression an “offer of securities to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the relevant member state) and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.

 

The sellers of the shares have not authorized and do not authorize the making of any offer of shares through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus. Accordingly, no purchaser of the shares, other than the underwriters, is authorized to make any further offer of the shares on behalf of the sellers or the underwriters.

 

Notice to Prospective Investors in the United Kingdom

 

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a “relevant person”). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

 

Notice to Prospective Investors in France

 

Neither this prospectus nor any other offering material relating to the shares described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the shares has been or will be:

 

   

released, issued, distributed or caused to be released, issued or distributed to the public in France; or

 

   

used in connection with any offer for subscription or sale of the shares to the public in France.

 

Such offers, sales and distributions will be made in France only:

 

   

to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;

 

   

to investment services providers authorized to engage in portfolio management on behalf of third parties; or

 

   

in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne).

 

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The shares may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

 

Notice to Prospective Investors in Hong Kong

 

The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

 

Notice to Prospective Investors in Japan

 

The shares offered in this prospectus have not been and will not be registered under the Financial Instruments and Exchange Law of Japan. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan (including any corporation or other entity organized under the laws of Japan), except (i) pursuant to an exemption from the registration requirements of the Financial Instruments and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.

 

Notice to Prospective Investors in Singapore

 

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

 

Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

 

   

a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

 

   

a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

 

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:

 

   

to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust

 

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are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;

 

   

where no consideration is or will be given for the transfer; or

 

   

where the transfer is by operation of law.

 

Notice to Prospective Investors in Switzerland

 

The prospectus does not constitute an issue prospectus pursuant to Article 652a or Article 1156 of the Swiss Code of Obligations (“CO”) and the shares will not be listed on the SIX Swiss Exchange. Therefore, the prospectus may not comply with the disclosure standards of the CO and/or the listing rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the shares may not be offered to the public in or from Switzerland, but only to a selected and limited circle of investors, which do not subscribe to the shares with a view to distribution.

 

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LEGAL MATTERS

 

The validity of the shares of common stock offered hereby will be passed upon for us by Akin Gump Strauss Hauer & Feld LLP, Houston, Texas. Certain legal matters in connection with this offering will be passed upon for the underwriters by Vinson & Elkins L.L.P., Houston, Texas.

 

EXPERTS

 

The financial statement of Memorial Resource Development Corp. as of January 31, 2014 has been included herein upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

 

The consolidated and combined financial statements and schedules of our predecessor (as described in Note 1 to those financial statements) as of December 31, 2013 and 2012, and for each of the years then ended, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

 

Estimated quantities of our proved oil and natural gas reserves and the net present value of such reserves as of December 31, 2013 set forth in this prospectus are based on the reserve report prepared by Netherland, Sewell & Associates, Inc. Our acreage had been audited or evaluated by an independent reservoir engineering firm since 2011 and Netherland, Sewell & Associates, Inc. evaluated these reserves as of December 31, 2013.

 

Our estimates of probable and possible reserves are prepared by management and audited by Netherland, Sewell & Associates, Inc.

 

Estimated quantities of MEMP’s proved oil and natural gas reserves and the net present value of such reserves as of December 31, 2013 set forth in this prospectus are based on the reserve report prepared by Netherland, Sewell & Associates, Inc. MEMP’s acreage had been audited or evaluated by an independent reservoir engineering firm since 2011 and Netherland, Sewell & Associates, Inc. evaluated these reserves as of December 31, 2013.

 

We have included these estimates in reliance on the authority of Netherland, Sewell & Associates, Inc. as experts in such matters.

 

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WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC a registration statement under the Securities Act, with respect to the shares of our common stock offered by this prospectus. This prospectus, filed as a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules thereto as permitted by the rules and regulations of the SEC. For further information about us and our common stock, you should refer to the registration statement. This prospectus summarizes provisions that we consider material of certain contracts and other documents to which we refer you. You should review the full text of those documents. We have included copies of those documents as exhibits to the registration statement.

 

The registration statement and the exhibits thereto filed with the SEC may be inspected, without charge, and copies may be obtained at prescribed rates, at the public reference facility maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may request copies of the documents, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC. Please call 1-800-SEC-0330 for further information on the public reference rooms. Our filings with the SEC are also available to the public from commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov.

 

Our website address is www.memorialrd.com. We expect to make available our periodic reports and other information filed with or furnished to the SEC, free of charge through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference herein and does not constitute a part of this prospectus.

 

As a result of the offering, we and our stockholders will also become subject to the proxy solicitation rules, annual and periodic reporting requirements and other requirements of the Exchange Act. These periodic reports, proxy statements and other information will be available for inspection and copying at the regional offices, public reference facilities and web site of the SEC referred to above. We will furnish our stockholders with annual reports containing audited financial statements certified by an independent registered public accounting firm and quarterly reports containing unaudited financial statements for the first three quarters of each fiscal year.

 

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INDEX TO FINANCIAL STATEMENTS

 

     Page  

MEMORIAL RESOURCE DEVELOPMENT CORP.

  

Historical Balance Sheet

  

Report of Independent Registered Public Accounting Firm

     F-2   

Balance Sheet as of January 31, 2014

     F-3   

Note to Balance Sheet

     F-4   

Unaudited Pro Forma Condensed Combined Financial Information

  

Introduction

     F-5   

Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2013

     F-7   

Unaudited Pro Forma Condensed Combined Statements of Operations for the Year ended December 31, 2013

     F-9   

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

     F-10   

PREDECESSOR

  

Audited Financial Statements

  

Report of Independent Registered Public Accounting Firm

     F-21   

Consolidated and Combined Balance Sheets as of December 31, 2013 and 2012

     F-22   

Statements of Consolidated and Combined Operations for the Years ended December 31, 2013 and 2012

     F-23   

Statements of Consolidated and Combined Cash Flows for the Years ended December 31, 2013 and 2012

     F-24   

Statements of Consolidated and Combined Equity for the Years ended December 31, 2013 and 2012

     F-25   

Notes to Consolidated and Combined Financial Statements

     F-26   

Schedule 1—Condensed Financial Information

  

Condensed Balance Sheets as of December 31, 2013 and 2012

     F-76   

Condensed Statements of Operations for the Years ended December 31, 2013 and 2012

     F-77   

Condensed Statements of Cash Flows for the Years ended December 31, 2013 and 2012

     F-77   

Notes to Condensed Financial Statements

     F-78   

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors

Memorial Resource Development Corp.

 

We have audited the accompanying balance sheet of Memorial Resource Development Corp. as of January 31, 2014. This financial statement is the responsibility of the Memorial Resource Development Corp.’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit of a balance sheet also includes examining, on a test basis, evidence supporting the amounts and disclosures in that balance sheet, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.

 

In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of Memorial Resource Development Corp. as of January 31, 2014, in conformity with U.S. generally accepted accounting principles.

 

/s/ KPMG LLP

Dallas, TX

February 6, 2014

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

BALANCE SHEET

 

     January 31,
2014
 

ASSETS

  

Cash and cash equivalents

   $   —    
  

 

 

 

Total assets

   $ —    
  

 

 

 

SHAREHOLDERS’ EQUITY

  

Common stock, $0.01 par value; authorized 1,000 shares; 100 issued and outstanding at January 31, 2014

     1   

Less receivable from Memorial Resource Development LLC

     (1
  

 

 

 

Total shareholders’ equity

   $ —    
  

 

 

 

 

See Accompanying Note to Balance Sheet.

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTE TO BALANCE SHEET

 

Note 1. Organization and Basis of Presentation

 

Memorial Resource Development Corp. (“MRDC”) is a Delaware corporation formed by Memorial Resource Development LLC (“MRD LLC”) on January 31, 2014 to own and acquire oil and natural gas properties in North America. MRD LLC is a Delaware limited liability company formed on April 27, 2011 by Natural Gas Partners VIII, L.P. (“NGP VIII”), Natural Gas Partners IX, L.P. (“NGP IX”) and NGP IX Offshore Holdings, L.P. (“NGP IX Offshore”) (collectively, the “Funds”) to own, acquire, exploit and develop oil and natural gas properties. The Funds are private equity funds managed by Natural Gas Partners (“NGP”).

 

MRDC plans to pursue an initial public offering (the “offering”) of its common stock. In connection with the closing of this offering, MRD LLC will contribute the following to us in exchange for shares of common stock: (1) 100% of its ownership interests in Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”), Beta Operating Company, LLC (“Beta Operating”), MRD Operating LLC (“MRD Operating”) and Memorial Production Partners GP LLC (“MEMP GP”), which owns a 0.1% general partner interest and 50% of the incentive distribution rights in Memorial Production Partners LP (“MEMP”), and (2) its 99.9% membership interest in WildHorse Resources, LLC (“WildHorse Resources”). In addition, certain former management members of WildHorse Resources will contribute to us the remaining 0.1% membership interest in WildHorse Resources as well as exchange their incentive units in exchange for shares of common stock and cash consideration.

 

This balance sheet has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). MRD LLC has committed to contribute $1 as the initial sole shareholder. This contribution receivable is reflected as a reduction to equity. Separate Statements of Income, Changes in Stockholder’s Equity and of Cash Flows have not been presented because MRDC has had no business transactions or activities to date.

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

We are a Delaware corporation (“MRDC”) formed by Memorial Resource Development LLC (“MRD LLC”) in January 2014 to own and acquire oil and natural gas properties in North America. MRD LLC is a Delaware limited liability company formed on April 27, 2011 by Natural Gas Partners VIII, L.P. (“NGP VIII”), Natural Gas Partners IX, L.P. (“NGP IX”) and NGP IX Offshore Holdings, L.P. (“NGP IX Offshore”) (collectively, the “Funds”) to own, acquire, exploit and develop oil and natural gas properties. The Funds are private equity funds managed by Natural Gas Partners (“NGP”).

 

In connection with the closing of this offering, the Funds will contribute all of their interests in MRD LLC to MRD Holdings LLC (“MRD Holdings”). MRD LLC and its consolidated subsidiaries, which is our accounting predecessor, will contribute the following to us in exchange for shares of common stock (which MRD LLC will immediately distribute to MRD Holdings): (1) 100% of its ownership interests in Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”), Beta Operating Company, LLC (“Beta Operating”), MRD Operating LLC (“MRD Operating”) and Memorial Production Partners GP LLC (“MEMP GP”), which owns a 0.1% general partner interest and 50% of the incentive distribution rights in Memorial Production Partners LP (“MEMP”), and (2) its 99.9% membership interest in WildHorse Resources, LLC (“WildHorse Resources”). In addition, certain former management members of WildHorse Resources will contribute to us the remaining 0.1% membership interest in WildHorse Resources as well as exchange their incentive units in exchange for shares of common stock and cash consideration. MRD Operating will enter into a merger agreement with MRD LLC pursuant to which after the termination of the PIK notes indenture (approximately 30 days after the closing of this offering), MRD LLC will merge into MRD Operating. Prior to this merger, MRD LLC will distribute the following to MRD Holdings: (i) its interests in both BlueStone Natural Resources Holdings, LLC (“BlueStone Holdings”) and Classic Pipeline & Gathering, LLC (“Classic Pipeline”) as well as two immaterial subsidiaries that were formed subsequent to December 31, 2013, (ii) the MEMP subordinated units and (iii) the right to the $50 million of cash to be released from the debt service reserve account in connection with the redemption of the PIK notes (or, if the closing of this offering occurs after June 15, 2014 the right to the amount remaining in such account plus the cash received from us in reimbursement of the interest paid on June 15, 2014 in respect of the PIK notes). Collectively, we refer to these transactions as the “Restructuring.”

 

MRD LLC controls MEMP through its ownership of MEMP GP. MEMP is a publicly traded limited partnership engaged in the acquisition, production and development of oil and natural gas properties in the United States. Due to MRD LLC’s control of MEMP through the ownership of its general partner, MRD LLC is required to consolidate MEMP for accounting and financial reporting purposes.

 

MRD LLC has two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties:

 

   

MRD—reflects all of MRD LLC’s consolidating subsidiaries except for MEMP and its subsidiaries.

 

   

MEMP—reflects the consolidated and combined operations of MEMP and its subsidiaries.

 

The following unaudited pro forma condensed combined financial information reflects the historical financial statements of MRD LLC adjusted on a pro forma basis to give effect to the following transactions as if they had occurred on December 31, 2013 for pro forma balance sheet purposes and on January 1, 2013 for pro forma statements of operations purposes:

 

   

the exclusion of both BlueStone Holdings and Classic Pipeline as well as the MEMP subordinated units since they are not being conveyed to MRDC and the cash reserve associated with the PIK notes;

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

   

the Restructuring transactions as described above; and

 

   

the initial public offering of shares of common stock and the use of the net proceeds therefrom as described in “Use of Proceeds” (the “Offering”).

 

Offering.    For purposes of the unaudited pro forma combined financial statements, the Offering is defined as the planned issuance and sale to the public of      shares of common stock of MRDC as contemplated by this prospectus and the application of the net proceeds from such issuance as described in “Use of Proceeds.” The net proceeds from the sale of the common stock are expected to be $     million (based on an assumed initial public offering price of $    , the midpoint of the price range set forth on the cover of this prospectus), net of underwriting discounts and commissions of $     million and other offering-related expenses payable by us, which is estimated to be approximately $     million.

 

The unaudited pro forma combined balance sheet of MRDC is based on the audited historical consolidated and combined balance sheet of MRD LLC as of December 31, 2013 and includes pro forma adjustments to give effect to the exclusion of both BlueStone Holdings and Classic Pipeline, the MEMP subordinated units and the cash reserve associated with the PIK notes, the Restructuring, and the Offering, as if they had occurred on December 31, 2013.

 

The unaudited pro forma combined statements of operations of MRDC are based on: (i) the audited historical consolidated and combined statement of operations of MRD LLC for the year ended December 31, 2013, having been adjusted to give effect to the exclusion of both BlueStone Holdings and Classic Pipeline, the MEMP subordinated units, the Restructuring and the Offering as if they occurred on January 1, 2013 and (ii) the historical accounting records of MRD LLC.

 

The unaudited pro forma combined financial statements have been prepared on the basis that MRDC will be subject to subchapter C of the Internal Revenue Code of 1986, as amended, and as a result, will become taxable as a corporation and subject to U.S. federal and state income taxes at the entity level. The unaudited pro forma combined financial statements should be read in conjunction with the notes thereto and with the audited historical consolidated and combined financial statements and related notes of MRD LLC, included elsewhere in this prospectus.

 

The pro forma adjustments to the audited historical consolidated and combined financial statements are based on currently available information and certain estimates and assumptions. The actual effect of the transactions discussed in the accompanying notes ultimately may differ from the unaudited pro forma adjustments included herein. However, management believes that the assumptions utilized to prepare the pro forma adjustments provide a reasonable basis for presenting the significant effects of the transactions as currently contemplated and that the unaudited pro forma adjustments are factually supportable, give appropriate effect to the expected impact of events that are directly attributable to the transactions, and reflect those items expected to have a continuing impact on MRDC.

 

The unaudited pro forma combined financial statements of MRDC are not necessarily indicative of financial results that would have been attained had the described transactions occurred on the dates indicated below or which could be achieved in the future because they necessarily exclude various operating expenses, such as incremental general and administrative expenses associated with being a public company.

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

DECEMBER 31, 2013

 

    MRD LLC
Historical
    Exclude
BlueStone
Holdings &
Classic
Pipeline
    Offering &
Restructuring
Related
Adjustments
    MRDC
Pro Forma
Combined
 

ASSETS

       

Current assets:

       

Cash and cash equivalents

  $ 77,721      $ (7,405   $     (e)    $     
            (f)   
            (g)   
       

Restricted cash

    35,000       —         (35,000 )(a)      —    

Accounts receivable:

       

Oil and natural gas sales

    68,764        (402     —         68,362   

Joint interest owners and other

    19,958        (144     —         19,814   

Affiliates

    4,652        —          —         4,652   

Short-term derivative instruments

    9,289        —         —         9,289   

Prepaid expenses and other current assets

    19,513        (1,786     —         17,727   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    234,897        (9,737    

Property and equipment, at cost:

       

Oil and natural gas properties, successful efforts method

    3,037,298        (50,759     —         2,986,539   

Other

    10,331        (500     —         9,831   

Accumulated depreciation, depletion and impairment

    (627,925     23,463        —         (604,462
 

 

 

   

 

 

   

 

 

   

 

 

 

Oil and natural gas properties, net

    2,419,704        (27,796     —         2,391,908   

Long-term derivative instruments

    48,616        —         —         48,616   

Restricted investments

    73,385        —         —         73,385   

Restricted cash

    15,506        —          (15,000 )(a)      506   

Other long-term assets

    37,053        —             (f)   
        (19,727 )(h)   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

  $ 2,829,161      $ (37,533   $        $     
 

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral part of this unaudited pro forma financial information.

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

DECEMBER 31, 2013

 

    MRD LLC
Historical
    Exclude
BlueStone
Holdings &
Classic
Pipeline
    Offering &
Restructuring
Related
Adjustments
    MRDC
Pro Forma
Combined
 

LIABILITIES AND EQUITY

       

Current liabilities:

       

Accounts payable

  $ 20,734        (401   $ —       $ 20,333   

Accounts payable—affiliates

    1,975        (119     —         1,856   

Revenues payable

    56,091        (429     —         55,662   

Accrued liabilities

    98,130        (1,333     —         96,797   

Short-term derivative instruments

    9,711        —         —         9,711   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

    186,641        (2,282     —         184,359   

Long-term debt—MRD Segment

    871,150        —            (f)   
        (871,150 )(g)   

Long-term debt—MEMP Segment

    792,067        —         —         792,067   

Asset retirement obligations

    111,679        (631     —         111,048   

Long-term derivative instruments

    6,080        —         —         6,080   

Other long-term liabilities

    3,412        —            (d)      3,412   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    1,971,029        (2,913    

Equity:

       

Common stock

    —         —            (b)   
           (c)   
           (e)   

Additional paid in capital

    —         —            (b)   
           (c)   
           (e)   
           (g)   

Accumulated deficit

    —         —            (c)   
           (d)   
        (19,727 )(h)   

Members’ equity

    237,186        (28,544     (108,436 )(b)      —    
       

 

(50,000

(50,206

)(a) 

)(a)

 

Previous owners

    40,331        —         —         40,331   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total members’ equity

    277,517        (28,544     —          —     

Noncontrolling interest

    580,615        (6,076    
50,206
 (a) 
    624,347   
        (398 )(c)   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

    858,132        (34,620    
 

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

  $ 2,829,161      $ (37,533   $        $     
 

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying notes are an integral part of this unaudited pro forma financial information.

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2013

 

    MRD LLC
Historical
    Exclude
BlueStone
Holdings &
Classic
Pipeline
    Offering &
Restructuring
Related
Adjustments
    MRDC
Pro Forma
Combined
 

Revenues:

       

Oil & natural gas sales

  $ 571,948      $ (18,148   $ —       $ 553,800   

Other revenues

    3,075        (807 )     —         2,268   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    575,023        (18,955     —         556,068   
 

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

       

Lease operating

    113,640        (1,652     —         111,988   

Pipeline operating

    1,835        —         —         1,835   

Exploration

    2,356        —         —         2,356   

Production and ad valorem taxes

    27,146        (877     —         26,269   

Depreciation, depletion, and amortization

    184,717        (10,519     —         174,198   

Impairment of proved oil and natural gas properties

    6,600        (2,399     —         4,201   

General and administrative

    125,358        (24,260     —         101,098   

Accretion of asset retirement obligations

    5,581        (58     —         5,523   

(Gain) loss on commodity derivative instruments

    (29,294     (17     —         (29,311

(Gain) loss on sale of properties

    (85,621     89,548        —         3,927   

Other, net

    649        —         —         649   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    352,967        49,766        —         402,733   
 

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    222,056        (68,721     —         153,335   

Other income (expense):

       

Interest expense, net

    (69,250     53              (i)   
        1,411 (j)   
        20,814 (k)   

Other, net

    145        (2     —         143   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (69,105     51       
 

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    152,951        (68,670    

Income tax benefit (expense)

    (1,619     1,147              (l)   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 151,332      $ (67,523   $        $     
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per common share(n)

       

Basic and diluted

       

Weighted average common shares outstanding(n)

       

Basic and diluted

       

 

The accompanying notes are an integral part of this unaudited pro forma financial information.

 

F-9


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MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Note 1. Basis of Presentation

 

We are a Delaware corporation (“MRDC”) formed by Memorial Resource Development LLC (“MRD LLC”) in January 2014 to own and acquire oil and natural gas properties in North America. MRD LLC is a Delaware limited liability company formed on April 27, 2011 by Natural Gas Partners VIII, L.P. (“NGP VIII”), Natural Gas Partners IX, L.P. (“NGP IX”) and NGP IX Offshore Holdings, L.P. (“NGP IX Offshore”) (collectively, the “Funds”) to own, acquire, exploit and develop oil and natural gas properties. The Funds are private equity funds managed by Natural Gas Partners (“NGP”).

 

In connection with the closing of this offering, the Funds will contribute all of their interests in MRD LLC to MRD Holdings LLC (“MRD Holdings”). MRD LLC and its consolidated subsidiaries, which is our accounting predecessor, will contribute the following to us in exchange for shares of common stock (which MRD LLC will immediately distribute to MRD Holdings): (1) 100% of its ownership interests in Classic Hydrocarbons Holdings, L.P. (“Classic”), Classic Hydrocarbons GP Co., L.L.C. (“Classic GP”), Black Diamond Minerals, LLC (“Black Diamond”), Beta Operating Company, LLC (“Beta Operating”), MRD Operating LLC (“MRD Operating”) and Memorial Production Partners GP LLC (“MEMP GP”), which owns a 0.1% general partner interest and 50% of the incentive distribution rights in Memorial Production Partners LP (“MEMP”), and (2) its 99.9% membership interest in WildHorse Resources, LLC (“WildHorse Resources”). In addition, certain former management members of WildHorse Resources will contribute to us the remaining 0.1% membership interest in WildHorse Resources as well as exchange their incentive units in exchange for shares of common stock and cash consideration. MRD Operating will enter into a merger agreement with MRD LLC pursuant to which after the termination of the PIK notes indenture (approximately 30 days after the closing of this offering), MRD LLC will merge into MRD Operating. Prior to this merger, MRD LLC will distribute the following to MRD Holdings: (i) its interests in both BlueStone Natural Resources Holdings, LLC (“BlueStone Holdings”) and Classic Pipeline & Gathering, LLC (“Classic Pipeline”) as well as two immaterial subsidiaries that were formed subsequent to December 31, 2013, (ii) the MEMP subordinated units and (iii) the right to the $50 million of cash to be released from the debt service reserve account in connection with the redemption of the PIK notes (or, if the closing of this offering occurs after June 15, the right to the amount remaining in such account plus the cash received from us in reimbursement of the interest paid on June 15 in respect of the PIK notes). Collectively, we refer to these transactions as the “Restructuring.”

 

MRD LLC controls MEMP through its ownership of MEMP GP. MEMP is a publicly traded limited partnership engaged in the acquisition, production and development of oil and natural gas properties in the United States. Due to MRD LLC’s control of MEMP through the ownership of its general partner, MRD LLC is required to consolidate MEMP for accounting and financial reporting purposes.

 

The following unaudited pro forma condensed combined financial information reflects the historical financial statements of MRD LLC adjusted on a pro forma basis to give effect to the following transactions as if they had occurred on December 31, 2013 for pro forma balance sheet purposes and on January 1, 2013 for pro forma statements of operations purposes:

 

   

the exclusion of both BlueStone Holdings and Classic Pipeline as well as the MEMP subordinated units since they are not being conveyed to MRDC and the cash reserve associated with the PIK notes;

 

   

the Restructuring transactions as described above; and

 

   

the initial public offering of shares of common stock and the use of the net proceeds therefrom as described in “Use of Proceeds” (the “Offering”).

 

The unaudited pro forma combined balance sheet of MRDC is based on the audited historical consolidated and combined balance sheet of MRD LLC as of December 31, 2013 and includes pro forma adjustments to give

 

F-10


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

effect to the exclusion of both BlueStone Holdings and Classic Pipeline as well as the MEMP subordinated units, and the Offering, as if they had occurred on December 31, 2013.

 

The unaudited pro forma combined statements of operations of MRDC are based on: (i) the audited historical consolidated and combined statement of operations of MRD LLC for the year ended December 31, 2013, having been adjusted to give effect to the exclusion of both BlueStone Holdings and Classic Pipeline as well as the MEMP subordinated units, and the Offering as if they occurred on January 1, 2013 and (ii) the historical accounting records of MRD LLC.

 

The unaudited pro forma combined financial statements have been prepared on the basis that MRDC will be subject to subchapter C of the Internal Revenue Code of 1986, as amended, and as a result, will become taxable as a corporation and subject to U.S. federal and state income taxes at the entity level. The unaudited pro forma combined financial statements should be read in conjunction with the notes thereto and with the audited historical consolidated and combined financial statements and related notes of MRD LLC, included elsewhere in this prospectus.

 

The pro forma adjustments to the audited historical consolidated and combined financial statements are based on currently available information and certain estimates and assumptions. The actual effect of the transactions discussed in the accompanying notes ultimately may differ from the unaudited pro forma adjustments included herein. However, management believes that the assumptions utilized to prepare the pro forma adjustments provide a reasonable basis for presenting the significant effects of the transactions as currently contemplated and that the unaudited pro forma adjustments are factually supportable, give appropriate effect to the expected impact of events that are directly attributable to the transactions, and reflect those items expected to have a continuing impact on MRDC.

 

The unaudited pro forma combined financial statements of MRDC are not necessarily indicative of financial results that would have been attained had the described transactions occurred on the dates indicated below or which could be achieved in the future because they necessarily exclude various operating expenses, such as incremental general and administrative expenses associated with being a public company.

 

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Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Note 2. MRD Segment Stand-Alone Pro Forma Financial Statements

 

Unaudited Pro Forma Condensed Combined Balance Sheet—December 31, 2013

 

     MRD Segment
Historical
    Exclude
BlueStone
Holdings &
Classic Pipeline
    Offering &
Restructuring
Related
Adjustments
    MRD Segment
Pro Forma
Combined
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 64,582      $ (7,405   $    (e)    $     
            (f)   
            (g)   
        

Restricted cash

     35,000        —         (35,000 )(a)      —    

Accounts receivable:

        

Oil and natural gas sales

     34,232        (402     —         33,830   

Joint interest owners and other

     15,324        (144     —         15,180   

Affiliates

     6,963        —          —         6,963   

Short-term derivative instruments

     1,688        —         —         1,688   

Prepaid expenses and other current assets

     10,367        (1,786     —         8,581   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     168,156        (9,737    

Property and equipment, at cost:

      

Oil and natural gas properties, successful efforts method

     1,272,830        (50,759     —         1,222,071   

Other

     7,431        (500     —         6,931   

Accumulated depreciation, depletion and impairment

     (259,121     23,463        —         (235,658
  

 

 

   

 

 

   

 

 

   

 

 

 

Oil and natural gas properties, net

     1,021,140        (27,796     —         993,344   

Long-term derivative instruments

     5,959        —           5,959   

Investments in unconsolidated affiliates

     50,780        —         (50,206 )(a)      574   

Restricted cash

     15,506        —          (15,000 )(a)      506   

Other long-term assets

     19,593        —            (f)   
         (19,727 )(h)   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 1,281,134      $ (37,533   $        $     
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-12


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

     MRD  Segment
Historical
     Exclude
BlueStone
Holdings &
Classic Pipeline
    Offering &
Restructuring
Related
Adjustments
    MRD Segment
Pro Forma
Combined
 

LIABILITIES AND EQUITY

         

Current liabilities:

         

Accounts payable

   $ 12,561         (401   $ —       $ 12,160   

Accounts payable—affiliates

     4,493         (119     —         4,374   

Revenues payable

     39,800         (429     —         39,371   

Accrued liabilities

     58,373         (1,333     —         57,040   

Short-term derivative instruments

     1,715         —         —         1,715   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total current liabilities

     116,942         (2,282     —         114,660   

Long-term debt—MRD Segment

     871,150         —            (f)   
          (871,150 )(g)   

Asset retirement obligations

     12,059         (631     —         11,428   

Long-term derivative instruments

     205         —         —         205   

Other long-term liabilities

     1,366         —         —   (d)      1,366   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities

     1,001,722         (2,913    

Equity:

         

Common stock

     —          —            (b)   
             (c)   
             (e)   

Additional paid in capital

     —          —            (b)   
             (c)   
             (e)   
             (g)   

Accumulated deficit

     —          —            (c)   
             (d)   
          (19,727 )(h)   

Members’ equity

     232,774         (28,544     (104,024 )(b)      —    
          (50,000 )(a)   
          (50,206 )(a)   

Previous Owners

     40,331         —          —          40,331   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total members’ equity

     273,105         (28,544    

Noncontrolling interest

     6,307         (6,076     (231 )(c)      —     
  

 

 

    

 

 

   

 

 

   

 

 

 

Total equity

     279,412         (34,620    
  

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 1,281,134       $ (37,533   $        $     
  

 

 

    

 

 

   

 

 

   

 

 

 

 

F-13


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Unaudited Pro Forma Condensed Combined Statements of Operations—For the Year Ended December 31, 2013

 

.   MRD Segment
Historical
    Exclude
BlueStone
Holdings &
Class Pipeline
    MRD Segment
Adjustments
    Offering &
Restructuring
Related
Adjustments
    MRD Segment
Pro Forma
Combined
 

Revenues:

         

Oil & natural gas sales

  $ 230,751      $ (18,148   $ —       $ —       $ 212,603   

Other revenues

    807        (807 )     —         —         —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    231,558        (18,955     —         —         212,603   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

         

Lease operating

    25,006        (1,652     —         —         23,354   

Exploration

    1,226        —         —         —         1,226   

Production and ad valorem taxes

    9,362        (877     —         —         8,485   

Depreciation, depletion, and amortization

    87,043        (10,519     —         —         76,524   

Impairment of proved oil and natural gas properties

    2,527        (2,399     —         —         128   

General and administrative

    81,758        (24,260     —         —         57,498   

Accretion of asset retirement obligations

    728        (58     —         —         670   

(Gain) loss on commodity derivative instruments

    (3,013     (17     —         —         (3,030

(Gain) loss on sale of properties

    (82,773     89,548        —         —         6,775   

Other, net

    2        —         —         —         2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    121,866        49,766        —         —         171,632   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    109,692        (68,721     —         —         40,971   

Other income (expense):

         

Interest expense, net

    (27,349     53        —            (i)   
          1,411  (j)   
          20,814  (k)   

Earnings from equity investments

    1,066        —         —         (797 )(m)      269   

Other, net

    145        (2     —         —         143   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

    (26,138     51        —        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    83,554        (68,670     —        

Income tax benefit (expense)

    (1,311     1,147        —           (l)   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 82,243      $ (67,523   $ —       $        $     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-14


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Note 3. Pro Forma Adjustments and Assumptions

 

Unaudited Pro Forma Condensed Combined Balance Sheet

 

The following adjustments were made in the preparation of the unaudited pro forma condensed combined balance sheet:

 

  (a)   Pro forma adjustments to reflect the $50 million in cash to be released from its debt service reserve account in connection with the redemption of the PIK notes as well as the exclusion of the MEMP subordinated units.

 

  (b)   Pro forma adjustment to reflect the issuance of     shares of our common stock to MRD LLC in exchange for: (1) 100% of the ownership interests in Classic, Classic GP, Black Diamond, Beta Operating, MRD Operating and MEMP GP; (2) 99.9% of the membership interests in WildHorse Resources; and (3) 50% of the incentive distribution rights of MEMP.

 

  (c)   Pro forma adjustment to reflect the contribution from certain former management members of WildHorse Resources to us of the remaining 0.1% membership interest in WildHorse Resources and the forfeiture of their incentive units in exchange for shares of our common stock and cash consideration of $    . The cash consideration will be paid from the net proceeds from the Offering and borrowings under a new revolving credit facility as discussed in (e) and (f) below. The portion of the total consideration related to acquiring the 0.1% membership interest will be accounted for as the acquisition of noncontrolling interests and the remaining portion related to the incentive units will be recorded as compensation expense within general and administrative expenses. A corresponding charge to earnings has not been reflected in the unaudited pro forma combined statements of operations as the charge is considered non-recurring.

 

  (d)   Pro forma adjustment to reflect the estimated change in long-term deferred tax liabilities for temporary differences between the historical cost basis and tax basis of the assets and liabilities being contributed to MRDC. MRDC will be subject to subchapter C of the Internal Revenue Code of 1986, as amended, and as a result, will become taxable as a corporation and subject to U.S. federal and state income taxes at the entity level. A corresponding charge to earnings has not been reflected in the unaudited pro forma combined statements of operations as the charge is considered non-recurring.

 

  (e)   Pro forma adjustments to reflect the estimated gross proceeds of     million to the Company from the issuance and sale of     million shares of common stock at an assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover of this registration statement), net of estimated underwriting discounts and commissions of $     million and additional estimated expenses related to the Offering of approximately $    million.

 

  (f)   Pro forma adjustment to reflect the cash proceeds from borrowings by MRDC of $    million under a new credit facility and financing costs of $    .

 

  (g)   Pro forma adjustments to record the use of the $    million of net proceeds from this Offering and borrowings under our new revolving credit facility to: (1) redeem the PIK notes in their entirety and pay any applicable premium in connection with such redemption and accrued and unpaid interest, if any, to the date of redemption; (2) repay indebtedness under WildHorse Resources’ revolving and second lien credit facilities; and (3) pay cash consideration to former management members of WildHorse Resources.

 

  (h)   Pro forma adjustment to reflect a $8.3 million write-off of unamortized deferred financing costs associated with the PIK notes upon redemption and a $11.4 million of write-off of unamortized deferred financing costs associated with WildHorse Resources’ revolving and second lien credit facilities; however, a corresponding charge to earnings has not been reflected in the unaudited pro forma combined statements of operations as the charge is considered non-recurring.

 

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Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

Unaudited Pro Forma Condensed Combined Statements of Operations

 

The following adjustments were made in the preparation of the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2013:

 

  (i)   Pro forma adjustment to reflect the incurrence of interest expense on $    million of borrowings by MRDC under a new credit facility at LIBOR plus     % and expenses on the unused borrowing base of     %. Pro forma adjustment also reflects amortization of deferred financing costs of approximately $    million for the year ended December 31, 2013. A one-eighth percentage point change in the interest rate would change pro forma interest by $    million for the year ended December 31, 2013.

 

  (j)   Pro forma adjustment to reflect a reduction in interest expense on the PIK notes as a result of applying $    million of net proceeds from this Offering to redeem the PIK notes in their entirety.

 

  (k)   Pro forma adjustment to reflect a reduction in interest expense under WildHorse Resources’ revolving and second lien credit facilities associated with repayment of such debt with net proceeds from the Offering and borrowing by MRDC under a new credit facility. The second lien facility was entered into in June 2013.

 

  (l)   Pro forma adjustment to reflect the estimated incremental income tax provision associated with the historical results of operations and pro forma adjustments assuming the earnings had been subject to federal income tax as a subchapter C corporation using an effective tax rate of approximately     %. This rate is inclusive of federal and state income taxes.

 

  (m)   Pro forma adjustment to reflect the exclusion of the MEMP subordinated units.

 

  (n)   Basic and diluted earnings per share is based on the issuance and sale of shares of common stock at the initial public offering.

 

Note 4. Pro Forma Proved Reserves and Standardized Measure of Discounted Future Net Cash Flows

 

Users of this information should be aware that the process of estimating quantities of “proved” and “proved developed” oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure reserve estimates reported represent the most accurate assessments possible, the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other estimates included in the financial statement disclosures.

 

Proved reserves are those quantities of oil and natural gas that by analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will continue the project within a reasonable time.

 

Netherland, Sewell & Associates, Inc. (“NSAI”) was engaged to prepare all of our estimated proved reserves (by volume) at December 31, 2013. All proved reserves are located in the United States and all prices are held constant in accordance with SEC rules.

 

In accordance with SEC regulations, reserves at December 31, 2013 were estimated using the unweighted arithmetic average first-day-of-the-month price for the preceding 12-month period.

 

F-16


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

The following table sets forth estimates of the net reserves as of December 31, 2013:

 

     MRD LLC
Historical
Equivalent
(MMcfe)
    Exclude
BlueStone
Holdings
Equivalent
(MMcfe)
    MRDC
Pro Forma
Combined
Equivalent
(MMcfe)
 

Proved developed and undeveloped reserves:

      

Beginning of year

     2,074,990        (8,057     2,066,933   

Extensions and discoveries

     295,832        —          295,832   

Purchase of minerals in place

     57,737        —         57,737   

Production

     (103,122     1,690        (101,432

Sales of minerals in place

     (27,169     4,178        (22,991

Revision of previous estimates

     (157,586     2,189        (155,397
  

 

 

   

 

 

   

 

 

 

End of year(1)

     2,140,682        —          2,140,682   
  

 

 

   

 

 

   

 

 

 

Proved developed reserves:

      

Beginning of year

     957,573        (4,901     952,672   

End of year

     984,534        —          984,534   

Proved undeveloped reserves:

      

Beginning of year

     1,117,417        (3,156     1,114,261   

End of year

     1,156,148        —          1,156,148   

 

(1)   MRD LLC historical column includes reserves of 965,110 MMcfe attributable to noncontrolling interests and the previous owners.

 

A variety of methodologies are used to determine our proved reserve estimates. The principal methodologies employed are reservoir simulation, decline curve analysis, volumetric, material balance, advance production type curve matching, petro-physics/log analysis and analogy. Some combination of these methods is used to determine reserve estimates in substantially all of our fields.

 

The standardized measure of discounted future net cash flows presented below is computed by applying first of month average prices, year-end costs and legislated tax rates and a discount factor of 10 percent to proved reserves. We do not believe the standardized measure provides a reliable estimate of the expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. The standardized measure is prepared on the basis of certain prescribed assumptions including first of month average prices, which represent discrete points in time and therefore may cause significant variability in cash flows from year to year as prices change.

 

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Table of Contents

MEMORIAL RESOURCE DEVELOPMENT CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

The standardized measure of discounted future net cash flows is as follows for the year ended December 31, 2013 (in thousands):

 

     MRD LLC
Historical
    Offering &
Restructuring
Related
Adjustments
    MRDC
Pro Forma
Combined
 

Future cash inflows

   $ 12,614,998      $ —       $ 12,614,998   

Future production costs

     (4,306,398     —         (4,306,398

Future development costs

     (2,038,803     —         (2,038,803

Future income tax expense(1)

     —         (821,733     (821,733
  

 

 

   

 

 

   

 

 

 

Future net cash flows for estimated timing of cash flows

     6,269,797        (821,733     5,448,064   

10% annual discount for estimated timing of cash flows

     (3,192,733     392,018        (2,800,715
  

 

 

   

 

 

   

 

 

 

Standardized measure of discounted future net cash flows(2)

   $ 3,077,064      $ (429,715   $ 2,647,349   
  

 

 

   

 

 

   

 

 

 

 

(1)   Pro forma adjustment to reflect the estimated incremental income tax provision associated with the historical results of operations and pro forma adjustments for the MRD Segment assuming the earnings had been subject to federal income tax as a subchapter C corporation using an effective tax rate of approximately 36%. This rate is inclusive of federal and state income taxes.

 

(2)   The MRD LLC Historical column includes $1,529,217 attributable to noncontrolling interests and the previous owners and on a pro forma basis includes $1,506,499 attributable to noncontrolling interests and the previous owners.

 

The following is a summary of the changes in the standardized measure of discounted future net cash flows for the proved oil and natural gas reserves during the year ended December 31, 2013 (in thousands):

 

     MRD LLC
Historical
    Exclude
BlueStone
Holdings
    Offering &
Restructuring
Related
Adjustments
    MRDC
Pro Forma
Combined
 

Beginning of year

   $ 2,910,511      $ (35,469   $ —       $ 2,875,042   

Sale of oil and natural gas produced, net of production costs

     (430,964     13,694        —         (417,270

Purchase of minerals in place

     74,337        —         —         74,337   

Sale of minerals in place

     (54,091     24,718        —         (29,373

Extensions and discoveries

     437,427        —          —         437,427   

Changes in income taxes

     —         —         (429,715     (429,715

Changes in prices and costs

     (85,731     —          —         (85,731

Previously estimated development costs incurred

     261,787        (4,048     —         257,739   

Net changes in future development costs

     (17,514     —          —         (17,514

Revisions of previous quantities

     (327,926     —          —         (327,926

Accretion of discount

     287,535        —          —         287,535   

Change in production rates and other

     21,693        1,105        —         22,798   
  

 

 

   

 

 

   

 

 

   

 

 

 

End of year

   $ 3,077,064      $ —        $ (429,715   $ 2,647,349   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-18


Table of Contents

MRD Segment

 

The following table sets forth estimates of the net reserves as of December 31, 2013:

 

     MRD Segment
Historical
Equivalent
(MMcfe)
    Exclude
BlueStone
Holdings
Equivalent
(MMcfe)
    MRD Segment
Pro Forma
Combined
Equivalent
(MMcfe)
 

Proved developed and undeveloped reserves:

      

Beginning of year

     1,059,895        (8,057     1,051,838   

Extensions and discoveries

     210,652        —          210,652   

Purchase of minerals in place

     39,183        —          39,183   

Production

     (46,819     1,690        (45,129

Sales of minerals in place

     (27,169     4,178        (22,991

Revision of previous estimates

     (110,165     2,189        (107,976
  

 

 

   

 

 

   

 

 

 

End of year(1)

     1,125,577        —          1,125,577   
  

 

 

   

 

 

   

 

 

 

Proved developed reserves:

      

Beginning of year

     337,869        (4,901     332,968   

End of year

     367,641        —          367,641   

Proved undeveloped reserves:

      

Beginning of year

     722,026        (3,156     718,870   

End of year

     757,936        —          757,936   

 

(1)   MRD segment historical column includes reserves of 965,110 MMcfe attributable to noncontrolling interests and the previous owners.

 

The standardized measure of discounted future net cash flows is as follows for the year ended December 31, 2013 (in thousands):

 

     MRD Segment
Historical
    Exclude
BlueStone
Holdings
     Offering &
Restructuring
Related
Adjustments
    MRD Segment
Pro Forma
Combined
 

Future cash inflows

   $ 5,722,848      $ —         $ —        $ 5,722,848   

Future production costs

     (1,587,374     —           —          (1,587,374

Future development costs

     (1,352,945     —           —          (1,352,945

Future income tax expense(1)

     —          —           (760,433     (760,433
  

 

 

   

 

 

    

 

 

   

 

 

 

Future net cash flows for estimated timing of cash flows

     2,782,529        —           (760,433     2,022,096   

10% annual discount for estimated timing of cash flows

     (1,313,577     —           358, 986        (954,591
  

 

 

   

 

 

    

 

 

   

 

 

 

Standardized measure of discounted future net cash flows(2)

   $ 1,468,952      $ —         $ (401,447   $ 1,067,505   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

(1)   Pro forma adjustment to reflect the estimated incremental income tax provision associated with the historical results of operations and pro forma adjustments for the MRD Segment assuming the earnings had been subject to federal income tax as a subchapter C corporation using an effective tax rate of approximately 36%. This rate is inclusive of federal and state income taxes.
(2)   The MRD Segment Historical column includes $63,422 attributable to noncontrolling interests and the previous owners and on a pro forma basis includes $40,704 attributable to noncontrolling interests and the previous owners.

 

F-19


Table of Contents

The following is a summary of the changes in the standardized measure of discounted future net cash flows for the proved oil and natural gas reserves during the year ended December 31, 2013 (in thousands):

 

     MRD Segment
Historical
    Exclude
BlueStone
Holdings
    Offering &
Restructuring
Related
Adjustments
    MRD Segment
Pro Forma
Combined
 

Beginning of year

   $ 1,320,595      $ (35,469   $ —       $ 1,285,126   

Sale of oil and natural gas produced, net of production costs

     (196,444     13,694        —         (182,750

Purchase of minerals in place

     51,177        —         —         51,177   

Sale of minerals in place

     (54,091     24,718        —         (29,373

Extensions and discoveries

     301,004        —         —         301,004   

Changes in income taxes

     —         —         (401,447     (401,447

Changes in prices and costs

     (11,336     —         —         (11,336

Previously estimated development costs incurred

     87,297        (4,048     —         83,249   

Net changes in future development costs

     57,353        —         —         57,353   

Revisions of previous quantities

     (186,804     —         —         (186,804

Accretion of discount

     128,544        —         —         128,544   

Change in production rates and other

     (28,343     1,105        —         (27,238
  

 

 

   

 

 

   

 

 

   

 

 

 

End of year

   $ 1,468,952      $ —       $ (401,447   $ 1,067,505   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-20


Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Managers

Memorial Resource Development LLC:

 

We have audited the accompanying consolidated and combined balance sheets of Memorial Resource Development LLC and subsidiaries (the Company) as of December 31, 2013 and 2012, and the related consolidated and combined statements of operations, equity, and cash flows for the years then ended. In connection with our audits of the consolidated and combined financial statements, we also have audited Schedule I—Condensed Financial Information (Schedule I). These consolidated and combined financial statements and Schedule I are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated and combined financial statements and Schedule I based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated and combined financial statements referred to above present fairly, in all material respects, the financial position of Memorial Resource Development LLC and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the years then ended in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related Schedule I, when considered in relation to the basic consolidated and combined financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

 

As discussed in Note 1 to the consolidated and combined financial statements, the balances sheets, and the related statements of operations, equity, and cash flows have been prepared on a combined basis of accounting.

 

/s/ KPMG LLP

 

Dallas, Texas

April 4, 2014

 

F-21


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

CONSOLIDATED AND COMBINED BALANCE SHEETS

(In thousands)

 

     December 31,  
     2013     2012  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 77,721      $ 49,391   

Restricted cash

     35,000        2,013   

Accounts receivable:

    

Oil and natural gas sales

     68,764        64,128   

Joint interest owners and other

     19,958        17,701   

Affiliates

     4,652        77   

Short-term derivative instruments

     9,289        41,921   

Prepaid expenses and other current assets

     19,513        13,577   
  

 

 

   

 

 

 

Total current assets

     234,897        188,808   

Property and equipment, at cost:

    

Oil and natural gas properties, successful efforts method

     3,037,298        2,637,466   

Other

     10,331        9,920   

Accumulated depreciation, depletion and impairment

     (627,925     (471,949
  

 

 

   

 

 

 

Oil and natural gas properties, net

     2,419,704        2,175,437   

Long-term derivative instruments

     48,616        17,179   

Restricted investments

     73,385        68,024   

Restricted cash

     15,506        —     

Other long-term assets

     37,053        9,856   
  

 

 

   

 

 

 

Total assets

   $ 2,829,161      $ 2,459,304   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Accounts payable

   $ 20,734      $ 36,633   

Accounts payable—affiliates

     1,975        —     

Revenues payable

     56,091        50,967   

Accrued liabilities

     98,130        33,487   

Short-term derivative instruments

     9,711        4,667   
  

 

 

   

 

 

 

Total current liabilities

     186,641        125,754   

Long-term debt—MRD Segment

     871,150        309,200   

Long-term debt—MEMP Segment

     792,067        630,182   

Asset retirement obligations

     111,679        101,990   

Long-term derivative instruments

     6,080        11,623   

Other long-term liabilities

     3,412        3,846   
  

 

 

   

 

 

 

Total liabilities

     1,971,029        1,182,595   

Commitments and contingencies (Note 14)

    

Equity:

    

Members

     237,186        811,614   

Previous owners (Note 1)

     40,331        233,433   
  

 

 

   

 

 

 

Total members’ equity

     277,517        1,045,047   

Noncontrolling interest

     580,615        231,662   
  

 

 

   

 

 

 

Total equity

     858,132        1,276,709   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 2,829,161      $ 2,459,304   
  

 

 

   

 

 

 

 

See Accompanying Notes to Consolidated and Combined Financial Statements.

 

F-22


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

STATEMENTS OF CONSOLIDATED AND COMBINED OPERATIONS

(In thousands)

 

    For Year Ended December 31,  
            2013                     2012          

Revenues:

   

Oil & natural gas sales

  $ 571,948      $ 393,631   

Other revenues

    3,075        3,237   
 

 

 

   

 

 

 

Total revenues

    575,023        396,868   
 

 

 

   

 

 

 

Costs and expenses:

   

Lease operating

    113,640        103,754   

Pipeline operating

    1,835        2,114   

Exploration

    2,356        9,800   

Production and ad valorem taxes

    27,146        23,624   

Depreciation, depletion, and amortization

    184,717        138,672   

Impairment of proved oil and natural gas properties

    6,600        28,871   

General and administrative

    125,358        69,187   

Accretion of asset retirement obligations

    5,581        5,009   

(Gain) loss on commodity derivative instruments

    (29,294     (34,905

(Gain) loss on sale of properties

    (85,621     (9,761

Other, net

    649        502   
 

 

 

   

 

 

 

Total costs and expenses

    352,967        336,867   
 

 

 

   

 

 

 

Operating income

    222,056        60,001   

Other income (expense):

   

Interest expense, net

    (69,250     (33,238

Amortization of investment premium

    —          (194

Other, net

    145        535   
 

 

 

   

 

 

 

Total other income (expense)

    (69,105     (32,897
 

 

 

   

 

 

 

Income before income taxes

    152,951        27,104   

Income tax benefit (expense)

    (1,619     (107
 

 

 

   

 

 

 

Net income

    151,332        26,997   

Net income (loss) attributable to noncontrolling interest

    49,830        (2,701
 

 

 

   

 

 

 

Net income (loss) attributable to Memorial Resource Development LLC

  $ 101,502      $ 29,698   
 

 

 

   

 

 

 

Net income (loss) attributable to members

  $ 90,712      $ (7,620

Net income (loss) attributable to previous owners (Note 1)

    10,790        37,318   
 

 

 

   

 

 

 

Net income (loss) attributable to Memorial Resource Development LLC

  $ 101,502      $ 29,698   
 

 

 

   

 

 

 

Income before income taxes

    152,951        27,104   

Pro forma provision for income taxes (Note 2)

    (55,154     (9,592
 

 

 

   

 

 

 

Pro forma net income

  $ 97,797      $ 17,512   
 

 

 

   

 

 

 

Pro forma basic and diluted earnings per share

   

Pro forma basic and diluted weighted average shares outstanding

   

 

See Accompanying Notes to Consolidated and Combined Financial Statements.

 

F-23


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

STATEMENTS OF CONSOLIDATED AND COMBINED CASH FLOWS

(In thousands)

 

    For Year Ended December 31,  
    2013     2012  

Cash flows from operating activities:

   

Net income

  $ 151,332      $ 26,997   

Adjustments to reconcile net income to net cash provided by operating activities:

   

Depreciation, depletion, and amortization

    184,717        138,672   

Impairment of oil and natural gas properties

    6,600        28,871   

(Gain) loss on derivative instruments

    (29,533     (29,323

Cash settlements on derivative instruments

    30,403        72,045   

Premiums paid for derivatives

    —          (411

Deferred income tax expense (benefit)

    76        (312

Amortization of loan origination costs

    8,343        3,584   

Accretion of senior notes net discount

    554        —     

Amortization of investment premium

    —          194   

Accretion of asset retirement obligations

    5,581        5,009   

Amortization of MEMP equity awards

    3,557        1,423   

(Gain) loss on sale of properties

    (85,621     (9,761

Non-cash compensation expense

    1,057        —     

Exploration costs

    181        6,980   

Changes in operating assets and liabilities:

   

Accounts receivable

    (15,758     (7,382

Prepaid expenses and other

    (2,986     (1,574

Payables and accrued liabilities

    19,320        5,392   
 

 

 

   

 

 

 

Net cash provided by operating activities

    277,823        240,404   
 

 

 

   

 

 

 

Cash flows from investing activities:

   

Acquisition of oil and natural gas properties

    (105,762     (360,678

Additions to oil and gas properties

    (360,015     (273,334

Additions to restricted investments

    (5,361     (4,599

Additions to other property and equipment

    (2,670     (2,674

Additions to restricted cash

    (49,347     (3

Proceeds from the sale of oil and gas properties

    155,712        34,521   

Other

    —          29   
 

 

 

   

 

 

 

Net cash used in investing activities

    (367,443     (606,738
 

 

 

   

 

 

 

Cash flows from financing activities:

   

Advances on revolving credit facility

    1,132,755        619,450   

Payments on revolving credit facility

    (1,766,037     (251,569

Loan origination fees

    (41,175     (3,501

Borrowings under second lien credit facility

    325,000        —     

Proceeds from the issuances of senior notes

    1,031,563        —     

Purchase of additional interests in consolidated subsidiaries

    (15,135     —     

Contributions from previous owners

    1,214        44,072   

Proceeds from changes in ownership interests of MEMP

    135,012        —     

Proceeds from MEMP public equity offering

    511,204        202,573   

Costs incurred in conjunction with MEMP public equity offering

    (21,066     (8,268

Contributions from NGP affiliates related to sale of properties

    2,013        45,158   

Distributions to the Funds

    (732,362     —     

Distributions to noncontrolling interests

    (78,083     (15,208

Distribution to NGP affiliates (see Note 1)

    (355,494     (242,174

Distributions made by previous owners

    (4,005     (28,772

Cash retained by previous owners

    (7,909     —     

Other

    455        —     
 

 

 

   

 

 

 

Net cash provided by financing activities

    117,950        361,761   
 

 

 

   

 

 

 

Net change in cash and cash equivalents

    28,330        (4,573

Cash and cash equivalents, beginning of year

    49,391        53,964   
 

 

 

   

 

 

 

Cash and cash equivalents, end of year

  $ 77,721      $ 49,391   
 

 

 

   

 

 

 

Supplemental cash flows:

   

Cash paid for interest

  $ 61,140      $ 23,525   

Noncash investing and financing activities:

   

Change in capital expenditures in payables and accrued liabilities

    41,017        17,158   

Assumptions of asset retirement obligations related to properties acquired or drilled

    4,227        7,962   

Contribution of oil and gas properties from NGP affiliate

    —          6,893   

Accrued distribution to NGP affiliates related to Cinco Group acquisition

    4,352        —     

Contribution related to sale of assets to NGP affiliate—restricted cash

    —          2,013   

Accrued equity offering costs

    —          171   

Distributions to noncontrolling interests

    —          47   

 

See Accompanying Notes to Consolidated and Combined Financial Statements.

 

F-24


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

STATEMENTS OF CONSOLIDATED AND COMBINED EQUITY

(In thousands)

 

    Members’ Equity              
          Previous     Noncontrolling        
    Members     Owners     Interest     Total  

Balance January 1, 2012

  $ 853,436      $ 261,340      $ 161,588      $ 1,276,364   

Net income (loss)

    (7,620     37,318        (2,701     26,997   

Contributions

    —          44,072        —          44,072   

Contribution of oil and gas properties from NGP affiliate

    —          6,893        —          6,893   

Net proceeds from MEMP public equity offering

    —          —          194,134        194,134   

Distributions

    —          (28,772     (15,255     (44,027

Net book value of net assets acquired from affiliates (Note 12)

    52,217        (93,696     41,479        —     

Amortization of MEMP equity awards

    —          —          1,423        1,423   

Noncontrolling interest’s share of net book value in excess of consideration received from sale of assets to MEMP

    727        —          (727     —     

Contribution related to sale of assets to NGP affiliate

    6,291        40,138        742        47,171   

Net book value of assets acquired by NGP affiliate

    (579     (33,859     (68     (34,506

Distribution to affiliate in connection with acquisition of assets

    (134,964     —          (107,210     (242,174

Impact from equity transactions of MEMP

    41,930        —          (41,930     —     

Other

    176        (1     187        362   
 

 

 

   

 

 

   

 

 

   

 

 

 

Balance December 31, 2012

    811,614        233,433        231,662        1,276,709   

Net income (loss)

    90,712        10,790        49,830        151,332   

Contributions

    —          1,214        —          1,214   

Net proceeds from MEMP public equity offering

    —          —          490,138        490,138   

Sale of MEMP common units

    60,701        —          74,311        135,012   

Distributions

    (732,362     (4,005     (78,083     (814,450

Net book value of net assets acquired from affiliates (Note 12)

    50,751        (181,556     130,805        —     

Amortization of MEMP equity awards

    —          —          3,557        3,557   

Noncontrolling interest’s share of cash consideration received in excess of the net book value sold to MEMP

    (24     —          24        —     

Distribution to affiliate in connection with acquisition of assets

    (98,180     —          (253,055     (351,235

Purchase of noncontrolling interests

    (303     —          (14,832     (15,135

Impact from equity transactions of MEMP

    54,183        —          (54,183     —     

Other

    94        (2,299     441        (1,764

Net assets retained by previous owners

    —          (17,246     —          (17,246
 

 

 

   

 

 

   

 

 

   

 

 

 

Balance December 31, 2013

  $ 237,186      $ 40,331      $ 580,615      $ 858,132   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

See Accompanying Notes Consolidated and Combined Financial Statements.

 

F-25


Table of Contents

MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Note 1. Background, Organization and Basis of Presentation

 

Background & Organization

 

Memorial Resource Development LLC (“Memorial Resource”) is a Delaware limited liability company (the “Company”) formed on April 27, 2011 by Natural Gas Partners VIII, L.P. (“NGP VIII”), Natural Gas Partners IX, L.P. (“NGP IX”) and NGP IX Offshore Holdings, L.P. (“NGP IX Offshore”) (collectively, the “Funds”) to own, acquire, exploit and develop oil and natural gas properties. The Funds are private equity funds managed by Natural Gas Partners (“NGP”). Unless the context requires otherwise, references to “we,” “us,” “our,” or “the Company” are intended to mean the business and operations of Memorial Resource Development LLC and its consolidated subsidiaries.

 

These financial statements have been prepared in anticipation of a proposed initial public offering (the “Offering”) of the common stock of Memorial Resource Development Corp. (“MRDC”). In connection with the closing of the Offering, Memorial Resource will contribute its ownership interests in all of its directly owned subsidiaries except for BlueStone Natural Resources Holdings, LLC (“BlueStone Holdings”), Classic Pipeline & Gathering, LLC (“Classic Pipeline”) as well as two immaterial subsidiaries that were recently formed, and 50% of the incentive distribution rights of Memorial Production Partners LP (“MEMP”) in exchange for shares of common stock of MRDC. MRDC will become a subsidiary of Memorial Resource. Memorial Resource’s consolidated and combined financial statements represent MRDC’s predecessor for accounting and financial reporting purposes.

 

At December 31, 2013, BlueStone Holdings’ total assets were less than 1% of consolidated total assets and the MRD Segment’s total assets. BlueStone Holdings’ total revenues were approximately 3% of consolidated total revenues and 7% of the MRD Segment’s total revenues for the year ended December 31, 2013. BlueStone Holdings’ production volumes were approximately 2% of consolidated production volumes and 4% of the MRD Segment’s production volumes for the year ended December 31, 2013.

 

As of December 31, 2013, Memorial Resource’s significant consolidating subsidiaries consisted of the following:

 

   

Memorial Production Partners GP LLC (“MEMP GP”), a wholly-owned subsidiary, owns a 0.1% general partner interest in MEMP represented by 61,300 general partner units as of December 31, 2013. MEMP is a publicly traded Delaware limited partnership, the common units of which are listed on the NASDAQ Global Market under the symbol “MEMP.” MEMP was formed in April 2011 to own and acquire oil and natural gas properties in North America and completed its initial public offering on December 14, 2011. MEMP’s business activities are conducted through its wholly-owned subsidiary Memorial Production Operating LLC (“OLLC”) and its subsidiaries. All of OLLC’s consolidating subsidiaries are wholly-owned either directly or indirectly, except for one indirect majority-owned subsidiary. At December 31, 2013, Memorial Resource owned all of the 5,360,912 subordinated units outstanding. The Funds collectively indirectly own 50% of MEMP’s incentive distribution rights (“IDRs”). Memorial Resource owns the remaining IDRs. MEMP’s assets consist primarily of producing oil and natural gas properties and are located in Texas, Louisiana, Colorado, Wyoming, New Mexico, and offshore Southern California.

 

   

Black Diamond Minerals, LLC (“Black Diamond”), a wholly-owned subsidiary, together with its majority-owned subsidiary are engaged in the exploration, development, production, and operations of oil and natural gas properties located in Colorado, Oklahoma, and Wyoming.

 

   

BlueStone Holdings, a majority-owned subsidiary, together with its consolidated subsidiaries (collectively, “BlueStone”) are engaged in the exploration, development, production, and operations of oil and natural gas properties located in Texas. As of December 31, 2013, Memorial Resource owned an

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

 

89.45% membership interest in BlueStone Holdings and other individuals owned the remaining membership interests. All of BlueStone Holdings’ consolidating subsidiaries are wholly-owned either directly or indirectly.

 

   

Classic Hydrocarbons Holdings, L.P. (“Classic”), an indirect wholly-owned subsidiary, together with its consolidated subsidiaries are engaged in the exploration, development, production, and sale of oil and natural gas primarily in East Texas and Louisiana. As of December 31, 2013, Classic Hydrocarbons GP CO., L.L.C. (“Classic GP”) owned a 0.41% general partner interest in Classic and Memorial Resource owned a 99.59% limited partner interest in Classic. All of Classic’s consolidating subsidiaries are wholly-owned either directly or indirectly. As of December 31, 2013, Memorial Resource owned a 100% membership interest in Classic GP.

 

   

WildHorse Resources, LLC (“WildHorse”), a majority-owned subsidiary, together with its wholly-owned subsidiary are engaged in the acquisition, exploitation, and development of natural gas and crude oil properties located in Louisiana and Texas. As of December 31, 2013, Memorial Resource owned a 99.89% membership interest in WildHorse and other individuals owned the remaining membership interests. In connection with the closing of the Offering, the remaining membership interests will be contributed to MRDC and incentive units held by certain members of management will be exchanged for shares of common stock of MRDC and cash consideration.

 

   

Beta Operating Company, LLC (“Beta Operating”), a wholly-owned subsidiary, employs those employees who operate and support MEMP’s offshore Southern California oil and gas properties. Beta Operating was contributed to Memorial Resource by MEMP in December 2012. This entity was formerly owned by an affiliate of NGP. MEMP’s acquisition of Beta Operating in December 2012 and the subsequent contribution to Memorial Resource were accounted for as common control transactions at historical cost.

 

   

Memorial Resource Finance Corp. (“MRD Finance Corp.”), a wholly-owned subsidiary, has no material assets or any liabilities other than as a co-issuer of our debt securities. Its activities will be limited to co-issuing our debt securities and engaging in other activities incidental thereto.

 

MEMP acquired certain oil and natural gas producing properties in East Texas from Tanos Energy, LLC (“Tanos”) on April 2, 2012. Prior to April 1, 2013, Memorial Resource owned a 98.94% membership interest in Tanos. On April 1, 2013, Memorial Resource purchased the remaining membership interest in Tanos (see Note 11). MEMP acquired certain oil and natural gas producing properties in East Texas from Classic on May 14, 2012; acquired all of the outstanding membership interests in WHT Energy Partners LLC (“WHT”) from WildHorse and Tanos on March 28, 2013; acquired all the outstanding membership interests in Prospect Energy, LLC (“Prospect Energy”) from Black Diamond on October 1, 2013; acquired all of the outstanding membership interests in Tanos from Memorial Resource on October 1, 2013; acquired certain of the oil and natural gas properties in Jackson County, Texas (the “MRD Assets”) from Memorial Resource on October 1, 2013; and acquired certain oil and natural gas producing properties in East Texas from WildHorse on April 1, 2014. These intercompany transactions have been eliminated in preparation of our consolidated and combined financial statements.

 

References to “previous owners” for accounting and financial reporting purposes refer collectively to:

 

   

Rise Energy Operating, LLC and its wholly-owned subsidiaries (except for Rise Energy Operating, Inc.) (“REO”) from February 3, 2009 (inception) through the date of acquisition. MEMP acquired REO, which owns certain operating interests in producing and non-producing oil and gas properties offshore Southern California, in December 2012 from Rise Energy Partners, LP (“Rise”). Beta Operating was a wholly-owned subsidiary of Rise Energy Operating, LLC until it was contributed to Memorial Resource by MEMP in December 2012. Rise is primarily owned by two of the Funds.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

   

Certain oil and natural gas properties and related assets primarily in the Permian Basin, East Texas and the Rockies that MEMP acquired through equity transactions on October 1, 2013 from certain affiliates of NGP. On October 1, 2013, MEMP acquired Boaz Energy, LLC (“Boaz”), Crown Energy Partners, LLC (“Crown”), the Crown net profits interest and overriding royalty interest (“Crown NPI/ORRI”), Propel Energy SPV LLC (“Propel SPV”), together with its wholly-owned subsidiary Propel Energy Services, LLC (“Propel Energy Services”), and Stanolind Oil and Gas SPV LLC (“Stanolind SPV”) from: (a) Boaz Energy Partners, LLC (“Boaz Energy Partners”), Crown Energy Partners Holdings, LLC (“Crown Holdings”), Propel Energy, LLC (“Propel Energy”) and Stanolind Oil and Gas LP (“Stanolind”), all of which are primarily owned by two of the Funds.

 

   

A net profits interest that WildHorse purchased from NGP Income Co-Investment Fund II, L.P. (“NGPCIF”) on February 28, 2014 (“NGPCIF NPI”). NGPCIF is controlled by NGP. Upon the completion of the 2010 Petrohawk and Clayton Williams acquisitions, WildHorse sold a net profits interest in these properties to NGPCIF (see Note 12). Since WildHorse sold the net profits interest, the historical results are accounted for as a working interest for all periods.

 

Basis of Presentation

 

Our consolidated financial statements include our accounts and those of our majority-owned subsidiaries in which we have a controlling interest. Likewise, the combined financial statements include those of the previous owners for the periods that those entities were under common control.

 

All material intercompany transactions and balances have been eliminated in preparation of our consolidated and combined financial statements. The accompanying consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been made. Certain amounts in the prior year financial statements have been reclassified to conform to the presentation in the current year financial statements.

 

We have two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties (See Note 13). Our reportable business segments are as follows:

 

   

MRD—reflects the combined operations of Memorial Resource, WildHorse and its previous owners, Classic and Classic GP, Black Diamond, BlueStone, Beta Operating and MEMP GP.

 

   

MEMP—reflects the combined operations of MEMP, its previous owners, and any dropdown transactions between MEMP and other Memorial Resource subsidiaries.

 

Segment financial information has been retrospectively revised for the following common control transactions between MEMP and other Memorial Resource subsidiaries for comparability purposes:

 

   

acquisition by MEMP of all the outstanding membership interests in Tanos for a purchase price of approximately $77.4 million on October 1, 2013;

 

   

acquisition by MEMP of all the outstanding membership interests in Prospect Energy for a purchase price of approximately $16.3 million on October 1, 2013;

 

   

acquisition by MEMP of all the outstanding membership interests in WHT for a purchase price of approximately $200.0 million on March 28, 2013;

 

   

acquisition by MEMP of certain assets from Classic in East Texas in May 2012 for a purchase price of approximately $27.0 million; and

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

   

acquisition by MEMP of certain assets from Tanos in East Texas in April 2012 for a purchase price of approximately $18.5 million.

 

Note 2. Summary of Significant Accounting Policies

 

Use of Estimates

 

The preparation of consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated and combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Significant estimates include, but are not limited to, oil and natural gas reserves; depreciation, depletion, and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations.

 

Principles of Consolidation and Combination

 

Our consolidated financial statements include our accounts and those of our majority-owned subsidiaries in which we have a controlling interest. Likewise, the combined financial statements include those of the previous owners. All material intercompany balances and transactions have been eliminated.

 

Cash and Cash Equivalents

 

Cash and cash equivalents represent unrestricted cash on hand and all highly liquid investments with original contractual maturities of three months or less.

 

Concentrations of Credit Risk

 

Cash balances, accounts receivable, restricted investments and derivative financial instruments are financial instruments potentially subject to credit risk. Cash and cash equivalents are maintained in bank deposit accounts which, at times, may exceed the federally insured limits. Management periodically reviews and assesses the financial condition of the banks to mitigate the risk of loss. Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with the offshore Southern California oil and gas properties. These restricted investments consist of money market deposit accounts, money market mutual funds, commercial paper, and U.S. Government securities, all held with credit-worthy financial institutions. Derivative financial instruments are generally executed with major financial institutions that expose us to market and credit risks and which may, at times, be concentrated with certain counterparties. The credit worthiness of the counterparties is subject to continual review. We rely upon netting arrangements with counterparties to reduce credit exposure. We have not experienced any losses from such instruments.

 

Oil and natural gas are sold to a variety of purchasers, including intrastate and interstate pipelines or their marketing affiliates and independent marketing companies. Accounts receivable from joint operations are from a number of oil and natural gas companies, partnerships, individuals, and others who own interests in the properties operated by us and our predecessor. Generally, operators of crude oil and natural gas properties have the right to offset future revenues against unpaid charges related to operated wells, minimizing the credit risk associated with these receivables. Additionally, management believes that any credit risk imposed by a

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

concentration in the oil and natural gas industry is mitigated by the creditworthiness of its customer base. An allowance for doubtful accounts is recorded after all reasonable efforts have been exhausted to collect or settle the amount owed. Any amounts outstanding longer than the contractual terms are considered past due. Management determined that an allowance for uncollectible accounts was unnecessary at both December 31, 2013 and 2012, respectively.

 

If we were to lose any one of our customers, the loss could temporarily delay production and the sale of oil and natural gas in the related producing region. If we were to lose any single customer, we believe that a substitute customer to purchase the impacted production volumes could be identified.

 

Oil and Natural Gas Properties

 

Oil and natural gas exploration, development and production activities are accounted for in accordance with the successful efforts method of accounting. Under this method, costs of acquiring properties, costs of drilling successful exploration wells, and development costs are capitalized. The costs of exploratory wells are initially capitalized pending a determination of whether proved reserves have been found. At the completion of drilling activities, the costs of exploratory wells remain capitalized if determination is made that proved reserves have been found. If no proved reserves have been found, the costs of each of the related exploratory wells are charged to expense. In some cases, a determination of proved reserves cannot be made at the completion of drilling, requiring additional testing and evaluation of the wells. The costs of such exploratory wells are expensed if a determination of proved reserves has not been made within a twelve-month period after drilling is complete. Exploration costs such as geological, geophysical, and seismic costs are expensed as incurred.

 

As exploration and development work progresses and the reserves on these properties are proven, capitalized costs attributed to the properties are subject to depreciation and depletion. Depletion of capitalized costs is provided using the units-of-production method based on proved oil and gas reserves related to the associated field. Capitalized drilling and development costs of producing oil and natural gas properties are depleted over proved developed reserves and leasehold costs are depleted over total proved reserves.

 

On the sale or retirement of a complete or partial unit of a proved property or pipeline and related facilities, the cost and related accumulated depreciation, depletion, and amortization are removed from the property accounts, and any gain or loss is recognized.

 

There were no material capitalized exploratory drilling costs pending evaluation at December 31, 2013 and December 31, 2012.

 

Impairments

 

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties, such as a downward revision of the reserve estimates, less than expected production, drilling results, higher operating and development costs, or lower commodity prices. The estimated undiscounted future cash flows expected in connection with the property are compared to the carrying value of the property to determine if the carrying amount is recoverable. If the carrying value of the property exceeds its estimated undiscounted future cash flows, the carrying amount of the property is reduced to its estimated fair value using Level 3 inputs. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties. Impairment expense for the years ended December 31, 2013 and 2012 was approximately $6.6 million and $28.9 million, respectively.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Nonproducing oil and natural gas properties, which consist of undeveloped leasehold costs and costs associated with the purchase of proved undeveloped reserves, are assessed for impairment on a property-by-property basis. If the assessment indicates an impairment, a loss is recognized by providing a valuation allowance. The impairment assessment is affected by economic factors such as the results of exploration activities, commodity price outlooks, remaining lease terms, and potential shifts in business strategy employed by management.

 

Asset Retirement Obligations

 

An asset retirement obligation associated with retiring long-lived assets is recognized as a liability on a discounted basis in the period in which the legal obligation is incurred and becomes determinable, with an equal amount capitalized as an addition to oil and natural gas properties, which is allocated to expense over the useful life of the asset. Generally, oil and gas producing companies incur such a liability upon acquiring or drilling a well. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value. Upon settlement of the liability, a gain or loss is recognized as a component of exploration costs to the extent the actual costs differ from the recorded liability. See Note 6 for further discussion of asset retirement obligations.

 

Oil and Gas Reserves

 

The estimates of proved oil and natural gas reserves utilized in the preparation of the consolidated and combined financial statements are estimated in accordance with the rules established by the SEC and the Financial Accounting Standards Board (“FASB”). These rules require that reserve estimates be prepared under existing economic and operating conditions using a trailing 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. Netherland, Sewell & Associates, Inc. (“NSAI”), our independent reserve engineers, was engaged to prepare our reserves estimates at December 31, 2013.

 

Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, future gross revenues, the amount of oil and natural gas reserves, the remaining estimated lives of oil and natural gas properties, or any combination of the above may be increased or reduced. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates.

 

Other Property & Equipment

 

Other property and equipment is stated at historical costs and is comprised primarily of vehicles, furniture, fixtures, and computer hardware and software. Depreciation of other property and equipment is calculated using the straight-line method generally based on estimated useful lives of three to five years.

 

Restricted Investments

 

Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with the offshore Southern California oil and gas properties. These investments are classified as held-to-maturity, and such investments are stated at amortized cost. Interest earned on these investments is included in interest expense – net in the statement of operations. The amortized cost of such investments is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is displayed as a separate line item in the statement of operations. At December 31, 2013, these restricted investments consisted of money market deposit accounts, money market mutual funds, commercial paper, and U.S. Government securities. See Note 7 for additional information.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Debt Issuance Costs

 

These costs are recorded on the balance sheet and amortized over the term of the associated debt using the straight-line method which approximates the effective yield method. Amortization expense, including write-offs of debt issuance costs, for the years ended December 31, 2013 and 2012 was approximately $8.3 million and $3.6 million, respectively.

 

Revenue Recognition

 

Revenue from the sale of oil and natural gas is recognized when title passes, net of royalties due to third parties. Oil and natural gas revenues are recorded using the sales method. Under this method, revenues are recognized based on actual volumes of oil and natural gas sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. An asset or a liability is recognized to the extent that we have an imbalance in excess of our proportionate share of the remaining recoverable reserves on the underlying properties. No significant imbalances existed at December 31, 2013 or 2012.

 

The following individual customers each accounted for 10% or more of total reported revenues for the period indicated:

 

    

Years Ending December 31,

 
         2013             2012      

Consolidated & Combined:

    

Energy Transfer Equity, L.P. and subsidiaries

     35     13

MRD Segment:

    

Energy Transfer Equity, L.P. and subsidiaries

     77     39

Sunoco, Inc.(1)

     n/a        15

Dominion Gas Ventures LP

     n/a        15

MEMP Segment:

    

Phillips 66(2)

     15     13

ConocoPhillips(2)

     n/a        14

 

(1)   Sunoco, Inc. became a subsidiary of Energy Transfer Equity, L.P. in October 2012.
(2)   Phillips 66 was a subsidiary of ConocoPhillips through April 30, 2012. Accordingly, any revenues generated from Phillips 66 prior to May 1, 2012 were reported under ConocoPhillips.

 

Derivative Instruments

 

Commodity derivative financial instruments (e.g., swaps, floors, collars, and put options) are used to reduce the impact of natural gas and oil price fluctuations. Interest rate swaps are used to manage exposure to interest rate volatility, primarily as a result of variable rate borrowings under the credit facilities. Every derivative instrument is recorded on the balance sheet as either an asset or liability measured at its fair value. Changes in the derivative’s fair value are recognized in earnings as we have not elected hedge accounting for any of our derivative positions.

 

Income Tax

 

We are organized as a pass-through entity for federal income tax purposes. As a result, our members are responsible for federal income taxes on their share of our taxable income. Certain of our consolidated subsidiaries are taxed as corporations and subject to federal income taxes. We are also subject to the Texas margin tax and certain aspects of the tax make it similar to an income tax as the tax is assessed on 1% of taxable margin apportioned to operations in Texas. Deferred taxes arise due to temporary differences between the

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

financial statement carrying value of existing assets and liabilities and their respective tax basis. Deferred tax liabilities as of December 31, 2013 were approximately $3.2 million and total tax expense for the year was approximately $1.6 million. Deferred tax liabilities as of December 31, 2012 were approximately $3.1 million and total tax expense for the year was approximately $0.1 million.

 

We must recognize the tax effects of any uncertain tax positions we may adopt if the position taken by us is more likely than not sustainable based on its technical merits. If a tax position meets such criteria, the tax effect that would be recognized by us would be the largest amount of benefit with more than a 50% chance of being realized. There were no uncertain tax positions that required recognition in the financial statements at December 31, 2013 or 2012.

 

Upon closing of the Offering, MRDC will be treated as a taxable C corporation and will be subject to federal and certain state income taxes. Accordingly, a pro forma income tax provision has been disclosed as if Memorial Resource was a taxable corporation for all periods presented. Pro forma tax expense was computed using a blended corporate level federal and state tax rate of 36.06% and 35.39% for the years ended December 31, 2013 and 2012, respectively.

 

Unaudited Pro Forma Earnings Per Share

 

Memorial Resource has presented pro forma earnings per share (“EPS”) for all periods presented. Pro forma net income (loss) per basic share is determined by dividing the pro forma net income (loss) available to common shareholders by the number of common shares expected to be outstanding immediately following the Offering.

 

The following sets forth the calculation of pro forma EPS for the periods indicated (in thousands, except per share amounts):

 

     For the Year Ended December 31,  
         2013             2012      

Numerator:

    

Pro forma net income (loss)

   $ 97,797      $ 17,512   

Noncontrolling interest in pro forma net (income) loss, net of tax

     (31,861     1,745   

Previous owners interest in pro forma net (income) loss, net of tax

     (6,899     (24,111
  

 

 

   

 

 

 

Pro forma net income (loss) available to common shareholders

   $ 59,037      $ (4,854
  

 

 

   

 

 

 

Denominator:

    

Common shares outstanding immediately following the Offering

    
  

 

 

   

 

 

 

Basic and diluted EPS

   $           $        
  

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

The following sets forth the calculation of our supplemental pro forma EPS, for the periods indicated (in thousands, except per share amounts):

 

     For the Year Ended December 31,  
         2013             2012      

Numerator:

    

Pro forma net income (loss)

   $ 97,797      $ 17,512   

Noncontrolling interest in pro forma net (income) loss, net of tax

     (31,861     1,745   
  

 

 

   

 

 

 

Pro forma net income (loss) available to common shareholders

   $ 65,936      $ 19,257   
  

 

 

   

 

 

 

Denominator:

    

Common shares outstanding immediately following the Offering

    
  

 

 

   

 

 

 

Basic and diluted EPS

   $           $        
  

 

 

   

 

 

 

 

Our supplemental basic and diluted EPU includes all the earnings generated by the previous owners for all periods presented due to common control considerations.

 

Unit-Based Compensation Arrangements

 

The fair value of equity-classified awards (e.g., restricted common unit awards) is amortized to earnings over the requisite service or vesting period. Compensation expense for liability-classified awards are recognized over the requisite service or vesting period of an award based on the fair value of the award re-measured at each reporting period. Generally, no compensation expense is recognized for equity instruments that do not vest.

 

The governing documents of Memorial Resource and certain of its subsidiaries, including WildHorse and BlueStone, provide for the issuance of incentive units. The incentive units are subject to performance conditions that affect their vesting. Compensation cost is recognized only if the performance condition is probable of being satisfied at each reporting date.

 

See Note 10 and 11 for further information.

 

Current Accrued Liabilities

 

Current accrued liabilities consisted of the following at the dates indicated (in thousands):

 

     December 31,  
     2013      2012  

Accrued capital expenditures

   $ 48,579       $ 14,352   

Accrued lease operating expense

     13,240         6,701   

Accrued general and administrative expenses

     14,485         2,290   

Accrued ad valorem and production taxes

     3,541         3,753   

Accrued interest payable

     11,934         1,239   

Accrued environmental

     577         1,012   

Other miscellaneous, including operator advances

     5,774         4,140   
  

 

 

    

 

 

 
   $ 98,130       $ 33,487   
  

 

 

    

 

 

 

 

New Accounting Pronouncements

 

Offsetting Disclosure Requirements.    In December 2011, the FASB issued an accounting standard update intended to enhance current disclosure requirements on offsetting financial assets and liabilities. In January 2013,

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

the FASB issued an accounting standard update to clarify the scope of offsetting disclosure requirements. The new disclosure requirements required the disclosure of both gross and net information about derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions eligible for offset on the balance sheet or subject to a master netting arrangement or similar agreement. Disclosure of collateral received and posted in connection with master netting agreements or similar arrangements is also required. The disclosures became effective for annual and interim periods beginning on or after January 1, 2013 and were applied retrospectively. The adoption of this new guidance did not have a significant impact on our financial statements.

 

Note 3. Acquisitions and Divestitures

 

The third party acquisitions discussed below were accounted for under the acquisition method of accounting. Accordingly, we conducted assessments of net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while acquisition costs associated with the acquisitions were expensed as incurred. The operating revenues and expenses of acquired properties are included in the accompanying financial statements from their respective closing dates forward. The transactions were financed through capital contributions and borrowings under credit facilities.

 

The fair values of oil and natural gas properties are measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural properties include estimates of: (i) economic reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital.

 

MEMP has consummated several common control acquisitions since completing its initial public offering in December 2011, as further discussed in Note 12, from certain affiliates of NGP. These acquisitions were each accounted for as a transaction between entities under common control, similar to a pooling of interests, whereby the net assets acquired were recorded at historical cost.

 

Acquisition-related costs

 

Acquisition-related costs for both related party and third party transactions are included in general and administrative expenses in the accompanying statements of operations for the periods indicated below (in thousands):

 

   

For the Year

Ended December 31,

   
   

2013

 

2012

   
 

$8,313

  $4,538  

 

2013 Acquisitions

 

On March 18, 2013, a purchase and sale agreement was executed by WildHorse for the purchase of certain oil and gas properties and leases in Louisiana from a third party (‘‘Louisiana Acquisition’’). The final adjusted purchase price was $67.1 million. This transaction closed on April 30, 2013. The following table summarizes the fair value of the third party assets acquired and liabilities assumed as of the acquisition date (in thousands):

 

     Louisiana
Acquisition
 

Oil and gas properties

   $ 68,887   

Asset retirement obligations

     (1,789
  

 

 

 

Total identifiable net assets

   $ 67,098   
  

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

MEMP closed two separate transactions during the year ended December 31, 2013 to acquire certain oil and natural gas properties from third parties in East Texas (the “East Texas Acquisition”) and the Rockies (the “Rockies Acquisition”) for approximately $29.4 million in aggregate. The East Texas Acquisition closed on September 6, 2013 and the Rockies Acquisition closed on August 30, 2013. The following table summarizes the fair value of the third party assets acquired and liabilities assumed as of each acquisition date (in thousands):

 

     East Texas
Acquisition
    Rockies
Acquisition
 

Oil and gas properties

   $ 9,974      $ 20,744   

Asset retirement obligations

     (78     (1,163

Accrued liabilities

     —          (118
  

 

 

   

 

 

 

Total identifiable net assets

   $ 9,896      $ 19,463   
  

 

 

   

 

 

 

 

Propel Energy also acquired incremental interests in certain oil and gas properties and leases in the Hendrick Field located in Winkler County, Texas from two third parties in three separate transactions for approximately $9.3 million.

 

2012 Acquisitions

 

Third Party.    On May 1, 2012, MEMP and WildHorse jointly acquired operating and non-operating interests in certain oil and natural gas properties located in East Texas and North Louisiana from an undisclosed third party seller (“Undisclosed Seller Acquisition”) for a final net purchase price of approximately $112.1 million. These properties are located primarily in Polk County, Texas and Lincoln and Claiborne Parishes, Louisiana. During the year ended December 31, 2012, approximately $22.1 million of revenue and $9.2 million of earnings were recorded in the statement of operations related to the Undisclosed Seller Acquisition subsequent to the closing date.

 

On September 28, 2012, MEMP acquired certain oil and natural gas properties in East Texas from Goodrich Petroleum Corporation (“Goodrich Acquisition”) for a final net purchase price of $90.4 million after customary post-closing adjustments. The effective date of this transaction was July 1, 2012. This transaction was financed with borrowings under MEMP’s revolving credit facility. These properties are located in the East Henderson field of Rusk County, Texas. During the year ended December 31, 2012, approximately $4.6 million of revenue and $2.0 million of earnings were recorded in the statement of operations related to the Goodrich Acquisition subsequent to the closing date.

 

Collectively, the previous owners consummated multiple acquisitions during 2012 by acquiring operating and non-operating interests in certain oil and natural gas properties primarily located in various Texas and New Mexico counties for an aggregate adjusted purchase price of $147.9 million, the largest of which was completed in July by Stanolind. In July 2012, Stanolind completed an acquisition of working interests, royalty interests and net revenue interests (the “Menemsha Acquisition”) located in various counties in Texas for a final net purchase price of $74.7 million. During the year ended December 31, 2012, approximately $4.9 million of revenue and $0.9 million of earnings were recorded in the statement of operations related to the Menemsha Acquisition subsequent to the closing date.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

The following table summarizes the fair value of the assets acquired and liabilities assumed as of each acquisition date (in thousands).

 

     Undisclosed
Seller  Acquisition
    Goodrich
Acquisition
    Menemsha
Acquisition
    Other
Previous Owner
Acquisitions
 

Oil and gas properties

   $ 115,633      $ 91,187      $ 75,114      $ 77,764   

Prepaid expenses and other current assets

     —          425        —          —     

Revenues payable

     (1,602     (875     —          —     

Asset retirement obligations

     (1,592     (161     (408     (4,558

Accrued liabilities

     (297     (153     —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total identifiable net assets

   $ 112,142      $ 90,423      $ 74,706      $ 73,206   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

The following unaudited pro forma combined results of operations are provided for the year ended December 31, 2012 (in thousands) as though the Undisclosed Seller Acquisition, Goodrich Acquisition, and Menemsha Acquisition had been completed on January 1, 2011. The unaudited pro forma financial information was derived from our historical combined statements of operations and adjusted to include: (i) the revenues and direct operating expenses associated with oil and gas properties acquired, (ii) depletion expense applied to the adjusted basis of the properties acquired and (iii) interest expense on additional borrowings necessary to finance the acquisitions. The unaudited pro forma financial information does not purport to be indicative of results of operations that would have occurred had the transactions occurred on the basis assumed above, nor is such information indicative of expected future results of operations.

 

Revenues

     431,061   

Net income

     40,940   

 

During 2012, we also acquired certain interests in oil and gas properties through several individually immaterial acquisitions for an aggregate purchase price of $10.2 million.

 

Divestitures

 

On January 1, 2013, Tanos sold a natural gas gathering pipeline located in East Texas, which it had originally acquired in April 2010, to a privately held gas transportation company for a minimum of $1.5 million. The maximum allowable additional proceeds are $2.0 million. The contingent consideration is based on the natural gas pipeline servicing any new wells that Tanos drills in the area over the next three years. The contingent consideration portion of an arrangement is recorded when the consideration is determined to be realizable. Tanos recorded an aggregate gain of approximately $1.4 million related to this transaction, of which $0.4 million was contingent consideration. Tanos also sold certain non-operated oil and gas properties in 2013 for $2.9 million and recorded a gain of $1.4 million.

 

On May 10, 2013, Black Diamond entered into a purchase and sale agreement with a third party to sell certain of its Wyoming oil and gas properties with an estimated net book value of $39.8 million for $33.0 million, before customary adjustments. As a result, Black Diamond recorded a loss on the sale of $6.8 million. This transaction closed on June 4, 2013.

 

BlueStone entered into an agreement with a publicly traded third party to sell its remaining interest in certain properties in the Mossy Grove Prospect in Walker and Madison Counties located in East Texas. Total cash consideration received by BlueStone was approximately $117.9 million, which exceeded the net book value of the properties sold by $89.5 million. The transaction closed on July 31, 2013.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

During 2012, certain of our subsidiaries sold certain interests in oil and gas properties for an aggregate $3.3 million. Losses of approximately $0.1 million were recognized related to these divestures.

 

The previous owners sold certain interests in oil and gas properties offshore Louisiana on October 11, 2012 for an aggregate $40.1 million to an NGP controlled entity, of which $38.1 million was received upon closing. As of December 31, 2012, the remaining proceeds were held in escrow and included in restricted cash on the balance sheet. The remaining proceeds were released from escrow in April 2013. Due to common control considerations, the proceeds from the sale exceeded the net book value of the properties sold by $6.3 million and recognized in the equity statement as a net contribution.

 

On July 11, 2012, the previous owners completed the sale of a portion of its oil and gas assets located in Garza County, Texas to a third party for $26.1 million and recognized a gain of approximately $7.6 million. On September 18, 2012, the previous owners completed the sale of a portion of its oil and gas assets located in Ector County, Texas to a third party for $4.7 million and recognized a gain of approximately $2.2 million.

 

The majority of the proceeds generated from these sales were used to acquire operating and non-operating interests in certain oil and natural gas properties located primarily in various Texas and New Mexico counties.

 

Note 4. Fair Value Measurements of Financial Instruments

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. A three-tier hierarchy has been established that classifies fair value amounts recognized or disclosed in the financial statements. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). The characteristics of fair value amounts classified within each level of the hierarchy are described as follows:

 

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market is one in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2—Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. At December 31, 2013 and 2012, all of the derivative instruments reflected on the accompanying balance sheets were considered Level 2.

 

Level 3—Measure based on prices or valuation models that require inputs that are both significant to the fair value measurement and are less observable from objective sources (i.e., supported by little or no market activity).

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The carrying values of cash and cash equivalents, accounts receivables, accounts payables (including accrued liabilities) and amounts outstanding under long-term debt agreements included in the accompanying balance sheets approximated fair value at December 31, 2013 and 2012. The fair value estimates are based upon observable market data and are classified within Level 2 of the fair value hierarchy. These assets and liabilities are not presented in the following tables.

 

The fair market values of the derivative financial instruments reflected on the balance sheets as of December 31, 2013 and 2012 were based on estimated forward commodity prices and forward interest rate yield curves. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement in its entirety. The significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table presents the derivative assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013 and 2012 for each of the fair value hierarchy levels:

 

     Fair Value Measurements at December 31, 2013 Using  
     Quoted Prices in
Active  Market
(Level 1)
     Significant Other
Observable  Inputs
(Level 2)
     Significant
Unobservable  Inputs
(Level 3)
     Fair Value  
     (in thousands)  

Assets:

           

Commodity derivatives

   $ —         $ 105,054       $ —         $ 105,054   

Interest rate derivatives

     —           884         —           884   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ —         $ 105,938       $ —         $ 105,938   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Commodity derivatives

     —         $ 58,234         —         $ 58,234   

Interest rate derivatives

     —           5,590         —           5,590   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ —         $ 63,824       $ —         $ 63,824   
  

 

 

    

 

 

    

 

 

    

 

 

 
     Fair Value Measurements at December 31, 2012 Using  
     Quoted Prices in
Active Market
(Level 1)
     Significant Other
Observable Inputs
(Level 2)
     Significant
Unobservable Inputs
(Level 3)
     Fair Value  
     (in thousands)  

Assets:

           

Commodity derivatives

   $ —         $ 95,586       $ —         $ 95,586   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Commodity derivatives

     —         $ 45,938         —         $ 45,938   

Interest rate derivatives

     —           6,838         —           6,838   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ —         $ 52,776       $ —         $ 52,776   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

See Note 5 for additional information regarding our derivative instruments.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

 

Certain assets and liabilities are reported at fair value on a nonrecurring basis as reflected on the balance sheets. The following methods and assumptions are used to estimate the fair values:

 

   

The fair value of asset retirement obligations (“AROs”) is based on discounted cash flow projections using numerous estimates, assumptions, and judgments regarding such factors as the existence of a legal obligation for an ARO; amounts and timing of settlements; the credit-adjusted risk-free rate; and inflation rates. See Note 6 for a summary of changes in AROs.

 

   

If sufficient market data is not available, the determination of the fair values of proved and unproved properties acquired in transactions accounted for as business combinations are prepared by utilizing estimates of discounted cash flow projections. The factors to determine fair value include, but are not limited to, estimates of: (i) economic reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital.

 

   

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties.

 

   

During the year ended December 31, 2013, we recognized $6.6 million of impairments. The impairments primarily related to certain properties located in South Texas. The estimated future cash flows expected from South Texas properties were compared to their carrying values and determined to be unrecoverable as a result of a downward revision of estimated proved reserves based on pricing terms specific to these properties.

 

   

During the year ended December 31, 2012, we recognized $28.9 million of impairments to proved oil and natural gas properties. Approximately $8.0 million related to a particular lease in the Elkhorn (Ellenburger) and Canyon Fields located in the Permian Basin as a result of a downward revision of estimated proved reserves due to unfavorable drilling results in the area. The remaining $20.9 million of impairments primarily related to certain fields in East Texas. The carrying values of these fields were determined to be unrecoverable due to a decline in gas prices.

 

Note 5. Risk Management and Derivative Instruments

 

Derivative instruments are utilized to manage exposure to commodity price and interest rate fluctuations and achieve a more predictable cash flow in connection with natural gas and oil sales from production and borrowing related activities. These transactions limit exposure to declines in prices or increases in interest rates, but also limit the benefits that would be realized if prices increase or interest rates decrease.

 

Certain inherent business risks are associated with commodity and interest derivative contracts, including market risk and credit risk. Market risk is the risk that the price of natural gas or oil will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the counterparty to a contract. It is our policy to enter into derivative contracts, including interest rate swaps, only with counterparties that are creditworthy financial institutions deemed by management as competent and competitive market makers. Each of the counterparties to our derivative contracts is a lender in our credit agreements. While collateral is generally not required to be posted by counterparties, credit risk associated with derivative instruments is minimized by limiting exposure to any single counterparty and entering into derivative instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. Additionally, master netting agreements are used to mitigate risk of loss due to default with counterparties on derivative instruments. We have also entered into the International Swaps and Derivatives

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Association Master Agreements (“ISDA Agreements”) with each of our counterparties. The terms of the ISDA Agreements provide us and each of our counterparties with rights of set-off upon the occurrence of defined acts of default by either us or our counterparty to a derivative, whereby the party not in default may set-off all liabilities owed to the defaulting party against all net derivative asset receivables from the defaulting party. See Note 8 for additional information in regards to our revolving credit facilities.

 

Commodity Derivatives

 

A combination of commodity derivatives (e.g., floating-for-fixed swaps, collars, call spreads and basis swaps) is used to manage exposure to commodity price volatility. Generally, natural gas derivative contracts are entered into and indexed to NYMEX Henry Hub and regional indices that are in proximity to our areas of production. Generally, oil derivative contracts are entered into and indexed to NYMEX WTI, Inter-Continental Exchange (“ICE”) Brent and California Midway-Sunset. Our NGL derivative contracts are indexed to OPIS Mont Belvieu. At December 31, 2013, the MRD Segment had the following open commodity positions:

 

     2014     2015     2016     2017  

Natural Gas Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (MMBtu)

     1,190,000        880,000        670,000        520,000   

Weighted-average fixed price

   $ 4.10      $ 4.19      $ 4.32      $ 4.45   

Collar contracts:

        

Average Monthly Volume (MMBtu)

     330,000        130,000        —          —     

Weighted-average floor price

   $ 4.09      $ 4.00      $ —        $ —     

Weighted-average ceiling price

   $ 5.24      $ 4.64      $ —        $ —     

Basis swaps:

        

Average Monthly Volume (MMBtu)

     270,000        180,000        220,000        200,000   

Spread

   $ (0.07   $ (0.09   $ (0.08   $ (0.08

Crude Oil Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (Bbls)

     18,000        6,000        —          —     

Weighted-average fixed price

   $ 91.66      $ 88.50      $ —        $ —     

Collar contracts:

        

Average Monthly Volume (Bbls)

     8,000        2,000        —          —     

Weighted-average floor price

   $ 85.00      $ 85.00      $ —        $ —     

Weighted-average ceiling price

   $ 117.50      $ 101.35      $ —        $ —     

NGL Derivative Contracts:

        

Fixed price swap contracts:

        

Average Monthly Volume (Bbls)

     18,000        —          —          —     

Weighted-average fixed price

   $ 64.27        —          —          —     

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

At December 31, 2013, the MEMP Segment had the following open commodity positions:

 

    2014     2015     2016     2017     2018     2019  

Natural Gas Derivative Contracts:

           

Fixed price swap contracts:

           

Average Monthly Volume (MMBtu)

    2,575,458        2,145,278        2,342,442        2,230,067        2,060,000        1,814,583   

Weighted-average fixed price

  $ 4.34      $ 4.30      $ 4.42      $ 4.31      $ 4.52      $ 4.77   

Collar contracts:

           

Average Monthly Volume (MMBtu)

    340,000        350,000        —          —          —          —     

Weighted-average floor price

  $ 4.93      $ 4.62      $ —        $ —        $ —        $ —     

Weighted-average ceiling price

  $ 6.12      $ 5.80      $ —        $ —        $ —        $ —     

Call spreads(1):

           

Average Monthly Volume (MMBtu)

    120,000        80,000        —          —          —          —     

Weighted-average sold strike price

  $ 5.08      $ 5.25      $ —        $ —        $ —        $ —     

Weighted-average bought strike price

  $ 6.31      $ 6.75      $ —        $ —        $ —        $ —     

Basis swaps:

           

Average Monthly Volume (MMBtu)

    2,822,083        —          —          —          —          —     

Spread

  $ (0.09   $ —        $ —        $ —        $ —        $ —     

Crude Oil Derivative Contracts:

           

Fixed price swap contracts:

           

Average Monthly Volume (Bbls)

    136,444        148,281        142,313        130,600        122,000        40,000   

Weighted-average fixed price

  $ 95.82      $ 93.07      $ 86.85      $ 85.96      $ 85.62      $ 85.00   

Collar contracts:

           

Average Monthly Volume (Bbls)

    23,000        5,000        —          —          —          —     

Weighted-average floor price

  $ 82.83      $ 80.00      $ —        $ —        $ —        $ —     

Weighted-average ceiling price

  $ 105.31      $ 94.00      $ —        $ —        $ —        $ —     

Basis swaps:

           

Average Monthly Volume (Bbls)

    57,292        57,500        —          —          —          —     

Spread

  $ (9.21   $ (9.73   $ —        $ —        $ —        $ —     

NGL Derivative Contracts:

           

Fixed price swap contracts:

           

Average Monthly Volume (Bbls)

    118,500        112,800        —          —          —          —     

Weighted-average fixed price

  $ 36.23      $ 35.04      $ —        $ —        $ —        $ —     

 

(1)   These transactions were entered into for the purpose of eliminating the ceiling portion of certain collar arrangements, which effectively converted the applicable collars into swaps.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Interest Rate Swaps

 

Periodically, we enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates such as those in our credit agreement to fixed interest rates. Conditions sometimes arise where actual borrowings are less than notional amounts hedged which has and could result in over-hedged amounts from an economic perspective. From time to time we enter into offsetting positions to avoid being economically over-hedged. At December 31, 2013, we had the following interest rate swap open positions:

 

Credit Facility (see Note 8)

  2014     2015     2016  

MEMP Segment:

     

Average Monthly Notional (in thousands)

  $ 173,958      $ 280,833      $ 150,000   

Weighted-average fixed rate

    1.306     1.416     1.193

Floating rate

    1 Month LIBOR        1 Month LIBOR        1 Month LIBOR   

MRD Segment:

     

Average Monthly Notional (in thousands)

  $ 118,750      $ 100,000      $ —    

Weighted-average fixed rate

    0.773     0.758     —    

Floating rate

    1 Month LIBOR        1 Month LIBOR        —    

 

Balance Sheet Presentation

 

The following table summarizes the gross fair value of derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation on the balance sheet and the net recorded fair value as reflected on the balance sheet at December 31:

 

         Asset Derivatives     Liability Derivatives  

Type

 

Balance Sheet Location

   2013     2012     2013     2012  
         (in thousands)  

Commodity contracts

  Short-term derivative instruments    $ 21,759      $ 48,901      $ 19,739      $ 8,072   

Interest rate swaps

  Short-term derivative instruments      845        —          3,287        3,575   
    

 

 

   

 

 

   

 

 

   

 

 

 

Gross fair value

       22,604        48,901        23,026        11,647   

Netting arrangements

  Short-term derivative instruments      (13,315     (6,980     (13,315     (6,980
    

 

 

   

 

 

   

 

 

   

 

 

 

Net recorded fair value

  Short-term derivative instruments    $ 9,289      $ 41,921      $ 9,711      $ 4,667   
    

 

 

   

 

 

   

 

 

   

 

 

 

Commodity contracts

  Long-term derivative instruments    $ 83,295      $ 46,685      $ 38,495      $ 37,866   

Interest rate swaps

  Long-term derivative instruments      39        —          2,303        3,263   
    

 

 

   

 

 

   

 

 

   

 

 

 

Gross fair value

       83,334        46,685        40,798        41,129   

Netting arrangements

  Long-term derivative instruments      (34,718     (29,506     (34,718     (29,506
    

 

 

   

 

 

   

 

 

   

 

 

 

Net recorded fair value

  Long-term derivative instruments    $ 48,616      $ 17,179      $ 6,080      $ 11,623   
    

 

 

   

 

 

   

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Gains & Losses on Derivatives

 

We do not designate derivative instruments as hedging instruments for financial reporting purposes and neither did our predecessor. Accordingly, all gains and losses, including unrealized gains and losses from changes in the derivative instruments’ fair values, have been recorded in the accompanying statements of operations. The following table details the gains and losses related to derivative instruments for the years ending December 31, 2013 and 2012:

 

     

Statements of

Operations Location

   Years Ended
December  31,
 

Derivative Instruments

      2013     2012  
          (in thousands)  

Commodity derivative contracts

   (Gain) loss on commodity derivative instruments    $ (29,294   $ (34,905

Interest rate swaps

   Interest expense, net      (239     5,582   

 

Note 6. Asset Retirement Obligations

 

Asset retirement obligations primarily relate to our portion of future plugging and abandonment of wells and related facilities. The following table represents a reconciliation of the asset retirement obligations for the years ended December 31, 2013 and 2012:

 

     2013     2012  
     (in thousands)  

Asset retirement obligations at beginning of year

   $ 102,380      $ 90,699   

Liabilities added from acquisitions or drilling

     4,227        7,962   

Liabilities removed upon sale of wells

     (1,765     (1,931

Liabilities removed upon plugging and abandoning

     (170     (119

Accretion expense

     5,581        5,009   

Revision of estimates

     1,516        760   
  

 

 

   

 

 

 

Asset retirement obligations at end of year

     111,769        102,380   

Less: Current portion

     90        390   
  

 

 

   

 

 

 

Asset retirement obligations—long-term portion

     111,679        101,990   
  

 

 

   

 

 

 

 

Note 7. Restricted Investments

 

Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with the offshore Southern California oil and gas properties. The components of the restricted investment balance, which are all attributable to our MEMP Segment, are as follows at December 31:

 

     2013      2012  
     (in thousands)  

BOEM platform abandonment (See Note 14)

   $ 66,373       $ 61,389   

BOEM lease bonds

     794         776   

SPBPC Collateral:

     

Contractual pipeline and surface facilities abandonment (See Note 14)

     2,306         1,959   

California State Lands Commission pipeline right-of-way bond

     3,005         3,000   

City of Long Beach pipeline facility permit

     500         500   

Federal pipeline right-of-way bond

     307         300   

Port of Long Beach pipeline license

     100         100   
  

 

 

    

 

 

 

Restricted investments

   $ 73,385       $ 68,024   
  

 

 

    

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Note 8. Long Term Debt

 

Our debt obligations under revolving credit facilities consisted of the following at December 31:

 

     2013     2012  
     (in thousands)  

MRD Segment:

  

Memorial Resource $1.0 billion revolving credit facility, variable-rate, terminated December 2013

   $ —        $ 80,000   

10.00%/10.75% senior PIK toggle notes due December 2018(1)

     350,000        —     

10.00%/10.75% senior PIK toggle notes unamortized discounts

     (6,950     —     

WildHorse $1.0 billion revolving credit facility, variable-rate, due April 2018

     203,100        202,200   

WildHorse $325.0 million second lien term facility, variable-rate, due December 2018

     325,000        —     

Black Diamond $150.0 million revolving credit facility, variable-rate, terminated November 2013

     —          27,000   

BlueStone $150.0 million revolving credit facility, variable-rate, terminated August 2013

     —          —     
  

 

 

   

 

 

 

Subtotal

     871,150        309,200   
  

 

 

   

 

 

 

MEMP Segment:

    

MEMP $2.0 billion revolving credit facility, variable-rate, due March 2018

     103,000        371,000   

7.625% senior notes, fixed-rate, due May 1, 2021(2)

     700,000        —     

7.625% senior notes unamortized discounts

     (10,933     —     

WHT $400.0 million revolving credit facility, variable-rate, terminated March 2013

     —          89,300   

Tanos $250.0 million revolving credit facility, variable-rate, terminated April 2013

     —          25,250   

Stanolind $250.0 million revolving credit facility, variable-rate, due July 2017

     —          85,750   

Boaz $75.0 million revolving credit facility, variable-rate, terminated October 2013

     —          29,500   

Crown $75.0 million revolving credit facility, variable-rate, terminated October 2013

     —          13,882   

Propel Energy $200.0 million revolving credit facility, variable-rate, due June 2015

     —          15,500   
  

 

 

   

 

 

 

Subtotal

     792,067        630,182   
  

 

 

   

 

 

 

Total long-term debt

   $ 1,663,217      $ 939,382   
  

 

 

   

 

 

 

 

(1)   The estimated fair value of this fixed-rate debt was $348.3 million. The estimated fair value is based on quoted market prices and is classified as Level 2 within the fair value hierarchy.
(2)   The estimated fair value of this fixed-rate debt was $721.0 million. The estimated fair value is based on quoted market prices and is classified as Level 2 within the fair value hierarchy.

 

Each of the revolving credit facilities contain customary covenants and restrictive provisions including but not limited to: (i) limitation on indebtedness and liens, (ii) limitations on restricted payments, (iii) limitation on investments and acquisitions, (iv) limitations on transactions with affiliates, (v) limitation on mergers, consolidation and asset sales, and (vi) limitations on commodity hedging and interest rate hedging. Each of the revolving credit facilities also includes financial maintenance covenants that require each borrower to meet certain financial performance criteria periodically (e.g., minimum interest coverage ratio and maximum leverage). The definitions and required ratios are set forth in each credit facility.

 

Each of the credit facilities contain customary and other events of default including but not limited to: (i) failure to make payments when due, (ii) breach of any covenants continuing beyond the cure period, (iii) default under any other material debt, (iv) change in management or change of control, and (v) certain material adverse effects on the business of the loan parties. Upon an event of default, revolving credit commitments could be terminated and any outstanding indebtedness under such revolving credit facility, together with accrued interest, fees and other obligations under such credit facility, could be declared immediately due and payable.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Borrowing Base

 

Credit facilities tied to borrowing bases are common throughout the oil and gas industry. Each of the revolving credit facilities borrowing base is subject to redetermination on at least a semi-annual basis primarily based on estimated proved reserves. The borrowing base for each credit facility was the following at December 31:

 

     2013  
     (in thousands)  

MRD Segment:

  

WildHorse $1.0 billion revolving credit facility, variable-rate, due April 2018

     300,000   

MEMP Segment:

  

MEMP $2.0 billion revolving credit facility, variable-rate, due March 2018

     845,000   
  

 

 

 

Total borrowing base

     1,145,000   
  

 

 

 

 

Weighted-Average Interest Rates

 

The following table presents the weighted-average interest rates paid on variable-rate debt obligations for the periods presented:

 

     For the Year
Ended December 31,
 

Credit facility

       2013             2012      

MRD Segment:

    

Memorial Resource

     3.17     4.11

Classic

     n/a        4.50

WildHorse revolver

     2.30     3.00

WildHorse second lien

     7.60     n/a   

Black Diamond

     3.97     3.62

BlueStone

     n/a        n/a   

MEMP Segment:

    

MEMP

     3.25     2.74

Tanos

     3.10     2.31

WHT

     2.29     2.60

REO

     n/a        3.40

Stanolind

     3.52     3.76

Crown

     3.38     4.20

Propel Energy

     3.08     3.28

 

Generally, borrowings under each revolving credit facility bear interest, at the borrower’s option, at either: (i) the Alternative Base Rate (as defined within each credit facility) plus a margin that varies according to the borrowing base usage (which is the ratio of outstanding borrowings and letters of credit to the borrowing base then in effect), or (ii) the applicable LIBOR plus a margin that varies according to the borrowing base usage. The unused portion of the borrowing base will be subject a commitment fee that may vary from 0.375% to 0.50% per annum according to the borrowing base usage.

 

Memorial Resource Revolving Credit Agreement & Senior Notes

 

On July 13, 2012, Memorial Resource entered into a two-year $50.0 million senior secured revolving credit facility with an initial borrowing base of $35.0 million. Memorial Resource pledged 7,061,294 of MEMP

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

common units and 5,360,912 of MEMP subordinated units as security under the revolving credit facility as well as its oil and gas properties and certain other assets of Memorial Resource. This revolving credit facility was also guaranteed by certain of Memorial Resource’s wholly-owned subsidiaries.

 

On November 20, 2012, Memorial Resource entered into a first amendment to its credit agreement, which among other things: (i) increased the aggregate maximum credit to $1.0 billion, (ii) increased the borrowing base to $120.0 million and (iii) extended the maturity date to November 20, 2016. On April 25, 2013, Memorial Resource entered into a second amendment to its credit agreement, which among other things: (i) increased the borrowing base to $170.0 million and (ii) designated Tanos together with its consolidating subsidiaries as additional guarantors. On October 1, 2013, Tanos and its consolidating subsidiaries were removed as guarantors and the borrowing base was reduced to $120.0 million. On November 1, 2013, Memorial Resource entered into a third amendment to its credit agreement, which among other things: (i) designated Black Diamond together with its consolidating subsidiaries as additional guarantors, (ii) reduced the borrowing base to $100.0 million, and (iii) permitted second lien indebtedness. On November 22, 2013, the borrowing base was automatically reduced to $60.0 million upon Memorial Resource’s sale of 7,061,294 MEMP common units in a secondary offering.

 

On December 18, 2013, indebtedness then outstanding under the revolving credit facility of $59.7 million and all accrued interest was paid off in full and the revolving credit facility was terminated in connection with the issuance of senior notes discussed below.

 

On December 18, 2013, Memorial Resource and its wholly-owned subsidiary, Memorial Resource Finance Corp. (“MRD Finance Corp.” and collectively, the “MRD Issuers”), completed a private placement of $350.0 million in aggregate principal amount of 10.00% / 10.75% Senior PIK Toggle Notes due 2018 (the “PIK notes”). The PIK notes were issued at 98% of par and will mature on December 15, 2018. Net proceeds from the private offering were used: (i) to repay all indebtedness then outstanding under Memorial Resource’s revolving credit facility, (ii) to establish a cash reserve of $50.0 million for the payment of interest on the PIK notes, (iii) to pay a $210.0 million distribution to the Funds, and (iv) for general company purposes.

 

Interest on the PIK notes will be payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2014. Subject to conditions in the indenture governing the PIK notes, Memorial Resource will be required to pay interest on the PIK notes in cash or through issuing additional notes (such an issuance, “PIK Interest”). The interest rate on the PIK notes is 10.00% per annum for interest paid in cash or 10.75% per annum for PIK Interest. PIK Interest will be paid by issuing additional notes having the same terms as the PIK notes. The PIK notes are subject to optional redemption at prices specified in the indenture plus accrued and unpaid interest, if any. The MRD Issuers may also be required to repurchase the PIK notes upon a change of control.

 

At the time the PIK notes were issued, all of Memorial Resource’s subsidiaries other than MEMP and BlueStone (and their respective subsidiaries) were designated as restricted subsidiaries. The indenture governing the PIK notes contains customary covenants and restrictive provisions that apply to both Memorial Resource and its restricted subsidiaries, many of which will terminate if at any time no default exists under the indenture and the PIK notes receive an investment grade rating from both of two specified ratings agencies. The PIK notes are fully and unconditionally guaranteed on a senior unsecured basis by all of Memorial Resource’s restricted subsidiaries, except MEMP GP, WildHorse and MRD Royalty LLC.

 

The indenture also provides for customary and other events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency, all outstanding PIK notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding PIK notes may declare all the PIK notes to be due and payable immediately.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Classic Revolving Credit Facility

 

On November 1, 2007, Classic entered into a four-year, $150.0 million revolving credit facility, which was collateralized by its oil and gas properties. The revolving credit facility was amended on June 21, 2010 to extend the maturity date to June 21, 2014. On November 20, 2012, indebtedness then outstanding under the revolving credit facility of $80.0 million and all accrued interest was paid off in full with borrowings under the Memorial Resource revolving credit facility and the Classic revolving credit facility was terminated.

 

WildHorse Revolving Credit Facility & Second Lien Facility

 

On May 12, 2010, WildHorse entered into a revolving credit facility. Borrowings under the amended revolving credit facility are secured by liens on substantially all of WildHorse’s properties, but in any event, not less than 80% of the total value of the WildHorse’s oil and natural gas properties.

 

On April 3, 2013, WildHorse entered into an amended and restated credit agreement. The new revolving credit facility provides for aggregate maximum credit amounts at any time of $1.0 billion, consisting of borrowings and letters of credit and has an initial borrowing base of $300.0 million. The new revolving credit facility matures on April 13, 2018. The borrowing base is subject to redetermination on at least a semi-annual basis. Borrowings under the revolving credit facility are secured by liens on substantially all of WildHorse’s properties, but in any event, not less than 80% of the total value of the WildHorse’s oil and natural gas properties.

 

On June 13, 2013, WildHorse entered into a $325.0 million second lien term loan agreement and matures on December 13, 2018. No amount of second lien term loans once repaid may be reborrowed. Borrowings bear interest, at the borrower’s option, at either: (i) the Alternative Base Rate (as defined within each credit facility) plus 5.25% per annum or (ii) the applicable LIBOR plus 6.25% per annum. Borrowings under the second lien term loan agreement are secured by second-priority liens on substantially all of WildHorse’s properties, but in any event, not less than 80% of the total value of the WildHorse’s oil and natural gas properties. The priority of the security interests in the collateral and related creditors’ rights is set forth in an intercreditor agreement. The second lien term loan agreement contains customary affirmative and negative covenants, restrictive provisions and events of default.

 

On June 13, 2013, WildHorse borrowed $325.0 million under its second lien term loan agreement and used such borrowings to reduce outstanding indebtedness under its revolving credit facility and to pay a one-time special $225.0 million distribution to Memorial Resource. This $225.0 million distribution was subsequently distributed to NGP.

 

Black Diamond Revolving Credit Facility

 

On July 27, 2011, the Black Diamond entered into a second amended and restated revolving credit facility, which extended the maturity date of the original agreement to May 9, 2015. Borrowings under the revolving credit facility were collateralized by Black Diamond’s oil and natural gas properties. On November 1, 2013, the Black Diamond revolving credit facility was terminated. There was no indebtedness outstanding or accrued interest payable on such date.

 

BlueStone Revolving Credit Facility

 

On July 8, 2009, BlueStone entered into a $150.0 million revolving credit facility with various lenders. The line of credit was available until July 8, 2012, at which time all principal and accrued interest amounts would have been payable. On June 25, 2010, BlueStone refinanced its existing credit agreement and entered into a new

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

$150.0 million revolving credit facility. Amounts outstanding under this credit facility were payable on June 25, 2014. There were no amounts outstanding under these facilities at December 31, 2012. Borrowings under the revolving credit facility were secured by BlueStone’s assets and its equity interests in its subsidiaries. On August 27, 2013, the BlueStone revolving credit facility was terminated. There was no indebtedness outstanding or accrued interest payable on such date.

 

MEMP Revolving Credit Facility & Senior Notes

 

OLLC is a party to a $2.0 billion revolving credit facility, which is guaranteed by MEMP and certain of its current and future subsidiaries. A sixth amendment to the credit agreement was entered into on September 23, 2013, which among other things: (i) increased the facility from $1.0 billion to $2.0 billion and (ii) increased the borrowing base from $480.0 million to $920.0 million upon the closing of MEMP’s $603.0 million acquisition that closed October 1, 2013. The borrowing base was automatically reduced by $100.0 million in conjunction with the issuances of senior notes in April and May 2013 as discussed below in accordance with the terms of the credit facility. On October 10, 2013, the borrowing base was automatically reduced by $75.0 million in conjunction with the issuance of additional senior notes.

 

Borrowings under the revolving credit facility are secured by liens on substantially all of MEMP’s properties, but in any event, not less than 80% of the total value of MEMP’s oil and natural gas properties, and all of MEMP’s equity interests in OLLC and any future guarantor subsidiaries (other than San Pedro Bay Pipeline Company) and all of MEMP’s other assets including personal property.

 

On April 17, 2013, MEMP and its wholly-owned subsidiary, Memorial Production Finance Corporation (“Finance Corp.” and collectively, the “Issuers”), completed a private placement of $300.0 million aggregate principal amount of 7.625% senior unsecured notes due 2021 (the “Senior Notes”). The Senior Notes were issued at 98.521% of par and are fully and unconditionally guaranteed (subject to customary release provisions) on a joint and several basis by all of MEMP’s subsidiaries (other than Finance Corp., which is co-issuer of the Senior Notes, and certain immaterial subsidiaries). On May 23, 2013, the Issuers issued an additional $100.0 million aggregate principal amount of the Senior Notes at 102% of par. On October 10, 2013, the Issuers issued additional $300.0 million aggregate principal amounts at 97% of par. The Senior Notes will mature on May 1, 2021 with interest accruing at a rate of 7.625% per annum and payable semi-annually in arrears on May 1 and November 1 of each year, commencing November 1, 2013. The Senior Notes are governed by an indenture. The Senior Notes are subject to optional redemption at prices specified in the indenture plus accrued and unpaid interest, if any. The Issuers may also be required to repurchase the Senior Notes upon a change of control. The indenture contains customary covenants and restrictive provisions, many of which will terminate if at any time no default exists under the indenture and the Senior Notes receive an investment grade rating from both of two specified ratings agencies. The indenture also provides for customary and other events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to either of the Issuers, all outstanding Senior Notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding Senior Notes may declare all the Senior Notes to be due and payable immediately. The Issuers have agreed pursuant to registration rights agreements to file an exchange offer registration statement or, under certain circumstances, a shelf registration statement with respect to the Senior Notes no later than April 17, 2014.

 

Tanos Revolving Credit Facility

 

On December 16, 2010, Tanos entered into an amended and restated credit agreement with various lenders, which consisted of a four-year, $250 million revolving credit facility, which was collateralized by Tanos’ oil and

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

gas properties. On April 1, 2013, indebtedness then outstanding under the revolving credit facility of $27.0 million was repaid and on April 25, 2013 all accrued interest was paid off in full and the Tanos revolving credit facility was terminated.

 

WHT Revolving Credit Facility

 

On April 8, 2011, WHT entered into a revolving credit facility. Borrowings under the revolving credit facility were secured by liens on substantially all of WHT’s properties, but in any event, not less than 80% of the total value of the WHT’s oil and natural gas properties. On March 28, 2013, the debt balance then outstanding under the revolving credit facility of $89.3 million and all accrued interest was paid off in full and the WHT revolving credit facility was terminated.

 

Stanolind Revolving Credit Facility

 

On September 9, 2010, Stanolind entered into a multi-year $50.0 million senior secured revolving credit agreement, which is collateralized by substantially all of Stanolind’s oil and gas properties. During 2012, the credit agreement was amended, which among other things: (i) increased the aggregate maximum credit to $250.0 million and (ii) increased the borrowing base to $75.0 million. The borrowing base was redetermined subsequent to the amendment date and set at $97.0 million. The maturity date of the credit facility was July 13, 2017. All of Stanolind’s indebtedness outstanding under the revolving credit facility was attributable to Stanolind SPV. On October 1, 2013, the debt balance then outstanding under the revolving credit facility and all accrued interest was paid off in full by MEMP on behalf of Stanolind.

 

Boaz Revolving Credit Facility

 

On August 1, 2011, Boaz entered into a multi-year $75.0 million senior secured revolving credit agreement, which was collateralized by substantially all of Boaz’s oil and gas properties. The maturity date of the credit facility was August 31, 2015. On October 1, 2013, the debt balance then outstanding under the revolving credit facility and all accrued interest was paid off in full and the Boaz revolving credit facility was terminated.

 

Crown Revolving Credit Facility

 

On January 28, 2010, Crown entered into a multi-year $75.0 million senior secured revolving credit agreement, which was collateralized by substantially all of Crown’s oil and gas properties. The maturity date of the credit facility was October 25, 2016. On October 1, 2013, the debt balance then outstanding under the revolving credit facility and all accrued interest was paid off in full and the Crown revolving credit facility was terminated.

 

Propel Energy Revolving Credit Facility

 

On June 15, 2011, Propel Energy entered into a multi-year $200.0 million senior secured revolving credit agreement, which was collateralized by substantially all of Propel Energy’s oil and gas properties. The maturity date of the credit facility was June 15, 2015. All of Propel Energy’s indebtedness outstanding under the revolving credit facility was attributable to Propel SPV. On October 1, 2013, the debt balance then outstanding under the revolving credit facility and all accrued interest was paid off in full by MEMP on behalf of Propel Energy.

 

REO Revolving Credit Facility

 

On October 26, 2011, REO entered into a three-year, $150.0 million revolving credit facility, which was collateralized by its assets. On December 12, 2012, indebtedness then outstanding under the revolving credit facility of $28.5 million and all accrued interest was paid off in full and the revolving credit facility was terminated.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Unamortized Deferred Financing Costs

 

Unamortized deferred financing costs associated with our combined debt obligations were as follows at December 31:

 

     2013      2012  
     (in thousands)  

MRD Segment:

     

Memorial Resource revolving credit facility

   $ —         $ 653   

PIK notes

     8,261         —     

Classic revolving credit facility

     —           160   

WildHorse revolving credit facility

     2,436         921   

WildHorse second lien term loan

     9,030         —     

Black Diamond revolving credit facility

     —           233   

MEMP Segment:

     

MEMP revolving credit facility

     5,413         3,359   

Senior Notes

     15,053         —     

Tanos revolving credit facility

     —           416   

WHT revolving credit facility

     —           1,419   

Stanolind revolving credit facility

     —           580   

Boaz revolving credit facility

     —           153   

Crown revolving credit facility

     —           96   

Propel Energy revolving credit facility

     —           236   
  

 

 

    

 

 

 
   $ 40,193       $ 8,226   
  

 

 

    

 

 

 

 

Note 9. Noncontrolling Interests

 

Noncontrolling interests is the portion of equity ownership in our majority-owned subsidiaries not attributable to us and primarily consists of the equity interests held by: (i) the limited partners of MEMP, excluding units held by MRD; (ii) a third party investor in the San Pedro Bay Pipeline Company; and (iii) certain current or former key employees of certain of our subsidiaries.

 

Distributions paid to the limited partners of MEMP primarily represent the quarterly cash distributions paid to MEMP’s unitholders, excluding those paid to Memorial Resource.

 

Contributions received from limited partners of MEMP primarily represent net cash proceeds received from common unit offerings. On March 25, 2013, MEMP sold 9,775,000 of its common units in an underwritten equity offering, which generated net cash proceeds of approximately $171.8 million after deducting underwriting discounts and offering expenses. The net proceeds from this equity offering partially funded MEMP’s acquisition of all of the outstanding equity interests in WHT. On October 8, 2013, MEMP sold 16,675,000 of its common units in an underwritten equity offering, which generated net cash proceeds of approximately $318.3 million after deducting underwriting discounts and offering expenses. The net proceeds from this equity offering were used to repay a portion of outstanding borrowings under the MEMP revolving credit facility. In December 2012, MEMP sold 11,975,000 of its common units in an underwritten equity offering, which generated net cash proceeds of $194.3 million. The net proceeds from this equity offering partially funded MEMP’s December 2012 acquisition.

 

On April 1, 2013, Tanos’ management team sold its 1.066% interest in Tanos to Memorial Resource and all incentive units held were forfeited. See Note 11 for further information.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

In connection with this sale, all of Tanos’ employees resigned and became employees of Tanos Exploration II, LLC (“Tanos II”), a Texas limited liability company controlled by the former management team of Tanos. Effective April 1, 2013, Tanos II entered into a transition services agreement with Tanos, whereby Tanos II would manage the operations of Tanos for up to a 6-month period of time. Tanos II is an unrelated entity.

 

On November 1, 2013, Memorial Resource purchased the noncontrolling interests in Black Diamond, Classic GP and Classic and all incentive units were forfeited. See Note 11 for further information.

 

In connection with the purchase of the remaining noncontrolling interests in Black Diamond, all of Black Diamond’s employees resigned and certain of them became members of DBD Partners, LLC (“DBD”), a Delaware limited liability company controlled by the former management team of Black Diamond. Effective November 1, 2013, DBD entered into a transition services agreement with Black Diamond, whereby DBD would manager the operations of Black Diamond for up to a 12 month period of time. DBD is an unrelated entity.

 

Note 10. Long-Term Incentive Plan

 

In December 2011, the Memorial Production Partners GP LLC Long-Term Incentive Plan (“LTIP”) was adopted for employees, officers, consultants and directors of MEMP GP and any of its affiliates, including Memorial Resource, who perform services for MEMP. The LTIP consists of restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights, other unit-based awards and unit awards. The LTIP initially limits the number of common units that may be delivered pursuant to awards under the plan to 2,142,221 common units. Common units that are cancelled, forfeited or withheld to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards. During the years ended December 31, 2013 and 2012, there were multiple awards of restricted common units that were granted under the LTIP to executive officers and independent directors of MEMP GP and other Memorial Resource employees who provide services for MEMP.

 

The restricted common units awarded are subject to restrictions on transferability, customary forfeiture provisions and graded vesting provisions. Award recipients have all the rights of a unitholder in MEMP with respect to the restricted common units, including the right to receive distributions thereon if and when distributions are made by MEMP to its unitholders (except with respect to the fourth quarter 2011 distribution that was paid in February 2012). The term “restricted common unit” represents a time-vested unit. Such awards are non-vested until the required service period expires.

 

Based on the market price per unit on the date of grant, the aggregate fair value of the restricted common units awarded to MEMP GP’s executive officers and other Memorial Resource employees during the years ended December 31, 2013 and 2012 was $9.7 million and $5.0 million, respectively. The restricted common units granted are accounted for as equity-classified awards. The grant-date fair value net of estimated forfeitures is recognized as compensation cost on a straight-line basis over the requisite service period. The fair value of the restricted unit awards granted to the independent directors of MEMP GP are also recognized as compensation cost on a straight-line basis over the requisite service period. The compensation costs associated with these awards are recorded as general and administrative expenses.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

The following table summarizes information regarding restricted common unit awards for the periods presented:

 

     Number
of Units
    Weighted
Average  Grant
Date Fair Value
per Unit(1)
 

Restricted common units outstanding at January 1, 2012

     —        $ —     

Granted(2)

     287,943      $ 18.07   

Forfeited

     (2,334   $ 17.14   
  

 

 

   

Restricted common units outstanding at December 31, 2012

     285,609      $ 18.08   

Granted(3)

     524,718      $ 18.83   

Forfeited

     (11,734   $ 17.24   

Vested

     (91,666   $ 18.31   
  

 

 

   

Restricted common units outstanding at December 31, 2013

     706,927      $ 18.62   
  

 

 

   

 

(1)   Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.
(2)   The aggregate grant date fair value of restricted common unit awards issued in 2012 was $5.2 million based on grant date market prices of MEMP ranging from of $17.14 to $18.58 per unit.
(3)   The aggregate grant date fair value of restricted common unit awards issued in 2013 was $9.9 million based on grant date market prices of MEMP ranging from of $18.33 to $20.35 per unit.

 

The unrecognized compensation cost associated with restricted common unit awards was an aggregate $9.9 million at December 31, 2013, which will be recognized over a weighted-average period of 2.2 years.

 

Since the restricted common units are participating securities of MEMP, any distributions received by the restricted common unitholders are reflected as a component of cash distributions to noncontrolling interest as presented on our statements of consolidated and combined cash flows. During the years ended December 31, 2013 and 2012, the restricted common unitholders received a distribution of approximately $1.0 million and $0.2 million, respectively.

 

Note 11. Incentive Units

 

Each of the governing documents of BlueStone Holdings, Tanos, WildHorse, Classic, Black Diamond and Memorial Resource either currently provide or previously provided for the issuance of incentive units. The incentive units are subject to performance conditions that affects their vesting. Compensation cost is recognized only if the performance condition is probable of being satisfied at each reporting date.

 

BlueStone Holdings, Tanos, WildHorse, Classic, Black Diamond and Memorial Resource each granted incentive units to certain of its members who were key employees at the time of grant. Holders of incentive units are entitled to distributions ranging from 10% to 31.5% when declared, but only after cumulative distribution thresholds (“payouts”) have been achieved. Payouts are generally triggered after the recovery of specified members’ capital contributions plus a rate of return. On December 14, 2011 and in connection with MEMP’s initial public offering, BlueStone Holdings’ Special Tier and Tier I unit holders vested in their respective awards. Tier I unit holders will participate in 16.5% of any future distributions made by BlueStone Holdings.

 

Vesting of the incentive units is generally dependent upon an explicit service period, a fundamental change as defined in the respective governing document, and achievement of payout. All incentive units not vested are forfeited if an employee is no longer employed. All incentive units will be forfeited if a holder resigns whether the incentive units are vested or not. If the payouts have not yet occurred, then all incentive units, whether or not vested, will be forfeited automatically (unless extended).

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Except for the following, no compensation cost has been recorded related to incentive units for the years ended December 31, 2013 and 2012:

 

   

During 2012, a special distribution of $9.5 million was approved and declared to the WildHorse incentive unit holders as an advance on a future potential final distribution. This special distribution was included in general and administrative expense in the accompanying statement of operations for the year ended December 31, 2012.

 

   

On April 1, 2013, Tanos’ management team sold its 1.066% interest in Tanos to Memorial Resource and all incentive units held were forfeited. Compensation expense of approximately $5.8 million was recorded by Tanos and recognized as general and administrative expense during April 2013.

 

   

Compensation expense of approximately $19.1 million was recorded by BlueStone and recognized as general and administrative expense during July 2013. Net proceeds generated from the sale of oil and gas properties (see Note 3) were used to pay the distribution.

 

   

On November 1, 2013, Memorial Resource purchased the noncontrolling interests in Black Diamond, Classic GP and Classic and all incentive units were forfeited. Total consideration remitted by Memorial Resource was approximately $28.5 million, of which $2.0 million is payable in quarterly installments commencing February 1, 2014. Compensation expense of approximately $12.6 million was recorded by Black Diamond, Classic GP and Classic in the aggregate and recognized as general and administrative expense during November 2013.

 

   

In connection with the PIK notes issued in December 2013, a special distribution of $10.0 million to holders of WildHorse’s Tier 1 incentive units was deemed probable of occurring. This amount was recognized as compensation expense in December 2013 with a corresponding amount in accrued liabilities on our balance sheet at December 31, 2013 as payment was not made until January 2, 2014.

 

In connection with the Offering, certain former management members of WildHorse Resources will contribute their 0.1% membership interest in WildHorse as well as their incentive units in exchange for shares of common stock of MRDC and cash consideration. As such, WildHorse is expected to recognize additional compensation cost in 2014 upon the closing of the Offering.

 

Note 12. Related Party Transactions

 

Common Control Transactions between MEMP and Other Memorial Resource Subsidiaries

 

During the year ended December 31, 2012, MEMP acquired additional oil and natural gas properties from Tanos and Classic. MEMP acquired all of the outstanding membership interests in WHT from WildHorse and Tanos on March 28, 2013; acquired all the outstanding membership interests in Prospect Energy from Black Diamond on October 1, 2013; acquired all of the outstanding membership interests in Tanos from Memorial Resource on October 1, 2013; and acquired the MRD Assets from Memorial Resource on October 1, 2013. These intercompany transactions eliminate in preparation of our consolidated and combined financial statements.

 

Beta Acquisition

 

On December 12, 2012, MEMP acquired REO, which owns certain operating interests in producing and non-producing oil and gas properties offshore Southern California, from Rise for a purchase price of $270.6 million, which included $3.0 million of working capital and other customary adjustments. The Beta acquisition was funded with borrowings under MEMP’s revolving credit facility and the net proceeds generated

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

from its December 12, 2012 public offering of common units. The effective date for this transaction was September 1, 2012. The acquired properties, which are referred to as the Beta properties, primarily consist of a 51.75% working interest in three Pacific Outer Continental Shelf blocks covering the Beta Field, and are located in federal waters approximately eleven miles offshore the Port of Long Beach, California. Associated facilities include three conventional wellhead and production processing platforms, a 17.5-mile pipeline and an onshore tankage and metering facility. Two of the platforms are bridge connected and stand in approximately 260 feet of water, while the third platform stands in approximately 700 feet of water. This acquisition was accounted for as a combination of entities under common control at historical cost in a manner similar to the pooling of interest method. MEMP recorded the following net assets (in thousands):

 

Cash and cash equivalents

   $ 6,021   

Accounts receivable

     16,284   

Short-term derivative instruments, net

     2,926   

Prepaid expenses and other current assets

     4,521   

Oil and natural gas properties, net

     108,342   

Restricted investments

     68,009   

Accounts payable

     (9,092

Accrued liabilities

     (9,140

Asset retirement obligations

     (58,746

Credit facilities

     (28,500

Deferred tax liability

     (1,674

Noncontrolling interest

     (5,255
  

 

 

 

Net assets

   $ 93,696   
  

 

 

 

 

An affiliate of REO collected a management fee for providing administrative services to REO. These administrative services included accounting, business development, finance, legal, information technology, insurance, government regulations, communications, regulatory, environmental and human resources services. REO incurred and paid management fees of $1.6 million during the year ended December 31, 2012. These management fees are presented as a component of general and administrative costs and expenses in the accompanying statements of operations.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

October 2013 Cinco Group Acquisition

 

On October 1, 2013, MEMP acquired, through equity and asset transactions, oil and natural gas properties primarily in the Permian Basin, East Texas and the Rockies from Memorial Resource and certain affiliates of NGP for an aggregate preliminary purchase price of approximately $603 million (subject to customary post-closing adjustments), of which approximately $507.1 million was received by certain affiliates of NGP. We refer to this transaction as the “Cinco Group acquisition.” The Cinco Group acquisition was funded with borrowings under MEMP’s revolving credit facility. The Cinco Group acquisition was accounted for as a combination of entities under common control at historical cost in a manner similar to the pooling of interest method.

 

Cash and cash equivalents

   $ 2,820   

Accounts receivable

     5,184   

Prepaid expenses and other current assets

     1,454   

Oil and natural gas properties, net

     342,759   

Other long-term assets

     344   

Accounts payable

     (2,346

Revenue payable

     (2,910

Accrued liabilities

     (1,799

Short-term derivative instruments, net

     (1,828

Long-term derivative instruments, net

     (826

Asset retirement obligations

     (9,606

Credit facilities

     (151,690
  

 

 

 

Net assets

   $ 181,556   
  

 

 

 

 

Net Profits Interest Sold to NGP

 

Upon the completion of the 2010 Petrohawk and Clayton Williams acquisitions, WildHorse sold a net profits interest in these properties to NGPCIF. Upon the acquisition of the Petrohawk properties WildHorse immediately sold a net profits interest of 6.25% for all producing well bores and the right to participate in a 3.125% net profits interest in non-producing wellbores for the subject area for $19.5 million, or $19.1 million after adjustments. Upon the acquisition of the Clayton Williams properties, WildHorse immediately sold a net profits interest of 23.5% for all producing wellbores and the right to participate in a 10.0% net profits interest in non-producing wellbores for the subject area for $19.8 million, or $19.9 million after adjustments. No gain or loss was recorded from these two transactions.

 

The net profits agreements for these transactions provide for a fixed fee of $20,000 per month for overhead and management in lieu of COPAS (Council of Petroleum Accountants Societies) billings. The net profits agreements do not provide for an overhead adjustment factor for this monthly charge, as suggested by COPAS. Quarterly net payments are made to NGPCIF for its net profits interest in the Petrohawk and Clayton Williams acquisitions. The net payments include credits for revenue receipts which are offset with production costs, capital expenditures and the management fee and are adjusted for any acquisition settlements received or paid and any other miscellaneous adjustments. As required by such agreements, WildHorse cannot collect funds owed by NGPCIF to WildHorse, but WildHorse can net amounts due from future quarterly payments.

 

As a result of these transactions, WildHorse paid NGPCIF a total of $2.6 million and $2.3 million during 2013 and 2012, respectively. NGPCIF owed WildHorse $0.2 million at December 31, 2013. WildHorse owed NGPCIF $0.4 million at December 31, 2012.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

On February 28, 2014, WildHorse repurchased these net profits interests from NGPCIF for a purchase price $63.4 million after customary adjustments. This acquisition was accounted for as a combination of entities under common control at historical cost in a manner similar to the pooling of interest method and our consolidated and combined financial statements presented herein have been retrospectively revised.

 

WildHorse Management Services Agreement

 

WildHorse Resources II, LLC (“WHR II”) is an independent energy company engaged in the acquisition, exploitation, and development of natural gas and crude oil properties. WHR II is a related party and was organized in the State of Delaware on June 3, 2013. A management services agreement was executed on August 8, 2013, where WildHorse began providing general, administrative and employee services to WHR II. On August 8, 2013, a management agreement between WildHorse and WHR II was executed where WildHorse was appointed the manager for WHR II with responsibilities including administrative and land services, operator services and financial and accounting services. As operator, WildHorse receives operated and non-operated revenues on behalf of WHR II and bills and receives joint interest billings. In addition, WildHorse pays for lease operating expenses and drilling costs on behalf of WHR II. On August 8, 2013, an asset and cost sharing agreement between WildHorse and WHR II was executed. As part of the agreement, shared WildHorse costs are allocated between WildHorse and WHR II in accordance with a sharing ratio. The sharing ratio is based on the previous quarters capital expenditures and number of operated wells. Company specific costs are billed directly to the appropriate entity. As a result of these agreements, WildHorse received net payments of $4.4 million from WHR II during 2013. WildHorse owed WHR II $2.4 million as of December 31, 2013.

 

Cinco Group Transition Service Agreements

 

MEMP entered into transition service agreements with Propel Energy, Stanolind, and Boaz Energy Partners to ensure that ownership, operation, and maintenance of acquired properties can be smoothly transitioned. The term of these agreements are from October 1, 2013 through February 28, 2014. MEMP expects to pay transition service fees of approximately $0.8 million in the aggregate under these agreements.

 

Other

 

Effective March 1, 2012, BlueStone entered into an agreement with CH4 Energy III, LLC, an NGP controlled entity, to sell an undivided 25% interest in certain properties in the Mossy Grove Prospect in Walker and Madison Counties located in East Texas. Total cash consideration received by BlueStone was approximately $7.0 million, which exceeded the net book value of the properties sold by $6.4 million. Due to common control considerations, the $6.4 million was recognized in the equity statement as a contribution. The transaction closed on July 13, 2012.

 

A company affiliated with one of the Classic’s employees provided certain land-related services to Classic. Classic paid approximately $1.0 million to this company for these services in 2012.

 

Certain of the Cinco Group entities entered into an advisory service, reimbursement, and indemnification agreements with NGP. These agreements generally required that an annual advisory fee be paid to NGP. Fees paid under these agreements for the years ended December 31, 2013 and 2012 were approximately $0.3 million and $0.4 million, respectively. Certain of the Cinco Group entities also paid a financing fee equal to a percentage of the capital contributions raised by NGP. These fees were considered a syndication cost and reduced equity contributions for financing fees paid. Fees for the year ended December 31, 2012 was approximately $0.4 million. There were no fees for the year ended December 31, 2013.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

During 2012, the previous owners received an equity contribution of $6.9 million of oil and gas properties in the Hendricks Field located in the Permian Basin of Texas by an NGP controlled entity. Due to common control considerations, this equity contribution was recorded at historical cost of the properties.

 

During 2012, Boaz reimbursed a member of its management team approximately $0.3 million in general, administrative, and lease operating expenses related to an oral lease agreement between the member of management and a third party for a field office and yard located in Bronte, Texas.

 

See Note 3 for additional information regarding the divestiture of certain interests in oil and gas properties offshore Louisiana that the previous owners sold during 2012 to an NGP controlled entity.

 

Note 13. Business Segment Data

 

Our reportable business segments are organized in a manner that reflects how management manages those business activities.

 

We have two reportable business segments, both of which are engaged in the acquisition, exploitation, development and production of oil and natural gas properties. Our reportable business segments are as follows:

 

   

MRD—reflects the combined operations of Memorial Resource, WildHorse, Classic and Classic GP, Black Diamond, BlueStone, Beta Operating, and MEMP GP.

 

   

MEMP—reflects the combined operations of MEMP, including the previous owners and any dropdown transactions between MEMP and other Memorial Resource subsidiaries. See Note 1 for additional information regarding dropdown transactions between MEMP and other Memorial Resource subsidiaries.

 

We evaluate segment performance based on Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss), plus interest expense; income tax expense; depreciation, depletion and amortization; impairment of goodwill and long-lived assets; accretion of asset retirement obligations; losses on commodity derivative contracts and cash settlements received; losses on sale of assets; unit-based compensation expenses; exploration costs; equity loss from MEMP (MRD Segment only); cash distributions from MEMP (MRD Segment only); acquisition related costs; amortization of investment premium; and other non-routine items, less interest income; income tax benefit; gains on commodity derivative contracts and cash settlements paid; equity income from MEMP (MRD Segment only); gains on sale of assets and other non-routine items.

 

Financial information presented for the MEMP business segment is derived from the underlying consolidated and combined financial statements of MEMP that are publicly available.

 

Segment revenues and expenses include intersegment transactions. Our combined totals reflect the elimination of intersegment transactions.

 

In the MRD Segment’s individual financial statements, investments in the MEMP Segment that are included in the consolidated and combined financial statements are accounted for by the equity method.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

The following table presents selected business segment information for the periods indicated (in thousands):

 

     MRD      MEMP      Other
Adjustments  &
Eliminations
    Consolidated
and

Combined
Totals
 

Total revenues:

          

Year ended December 31, 2013

   $ 231,558       $ 343,616       $ (151   $ 575,023   

Year ended December 31, 2012

     138,814         258,423         (369     396,868   

Adjusted EBITDA:

          

Year ended December 31, 2013(1)

     197,903         222,185         (25,232     394,856   

Year ended December 31, 2012(1)

     131,702         179,334         (23,447     287,589   

Segment assets:(2)

          

As of December 31, 2013

     1,281,134         1,552,307         (4,280     2,829,161   

As of December 31, 2012

     1,102,406         1,489,404         (132,506     2,459,304   

Total expenditures for additions to long-lived assets:

          

Year ended December 31, 2013

     267,870         200,577         —          468,447   

Year ended December 31, 2012

     249,526         387,160         —          636,686   

 

(1)   Adjustments and eliminations for the years ended December 31, 2013 and 2012 include amounts related to the MRD’s Segment equity investments in the MEMP Segment as well the elimination of $26.0 million and $19.3 million of cash distributions that MEMP paid Memorial Resource for the years ended December 31, 2013 and 2012, respectively, related to Memorial Resource’s partnership interests in MEMP.
(2)   Adjustments and eliminations primarily represent the elimination of the MRD’s Segment equity investments in the MEMP Segment. The adjustment at December 31, 2013 also includes $49.9 million related to an impairment recognized by the MEMP Segment during 2013. This impairment did not exist on a consolidated basis.

 

Calculation of Reportable Segments’ Adjusted EBITDA

 

     For the Year
Ended December 31, 2013
 
     MRD     MEMP     Combined
Totals
 
     (in thousands)  

Net income (loss)

   $ 82,243      $ 20,268      $ 102,511   

Interest expense, net

     27,349        41,901        69,250   

Income tax expense (benefit)

     1,311        308        1,619   

DD&A

     87,043        97,269        184,312   

Impairment of proved oil and natural gas properties

     2,527        54,362        56,889   

Accretion of AROs

     728        4,853        5,581   

(Gain) loss on commodity derivative instruments

     (3,013     (26,281     (29,294

Cash settlements received on commodity derivative instruments

     12,240        19,879        32,119   

Gain on sale of properties

     (82,773     (2,848     (85,621

Acquisition related costs

     1,584        6,729        8,313   

Incentive unit compensation expense

     43,279        3,558        46,837   

Non-cash compensation expense

     —          1,057        1,057   

Exploration costs

     1,226        1,130        2,356   

Equity (income) loss from MEMP

     (1,847     —          (1,847

Cash distributions from MEMP

     26,006        —          26,006   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 197,903      $ 222,185      $ 420,088   
  

 

 

   

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

     For the Year
Ended December 31, 2012
 
     MRD     MEMP     Combined
Totals
 
     (in thousands)  

Net income (loss)

   $ (14,641   $ 46,518      $ 31,877   

Interest expense, net

     12,802        20,436        33,238   

Income tax expense (benefit)

     (178     285        107   

DD&A

     62,636        76,036        138,672   

Impairment of proved oil and natural gas properties

     18,339        10,532        28,871   

Accretion of AROs

     632        4,377        5,009   

(Gain) loss on commodity derivative instruments

     (13,488     (21,417     (34,905

Cash settlements received on commodity derivative instruments

     30,188        44,111        74,299   

Gain on sale of properties

     (2     (9,759     (9,761

Acquisition related costs

     403        4,135        4,538   

Incentive unit compensation expense

     9,510        1,423        10,933   

Exploration costs

     7,337        2,463        9,800   

Amortization of investment premium

     —          194        194   

Non-cash equity (income) loss from MEMP

     (696     —          (696

Cash distributions from MEMP

     19,263        —          19,263   
  

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 132,105      $ 179,334      $ 311,439   
  

 

 

   

 

 

   

 

 

 

 

The following table presents a reconciliation of total reportable segments’ Adjusted EBITDA to net income (loss) for each of the periods indicated.

 

     For the Years
Ended December 31,
 
     2013     2012  
     (in thousands)  

Total Reportable Segments’ Adjusted EBITDA

   $ 420,088      $ 311,439   

Adjustment to reconcile Adjusted EBITDA to net income (loss):

    

Interest expense, net

     (69,250     (33,238

Income tax benefit (expense)

     (1,619     (107

DD&A

     (184,717     (138,672

Impairment of proved oil and natural gas properties

     (6,600     (28,871

Accretion of AROs

     (5,581     (5,009

Gains (losses) on commodity derivative instruments

     29,294        34,905   

Cash settlements received on commodity derivative instruments

     (32,119     (74,299

Gain on sale of properties

     85,621        9,761   

Acquisition related costs

     (8,313     (4,538

Incentive unit compensation expense

     (46,837     (10,933

Non-cash compensation expense

     (1,057     —     

Exploration costs

     (2,356     (9,800

Amortization of investment premium

     —          (194

Cash distributions from MEMP

     (26,006     (19,263

Non-cash equity (income) loss from WHT & MRD Assets

     784        (4,184
  

 

 

   

 

 

 

Net income (loss)

   $ 151,332      $ 26,997   
  

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Included below is our consolidated and combined statement of operations disaggregated by reportable segment for the period indicated:

 

     For the Year
Ended December 31, 2013
 
     MRD     MEMP     Other
Adjustments  &
Eliminations
    Consolidated
and
Combined

Totals
 
     (in thousands)  

Revenues:

        

Oil & natural gas sales

   $ 230,751      $ 341,197      $ —        $ 571,948   

Other revenues

     807        2,419        (151     3,075   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     231,558        343,616        (151     575,023   
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

        

Lease operating

     25,006        88,893        (259     113,640   

Pipeline operating

     —          1,835        —          1,835   

Exploration

     1,226        1,130        —          2,356   

Production and ad valorem taxes

     9,362        17,784        —          27,146   

Depreciation, depletion, and amortization

     87,043        97,269        405        184,717   

Impairment of proved oil and natural gas properties

     2,527        54,362        (50,289     6,600   

General and administrative

     81,758        43,495        105        125,358   

Accretion of asset retirement obligations

     728        4,853        —          5,581   

(Gain) loss on commodity derivative instruments

     (3,013     (26,281     —          (29,294

(Gain) loss on sale of properties

     (82,773     (2,848     —          (85,621

Other, net

     2        647        —          649   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     121,866        281,139        (50,038     352,967   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     109,692        62,477        49,887        222,056   

Other income (expense):

        

Interest expense, net

     (27,349     (41,901     —          (69,250

Earnings from equity investments

     1,066        —          (1,066     —     

Other, net

     145        —          —          145   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (26,138     (41,901     (1,066     (69,105
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     83,554        20,576        48,821        152,951   

Income tax benefit (expense)

     (1,311     (308     —          (1,619
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 82,243      $ 20,268      $ 48,821      $ 151,332   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)   During the year ended December 31, 2013 the MEMP Segment recorded impairments of $50.3 million related to certain properties in East Texas. Both the MRD and MEMP Segments own properties in the same field and on a consolidated basis the expected future cash flows exceeded the carrying value, and therefore, did not result in an impairment on a consolidated basis.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

     For the Year
Ended December 31, 2012
 
     MRD     MEMP     Other
Adjustments  &
Eliminations
    Consolidated
and
Combined

Totals
 
     (in thousands)  

Revenues:

        

Oil & natural gas sales

   $ 138,032      $ 255,608      $ (9   $ 393,631   

Other revenues

     782        2,815        (360     3,237   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     138,814        258,423        (369     396,868   
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

        

Lease operating

     24,438        80,116        (800     103,754   

Pipeline operating

     —          2,114        —          2,114   

Exploration

     7,337        2,463        —          9,800   

Production and ad valorem taxes

     7,576        16,048        —          23,624   

Depreciation, depletion, and amortization

     62,636        76,036        —          138,672   

Impairment of proved oil and natural gas properties

     18,339        10,532        —          28,871   

General and administrative

     38,414        30,342        431        69,187   

Accretion of asset retirement obligations

     632        4,377        —          5,009   

(Gain) loss on commodity derivative instruments

     (13,488     (21,417     —          (34,905

(Gain) loss on sale of properties

     (2     (9,759     —          (9,761

Other, net

     364        138        —          502   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     146,246        190,990        (369     336,867   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     (7,432     67,433        —          60,001   

Other income (expense):

        

Interest expense, net

     (12,802     (20,436     —          (33,238

Amortization of investment premium

     —          (194     —          (194

Earnings from equity investments

     4,880        —          (4,880     —     

Other, net

     535        —          —          535   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense)

     (7,387     (20,630     (4,880     (32,897
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     (14,819     46,803        (4,880     27,104   

Income tax benefit (expense)

     178        (285     —          (107
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ (14,641   $ 46,518      $ (4,880   $ 26,997   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Note 14. Commitments and Contingencies

 

Litigation & Environmental

 

As part of our normal business activities, we may be named as defendants in litigation and legal proceedings, including those arising from regulatory and environmental matters. Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to indemnify us against liabilities arising from future legal proceedings. We are not aware of any litigation, pending or threatened, that we believe is reasonably likely to have a significant adverse effect on our financial position, results of operations or cash flows. At December 31, 2012, we had an accrued liability of approximately $0.1 million relating primarily to a matter that has been settled. We did not have an accrued liability at December 31, 2013.

 

Environmental costs for remediation are accrued based on estimates of known remediation requirements. Such accruals are based on management’s best estimate of the ultimate cost to remediate a site and are adjusted

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

as further information and circumstances develop. Those estimates may change substantially depending on information about the nature and extent of contamination, appropriate remediation technologies and regulatory approvals. Expenditures to mitigate or prevent future environmental contamination are capitalized. Ongoing environmental compliance costs are charged to expense as incurred. In accruing for environmental remediation liabilities, costs of future expenditures for environmental remediation are not discounted to their present value, unless the amount and timing of the expenditures are fixed or reliably determinable. At December 31, 2013, none of our estimated environmental remediation liabilities were discounted to present value since the ultimate amount and timing of cash payments for such liabilities were not readily determinable.

 

The following table presents the activity of our environmental reserves for the periods presented:

 

     2013     2012  
     (in thousands)  

Balance at beginning of period

   $ 1,469      $ 1,747   

Charged to costs and expenses

     —          193   

Payments

     (892     (471
  

 

 

   

 

 

 

Balance at end of period

   $ 577      $ 1,469   
  

 

 

   

 

 

 

 

At December 31, 2013 and 2012, $0.6 million and $1.0 million, respectively, of our environmental reserves were classified as current liabilities in accrued liabilities.

 

Sinking Fund Trust Agreement

 

REO assumed an obligation with a third party to make payments into a sinking fund in connection with its 2009 acquisition of the Beta properties, the purpose of which is to provide funds adequate to decommission the portion of the San Pedro Bay pipeline that lies within California state waters and the surface facilities. Under the terms of the agreement, REO, as the operator of the properties, is obligated to make monthly deposits into the sinking fund account in an amount equal to $0.25 per barrel of oil and other liquid hydrocarbon produced from the acquired working interest. Interest earned in the account stays in the account. The obligation to fund ceases when the aggregate value of the account reaches $4.3 million. As of December 31, 2013, the gross account balance included in restricted investments was approximately $2.3 million. REO’s maximum remaining obligation net to its 51.75% interest under the terms of the current agreement was $1.0 million at December 31, 2013.

 

Supplemental Bond for Decommissioning Liabilities Trust Agreement

 

REO assumed an obligation with the Bureau of Ocean Energy Management (“BOEM”) in connection with its 2009 acquisition of the Beta properties. Under the terms of the agreement dated March 1, 2007, the seller of the Beta properties was obligated to deliver a $90.0 million U.S. Treasury Note into a trust account for the decommissioning of the offshore production facilities. At the time of acquisition, all obligations under this existing agreement had been met.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

In January 2010, the BOEM issued a report that revised upward, the estimated cost of decommissioning. In June 2010, REO agreed to make additional quarterly payments to the trust account attributable to its net working interest of approximately $0.6 million beginning on June 30, 2010 until the payments and accrued interest attributable to REO equal $78.7 million by December 31, 2016. The trust account must maintain minimum balances attributable to REO’s net working interest as follows (in thousands):

 

June 30, 2014

   $ 68,310   

June 30, 2015

   $ 72,450   

June 30, 2016

   $ 76,590   

December 31, 2016

   $ 78,660   

 

In the event the account balance is less than the contractual amount, the working interest owners must make additional payments. Interest income earned and deposited in the trust account mitigates the likelihood that additional payments will have to be made by the working interest owners. As of December 31, 2013, the maximum remaining obligation net to REO’s interest was approximately $12.2 million.

 

The trust account is held by REO for the benefit of all working interest owners. The following is a summary of the gross held-to-maturity investments held in the trust account less the outside working interest owners share as of December 31, 2013 (in thousands):

 

Investment

   Amortized
Cost
    Unrealized
Gain  (Loss)
    Fair Market
Value
 

U.S. Bank Money Market Cash Equivalent

   $ 105,184      $ —        $ 105,184   

U.S. Government Treasury Note, maturity of March 31, 2014, and 1.75% coupon

     23,073        93        23,166   

Less: Outside working interest owners share

     (61,884     (45     (61,929
  

 

 

   

 

 

   

 

 

 
   $ 66,373      $ 48      $ 66,421   
  

 

 

   

 

 

   

 

 

 

 

Processing Plant Expansions by Third Party Gatherer

 

In 2012, WildHorse contracted with Regency Field Services LLC (the “Gatherer”) to expand their Dubach processing plant by up to 70 MMcf per day among other facility and infrastructure improvements. The expansion project was complete and fully operational by July 2013. WildHorse will pay a payback demand fee until the payback demand fees received by the Gatherer plus any third party fees equal 110% of the new facility cost. For each month from the commencement date through the month in which the payout date occurs, WildHorse will pay a payback demand fee equal to the monthly demand quantity (136,200 MMBtu per day) times $0.26 per MMBtu. In addition, for each MMBtu gathered in excess of the demand quantity, WildHorse will pay a payback demand fee of $0.26 per MMBtu.

 

In 2013, WildHorse contracted with the Gatherer to build a new high pressure pipeline from the dedicated area to the Gatherer’s Dubberly processing plant in Webster Parish, LA amongst other pipeline and infrastructure improvements. The expansion project was complete and fully operational by mid-December 2013. WildHorse will pay a payback demand fee until the payback demand fees received by the Gatherer plus any third party fees equal to 110% of the pipeline and infrastructure improvement costs. For each month from the commencement date through the month in which the payout date occurs, WildHorse will pay a payback demand fee equal to the monthly demand fee times $0.31 per MMBtu. In addition, for each MMBtu gathered in excess of the demand quantity, WildHorse will pay a payback demand fee of $0.31 per MMBtu. The monthly demand quantity is 56,750 MMBtu per day from the Dubberly start-up date through one full year thereafter and then increasing to 113,500 MMBtu per day until payout.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Pursuant to the agreement, the Gatherer is obligated to process gas up to the maximum daily quantity of 158,000 MMBtu per day from the commencement date of the Dubach facility expansion through the start-up of the Dubberly pipeline. With the start-up of the Dubberly pipeline, the Gatherer is obligated to process gas up to the maximum daily quantity of 214,750 MMBtu per day through one full year thereafter. From and after the first anniversary of the Dubberly start-up date, the Gatherer is obligated to process gas up to the maximum daily quantity of 271,500 MMbtu per day. WildHorse is obligated to deliver all volumes of gas produced from the dedicated area to the Gatherer up to the maximum daily quantity.

 

Total allowable costs for the Dubach Plant expansion and the Dubberly pipeline (new Facility Costs) cannot exceed $129.0 million. WildHorse expects that total payments by WildHorse to the Gatherer for the new Facility Costs will not exceed 60% of the total payment amounts after contributions made by other owners. Payments made will reduce revenue associated with the production and are reflected in our reserve report.

 

WildHorse’s minimum commitments to the Gatherer, before other owner contributions, as of December 31, 2013 were as follows (in thousands):

 

      Dubach      Dubberly      Total
Facility

Costs
 

2014

   $ 12,925       $ 6,421       $ 19,346   

2015

     12,925         12,842         25,767   

2016

     12,961         12,878         25,839   

2017

     12,925         12,842         25,767   

2018

     10,766         10,697         21,463   
  

 

 

    

 

 

    

 

 

 

Total

   $ 62,502       $ 55,680       $ 118,182   
  

 

 

    

 

 

    

 

 

 

 

Subsequent event.    The contract with the Gatherer for the Dubach processing plant was amended effective February 1, 2014 where the payback demand fee for the Dubach processing plant increased from $0.26 to $0.275 cents per MMbtu. Also, the contract with the Gatherer for the new high pressure pipeline was amended effective February 1, 2014 where the payback demand fee decreased from $0.31 to $0.275 cents per MMbtu.

 

WildHorse’s minimum commitments to the Gatherer, before other owner contributions, as of February 1, 2014 were as follows (in thousands):

 

     Dubach      Dubberly      Total
Facility

Costs
 

2014

   $ 12,510       $ 5,212       $ 17,722   

2015

     13,671         11,393         25,064   

2016

     13,709         11,424         25,133   

2017

     13,671         11,393         25,064   

2018

     12,772         10,643         23,415   
  

 

 

    

 

 

    

 

 

 

Total

   $ 66,333       $ 50,065       $ 116,398   
  

 

 

    

 

 

    

 

 

 

 

Operating Leases

 

We have leases for offshore Southern California pipeline right-of-way use and office space. We also incur surface rentals related to our business operations. For the years ended December 31, 2013 and 2012, we recognized $8.3 million and $5.0 million, respectively, of rent expense.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Amounts shown in the following table represent minimum lease payment obligations under non-cancelable operating leases with a remaining term in excess of one year as of December 31, 2013:

 

     Payment or Settlement due by Period  

Lease Obligations

   Total      2014      2015      2016      2017      2018      Thereafter  
     (in thousands)  

Operating leases

     20,325         2,389         2,546         2,583         2,718         2,783         7,306   

 

Drilling & Compression Services

 

We have entered into drilling and compression services agreements with various terms. Amounts shown in the following table represent our minimum commitments as of December 31, 2013:

 

     Payment or Settlement due by Period  

Service Agreements

   Total      2014      2015      2016      2017      2018      Thereafter  
     (in thousands)  

Drilling services

     20,323         20,323         —           —           —           —           —     

Compression services

     7,090         7,079         11         —           —           —           —     

 

WildHorse Letter of Credit and Certificate of Deposit

 

Standby letters of credit were issued to the Louisiana Office of Conservation and the Railroad Commission of Texas for the account of WildHorse for $1.2 million during 2011. The letters of credit are to insure compliance by WildHorse with regulatory requirements. These letters of credit are collateralized by two Certificates of Deposits; the fair value of the Certificates of Deposits was $0.5 million and $1.2 million at December 31, 2013 and 2012, respectively. The amount of the letter of credit and the Certificates of Deposit is adjusted depending on the requirements of the Office of Conservation. The Certificates of Deposit is classified as a restricted noncurrent asset and is not considered operating cash for the purposes of the statements of cash flows.

 

Note 15. Defined Contribution Plans

 

Memorial Resource sponsors a defined contribution plan for the benefit of substantially all employees who have attained 18 years of age. The plan allows eligible employees to make tax-deferred contributions up to 100% of their annual compensation, not to exceed annual limits established by the Internal Revenue Service. Memorial Resource makes matching contributions of 100% of employee contributions that does not exceed 6% of compensation. Employees are immediately vested in these matching contributions. The plan received employer contributions of approximately $0.9 million and $0.4 million in for the years ended December 31, 2013 and 2012, respectively.

 

Effective January 1, 2012, REO assumed sponsorship of a separate defined contribution plan. This plan specifically benefits substantially all those employed by the Memorial Resource subsidiary (Beta Operating) that operates and supports the Beta properties that have attained 21 years of age. Eligible employees are permitted to make tax-deferred contributions up to 100% of their annual compensation, not to exceed annual limits established by the Internal Revenue Service. Employer matching contributions of 100% of employee contributions that does not exceed 6% of compensation are made to the plan as well. The employer matching contributions associated with this plan were subject to a three-year graded vesting schedule through February 28, 2012. Effective March 1, 2012, the plan was amended to offer immediate vesting of employer matching contributions. The plan received employer contributions of approximately $0.6 million and $0.5 million in 2013

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

and 2012, respectively. Approximately $0.3 million associated with this plan are reflected as costs and expenses in the accompanying statements of operations for both the years ended December 31, 2013 and 2012, respectively.

 

WildHorse, Tanos, BlueStone, Classic and Black Diamond also sponsor defined contribution plans for the benefit their eligible employees. Matching employer contributions of approximately $0.5 million and $0.6 million were made to these other plans in 2013 and 2012, respectively.

 

Crown and Stanolind also made matching contributions to defined contribution plans for the benefit of their eligible employees. Matching employer contributions of approximately $0.1 million were made to these plans in both 2013 and 2012. Such contributions to these plans are included in general and administrative expenses in the accompanying combined statements of operations.

 

Note 16. Subsequent Events

 

In preparing the consolidated and combined financial statements, management has evaluated all subsequent events and transactions for potential recognition or disclosure through April 4, 2014, the date the consolidated and combined financial statements were available for issuance.

 

Common Control Acquisition

 

On April 1, 2014, MEMP acquired certain oil and natural gas producing properties in East Texas from WildHorse for a purchase price of $34.0 million, subject to customary purchase price adjustments. This transaction was financed with borrowings under MEMP’s revolving credit facility. The acquired properties primarily represent additional working interests in wells currently owned by MEMP and located primarily in Polk and Tyler Counties in the Double A Field of East Texas, as well as the Sunflower, Segno and Sugar Creek Fields.

 

3rd Party Acquisition

 

On March 25, 2014, MEMP acquired certain oil and gas producing properties in the Eagle Ford trend from Alta Mesa Holdings, LP for a purchase price of $173 million, subject to customary purchase price adjustments. The acquired properties are located in Karnes County in the core of the Eagle Ford oil window. The properties are 100% non-operated. In addition, MEMP acquired a 30% interest in the seller’s Eagle Ford leasehold. MEMP acquired all of the seller’s working and net revenue interest in the producing wells subject to a net profits interest retained by the seller that reduces annually and terminates after three years. At the end of three years, MEMP will own all of the seller’s interests in the currently producing wells.

 

NGPCIF NPI Acquisition

 

See Notes 1 and 12 for further information regarding WildHorse’s acquisition of NGPCIF NPI.

 

Recently Formed Subsidiaries

 

MRD Royalty LLC (“MRD Royalty”) and MRD Midstream LLC (“MRD Midstream”) were formed by Memorial Resource in 2014. MRD Royalty owns certain immaterial leasehold interests and overriding royalty interests in Texas and Montana. MRD Midstream owns an indirect interest in certain immaterial midstream assets in North Louisiana. Following the completion of the Offering, Memorial Resource will retain its ownership interest in MRD Royalty and MRD Midstream.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Gas Processing Agreement

 

On March 17, 2014, WildHorse entered into a gas processing agreement with PennTex North Louisiana, LLC (“PennTex”). PennTex is a joint venture among certain affiliates of NGP in which MRD Midstream owns a noncontrolling interest. Once PennTex’s processing plant becomes operational, it will process natural gas produced from wells located on certain leases owned by WildHorse in the state of Louisiana. The agreement has a 15-year primary term, subject to one year extensions at either party’s election. WildHorse will pay PennTex a monthly fee, subject to an annual inflationary escalation, based on volumes of natural gas delivered and processed. Once the plant is declared operational, WildHorse will be obligated to pay a minimum processing fee equal to approximately $18.3 million on an annual basis, subject to certain adjustments and conditions. The gas processing agreement requires that the processing plant be operational no later than November 1, 2015.

 

Note 17. Supplemental Oil and Gas Information (Unaudited)

 

Capitalized Costs Relating to Oil and Natural Gas Producing Activities

 

The total amount of capitalized costs relating to oil and natural gas producing activities and the total amount of related accumulated depreciation, depletion and amortization is as follows at the dates indicated.

 

     Years Ended December 31,  
     2013     2012  
     (in thousands)  

MRD Segment:

    

Evaluated oil and natural gas properties

   $ 1,226,417      $ 1,052,219   

Unevaluated oil and natural gas properties

     46,413        26,589   

Accumulated depletion, depreciation, and amortization

     (256,629     (202,581
  

 

 

   

 

 

 

Subtotal

   $ 1,016,201      $ 876,227   
  

 

 

   

 

 

 

MEMP Segment:

    

Evaluated oil and natural gas properties(1)

   $ 1,758,953      $ 1,545,402   

Unevaluated oil and natural gas properties

     —          5,004   

Accumulated depletion, depreciation, and amortization(1)

     (416,617     (265,710
  

 

 

   

 

 

 

Subtotal

   $ 1,342,336      $ 1,284,696   
  

 

 

   

 

 

 

Eliminations:

    

Accumulated depletion, depreciation, and amortization(1)

   $ 49,884      $ —     

Consolidated:

    

Evaluated oil and natural gas properties(1)

   $ 2,985,370      $ 2,597,621   

Unevaluated oil and natural gas properties

     46,413        31,593   

Accumulated depletion, depreciation, and amortization(1)

     (623,362     (468,291
  

 

 

   

 

 

 

Total

   $ 2,408,421      $ 2,160,923   
  

 

 

   

 

 

 

 

(1)    Amounts do not include costs for SPBPC and related support equipment

    

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Activities

 

Costs incurred in property acquisition, exploration and development activities were as follows for the periods indicated:

 

     Years Ended December 31,  
               2013                           2012             
     (in thousands)  

MRD Segment:

     

Property acquisition costs, proved

   $ 56,108       $ 87,857   

Property acquisition costs, unproved

     19,975         5,293   

Exploration and extension well costs

     13,313         212   

Development

     210,440         135,951   
  

 

 

    

 

 

 

Subtotal

   $ 299,836       $ 229,313   
  

 

 

    

 

 

 

MEMP Segment:

     

Property acquisition costs, proved

   $ 37,786       $ 278,246   

Property acquisition costs, unproved

     —           —     

Exploration and extension well costs

     —           42,430   

Development(1)

     145,830         62,472   
  

 

 

    

 

 

 

Subtotal

   $ 183,616       $ 383,148   
  

 

 

    

 

 

 

Consolidated:

     

Property acquisition costs, proved

   $ 93,894       $ 366,103   

Property acquisition costs, unproved

     19,975         5,293   

Exploration and extension well costs

     13,313         42,642   

Development(1)

     356,270         198,423   
  

 

 

    

 

 

 

Total

   $ 483,452       $ 612,461   
  

 

 

    

 

 

 

 

(1)    Amounts do not include costs for SPBPC and related support equipment

     

 

Standardized Measure of Discounted Future Net Cash Flows from Proved Reserves

 

As required by the FASB and SEC, the standardized measure of discounted future net cash flows presented below is computed by applying first-day-of-the-month average prices, year-end costs and legislated tax rates and a discount factor of 10 percent to proved reserves. We do not believe the standardized measure provides a reliable estimate of the expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. The standardized measure is prepared on the basis of certain prescribed assumptions including first-day-of-the-month average prices, which represent discrete points in time, and therefore, may cause significant variability in cash flows from year to year as prices change.

 

Oil and Natural Gas Reserves

 

Users of this information should be aware that the process of estimating quantities of “proved” and “proved developed” oil and natural gas reserves is very complex, requiring significant subjective decisions in the evaluation of all available geological, engineering and economic data for each reservoir. The data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure reserve estimates reported represent the

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

most accurate assessments possible, the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other estimates included in the financial statement disclosures.

 

Proved reserves are those quantities of oil and natural gas that by analysis of geoscience and engineering data can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

 

We engaged NSAI to prepare reserves estimates for all of our estimated proved reserves (by volume) at December 31, 2013. All proved reserves are located in the United States and all prices are held constant in accordance with SEC rules.

 

The weighted-average benchmark product prices used for valuing the reserves are based upon the average of the first-day-of-the-month price for each month within the period January through December of each year presented:

 

     2013      2012  

Oil ($/Bbl):

     

Spot(1)

   $ 93.42       $ 91.33   

NGL ($/Bbl):

     

Spot(1)

   $ 93.42       $ 91.75   

Natural Gas ($/MMbtu):

     

Spot(2)

   $ 3.67       $ 2.75   

 

(1)   The unweighted average West Texas Intermediate spot price was adjusted by lease for quality, transportation fees, and a regional price differential.
(2)   The unweighted average Henry Hub spot price was adjusted by lease for energy content, compression charges, transportation fees, and regional price differentials.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

MRD Segment

 

The following tables set forth estimates of the net reserves as of December 31, 2013 and 2012, respectively:

 

     Year Ended December 31, 2013  
     Oil
(MBbls)
    Gas
(MMcf)
    NGLs
(MBbls)
    Equivalent
(MMcfe)
 

Proved developed and undeveloped reserves:

        

Beginning of year

     11,953        739,378        41,466        1,059,895   

Extensions and discoveries

     1,794        149,974        8,319        210,652   

Purchase of minerals in place

     211        31,815        1,017        39,183   

Production

     (665     (34,092     (1,457     (46,819

Sales of minerals in place

     (599     (14,137     (1,573     (27,169

Revision of previous estimates

     (1,383     (70,684     (5,196     (110,165
  

 

 

   

 

 

   

 

 

   

 

 

 

End of year(1)

     11,311        802,254        42,576        1,125,577   
  

 

 

   

 

 

   

 

 

   

 

 

 

Proved developed reserves:

        

Beginning of year

     3,082        245,449        12,321        337,869   

End of year

     3,402        263,797        13,904        367,641   

Proved undeveloped reserves:

        

Beginning of year

     8,871        493,929        29,145        722,026   

End of year

     7,909        538,457        28,672        757,936   

 

(1)   Includes reserves of 41,077 MMcfe attributable to noncontrolling interests and the MRD Segment previous owners.

 

     Year Ended December 31, 2012  
     Oil
(MBbls)
    Gas
(MMcf)
    NGLs
(MBbls)
    Equivalent
(MMcfe)
 

Proved developed and undeveloped reserves:

        

Beginning of year

     10,834        929,335        53,031        1,312,533   

Extensions and discoveries

     689        42,019        2,778        62,819   

Purchase of minerals in place

     1,100        28,115        1,879        45,987   

Production

     (369     (24,131     (898     (31,731

Sales of minerals in place

     (4     (728     —          (752

Revision of previous estimates

     (297     (235,232     (15,324     (328,961
  

 

 

   

 

 

   

 

 

   

 

 

 

End of year(1)

     11,953        739,378        41,466        1,059,895   
  

 

 

   

 

 

   

 

 

   

 

 

 

Proved developed reserves:

        

Beginning of year

     2,107        191,557        7,644        250,073   

End of year

     3,082        245,449        12,321        337,869   

Proved undeveloped reserves:

        

Beginning of year

     8,727        737,778        45,387        1,062,460   

End of year

     8,871        493,929        29,145        722,026   

 

(1)   Includes reserves of 67,135 MMcfe attributable to noncontrolling interests and the MRD Segment previous owners.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Noteworthy amounts included in the categories of proved reserve changes for the years ended December 31, 2013 and 2012 in the above tables include:

 

   

148.6 Bcfe of the increase in reserves for the year end December 31, 2013, through the category extensions and discoveries, was due to the WildHorse’s horizontal redevelopment drilling program in the Terryville Complex in Lincoln Parish, Louisiana.

 

   

WildHorse acquired 43.5 Bcfe in multiple acquisitions during the year ended December 31, 2012, the largest being the Undisclosed Seller Acquisition. Downward revisions of previous estimates for estimated natural gas proved reserves was primarily the result of a decrease in natural gas prices.

 

See Note 3 for additional information on acquisitions and divestitures.

 

A variety of methodologies are used to determine our proved reserve estimates. The principal methodologies employed are reservoir simulation, decline curve analysis, volumetric, material balance, advance production type curve matching, petro-physics/log analysis and analogy. Some combination of these methods is used to determine reserve estimates in substantially all of our fields.

 

The standardized measure of discounted future net cash flows is as follows:

 

     Years Ended December 31,  
     2013     2012  
     (in thousands)  

Future cash inflows

   $ 5,722,848      $ 4,921,192   

Future production costs

     (1,587,374     (1,255,289

Future development costs

     (1,352,945     (1,060,777
  

 

 

   

 

 

 

Future net cash flows for estimated timing of cash flows(1)

     2,782,529        2,605,126   

10% annual discount for estimated timing of cash flows

     (1,313,577     (1,284,531
  

 

 

   

 

 

 

Standardized measure of discounted future net cash flows(2)

   $ 1,468,952      $ 1,320,595   
  

 

 

   

 

 

 

 

(1)   We are subject to the Texas Franchise tax which has a maximum effective rate of 0.7% of gross income apportioned to Texas to immateriality we have excluded the impact of this tax. However, had we not been a tax exempt entity future income tax for the years ended December 31, 2013 and 2012 would have been $760,433 and $647,464, respectively.
(2)   Includes $63,422 and $78,518 attributable to both noncontrolling interests and the MRD Segment previous owners for the years ended December 31, 2013 and 2012, respectively.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves

 

The following is a summary of the changes in the standardized measure of discounted future net cash flows for the proved oil and natural gas reserves during each of the years in the two year period ended December 31, 2013:

 

     Years Ended December 31,  
     2013     2012  
     (in thousands)  

Beginning of year

   $ 1,320,595      $ 1,386,071   

Sale of oil and natural gas produced, net of production costs

     (196,444     (107,316

Purchase of minerals in place

     51,177        98,384   

Sale of minerals in place

     (54,091     —     

Extensions and discoveries

     301,004        127,994   

Changes in prices and costs

     (11,336     (402,202

Previously estimated development costs incurred

     87,297        64,390   

Net changes in future development costs

     57,353        (67,331

Revisions of previous quantities

     (186,804     (176,788

Accretion of discount

     128,544        138,607   

Change in production rates and other

     (28,343     258,786   
  

 

 

   

 

 

 

End of year

   $ 1,468,952      $ 1,320,595   
  

 

 

   

 

 

 

 

MEMP Segment

 

The following tables set forth estimates of the net reserves as of December 31, 2013 and 2012, respectively:

 

     Year Ended December 31, 2013  
     Oil
(MBbls)
    Gas
(MMcf)
    NGLs
(MBbls)
    Equivalent
(MMcfe)
 

Proved developed and undeveloped reserves:

        

Beginning of year

     39,089        604,440        29,352        1,015,095   

Extensions and discoveries

     5,655        40,770        1,747        85,180   

Purchase of minerals in place

     119        16,294        258        18,554   

Production

     (1,764     (35,924     (1,632     (56,303

Sales of minerals in place

     —          —          —          —     

Revision of previous estimates

     (3,950     (18,441     (879     (47,421
  

 

 

   

 

 

   

 

 

   

 

 

 

End of year(1)

     39,149        607,139        28,846        1,015,105   
  

 

 

   

 

 

   

 

 

   

 

 

 

Proved developed reserves:

        

Beginning of year

     24,515        376,932        15,947        619,704   

End of year

     22,265        387,548        15,959        616,893   

Proved undeveloped reserves:

        

Beginning of year

     14,574        227,508        13,405        395,391   

End of year

     16,884        219,591        12,887        398,212   

 

(1)   MRD Segment’s share of these reserves is 89,837 MMcfe.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

     Year Ended December 31, 2012  
     Oil
(MBbls)
    Gas
(MMcf)
    NGLs
(MBbls)
    Equivalent
(MMcfe)
 

Proved developed and undeveloped reserves:

        

Beginning of year

     27,150        579,751        15,045        832,913   

Extensions and discoveries

     7,501        19,869        1,053        71,192   

Purchase of minerals in place

     11,336        113,617        7,095        224,202   

Production

     (1,519     (29,744     (745     (43,329

Sales of minerals in place

     (4,214     (4,214     —          (29,499

Revision of previous estimates

     (1,165     (74,839     6,904        (40,384
  

 

 

   

 

 

   

 

 

   

 

 

 

End of year(1)(2)

     39,089        604,440        29,352        1,015,095   
  

 

 

   

 

 

   

 

 

   

 

 

 

Proved developed reserves:

        

Beginning of year

     19,332        413,431        10,015        589,504   

End of year

     24,515        376,932        15,947        619,704   

Proved undeveloped reserves:

        

Beginning of year

     7,818        166,320        5,030        243,409   

End of year

     14,574        227,508        13,405        395,391   

 

(1)   Includes reserves of 406,324 MMcfe attributable to common control acquisitions.
(2)   MRD Segment’s share of these reserves is 476,550 MMcfe.

 

Noteworthy amounts included in the categories of proved reserve changes for the years 2013 and 2012 in the above tables include:

 

   

MEMP acquired 224.2 Bcfe in multiple acquisitions during the year ended December 31, 2012, the largest being the Goodrich Acquisition of 148.9 Bcfe. Stanolind acquired 43.6 Bcfe through multiple acquisitions, the largest being the Menemsha Acquisition of 23.9 Bcfe. During the year ended December 31, 2012, Propel divested 19.0 Bcfe of offshore Louisiana oil and gas properties to an NGP controlled entity.

 

See Note 3 for additional information on acquisitions and divestitures.

 

A variety of methodologies are used to determine our proved reserve estimates. The principal methodologies employed are reservoir simulation, decline curve analysis, volumetric, material balance, advance production type curve matching, petro-physics/log analysis and analogy. Some combination of these methods is used to determine reserve estimates in substantially all of our fields.

 

The standardized measure of discounted future net cash flows is as follows:

 

     Years Ended December 31,  
     2013     2012  
     (in thousands)  

Future cash inflows

   $ 6,892,150      $ 6,511,776   

Future production costs

     (2,719,024     (2,258,554

Future development costs

     (685,858     (620,944
  

 

 

   

 

 

 

Future net cash flows for estimated timing of cash flows(1)

     3,487,268        3,632,278   

10% annual discount for estimated timing of cash flows

     (1,879,156     (2,042,362
  

 

 

   

 

 

 

Standardized measure of discounted future net cash flows(2)(3)

   $ 1,608,112      $ 1,589,916   
  

 

 

   

 

 

 

 

(1)   MEMP is subject to the Texas Franchise tax which has a maximum effective rate of 0.7% of gross income apportioned to Texas. Due to immateriality we have excluded the impact of this tax. MEMP is organized as a pass-through entity for income tax purposes. Had we not been a tax exempt entity our share of future income tax related to our ownership of MEMP for the years ended December 31, 2013 and 2012 would have been $61,300 and $306,297, respectively.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

(2)   Includes $503,021 attributable to the MEMP previous owners for the year ended December 31, 2012.
(3)   MRD Segment’s share of the standardized measure of discounted future net cash flows was $142,318 and $554,981 for the years ended December 31, 2013 and 2012, respectively.

 

Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves

 

The following is a summary of the changes in the standardized measure of discounted future net cash flows for the proved oil and natural gas reserves during each of the years in the two year period ended December 31, 2013:

 

     Years Ended December 31,  
     2013     2012  
     (in thousands)  

Beginning of year

   $ 1,589,916      $ 1,499,414   

Sale of oil and natural gas produced, net of production costs

     (234,520     (160,023

Purchase of minerals in place

     23,160        375,953   

Sale of minerals in place

     —          (154,963

Extensions and discoveries

     136,423        265,108   

Changes in income taxes, net.

     —          1,947   

Changes in prices and costs

     (74,395     (331,760

Previously estimated development costs incurred

     174,490        66,360   

Net changes in future development costs

     (74,867     (1,140

Revisions of previous quantities

     (141,122     (90,587

Accretion of discount

     158,991        150,136   

Change in production rates and other

     50,036        (30,529
  

 

 

   

 

 

 

End of year

   $ 1,608,112      $ 1,589,916   
  

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

SCHEDULE 1—CONDENSED FINANCIAL INFORMATION

 

Condensed balance sheets

 

     December 31,  
     2013     2012  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 19,293      $ 8,019   

Restricted cash

     35,000        —     

Accounts receivable:

    

Affiliates

     90,917        84,347   

Other

     —          3   

Prepaid expenses and other current assets

     2,802        707   
  

 

 

   

 

 

 

Total current assets

     148,012        93,076   

Property and equipment, at cost:

    

Furniture and fixtures

     1,679        1,217   

Accumulated depreciation, depletion and impairment

     (547     (199
  

 

 

   

 

 

 

Oil and natural gas properties, net

     1,132        1,018   

Long-term derivative instruments

    

Investments in subsidiaries

     411,657        797,868   

Investments in previous owners

     40,331        233,433   

Restricted cash

     15,000        —     

Other long-term assets

     6,596        259   
  

 

 

   

 

 

 

Total assets

   $ 622,728      $ 1,125,654   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Accounts payable

   $ 130      $ 161   

Accrued liabilities

     1,896        225   
  

 

 

   

 

 

 

Total current liabilities

     2,026        386   

Long-term debt

     343,050        80,000   

Other long-term liabilities

     135        221   
  

 

 

   

 

 

 

Total liabilities

     345,211        80,607   

Commitments and contingencies

    

Equity:

    

Members

     237,186        811,614   

Previous Owners

     40,331        233,433   
  

 

 

   

 

 

 

Total liabilities and members’ equity

   $ 622,728      $ 1,125,654   
  

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

SCHEDULE 1—CONDENSED FINANCIAL INFORMATION

 

Condensed statements of income

 

     For Year Ended
December 31,
 
     2013     2012  

Costs and expenses:

    

Depreciation, depletion, and amortization

     348        195   

General and administrative

     20,111        10,176   

(Gain) loss on commodity derivative instruments

     546        —     
  

 

 

   

 

 

 

Total costs and expenses

     21,005        10,371   
  

 

 

   

 

 

 

Operating income

     (21,005     (10,371

Other income (expense):

    

Equity income (loss) from subsidiaries

     114,974        2,970   

Equity income (loss) from previous owners

     10,790        37,318   

Interest expense, net

     (3,257     (219
  

 

 

   

 

 

 

Total other income (expense)

     122,507        40,069   
  

 

 

   

 

 

 

Net income (loss)

   $ 101,502      $ 29,698   
  

 

 

   

 

 

 

 

Condensed statements of cash flows

 

     For Year Ended
December 31,
 
     2013     2012  

Net cash provided by (used in) operating activities

   $ (3,556   $ (75,088
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Investments in subsidiaries

     (40,666     (718

Additions to furniture and fixtures

     (461     (903

Proceeds from changes in ownership interests in MEMP

     135,012        —     

Changes in restricted cash

     (50,000     —     
  

 

 

   

 

 

 

Net cash (used in) provided by investing activities

     43,885        (1,621
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Advances on revolving credit facility

     —          80,000   

Payments on revolving credit facility

     (80,000     —     

Proceeds from issuance of senior notes

     343,000        —     

Distributions received from subsidiaries (see Note 3)

     448,349        —     

Loan origination fees

     (8,042     (802

Distributions to the Funds

     (732,362     —     
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (29,055     79,198   
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     11,274        2,489   

Cash and cash equivalents, beginning of year

     8,019        5,530   
  

 

 

   

 

 

 

Cash and cash equivalents, end of year

   $ 19,293      $ 8,019   
  

 

 

   

 

 

 

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONDENSED FINANCIAL INFORMATION

 

Note 1. Basis of Presentation

 

Memorial Resource Development LLC (“Memorial Resource”) is a Delaware limited liability company (the “Company”) formed on April 27, 2011 to own, acquire, exploit and develop oil and natural gas properties. Unless the context requires otherwise, references to “we,” “us,” “our,” or “the Company” are intended to mean the business and operations of Memorial Resource Development LLC and its consolidated subsidiaries. There are significant restrictions over the ability of Memorial Resource to obtain funds from certain of its consolidating subsidiaries through dividends, loans or advances. Accordingly, these condensed financial statements have been presented on a “parent-only” basis. Under a parent-only presentation, the investments of Memorial Resource in its consolidated subsidiaries are presented under the equity method of accounting. These parent-only financial statements should be read in conjunction with the consolidated financial statements of MRD LLC included elsewhere herein. These condensed financial statements have been prepared in anticipation of a proposed initial public offering of the common stock of Memorial Resource Development Corp. (“MRDC”).

 

Note 2. Long-Term Debt

 

Our debt obligations under revolving credit facilities consisted of the following at December 31:

 

     2013     2012  
     (in thousands)  

Memorial Resource $1.0 billion revolving credit facility, variable-rate, terminated December 2013

   $ —        $ 80,000   

10.00%/10.75% senior PIK toggle notes due December 2018

     350,000        —     

10.00%/10.75% senior PIK toggle notes unamortized discounts

     (6,950     —     
  

 

 

   

 

 

 

Total long-term debt

   $ 343,050      $ 80,000   
  

 

 

   

 

 

 

 

On July 13, 2012, Memorial Resource entered into a two-year $50.0 million senior secured revolving credit with an initial borrowing base of $35.0 million. Memorial Resource pledged 7,061,294 of Memorial Production Partners LP (“MEMP”) common units and 5,360,912 of MEMP subordinated units as security under the credit facility as well as its oil and gas properties and certain other assets of Memorial Resource. This credit facility was also guaranteed by certain of Memorial Resources wholly-owned subsidiaries.

 

On November 20, 2012, Memorial Resource entered into a first amendment to its credit agreement, which among other things: (i) increased the aggregate maximum credit to $1.0 billion (ii) increased the borrowing base to $120.0 million and (iii) extended the maturity date to November 20, 2016. On April 25, 2013, Memorial Resource entered into a second amendment to its credit agreement, which among other things: (i) increased the borrowing base to $170.0 million and (ii) designated Tanos together with its consolidating subsidiaries as additional guarantors. On October 1, 2013, Tanos Energy, LLC (“Tanos”) and its consolidating subsidiaries were removed as guarantors and the borrowing base was reduced to $120.0 million .. On November 1, 2013, Memorial Resource entered into a third amendment to its credit agreement, which among other things: (i) designated Black Diamond Minerals, LLC (“Black Diamond”) together with its consolidating subsidiaries as additional guarantors, (ii) reduced the borrowing base to $100.0 million, and (iii) permitted second lien indebtedness. On November 22, 2013, the borrowing base was automatically reduced to $60.0 million upon Memorial Resource’s sale of 7,061,294 MEMP common units in a secondary offering.

 

On December 18, 2013, indebtedness then outstanding under the revolving credit facility of $59.7 million and all accrued interest was paid off in full and the revolving credit facility was terminated in connection with the issuance of senior notes discussed below.

 

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MEMORIAL RESOURCE DEVELOPMENT LLC (PREDECESSOR)

NOTES TO CONDENSED FINANCIAL INFORMATION

 

On December 18, 2013, Memorial Resource and its wholly-owned subsidiary, Memorial Resource Finance Corp. (“MRD Finance Corp.” and collectively, the “MRD Issuers”), completed a private placement of $350.0 million in aggregate principal amount of 10.00% / 10.75% Senior PIK Toggle Notes due 2018 (the “PIK notes”). The PIK notes were issued at 98% of par and will mature on December 15, 2018. Net proceeds from the private offering were used: (i) to repay all indebtedness then outstanding under Memorial Resource’s revolving credit facility, (ii) to establish a cash reserve of $50.0 million for the payment of interest on the PIK notes, (iii) to pay a $220.0 million distribution to the Funds, and (iv) for general company purposes.

 

Interest on the PIK notes will be payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2014. Subject to conditions in the indenture governing the PIK notes, Memorial Resource will be required to pay interest on the PIK notes in cash or through issuing additional notes (such an issuance, “PIK Interest”). The interest rate on the PIK notes is 10.00% per annum for interest paid in cash or 10.75% per annum for PIK Interest. PIK Interest will be paid by issuing additional notes having the same terms as the PIK notes. The PIK notes are subject to optional redemption at prices specified in the indenture plus accrued and unpaid interest, if any. The MRD Issuers may also be required to repurchase the PIK notes upon a change of control.

 

At the time the PIK notes were issued, all of Memorial Resource’s subsidiaries other than MEMP and BlueStone Holdings (and their respective subsidiaries) were designated as restricted subsidiaries. The indenture governing the PIK notes contains customary covenants and restrictive provisions that apply to both Memorial Resource and its restricted subsidiaries, many of which will terminate if at any time no default exists under the indenture and the PIK notes receive an investment grade rating from both of two specified ratings agencies. The PIK notes are fully and unconditionally guaranteed on a senior unsecured basis by all of Memorial Resource’s restricted subsidiaries, except MEMP GP and WildHorse.

 

The indenture also provides for customary and other events of default. In the case of an event of default arising from certain events of bankruptcy or insolvency, all outstanding PIK notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding PIK notes may declare all the PIK notes to be due and payable immediately.

 

Note 3. Distribution from subsidiaries

 

The table below shows the distributions received from our subsidiaries classified as inflows from operating activities for the periods indicated since they are represent return on investment:

 

     For Year Ended December 31,  
             2013                      2012          

Distributions received from subsidiaries

   $ 25,966       $ 19,228   

 

Distributions received from our subsidiaries that represent return of investment are classified as inflows from investing activities.

 

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Appendix A

 

GLOSSARY OF OIL AND NATURAL GAS TERMS

 

The terms defined in this section are used throughout this prospectus:

 

Analogous Reservoir:    Analogous reservoirs, as used in resource assessments, have similar rock and fluid properties, reservoir conditions (depth, temperature, and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When used to support proved reserves, analogous reservoir refers to a reservoir that shares all of the following characteristics with the reservoir of interest: (i) the same geological formation (but not necessarily in pressure communication with the reservoir of interest); (ii) the same environment of deposition; (iii) similar geologic structure; and (iv) the same drive mechanism.

 

Basin:    A large depression on the earth’s surface in which sediments accumulate.

 

Bbl:    One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

 

Bcf:    One billion cubic feet of natural gas.

 

Bcfe:    One billion cubic feet of natural gas equivalent.

 

Boe:    One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil.

 

Btu:    One British thermal unit, the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.

 

Developed Acreage:    The number of acres which are allocated or assignable to producing wells or wells capable of production.

 

Development Well:    A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

 

Differential:    An adjustment to the price of oil or natural gas from an established spot market price to reflect differences in the quality and/or location of oil or natural gas.

 

Economically Producible:    The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. For this determination, the value of the products that generate revenue are determined at the terminal point of oil and natural gas producing activities.

 

Estimated Ultimate Recovery (EUR):    Estimated ultimate recovery is the sum of reserves remaining as of a given date and cumulative production as of that date.

 

Exploitation:    A development or other project which may target proven or unproven reserves (such as probable or possible reserves), but which generally has a lower risk than that associated with exploration projects.

 

Exploratory Well:    A well drilled to find and produce oil and natural gas reserves not classified as proved, to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir or to extend a known reservoir.

 

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Table of Contents

Field:    An area consisting of a single reservoir or multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

 

Gross Acres or Gross Wells:    The total acres or wells, as the case may be, in which we have working interest.

 

ICE:    Inter-Continental Exchange.

 

MBtu/d:    One thousand Btu per day.

 

Mcf:    One thousand cubic feet of natural gas.

 

MMBtu:    One million British thermal units.

 

MMcf:    One million cubic feet of natural gas.

 

MMcfe:    One million cubic feet of natural gas equivalent.

 

Net Acres or Net Wells:    Gross acres or wells, as the case may be, multiplied by our working interest ownership percentage.

 

Net Production:    Production that is owned by us less royalties and production due others.

 

Net Revenue Interest:    A working interest owner’s gross working interest in production less the royalty, overriding royalty, production payment and net profits interests.

 

NGLs:    The combination of ethane, propane, butane and natural gasolines that when removed from natural gas become liquid under various levels of higher pressure and lower temperature.

 

NYMEX:    New York Mercantile Exchange.

 

Oil:    Oil and condensate.

 

Operator:    The individual or company responsible for the exploration and/or production of an oil or natural gas well or lease.

 

Play:    A geographic area with hydrocarbon potential.

 

Possible Reserves:    Reserves that are less certain to be recovered than probable reserves.

 

Probable Reserves:    Reserves that are less certain to be recovered than proved reserves but that, together with proved reserves, are as likely as not to be recovered.

 

Productive Well:    A well that produces commercial quantities of hydrocarbons, exclusive of its capacity to produce at a reasonable rate of return.

 

Proved Developed Reserves:    Proved reserves that can be expected to be recovered from existing wells with existing equipment and operating methods.

 

Proved Reserves:    Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time. The area of the reservoir considered as proved

 

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includes (i) the area identified by drilling and limited by fluid contacts, if any, and (ii) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or natural gas on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons, as seen in a well penetration, unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty. Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. Reserves which can be produced economically through application of improved recovery techniques (including fluid injection) are included in the proved classification when (i) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir, or an analogous reservoir or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (ii) the project has been approved for development by all necessary parties and entities, including governmental entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price used is the average price during the twelve-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

 

PUDs:    Proved Undeveloped Reserves.

 

Proved Undeveloped Reserves:    Proved oil and natural gas reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units can be claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Under no circumstances should estimates for proved undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir.

 

Realized Price:    The cash market price less all expected quality, transportation and demand adjustments.

 

Recompletion:    The completion for production of an existing wellbore in another formation from that which the well has been previously completed.

 

Reliable Technology:    Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

 

Reserve Life:    A measure of the productive life of an oil and natural gas property or a group of properties, expressed in years. Reserve life is calculated by dividing proved reserve volumes at year-end by production volumes. In our calculation of reserve life, production volumes are adjusted, if necessary, to reflect property acquisitions and dispositions.

 

Reserves:    Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to market and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are

 

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penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

 

Reservoir:    A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reserves.

 

Resources:    Resources are quantities of oil and natural gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated to be recoverable and another portion may be considered unrecoverable. Resources include both discovered and undiscovered accumulations.

 

Spacing:    The distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres (e.g., 40-acre spacing) and is often established by regulatory agencies.

 

Undeveloped Acreage:    Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

 

Wellbore:    The hole drilled by the bit that is equipped for oil or natural gas production on a completed well. Also called well or borehole.

 

Working Interest:    An interest in an oil and natural gas lease that gives the owner of the interest the right to drill for and produce oil and natural gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations.

 

WTI:    West Texas Intermediate.

 

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Appendix B-1

 

LOGO

  

CHAIRMAN & CEO

C.H. (SCOTT) REES III

PRESIDENT & COO

DANNY D. SIMMONS

EXECUTIVE VP

G. LANCE BINDER

  

EXECUTIVE COMMITTEE

P. SCOTT FROST – DALLAS

J. CARTER HENSON, JR. – HOUSTON

DAN PAUL SMITH – DALLAS

JOSEPH J. SPELLMAN – DALLAS

THOMAS J. TELLA II – DALLAS

 

 

 

 

April 3, 2014

 

Mr. John A. Weinzierl

Memorial Resource Development LLC

1301 McKinney Street, Suite 2100

Houston, Texas 77010

 

Dear Mr. Weinzierl:

 

In accordance with your request, we have estimated the proved reserves and future revenue, as of December 31, 2013, to the Memorial Resource Development LLC (MRD) interest in certain oil and gas properties located in Colorado, Louisiana, Oklahoma, Texas, and Wyoming. Memorial Resource Development LLC owns its interest in these properties through its subsidiaries Black Diamond Minerals, LLC; Classic Hydrocarbons, Inc. (Classic IV); and WildHorse Resources, LLC (WHR). The WHR portion of the MRD interest shown herein comprises the WHR interest owned by MRD as of December 31, 2013, and the NGP Income Co-Investment Opportunities Fund II, LP interest managed by WHR. We completed our evaluation on or about the date of this letter. It is our understanding that the proved reserves estimated in this report constitute all of the proved reserves owned by MRD (other than those attributable to BlueStone Natural Resources Holdings, LLC; Memorial Production Partners LP; and their respective subsidiaries). The estimates in this report have been prepared in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission (SEC) and, with the exception of the exclusion of future income taxes, conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas. Definitions are presented immediately following this letter. This report has been prepared for Memorial Resource Development LLC’s use in filing with the SEC; in our opinion the assumptions, data, methods, and procedures used in the preparation of this report are appropriate for such purpose.

 

We estimate the net reserves and future net revenue to the MRD interest in these properties, as of December 31, 2013, to be:

 

     Net Reserves      Future Net Revenue (M$)  

Category

   Oil
(MBBL)
     NGL
(MBBL)
     Gas(1)
(MMCF)
     Total      Present Worth
at 10%
 

Proved Developed Producing

     2,625.8         12,259.9         234,036.9         1,014,683.4         610,303.5   

Proved Developed Non-Producing

     776.9         1,644.9         29,760.0         159,150.0         92,615.4   

Proved Undeveloped

     7,907.9         28,671.9         538,457.1         1,608,681.2         766,033.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Proved

     11,310.5         42,576.7         802,254.1         2,782,514.7         1,468,952.1   

 

Totals may not add because of rounding.

 

(1)   Estimates of gas reserves include field fuel usage volumes for the WHR properties.

 

The oil volumes shown include crude oil and condensate. Oil and natural gas liquids (NGL) volumes are expressed in thousands of barrels (MBBL); a barrel is equivalent to 42 United States gallons. Gas volumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure bases.

 

 

4500 THANKSGIVING TOWER Ÿ 1601 ELM STREET Ÿ DALLAS, TEXAS 75201-4754 Ÿ PH: 214-969-5401 Ÿ FAX: 214-969-5411

    nsai@nsai-petro.com   

1221 LAMAR STREET, SUITE 1200 Ÿ HOUSTON, TEXAS 77010-3072 Ÿ PH: 713-654-4950 Ÿ FAX: 713-654-4951

    netherlandsewell.com   

 

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The estimates shown in this report are for proved reserves. As requested, probable and possible reserves that exist for these properties have not been included. This report does not include any value that could be attributed to interests in undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated. Reserves categorization conveys the relative degree of certainty; reserves subcategorization is based on development and production status. The estimates of reserves and future revenue included herein have not been adjusted for risk.

 

Gross revenue is MRD’s share of the gross (100 percent) revenue from the properties prior to any deductions. Future net revenue is after deductions for MRD’s share of production taxes, ad valorem taxes, capital costs, and operating expenses but before consideration of any income taxes. The future net revenue has been discounted at an annual rate of 10 percent to determine its present worth, which is shown to indicate the effect of time on the value of money. Future net revenue presented in this report, whether discounted or undiscounted, should not be construed as being the fair market value of the properties.

 

Prices used in this report are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2013. For oil and NGL volumes, the average Southwestern Wyoming Sweet posted price of $83.53 per barrel is used for properties located in Natrona and Sweetwater Counties, Wyoming, and the average West Texas Intermediate posted price of $93.42 per barrel is used for all other properties. These average posted prices are adjusted by lease for quality and regional and local price differentials. For gas volumes, the average CIG Rocky Mountains spot price of $3.527 per MMBTU is used for properties located in Colorado and Wyoming, and the average Henry Hub spot price of $3.670 per MMBTU is used for all other properties. These average spot prices are adjusted by lease for energy content, transportation fees, and regional and local price differentials. All prices are held constant throughout the lives of the properties. The average adjusted product prices weighted by production over the remaining lives of the properties are $100.26 per barrel of oil, $39.72 per barrel of NGL, and $3.656 per MCF of gas.

 

Operating costs used in this report are based on operating expense records of MRD. For nonoperated properties, these costs include the per-well overhead expenses allowed under joint operating agreements along with estimates of costs to be incurred at and below the district and field levels. Operating costs have been divided into per-well costs, per-unit-of-production costs, and workover costs. As requested, operating costs for the operated properties are limited to direct lease- and field-level costs and MRD’s estimate of the portion of its headquarters general and administrative overhead expenses necessary to operate the properties. Operating costs are not escalated for inflation.

 

Capital costs used in this report were provided by MRD and are based on authorizations for expenditure and actual costs from recent activity. Capital costs are included as required for workovers, new development wells, and production equipment. Based on our understanding of future development plans, a review of the records provided to us, and our knowledge of similar properties, we regard these estimated capital costs to be reasonable. Capital costs are not escalated for inflation. As requested, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties.

 

For the purposes of this report, we did not perform any field inspection of the properties, nor did we examine the mechanical operation or condition of the wells and facilities. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability.

 

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We have made no investigation of potential volume and value imbalances resulting from overdelivery or underdelivery to the MRD interest. Therefore, our estimates of reserves and future revenue do not include adjustments for the settlement of any such imbalances; our projections are based on MRD receiving its net revenue interest share of estimated future gross production after field usage and shrinkage.

 

The reserves shown in this report are estimates only and should not be construed as exact quantities. Proved reserves are those quantities of oil and gas which, by analysis of engineering and geoscience data, can be estimated with reasonable certainty to be economically producible; probable and possible reserves are those additional reserves which are sequentially less certain to be recovered than proved reserves. Estimates of reserves may increase or decrease as a result of market conditions, future operations, changes in regulations, or actual reservoir performance. In addition to the primary economic assumptions discussed herein, our estimates are based on certain assumptions including, but not limited to, that the properties will be developed consistent with current development plans, that the properties will be operated in a prudent manner, that no governmental regulations or controls will be put in place that would impact the ability of the interest owner to recover the reserves, and that our projections of future production will prove consistent with actual performance. If the reserves are recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing this report.

 

For the purposes of this report, we used technical and economic data including, but not limited to, well logs, geologic maps, well test data, production data, historical price and cost information, and property ownership interests. The reserves in this report have been estimated using deterministic methods; these estimates have been prepared in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers (SPE Standards). We used standard engineering and geoscience methods, or a combination of methods, including performance analysis, volumetric analysis, and analogy, that we considered to be appropriate and necessary to categorize and estimate reserves in accordance with SEC definitions and regulations. For the Classic IV and WHR properties, a substantial portion of these reserves are for undeveloped locations and producing wells that lack sufficient production history upon which performance-related estimates of reserves can be based; such reserves are based on estimates of reservoir volumes and recovery efficiencies along with analogy to properties with similar geologic and reservoir characteristics. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment.

 

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The data used in our estimates were obtained from MRD, public data sources, and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting work data are on file in our office. We have not examined the titles to the properties or independently confirmed the actual degree or type of interest owned. The technical persons responsible for preparing the estimates presented herein meet the requirements regarding qualifications, independence, objectivity, and confidentiality set forth in the SPE Standards. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties nor are we employed on a contingent basis.

 

    Sincerely,
    NETHERLAND, SEWELL & ASSOCIATES, INC.
    Texas Registered Engineering Firm F-2699
    By:   /s/ C.H. (Scott) Rees III
      C.H. (Scott) Rees III, P.E.
      Chairman and Chief Executive Officer
By:   /s/ Justin S. Hamilton   By:   /s/ Allen E. Evans, Jr.
  Justin S. Hamilton, P.E. 104999     Allen E. Evans, Jr., P.G. 1286
  Vice President     Vice President
Date Signed: April 3, 2014   Date Signed: April 3, 2014
JSH:JLO    

 

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LOGO

 

DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

The following definitions are set forth in U.S. Securities and Exchange Commission (SEC) Regulation S-X Section 210.4-10(a). Also included is supplemental information from (1) the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers, (2) the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas, and (3) the SEC’s Compliance and Disclosure Interpretations.

 

(1) Acquisition of properties.    Costs incurred to purchase, lease or otherwise acquire a property, including costs of lease bonuses and options to purchase or lease properties, the portion of costs applicable to minerals when land including mineral rights is purchased in fee, brokers’ fees, recording fees, legal costs, and other costs incurred in acquiring properties.

 

(2) Analogous reservoir.    Analogous reservoirs, as used in resources assessments, have similar rock and fluid properties, reservoir conditions (depth, temperature, and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When used to support proved reserves, an “analogous reservoir” refers to a reservoir that shares the following characteristics with the reservoir of interest:

 

  (i)   Same geological formation (but not necessarily in pressure communication with the reservoir of interest);

 

  (ii)   Same environment of deposition;

 

  (iii)   Similar geological structure; and

 

  (iv)   Same drive mechanism.

 

Instruction to paragraph (a)(2):    Reservoir properties must, in the aggregate, be no more favorable in the analog than in the reservoir of interest.

 

(3) Bitumen.    Bitumen, sometimes referred to as natural bitumen, is petroleum in a solid or semi-solid state in natural deposits with a viscosity greater than 10,000 centipoise measured at original temperature in the deposit and atmospheric pressure, on a gas free basis. In its natural state it usually contains sulfur, metals, and other non-hydrocarbons.

 

(4) Condensate.    Condensate is a mixture of hydrocarbons that exists in the gaseous phase at original reservoir temperature and pressure, but that, when produced, is in the liquid phase at surface pressure and temperature.

 

(5) Deterministic estimate.    The method of estimating reserves or resources is called deterministic when a single value for each parameter (from the geoscience, engineering, or economic data) in the reserves calculation is used in the reserves estimation procedure.

 

(6) Developed oil and gas reserves.    Developed oil and gas reserves are reserves of any category that can be expected to be recovered:

 

  (i)   Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

  (ii)   Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

 

Supplemental definitions from the 2007 Petroleum Resources Management System:

 

Developed Producing Reserves—Developed Producing Reserves are expected to be recovered from completion intervals that are open and producing at the time of the estimate. Improved recovery reserves are considered producing only after the improved recovery project is in operation.

 

Developed Non-Producing Reserves—Developed Non-Producing Reserves include shut-in and behind-pipe Reserves. Shut-in Reserves are expected to be recovered from (1) completion intervals which are open at the time of the estimate but which have not yet started producing, (2) wells which were shut-in for market conditions or pipeline connections, or (3) wells not capable of production for mechanical reasons. Behind-pipe Reserves are expected to be recovered from zones in existing wells which will require additional completion work or future recompletion prior to start of production. In all cases, production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.

 

(7) Development costs.    Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing the oil and gas. More specifically, development costs, including depreciation and applicable operating costs of support equipment and facilities and other costs of development activities, are costs incurred to:

 

  (i)   Gain access to and prepare well locations for drilling, including surveying well locations for the purpose of determining specific development drilling sites, clearing ground, draining, road building, and relocating public roads, gas lines, and power lines, to the extent necessary in developing the proved reserves.

 

  (ii)   Drill and equip development wells, development-type stratigraphic test wells, and service wells, including the costs of platforms and of well equipment such as casing, tubing, pumping equipment, and the wellhead assembly.

 

  (iii)   Acquire, construct, and install production facilities such as lease flow lines, separators, treaters, heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling and processing plants, and central utility and waste disposal systems.

 

  (iv)   Provide improved recovery systems.

 

(8) Development project.    A development project is the means by which petroleum resources are brought to the status of economically producible. As examples, the development of a single reservoir or field, an incremental development in a producing field, or the integrated development of a group of several fields and associated facilities with a common ownership may constitute a development project.

 

(9) Development well.    A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive.

 

(10) Economically producible.    The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. The value of the products that generate revenue shall be determined at the terminal point of oil and gas producing activities as defined in paragraph (a)(16) of this section.

 

(11) Estimated ultimate recovery (EUR).    Estimated ultimate recovery is the sum of reserves remaining as of a given date and cumulative production as of that date.

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

(12) Exploration costs.    Costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered to have prospects of containing oil and gas reserves, including costs of drilling exploratory wells and exploratory-type stratigraphic test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred to in part as prospecting costs) and after acquiring the property. Principal types of exploration costs, which include depreciation and applicable operating costs of support equipment and facilities and other costs of exploration activities, are:

 

  (i)   Costs of topographical, geographical and geophysical studies, rights of access to properties to conduct those studies, and salaries and other expenses of geologists, geophysical crews, and others conducting those studies. Collectively, these are sometimes referred to as geological and geophysical or “G&G” costs.

 

  (ii)   Costs of carrying and retaining undeveloped properties, such as delay rentals, ad valorem taxes on properties, legal costs for title defense, and the maintenance of land and lease records.

 

  (iii)   Dry hole contributions and bottom hole contributions.

 

  (iv)   Costs of drilling and equipping exploratory wells.

 

  (v)   Costs of drilling exploratory-type stratigraphic test wells.

 

(13) Exploratory well.    An exploratory well is a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, an extension well, a service well, or a stratigraphic test well as those items are defined in this section.

 

(14) Extension well.    An extension well is a well drilled to extend the limits of a known reservoir.

 

(15) Field.    An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. There may be two or more reservoirs in a field which are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or by both. Reservoirs that are associated by being in overlapping or adjacent fields may be treated as a single or common operational field. The geological terms “structural feature” and “stratigraphic condition” are intended to identify localized geological features as opposed to the broader terms of basins, trends, provinces, plays, areas-of-interest, etc.

 

(16) Oil and gas producing activities.

 

  (i)   Oil and gas producing activities include:

 

  (A)   The search for crude oil, including condensate and natural gas liquids, or natural gas (“oil and gas”) in their natural states and original locations;

 

  (B)   The acquisition of property rights or properties for the purpose of further exploration or for the purpose of removing the oil or gas from such properties;

 

  (C)   The construction, drilling, and production activities necessary to retrieve oil and gas from their natural reservoirs, including the acquisition, construction, installation, and maintenance of field gathering and storage systems, such as:

 

  (1) Lifting the oil and gas to the surface; and

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

  (2) Gathering, treating, and field processing (as in the case of processing gas to extract liquid hydrocarbons); and

 

  (D)   Extraction of saleable hydrocarbons, in the solid, liquid, or gaseous state, from oil sands, shale, coalbeds, or other nonrenewable natural resources which are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction.

 

Instruction 1 to paragraph (a)(16)(i):    The oil and gas production function shall be regarded as ending at a “terminal point”, which is the outlet valve on the lease or field storage tank. If unusual physical or operational circumstances exist, it may be appropriate to regard the terminal point for the production function as:

 

  a.   The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal; and

 

  b.   In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser prior to upgrading, the first point at which the natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility which upgrades such natural resources into synthetic oil or gas.

 

Instruction 2 to paragraph (a)(16)(i):    For purposes of this paragraph (a)(16), the term saleable hydrocarbons means hydrocarbons that are saleable in the state in which the hydrocarbons are delivered.

 

  (ii)   Oil and gas producing activities do not include:

 

  (A)   Transporting, refining, or marketing oil and gas;

 

  (B)   Processing of produced oil, gas, or natural resources that can be upgraded into synthetic oil or gas by a registrant that does not have the legal right to produce or a revenue interest in such production;

 

  (C)   Activities relating to the production of natural resources other than oil, gas, or natural resources from which synthetic oil and gas can be extracted; or

 

  (D)   Production of geothermal steam.

 

(17) Possible reserves.    Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.

 

  (i)   When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates.

 

  (ii)   Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project.

 

  (iii)   Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.

 

  (iv)   The proved plus probable and proved plus probable plus possible reserves estimates must be based on reasonable alternative technical and commercial interpretations within the reservoir or subject project that are clearly documented, including comparisons to results in successful similar projects.

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

  (v)   Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.

 

  (vi)   Pursuant to paragraph (a)(22)(iii) of this section, where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations.

 

(18) Probable reserves.    Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.

 

  (i)   When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.

 

  (ii)   Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.

 

  (iii)   Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.

 

  (iv)   See also guidelines in paragraphs (a)(17)(iv) and (a)(17)(vi) of this section.

 

(19) Probabilistic estimate.    The method of estimation of reserves or resources is called probabilistic when the full range of values that could reasonably occur for each unknown parameter (from the geoscience and engineering data) is used to generate a full range of possible outcomes and their associated probabilities of occurrence.

 

(20) Production costs.

 

  (i)   Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced. Examples of production costs (sometimes called lifting costs) are:

 

  (A)   Costs of labor to operate the wells and related equipment and facilities.

 

  (B)   Repairs and maintenance.

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

  (C)   Materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities.

 

  (D)   Property taxes and insurance applicable to proved properties and wells and related equipment and facilities.

 

  (E)   Severance taxes.

 

  (ii)   Some support equipment or facilities may serve two or more oil and gas producing activities and may also serve transportation, refining, and marketing activities. To the extent that the support equipment and facilities are used in oil and gas producing activities, their depreciation and applicable operating costs become exploration, development or production costs, as appropriate. Depreciation, depletion, and amortization of capitalized acquisition, exploration, and development costs are not production costs but also become part of the cost of oil and gas produced along with production (lifting) costs identified above.

 

(21) Proved area.    The part of a property to which proved reserves have been specifically attributed.

 

(22) Proved oil and gas reserves.    Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

 

  (i)   The area of the reservoir considered as proved includes:

 

  (A)   The area identified by drilling and limited by fluid contacts, if any, and

 

  (B)   Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

 

  (ii)   In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

 

  (iii)   Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

 

  (iv)   Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:

 

  (A)   Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

  (B)   The project has been approved for development by all necessary parties and entities, including governmental entities.

 

  (v)   Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

 

(23) Proved properties.    Properties with proved reserves.

 

(24) Reasonable certainty.    If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as changes due to increased availability of geoscience (geological, geophysical, and geochemical), engineering, and economic data are made to estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant than to decrease.

 

(25) Reliable technology.    Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

 

(26) Reserves.    Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

 

Note to paragraph (a)(26):    Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

Excerpted from the FASB Accounting Standards Codification Topic 932, Extractive ActivitiesOil and Gas:

 

932-235-50-30 A standardized measure of discounted future net cash flows relating to an entity’s interests in both of the following shall be disclosed as of the end of the year:

 

  a.   Proved oil and gas reserves (see paragraphs 932-235-50-3 through 50-11B)  

 

  b.   Oil and gas subject to purchase under long-term supply, purchase, or similar agreements and contracts in which the entity participates in the operation of the properties on which the oil or gas is located or otherwise serves as the producer of those reserves (see paragraph 932-235-50-7).  

 

The standardized measure of discounted future net cash flows relating to those two types of interests in reserves may be combined for reporting purposes.

 

932-235-50-31 All of the following information shall be disclosed in the aggregate and for each geographic area for which reserve quantities are disclosed in accordance with paragraphs 932-235-50-3 through 50-11B:

 

  a.   Future cash inflows. These shall be computed by applying prices used in estimating the entity’s proved oil and gas reserves to the year-end quantities of those reserves. Future price changes shall be considered only to the extent provided by contractual arrangements in existence at year-end.  

 

  b.   Future development and production costs. These costs shall be computed by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. If estimated development expenditures are significant, they shall be presented separately from estimated production costs.  

 

  c.   Future income tax expenses. These expenses shall be computed by applying the appropriate year-end statutory tax rates, with consideration of future tax rates already legislated, to the future pretax net cash flows relating to the entity’s proved oil and gas reserves, less the tax basis of the properties involved. The future income tax expenses shall give effect to tax deductions and tax credits and allowances relating to the entity’s proved oil and gas reserves.  

 

  d.   Future net cash flows. These amounts are the result of subtracting future development and production costs and future income tax expenses from future cash inflows.  

 

  e.   Discount. This amount shall be derived from using a discount rate of 10 percent a year to reflect the timing of the future net cash flows relating to proved oil and gas reserves.  

 

  f.   Standardized measure of discounted future net cash flows. This amount is the future net cash flows less the computed discount.  

 

(27) Reservoir.    A porous and permeable underground formation containing a natural accumulation of producible oil and/or gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

 

(28) Resources.    Resources are quantities of oil and gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated to be recoverable, and another portion may be considered to be unrecoverable. Resources include both discovered and undiscovered accumulations.

 

(29) Service well.    A well drilled or completed for the purpose of supporting production in an existing field. Specific purposes of service wells include gas injection, water injection, steam injection, air injection, salt-water disposal, water supply for injection, observation, or injection for in-situ combustion.

 

(30) Stratigraphic test well.    A stratigraphic test well is a drilling effort, geologically directed, to obtain information pertaining to a specific geologic condition. Such wells customarily are drilled without the intent of being completed for hydrocarbon production. The classification also includes tests identified as core tests and all types of expendable holes related to hydrocarbon exploration. Stratigraphic tests are classified as “exploratory type” if not drilled in a known area or “development type” if drilled in a known area.

 

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Section 210.4-10(a)

 

 

(31) Undeveloped oil and gas reserves.    Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

 

  (i)   Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

 

  (ii)   Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.

 

From the SEC’s Compliance and Disclosure Interpretations (October 26, 2009):

 

Although several types of projects—such as constructing offshore platforms and development in urban areas, remote locations or environmentally sensitive locations—by their nature customarily take a longer time to develop and therefore often do justify longer time periods, this determination must always take into consideration all of the facts and circumstances. No particular type of project per se justifies a longer time period, and any extension beyond five years should be the exception, and not the rule.

 

Factors that a company should consider in determining whether or not circumstances justify recognizing reserves even though development may extend past five years include, but are not limited to, the following:

 

   

The company’s level of ongoing significant development activities in the area to be developed (for example, drilling only the minimum number of wells necessary to maintain the lease generally would not constitute significant development activities);

 

 

   

The company’s historical record at completing development of comparable long-term projects;

 

 

   

The amount of time in which the company has maintained the leases, or booked the reserves, without significant development activities;

 

 

   

The extent to which the company has followed a previously adopted development plan (for example, if a company has changed its development plan several times without taking significant steps to implement any of those plans, recognizing proved undeveloped reserves typically would not be appropriate); and

 

 

   

The extent to which delays in development are caused by external factors related to the physical operating environment (for example, restrictions on development on Federal lands, but not obtaining government permits), rather than by internal factors (for example, shifting resources to develop properties with higher priority).

 

 

  (iii)   Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.

 

(32) Unproved properties.    Properties with no proved reserves.

 

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Appendix B-2

 

LOGO

  

CHAIRMAN & CEO

C.H. (SCOTT) REES III

PRESIDENT & COO

DANNY D. SIMMONS

EXECUTIVE VP

G. LANCE BINDER

  

EXECUTIVE COMMITTEE

P. SCOTT FROST – DALLAS

J. CARTER HENSON, JR. – HOUSTON

DAN PAUL SMITH – DALLAS

JOSEPH J. SPELLMAN – DALLAS

THOMAS J. TELLA II – DALLAS

 

 

 

April 24, 2014

 

Mr. John A. Weinzierl

Memorial Resource Development LLC

1301 McKinney Street, Suite 2100

Houston, Texas 77010

 

Dear Mr. Weinzierl:

 

In accordance with your request, we have audited the estimates prepared by Memorial Resource Development LLC and its subsidiaries (collectively referred to herein as “MRD”), as of December 31, 2013, of the probable and possible reserves and future revenue to the Memorial Resource Development LLC interest in certain oil and gas properties located in Colorado, Louisiana, Oklahoma, and Texas. The audited estimates shown herein have been revised from the estimates in our April 4, 2014, audit letter to reflect changes in the development plan of the Upper Cotton Valley Sands in Terryville and Hico-Knowles Fields, Louisiana. With the exception of these changes, we completed our audit on or about April 4, 2014. Our estimates of proved reserves and future revenue for these properties are set forth in our report dated April 3, 2014. Memorial Resource Development LLC owns its interest in these properties through its subsidiaries Black Diamond Minerals, LLC; Classic Hydrocarbons, Inc.; and WildHorse Resources, LLC (WHR). It is our understanding that the probable and possible reserves estimated in this report constitute all of the probable and possible reserves owned by MRD (other than those attributable to BlueStone Natural Resources Holdings, LLC; Memorial Production Partners LP; and their respective subsidiaries). We have examined the estimates with respect to reserves quantities, reserves categorization, future producing rates, future net revenue, and the present value of such future net revenue, using the definitions set forth in U.S. Securities and Exchange Commission (SEC) Regulation S-X Rule 4-10(a). The estimates of reserves and future revenue have been prepared in accordance with the definitions and regulations of the SEC and, with the exception of the exclusion of future income taxes, conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas. This report has been prepared for Memorial Resource Development LLC’s use in filing with the SEC; in our opinion the assumptions, data, methods, and procedures used in the preparation of this report are appropriate for such purpose.

 

The following table sets forth MRD’s estimates of the net reserves and future net revenue, as of December 31, 2013, for the audited properties:

 

     Net Reserves      Future Net Revenue (M$)  

Category

   Oil
(MBBL)
     NGL
(MBBL)
     Gas(1)
(MMCF)
     Total      Present Worth
at 10%
 

Probable

     10,479.7         33,708.9         535,185.3         2,148,275.7         1,052,242.6   

Possible

     36,376.1         68,686.1         1,080,539.7         6,167,918.1         2,386,228.2   

 

(1)   Estimates of gas reserves include field fuel usage volumes for the WHR properties.

 

The oil volumes shown include crude oil and condensate. Oil and natural gas liquids (NGL) volumes are expressed in thousands of barrels (MBBL); a barrel is equivalent to 42 United States gallons. Gas volumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure bases.

 

 

4500 THANKSGIVING TOWER Ÿ 1601 ELM STREET Ÿ DALLAS, TEXAS 75201-4754 Ÿ PH: 214-969-5401 Ÿ FAX: 214-969-5411

    nsai@nsai-petro.com   

1221 LAMAR STREET, SUITE 1200 Ÿ HOUSTON, TEXAS 77010-3072 Ÿ PH: 713-654-4950 Ÿ FAX: 713-654-4951

    netherlandsewell.com   

 

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When compared on a field-by-field basis, some of the estimates of MRD are greater and some are less than the estimates of Netherland, Sewell & Associates, Inc. (NSAI). However, in our opinion the estimates of MRD’s probable and possible reserves and future revenue shown herein are, in the aggregate, reasonable and have been prepared in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers (SPE Standards). Additionally, these estimates are within the recommended 10 percent tolerance threshold set forth in the SPE Standards. We are satisfied with the methods and procedures used by MRD in preparing the December 31, 2013, estimates of reserves and future revenue, and we saw nothing of an unusual nature that would cause us to take exception with the estimates, in the aggregate, as prepared by MRD.

 

The estimates shown herein are for probable and possible reserves; a substantial portion of these reserves are for undeveloped locations. MRD’s estimates do not include any value for undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated. Reserves categorization conveys the relative degree of certainty; reserves subcategorization is based on development and production status. The estimates of reserves and future revenue included herein have not been adjusted for risk.

 

Prices used by MRD are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2013. For oil and NGL volumes, the average West Texas Intermediate posted price of $93.42 per barrel is adjusted by lease for quality and regional and local price differentials. For gas volumes, the average CIG Rocky Mountains spot price of $3.527 per MMBTU is used for properties located in Colorado, and the average Henry Hub spot price of $3.670 per MMBTU is used for all other properties. These average spot prices are adjusted by lease for energy content, transportation fees, and regional and local price differentials. All prices are held constant throughout the lives of the properties.

 

Operating costs used by MRD are based on historical operating expense records. For nonoperated properties, these costs include the per-well overhead expenses allowed under joint operating agreements along with estimates of costs to be incurred at and below the district and field levels. Operating costs have been divided into per-well costs, per-unit-of-production costs, and workover costs. Operating costs for the operated properties are limited to direct lease- and field-level costs and MRD’s estimate of the portion of its headquarters general and administrative overhead expenses necessary to operate the properties. Capital costs used by MRD are based on authorizations for expenditure and actual costs from recent activity. Capital costs are included as required for workovers, new development wells, and production equipment. Operating costs and capital costs are not escalated for inflation. Estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties.

 

The reserves shown in this report are estimates only and should not be construed as exact quantities. Proved reserves are those quantities of oil and gas which, by analysis of engineering and geoscience data, can be estimated with reasonable certainty to be economically producible; probable and possible reserves are those additional reserves which are sequentially less certain to be recovered than proved reserves. Estimates of reserves may increase or decrease as a result of market conditions, future operations, changes in regulations, or actual reservoir performance. In addition to the primary economic assumptions discussed herein, estimates of MRD and NSAI are based on certain assumptions including, but not limited to, that the properties will be developed consistent with current development plans, that the properties will be operated in a prudent manner, that no governmental regulations or controls will be put in place that would impact the ability of the interest owner to recover the reserves, and that projections of future production will prove consistent with actual performance. If the reserves are recovered, the revenues therefrom and the costs related thereto could be more or less than the

 

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estimated amounts. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing these estimates.

 

It should be understood that our audit does not constitute a complete reserves study of the audited oil and gas properties. Our audit consisted primarily of substantive testing, wherein we conducted a detailed review of all properties. In the conduct of our audit, we have not independently verified the accuracy and completeness of information and data furnished by MRD with respect to ownership interests, oil and gas production, well test data, historical costs of operation and development, product prices, or any agreements relating to current and future operations of the properties and sales of production. However, if in the course of our examination something came to our attention that brought into question the validity or sufficiency of any such information or data, we did not rely on such information or data until we had satisfactorily resolved our questions relating thereto or had independently verified such information or data. Our audit did not include a review of MRD’s overall reserves management processes and practices.

 

We used standard engineering and geoscience methods, or a combination of methods, including performance analysis, volumetric analysis, and analogy, that we considered to be appropriate and necessary to establish the conclusions set forth herein. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment.

 

Supporting data documenting this audit, along with data provided by MRD, are on file in our office. The technical persons responsible for conducting this audit meet the requirements regarding qualifications, independence, objectivity, and confidentiality set forth in the SPE Standards. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties nor are we employed on a contingent basis.

 

      Sincerely,
      NETHERLAND, SEWELL & ASSOCIATES, INC.
      Texas Registered Engineering Firm F-2699
      By:   /s/ C.H. (Scott) Rees III
        C.H. (Scott) Rees III, P.E.
        Chairman and Chief Executive Officer
By:   /s/ Philip S. (Scott) Frost     By:   /s/ William J. Knights
  Philip S. (Scott) Frost, P.E. 88738       William J. Knights, P.G. 1532
  Senior Vice President       Vice President
Date Signed: April 24, 2014     Date Signed: April 24, 2014
PSF:JLO      

 

Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document.

 

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                Shares

 

LOGO

 

Common Stock

 

 

 

 

PRELIMINARY PROSPECTUS

 

 

 

Joint Book-Running Managers

Citigroup

Barclays

BofA Merrill Lynch

BMO Capital Markets

Goldman, Sachs & Co.

Raymond James

RBC Capital Markets

Wells Fargo Securities

 

Co-Managers

Credit Suisse

Morgan Stanley

Scotiabank / Howard Weil

Simmons & Company International

Stephens Inc.

Stifel

UBS Investment Bank

Wunderlich Securities

 

                    , 2014

 

Until                     , 2014 (25 days after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

 

 

 


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PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS

 

Item 13. Other Expenses of Issuance and Distribution

 

The following table sets forth the estimated fees and expenses, other than underwriting discounts and commissions, paid or payable by the registrant in connection with the issuance and distribution of the common stock. All amounts are estimates except for the SEC registration, Financial Industry Regulatory Authority, Inc. and stock exchange and listing fees.

 

SEC registration fee

   $ 90,160   

Stock exchange filing fee and listing fee

     *   

Transfer agent and registrar fees

     *   

Printing and engraving costs

     *   

Legal fees and expenses

     *   

Accountants’ fees and expenses

     *   

Financial Industry Regulatory Authority, Inc. filing fee

     105,500   

Miscellaneous

     *   
  

 

 

 

Total

   $ *   
  

 

 

 

 

*   To be filed by amendment.

 

Item 14. Indemnification of Directors and Officers

 

The Company is incorporated in Delaware. Section 145 of the Delaware General Corporation Law (“DGCL”) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or such other court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

 

The Company’s bylaws provide that indemnification shall be to the fullest extent permitted by the DGCL for all current or former directors or officers of the Company. As permitted by the DGCL, the Company’s certificate of incorporation provides that directors of the Company shall have no personal liability to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that exculpation from liability is not permitted under the DGCL as in effect when such liability is determined.

 

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Item 15. Recent Sales of Unregistered Securities

 

Set forth below is certain information regarding securities issued by the registrant during the last three years in transactions that were not registered under the Securities Act of 1933, as amended (the “Securities Act”), including the consideration, if any, received by the registrant for such issuances.

 

In connection with its formation in January 2014, the Company issued 100 shares of its common stock to Memorial Resource Development LLC in exchange for consideration of $1.00. The issuance of these shares was exempt from the registration requirements of the Securities Act of 1933, as amended, or the Securities Act, pursuant to Section 4(2) of the Securities Act.

 

Item 16. Exhibits and Financial Statement Schedules

 

(a) Exhibits

 

See the Exhibit Index immediately following the signature page hereto, which is incorporated by reference as if fully set forth herein.

 

(b) Financial Statement Schedules

 

Schedules are omitted because they either are not required or are not applicable or because equivalent information has been included in the financial statements, the notes thereto or elsewhere herein.

 

Item 17. Undertakings

 

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

The undersigned registrant hereby undertakes:

 

  (1)   For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

  (2)   For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Houston, Texas on the 2nd day of May, 2014.

 

MEMORIAL RESOURCE DEVELOPMENT CORP.
By:  

/s/ John A. Weinzierl

  John A. Weinzierl
  Chief Executive Officer

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated below.

 

Signature

  

Title

 

Date

*

Tony R. Weber

  

Chairman

  May 2, 2014

/s/ John A. Weinzierl

John A. Weinzierl

   Chief Executive Officer and Director (Principal Executive Officer)   May 2, 2014

/s/ Andrew J. Cozby

Andrew J. Cozby

  

Chief Financial Officer

(Principal Financial Officer)

  May 2, 2014

/s/ Dennis G. Venghaus

Dennis G. Venghaus

   Chief Accounting Officer (Principal Accounting Officer)   May 2, 2014

*

Scott A. Gieselman

  

Director

  May 2, 2014

*

Kenneth A. Hersh

  

Director

  May 2, 2014

 

*By:  

  /s/ John A. Weinzierl

    John A. Weinzierl
    Attorney-in-Fact


Table of Contents

Exhibit No.

    

Exhibit Description

    1.1**       Form of Underwriting Agreement
    2.1##       Purchase and Sale Agreement between Memorial Resource Development LLC and Memorial Production Operating LLC, dated as of July 15, 2013 (incorporated by reference to Exhibit 2.5 to Memorial Production Partners LP’s Form 8-K (File No. 001-35364), filed with the SEC on July 16, 2013)
    3.1*       Form of Amended and Restated Certificate of Incorporation of Memorial Resource Development Corp.
    3.2*       Form of Amended and Restated Bylaws of Memorial Resource Development Corp.
    5.1**       Opinion of Akin Gump Strauss Hauer & Feld LLP as to the legality of securities being registered
  10.1+*       Memorial Resource Development Corp. 2014 Long Term Incentive Plan
  10.2+*       Form of Restricted Stock Agreement
  10.3**       Voting Agreement, dated as of                     , 2014, among Memorial Resource Development Corp., MRD Holdings LLC and certain former management members of WildHorse Resources, LLC
  10.4**       Form of Registration Rights Agreement among Memorial Resource Development Corp. and certain stockholders
  10.5*       Services Agreement, dated as of                     , 2014, among Memorial Resource Development Corp., WildHorse Resources, LLC and WildHorse Resources Management Company, LLC
  10.6**       Credit Agreement, dated as of                     , 2014, by and among Memorial Resource Development, as the Borrower, the Lenders party thereto,             , as Administrative Agent and Collateral Agent, and the other parties party thereto
  10.7+*       Form of Change in Control Agreement
  10.8+*       Form of Indemnification Agreement between Memorial Resource Development Corp. and each of the officers and directors thereof
  10.9       Omnibus Agreement, dated as of December 14, 2011, by and among Memorial Production Partners LP, Memorial Production Partners GP LLC and Memorial Resource Development LLC (incorporated by reference to Exhibit 10.1 to Memorial Production Partners LP’s Form 8-K (File No. 001-35364) filed with the SEC on December 15, 2011)
  10.10†*       Gas Processing Agreement, dated as of March 17, 2014, between WildHorse Resources, LLC and PennTex North Louisiana, LLC
  21.1**       Subsidiaries of Memorial Resource Development Corp.
  23.1*       Consent of KPMG LLP, an independent registered public accounting firm
  23.2*       Consent of Netherland, Sewell & Associates, Inc.
  23.3**       Consent of Akin Gump Strauss Hauer & Feld LLP (contained in Exhibit 5.1)
  24.1***       Powers of attorney (included on the signature page to the Company’s Registration Statement on Form S-1, filed with the SEC on April 4, 2014)
  24.2*       Power of attorney of Andrew J. Cozby


Table of Contents
  99.1*       Netherland, Sewell & Associates, Inc. reserve report for Memorial Resource Development LLC related to proved reserves as of December 31, 2013 (included as Appendix B-1 to the prospectus)
  99.2*       Netherland, Sewell & Associates, Inc. audit letter for Memorial Resource Development LLC related to management’s report of probable and possible reserves as of December 31, 2013 (included as Appendix B-2 to the prospectus)
  99.3***       Netherland, Sewell & Associates, Inc. reserve report for Memorial Production Partners LP as of December 31, 2013 (incorporated by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-1, filed with the SEC on April 4, 2014)

 

*   Filed herewith
**   To be filed by amendment
***   Previously filed
##   Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
+   Management contract or compensatory plan, contract or arrangement.
  Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the SEC.
EX-3.1 2 d658814dex31.htm EX-3.1 EX-3.1

Exhibit 3.1

FORM OF

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

MEMORIAL RESOURCE DEVELOPMENT CORP.

Memorial Resource Development Corp. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the “DGCL”), hereby certifies as follows:

1. The original Certificate of Incorporation of the Corporation (the “Original Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware on January 31, 2014.

2. This Amended and Restated Certificate of Incorporation, which restates and amends the Original Certificate of Incorporation, has been declared advisable by the board of directors of the Corporation (the “Board”), duly adopted by the stockholders of the Corporation and duly executed and acknowledged by the officers of the Corporation in accordance with Sections 103, 228, 242 and 245 of the DGCL. References to “this Amended and Restated Certificate of Incorporation” herein refer to the Amended and Restated Certificate of Incorporation, as amended, restated, supplemented and otherwise modified from time to time.

3. The Original Certificate of Incorporation is hereby amended and restated in its entirety to read as follows:

ARTICLE I

NAME

Section 1.1 Name. The name of the Corporation is Memorial Resource Development Corp.

ARTICLE II

REGISTERED AGENT

Section 2.1 Registered Agent. The address of its registered office in the State of Delaware is 615 South DuPont Highway in the City of Dover, County of Kent, postal code 19901, and the name of the Corporation’s registered agent at such address is National Corporate Research, Ltd.

ARTICLE III

PURPOSE

Section 3.1 Purpose. The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL as it currently exists or may hereafter be amended.


ARTICLE IV

CAPITALIZATION

Section 4.1 Number of Shares. The total number of shares of stock that the Corporation shall have authority to issue is                 shares of stock, classified as (i)                 shares of preferred stock, par value $0.01 per share (“Preferred Stock”), and (ii)                  shares of common stock, par value $0.01 per share (“Common Stock”).

Section 4.2 Provisions Relating to Preferred Stock.

(a) The Board is authorized, subject to any limitations prescribed by law, to provide for the issuance of shares of Preferred Stock from time to time in one or more series, the shares of each series to have such designations and powers, preferences and rights, and qualifications, limitations and restrictions thereof, as are stated and expressed in the resolution or resolutions providing for the issue of such series adopted by the Board as hereafter prescribed and filed pursuant to applicable law (a “Preferred Stock Designation”).

(b) Subject to any limitations prescribed by law, authority is hereby expressly granted to and vested in the Board to authorize the issuance of Preferred Stock from time to time in one or more series, and with respect to each series of Preferred Stock, to fix and state the designation and the powers, preferences, rights, qualifications, limitations and restrictions relating to each series of Preferred Stock, including, but not limited to, the following:

(i) whether or not the series is to have voting rights, full, special or limited, or is to be without voting rights, and whether or not such series is to be entitled to vote as a separate class either alone or together with the holders of one or more other classes or series of stock;

(ii) the number of shares to constitute the series and the designations thereof;

(iii) the preferences, and relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions thereof, if any, with respect to any series;

(iv) whether or not the shares of any series shall be redeemable at the option of the Corporation or the holders thereof or upon the happening of any specified event, and, if redeemable, the redemption price or prices (which may be payable in the form of cash, notes, securities or other property), and the time or times at which, and the terms and conditions upon which, such shares shall be redeemable and the manner of redemption;

(v) whether or not the shares of a series shall be subject to the operation of retirement or sinking funds to be applied to the purchase or redemption of such shares for retirement, and, if such retirement or sinking fund or funds are to be established, the annual amount thereof, and the terms and provisions relative to the operation thereof;

(vi) the dividend rate, whether dividends are payable in cash, stock of the Corporation or other property, the conditions upon which and the times when such dividends are payable, the preference to or the relation to the payment of dividends payable on any other class or classes or series of stock, whether or not such dividends shall be cumulative or noncumulative, and if cumulative, the date or dates from which such dividends shall accumulate;

 

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(vii) the preferences, if any, and the amounts thereof which the holders of any series thereof shall be entitled to receive upon the voluntary or involuntary liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation;

(viii) whether or not the shares of any series, at the option of the Corporation or the holder thereof or upon the happening of any specified event, shall be convertible into or exchangeable for, the shares of any other class or classes or of any other series of the same or any other class or classes of stock, securities or other property of the Corporation and the conversion price or prices or ratio or ratios or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided for in such resolution or resolutions; and

(ix) such other powers, preferences, rights, qualifications, limitations and restrictions with respect to any series as may to the Board seem advisable.

(c) The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all of the foregoing respects.

Section 4.3 Provisions Relating to Common Stock.

(a) Common Stock shall be subject to the express terms of Preferred Stock and any series thereof. Except as may otherwise be required by this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) or by applicable law, the holders of shares of Common Stock shall be entitled to one vote for each such share upon all questions presented to the stockholders and the holders of shares of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and the holders of Preferred Stock shall not be entitled to vote at or receive notice of any meeting of stockholders.

(b) Notwithstanding the foregoing, except as otherwise required by applicable law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation).

(c) Subject to the prior rights and preferences, if any, applicable to shares of Preferred Stock or any series thereof, the holders of shares of Common Stock shall be entitled to receive ratably in proportion to the number of shares of Common Stock held by them such dividends and distributions (payable in cash, stock or otherwise), if any, as may be declared thereon by the Board at any time and from time to time out of any funds of the Corporation legally available therefor.

(d) The number of authorized shares of Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of either Common Stock or Preferred Stock voting separately as a class shall be required therefor.

 

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ARTICLE V

DIRECTORS

Section 5.1 Term and Classes.

(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board. In addition to the powers and authority expressly conferred upon them by statute or by this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

(b) Until the first date on which MRD Holdings LLC, Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P., NGP IX Offshore Holdings, L.P. and any other fund, now or in the future, under common control with, or managed by the same management company (or its successor) as, any of the foregoing (each, a “Fund” and together, the “Funds”) and their respective Affiliates (as such term is defined in Section 10.2) no longer collectively beneficially own (or otherwise have the right to vote or direct the vote of) more than 50% of the outstanding shares of Common Stock (the “Trigger Date”), the directors, other than those who may be elected by the holders of any series of Preferred Stock specified in the related Preferred Stock Designation, shall consist of a single class, with the initial term of office to expire at the 2015 annual meeting, and each director shall hold office until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier death, resignation, disqualification or removal. For purposes of this Amended and Restated Certificate of Incorporation, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended. At each annual meeting of stockholders, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the next succeeding annual meeting of stockholders after their election, with each director to hold office until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier death, resignation, disqualification or removal.

(c) On and after the Trigger Date, the directors, other than those who may be elected by the holders of any series of Preferred Stock specified in the related Preferred Stock Designation, shall be divided, with respect to the time for which they severally hold office, into three classes, serving staggered three-year terms, with the initial term of office of the first class to expire at the first annual meeting of stockholders following the Trigger Date, the initial term of office of the second class to expire at the second annual meeting of stockholders following the Trigger Date and the initial term of office of the third class to expire at the third annual meeting of stockholders following the Trigger Date, with each director to hold office until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier death, resignation, disqualification or removal, and the Board shall be authorized to assign members of the Board, other than those directors who may be elected by the holders of any series of Preferred Stock, to such classes at the time such classification becomes effective. At each annual meeting of stockholders following the Trigger Date, directors elected to succeed those directors

 

4


whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his successor shall have been duly elected and qualified, subject, however, to such director’s earlier death, resignation, disqualification or removal. For purposes of this Amended and Restated Certificate of Incorporation, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

Section 5.2 Vacancies. Subject to applicable law and the rights of the holders of any series of Preferred Stock then outstanding and the then-applicable terms of the Voting Agreement, among the Corporation and certain of its stockholders, dated as of             , 2014 (the “Voting Agreement”), any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, resignation, disqualification or removal of any director or from any other cause shall, unless otherwise required by law or by resolution of the Board, be filled solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall hold office for the remaining term of his predecessor. No decrease in the number of authorized directors constituting the Board shall shorten the term of any incumbent director.

Section 5.3 Removal.

(a) Until the Trigger Date, subject to the rights of the holders of shares of any series of Preferred Stock, if any, to elect additional directors pursuant to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation thereunder) and the then-applicable terms of the Voting Agreement, any director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the voting power of the outstanding shares of stock of the Corporation entitled to vote generally for the election of directors, voting together as a single class and acting at a meeting of the stockholders or by written consent (if permitted) in accordance with the DGCL, this Amended and Restated Certificate of Incorporation and the bylaws of the Corporation.

(b) On and after the Trigger Date, subject to the rights of the holders of shares of any series of Preferred Stock, if any, to elect additional directors pursuant to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation thereunder) and the then-applicable terms of the Voting Agreement, any director may be removed only for cause, upon the affirmative vote of the holders of at least 75% of the voting power of the outstanding shares of stock of the Corporation entitled to vote generally for the election of directors, voting together as a single class and acting at a meeting of the stockholders in accordance with the DGCL, this Amended and Restated Certificate of Incorporation and the bylaws of the Corporation.

Section 5.4 Number. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, if any, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by the affirmative vote of a majority of the Whole Board. Unless and except to the extent that the bylaws of the Corporation so provide, the election of directors need not be by written ballot. For purposes of this Amended

 

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and Restated Certificate of Incorporation, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.

ARTICLE VI

STOCKHOLDER ACTION

Section 6.1 Written Consents.

(a) Prior to the Trigger Date, any action required or permitted to be taken at any annual meeting or special meeting of the stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote of stockholders, if a consent or consents in writing, setting forth the action so taken, is or are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

(b) On and after the Trigger Date, subject to the rights of holders of any series of Preferred Stock with respect to such series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be taken at a duly held annual or special meeting of stockholders and may not be taken by any consent in writing of such stockholders.

ARTICLE VII

SPECIAL MEETINGS

Section 7.1 Special Meetings. Special meetings of stockholders of the Corporation may be called only by the Board pursuant to a resolution adopted by the affirmative vote of a majority of the Whole Board; provided, however, that prior to the Trigger Date, special meetings of the stockholders of the Corporation may also be called by the Secretary of the Corporation at the request of the holders of record of a majority of the outstanding shares of Common Stock. The authorized person(s) calling a special meeting may fix the time and place, if any, of such special meeting. On and after the Trigger Date, subject to the rights of holders of any series of Preferred Stock, the stockholders of the Corporation do not have the power to call or request a special meeting of stockholders of the Corporation.

ARTICLE VIII

BYLAWS

Section 8.1 Bylaws. In furtherance of, and not in limitation of, the powers conferred by the laws of the State of Delaware, the Board is expressly authorized to adopt, amend or repeal the bylaws of the Corporation. Any adoption, amendment or repeal of the bylaws of the Corporation by the Board shall require the approval of a majority of the Whole Board. A Stockholder shall also have the power to adopt, amend or repeal the bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Amended and Restated Certificate of Incorporation, the bylaws of the Corporation shall not be adopted, altered, amended or repealed by the stockholders of the Corporation (i) prior to the Trigger Date, except by the affirmative vote of holders of not less than 50% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class, or (ii) on and after the Trigger Date, except by the

 

6


affirmative vote of holders of not less than 66 23% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class. No bylaws hereafter made or adopted, nor any repeal of or amendment thereto, shall invalidate any prior act of the Board that was valid at the time it was taken.

ARTICLE IX

LIMITATION OF DIRECTOR LIABILITY

Section 9.1 Limitation of Director Liability. No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists. In addition to the circumstances in which a director of the Corporation is not personally liable as set forth in the preceding sentence, a director of the Corporation shall not be liable to the fullest extent permitted by any amendment to the DGCL hereafter enacted that further limits the liability of a director. Any amendment, repeal or modification of this Article IX shall be prospective only and shall not affect any limitation on liability of a director for acts or omissions occurring prior to the date of such amendment, repeal or modification.

ARTICLE X

CORPORATE OPPORTUNITY

Section 10.1 Corporate Opportunities. Members of the NGP Group (defined below) own and will own substantial equity interests in other entities (existing and future) that participate in the energy industry (“NGP Portfolio Companies”) and may enter into advisory service agreements and other agreements from time to time with those NGP Portfolio Companies. Certain members of the Board may also serve as employees, partners, officers or directors of members of the NGP Group and, at any given time, members of the NGP Group may be in direct or indirect competition with the Corporation and/or its subsidiaries. The Corporation waives, to the maximum extent permitted by law, the application of the doctrine of corporate opportunity (or any analogous doctrine) with respect to the Corporation, to the NGP Group or any directors or officers of the Corporation who are also employees, partners, members, managers, officers or directors of any of the NGP Group. As a result of such waiver, no member of the NGP Group, nor any director or officer of the Corporation who is also an employee, partner, member, manager, officer or director of any member of the NGP Group, shall have any obligation to refrain from: (i) engaging in or managing the same or similar activities or lines of business as the Corporation or any of its subsidiaries or developing or marketing any products or services that compete (directly or indirectly) with those of the Corporation or any of its subsidiaries; (ii) investing in or owning any (public or private) interest in any Person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the Corporation or any of its subsidiaries (including any member of the NGP Group, a “Competing Person”); (iii) developing a business relationship with any Competing Person; or (iv) entering into any agreement to provide any service(s) to any Competing Person or acting as an officer, director, member, manager or advisor to, or other principal of, any Competing Person, regardless (in the case of each of (i) – (iv)) whether such activities are in direct or indirect competition with the business or activities of the Corporation or any of its subsidiaries (the activities described in (i) – (iv) are referred to herein as “Specified Activities”). To the fullest extent permitted by law, the Corporation hereby renounces (for itself and on behalf of its subsidiaries) any interest or

 

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expectancy in, or in being offered an opportunity to participate in, any Specified Activity that may be presented to or become known to any member of the NGP Group or any director or officer of the Corporation who is also an employee, partner, member, manager, officer or director of any member of the NGP Group.

Section 10.2 Definitions. For purposes of this Article X, the following terms have the following definitions:

Affiliate” means, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, such specified Person, and with respect to any NGP Group member, an “Affiliate” shall include (i) any Person who is the direct or indirect ultimate holder of Equity Securities (as such term is described in Rule 405 under the Securities Act of 1933, as amended) of such NGP Group member, and (ii) any investment fund, alternative investment vehicle, special purpose vehicle or holding company that is directly or indirectly managed, advised or controlled by such NGP Group member.

NGP Group” means the Funds, MRD Holdings LLC, Affiliates of any of the Funds, Memorial Resource Development LLC and/or MRD Holdings LLC other than the Corporation; and all NGP Portfolio Companies.

Person” means any individual, corporation, partnership, limited liability company, joint venture, firm, association, or other entity.

To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article X.

ARTICLE XI

AMENDMENT OF CERTIFICATE OF INCORPORATION

Section 11.1 Amendments.

(a) The Corporation shall have the right, subject to any express provisions or restrictions contained in this Amended and Restated Certificate of Incorporation, from time to time, to amend this Amended and Restated Certificate of Incorporation or any provision hereof in any manner now or hereafter provided by applicable law, and all rights and powers of any kind conferred upon a director or stockholder of the Corporation by this Amended and Restated Certificate of Incorporation or any amendment hereof are subject to such right of the Corporation.

(b) Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation (and in addition to any other vote that may be required by applicable law or this Amended and Restated Certificate of Incorporation), prior to the Trigger Date, the affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to amend, alter or repeal any provision of this Amended and Restated Certificate of Incorporation.

 

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(c) Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation (and in addition to any other vote that may be required by applicable law or this Amended and Restated Certificate of Incorporation), on and after the Trigger Date, the affirmative vote of the holders of at least 66 23% in voting power of the outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to amend, alter or repeal any provision of this Amended and Restated Certificate of Incorporation; provided, however, that the amendment, alteration or repeal of Section 4.1 shall only require the affirmative vote of the holders of a majority in voting power of the outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class.

ARTICLE XII

FORUM SELECTION

Section 12.1 Exclusive Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees or agents arising pursuant to any provision of the DGCL, this Amended and Restated Certificate of Incorporation or the Corporation’s bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees or agents governed by the internal affairs doctrine except as to each of (i) through (iv) above, for any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or over which the Court of Chancery does not have subject matter jurisdiction. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.

If any provision or provisions of this Article XII shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article XII (including, without limitation, each portion of any sentence of this Article XII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

 

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Section 12.2 Stockholder Consent to Personal Jurisdiction. To the fullest extent permitted by law, if any action the subject matter of which is within the scope of Section 12.1 above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 12.1 above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of Incorporation as of this      day of         , 2014.

 

MEMORIAL RESOURCE DEVELOPMENT CORP.
By:  

 

Name:   John A. Weinzierl
Title:   Chief Executive Officer

[Signature Page to Amended and Restated Certificate of Incorporation]

EX-3.2 3 d658814dex32.htm EX-3.2 EX-3.2

Exhibit 3.2

FORM OF

AMENDED AND RESTATED BYLAWS

OF

MEMORIAL RESOURCE DEVELOPMENT CORP.

Incorporated under the Laws of the State of Delaware

Date of Adoption:             , 2014

 

 

ARTICLE I

OFFICES AND RECORDS

SECTION 1.1. Registered Office. The registered office of Memorial Resource Development Corp. (the “Corporation”) in the State of Delaware shall be as set forth in the Amended and Restated Certificate of Incorporation of the Corporation, as it may be amended from time to time (the “Certificate of Incorporation”), and the name of the Corporation’s registered agent at such address is as set forth in the Certificate of Incorporation. The registered office and registered agent of the Corporation may be changed from time to time by the board of directors of the Corporation (the “Board”) in the manner provided by applicable law.

SECTION 1.2. Other Offices. The Corporation may have such other offices, either within or without the State of Delaware, as the Board may designate or as the business of the Corporation may from time to time require.

SECTION 1.3. Books and Records. The books and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board.

ARTICLE II

STOCKHOLDERS

SECTION 2.1. Annual Meeting. If required by applicable law, an annual meeting of the stockholders of the Corporation shall be held at such date, time and place, if any, either within or outside of the State of Delaware, and time as may be fixed by resolution of the Board. The Board may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board.

SECTION 2.2. Special Meeting. Special meetings of stockholders of the Corporation may be called only by the Board pursuant to a resolution adopted by the affirmative vote of a majority of the Whole Board; providedhowever, that prior to the first date on which MRD Holdings LLC, Natural Gas Partners VIII L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P. (each, a “Fund” and collectively, the “Funds”) and their respective affiliates (as such term is defined in the Certificate of Incorporation) no longer collectively beneficially own (or otherwise have the right to vote or direct the vote of) more than 50% of the outstanding shares of the Corporation’s common stock, par value $0.01 per share (“Common Stock”) (the “Trigger Date”), special meetings of the stockholders of the Corporation may also be called by the Secretary of the Corporation at the request of the holders of record of a majority of the outstanding shares of Common Stock. For purposes of these Bylaws, beneficial ownership of shares shall be determined in accordance with Rule 13d-3 promulgated under the Exchange Act. The authorized person(s) calling a special meeting may fix the time and place, if any, of such meeting. On and after the Trigger Date, subject to the rights of holders of any series of Preferred Stock, the stockholders of the Corporation do not have the power to call or request a special meeting of stockholders of the Corporation. The Board may postpone, reschedule or cancel any special meeting of the stockholders previously scheduled by the Board. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships.


SECTION 2.3. Record Date.

(A) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by applicable law, not be more than 60 nor less than ten days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

(B) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

SECTION 2.4. Stockholder List. The officer who has charge of the stock ledger shall prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at any meeting of stockholders (provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date), arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in the name of such stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either on a reasonably accessible electronic network (provided that the information required to gain access to the list is provided with the notice of the meeting) or during ordinary business hours at the principal place of business of the Corporation. The stock list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise required by applicable law, the stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled by this section to examine the list required by this section or to vote in person or by proxy at any meeting of the stockholders.

SECTION 2.5. Place of Meeting. The Board, the Chairman of the Board, the Chief Executive Officer or the President, as the case may be, may designate the place of meeting for any annual meeting or for any special meeting of the stockholders. If no designation is so made, the place of meeting shall be the principal executive offices of the Corporation. The Board, acting in its sole discretion, may establish guidelines and procedures in accordance with applicable provisions of the Delaware General Corporation Law (the “DGCL”) and any other applicable law for the participation by stockholders and proxyholders in a meeting of stockholders by means of remote communications, and may determine that any meeting of stockholders will not be held at any place but will be held solely by means of remote communication. Stockholders and proxyholders complying with such procedures and guidelines and otherwise entitled to vote at a meeting of stockholders shall be deemed present in person and entitled to vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication.

 

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SECTION 2.6. Notice of Meeting. Written notice, stating the place, if any, date and time of the meeting, shall be given not less than ten days nor more than 60 days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. The notice shall specify (i) the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), (ii) the place, if any, date and time of such meeting, (iii) the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and (iv) in the case of a special meeting, the purpose or purposes for which such meeting is called. If the stockholder list referred to in Section 2.4 of these Bylaws is made accessible on an electronic network, the notice of meeting must indicate how the stockholder list can be accessed. If the meeting of stockholders is to be held solely by means of electronic communications, the notice of meeting must provide the information required to access such stockholder list during the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his address as it appears on the stock transfer books of the Corporation. The Corporation may provide stockholders with notice of a meeting by electronic transmission provided such stockholders have consented to receiving electronic notice in accordance with the DGCL. Such further notice shall be given as may be required by applicable law. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the notice of meeting.

SECTION 2.7. Quorum and Adjournment of Meetings.

(A) Except as otherwise required by applicable law or by the Certificate of Incorporation, the holders of a majority of the voting power of all of the outstanding shares of stock of the Corporation entitled to vote at the meeting (the “Voting Stock”), represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority of the voting power of all of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. The chairman of the meeting or the affirmative vote of a majority of the voting power of the outstanding shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum. The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

(B) Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.

SECTION 2.8. Proxies. At all meetings of stockholders, a stockholder may vote by proxy executed in writing (or in such other manner prescribed by the DGCL) by the stockholder or by his duly authorized attorney-in-fact. Any copy, facsimile transmission or other reliable reproduction of the writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile transmission or other reproduction shall be a complete reproduction of the entire original writing or transmission. No proxy may be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy is revocable at the pleasure of the stockholder executing it unless the proxy states that it is irrevocable and applicable law makes it irrevocable. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary of the Corporation.

SECTION 2.9. Notice of Stockholder Business and Nominations.

(A) Annual Meetings of Stockholders.

(1) Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders at an annual meeting of stockholders may be made only

 

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(a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board or any committee thereof or (c) by any stockholder of the Corporation who (i) was a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the annual meeting, (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in these Bylaws as to such business or nomination; Section 2.9(A)(2) of these Bylaws shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, and included in the Corporation’s notice of meeting) before an annual meeting of the stockholders.

(2) For any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.9(A)(2) of these Bylaws, (a) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (b) such other business must otherwise be a proper matter for stockholder action under the DGCL and (c) the record stockholder and the beneficial owner, if any, on whose behalf any such proposal or nomination is made, must have acted in accordance with the representations set forth in the Solicitation Statement required by these Bylaws. To be timely, a stockholder’s notice shall be received by the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting (which anniversary, in the case of the first annual meeting of stockholders following the close of the Corporation’s initial public offering, shall be deemed to be May 1, 2015; providedhowever, that subject to the following sentence, in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. To be in proper form, a stockholder’s notice (whether given pursuant to this Section 2.9(A)(2) or Section 2.9(B)) to the Secretary of the Corporation must:

(a) set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such stockholder’s Stockholder Associated Person (as defined in Section 2.9(C)(2)), if any, (ii) (A) the class or series and number of shares of the Corporation that are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of stock of the Corporation or otherwise (a “Derivative Instrument”), directly or indirectly owned beneficially by such stockholder or by any Stockholder Associated Person and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (C) a description of any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or any Stockholder Associated Person has a right to vote, directly or indirectly, any shares of any security of the Corporation, (D) any short interest in any security of the Corporation held by such stockholder or any Stockholder Associated Person (for purposes of these Bylaws a person shall be deemed to have a “short interest” in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (E) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or by any Stockholder Associated Person that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or any Stockholder Associated Person is a general partner or, directly or

 

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indirectly, beneficially owns an interest in a general partner and (G) any performance-related fees (other than an asset-based fee) that such stockholder or any Stockholder Associated Person is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s or any Stockholder Associated Person’s immediate family sharing the same household (which information shall be supplemented by such stockholder and any Stockholder Associated Person, if any, not later than ten days after the record date for determining the stockholders entitled to vote at the meeting to disclose such ownership as of the record date; provided, that if such date is after the date of the meeting, not later than the day prior to the meeting), (iii) any other information relating to such stockholder and any Stockholder Associated Person, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (iv) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting, and (v) a representation as to whether or not such stockholder or any Stockholder Associated Person will (vi) deliver a proxy statement or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding stock required to approve or adopt the proposal or, in the case of a nomination or nominations, at least the percentage of the voting power of the Corporation’s outstanding stock reasonably believed by the stockholder or Stockholder Associated Person, as the case may be, to be sufficient to elect such nominee or nominees (such representation a “Solicitation Statement”). If requested by the Corporation, the information required under clauses (a)(i) and (ii) of the preceding sentence of this Section 2.9(A)(2)(a) shall be supplemented by such stockholder and any such Stockholder Associated Person not later than ten days after the record date for notice of the meeting to disclose such information as of such record date;

(b) if the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, set forth (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and Stockholder Associated Person, if any, in such business and (ii) a description of all agreements, arrangements and understandings between such stockholder and Stockholder Associated Person, if any, and any other person(s) or entity or entities (including their names) in connection with the proposal of such business by such stockholder;

(c) set forth, as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and Stockholder Associated Person, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

 

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(d) with respect to each nominee for election or reelection to the Board, include a completed and signed questionnaire, representation and agreement in a form provided by the Corporation. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

(3) Notwithstanding anything in the second sentence of Section 2.9(A)(2) of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 10 days before the last day a record stockholder may deliver a notice of nomination in accordance with the second sentence of Section 2.9(A)(2), a stockholder’s notice required by these Bylaws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

(B) Special Meetings of Stockholders.

Following the Trigger Date, only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting by or at the direction of the Board. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to a notice of meeting (a) by or at the direction of the Board or any committee thereof (or stockholders pursuant to Article VII of the Certificate of Incorporation and Section 2.2 of these Bylaws prior to the Trigger Date) or (b) provided, that the Board (or stockholders pursuant to Article VII of the Certificate of Incorporation and Section 2.2 of these Bylaws prior to the Trigger Date) has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (i) is a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the special meeting, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in these Bylaws. The proposal by stockholders of other business to be conducted at a special meeting of stockholders may be made only in accordance with Article VII of the Certificate of Incorporation prior to the Trigger Date. In the event a special meeting of stockholders is called for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder delivers notice with the information required by Section 2.9(A)(2) of these Bylaws with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 2.9(A)(2) of these Bylaws). Such notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

(C) General.

(1) Only such persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in these Bylaws. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall be disregarded.

 

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(2) For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by Dow Jones News Service, the Associated Press, or any other national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder and “Stockholder Associated Person” shall mean for any stockholder (i) any person or entity controlling, directly or indirectly, or acting in concert with, such stockholder, (ii) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder, or (iii) any person or entity controlling, controlled by or under common control with any person or entity referred to in the preceding clauses (i) and (ii).

(3) Notwithstanding the foregoing provisions of these Bylaws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in these Bylaws; providedhowever, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.9(A) or Section 2.9(B) of these Bylaws. Nothing in these Bylaws shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of preferred stock of the Corporation (“Preferred Stock”) if and to the extent provided for under applicable law or the Certificate of Incorporation.

(4) The Corporation may require any proposed stockholder nominee for director to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation. Unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) making a nomination or proposal under this Section 2.9 does not appear at a meeting of stockholders to present such nomination or proposal, the nomination shall be disregarded and the proposed business shall not be transacted, as the case may be, notwithstanding that proxies in favor thereof may have been received by the Corporation. For purposes of this Section 2.9, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

SECTION 2.10. Conduct of Business. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the person presiding over any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

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SECTION 2.11. Required Vote. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, at any meeting at which directors are to be elected, so long as a quorum is present, the directors shall be elected by a plurality of the votes validly cast in such election. Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors shall be prohibited. Except as otherwise required by applicable law, the rules and regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation, or these Bylaws, in all matters other than the election of directors and certain non-binding advisory votes described below, the affirmative vote of a majority of the voting power of the outstanding shares present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the act of the stockholders. In non-binding advisory matters with more than two possible vote choices, the affirmative vote of a plurality of the voting power of the outstanding shares present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the recommendation of the stockholders.

SECTION 2.12. Treasury Stock. The Corporation shall not vote, directly or indirectly, shares of its own stock belonging to it or any other corporation, if a majority of shares entitled to vote in the election of directors of such corporation is held, directly or indirectly by the Corporation, and such shares will not be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or such other corporation, to vote stock of the Corporation held in a fiduciary capacity.

SECTION 2.13. Inspectors of Elections; Opening and Closing the Polls. The Corporation may, and when required by applicable law, shall, appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders and the appointment of an inspector is required by applicable law, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his ability. The inspectors shall have the duties prescribed by applicable law.

SECTION 2.14. Stockholder Action by Written Consent. Prior to the Trigger Date, any action required or permitted to be taken at any annual meeting or special meeting of the stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote of stockholders, if a consent or consents in writing, setting forth the action so taken, is or are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. On and after the Trigger Date, subject to the rights of holders of any series of Preferred Stock with respect to such series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be taken at a duly held annual or special meeting of stockholders and may not be taken by any consent in writing of such stockholders.

ARTICLE III

BOARD OF DIRECTORS

SECTION 3.1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board elected in accordance with these Bylaws. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. The directors shall act only as a Board, and the individual directors shall have no power as such.

SECTION 3.2. Number, Tenure and Qualifications. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, if any, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Whole Board. The election and term of directors shall be as set forth in the Certificate of Incorporation.

 

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SECTION 3.3. Regular Meetings. Subject to Section 3.5, regular meetings of the Board shall be held on such dates, and at such times and places, as are determined from time to time by resolution of the Board.

SECTION 3.4. Special Meetings. Special meetings of the Board shall be called at the request of the Chairman of the Board, the Chief Executive Officer or a majority of the Board then in office. The person or persons authorized to call special meetings of the Board may fix the place, if any, date and time of the meetings. Any business may be conducted at a special meeting of the Board.

SECTION 3.5. Notice. Notice of any special meeting of directors shall be given to each director at his business or residence in writing by hand delivery, first-class or overnight mail, courier service or facsimile or electronic transmission or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five days before such meeting. If by overnight mail or courier service, such notice shall be deemed adequately delivered when the notice is delivered to the overnight mail or courier service company at least 24 hours before such meeting. If by facsimile or electronic transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least 24 hours before such meeting. If by telephone or by hand delivery, the notice shall be given at least 24 hours prior to the time set for the meeting and shall be confirmed by facsimile or electronic transmission that is sent promptly thereafter. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, except for amendments to these Bylaws, as provided under Section 8.1.

SECTION 3.6. Action by Consent of Board. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, including by electronic transmission, and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State of the State of Delaware.

SECTION 3.7. Conference Telephone Meetings. Members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

SECTION 3.8. Quorum. A whole number of directors equal to at least a majority of the Whole Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the directors present may, to the fullest extent permitted by law, adjourn the meeting from time to time without further notice unless (i) the date, time and place, if any, of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 3.5 of these Bylaws shall be given to each director, or (ii) the meeting is adjourned for more than 24 hours, in which case the notice referred to in clause (i) shall be given to those directors not present at the announcement of the date, time and place of the adjourned meeting. Except as otherwise expressly required by law, the Certificate of Incorporation or the Bylaws, all matters shall be determined by the affirmative vote of a majority of the directors present at a meeting at which a quorum is present. To the fullest extent permitted by law, the directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

SECTION 3.9. Vacancies. Subject to applicable law and the rights of holders of any series of Preferred Stock then outstanding, any newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, resignation, disqualification or removal of any director or from any other cause shall, unless otherwise required by law or by resolution of the Board, be filled solely by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall hold office for the remaining term of his predecessor. No decrease in the number of authorized directors constituting the Board shall shorten the term of any incumbent director.

 

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SECTION 3.10. Removal. Until the Trigger Date, subject to the rights of the holders of shares of any series of Preferred Stock, if any, to elect additional directors pursuant to the Certificate of Incorporation (including any certificate of designation thereunder), any director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the voting power of the outstanding shares of stock of the Corporation entitled to vote generally for the election of directors, voting together as a single class. On and after the Trigger Date, subject to the rights of the holders of shares of any series of Preferred Stock, if any, to elect additional directors pursuant to the Certificate of Incorporation (including any certificate of designation thereunder), any director may be removed only for cause, upon the affirmative vote of the holders of at least 75% of the outstanding shares of stock of the Corporation entitled to vote generally for the election of directors, voting together as a single class.

SECTION 3.11. Records. The Board shall cause to be kept a record containing the minutes of the proceedings of the meetings of the Board and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the Corporation.

SECTION 3.12. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.

SECTION 3.13. Regulations. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board may adopt such rules and regulations for the conduct of meetings of the Board and for the management of the affairs and business of the Corporation as the Board may deem appropriate.

SECTION 3.14. Board Observers. To the extent provided by the Voting Agreement, dated as of , between the Corporation, MRD Holdings LLC and the other parties thereto (the “Voting Agreement”) and to the fullest extent permitted by law, certain parties to such agreement shall have the right to designate an individual who may attend (in a non-voting observer capacity) each meeting of the Board. The Board and the Corporation shall comply with the Voting Agreement.

ARTICLE IV

COMMITTEES

SECTION 4.1. Designation; Powers. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent permitted by applicable law and to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.

SECTION 4.2. Procedure; Meetings; Quorum. Any committee designated pursuant to Section 4.1 shall choose its own chairman by a majority vote of the members then in attendance in the event the chairman has not been selected by the Board, shall keep regular minutes of its proceedings, and shall meet at such times and at such place or places as may be provided by the charter of such committee or by resolution of such committee or resolution of the Board. At every meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution. The Board shall adopt a charter for each committee for which a charter is required by applicable laws, regulations or stock exchange rules, may adopt a charter for any other committee, and may adopt other rules and regulations for the governance of any committee not inconsistent with the provisions of these Bylaws or any such charter, and each committee may adopt its own rules and regulations of governance, to the extent not inconsistent with these Bylaws or any charter or other rules and regulations adopted by the Board.

 

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SECTION 4.3. Substitution of Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of the absent or disqualified member.

ARTICLE V

OFFICERS

SECTION 5.1. Officers. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a President, a Secretary, a Treasurer and such other officers as the Board from time to time may deem proper. The Chairman of the Board shall be chosen from among the directors. All officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article V. Such officers shall also have such powers and duties as from time to time may be conferred by the Board or by any committee thereof or, with respect to any Senior Vice President, Vice President, Treasurer or Secretary, by the Chairman of the Board, Chief Executive Officer or President. The Board or any committee thereof may from time to time elect, or the Chairman of the Board, Chief Executive Officer or President may appoint, such other officers (including a Chief Financial Officer, Chief Operating Officer and one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers) and such agents, as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in these Bylaws or as may be prescribed by the Board or such committee thereof or by the Chairman of the Board, Chief Executive Officer or President, as the case may be. Any number of offices may be held by the same person.

SECTION 5.2. Election and Term of Office. Each officer shall hold office until his successor shall have been duly elected or appointed and shall have qualified or until his death or until he shall resign, but any officer may be removed from office at any time by the affirmative vote of a majority of the Board or, except in the case of an officer elected by the Board, by the Chairman of the Board, Chief Executive Officer or President. Such removal shall be without prejudice to the contractual rights, if any, of the person so removed. No elected officer shall have any contractual rights against the Corporation for compensation by virtue of such election beyond the date of the election of his successor, his death, his resignation or his removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan.

SECTION 5.3. Chairman of the Board. The Chairman of the Board shall preside at all meetings of the stockholders and of the Board. The Chairman of the Board shall be responsible for the general management of the affairs of the Corporation and shall perform all duties incidental to his office that may be required by law and all such other duties as are properly required of him by the Board. He shall make reports to the Board, and shall see that all orders and resolutions of the Board and of any committee thereof are carried into effect. The Chairman of the Board may also serve as Chief Executive Officer, if so elected by the Board.

SECTION 5.4. Chief Executive Officer. The Chief Executive Officer shall act in a general executive capacity and shall assist the Chairman of the Board in the administration and operation of the Corporation’s business and general supervision of its policies and affairs. The Chief Executive Officer shall, in the absence of or because of the inability to act of the Chairman of the Board, perform all duties of the Chairman of the Board and preside at all meetings of stockholders and of the Board. The Chief Executive Officer shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and all other documents and instruments in connection with the business of the Corporation.

SECTION 5.5. President. The President shall be the chief operating officer of the Corporation and shall, subject to the authority of the Chief Executive Officer and the Board, have general management and control of the day-to-day business operations of the Corporation and shall consult with and report to the Chief Executive Officer. The President shall put into operation the business policies of the Corporation as determined by the Chief Executive Officer and the Board and as communicated to the President by the Chief Executive Officer and the Board. In the absence (or inability or refusal to act) of the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board.

 

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SECTION 5.6. Senior Vice Presidents and Vice Presidents. Each Senior Vice President and Vice President, if any, shall have such powers and shall perform such duties as shall be assigned to him by the Board or the Chairman of the Board, the Chief Executive Officer, or the President.

SECTION 5.7. Treasurer. The Treasurer shall exercise general supervision over the receipt, custody and disbursement of corporate funds. He shall have such further powers and duties and shall be subject to such directions as may be granted or imposed upon him from time to time by the Board, the Chairman of the Board, the Chief Executive Officer or the President.

SECTION 5.8. Secretary. The Secretary shall keep or cause to be kept in one or more books provided for that purpose, the minutes of all meetings of the Board, the committees of the Board and the stockholders; he shall see that all notices are duly given in accordance with the provisions of these Bylaws and as required by applicable law; he shall be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; and he shall see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and in general, he shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board, the Chairman of the Board, the Chief Executive Officer or the President.

SECTION 5.9. Vacancies. A newly created elected office and a vacancy in any elected office because of death, resignation, or removal may be filled by the Board for the unexpired portion of the term at any meeting of the Board. Any vacancy in an office appointed by the Chairman of the Board, the Chief Executive Officer or the President because of death, resignation, or removal may be filled by the Chairman of the Board, the Chief Executive Officer or the President.

SECTION 5.10. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board, the Chief Executive Officer or any officer authorized by the Chairman of the Board, the Chief Executive Officer, or the President, shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of security holders of or with respect to any action of security holders of any other corporation in which the Corporation may hold securities and otherwise to exercise any and all rights and powers that the Corporation may possess by reason of its ownership of securities in such other corporation.

SECTION 5.11. Delegation. The Board may from time to time delegate the powers and duties of any officer to any other officer or agents, notwithstanding any provision hereof.

ARTICLE VI

STOCK CERTIFICATES AND TRANSFERS

SECTION 6.1. Stock Certificates and Transfers. The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the appropriate officers of the Corporation may from time to time prescribe, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock may be uncertificated shares. The shares of the stock of the Corporation shall be entered in the books of the Corporation as they are issued and shall exhibit the holder’s name and number of shares. Subject to the provisions of the Certificate of Incorporation, the shares of the stock of the Corporation shall be transferred on the books of the Corporation, which may be maintained by a third-party registrar or transfer agent, by the holder thereof in person or by his attorney, upon surrender for cancellation of certificates for at least the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require or upon receipt of proper transfer instructions from the registered holder of uncertificated shares and upon compliance with appropriate procedures for transferring shares in uncertificated form, at which time the Corporation shall issue a new certificate to the person entitled thereto (if the stock is then represented by certificates), cancel the old certificate and record the transaction upon its books.

 

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Each certificated share of stock shall be signed, countersigned and registered in the manner required by law. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

SECTION 6.2. Lost, Stolen or Destroyed Certificates. No certificate for shares or uncertificated shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or stolen, except on production of such evidence of such loss, destruction or theft and on delivery to the Corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board or any financial officer may in its or his discretion require.

SECTION 6.3. Ownership of Shares. The Corporation shall be entitled to treat the holder of record of any share or shares of stock of the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by the laws of the State of Delaware.

SECTION 6.4. Regulations Regarding Certificates. The Board shall have the power and authority to make all such rules and regulations concerning the issue, transfer and registration or the replacement of certificates for shares of stock of the Corporation. The Corporation may enter into additional agreements with stockholders to restrict the transfer of stock of the Corporation in any manner not prohibited by the DGCL.

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the thirty-first day of December of each year.

SECTION 7.2. Dividends. Except as otherwise provided by law or the Certificate of Incorporation, the Board may from time to time declare, and the Corporation may pay, dividends on its outstanding shares of stock, which dividends may be paid in either cash, property or shares of stock of the Corporation. A member of the Board, or a member of any committee designated by the Board, shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

SECTION 7.3. Seal. If the Board determines that the Corporation shall have a corporate seal, the corporate seal shall have enscribed thereon the words “Corporate Seal,” the year of incorporation, and the words “Memorial Resource Development Corp. — Delaware.”

SECTION 7.4. Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the DGCL, the Certificate of Incorporation or these Bylaws, a waiver thereof in writing, including by electronic transmission, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the Board or committee thereof need be specified in any waiver of notice of such meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

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SECTION 7.5. Resignations. Any director or any officer, whether elected or appointed, may resign at any time by giving written notice, including by electronic transmission, of such resignation to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received by the Chairman of the Board, the Chief Executive Officer, the President or the Secretary, or at such later time as is specified therein. No formal action shall be required of the Board or the stockholders to make any such resignation effective.

SECTION 7.6. Indemnification and Advancement of Expenses.

(A) The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (a “Covered Person”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, trustee, employee or agent, or in any other capacity while serving as a director, officer, trustee, employee or agent, against all expenses, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by such Covered Person in connection with such proceeding.

(B) The Corporation shall, to the fullest extent not prohibited by applicable law as it presently exists or may hereafter be amended, pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition; provided, however, that to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined by final judicial decision from which there is no further right to appeal (hereinafter, a “final adjudication”) that the Covered Person is not entitled to be indemnified under this Section 7.6 or otherwise.

(C) The rights to indemnification and advancement of expenses under this Section 7.6 shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 7.6, except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to a Covered Person in connection with a proceeding (or part thereof) initiated by such Covered Person only if such proceeding (or part thereof) was authorized by the Board.

(D) If a claim for indemnification under this Section 7.6 (following the final disposition of such proceeding) is not paid in full within sixty days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Section 7.6 is not paid in full within thirty days after the Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the Covered Person shall be entitled to be paid the expense of prosecuting such claim, or a claim brought by the Corporation to recover an advancement of expenses prior to the terms of an undertaking, to the fullest extent permitted by applicable law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law. In (i) any suit brought by a Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by a Covered Person to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the Covered Person has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its

 

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directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that the Covered Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit. In any suit brought by the Covered Person to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to such advancement of expenses, under this Article 7.6 or otherwise shall be on the Corporation.

(E) The rights conferred on any Covered Person by this Section 7.6 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, any provision of the Certificate of Incorporation, these Bylaws, any agreement or vote of stockholders or disinterested directors or otherwise.

(F) This Section 7.6 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

(G) Any Covered Person entitled to indemnification and/or advancement of expenses, in each case pursuant to this Section 7.6, may have certain rights to indemnification, advancement and/or insurance provided by one or more persons with whom or which such Covered Person may be associated (including, without limitation, any Fund). The Corporation hereby acknowledges and agrees that (i) the Corporation shall be the indemnitor of first resort with respect to any proceeding, expense, liability or matter that is the subject of this Section 7.6, (ii) the Corporation shall be primarily liable for all such obligations and any indemnification afforded to a Covered Person in respect of a proceeding, expense, liability or matter that is the subject of this Section 7.6, whether created by law, organizational or constituent documents, contract or otherwise, (iii) any obligation of any persons with whom or which a Covered Person may be associated (including, without limitation, any Fund) to indemnify such Covered Person and/or advance expenses or liabilities to such Covered Person in respect of any proceeding shall be secondary to the obligations of the Corporation hereunder, (iv) the Corporation shall be required to indemnify each Covered Person and advance expenses to each Covered Person hereunder to the fullest extent provided herein without regard to any rights such Covered Person may have against any other person with whom or which such Covered Person may be associated (including, without limitation, any Fund) or insurer of any such person, and (v) the Corporation irrevocably waives, relinquishes and releases any other person with whom or which a Covered Person may be associated (including, without limitation, any Fund) from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Corporation hereunder.

SECTION 7.7. Facsimile and Electronic Signatures. In addition to the provisions for use of facsimile or electronic signatures elsewhere specifically authorized in these Bylaws, facsimile or electronic signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof, the Chairman of the Board, the Chief Executive Officer or President.

SECTION 7.8. Time Periods. In applying any provision of these Bylaws that require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

SECTION 7.9. Reliance Upon Books, Reports and Records. Each director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees designated by the Board, or by any other person as to the matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

 

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SECTION 7.10. Forum for Adjudication of Disputes.

(A) Exclusive Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees or agents arising pursuant to any provision of the DGCL, the Certificate of Incorporation or these Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees or agents governed by the internal affairs doctrine except as to each of (i) through (iv) above, for any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.

(B) To the fullest extent permitted by law, if any action the subject matter of which is within the scope of Section 7.10(A) above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 7.10(A) above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

ARTICLE VIII

AMENDMENTS

SECTION 8.1. Amendments. In furtherance of, and not in limitation of, the powers conferred by the laws of the State of Delaware, the Board is expressly authorized to adopt, amend or repeal the bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board shall require the approval of a majority of the Whole Board. Stockholders shall also have the power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Certificate of Incorporation, the Bylaws of the Corporation shall not be adopted, altered, amended or repealed by the stockholders of the Corporation (i) prior to the Trigger Date, except by the affirmative vote of holders of not less than 50% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class, or (ii) on and after the Trigger Date, except by the affirmative vote of holders of not less than 66 2/3% in voting power of the then-outstanding shares of stock entitled to vote thereon, voting together as a single class. No Bylaws hereafter made or adopted, nor any repeal of or amendment thereto, shall invalidate any prior act of the Board that was valid at the time it was taken. So long as the Voting Agreement remains in effect, the Board shall not approve any amendment, alteration or repeal of Section 3.14 of these Bylaws, or the adoption of any new Bylaw, that would be contrary to or inconsistent with Article 4 of the Voting Agreement.

Notwithstanding the foregoing, (i) no amendment to the Voting Agreement (whether or not such amendment modifies any provision to the Voting Agreement to which these Bylaws are subject) shall be deemed an amendment of these Bylaws for purposes of this Section 8.1, and (ii) no amendment, alteration or repeal of Section 7.6 shall adversely affect any right or protection existing under these Bylaws immediately prior to such amendment, alteration or repeal, including any right or protection of a present or former director, officer or employee thereunder in respect of any act or omission occurring prior to the time of such amendment.

 

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EX-10.1 4 d658814dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

MEMORIAL RESOURCE DEVELOPMENT CORP.

2014 LONG TERM INCENTIVE PLAN


TABLE OF CONTENTS

 

               Page  
1.    Purpose      1  
2.    Definitions      1  
3.    Administration      5  
   (a)    Authority of the Committee      5  
   (b)    Manner of Exercise of Committee Authority      6  
   (c)    Limitation of Liability      7  
4.    Stock Subject to Plan      7  
   (a)    Overall Number of Shares Available for Delivery      7  
   (b)    Application of Limitation to Grants of Awards      7  
   (c)    Availability of Shares Not Issued under Awards      7  
   (d)    Stock Offered      7  
5.    Eligibility; Per Person Award Limitations      8  
6.    Specific Terms of Awards      8  
   (a)    General      8  
   (b)    Options      8  
   (c)    Stock Appreciation Rights      9  
   (d)    Restricted Stock      10  
   (e)    Restricted Stock Units      11  
   (f)    Bonus Stock and Awards in Lieu of Obligations      12  
   (g)    Dividend Equivalents      12  
   (h)    Other Awards      12  
7.    Certain Provisions Applicable to Awards      12  
   (a)    Termination of Employment      12  
   (b)    Stand-Alone, Additional, Tandem, and Substitute Awards      12  
   (c)    Term of Awards      13  
   (d)    Form and Timing of Payment under Awards; Deferrals      13  
   (e)    Exemptions from Section 16(b) Liability      13  
   (f)    Non-Competition Agreement      14  
8.    Performance and Annual Incentive Awards      14  
   (a)    Performance Conditions      14  
   (b)    Performance Awards Granted to Designated Covered Employees      14  
   (c)    Annual Incentive Awards Granted to Designated Covered Employees      16  
   (d)    Written Determinations      17  
   (e)    Status of Section 8(b) and Section 8(c) Awards under Section 162(m) of the Code      17  
9.    Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization      18  
   (a)    Existence of Plans and Awards      18  
   (b)    Subdivision or Consolidation of Shares      18  

 

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   (c)    Corporate Recapitalization      19  
   (d)    Additional Issuances      19  
   (e)    Change in Control      19  
   (f)    Change in Control Price      20  
   (g)    Impact of Corporate Events on Awards Generally      20  
10.    General Provisions      21  
   (a)    Transferability      21  
   (b)    Taxes      22  
   (c)    Changes to this Plan and Awards      22  
   (d)    Limitation on Rights Conferred under Plan      23  
   (e)    Unfunded Status of Awards      23  
   (f)    Nonexclusivity of this Plan      23  
   (g)    Fractional Shares      23  
   (h)    Severability      23  
   (i)    Governing Law      24  
   (j)    Conditions to Delivery of Stock      24  
   (k)    Section 409A of the Code      24  
   (l)    Plan Effective Date and Term      24  

 

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MEMORIAL RESOURCE DEVELOPMENT CORP.

2014 Long Term Incentive Plan

1. Purpose. The purpose of the Memorial Resource Development Corp. 2014 Long Term Incentive Plan (the “Plan”) is to provide a means through which Memorial Resource Development Corp., a Delaware corporation (the “Company”), and its Subsidiaries may attract and retain able persons as employees, directors and consultants of the Company and its Subsidiaries, and to provide a means whereby those persons upon whom the responsibilities of the successful administration and management of the Company and its Subsidiaries rest, and whose present and potential contributions to the welfare of the Company and its Subsidiaries are of importance, can acquire and maintain stock ownership, or awards the value of which is tied to the performance of the Company, thereby strengthening their concern for the welfare of the Company and its Subsidiaries and their desire to remain employed. A further purpose of this Plan is to provide such employees, directors and consultants with additional incentive and reward opportunities designed to enhance the profitable growth of the Company. Accordingly, this Plan primarily provides for the granting of Incentive Stock Options, options which do not constitute Incentive Stock Options, Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, Dividend Equivalents, Bonus Stock, Other Stock-Based Awards, Annual Incentive Awards, Performance Awards, or any combination of the foregoing, as is best suited to the circumstances of the particular individual as provided herein.

2. Definitions. For purposes of this Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section 1 hereof:

(a) “Annual Incentive Award” means a conditional right granted to an Eligible Person under Section 8(c) hereof to receive a cash payment, Stock or other Award, unless otherwise determined by the Committee, after the end of a specified year.

(b) “Award” means any Option, SAR, Restricted Stock Award, Restricted Stock Unit, Bonus Stock, Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual Incentive Award, together with any other right or interest granted to a Participant under this Plan.

(c) “Beneficiary” means one or more persons, trusts or other entities which have been designated by a Participant, in his or her most recent written beneficiary designation filed with the Committee, to receive the benefits specified under this Plan upon such Participant’s death or to which Awards or other rights are transferred if and to the extent permitted under Section 10(a) hereof. If, upon a Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the persons, trusts or other entities entitled by will or the laws of descent and distribution to receive such benefits.

(d) “Board” means the Company’s Board of Directors.

(e) “Bonus Stock” means Stock granted as a bonus pursuant to Section 6(f).


(f) “Business Day” means any day other than a Saturday, a Sunday, or a day on which banking institutions in the state of Texas are authorized or obligated by law or executive order to close.

(g) “Change in Control” means, except as otherwise provided in an Award Agreement, the occurrence of any of the following events:

(i) The consummation of an agreement to acquire or a tender offer for beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act by any Person, of 50% or more of either (x) the then outstanding shares of Stock (the “Outstanding Stock”) or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, (D) any acquisition by any entity pursuant to a transaction that complies with clauses (A), (B) and (C) of paragraph (iii) below or (E) any transfer of voting power relating to the Outstanding Company Voting Securities to any entity or entities controlled by or under common control with NGP Energy Capital Management, L.L.C;

(ii) Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board;

(iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (A) the Outstanding Stock and Outstanding Company Voting Securities immediately prior to such Business Combination represent or are converted into or exchanged for securities which represent or are convertible into more than 50% of, respectively, the then outstanding shares of common stock or common equity interests and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or other governing body, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company, or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person (excluding any employee benefit plan (or related trust) of the Company, the entity resulting from such Business Combination or any entity controlled by or under common control with NGP Energy Capital Management, L.L.C.) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock or common equity interests of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or other governing body of such entity to the extent that such ownership results solely from ownership of the Company that existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors or similar governing body of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

 

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(iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, with respect to an Award that provides for a deferral of compensation under the Nonqualified Deferred Compensation Rules and with respect to which a Change in Control would accelerate vesting, “Change in Control” shall mean an event that qualifies both as a “Change in Control” as defined in this Section 2(g) as well as a “change of control event” as defined in the Nonqualified Deferred Compensation Rules.

(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.

(i) “Committee” means a committee of two or more directors designated by the Board to administer this Plan; provided, however, that, unless otherwise determined by the Board, the Committee shall consist solely of two or more directors, each of whom shall be a Qualified Member (except to the extent administration of this Plan by “outside directors” is not then required in order to qualify for tax deductibility under section 162(m) of the Code).

(j) “Control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of management and the policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

(k) “Covered Employee” means an Eligible Person who is a Covered Employee as specified in Section 8(e) of this Plan.

(l) “Dividend Equivalent” means a right, granted to an Eligible Person under Section 6(g), to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.

(m) “Effective Date” means                     , 2014.

(n) “Eligible Person” means all officers and employees of the Company or of any of its Subsidiaries and all directors of the Company. An employee on leave of absence may be considered as still in the employ of the Company or any of its Subsidiaries for purposes of eligibility for participation in this Plan.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.

(p) “Fair Market Value” means, as of any specified date, (i) if the Stock is listed on a national securities exchange, the closing sales price of the Stock, as reported on the stock exchange composite tape on that date (or if no sales occur on that date, on the last preceding date on which such sales of the Stock are so reported); (ii) if the Stock is not traded on a national securities exchange but is traded over the counter at the time a determination of its fair market value is required to be made under the Plan, the average between the reported high and low bid and asked prices of Stock on the most recent date on which Stock was publicly traded; (iii) in the event Stock is not publicly traded at the time a determination of its value is required to

 

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be made under the Plan, the amount determined by the Committee in its discretion in such manner as it deems appropriate, taking into account all factors the Committee deems appropriate including, without limitation, the Nonqualified Deferred Compensation Rules; or (iv) on the date of a Qualifying Public Offering of Stock, the offering price under such Qualifying Public Offering.

(q) “Incentive Stock Option” or “ISO” means any Option intended to be and designated as an incentive stock option within the meaning of section 422 of the Code or any successor provision thereto.

(r) “Incumbent Board” means the portion of the Board constituted of the individuals who are members of the Board as of the Effective Date and any other individual who becomes a director of the Company after the Effective Date and whose election or appointment by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.

(s) “Nonqualified Deferred Compensation Rules” means the limitations or requirements of section 409A of the Code and the guidance and regulations promulgated thereunder.

(t) “Option” means a right, granted to an Eligible Person under Section 6(b) hereof, to purchase Stock or other Awards at a specified price during specified time periods.

(u) “Other Stock-Based Awards” means Awards granted to an Eligible Person under Section 6(h) hereof.

(v) “Participant” means a person who has been granted an Award under this Plan which remains outstanding, including a person who is no longer an Eligible Person.

(w) “Performance Award” means a right, granted to an Eligible Person under Section 8 hereof, to receive Awards based upon performance criteria specified by the Committee.

(x) “Person” means any person or entity of any nature whatsoever, specifically including an individual, a firm, a company, a corporation, a partnership, a limited liability company, a trust or other entity; a Person, together with that Person’s Affiliates and Associates (as those terms are defined in Rule 12b-2 under the Exchange Act, provided that “registrant” as used in Rule 12b-2 shall mean the Company), and any Persons acting as a partnership, limited partnership, joint venture, association, syndicate or other group (whether or not formally organized), or otherwise acting jointly or in concert or in a coordinated or consciously parallel manner (whether or not pursuant to any express agreement), for the purpose of acquiring, holding, voting or disposing of securities of the Company with such Person, shall be deemed a single “Person.”

 

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(y) “Qualifying Public Offering” means a firm commitment underwritten public offering of Stock for cash where the shares of Stock registered under the Securities Act are listed on a national securities exchange.

(z) “Qualified Member” means a member of the Committee who is a “nonemployee director” within the meaning of Rule 16b-3(b)(3) and an “outside director” within the meaning of Treasury Regulation 1.162-27 under section 162(m) of the Code.

(aa) “Restricted Stock” means Stock granted to an Eligible Person under Section 6(d) hereof, that is subject to certain restrictions and to a risk of forfeiture.

(bb) “Restricted Stock Unit” means a right, granted to an Eligible Person under Section 6(e) hereof, to receive Stock, cash or a combination thereof at the end of a specified deferral period.

(cc) “Rule 16b-3” means Rule 16b-3, promulgated by the Securities and Exchange Commission under section 16 of the Exchange Act, as from time to time in effect and applicable to this Plan and Participants.

(dd) “Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder, or any successor law, as it may be amended from time to time.

(ee) “Stock” means the Company’s Common Stock, par value $0.01 per share, and such other securities as may be substituted (or resubstituted) for Stock pursuant to Section 9.

(ff) “Stock Appreciation Rights” or “SAR” means a right granted to an Eligible Person under Section 6(c) hereof.

(gg) “Subsidiary” means with respect to the Company, any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by the Company (including without limitation any limited partnership the general partner of which is owned, directly or indirectly, by the Company).

3. Administration.

(a) Authority of the Committee. This Plan shall be administered by the Committee except to the extent the Board elects to administer this Plan, in which case references herein to the “Committee” shall be deemed to include references to the “Board.” Subject to the express provisions of the Plan and Rule 16b-3, the Committee shall have the authority, in its sole and absolute discretion, to (i) adopt, amend, and rescind administrative and interpretive rules and regulations relating to the Plan; (ii) determine the Eligible Persons to whom, and the time or times at which, Awards shall be granted; (iii) determine the amount of cash and/or the number of shares of Stock, as applicable Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Dividend Equivalents, Bonus Stock, Other Stock-Based Awards, Annual Incentive Awards, Performance Awards, or any combination thereof, that shall be the subject of each Award; (iv) determine the terms and provisions of each Award agreement (which need not be identical), including provisions defining or otherwise relating to (A) the term and the period or

 

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periods and extent of exercisability of the Options, (B) the extent to which the transferability of shares of Stock issued or transferred pursuant to any Award is restricted, (C) except as otherwise provided herein, the effect of termination of employment, or the service relationship with the Company, of a Participant on the Award, and (D) the effect of approved leaves of absence (consistent with any applicable regulations of the Internal Revenue Service); (v) accelerate the time of vesting or exercisability of any Award that has been granted; (vi) construe the respective Award agreements and the Plan; (vii) make determinations of the Fair Market Value of the Stock pursuant to the Plan; (viii) delegate its duties under the Plan (including, but not limited to, the authority to grant Awards) to such agents as it may appoint from time to time, provided that the Committee may not delegate its duties where such delegation would violate state corporate law, or with respect to making Awards to, or otherwise with respect to Awards granted to, Eligible Persons who are subject to section 16(b) of the Exchange Act or who are Covered Employees receiving Awards that are intended to constitute “performance-based compensation” within the meaning of section 162(m) of the Code; (ix) subject to Section 10(c), terminate, modify or amend the Plan; and (x) make all other determinations, perform all other acts, and exercise all other powers and authority necessary or advisable for administering the Plan, including the delegation of those ministerial acts and responsibilities as the Committee deems appropriate. Subject to Rule 16b-3 and section 162(m) of the Code, the Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan, in any Award, or in any Award agreement in the manner and to the extent it deems necessary or desirable to carry the Plan into effect, and the Committee shall be the sole and final judge of that necessity or desirability. The determinations of the Committee on the matters referred to in this Section 3(a) shall be final and conclusive.

(b) Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award granted or to be granted to an Eligible Person who is then subject to section 16 of the Exchange Act in respect of the Company, or relating to an Award intended by the Committee to qualify as “performance-based compensation” within the meaning of section 162(m) of the Code and regulations thereunder, may be taken either (i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided, however, that, upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of this Plan. Any action of the Committee shall be final, conclusive and binding on all Persons, including the Company, its Subsidiaries, stockholders, Participants, Beneficiaries, and transferees under Section 10(a) hereof or other Persons claiming rights from or through a Participant. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of the Company or any of its Subsidiaries, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions, as the Committee may determine, to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as “performance-based compensation” under section 162(m) of the Code to fail to so qualify. The Committee may appoint agents to assist it in administering the Plan.

 

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(c) Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any of its Subsidiaries, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan. Members of the Committee and any officer or employee of the Company or any of its Subsidiaries acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.

4. Stock Subject to Plan.

(a) Overall Number of Shares Available for Delivery. Subject to adjustment in a manner consistent with any adjustment made pursuant to Section 9, the total number of shares of Stock reserved and available for issuance in connection with Awards under this Plan shall not exceed              shares, and such total will be available for the issuance of Incentive Stock Options. The total number of shares of Stock reserved and available for issuance in connection with Incentive Stock Options issued under this Plan shall not exceed              shares to any one Participant in any calendar year.

(b) Application of Limitation to Grants of Awards. Subject to Section 4(c), no Award may be granted if the number of shares of Stock to be delivered in connection with such Award exceeds the number of shares of Stock remaining available under this Plan minus the number of shares of Stock issuable in settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.

(c) Availability of Shares Not Issued under Awards. Shares of Stock subject to an Award under this Plan that expire or are canceled, forfeited, exchanged, settled in cash or otherwise terminated, including (i) shares forfeited with respect to Restricted Stock, (ii) the number of shares withheld in payment of any exercise or purchase price of an Award or taxes relating to Awards, and (iii) the number of shares surrendered in payment of any exercise or purchase price of an Award or taxes relating to any Award, will again be available for Awards under this Plan, except that if any such shares could not again be available for Awards to a particular Participant under any applicable law or regulation, such shares shall be available exclusively for Awards to Participants who are not subject to such limitation.

(d) Stock Offered. The shares to be delivered under the Plan shall be made available from (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company, or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on the open market.

 

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5. Eligibility; Per Person Award Limitations. Awards may be granted under this Plan only to Persons who are Eligible Persons at the time of grant thereof. In each calendar year, during any part of which this Plan is in effect, a Covered Employee may not be granted (a) Awards (other than Awards designated to be paid only in cash or the settlement of which is not based on a number of shares of Stock) relating to more than              shares of Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Section 9 and (b) Awards designated to be paid only in cash, or the settlement of which is not based on a number of shares of Stock, having a value determined on the date of grant in excess of $            .

6. Specific Terms of Awards.

(a) General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(c)), such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment by the Participant, or termination of the Participant’s service relationship with the Company, and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under this Plan; provided, however, that the Committee shall not have any discretion to accelerate, waive or modify any term or condition of an Award that is intended to qualify as “performance-based compensation” for purposes of section 162(m) of the Code if such discretion would cause the Award to not so qualify or to accelerate the terms of payment of any Award that provides for a deferral of compensation under the Nonqualified Deferred Compensation Rules if such acceleration would subject a Participant to additional taxes under the Nonqualified Deferred Compensation Rules.

(b) Options. The Committee is authorized to grant Options to Eligible Persons on the following terms and conditions:

(i) Exercise Price. Each Option agreement shall state the exercise price per share of Stock (the “Exercise Price”); provided, however, that the Exercise Price per share of Stock subject to an ISO shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the Option (or in the case of an individual who owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or its parent or any subsidiary, 110% of the Fair Market Value per share of the Stock on the date of grant).

(ii) Time and Method of Exercise. The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which such Exercise Price may be paid or deemed to be paid, the form of such payment, including without limitation cash, Stock, other Awards or awards granted under other plans of the Company or any Subsidiary, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis), and the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants, including, but not limited to, the delivery of Restricted Stock subject to Section 6(d). In the case of an exercise whereby the Exercise Price is paid with Stock, such Stock shall be valued as of the date of exercise.

 

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(iii) ISOs. The terms of any ISO granted under this Plan shall comply in all respects with the provisions of section 422 of the Code. Except as otherwise provided in Section 9, no term of this Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under this Plan be exercised, so as to disqualify either this Plan or any ISO under section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification. ISOs shall not be granted more than ten years after the earlier of the adoption of this Plan or the approval of this Plan by the Company’s stockholders. Notwithstanding the foregoing, the Fair Market Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) subject to any other ISO (within the meaning of section 422 of the Code)) of the Company or a parent or subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) that first becomes purchasable by a Participant in any calendar year may not (with respect to that Participant) exceed $100,000, or such other amount as may be prescribed under section 422 of the Code or applicable regulations or rulings from time to time. As used in the previous sentence, Fair Market Value shall be determined as of the date the ISOs are granted. Failure to comply with this provision shall not impair the enforceability or exercisability of any Option, but shall cause the excess amount of shares to be reclassified in accordance with the Code.

(c) Stock Appreciation Rights. The Committee is authorized to grant SARs to Eligible Persons on the following terms and conditions:

(i) Right to Payment. A SAR shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.

(ii) Rights Related to Options. A SAR granted pursuant to an Option shall entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount computed pursuant to Section 6(c)(ii)(B). Such Option shall then cease to be exercisable to the extent surrendered. SARs granted in connection with an Option shall be subject to the terms of the Award agreement governing the Option, which shall comply with the following provisions in addition to those applicable to Options:

(A) A SAR granted in connection with an Option shall be exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable except to the extent that the related Option is transferable.

 

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(B) Upon the exercise of a SAR related to an Option, a Participant shall be entitled to receive payment from the Company of an amount determined by multiplying:

(1) the difference obtained by subtracting the Exercise Price with respect to a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of the SAR, by

(2) the number of shares as to which that SAR has been exercised.

(iii) Right Without Option. A SAR granted independent of an Option shall be exercisable as determined by the Committee and set forth in the Award agreement governing the SAR, which Award agreement shall comply with the following provisions:

(A) Each Award agreement shall state the total number of shares of Stock to which the SAR relates.

(B) Each Award agreement shall state the time or periods in which the right to exercise the SAR or a portion thereof shall vest and the number of shares of Stock for which the right to exercise the SAR shall vest at each such time or period.

(C) Each Award agreement shall state the date at which the SARs shall expire if not previously exercised.

(D) Each SAR shall entitle a Participant, upon exercise thereof, to receive payment of an amount determined by multiplying:

(1) the difference obtained by subtracting the Fair Market Value of a share of Stock on the date of grant of the SAR from the Fair Market Value of a share of Stock on the date of exercise of that SAR, by

(2) the number of shares as to which the SAR has been exercised.

(iv) Terms. Except as otherwise provided herein, the Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants, whether or not a SAR shall be in tandem or in combination with any other Award, and any other terms and conditions of any SAR. SARs may be either freestanding or in tandem with other Awards.

(d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Eligible Persons on the following terms and conditions:

(i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. During the restricted period applicable to the Restricted Stock, the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.

 

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(ii) Certificates for Stock. Restricted Stock granted under this Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

(iii) Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may require or permit a Participant to elect that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock, applied to the purchase of additional Awards under this Plan or deferred without interest to the date of vesting of the associated Award of Restricted Stock; provided, that, to the extent applicable, any such election shall comply with the Nonqualified Deferred Compensation Rules. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property (other than cash) distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.

(e) Restricted Stock Units. The Committee is authorized to grant Restricted Stock Units, which are rights to receive Stock or cash (or a combination thereof) at the end of a specified deferral period (which may or may not be coterminous with the vesting schedule of the Award), to Eligible Persons, subject to the following terms and conditions:

(i) Award and Restrictions. Settlement of an Award of Restricted Stock Units shall occur upon expiration of the deferral period specified for such Restricted Stock Unit by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, Restricted Stock Units shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine. Restricted Stock Units shall be satisfied by the delivery of cash or Stock in the amount equal to the Fair Market Value of the specified number of shares of Stock covered by the Restricted Stock Units, or a combination thereof, as determined by the Committee at the date of grant or thereafter.

(ii) Dividend Equivalents. Unless otherwise determined by the Committee at date of grant, Dividend Equivalents on the specified number of shares of Stock covered by an Award of Restricted Stock Units shall be either (A) paid with respect to such Restricted Stock Units on the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Restricted Stock Units and the amount or value thereof automatically deemed reinvested in additional Restricted Stock Units.

 

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(f) Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu of obligations to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, provided that, in the case of Participants subject to section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Stock or other Awards are exempt from liability under section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee. In the case of any grant of Stock to an officer of the Company or any of its Subsidiaries in lieu of salary or other cash compensation, the number of shares granted in place of such compensation shall be reasonable, as determined by the Committee.

(g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a Participant, entitling the Participant to receive cash, Stock, other Awards, or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles, and be subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify.

(h) Other Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of this Plan, including without limitation convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified Subsidiaries of the Company. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under this Plan, may also be granted pursuant to this Section 6(h).

7. Certain Provisions Applicable to Awards.

(a) Termination of Employment. Except as provided herein, the treatment of an Award upon a termination of employment or any other service relationship by and between a Participant and the Company or any Subsidiary shall be specified in the agreement controlling such Award.

(b) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under this Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, or any of its Subsidiaries, or of any business entity to be acquired

 

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by the Company or any of its Subsidiaries, or any other right of an Eligible Person to receive payment from the Company or any of its Subsidiaries. Such additional, tandem and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award, the Committee shall require the surrender of such other Award in consideration for the grant of the new Award. Awards under this Plan may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any of its Subsidiaries, in which the value of Stock subject to the Award is equivalent in value to the cash compensation, or in which the exercise price, grant price or purchase price of the Award in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Stock minus the value of the cash compensation surrendered. Awards granted pursuant to the preceding sentence shall be designed, awarded and settled in a manner that does not result in additional taxes under the Nonqualified Deferred Compensation Rules.

(c) Term of Awards. Except as specified herein, the term of each Award shall be for such period as may be determined by the Committee; provided, that in no event shall the term of any Option or SAR exceed a period of ten years (or such shorter term as may be required in respect of an ISO under section 422 of the Code).

(d) Form and Timing of Payment under Awards; Deferrals. Subject to the terms of this Plan and any applicable Award agreement, payments to be made by the Company or any of its Subsidiaries upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis; provided, however, that any such deferred payment will be set forth in the agreement evidencing such Award and/or otherwise made in a manner that will not result in additional taxes under the Nonqualified Deferred Compensation Rules. Except as otherwise provided herein, the settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control). Installment or deferred payments may be required by the Committee (subject to Section 10(c) of this Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award agreement) or permitted at the election of the Participant on terms and conditions established by the Committee and in compliance with the Nonqualified Deferred Compensation Rules. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. Any deferral shall only be allowed as is provided in a separate deferred compensation plan adopted by the Company and shall be made pursuant to the Nonqualified Deferred Compensation Rules. This Plan shall not constitute an “employee benefit plan” for purposes of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

(e) Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to section 16 of the Exchange Act shall be exempt from such section pursuant to an applicable exemption (except for transactions acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Award agreement does not comply with the

 

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requirements of Rule 16b-3 as then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under section 16(b) of the Exchange Act.

(f) Non-Competition Agreement. Each Participant to whom an Award is granted under this Plan may be required to agree in writing as a condition to the granting of such Award not to engage in conduct in competition with the Company or any of its Subsidiaries for a period after the termination of such Participant’s employment with the Company and its Subsidiaries as determined by the Committee (a “Non-Competition Agreement”); provided, however, to the extent a legally binding right to an Award within the meaning of the Nonqualified Deferred Compensation Rules is created with respect to a Participant, the Non-Competition Agreement must be entered into by such Participant within 30 days following the creation of such legally binding right.

8. Performance and Annual Incentive Awards.

(a) Performance Conditions. The right of an Eligible Person to receive a grant, and the right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Sections 8(b) and 8(c) hereof in the case of a Performance Award or Annual Incentive Award intended to qualify under section 162(m) of the Code.

(b) Performance Awards Granted to Designated Covered Employees. If the Committee determines that a Performance Award to be granted to an Eligible Person who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of section 162(m) of the Code, the grant, exercise and/or settlement of such Performance Award may be contingent upon achievement of preestablished performance goals and other terms set forth in this Section 8(b).

(i) Performance Goals Generally. The performance goals for such Performance Awards shall consist of one or more business criteria or individual performance criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 8(b). Performance goals shall be objective and shall otherwise meet the requirements of section 162(m) of the Code and regulations thereunder (including Treasury Regulation §1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain” at the time the Committee actually establishes the performance goal or goals. The Committee may determine that such Performance Awards shall be granted, exercised, and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

 

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(ii) Business and Individual Performance Criteria

(A) Business Criteria. One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified Subsidiaries or business or geographical units of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for such Performance Awards: (1) earnings per share; (2) increase in revenues; (3) increase in cash flow; (4) increase in cash flow from operations; (5) increase in cash flow return; (6) return on net assets; (7) return on assets; (8) return on investment; (9) return on capital; (10) return on equity; (11) economic value added; (12) operating margin; (13) contribution margin; (14) net income; (15) net income per share; (16) pretax earnings; (17) pretax earnings before interest, depreciation and amortization; (18) pretax operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; (19) total stockholder return; (20) debt reduction; (21) market share; (22) change in the Fair Market Value of the Stock; (23) operating income; (24) lease operating expenses; and (25) any of the above goals determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies. The Committee may exclude the impact of any of the following events or occurrences which the Committee determines should appropriately be excluded: (a) asset write-downs; (b) litigation, claims, judgments or settlements; (c) the effect of changes in tax law or other such laws or regulations affecting reported results; (d) accruals for reorganization and restructuring programs; (e) any extraordinary, unusual or nonrecurring items as described in the Accounting Standards Codification Topic 225, as the same may be amended or superseded from time to time; (f) any change in accounting principles as defined in the Accounting Standards Codification Topic 250, as the same may be amended or superseded from time to time; (g) any loss from a discontinued operation as described in the Accounting Standards Codification Topic 360, as the same may be amended or superseded from time to time; (h) goodwill impairment charges; (i) operating results for any business acquired during the calendar year; (j) third party expenses associated with any acquisition by us or any subsidiary; and (k) to the extent set forth with reasonable particularity in connection with the establishment of performance goals, any other extraordinary events or occurrences identified by the Committee. One or more of the foregoing business criteria shall also be exclusively used in establishing performance goals for Annual Incentive Awards granted to a Covered Employee under Section 8(c) hereof that are intended to qualify as “performance-based compensation” under section 162(m) of the Code.

(B) Individual Performance Criteria. The grant, exercise and/or settlement of Performance Awards may also be contingent upon individual performance goals established by the Committee. If required for compliance with section 162(m) of the Code, such criteria shall be approved by the stockholders of the Company.

(iii) Performance Period; Timing for Establishing Performance Goals. Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to ten years, as specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under section 162(m) of the Code.

 

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(iv) Performance Award Pool. The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the criteria set forth in Section 8(b)(ii) hereof during the given performance period, as specified by the Committee in accordance with Section 8(b)(iii) hereof. The Committee may specify the amount of the Performance Award pool as a percentage of any of such criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such criteria.

(v) Settlement of Performance Awards; Other Terms. After the end of each performance period, the Committee shall determine the amount, if any, of (A) the Performance Award pool, and the maximum amount of the potential Performance Award payable to each Participant in the Performance Award pool, or (B) the amount of the potential Performance Award otherwise payable to each Participant. Settlement of such Performance Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 8(b). The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of a performance period or settlement of Performance Awards.

(c) Annual Incentive Awards Granted to Designated Covered Employees. If the Committee determines that an Annual Incentive Award to be granted to an Eligible Person who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of section 162(m) of the Code, the grant, exercise and/or settlement of such Annual Incentive Award shall be contingent upon achievement of preestablished performance goals and other terms set forth in this Section 8(c).

(i) Potential Annual Incentive Awards. Not later than the end of the 90th day of each applicable year, or at such other date as may be required or permitted in the case of Awards intended to be “performance-based compensation” under section 162(m) of the Code, the Committee shall determine the Eligible Persons who will potentially receive Annual Incentive Awards, and the amounts potentially payable thereunder, for that fiscal year, either out of an Annual Incentive Award pool established by such date under Section 8(c)(ii) hereof or as individual Annual Incentive Awards. The amount potentially payable, with respect to Annual Incentive Awards, shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 8(b)(ii) hereof in the given performance year, as specified by the Committee.

(ii) Annual Incentive Award Pool. The Committee may establish an Annual Incentive Award pool, which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Annual Incentive Awards. The amount of such Annual Incentive Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 8(b)(ii) hereof during the given performance period, as specified by the Committee in accordance with Section 8(b)(iii) hereof.

 

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The Committee may specify the amount of the Annual Incentive Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.

(iii) Payout of Annual Incentive Awards. After the end of each applicable year, the Committee shall determine the amount, if any, of (A) the Annual Incentive Award pool, and the maximum amount of the potential Annual Incentive Award payable to each Participant in the Annual Incentive Award pool, or (B) the amount of the potential Annual Incentive Award otherwise payable to each Participant. The Committee may, in its discretion, determine that the amount payable to any Participant as a final Annual Incentive Award shall be reduced from the amount of his or her potential Annual Incentive Award, including a determination to make no final Award whatsoever, but may not exercise discretion to increase any such amount in the case of an Annual Incentive Award intended to qualify under section 162(m) of the Code. The Committee shall specify the circumstances in which an Annual Incentive Award shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of the applicable year or settlement of such Annual Incentive Award.

(d) Written Determinations. All determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards, the achievement of performance goals relating to and final settlement of Performance Awards under Section 8(b), the amount of any Annual Incentive Award pool or potential individual Annual Incentive Awards, the achievement of performance goals relating to and final settlement of Annual Incentive Awards under Section 8(c) shall be made in writing in the case of any Award intended to qualify under section 162(m) of the Code. The Committee may not delegate any responsibility relating to such Performance Awards or Annual Incentive Awards.

(e) Status of Section 8(b) and Section 8(c) Awards under Section 162(m) of the Code. It is the intent of the Company that Performance Awards and Annual Incentive Awards under Sections 8(b) and 8(c) hereof granted to Persons who are designated by the Committee as likely to be Covered Employees within the meaning of section 162(m) of the Code and the regulations thereunder (including Treasury Regulation §1.162-27 and successor regulations thereto) shall, if so designated by the Committee, constitute “performance-based compensation” within the meaning of section 162(m) of the Code and regulations thereunder. Accordingly, the terms of Sections 8(b), (c), (d) and (e), including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with section 162(m) of the Code and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Eligible Person will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a Person designated by the Committee, at the time of grant of a Performance Award or an Annual Incentive Award, who is likely to be a Covered Employee with respect to that fiscal year. If any provision of this Plan as in effect on the date of adoption of any agreements relating to Performance Awards or Annual Incentive Awards that are designated as intended to comply with section 162(m) of the Code does not comply or is inconsistent with the requirements of section 162(m) of the Code or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

 

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9. Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization.

(a) Existence of Plans and Awards. The existence of this Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. In no event will any action taken by the Committee pursuant to this Section 9 result in the creation of deferred compensation within the meaning of section 409A of the Code and the regulations and other guidance promulgated thereunder.

(b) Subdivision or Consolidation of Shares. The terms of an Award and the number of shares of Stock authorized pursuant to Section 4 for issuance under the Plan shall be subject to adjustment from time to time, in accordance with the following provisions:

(i) If at any time, or from time to time, the Company shall subdivide as a whole (by reclassification, by a Stock split, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number of shares of Stock then outstanding into a greater number of shares of Stock or in the event the Company distributes an extraordinary cash dividend, then, in each such case as appropriate, (A) the maximum number of shares of Stock available for the Plan or in connection with Awards as provided in Sections 4 and 5 shall be increased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be increased proportionately, and (C) the price (including the exercise price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

(ii) If at any time, or from time to time, the Company shall consolidate as a whole (by reclassification, by reverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lesser number of shares of Stock, (A) the maximum number of shares of Stock for the Plan or available in connection with Awards as provided in Sections 4 and 5 shall be decreased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be decreased proportionately, and (C) the price (including the exercise price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

(iii) Whenever the number of shares of Stock subject to outstanding Awards and the price for each share of Stock subject to outstanding Awards are required to be adjusted as provided in this Section 9(b), the Committee shall promptly prepare a notice setting

 

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forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the change in price and the number of shares of Stock, other securities, cash, or property purchasable subject to each Award after giving effect to the adjustments. The Committee shall promptly provide each affected Participant with such notice.

(iv) Adjustments under Sections 9(b)(i) and (ii) shall be made by the Committee, and its determination as to what adjustments shall be made and the extent thereof shall be final, binding, and conclusive. No fractional interest shall be issued under the Plan on account of any such adjustments.

(c) Corporate Recapitalization. If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”) without the occurrence of a Change in Control, the number and class of shares of Stock covered by an Option or a SAR theretofore granted shall be adjusted so that such Option or SAR shall thereafter cover the number and class of shares of stock and securities to which the holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the holder had been the holder of record of the number of shares of Stock then covered by such Option or SAR and the share limitations provided in Sections 4 and 5 shall be adjusted in a manner consistent with the recapitalization.

(d) Additional Issuances. Except as hereinbefore expressly provided, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to Awards theretofore granted or the purchase price per share, if applicable.

(e) Change in Control. Upon a Change in Control, the Committee, acting in its sole discretion without the consent or approval of any holder, shall affect one or more of the following alternatives, which may vary among individual holders and which may vary among Options or SARs (collectively “Grants”) held by any individual holder: (i) accelerate the time at which Grants then outstanding may be exercised so that such Grants may be exercised in full for a limited period of time on or before a specified date (before or after such Change in Control) fixed by the Committee, after which specified date all unexercised Grants and all rights of holders thereunder shall terminate, (ii) require the mandatory surrender to the Company by selected holders of some or all of the outstanding Grants held by such holders (irrespective of whether such Grants are then exercisable under the provisions of this Plan) as of a date, before or after such Change in Control, specified by the Committee, in which event the Committee shall thereupon cancel such Grants and pay to each holder an amount of cash (or other consideration including securities or other property) per share equal to the excess, if any, of the amount calculated in Section 9(f) (the “Change in Control Price”) of the shares subject to such Grants over the Exercise Price(s) under such Grants for such shares (except that to the extent the Exercise Price under any such Grant is equal to or exceeds the Change in Control Price, in which case no amount shall be payable with respect to such Grant), or (iii) make such adjustments to

 

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Grants then outstanding as the Committee deems appropriate to reflect such Change in Control; provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to Grants then outstanding; provided, further, however, that the right to make such adjustments shall include, but not require or be limited to, the modification of Grants such that the holder of the Grant shall be entitled to purchase or receive (in lieu of the total number of shares of Stock as to which an Option or SAR is exercisable (the “Total Shares”) or other consideration that the holder would otherwise be entitled to purchase or receive under the Grant (the “Total Consideration”)), the number of shares of stock, other securities, cash or property to which the Total Consideration would have been entitled to in connection with the Change in Control (A) (in the case of Options), at an aggregate exercise price equal to the exercise price that would have been payable if the Total Shares had been purchased upon the exercise of the Grant immediately before the consummation of the Change in Control and (B) in the case of SARs, if the SARs had been exercised immediately before the occurrence of the Change in Control.

(f) Change in Control Price. The “Change in Control Price” shall equal the amount determined in the following clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the price per share offered to holders of Stock in any merger or consolidation, (ii) the per share Fair Market Value of the Stock immediately before the Change in Control without regard to assets sold in the Change in Control and assuming the Company has received the consideration paid for the assets in the case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolution transaction, (iv) the price per share offered to holders of Stock in any tender offer or exchange offer whereby a Change in Control takes place, or (v) if such Change in Control occurs other than pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Section 9(f), the Fair Market Value per share of the Stock that may otherwise be obtained with respect to such Grants or to which such Grants track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Grants. In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 9(f) or in Section 9(e) consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash and such determination shall be binding on all affected Participants to the extent applicable to Awards held by such Participants.

(g) Impact of Corporate Events on Awards Generally. In the event of a Change in Control or changes in the outstanding Stock by reason of a recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant change in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this Section 9, any outstanding Awards and any Award agreements evidencing such Awards shall be subject to adjustment by the Committee at its discretion, which adjustment may, in the Committee’s discretion, be described in the Award agreement and may include, but not be limited to, adjustments as to the number and price of shares of Stock or other consideration subject to such Awards, accelerated vesting (in full or in part) of such Awards, conversion of such Awards into awards denominated in the securities or other interests of any successor Person, or the cash settlement of such Awards in exchange for the cancellation thereof. In the event of any such change in the outstanding Stock, the aggregate number of shares of Stock available under this Plan may be appropriately adjusted by the Committee, whose determination shall be conclusive.

 

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10. General Provisions.

(a) Transferability.

(i) Permitted Transferees. The Committee may, in its discretion, permit a Participant to transfer all or any portion of an Option or SAR, or authorize all or a portion of an Option or SAR to be granted to an Eligible Person to be on terms which permit transfer by such Participant; provided that, in either case the transferee or transferees must be any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, in each case with respect to the Participant, an individual sharing the Participant’s household (other than a tenant or employee of the Company), a trust in which any of the foregoing individuals have more than fifty percent of the beneficial interest, a foundation in which any of the foregoing individuals (or the Participant) control the management of assets, and any other entity in which any of the foregoing individuals (or the Participant) own more than fifty percent of the voting interests (collectively, “Permitted Transferees”); provided further that, (X) there may be no consideration for any such transfer and (Y) subsequent transfers of Options or SARs transferred as provided above shall be prohibited except subsequent transfers back to the original holder of the Option or SAR and transfers to other Permitted Transferees of the original holder. Agreements evidencing Options or SARs with respect to which such transferability is authorized at the time of grant must be approved by the Committee, and must expressly provide for transferability in a manner consistent with this Section 10(a)(i).

(ii) Qualified Domestic Relations Orders. An Option, Stock Appreciation Right, Restricted Stock Unit Award, Restricted Stock Award or other Award may be transferred, to a Permitted Transferee, pursuant to a domestic relations order entered or approved by a court of competent jurisdiction upon delivery to the Company of written notice of such transfer and a certified copy of such order.

(iii) Other Transfers. Except as expressly permitted by Sections 10(a)(i) and 10(a)(ii), Awards shall not be transferable other than by will or the laws of descent and distribution. Notwithstanding anything to the contrary in this Section 10, an Incentive Stock Option shall not be transferable other than by will or the laws of descent and distribution.

(iv) Effect of Transfer. Following the transfer of any Award as contemplated by Sections 10(a)(i), 10(a)(ii) and 10(a)(iii), (A) such Award shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that the term “Participant” shall be deemed to refer to the Permitted Transferee, the recipient under a qualified domestic relations order, or the estate or heirs of a deceased Participant or other transferee, as applicable, to the extent appropriate to enable the Participant to exercise the transferred Award in accordance with the terms of this Plan and applicable law and (B) the provisions of the Award relating to exercisability shall continue to be applied with respect to the original Participant and, following the occurrence of any applicable events described therein the Awards shall be exercisable by the Permitted Transferee, the recipient under a qualified domestic relations order, or the estate or heirs of a deceased Participant, as applicable, only to the extent and for the periods that would have been applicable in the absence of the transfer.

 

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(v) Procedures and Restrictions. Any Participant desiring to transfer an Award as permitted under Sections 10(a)(i), 10(a)(ii) or 10(a)(iii) shall make application therefor in the manner and time specified by the Committee and shall comply with such other requirements as the Committee may require to assure compliance with all applicable securities laws. The Committee shall not give permission for such a transfer if (A) it would give rise to short swing liability under section 16(b) of the Exchange Act or (B) it may not be made in compliance with all applicable federal, state and foreign securities laws.

(vi) Registration. To the extent the issuance to any Permitted Transferee of any shares of Stock issuable pursuant to Awards transferred as permitted in this Section 10(a) is not registered pursuant to the effective registration statement of the Company generally covering the shares to be issued pursuant to this Plan to initial holders of Awards, the Company shall not have any obligation to register the issuance of any such shares of Stock to any such transferee.

(b) Taxes. The Company and any of its Subsidiaries are authorized to withhold from any Award granted, or any payment relating to an Award under this Plan, including from a distribution of Stock, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis in the discretion of the Committee.

(c) Changes to this Plan and Awards. The Board may amend, alter, suspend, discontinue or terminate this Plan or the Committee’s authority to grant Awards under this Plan without the consent of stockholders or Participants, except that any amendment or alteration to this Plan, including any increase in any share limitation, shall be subject to the approval of the Company’s stockholders not later than the annual meeting next following such Board action if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit other such changes to this Plan to stockholders for approval; provided, that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award agreement relating thereto, except as otherwise provided in this Plan; provided, however, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under such Award. For purposes of clarity, any adjustments made to Awards pursuant to Section 9 will be deemed not to materially and adversely affect the rights of any Participant under any previously granted and outstanding Award and therefore may be made without the consent of affected Participants.

 

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(d) Limitation on Rights Conferred under Plan. Neither this Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or any of its Subsidiaries, (ii) interfering in any way with the right of the Company or any of its Subsidiaries to terminate any Eligible Person’s or Participant’s employment or service relationship at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under this Plan or to be treated uniformly with other Participants and/or employees and/or other service providers, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award.

(e) Unfunded Status of Awards. This Plan is intended to constitute an “unfunded” plan for certain incentive awards.

(f) Nonexclusivity of this Plan. Neither the adoption of this Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable, including incentive arrangements and awards which do not qualify under section 162(m) of the Code. Nothing contained in this Plan shall be construed to prevent the Company or any of its Subsidiaries from taking any corporate action which is deemed by the Company or such Subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on this Plan or any Award made under this Plan. No employee, beneficiary or other person shall have any claim against the Company or any of its Subsidiaries as a result of any such action.

(g) Fractional Shares. No fractional shares of Stock shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

(h) Severability. If any provision of this Plan is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and the Plan shall be construed and enforced as if the illegal or invalid provision had never been included herein. If any of the terms or provisions of this Plan or any Award agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible Persons who are subject to section 16(b) of the Exchange Act) or section 422 of the Code (with respect to Incentive Stock Options), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3) or section 422 of the Code. With respect to Incentive Stock Options, if this Plan does not contain any provision required to be included herein under section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, further, that, to the extent any Option that is intended to qualify as an Incentive Stock Option cannot so qualify, that Option (to that extent) shall be deemed an Option not subject to section 422 of the Code for all purposes of the Plan.

 

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(i) Governing Law. All questions arising with respect to the provisions of the Plan and Awards shall be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable federal and state laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.

(j) Conditions to Delivery of Stock. Nothing herein or in any Award granted hereunder or any Award agreement shall require the Company to issue any shares with respect to any Award if that issuance would, in the opinion of counsel for the Company, constitute a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, as then in effect. At the time of any exercise of an Option or Stock Appreciation Right, or at the time of any grant of a Restricted Stock Award, Restricted Stock Unit, or other Award the Company may, as a condition precedent to the exercise of such Option or Stock Appreciation Right or settlement of any Restricted Stock Award, Restricted Stock Unit or other Award, require from the Participant (or in the event of his or her death, his or her legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the holder’s intentions with regard to the retention or disposition of the shares of Stock being acquired pursuant to the Award and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Company, may be necessary to ensure that any disposition by that holder (or in the event of the holder’s death, his or her legal representatives, heirs, legatees, or distributees) will not involve a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable state or federal statute or regulation, or any rule of any applicable securities exchange or securities association, as then in effect. No Option or Stock Appreciation Right shall be exercisable and no settlement of any Restricted Stock Award or Restricted Stock Unit shall occur with respect to a Participant unless and until the holder thereof shall have paid cash or property to, or performed services for, the Company or any of its Subsidiaries that the Committee believes is equal to or greater in value than the par value of the Stock subject to such Award.

(k) Section 409A of the Code. In the event that any Award granted pursuant to this Plan provides for a deferral of compensation within the meaning of the Nonqualified Deferred Compensation Rules, it is the general intention, but not the obligation, of the Company to design such Award to comply with the Nonqualified Deferred Compensation Rules and such Award should be interpreted accordingly.

(l) Plan Effective Date and Term. This Plan was adopted by the Board on the Effective Date. No Awards may be granted under this Plan on and after                     ,     .1

 

1  Date to be inserted which is no later than 10th anniversary of Effective Date.

 

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EX-10.2 5 d658814dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

MEMORIAL RESOURCE DEVELOPMENT CORP.

2014 LONG TERM INCENTIVE PLAN

RESTRICTED STOCK GRANT AND AWARD AGREEMENT

This Agreement is made and entered into as of                      (the “Date of Grant”) by and between Memorial Resource Development Corp., a Delaware corporation (the “Company”), and                      (the “Grantee” or “you”);

WHEREAS, the Company adopted the Memorial Resource Development Corp. 2014 Long Term Incentive Plan as it may be amended from time to time (the “Plan”) under which the Company is authorized to grant restricted stock awards to certain employees and service providers of the Company;

WHEREAS, the Company, in order to induce you to enter into and to continue and dedicate service to the Company and to materially contribute to the success of the Company, agrees to grant you this restricted stock award;

WHEREAS, a copy of the Plan has been furnished to you and shall be deemed a part of this restricted stock grant and award agreement (“Agreement”) as if fully set forth herein and the terms capitalized but not defined herein shall have the meanings set forth in the Plan; and

WHEREAS, you desire to accept the restricted stock award made pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other valuable consideration hereinafter set forth, the parties agree as follows:

 

1. The Grant. Subject to the conditions set forth below, the Company hereby grants you effective as of the Date of Grant, as a matter of separate inducement but not in lieu of any salary or other compensation for your services for the Company, an award (the “Award”) consisting of shares of Stock (the “Restricted Shares”) in accordance with the terms and conditions set forth herein and in the Plan.

 

2. Escrow of Restricted Shares. The Company shall evidence the Restricted Shares in the manner that it deems appropriate. The Company may issue in your name a certificate or certificates representing the Restricted Shares and retain that certificate or those certificates until the restrictions on such Restricted Shares expire as described in Section 5 of this Agreement or the Restricted Shares are forfeited as described in Sections 4 and 6 of this Agreement. If the Company certificates the Restricted Shares, you shall execute one or more stock powers in blank for those certificates and deliver those stock powers to the Company. The Company shall hold the Restricted Shares and the related stock powers pursuant to the terms of this Agreement, if applicable, until such time as (a) a certificate or certificates for the Restricted Shares are delivered to you, (b) the Restricted Shares are otherwise transferred to you free of restrictions, or (c) the Restricted Shares are canceled and forfeited pursuant to this Agreement.


3. Ownership of Restricted Shares. From and after the time the Restricted Shares are issued in your name, you will be entitled to all the rights of absolute ownership of the Restricted Shares, including the right to vote those shares and to receive dividends thereon if, as, and when declared by the Board, subject, however, to the terms, conditions and restrictions set forth in this Agreement; provided, however, that each dividend payment will be made no later than the 60th day following the date such dividend payment is made to stockholders generally.

 

4. Restrictions; Forfeiture. The Restricted Shares are restricted in that they may not be sold, transferred or otherwise alienated or hypothecated until these restrictions are removed or expire as described in Section 5 of this Agreement. The Restricted Shares are also restricted in the sense that they may be forfeited to the Company (the “Forfeiture Restrictions”). You hereby agree that if the Restricted Shares are forfeited, as provided in Section 6, the Company shall have the right to deliver the Restricted Shares to the Company’s transfer agent for, at the Company’s election, cancellation or transfer to the Company.

 

5. Expiration of Restrictions and Risk of Forfeiture. The restrictions on the Restricted Shares granted pursuant to Section 4 of this Agreement will expire and the Restricted Shares will become transferable and nonforfeitable, provided that, subject to Section 6(b), you remain in the employ of, or a service provider to, the Company or its Subsidiaries until the applicable dates set forth in the following schedule:

 

Number of Shares of Restricted Shares    Vesting Date
[x]    One Year Anniversary of the Date of Grant
[x]    Two Year Anniversary of the Date of Grant
[x]    Three Year Anniversary of the Date of Grant

 

6. Termination of Services and Change in Control.

 

  a. Termination Generally. If your service relationship with the Company or any of its Subsidiaries is terminated for any reason, then those Restricted Shares for which the restrictions have not lapsed as of the date of termination shall become null and void and those Restricted Shares shall be forfeited to the Company. The Restricted Shares for which the restrictions have lapsed as of the date of such termination shall not be forfeited to the Company.

 

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  b. Change in Control. Notwithstanding the vesting schedule set forth in Section 5 above, upon the occurrence of a Change in Control, 100% of the Restricted Shares for which the restrictions have not yet lapsed as of the date of the Change in Control shall become immediately vested.

 

7. Leave of Absence. With respect to the Award, the Company may, in its sole discretion, determine that if you are on leave of absence for any reason you will be considered to still be in the employ of, or providing services for, the Company, provided that rights to the Restricted Shares during a leave of absence will be limited to the extent to which those rights were earned or vested when the leave of absence began.

 

8. Delivery of Stock. Promptly following the expiration of the restrictions on the Restricted Shares as contemplated in Section 5 or Section 6(b) of this Agreement, the Company shall cause to be issued and delivered to you or your designee a certificate or other evidence of the number of Restricted Shares as to which restrictions have lapsed, free of any restrictive legend relating to the lapsed restrictions, upon receipt by the Company of any tax withholding as may be requested pursuant to Section 9. The value of such Restricted Shares shall not bear any interest owing to the passage of time.

 

9. Payment of Taxes. The Company shall require you to pay to the Company (or the Company’s Subsidiary if you are an employee of a Subsidiary of the Company), an amount the Company deems necessary to satisfy its (or its Subsidiary’s) current or future obligation to withhold federal, state or local income or other taxes that you incur as a result of the Award. With respect to any required tax withholding, you may (a) direct the Company to withhold from the shares of Stock to be issued to you under this Agreement the number of shares necessary to satisfy the Company’s obligation to withhold taxes; which determination will be based on the shares’ Fair Market Value at the time such determination is made; (b) deliver to the Company shares of Stock sufficient to satisfy the Company’s tax withholding obligations, based on the shares’ Fair Market Value at the time such determination is made; (c) deliver cash to the Company sufficient to satisfy its tax withholding obligations; or (d) satisfy such tax withholding through any combination of (a), (b) and (c). If you desire to elect to use the stock withholding option described in subparagraph (a), you must make the election at the time and in the manner the Company prescribes. The Company, in its discretion, may deny your request to satisfy its tax withholding obligations using a method described under subparagraph (a) or (b).

 

10.

Compliance with Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuance of Stock (including Restricted Shares) will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Stock may then be listed. No Stock will be issued hereunder if such

 

3


  issuance would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, Stock will not be issued hereunder unless (a) a registration statement under the Securities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) in the opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company may require you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect to such compliance as may be requested by the Company. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessary and appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons to make shares of Stock available for issuance.

 

11. Legends. The Company may at any time place legends referencing any restrictions imposed on the shares pursuant to Sections 4 or 10 of this Agreement on all certificates representing shares issued with respect to this Award.

 

12. Right of the Company and Subsidiaries to Terminate Services. Nothing in this Agreement confers upon you the right to continue in the employ of or performing services for the Company or any Subsidiary, or interfere in any way with the rights of the Company or any Subsidiary to terminate your employment or service relationship at any time.

 

13. Furnish Information. You agree to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other requirements imposed upon the Company by or under any applicable statute or regulation.

 

14. Remedies. The parties to this Agreement shall be entitled to recover from each other reasonable attorneys’ fees incurred in connection with the successful enforcement of the terms and provisions of this Agreement whether by an action to enforce specific performance or for damages for its breach or otherwise.

 

15. No Liability for Good Faith Determinations. The Company and the members of the Board shall not be liable for any act, omission or determination taken or made in good faith with respect to this Agreement or the Restricted Shares granted hereunder.

 

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16. Execution of Receipts and Releases. Any payment of cash or any issuance or transfer of shares of Stock or other property to you, or to your legal representative, heir, legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such Persons hereunder. The Company may require you or your legal representative, heir, legatee or distributee, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall determine.

 

17. No Guarantee of Interests. The Board and the Company do not guarantee the Stock of the Company from loss or depreciation.

 

18. Notice. All notices required or permitted under this Agreement must be in writing and personally delivered or sent by mail and shall be deemed to be delivered on the date on which it is actually received by the person to whom it is properly addressed or if earlier the date it is sent via certified United States mail.

 

19. Waiver of Notice. Any person entitled to notice hereunder may waive such notice in writing.

 

20. Information Confidential. As partial consideration for the granting of the Award hereunder, you hereby agree to keep confidential all information and knowledge, except that which has been disclosed in any public filings required by law, that you have relating to the terms and conditions of this Agreement; provided, however, that such information may be disclosed as required by law and may be given in confidence to your spouse and tax and financial advisors. In the event any breach of this promise comes to the attention of the Company, it shall take into consideration that breach in determining whether to recommend the grant of any future similar award to you, as a factor weighing against the advisability of granting any such future award to you.

 

21. Successors. This Agreement shall be binding upon you, your legal representatives, heirs, legatees and distributees, and upon the Company, its successors and assigns.

 

22. Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included herein.

 

23. Company Action. Any action required of the Company shall be by resolution of the Board or by a person or entity authorized to act by resolution of the Board.

 

24. Headings. The titles and headings of Sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof.

 

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25. Governing Law. All questions arising with respect to the provisions of this Agreement shall be determined by application of the laws of Delaware without giving any effect to any conflict of law provisions thereof, except to the extent Delaware state law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.

 

26. Amendment. This Agreement may be amended the Board or by the Committee at any time; provided that any amendment that would adversely affect your rights hereunder shall not be effective without your consent.

 

27. The Plan. This Agreement is subject to all the terms, conditions, limitations and restrictions contained in the Plan.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly authorized, and the Grantee has set his hand as to the date and year first above written.

 

MEMORIAL RESOURCE DEVELOPMENT CORP.
By:    
Name:  

Title:

 

 

[GRANTEE NAME]
 

 

GRANTEE

Signature Page to Restricted Stock Grant and Award Agreement

EX-10.5 6 d658814dex105.htm EX-10.5 EX-10.5

Exhibit 10.5

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (this “Agreement”) is executed and agreed to as of             , 2014 (the “Effective Date”) by and among Memorial Resource Development Corp., a Delaware corporation (the “Parent”), WildHorse Resources, LLC, a Delaware limited liability company (the “Company”), and WildHorse Resources Management Company, LLC, a Delaware limited liability company (the “Service Provider”). The Parent, the Company and the Service Provider are hereinafter each referred to as a “Party” and are collectively referred to as the “Parties”.

RECITALS

WHEREAS, the Company, Service Provider, and WildHorse Resources II, LLC were previously parties to that certain Amended and Restated Management Services Agreement, dated as of August 8, 2013, which was terminated as of the date hereof;

WHEREAS, the Service Provider has in place a staff of management, administrative, financial, accounting, marketing, and human resource personnel capable of providing transition services to the Company;

WHEREAS, the Parent and the Company desire to enter into this Agreement with the Service Provider to obtain certain services necessary to manage the certain operations of the Company’s business, as more fully described herein; and

WHEREAS, the Service Provider desires to provide the Services (as defined below) to the Company.

NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I. DEFINITIONS

1.1 Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below:

Agreement” is defined in the preamble.

Asset” or “Assets” means all assets and property, real or personal, owned by the Company.

Company” is defined in the preamble.

Effective Date” is defined in the preamble.


Force Majeure Event” means any event not reasonably within the control of the Party claiming the force majeure, including the following to the extent such events are not reasonably within the control of the Party claiming the force majeure: act of God, act of the public enemy, war, blockade, public riot, lightning, fire, storm, flood or other act of nature, explosion, governmental action (including changes in Laws, regulations or policies with the effect of Law or, in each case, the enforcement thereof), and governmental delay or restraint (including with respect to the issuance of permits); provided, however, that a “Force Majeure Event” shall not include (i) lack of financing or funds and (ii) to the extent affecting only such Party’s or such Party’s affiliate’s employees, any strike, work stoppage or other organized labor difficulty.

Governmental Authority” means any federal, state, local, municipal, tribal or other government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, regulatory or taxing authority or power; and any court or governmental tribunal having or asserting jurisdiction.

Law” means any applicable constitutional provision, statute, act, code, law, regulation, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment, decision, declaration or interpretative or advisory opinion or letter of a Governmental Authority.

Management Fee” is defined in Section 3.3.

Outsourced Service” is defined in Section 2.1.

Parent” is defined in the preamble.

Party” and “Parties” are defined in the preamble.

Person” means a natural person, partnership (whether general or limited), limited liability company, Governmental Authority, trust, estate, association, corporation, venture, custodian, nominee or any other individual or entity in its own or any representative capacity.

Prudent Industry Practice” means, at a particular time, any of the practices, methods, standards of care, skill, safety and diligence, as the same may change from time to time, but applied in light of the facts known at the time, that are consistent with the general standards applied or utilized under comparable circumstances by a reasonably prudent operator, in a good and workmanlike manner, with due diligence and dispatch, in accordance with good industry practice.

Service Provider” is defined in the preamble.

Services” is defined in Section 2.1.

Term” is defined in Section 4.1.

Third Party” means a Person other than a Party.

 

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ARTICLE II.

SERVICES

2.1 Services. The Service Provider shall provide the Company with the services necessary to manage the day to day operations of the Company, including general and administrative, operational and other similar services necessary and sufficient or appropriate to conduct the affairs of the Company (the “Services”). The Services shall include, but are not limited to, the services set forth on Schedule 2.1 hereto. Such Services shall be provided by the Service Provider solely for the benefit of the Parent and the Company. The Service Provider may cause one or more Third Party contractors, subject to the prior approval of the Company, to provide any of the Services (any such Services provided by Third Party contractors being referred to herein as an “Outsourced Service”); provided, however, that except as expressly provided in this Agreement, any Outsourced Services shall be subject to the provisions of this Agreement in the same way as any Service that is not an Outsourced Service is subject to the provisions of this Agreement.

2.2 Records and Auditing Rights. The Service Provider shall at all times maintain adequate books and records to verify the accounts and transactions under this Agreement. Such records shall be retained and kept available for inspection and audit by the Parent and the Company, members of the Parent’s Board of Directors and other representatives of the Parent and the Company on days the Service Provider is open for business during normal working hours upon reasonable notice to the Service Provider.

2.3 Standard of Care. The Service Provider hereby warrants that it will perform all of its obligations under this Agreement in accordance with Prudent Industry Practices and in compliance with all applicable Laws.

2.4 Duty to the Company. The Service Provider shall dedicate sufficient personnel and resources to provide the Services in accordance with Prudent Industry Practices.

2.5 Conditions of Service.

(a) Subject to Sections 2.3 and 2.4, the Service Provider shall have complete authority and discretion to elect the means, manner and method of performing the Services.

(b) All Third Party contractors that provide Outsourced Services shall be selected by the Service Provider with reasonable care and with reasonable assurances that such Third Party contractors can perform the Services pursuant to the requirements of this Agreement.

(c) The Service Provider shall perform the Services as an “independent contractor” of the Company and nothing in this Agreement is intended, and nothing shall be construed, to create an agency, employer/employee, partnership, joint venture, association or other similar relationship between the Service Provider and the Company.

 

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(d) This Agreement is a purely commercial transaction between the Parties and nothing stated in this Agreement shall operate to create any special or fiduciary duty between the Parties.

(e) Notwithstanding anything to the contrary, all matters pertaining to the employment, supervision, compensation, promotion and discharge of any personnel of the Service Provider are the responsibility of the Service Provider. All such employment arrangements are solely the Service Provider’s obligation, and the Company shall have no liability with respect thereto.

ARTICLE III.

PAYMENTS

3.1 Management Fee. As sole consideration for the Services rendered by the Service Provider to the Company under this Agreement, the Company shall pay the Service Provider a management fee of $965,000 per month during the Term (the “Management Fee”). The Company will pay the Management Fee no later than the 20th day of the month following the calendar month in which services are provided. In the event the Term includes any partial calendar month, the Management Fee will be prorated based on the actual number of days elapsed in such month. The Management Fee is intended to reimburse the Service Provider for expenses for the Services that are general and administrative charges as accounted for under standard accounting methods. The Management Fee shall also be deemed to include reimbursement for geoscience expenses. Expenses incurred by the Service Provider in connection with Services that are not general and administrative expenses or geoscience expenses, including lifting and operating expenses, capital expenditures and lease acquisitions costs, will be reimbursed to the Service Provider on a monthly basis, subject to being netted against revenues received by the Service Provider on behalf of the Company, as described on Schedule 2.1.

3.2 Call for Company Advances. On an as needed basis, the Service Provider may request the Company advance funds to the Service Provider to cover all out-of-pocket third party costs and expenses to be incurred by the Service Provider at the request of, and for the benefit of, the Company, including, without limitation, the direct operating expenses of the Company and any cost or expense relating to a capital project of the Company. Any requests for advances hereunder shall be accompanied by appropriate documentation from the Service Provider supporting such costs and expenses. Upon the Company’s approval, the Company shall advance such funds within ten business days following such request from the Service Provider, subject to extension to the extent necessary to provide any additional documentation reasonably requested of the Service Provider by the Parent or the Company. The Service Provider, the Parent and the Company shall determine, no less frequently than on a monthly basis, whether excess cash advances may be returned to the Company; provided, that any unused advances shall be returned to the Company at the end of the Term.

 

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ARTICLE IV.

TERM; TERMINATION

4.1 Term. This Agreement will commence on the Effective Date and will remain in effect until the first anniversary of the Effective Date; provided, that this Agreement may be terminated (i) immediately by the Company, by delivering written notice to the Service Provider, or (ii) after the six (6) month anniversary of the Effective Date, by the Service Provider, by delivering ninety (90) days prior written notice to the Company (such period of time during which this Agreement is in effect, the “Term”).

4.2 Transition Services. If either Party notifies the other Party of its intention to terminate this Agreement in accordance with Section 4.1, then during the period of time commencing on the date of such notice until the date of termination of this Agreement, the Service Provider shall in good faith assist and cooperate with the Parent and the Company to facilitate the transfer of the Services to any Person designated by the Parent and the Company; provided, that, during such period, the Company shall pay to the Service Provider any amounts payable by the Company to the Service Provider pursuant to this Agreement.

ARTICLE V.

DUTIES AND RESPONSIBILITIES

5.1 Duties and Responsibilities. The Service Provider shall comply in all respects with the terms of this Agreement and shall use its reasonable commercial efforts, in the conduct of business and operations of the Company, (i) to comply, in all material respects, with the terms and provisions of all agreements relating to the Company’s business, operations or properties to which it is a party or to which the Company’s properties are subject and (ii) to comply, in all material respects, with all applicable Laws, ordinances or governmental rules and regulations to which the Company is subject (including, without limitation, all applicable federal, state and local environmental Laws, ordinances, rules and regulations).

5.2 Personnel. The Service Provider covenants and agrees that it will at all times retain and have available to it and the Company a professional staff and outside consultants that together will be reasonably adequate in size, experience and competency to discharge properly the duties and functions of the Service Provider and the Company hereunder and under any applicable operating and other agreements, including, but not limited to, technical personnel, attorneys, accountants and secretarial and clerical personnel.

5.3 Utilized Property. In connection with providing the Services, the Service Provider shall utilize certain personal property and other assets of the Service Provider (the “Utilized Property”). Ownership of the Utilized Property shall remain with the Service Provider notwithstanding that the Utilized Property may be used primarily for the benefit of the Company. The Utilized Property include, but are not limited to, (i) all rights of Service Provider in respect of the lease of office space for its principal office, (ii) all tangible personal property owned by the Service Provider, including corporate office build-out, computers, office furniture. computer hardware and software and corporate pool cars, (iii) utilities, telecommunications, office supplies and mailing expenses, (iv) professional services that benefit the Company, and (v) insurance premiums for the corporate office and corporate shared pool vehicles, including D&O insurance premiums, as applicable. The Service Provider shall be responsible for maintaining all Utilized Property in good condition and repair, reasonable wear and tear excepted, and may refurbish or replace, at the Service Provider’s expense, such items as they become worn out or obsolete. If the Service Provider uses or licenses intellectual property owned by Third Parties in the performance of Services under this Agreement, the Service Provider shall obtain and maintain any such licenses and authorizations necessary to authorize its use of such intellectual property in connection with such Services.

 

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ARTICLE VI.

LIMITED WARRANTY, LIMITATION ON LIABILITY

6.1 Limited Warranty; Warranties Disclaimer. THE WARRANTY CONTAINED IN THIS SECTION 6.1 SHALL BE EXCLUSIVE, AND IS GIVEN AND ACCEPTED IN LIEU OF ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITH RESPECT TO ANY DEFECT IN THE SERVICES RENDERED OR PRODUCTS OBTAINED FOR THE COMPANY (WHETHER A CLAIM FOR SUCH DEFECT ARISES UNDER CONTRACT, TORT, STRICT LIABILITY, STATUTE, OR ANY OTHER LEGAL OR EQUITABLE THEORY OR PRINCIPLE INCLUDING NEGLIGENCE), THE SERVICE PROVIDER’S SOLE LIABILITY AND RESPONSIBILITY AND THE COMPANY’S SOLE REMEDY SHALL BE THE REPERFORMANCE OF THE SERVICES IN ACCORDANCE WITH THIS AGREEMENT, UNLESS THE DEFECT WAS CAUSED BY THE FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SERVICE PROVIDER.

6.2 Limitation on Liability. It is expressly understood by the Service Provider and the Company that the Service Provider shall have no liability for the failure of Third Party providers to perform any Outsourced Services hereunder and further that the Service Provider shall have no liability whatsoever for the Services provided by any such Third Party unless in either event such Outsourced Services are provided in a manner that would evidence gross negligence or intentional misconduct on the part of the Service Provider but the Service Provider shall, on behalf of the Company, pursue all rights and remedies under any such Third Party contract. The Parent and the Company agree that the remuneration paid to the Service Provider hereunder for the Services to be performed reflect this limitation of liability and disclaimer of warranties. In no event shall the Service Provider be liable to the Parent and the Company or any other Person for any indirect, special or consequential damages resulting from any error in the performance of Services or from the breach of this Agreement, regardless of the fault of the Service Provider, or any Third Party provider or whether the Service Provider, or the Third Party provider, is wholly, concurrently, partially or solely negligent. To the extent any Third Party provider has limited its liability to the Service Provider for Outsourced Services under an agreement, the Company agrees to be bound by such limitation of liability for any product or Outsourced Service provided to the Company by such Third Party provider under the Service Provider’s agreement.

 

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ARTICLE VII.

FORCE MAJEURE

7.1 Excused Performance. A Party shall not be responsible or liable for or deemed in breach of this Agreement for any delay or failure in the performance of its obligations under this Agreement to the extent such performance is prevented by a Force Majeure Event; provided that:

(a) the affected Party gives the other Party prompt notice describing the particulars of the Force Majeure Event and the proposed cure;

(b) the suspension of performance is of no greater scope and of no longer duration than is reasonably attributable to the Force Majeure Event;

(c) the affected Party uses commercially reasonable efforts to remedy its inability to perform its obligations under this Agreement or the Force Majeure Event; and

(d) when the affected Party is able to resume performance of its obligations under this Agreement, that Party shall give the other Party written notice to that effect.

7.2 No Preclusion. The existence of a Force Majeure Event shall not relieve any Party of (a) any of its payment obligations under this Agreement, or (b) any other obligation under this Agreement to the extent that performance of such other obligation is not precluded by such Force Majeure Event.

7.3 Limitations on Effect of Force Majeure. In no event will any delay or failure of performance caused by a Force Majeure Event extend this Agreement beyond its Term.

ARTICLE VIII.

REPRESENTATIONS AND WARRANTIES

8.1 Company Representations. The Parent and the Company represent and warrant as of the Effective Date that:

(a) the Parent is a corporation incorporated and validly existing under the Laws of the State of Delaware and the Company is a limited liability company duly organized and validly existing under the Laws of the State of Delaware, as applicable, and each has all necessary authorizations required by applicable Law to perform its obligations under this Agreement;

(b) the execution, delivery and performance of this Agreement by the Parent and the Company has been duly authorized by all requisite corporate or limited liability company action, as applicable, and will not: (i) violate any provisions of its organizational documents or (ii) result in the breach or acceleration of any performance required by the terms of any contract, agreement or arrangement to which it is a party or any applicable Laws; and

(c) this Agreement is a valid and binding obligation of the Parent and the Company, enforceable against the Parent and the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and by general equitable principles, regardless of whether the issue of enforceability is considered in a proceeding in equity or at law.

 

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8.2 Service Provider Representations. The Service Provider represents and warrants as of the Effective Date that:

(a) the Service Provider is a limited liability company duly organized and validly existing under the Laws of the State of Delaware and has all necessary authorizations required by applicable Law to perform its obligations under this Agreement;

(b) the execution, delivery and performance of this Agreement by the Service Provider have been duly authorized by all requisite limited liability company action and will not: (i) violate any provisions of its organizational documents or (ii) result in the breach or acceleration of any performance required by the terms of any contract, agreement or arrangement to which it is a party, or any applicable Laws; and

(c) this Agreement is a valid and binding obligation of the Service Provider, enforceable against the Service Provider in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and by general equitable principles, regardless of whether the issue of enforceability is considered in a proceeding in equity or at law.

ARTICLE IX.

MISCELLANEOUS

9.1 Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all of such counterparts shall constitute for all purposes one agreement. Any signature hereto delivered by a Party by facsimile transmission shall be deemed an original signature hereto.

9.2 Notices.

(a) Except as expressly set forth to the contrary in this Agreement, all notices and communications required or permitted to be given hereunder shall be sufficient in all respects if given in writing and delivered personally, or sent by overnight courier, or mailed by U.S. Express Mail or by certified or registered United States Mail with all postage fully prepaid, or sent by facsimile transmission (provided any such facsimile transmission is confirmed either orally or by written confirmation) or sent by email, addressed to the appropriate Party at the address or email address for such Party shown below or at such other address as such Party shall have theretofore designated by written notice delivered to the Party giving such notice:

If to the Parent:

Memorial Resource Development Corp.

1301 McKinney, Suite 2100

Houston, Texas 77010

Attn: General Counsel

Facsimile: (713) 588-8301

 

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If to the Company:

WildHorse Resources, LLC

c/o Memorial Resource Development Corp.

1301 McKinney, Suite 2100

Houston, Texas 77010

Attn: General Counsel

Facsimile: (713) 588-8301

If to the Service Provider:

WildHorse Resources Management Company, LLC

9805 Katy Freeway, Suite 400

Houston, Texas 77024

Attn: Anthony Bahr

Facsimile: (713) 568-4911

(b) Any notice given in accordance herewith shall be deemed to have been given when delivered to the addressee by email, or in person, or by courier, or transmitted by facsimile transmission during normal business hours, or upon actual receipt by the addressee after such notice has either been delivered to an overnight courier or deposited in the United States Mail, as the case may be. The Parties may change the address, telephone numbers, and facsimile numbers to which such communications are to be addressed by giving written notice to the other Parties in the manner provided in this Section 9.2.

9.3 Entire Agreement; Conflicts. This Agreement and the Schedules hereto collectively constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof. In the event of a conflict between the terms and provisions of this Agreement and the terms and provisions of any Schedule hereto, the terms and provisions of this Agreement shall govern and control; provided, however, that the inclusion in any of the Schedules hereto of terms and provisions not addressed in this Agreement shall not be deemed a conflict, and all such additional provisions shall be given full force and effect, subject to the provisions of this Section 9.3.

9.4 Amendment. This Agreement may be amended only by an instrument in writing executed by all of the Parties and expressly identified as an amendment or modification.

9.5 Parties in Interest. Nothing in this Agreement shall entitle any Person other than the Parties to any claim, cause of action, remedy or right of any kind.

9.6 Successors and Permitted Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns.

9.7 Assignment. Except for the ability of the Service Provider to cause one or more of the Services to be performed by a Third Party provider (subject to the terms of this Agreement), no Party shall have the right to assign its rights or obligations under this Agreement without the prior written consent of the other party and any such assignment that is made without

 

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such consent shall be void and of no force and effect. No permitted assignment shall release any Party from any of its obligations under this Agreement. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assignees.

9.8 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Party shall execute and deliver all such future instruments and take such other and further action as may be reasonably necessary or appropriate to carry out the provisions of this Agreement and the intention of the Parties as expressed herein.

9.9 Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any adverse manner to any Party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

9.10 No Recourse. For the avoidance of doubt, the provisions of this Agreement shall not give rise to any right of recourse against any current or former stockholder, member, partner, owner, director, manager, officer or employee of the Service Provider or of the Parent or the Company or any of their respective officers, directors, employees, agents or representatives.

9.11 Governing Law. THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS.

9.12 Interpretation. All references in this Agreement to Schedules, Articles, Sections, subsections and other subdivisions refer to the corresponding Schedules, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections and other subdivisions of this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof. The words “this Agreement”, “herein”, “hereby”, “hereunder” and “hereof”, and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, subsection or other subdivision unless expressly so limited. The words “this Article”, “this Section”, and “this subsection”, and words of similar import, refer only to the Article, Section or subsection hereof in which such words occur. The word “including” (in its various forms) means including without limitation. All references to “$” or “dollars” shall be deemed references to United States dollars. Each accounting term not defined herein will have the meaning given to it under GAAP as interpreted as of the date of this Agreement. Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. Schedules referred to herein are attached to and by this reference incorporated herein for all purposes. References to any Law or agreement shall mean such Law or agreement as it may be amended from time to time.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date and year first above written.

 

PARENT:
MEMORIAL RESOURCE DEVELOPMENT CORP.
By:  

 

Name:  

 

Title:  

 

COMPANY:
WILDHORSE RESOURCES, LLC
By:  

 

Name:  

 

Title:  

 

SERVICE PROVIDER:
WILDHORSE RESOURCES MANAGEMENT COMPANY, LLC
By:  

 

Name:  

 

Title:  

 

SIGNATURE PAGE

MANAGEMENT SERVICES AGREEMENT


Schedule 2.1

Services

The Services shall include any services necessary or appropriate for the management and operation of the Company and may include, without limitation, employee services related to supporting the following:

 

  1. Administrative and Land Services (as described below)

 

  2. Operator Services (as described below)

 

  3. Financial and Accounting Services

 

  4. Accounts Payable and Receivables

 

  5. Contract Negotiation and Management (subject to Parent approval)

 

  6. Employee Health and Safety

 

  7. Government and Public Relations

 

  8. Information Technology

 

  9. Land, Land Administration and Ordinary Course Legal Services (subject to Parent approval of Legal Services)

 

  10. Personnel, Outside Contractors and Consultants

 

  11. Engineering and Technical Services

 

  12. Operations

 

  13. General and Administrative

 

  14. Equipment and Personnel Procurement

 

  15. Training and Development Programs

 

  16. Geoscience

 

  17. Strategic Planning and Budgeting Cooperation with the Company and the Parent

 

  18. Any Other Services as Reasonably Requested by the Parent or the Company from Time to Time


Administrative and Land Services: To fulfill its obligation to manage the day-to-day affairs of the Company, Service Provider:

(i) may, in the name of the Service Provider or the Company or as agent for the Company, as appropriate, negotiate, enter into or settle contracts and agreements which are necessary to prudently manage the Assets of the Company in accordance with the terms of this Agreement. Such contracts and agreements may include, but are not limited to, furnishment of utilities to Assets of the Company, gathering or processing agreements and contract services agreements. Company will, when necessary, appoint Service Provider as its agent to act on Company’s behalf;

(ii) as directed by the Parent, will cause the Company to retain qualified accountants and legal counsel, as applicable, to assist in developing appropriate accounting procedures, compliance procedures and testing systems with respect to financial reporting obligations and to conduct compliance reviews with respect thereto;

(iii) will use commercially reasonable efforts to cause third party expenses incurred by or on behalf of the Company to be commercially reasonable or commercially customary and within any budgeted parameters or expense guidelines set by the Company from time to time; provided, however, any expenditures that will exceed the applicable budgeted parameter by more than 10% shall require the Company’s prior approval;

(iv) will correspond with Company’s partners and generally conduct industry standard lease administration duties on Company’s Assets;

(v) will perform such other services as may be required from time to time for management and other activities relating to the Assets of the Company as the Company shall reasonably request or the Service Provider shall deem appropriate under the particular circumstances and approved by the Company; and

(vi) will perform other land functions as Service Provider and the Company may deem necessary to manage the Company’s Assets.

Operator Services: The Service Provider shall perform such services as are typically provided by an operator for non-operators for each of the Operator Services with respect to the Assets for which the Company would otherwise serve as an operator, and to perform those Operator Services required for the non-operated Assets owned by the Company. “Operator Services” is defined as one or more of the following services by the Service Provider for the benefit of Owner in connection with the operatorship and administration of the Assets, to-wit, the Service Provider shall:

(i) be contract operator in connection with the operation of the Assets;

(ii) cause the Company to comply in all material respects with all statutes, ordinances, laws, rules, regulations, orders and determinations affecting the Company and its Assets and issued by any governmental authority having jurisdiction thereof. The Service Provider shall not refuse or delay compliance with any specific instructions that


are given by the Company that are reasonably necessary to cause the Company to comply with such statutes, ordinances, laws, rules, regulations, orders and determinations. The Company shall cooperate with the Service Provider in compliance with such statutes, ordinances, laws, rules, regulations, orders and determinations, including the costs of all such compliance; timely collect, process and pay all approved bills and taxes attributable to the Assets;

(iii) for operated Assets, generate monthly joint interest billings to non-operating partners and the Company;

(iv) for operated Assets, disburse actual received revenues to revenue interest owners on the Service Provider’s normal monthly revenue distribution schedule;

(v) timely prepare and submit all required regulatory reports, including but not limited to, production reports, production disposition reports and wellwork activity reports;

(vi) manage the day-to-day operations of the Assets, including but not limited to the gathering and recording of production data, maintenance of the facilities and locations, execution and supervision of capital and expense projects; provided however, that any authorizations for expenditures exceeding $50,000 individually shall require the Company’s prior approval;

(vii) provide to the Company and the Parent fulltime electronic access to daily production data; and,

(viii) other duties the Service Provider or the Company deems necessary to prudently operate the Company’s Assets.

Financial and Accounting Services: To fulfill its obligation to manage certain of the operations of the Company, the Service Provider:

(i) will complete all billing, joint interest or otherwise, and accounts payable functions on behalf of the Company, and render the necessary auditing, accounting and bookkeeping services generally required for the proper management of the business and affairs of the Company or to comply with the instruction of the Company or the terms of any other agreements of the Company, including credit agreements;

(ii) will net, on a monthly basis, the joint interest billings of the Company for all operating and project expenses, revenues received by Service Provider on behalf of the Company, the Management Fee and COPAS income, and shall settle with the Company no later than the 15th day following the month to which such items relate or in which they were received;

(iv) will monitor the operating and financial performance of the Company and provide periodic reports with respect thereto to the Company and the Parent;


(v) will enter and maintain the revenue and expense decks of the Company’s Assets in the Service Provider’s land and accounting systems;

(vi) will prepare and distribute to the Company and the Parent, within 15 calendar days of each month end, lease operating statements and full financial statements;

(vii) will provide read-only access to the accounting system used by the Service Provider to account for the operations of the Company and the Service Provider; and

(viii) will perform or cause to be performed, any other accounting, financial or audit related services as the Company may reasonably request.

EX-10.7 7 d658814dex107.htm EX-10.7 EX-10.7

Exhibit 10.7

MEMORIAL RESOURCE DEVELOPMENT CORP.

FORM OF CHANGE IN CONTROL AGREEMENT

                    , 2014

[name]

[address]

Dear [name]:

Memorial Resource Development Corp. (the “Company”) considers it essential to the best interests of its members to attract top executives and to foster the continuous employment of key management personnel. In this regard, the Board of Directors of the Company (the “Board”) recognizes that the possibility of a change in control may exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.

The Board has determined that appropriate steps should be taken to ensure the continuity of management and to foster objectivity in the face of uncertainty arising from the possibility of a change in control of the Company, although no such change is now contemplated. In order to induce you to remain in the employ of the Company and in consideration of your continued services to the Company, the Company agrees that effective as of                     , 2014, you shall receive the severance benefits from the Company, set forth in this letter agreement (“Agreement”) in the event you “Separate from Service” with the Company and all related entities (collectively, the “Company Group”) subsequent to a “Change in Control” of the Company (as such terms are defined in Section 2 hereof) under the circumstances described below. This Agreement supersedes and replaces prior agreements and/or policies related to severance benefits payable to you following a Change in Control of the Company, as specified in Section 10 of this Agreement.

1. Term of Agreement. This Agreement shall commence on the date hereof and shall continue in effect until the earlier of (i) your Separation from Service other than on account of a Qualifying Termination; (ii) the Company’s satisfaction of all of its obligations under this Agreement; or (iii) the execution of a written agreement between the Company and you terminating this Agreement.

2. Definitions. As used in this Agreement:

(a) “Annual Compensation” means the total of:

(i) one year of base salary, at the highest base salary rate that you were paid by the Company in the 12-month period prior to the date of your Separation from Service (the “Look-Back Period”); and

(ii) 100% of the greatest target annual bonus target for which you were eligible within the Look-Back Period.


(b) “Cause” means (i) your commission of, conviction for, plea of guilty or nolo contendere to a felony or a crime involving moral turpitude; (ii) engaging in conduct that constitutes fraud, gross negligence or willful misconduct that results or would reasonably be expected to result in material harm to the Company or its business or reputation; (iii) breach of any material terms of your employment, including any of the Company’s policies or code of conduct; or (iv) failure to perform your duties for the Company.

(c) “Change in Control” has the meaning ascribed to such term in the Long Term Incentive Plan.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Company” means Memorial Resource Development Corp., and any successor as provided in Section 7 hereof.

(f) “Disability” means that, at the time you Separate from Service, you have been unable to perform the duties of your position for a period of 180 consecutive days as the result of your incapacity due to physical or mental illness.

(g) “Good Reason” means the occurrence of one of the following without your express written consent (i) a material reduction of your duties, position or responsibilities, or your removal from such position and responsibilities, unless you are offered a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation, title and status); (ii) a material reduction by the Company of your base compensation (base salary and target bonus) as in effect immediately prior to such reduction; or (iii) you are requested to relocate (except for office relocations that would not increase your one way commute by more than 50 miles); provided, that any such event shall not constitute Good Reason unless and until you shall have provided the Company with written notice thereof no later than thirty (30) days following your knowledge of the initial occurrence of such event and the Company shall have failed to fully remedy such event within thirty (30) days of receipt of such notice.

(h) “Long Term Incentive Plan” means the Memorial Resource Development Corp. 2014 Long Term Incentive Plan.

(i) “Qualifying Termination” means your Separation from Service on account of (i) an involuntary termination by the Company without Cause or (ii) your voluntary resignation for Good Reason; provided, that such Good Reason must have occurred within six (6) months prior to, or six (6) months following, a Change in Control and provided further, that with respect to clauses (i) and (ii), such Separation from Service must occur within six (6) months prior to, or twenty-four (24) months following, a Change in Control.

(j) “Separation from Service” or “Separates from Service” means a termination of employment with the Company Group that the Company determines is a Separation from Service in accordance with Section 409A of the Code.

(k) “Severance Payment” means the payment of severance compensation as provided in Section 3 of this Agreement.

 

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(l) “Specified Employee” means a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Employer from time to time in accordance therewith, or if none, the default methodology set forth therein.

3. Compensation Upon a Qualifying Termination. If you Separate from Service on account of a Qualifying Termination, then subject to (x) your signing and not revoking a separation agreement and release of claims in a form reasonably satisfactory to the Company (which separation agreement and release of claims will be provided by the Company to you within five (5) days following such Qualifying Termination and must be executed by you and returned to the Company within fifty (50) days following such Qualifying Termination) and (y) Section 4:

(a) You will be entitled to a Severance Payment in a lump sum amount equal to [one times (1x)][two times (2x)][three times (3x)] your Annual Compensation, which shall be payable in accordance with subsection (c) below.

(b) The Company agrees that, in addition to the payment provided under Section 3(a):

(i) all outstanding unvested awards previously granted to you under the Long Term Incentive Plan shall immediately be 100% vested upon such Separation from Service;

(ii) to the extent that you timely elect COBRA continuation coverage under the Company’s group insurance plans, the Company shall reimburse you for the amount of COBRA continuation premiums (less required co-pay) until the earlier of (x) twelve (12) months following your Separation from Service and (y) such time as you are no longer eligible for COBRA continuation coverage;

(iii) the Company will provide you with financial counseling services for twelve (12) months following your Separation from Service, subject to a maximum benefit of $30,000.00; and

(iv) the Company will provide you with outplacement counseling services for twelve (12) months following your Separation from Service, subject to a maximum value of $30,000.00.

(c) Subject to Section 19(b) below, all payments made to you under subsection (a) shall be made in a lump sum on the sixtieth (60th) calendar day following your Separation from Service, provided that your separation agreement and release of claims referenced above must be effective and not revocable on the date payment is to be made in order to receive payments under subsection (a).

(d) Notwithstanding anything contained herein to the contrary, the Company shall have no obligation to make any payment or offer any benefits to you under this Agreement if you Separate from Service other than on account of a Qualifying Termination.

4. Parachute Payments. If the Board determines, in its sole discretion, that Section 280G of the Code applies to any compensation payable to you, then the provisions of this Section 4 shall apply. If any payments or benefits to which you are entitled from the Company, any affiliate,

 

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any successor to the Company or an affiliate, or any trusts established by any of the foregoing by reason of, or in connection with, any transaction that occurs after the date hereof (collectively, the “Payments,” which shall include, without limitation, the vesting of any equity awards or other non-cash benefit or property) are, alone or in the aggregate, more likely than not, if paid or delivered to you, to be subject to the tax imposed by Section 4999 of the Code or any successor provisions to that section, then the Payments (beginning with any Payment to be paid in cash hereunder), shall be either (a) reduced (but not below zero) so that the present value of such total Payments received you will be one dollar ($1.00) less than three times your “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such Payments received by you shall be subject to the excise tax imposed by Section 4999 of the Code, or (b) paid in full, whichever of (a) or (b) produces the better net after tax position to you (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The determination as to whether any Payments are more likely than not to be subject to taxes under Section 4999 of the Code and as to whether reduction or payment in full of the amount of the Payments provided hereunder results in the better net after tax position to you shall be made by the Board and you in good faith.

5. No Mitigation. You shall not be required to mitigate the amount of any payment provided for in Section 3 hereof by seeking other employment or otherwise, nor shall the amount of such payment be reduced by reason of compensation or other income you receive for services rendered after your Separation from Service from the Company.

6. Exclusive Remedy. In the event of your Separation from Service on account of a Qualifying Termination, the provisions of Section 3 are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled (including any contrary provisions in any employment agreement you may have with the Company), whether at law, tort or contract, in equity, or under this Agreement.

7. Company’s Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform the obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. As used in this Section 7, Company includes any successor to its business or assets as aforesaid which executes and delivers this Agreement or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

8. Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or five (5) days after deposit with postal authorities transmitted by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first or last page of this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

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9. Amendment or Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless you and the Company agree to such amendment, modification, waiver or discharge in writing. No amendment, modification, waiver or discharge of this Agreement shall result in the accelerated payment of any Severance Payment provided for in Section 3. No waiver by either party at any time of the breach of, or lack of compliance with, any conditions or provisions of this Agreement shall be deemed a waiver of the provisions or conditions hereof.

10. Sole Agreement. This Agreement represents the entire agreement between you and the Company with respect to the matters set forth herein and supersedes and replaces any prior agreements in their entirety. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter of this Agreement will be made by either party which are not set forth expressly herein. No future agreement between you and the Company may supercede this Agreement, unless it is in writing and specifically makes reference to this Section 10.

11. Employee’s Successors. This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amounts are still payable to you hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designees, to your estate.

12. Funding. This Agreement shall be unfunded. Any payment made under the Agreement shall be made from the Company’s general assets.

13. Waiver. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

14. Headings. All captions and section headings used in this Agreement are for convenience purposes only and do not form a part of this Agreement.

15. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect.

16. Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

17. Applicable Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware (with the exception of its conflict of laws provisions). This Agreement is intended to comply with Section 409A of the Code and the regulations promulgated thereunder.

18. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

 

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19. Code Section 409A.

(a) General. The Agreement is intended to either comply with, or be exempt from, the requirements of Code Section 409A. To the extent that this Agreement is not exempt from the requirements of Code Section 409A, this Agreement is intended to comply with the requirements of Code Section 409A and shall be limited, construed and interpreted in accordance with such intent.

(b) Separation from Service; Specified Employees; Separate Payments. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a Separation from Service. If you are deemed on the date of termination to be a Specified Employee, then to the extent any payment or benefit hereunder (after taking into account all exclusions applicable thereto under Code Section 409A) is “nonqualified deferred compensation” subject to Section 409A, then such payment shall be delayed and not be made prior to the earlier of (A) the six (6)-month anniversary of the date of such Separation from Service and (B) the date of your death (the “Delay Period”). All payments delayed pursuant to this Section 19(b) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid to the Participant in a single lump sum on the first payroll date on or following the first day following the expiration of the Delay Period, and any remaining payments and benefits due under the Plan shall be paid or provided in accordance with the normal payment dates specified for them herein. Each payment made under this Plan will be treated as a separate payment for purposes of Code Section 409A and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments.

If the foregoing conforms to your understanding, please indicate your agreement to the terms hereof by signing where indicated below and returning one copy of this Agreement to the undersigned.

[signature page follows]

 

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IN WITNESS WHEREOF, this Agreement is executed effective as of the date first set forth above.

 

MEMORIAL RESOURCE DEVELOPMENT CORP.
By:    
Name:  
Title:  

ACCEPTED AND AGREED TO AS OF THE DATE FIRST SET FORTH ABOVE:

 

 

Name:
EX-10.8 8 d658814dex108.htm EX-10.8 EX-10.8

Exhibit 10.8

FORM OF

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of         , by and between Memorial Resource Development Corp., a Delaware corporation (the “Company”), and (“Indemnitee”).

RECITALS:

WHEREAS, directors, officers and other persons in service to corporations or business enterprises are subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

WHEREAS, highly competent persons have become more reluctant to serve as directors, officers or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, (i) the Amended and Restated Bylaws of the Company (as may be amended, the “Bylaws”) requires indemnification of the officers and directors of the Company, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and the Amended and Restated Certificate of Incorporation of the Company (as may be amended, the “Certificate of Incorporation”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder; and

WHEREAS, (i) Indemnitee does not regard the protection available under the Bylaws and insurance as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as a director or officer of the Company without adequate protection, (iii) the Company desires Indemnitee to serve in such capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified.


AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Definitions. (a) As used in this Agreement:

Affiliate” of any specified Person shall mean any other Person directly or indirectly controlling, controlled by or under common control with such specified Person.

Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of (i) the Company or (ii) any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.

Disinterested Director” shall mean a director of the Company who is not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary.

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

Expenses” shall mean all reasonable costs, expenses, fees and charges, including, without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, or in respect of or relating to, any Proceeding, including, without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 12(d) hereof only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and (iv) any interest, assessments or other charges in respect of the foregoing. “Expenses” shall not include “Liabilities.”

Indemnity Obligations” shall mean all obligations of the Company to Indemnitee under this Agreement, including the Company’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

Independent Counsel” shall mean a law firm of fifty (50) or more attorneys, or a member of a law firm of fifty (50) or more attorneys, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to

 

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represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

Liabilities” shall mean all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

Proceeding” shall mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought in the right of the Company or otherwise, and whether of a civil, criminal, administrative or investigative nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any actual or alleged action taken by Indemnitee or of any action on Indemnitee’s part while acting as director or officer of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, trustee, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement can be provided under this Agreement.

Sponsor Entities” means (i) MRD Holdings LLC, Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P. and (ii) any of their respective Affiliates and any investment fund or other Person advised or managed by any Sponsor Entity; provided, however, that neither the Company nor any of its subsidiaries shall be considered Sponsor Entities hereunder.

(b) For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner such Person reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

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Section 2. Indemnity in Third-Party Proceedings. The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or reasonably incurred (and, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding (other than any Proceeding brought by or in the right of the Company to procure a judgment in its favor, which is provided for in Section 3 below), or any claim, issue or matter therein.

Section 3. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred (and, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 4. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, including any rights to indemnification pursuant to Sections 2 or 3 hereof, to the fullest extent permitted by applicable law, to the extent that Indemnitee is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred (and, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved Proceeding, claim, issue or matter. For purposes of this Section 4 and without limitation, the termination of any Proceeding or claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 5. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise a participant in any Proceeding to which Indemnitee is not a party and is not threatened to be made a party, Indemnitee shall be indemnified against all Expenses suffered or incurred (or, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection therewith.

Section 6. Additional Indemnification. Notwithstanding any limitation in Sections 2, 3 or 4 hereof, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding

 

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(including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses suffered or reasonably incurred (and, in the case of retainers, reasonably expected to be incurred) by Indemnitee in connection with such Proceeding, including but not limited to:

(a) the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and

(b) the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 7. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to indemnify or hold harmless Indemnitee, or, in the case of (a) and (c), to advance Expenses to Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy obtained by the Company except with respect to any excess beyond the amount paid under such insurance policy;

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;

(c) except as provided in Section 12(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee or, if Indemnitee was nominated to the Board by one of more of the Sponsor Entities, such Sponsor Entity, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee or, if Indemnitee was nominated to the Board by one or more of the Sponsor Entities, such Sponsor Entity, against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law (for the avoidance of doubt, Indemnitee shall not be deemed, for purposes of this subsection, to have initiated or brought any claim by reason of (a) having asserted any affirmative defenses in connection with a claim not initiated by Indemnitee or (b) having made any counterclaim (whether permissive or mandatory) in connection with any claim not initiated by Indemnitee); or

(d) if a final decision by a court having jurisdiction in the matter that is not subject to appeal shall determine that such indemnification is not lawful.

Section 8. Advancement. The Company shall advance, to the extent not prohibited by applicable law, the Expenses and Liabilities reasonably incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the

 

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Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all Expenses reasonably incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that Indemnitee undertakes to repay the amounts advanced to the extent that it is ultimately determined by final judicial decision from which there is no further right to appeal that the Indemnitee is not entitled to be indemnified by the Company. Nothing in this Section 8 shall limit Indemnitee’s right to advancement pursuant to Section 12(d) of this Agreement. This Section 8 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Sections 7(a) or (c) hereof.

Section 9. Procedure for Notification and Defense of Claim.

(a) Indemnitee shall promptly notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification hereunder (the date of such notification, the “Submission Date”). The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding, including any appeal therein. Any delay or failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

(b) In the event Indemnitee is entitled to indemnification and/or advancement with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel (including local counsel) selected by Indemnitee and approved by the Company to defend Indemnitee in such Proceeding, at the sole expense of the Company (which approval shall not be unreasonably withheld, conditioned or delayed), or (ii) have the Company assume the defense of Indemnitee in such Proceeding, in which case the Company shall assume the defense of such Proceeding with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Company’s receipt of written notice of Indemnitee’s election to cause the Company to do so. If the Company is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Company shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense. Such legal counsel may represent both Indemnitee and the Company (and any other party or parties entitled to be indemnified by the Company with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a conflict of interest between Indemnitee and the Company (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Company (or any such other party or parties). Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate

 

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counsel at its own expense. If the Company has responsibility for defense of a Proceeding, the Company shall provide the Indemnitee and its counsel with all copies of pleadings and material correspondence relating to the Proceeding. Indemnitee and the Company shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Company or Indemnitee assumes the defense thereof. Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. The Company may not settle or compromise any Proceeding without the prior written consent of Indemnitee.

Section 10. Procedure Upon Application for Indemnification.

(a) Upon written request by Indemnitee for indemnification pursuant to Section 9(a) hereof, if any determination by the Company is required by applicable law with respect to Indemnitee’s entitlement thereto, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel, and (ii) in all other circumstances, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (D) if so directed by the Board, by the stockholders of the Company holding a majority of the securities of the Company entitled to vote; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall, to the fullest extent permitted by law, be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a determination as to Indemnitee’s entitlement to such indemnification described in this Section 10(a) has been made. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Liabilities and Expenses arising out of or relating to this Agreement or its engagement pursuant hereto.

(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a) hereof, (i) the Independent Counsel shall be selected by the Company within ten (10) days of the Submission Date (the cost of such Independent Counsel to be paid by the Company), (ii) the Company shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company Indemnitee’s written objection to such selection. Such objection by Indemnitee

 

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may be asserted only on the ground that the Independent Counsel selected does not meet the requirements of “Independent Counsel” as defined in this Agreement. If such written objection is made and substantiated, the Independent Counsel selected shall not serve as Independent Counsel unless and until Indemnitee withdraws the objection or a court has determined that such objection is without merit. Absent a timely objection, the person so selected shall act as Independent Counsel. If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the Submission Date and (ii) ten (10) days after the final disposition of the Proceeding, including any appeal therein, each of the Company and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel.

Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 11. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall, to the fullest extent not prohibited by applicable law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by applicable law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b) Subject to Section 12(e) hereof, if the person, persons or entity empowered or selected under Section 10 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefore, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by applicable law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by Independent Counsel and Indemnitee objects to the Company’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation or information relating thereto; provided further, however, that such 60-day period may also be extended for a reasonable time, not to exceed an additional sixty (60) days, if the determination of entitlement to indemnification is to be made by the stockholders of the Company.

 

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(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

(d) Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e) Actions of Others. The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 12. Remedies of Indemnitee.

(a) Subject to Section 12(e) hereof, in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been timely made pursuant to Section 10(a) of this Agreement, (iv) payment of indemnification is not made pursuant to Sections 4 or 5 or the third to the last sentence of Section 10(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Sections 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other Person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification or advancement. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

9


(b) In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.

(c) If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a prohibition of such indemnification under applicable law.

(d) The Company shall, to the fullest extent not prohibited by applicable law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that Indemnitee not be required to incur Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by applicable law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or the Bylaws, or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement or insurance recovery, as the case may be.

(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding, including any appeal therein.

Section 13. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to

 

10


be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity). The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) to indemnify Indemnitee or advance Expenses or Liabilities to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Liabilities to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated (including, any Sponsor Entity) or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any other Person with whom or which Indemnitee may be associated (including, without limitations, any Sponsor Entity) or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers affect the obligations of the Company hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity). Any indemnification, insurance or advancement provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) with respect to any liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Company or valid and any collectible insurance (including but not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company under this Agreement.

(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, trustees, or agents of any Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee,

 

11


trustee or agent under such policy or policies and such policies shall provide for and recognize that the insurance policies are primary to any rights to indemnification, advancement or insurance proceeds to which Indemnitee may be entitled from one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) to the same extent as the Company’s indemnification and advancement obligations set forth in this Agreement. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(d) In the event of any payment under this Agreement, the Company shall be subrogated to the rights of recovery of Indemnitee, including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated; provided, however, that the Company shall not be subrogated to the extent of any such payment of all rights of recovery of Indemnitee with respect to any Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity).

(e) The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

Section 14. Duration of Agreement; Not Employment Contract. This Agreement shall continue until and terminate upon the latest of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as a director or officer of any Enterprise and (ii) one (1) year after the date of final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding, including any appeal, commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators. The Company shall require and cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger, consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, the Bylaws or the DGCL.

 

12


Section 15. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by applicable law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 16. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor diminish or abrogate any rights of Indemnitee thereunder.

Section 17. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Agreement nor shall any waiver constitute a continuing waiver.

Section 18. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

 

13


(b) If to the Company to

Memorial Resource Development Corp.

1301 McKinney Street, Suite 2100

Houston, Texas 77010

Attention: Board of Directors

or to any other address as may have been furnished to Indemnitee by the Company.

Section 19. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Liabilities or for Expenses, in connection with any Proceeding, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and transaction(s) giving cause to such Proceeding; and (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and transaction(s).

Section 20. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) consent to service of process at the address set forth in Section 18 of this Agreement with the same legal force and validity as if served upon such party personally within the State of Delaware; (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

Section 21. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 22. Third-Party Beneficiaries. The Sponsor Entities are intended third-party beneficiaries of this Agreement and shall have all of the rights afforded to Indemnitee under this Agreement.

Section 23. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

14


IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

MEMORIAL RESOURCE DEVELOPMENT CORP.     INDEMNITEE
By:  

 

    By:  

 

Name:  

 

    Name:  

 

Title:  

 

    Title:  

 

Signature Page to Indemnification Agreement

EX-10.10 9 d658814dex1010.htm EX-10.10 EX-10.10

Exhibit 10.10

CONFIDENTIAL TREATMENT REQUESTED

GAS PROCESSING AGREEMENT

March 17, 2014

PennTex North Louisiana, LLC

“Processor”

and

WildHorse Resources, LLC

“Customer”


TABLE OF CONTENTS

 

ARTICLE

   PAGE

ARTICLE I. CERTAIN DEFINITIONS

   1

ARTICLE II. CUSTOMER RIGHTS AND OBLIGATIONS

   8

2.1 Dedication

   8

2.2 Prior Dedications

   9

2.3 Covenant Running with the Land

   9

2.4 Memorandum of Agreement

   9

2.5 Customer Warranty

   10

2.6 No Upstream Processing

   10

2.7 Customer Gas in Excess of Maximum Daily Quantity

   10

2.8 Gas for Lease Operations

   10

ARTICLE III. DELIVERY AND PROCESSING OF GAS

   10

3.1 Plant Operational Date; Initial Operation; Design Basis; Second Plant Option

   10

3.2 Delivery of Customer Gas

   11

3.3 Processor Commitment

   12

3.4 Delivery of Customer’s Residue Gas

   12

3.5 Receipt and Processing of Gas.

   12

3.6 Maintenance

   12

3.7 Customer’s MDQ

   13

3.8 Plant Operations

   13

3.9 Operation of the Plant

   15

3.10 Delivery of Customer Plant Products

   15

ARTICLE IV. NOMINATIONS AND BALANCING

   15

4.1 Nomination Procedures

   15

4.2 Balancing

   15

4.3 Allocation of Received Gas

   16

4.4 Plant Product Allocation Procedure

   16

ARTICLE V. QUALITY

   16

5.1 Gas Quality Specifications

   16

5.2 Non-Conforming Gas

   16

5.3 Hazardous Substances

   17

5.4 Environmental, Health and Safety Laws

   17

ARTICLE VI. MEASUREMENT AND TESTING

   17

6.1 Measurement Equipment

   17

6.2 Measurement Standards

   18

6.3 Measurement Factors

   18

6.4 Measurement Accuracy Verification

   19

6.5 Measurement Error

   19

6.6 Customer’s Right of Inspection

   19

6.7 Gross Heating Value Determination

   20

 

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6.8 Hydrocarbon Content

   20

6.9 Fractional Analysis

   20

6.10 Modifications to Measurement Procedures

   20

6.11 Measurement Disputes

   21

ARTICLE VII. PLANT PRODUCTS AND CUSTOMER RESIDUE GAS

   21

7.1 Conveyance of Rights to Processor

   21

7.2 Title to Customer Gas and Plant Products

   21

ARTICLE VIII. PLANT FUEL, LOST AND UNACCOUNTED FOR AND SHRINKAGE

   21

8.1 Calculation of Plant Fuel and Lost and Unaccounted for Gas

   21

8.2 Calculation of Shrinkage

   21

8.3 Plant Fuel, Shrinkage and Lost and Unaccounted for Gas

   21

ARTICLE IX. COMPENSATION AND FEES

   22

9.1 Processing Fee

   22

9.2 Stabilization Facilities

   22

9.3 Fee Adjustment

   22

9.4 Minimum Quantity Commitment.

   22

9.5 Deficiency Payments

   23

9.6 Certain Other Payments

   23

9.7 Electric Compression Reimbursement

   25

ARTICLE X. ROYALTIES; WARRANTY OF TITLE

   25

10.1 Royalties

   25

10.2 Title; Warranties Regarding Title

   25

ARTICLE XI. TERM

   26

11.1 Term

   26

11.2 Termination for Cause

   26

ARTICLE XII. STATEMENTS AND PAYMENTS

   26

12.1 Invoices and Statements

   26

12.2 Payment of Statements

   26

12.3 Billing Disputes

   26

12.4 Audit Rights

   27

12.5 Customer Credit Data

   27

12.6 Setoff and Recoupment

   27

12.7 Creditworthiness Determination

   27

ARTICLE XIII. LIABILITY OF THE PARTIES

   27

13.1 Control and Possession of Gas and Plant Products

   27

13.2 Waiver of Certain Damages

   28

13.3 Inert Constituents

   28

13.4 Indemnification

   29

ARTICLE XIV. FORCE MAJEURE

   30

14.1 Suspension of Obligations

   30

 

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14.2 Definition of Force Majeure

   30

14.3 Strikes

   30

ARTICLE XV. GOVERNING LAW; VENUE; DISPUTE RESOLUTION

   30

15.1 Governing Law

   30

15.2 Venue

   30

15.3 Negotiation

   31

ARTICLE XVI. TAXES

   31

16.1 Taxes on Processing and Plant Products

   31

16.2 Other Taxes

   31

ARTICLE XVII. ASSIGNMENT

   31

17.1 Restrictions on Assignment

   31

17.2 Permitted Assignments

   32

ARTICLE XVIII. NOTICES AND STATEMENTS

   32

18.1 Notice

   32

18.2 Change of Address

   33

ARTICLE XIX. MISCELLANEOUS

   34

19.1 Entire Agreement

   34

19.2 Confidentiality

   34

19.3 Waiver

   34

19.4 No Third Party Beneficiaries

   35

19.5 No Partnership

   35

19.6 Published Indices

   35

19.7 Headings

   35

19.8 Contract Interpretation

   35

19.9 Agreement Subject to Laws

   36

19.10 Federal Jurisdiction

   36

19.11 Reports to Governmental Authorities

   36

19.12 Material Adverse Change

   36

19.13 Severability

   37

19.14 Expenses

   37

19.15 Joint Preparation

   37

19.16 Further Assurances

   37

19.17 No Inducements

   37

19.18 Counterpart Execution

   37

19.19 Survival

   37

19.20 Customer-Affiliate-Subsidiary Obligations

   38

 

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Exhibits

    

EXHIBIT A

   Maximum Daily Quantity*

EXHIBIT B

   Memorandum

EXHIBIT C

   Specifications*

EXHIBIT D

   AMI Description

EXHIBIT E

   Schedule of Dedicated Leases

EXHIBIT F

   Prior Dedications

EXHIBIT G

   Plan Design Specifications*

 

 

*

-

Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

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GAS PROCESSING AGREEMENT

This Gas Processing Agreement (this “Agreement”) is hereby made and entered into as of the 17th day of March, 2014 (the “Effective Date”) by and between PennTex North Louisiana, LLC, a Delaware limited liability company (“Processor”), and WildHorse Resources, LLC, a Delaware limited liability company (“Customer”). Hereinafter, Processor and Customer may sometimes be referred to collectively as the “Parties” and individually as a “Party.”

W I T N E S S E T H:

WHEREAS, Customer owns title to or controls the right to process Customer Gas (as hereinafter defined) for the recovery and removal of certain liquefiable hydrocarbons and non-hydrocarbon components therefrom; and

WHEREAS, Processor intends to construct and own processing facilities in the vicinity of Customer’s wells in northern Louisiana; and

WHEREAS, Customer desires to have Customer Gas processed by Processor hereunder; and

WHEREAS, upon the completion of such processing facilities, Processor will be capable of processing Customer Gas and Processor desires to process Customer Gas; and

WHEREAS, Gatherer and Customer have entered into that certain Gas Gathering Agreement dated November 1, 2012, as amended and restated by that certain Amended and Restated Gas Gathering Agreement dated April 1, 2013 (as amended, supplemented or modified from time to time, the “Gathering Agreement”), pursuant to which Customer Gas will be delivered to the Plant.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Parties covenant and agree as follows:

ARTICLE I.

CERTAIN DEFINITIONS

For the purposes of this Agreement, the following definitions have the meanings as set forth below:

1.1 “Additional Term” shall have the meaning given to such term in Section 11.1.

1.2 “Affiliate” shall mean, when used with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person in question.

1.3 “Agreement” shall have the meaning given to such term in the preamble of this Agreement.

1.4 “Annual Period” shall mean a period commencing at 9:00 a.m., Central Clock Time, on the Plant Operational Date and ending at 9:00 a.m., Central Clock Time on the same Day and calendar month of the following calendar year and thereafter for succeeding periods of twelve (12) consecutive Months each.


1.5 “Area of Mutual Interest” or “AMI” shall mean all of the land described in Exhibit D attached hereto.

1.6 “Assumed Obligations” shall have the meaning given to such term in Section 17.2.

1.7 “Basis for Requesting Assurance” shall have the meaning given to such term in Section 12.7.

1.8 “Btu” shall mean one British thermal unit, the amount of heat required to raise the temperature of one pound of water one degree Fahrenheit at standard reference conditions.

1.9 “Business Day” shall mean any day (other than a Saturday or Sunday) on which commercial banking institutions in Houston, Texas are generally open for business.

1.10 “Central Clock Time” shall mean the current time in the Central Time Zone taking into consideration the seasonal changes back and forth between Daylight Savings and Standard time.

1.11 “Claims” shall mean any and all claims, demands and causes of action of any kind and all losses, damages, liabilities, costs and expenses of whatever nature (including court costs and reasonable attorneys’ fees).

1.12 “Control” (including its derivatives and similar terms) means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any such relevant Person by ownership of voting interest, by contract or otherwise.

1.13 “Credit Interruption Days” shall mean, with respect to any Semiannual Period in the MQ Period, the Interruption Days, if any, occurring in such Semiannual Period in excess of three (3) Interruption Days.

1.14 “Cumulative Gas Commitment” shall mean with respect to each Semiannual Period during the Primary Term, the quantity (in MMBtu) set forth for such Semiannual Period under the column entitled “Cumulative Gas Commitment” in the table in Section 9.4.

1.15 “Customer” shall have the meaning given to such term in the preamble of this Agreement.

1.16 “Customer Dedicated Leases” shall mean all oil and gas leases owned by Customer or any other Subsidiary covering lands located in the Dedicated Area (whether directly from a lessor or acquisitions from other third-parties as lessees), including, without limitation, those oil and gas leases described in Exhibit E hereto.

1.17 “Customer Gas” shall have the meaning given to such term in Section 2.1.

1.18 “Customer Plant Products” shall mean the volume of Plant Products allocated by Processor to Customer Gas processed at the Plant.

 

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1.19 “Customer Residue Gas” shall mean Gas having a Thermal Content equal to (i) the Thermal Content of Customer Gas measured at the Point of Delivery minus (ii) the Thermal Content of Inert Constituents removed from Customer Gas, Shrinkage attributable to Customer Plant Products, the Thermal Content of Plant Fuel and the Thermal Content of Lost and Unaccounted for Gas allocated or attributable to such Customer Gas.

1.20 “Customer’s Inert Constituents” shall have the meaning given to such term in Section 13.3.

1.21 “Day” or “Daily” shall mean a period of hours, commencing at 9:00 a.m., Central Clock Time, on a calendar day and ending at 9:00 a.m., Central Clock Time, on the next succeeding calendar day.

1.22 “Dedicated Area” shall mean all lands within the AMI.

1.23 “Dedication” shall have the meaning given to such term in Section 2.1.

1.24 “Default Interest Rate” shall mean the U.S. Prime Rate (as published in the “Money Rates” table of The Wall Street Journal, Eastern Edition) plus an additional two points (2.00%) applicable on the first Business Day prior to the due date of payment and thereafter on the first Business Day of each succeeding Month (or, if such rate is contrary to any applicable usury laws, the maximum rate permitted by such applicable laws).

1.25 “Deficiency Payment” shall have the meaning set forth in Section 9.5.

1.26 “Effective Date” shall have the meaning given to such term in the preamble of this Agreement.

1.27 “EGM” shall have the meaning given to such term in Section 6.2.

1.28 “Ethane Recovery Option” shall have the meaning given to such term in Section 3.1(c).

1.29 “Ethane Rejection Option” shall have the meaning given to such term in Section 3.1(c).

1.30 “Firm Receipts” shall mean receipts of Gas by Processor at the Plant, from Customer or any other Person, for which Processor is contractually entitled to interrupt its performance only to the extent of Plant Interruptions, including, without limitation, Customer Gas delivered hereunder up to the MDQ.

1.31 “Force Majeure” shall have the meaning given to such term in Section 14.2.

1.32 “Gallon” shall mean one (1) U.S. gallon.

1.33 “Gas” shall mean natural gas and casinghead gas as produced from wells classified as gas wells or oil wells.

 

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1.34 “Gatherer” means Regency Energy Partners, L.P., as gatherer under the Gathering Agreement, and its successors and assigns.

1.35 “Gathering Agreement” shall have the meaning given to such term in the recitals of this Agreement.

1.36 “Gathering System” shall mean the Gas gathering facilities that are used to gather Customer Gas and deliver it to the Plant, including such facilities that are subject to the Gathering Agreement.

1.37 “Governmental Authority” shall mean any federal, state, local, municipal, tribal or other government; any governmental, regulatory or administrative agency, commission, body or other authority or entitled to any administrative, executive, judicial, legislative, regulatory or taxing authority or power; and any court or governmental tribunal, including any tribal authority having or asserting jurisdiction.

1.38 “Greenhouse Gas Surcharge” shall have the meaning given to such term in Section 9.6(a).

1.39 “Greenhouse Gases” shall mean certain components which may from time to time comprise part of Customer Gas consisting of carbon dioxide, methane, nitrous oxide, and ozone.

1.40 “Gross Heating Value” shall mean the number of Btus liberated by the complete combustion at constant pressure of one (1) cubic foot of Gas, at a base temperature of sixty degrees Fahrenheit (60°F) and at a reference pressure base equal to 14.65 psia, with air of the temperature and pressure of the Gas, after the products of combustion are cooled to the initial temperature of the Gas, and after the water formed by the combustion is condensed to the liquid state. The gross heating value of the Gas shall be corrected for water vapor under testing conditions to the actual water vapor content of the Gas being delivered; provided, however, if the actual water vapor content is seven (7) pounds per 1,000,000 standard cubic feet of Gas or less, the Gas shall be deemed “dry” and no water vapor correction shall be made.

1.41 “Hazardous Substances” shall have the meaning set forth Section 5.3.

1.42 “Ideal Gas Laws” shall mean the thermodynamic laws applying to perfect gases.

1.43 “Inert Constituents” shall mean constituents other than Plant Products contained in Gas, including, without limitation, carbon dioxide, hydrogen sulfide, water vapor, ozone, nitrous oxide and mercury.

1.44 “Interests” shall mean any right, title, or interest in lands, wells, or leases and the right to produce oil and/or Gas therefrom whether arising from fee ownership, working interest ownership, mineral ownership, leasehold ownership, farm-out or arising from any pooling, unitization or communitization of any of the foregoing rights.

1.45 “Interruptible Gas” shall have the meaning given to such term in Section 3.5(b).

1.46 “Interruptible Receipts” shall mean receipts of Gas by Processor at the Plant from Customer or any other Person for which Processor is contractually entitled to interrupt its

 

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performance, in its sole and unfettered discretion, for any reason or no reason, including, without limitation, (i) the overall demand for services in the Plant exceeding the capacity of the Plant, (ii) an event of force majeure (including a Force Majeure under this Agreement), (iii) maintenance (including Maintenance under this Agreement), or (iv) Processor determines that the operation of all or any portion of the Plant will cause injury or harm to persons or property or to the integrity of the Plant, including, without limitation, Customer Gas delivered hereunder in excess of the MDQ.

1.47 “Interruption Day” shall mean any Day in the MQ Period that the quantity of Customer Gas accepted by Processor at the Point of Delivery is less than the lesser of (i) the MDQ in effect for such Day or (ii) ninety percent (90%) of the quantity of Customer Gas nominated hereunder that meets the Specifications and is available for delivery on such Day, due to a Plant Interruption of the type described in clauses (i), (ii), or (iv) in the definition of such term in Section 3.8(a), curtailment, or Processor’s failure to perform hereunder.

1.48 “Losses” shall mean any actual loss, cost, expense, liability, damage, demand, suit, sanction, claim, judgment, lien, fine or penalty, including attorney’s fees, which are incurred by the applicable indemnified Persons on account of injuries (including death) to any person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or arising out of the matters for which the indemnifying party has indemnified the applicable indemnified Persons.

1.49 “Lost and Unaccounted for Gas” shall mean Gas that is flared, vented and/or lost and unaccounted for in Plant operations.

1.50 “Maintenance” shall have the meaning given to such term in Section 3.6.

1.51 “Maximum Daily Quantity” or “MDQ” shall mean, as to each Day in the Primary Term during each period of time set forth in the table in Exhibit A, the quantity set forth in the column labeled “MDQ” for such period of time in such table, and as to each Day in any Additional Term, the quantity as determined in Section 3.7(b).

1.52 “Measurement Dispute” shall have the meaning given to such term in Section 6.11.

1.53 “Measurement Expert” shall have the meaning given to such term in Section 6.11.

1.54 “Memorandum” shall have the meaning given to such term in Section 2.4.

1.55 “MMBtu” shall mean one million (1,000,000) Btus.

1.56 “MMcf” shall mean one million (1,000,000) cubic feet at a pressure of 14.65 psia and a temperature of sixty degrees Fahrenheit (60°F).

1.57 “Month” shall mean a period of time beginning at 9:00 a.m., Central Clock Time on the first Day of the calendar month and ending at 9:00 a.m., Central Clock Time on the first Day of the next succeeding calendar month.

1.58 “MQ Period” shall have the meaning given to such term in Section 9.4.

 

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1.59 “NGL Delivery Point” shall mean the outlet flange of the Plant through which Processor delivers Customer Plant Products to Customer or its designee for Customer’s account.

1.60 “NGL Election” shall have the meaning given to such term in Section 3.1(c).

1.61 “Non-Conforming Gas” shall have the meaning given to such term in Section 5.2(a).

1.62 “Parties” shall have the meaning given to such term in the preamble of this Agreement.

1.63 “Party” shall have the meaning given to such term in the preamble of this Agreement.

1.64 “Performance Assurance” shall have the meaning given to such term in Section 12.5.

1.65 “Permanent Affected Volume” shall have the meaning set forth in Section 3.8(c).

1.66 “Person” shall mean any individual or any corporation, company, partnership, limited partnership, limited liability company, trust, estate, Governmental Authority or other entity.

1.67 “Plant” shall mean that certain initial Gas processing plant to be constructed by Processor or its Affiliate and located in Lincoln Parish, Louisiana.

1.68 “Plant Fuel” shall mean Gas used to operate the Plant.

1.69 “Plant Interruptions” shall have the meaning set forth in Section 3.8(a).

1.70 “Plant Interruption Credit Quantity” shall mean, with respect to any Credit Interruption Day, the difference between (i) the lesser of (a) the MDQ and (b) the quantity of Customer Gas nominated hereunder and that meets the Specifications and is available for delivery at the Point of Delivery on such Credit Interruption Day, and (ii) the quantity of Customer Gas actually accepted by Processor hereunder at the Point of Delivery on such Credit Interruption Day. With respect to the end of any Semiannual Period, the Plant Interruption Credit Quantity shall be the sum of the Plant Interruption Credit Quantities for all Credit Interruption Days as of the end of such Semiannual Period.

1.71 “Plant Operational Date” shall mean the Day on which Processor notifies Customer that the Plant is operational and ready for commercial service; provided, that if such Day is not the first Day of a Month, the Plant Operational Date shall be the first Day of the following Month.

1.72 “Plant Products” shall mean the mixture of liquefiable hydrocarbon components consisting of ethane, propane, normal butane, iso-butane and natural gasoline that Processor recovers and removes from Gas.

1.73 “Point of Delivery” shall mean, collectively:

(a) the custody transfer meter at the Plant at which Customer Gas is measured and delivered;

 

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(b) the meter or measurement facilities (if any) at which condensate and/or drip liquids that are recovered from the Gathering System, vaporized, and injected into the Plant for further processing are measured;

(c) the meter or measurement facilities (if any) at which Gas recovered by vapor recovery units as part of the condensate stabilization process (if any) and injected into the Plant for further processing are measured; and/or

(d) any other custody transfer meter or measurement facility at which Gas or condensate that is delivered into the Plant for processing that is not measured by any of the meters or measurement facilities described in clauses (a) through (c) above is measured.

1.74 “Point of Measurement” and “Points of Measurement” shall mean a “Receipt Point”, or collectively, all “Receipt Points” as such terms are defined in the Gathering Agreement.

1.75 “Point of Redelivery” shall mean the custody transfer meter at or near the tailgate of the Plant through which Processor redelivers Customer Residue Gas to Customer or its designees for Customer’s account for further transportation on downstream pipelines.

1.76 “PPI” shall mean the “Producer Price Index Industry Data for Oil and Gas Field Machinery and Equipment” as determined and published by the Bureau of Labor Statistics of the United States Department of Labor or its successor index.

1.77 “Primary Term” shall have the meaning given to such term in Section 11.1.

1.78 “Prior Dedications” shall mean, as to the Interests owned by Customer and/or any other Subsidiary in the Dedicated Area as of the Effective Date, all dedications or commitments for processing services burdening such Interests as of the Effective Date as set forth in Exhibit F hereto; and as to any Interests acquired by Customer or any other Subsidiary within the Dedicated Area after the Effective Date, all dedications or commitments for processing services burdening such Interests which are existing as of the time of any such acquisition.

1.79 “Processing Fee” shall have the meaning given to such term in Section 9.1.

1.80 “Processor” shall have the meaning given to such term in the preamble of this Agreement.

1.81 “Residue Gas” shall mean that gaseous portion of Gas delivered at the Point of Redelivery.

1.82 “SEC” shall have the meaning given to such term in Section 12.5(b).

1.83 “Second Plant” shall have the meaning given to such term in Section 3.1(e).

1.84 “Semiannual Deficiency Quantity” shall have the meaning given to such term in Section 9.5.

1.85 “Semiannual Gas Commitment” shall have the meaning given to such term in Section 9.4.

 

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1.86 “Semiannual Period” shall have the meaning given to such term in Section 9.4.

1.87 “Senior Management Meeting” shall have the meaning given to such term in Section 3.8(c).

1.88 “Separation Facilities” shall mean conventional mechanical separators and any equipment used in any other method of reducing liquefiable hydrocarbons in Gas; provided, however, except for equipment needed to meet the temperature requirements set forth in the Specifications, Separation Facilities shall not include any low-temperature separation equipment, absorption or adsorption facilities.

1.89 “Shrinkage” shall mean that decrease in Thermal Content of Gas that results from the conversion in the Plant of liquefiable components of Gas into Plant Products, but exclusive of Plant Fuel, Inert Constituents removed from Gas and Lost and Unaccounted for Gas.

1.90 “Specifications” shall have the meaning given to such term in Section 5.1.

1.91 “Subsidiary” shall mean, with respect to Memorial Resource Development LLC (the “parent”), at any date, any other Person (a) of which equity interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, any general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

1.92 “Taxes” shall mean any or all current or future taxes, fees, levies, charges, assessments and/or other impositions levied, charged, imposed, assessed or collected by any governmental authority having jurisdiction.

1.93 “Temporary Affected Volume” shall have the meaning given to such term in Section 3.8(b).

1.94 “Thermal Content” shall mean (i) with respect to Gas, the product of a volume of Gas and the Gross Heating Value of such Gas, adjusted to a same pressure base of 14.65 psia, as expressed in MMBtus, and (ii) with respect to a given Plant Product, the product of a volume of such Plant Product and the Gross Heating Value of such Plant Product.

1.95 “Third Party Gas” shall have the meaning given to such term in Section 3.7(a).

1.96 “Third Party Processing Fees” shall mean, with respect to any period of time, the processing fees received by Processor with respect to processing Third Party Gas in the Plant during such period of time.

1.97 “Total Gas Commitment” shall have the meaning set forth in Section 9.4.

ARTICLE II.

CUSTOMER RIGHTS AND OBLIGATIONS

2.1 Dedication. Subject to the other terms and conditions hereof, Customer hereby dedicates for processing under this Agreement and, commencing at 9:00 a.m., Central Clock Time,

 

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on the Plant Operational Date, shall deliver, or cause to be delivered, hereunder to the Point of Delivery the following (the “Dedication,” and the Gas that is the subject of the Dedication, being herein referred to as the “Customer Gas”):

(a) all Gas produced and saved from wells now or hereafter located on lands covered by the Customer Dedicated Leases or on lands pooled or unitized therewith to the extent such Gas is attributable to Interests now owned by Customer and/or any other Subsidiary or hereafter acquired by Customer and/or any other Subsidiary, and their respective successors and assigns, and not delivered or used in lease operations as permitted pursuant to Section 2.8 or otherwise excluded as provided below; and

(b) with respect to such wells for which Customer and/or any other Subsidiary is the operator, Gas produced from such wells that is attributable to Interests in such wells owned by other working interest owners and royalty owners which is not (i) taken “in-kind” by such working interest owners and royalty owners (and which Customer has the contractual right to deliver under this Agreement) or (ii) delivered or used in lease operations as permitted pursuant to Section 2.8, and for which Customer and/or such other Subsidiary has the right and/or obligation to deliver such Gas; provided, however, with respect to Customer Gas that is subject to a Prior Dedication, subject to the Dedication, such Customer Gas may be delivered in accordance with such Prior Dedication.

Notwithstanding the foregoing, the Parties acknowledge and agree that prior to Plant Operational Date, Customer may deliver Customer Gas to other gathering systems, processors and/or pipelines.

2.2 Prior Dedications. Other than the Prior Dedications and the Dedication hereunder, Customer represents and warrants to Processor that, as of the Effective Date, none of the Interests owned by Customer in the Dedicated Area are subject to any other dedication for Gas processing services. Upon termination of a Prior Dedication, the Gas subject to such Prior Dedication shall, to the extent not already subject to the Dedication, automatically be subject to the Dedication for all purposes under this Agreement without any further actions by the Parties.

2.3 Covenant Running with the Land.

(a) So long as this Agreement is in effect, this Agreement shall (i) be a covenant running with the Interests now owned by Customer and any other Subsidiary or hereafter acquired by Customer and/or any other Subsidiary and their respective successors and assigns in the Dedicated Area and (ii) be binding on and enforceable by Processor and its successors and assigns against Customer, such other Subsidiaries and their respective successors and assigns.

(b) Prior to assigning any of its Interests, Customer shall notify the potential acquiring party of the existence and terms of the Dedication hereunder.

2.4 Memorandum of Agreement . Within thirty (30) days of the execution of this Agreement, the Parties shall execute, acknowledge, deliver, and record a “short form” memorandum of this Agreement, listing the townships within the Dedicated Area, in the form of Exhibit B attached hereto which shall be placed of record in the parishes comprising the Dedicated Area (the

 

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Memorandum”). Customer has delivered to Processor a schedule showing, as of the Effective Date, all Interests owned by Customer and/or any other Subsidiary that cover lands located within the Dedicated Area, which schedule contains, for each such Interest, the name of the instrument creating the Interest, the date of such instrument, the parties to such instrument, the legal description of the lands covered by such instrument and the recording information for such instrument.

2.5 Customer Warranty. Customer represents and warrants to Processor that Customer has the right to process the Customer Gas delivered hereunder and to recover, remove and sell all Plant Products and Inert Constituents as are contained in such Customer Gas.

2.6 No Upstream Processing. Customer agrees that Customer Gas shall be delivered at the Points of Measurement to Gatherer pursuant to the Gathering Agreement without the prior extraction or removal therefrom of any liquefiable hydrocarbons, except as provided in the Gathering Agreement.

2.7 Customer Gas in Excess of Maximum Daily Quantity. Customer may, at its option, deliver additional Customer Gas in excess of the MDQ to Processor on an Interruptible Receipts basis pursuant to this Agreement. To the extent that Processor accepts Customer Gas in excess of the MDQ, such excess Customer Gas shall be treated as Interruptible Gas for purposes of Section 3.5.

2.8 Gas for Lease Operations. Customer reserves the right to withhold from delivery any Customer Gas required for Customer’s oil and gas producing operations with respect to wells within the AMI or lands pooled or unitized therewith.

ARTICLE III.

DELIVERY AND PROCESSING OF GAS

3.1 Plant Operational Date; Initial Operation; Design Basis; Second Plant Option.

(a) Plant Operational Date. Processor shall design, engineer, procure and construct the Plant in a good and workmanlike manner and in accordance with good industry practices, and shall use its commercially reasonable efforts to complete the Plant, and commence service hereunder, on or before March 1, 2015. The Plant, when complete, will have a nominal design capacity of * MMcf per Day. Processor shall provide at least forty-five (45) Days’ prior written notice to Customer of the expected Plant Operational Date. If the Plant Operational Date has not occurred by November 1, 2015, as such date may extended by the occurrence of Force Majeure events affecting Processor not to exceed one-hundred-twenty (120) Days in the aggregate, then Customer may terminate this Agreement upon written notice to Processor; provided, however, (i) in the event that Customer or any Affiliate of Customer, acting in its capacity as a member of the board of managers of Processor, takes any action, directly or indirectly, to materially delay or hinder Processor’s performance of obligations hereunder, then Customer’s right of termination pursuant to this Section 3.1(a) shall not apply, (ii) if the Plant Operational Date occurs after such date, but before Customer notifies Processor of such termination, Customer’s right of termination

 

 

 

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Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

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under this Section 3.1(a) shall expire and be of no further force and effect, and (iii) if any delay of the Plant Operational Date is caused by Customer or any third party operator of upstream or downstream pipelines or facilities sending or receiving Customer Gas, then Customer’s right of termination pursuant to this Section 3.1(a) shall not apply.

(b) Initial Plant Operation. The Parties agree the Plant shall startup and initially operate in ethane rejection mode.

(c) Processing Election. By 5:00 p.m. on the fifth (5th) Business Day prior to the first Day of each Month commencing with the Month following the date on which Processor notifies Customer that Processor is ready to operate the Plant in full recovery mode, Customer shall notify Processor in writing of Customer’s election (the “NGL Election”) to have the Customer Plant Products for such Month determined using either (i) maximum recovery of Plant Products (“Ethane Recovery Option”) or (ii) minimum recovery of Plant Products (“Ethane Rejection Option”). Should Customer fail to make a timely NGL Election, Customer shall be deemed to have elected to continue the option that is in place for the immediately preceding Month. Notwithstanding Customer’s NGL Election for a given Month, Processor shall not be required to operate its facilities in any particular recovery mode during such Month; provided, however, Customer Plant Products for such Month shall be determined in accordance with Customer’s NGL Election for such Month.

(d) Plant Design Basis. The Plant’s operating performance will be dictated by the quality of Customer Gas. Processor has designed and constructed, and will operate, the Plant based on the gas quality specifications provided by Customer in Exhibit G.

(e) Second Plant Option. Should Customer Gas be projected for a period of over twelve (12) consecutive months to be produced in excess of the nominal design capacity of the Plant, i.e., * MMcf per Day, Customer may, at its option, request in writing that Processor design, engineer, procure and construct a second plant (the “Second Plant”) to process Customer Gas. Processor shall then design, construct, and operate the Second Plant pursuant to terms and provisions substantially similar to those contained in this Agreement. Should Customer make such request, Customer hereby agrees that, upon completion of the Second Plant, Customer’s Semiannual Gas Commitment of Gas to be delivered to the Second Plant shall be * MMBtu per Day and Customer’s Semiannual Gas Commitment for the Plant shall be increased by an amount equal to the difference between (x) * MMBtu per Day and (y) the volume (in MMBtu) of all Gas that is committed to be delivered to the Plant (including Customer’s Gas) at the time the Second Plant is completed.

3.2 Delivery of Customer Gas. Subject to the provisions of this Agreement, any agreement applicable to the Gathering System, and the operational constraints of the Gathering System, Customer (i) shall deliver, or cause to deliver, Customer Gas to Processor at the Point of Delivery. Subject to the provisions of this Agreement, commencing upon the Plant Operational Date, Processor shall accept delivery of Customer Gas at the Point of Delivery hereunder (Customer recognizes Customer Gas in Processor’s custody may be commingled with Third Party Gas and that no segregated services are provided hereunder), and (ii) Customer will use commercially reasonable

 

 

 

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efforts to deliver Customer Gas at each Point of Measurement at uniform rates of flow and a pressure sufficient to cause the delivery pressure at the Point of Delivery to be not less than 500 Psig, but not greater than the maximum allowable operating pressure of the Plant at the Point of Delivery.

3.3 Processor Commitment. Subject to the provisions of this Agreement, commencing on the Plant Operational Date, Processor hereby agrees to (i) receive and accept hereunder, as Firm Receipts, all volumes of Customer Gas up to the Maximum Daily Quantity, and as Interruptible Receipts, all volumes of Customer Gas in excess of the Maximum Daily Quantity, (ii) process hereunder, as Firm Receipts, all volumes of Customer Gas up to the Maximum Daily Quantity, and as Interruptible Receipts, all volumes of Customer Gas in excess of the Maximum Daily Quantity, (iii) redeliver Customer Residue Gas to Customer or Customer’s designee at the Point of Redelivery, (iv) deliver Customer Plant Products pursuant to Section 3.10 of this Agreement, and (v) at Processor’s option, dispose of Inert Constituents removed from Customer Gas. Notwithstanding any provision herein to the contrary, Processor shall not have any obligation to receive or accept any volumes of Customer Gas if Customer cannot deliver to Processor a minimum of * MMBtu of Customer Gas per Day. Further, should Processor elect not to receive or accept Customer Gas pursuant to the preceding sentence, such Customer Gas shall not be included in the computation of Customer Gas delivered to the Point of Delivery as set forth in Section 9.5(ii)(v).

3.4 Delivery of Customer’s Residue Gas. Customer, or Customer’s designee, shall accept delivery of Customer Residue Gas from Processor at the Point of Redelivery. Subject to the provisions of this Agreement, any agreement applicable to the Gathering System, and the operational constraints of the Gathering System, Processor shall use commercially reasonable efforts to deliver Customer Residue Gas into the facilities of interconnecting pipelines at the Point of Redelivery at a pressure sufficient to overcome the operating pressure existing in such receiving facilities from time to time, but Processor shall not be obligated to install secondary residue compression in the Plant to make deliveries of Customer Residue Gas.

3.5 Receipt and Processing of Gas.

(a) Firm Receipts. Subject to the terms and conditions of this Agreement, from and after the Plant Operational Date, Processor shall receive and process, as Firm Receipts, all Customer Gas tendered by Customer each Day in accordance with this Agreement, up to the MDQ.

(b) Interruptible Receipts. Subject to the terms and conditions of this Agreement, from and after the Plant Operational Date, Processor shall receive and process, as Interruptible Receipts, all Customer Gas tendered by Customer each Day in accordance with this Agreement in excess of the MDQ (“Interruptible Gas”).

3.6 Maintenance. Processor shall be entitled, without liability, to interrupt its performance hereunder to perform necessary or desirable inspections, maintenance, testing, alterations, modifications, connections, repairs or replacements to its facilities as Processor deems necessary (“Maintenance”), with reasonable, advance notice provided to Customer, except in cases

 

 

 

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of emergency where such notice is impracticable or in cases where the provision of services to Customer pursuant to this Agreement will not be affected; provided that Processor will reasonably cooperate with Customer to minimize adverse effects due to such Maintenance work.

3.7 Customer’s MDQ.

(a) Curtailment. Subject to Plant Interruptions, Processor shall use commercially reasonable efforts to maintain operating capacity of the Plant available to Customer at the Point of Delivery through the Plant to the Point of Redelivery equal to the MDQ. Nothing herein shall restrict the right of Processor to receive, provide services for and redeliver Gas from other third parties (“Third Party Gas”) provided that for any period during which the quantity of Gas available for delivery to the Plant exceeds the physical processing capacity of the Plant for any reason, including Force Majeure, Maintenance, operational considerations or the recovery mode in which the Plant is operating, Processor shall have the right to interrupt or curtail receipts of Gas in accordance with the following:

(i) Interruptible Gas. First, Processor shall curtail all Interruptible Receipts prior to curtailing any Firm Receipts. If Processor curtails some, but not all, Interruptible Receipts on any Day hereunder, Processor shall allocate the processing capacity of the Plant available to customers receiving service on an Interruptible Receipts basis on a pro rata basis based upon Customer’s and each other customer’s actual volume of Gas delivered to the Point of Delivery on the Day immediately preceding the date on which Processor makes such allocation. Such allocation shall remain in effect for the period of the curtailment.

(ii) Firm Receipts. Second, if additional curtailments are required beyond clause (a) above, Processor shall curtail Firm Receipts. If Processor curtails some, but not all, Firm Receipts on any Day, Processor shall allocate the processing capacity of the Plant available to customers receiving service on a Firm Receipts basis on a pro rata basis based upon Customer’s and each other customer’s ratio of its reserved capacity to the total reserved capacity in the Plant. For the purposes of this Agreement, Customer’s reserved capacity shall be the MDQ.

(b) Additional Term MDQ. Subject to Section 3.1(e) hereof, prior to the commencement of any Additional Term, Customer shall provide written notice to Processor of the MDQ that Customer desires under this Agreement for each Annual Period in such Additional Term, not to exceed the MDQ for the most recent Annual Period in the Primary Term or the preceding Additional Term, as applicable; provided, however, the Parties acknowledge and agree that the Semiannual Gas Commitment, Cumulative Gas Commitment and Deficiency Payment shall not apply at any time after expiration of the Primary Term.

3.8 Plant Operations.

(a) Plant Interruptions. The Parties recognize that the processing services to be provided by Processor hereunder may be interrupted from time to time as provided herein. Accordingly, it is agreed and understood by the Parties that the receipt and processing of Customer Gas hereunder by Processor shall be subject from time to time to partial or total

 

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interruption by Processor in the following circumstances ((i) and (iv) to be determined by Processor) (“Plant Interruptions”): (i) to provide for the safe operation of the Plant, (ii) conditions of Force Majeure affecting Processor, (iii) the inability or failure of downstream transporters to receive Customer Residue Gas or Customer Plant Products at the Point of Redelivery or the NGL Delivery Point, and (iv) Maintenance. Except as provided in this Section 3.8 and in Section 9.5, Processor shall have no liability of any kind to Customer for any Plant Interruptions.

(b) Temporary Release. Notwithstanding anything in this Agreement to the contrary, if after the Plant Operational Date Processor is unable, whether due to Plant Interruptions or otherwise (except for circumstances caused by the gross negligence or willful misconduct of Customer), to provide processing services in the Plant with respect to all or any volume of the Customer Gas that meets the Specifications, then that volume of such Customer Gas for which Processor is unable to provide processing services in the Plant (the “Temporary Affected Volume”) will be temporarily released from the Dedication and the Temporary Affected Volume may be delivered by Customer to other gathering systems, processors or pipelines until Processor provides to Customer written notice that Processor will be able to resume receiving the Temporary Affected Volume hereunder. Customer shall resume delivery of the Temporary Affected Volume under this Agreement as soon as reasonably practicable after receiving such notice from Processor. As soon as practicable after a temporary release, the Parties shall attempt to reach agreement on a solution to the cause of such service interruption.

(c) Permanent Release. If, after the Plant Operational Date, Processor is unable to receive Customer Gas hereunder for processing in the Plant for more than one-hundred fifty (150) Days in any twelve (12) consecutive Month period with respect to Customer Gas that meets the Specifications up to the MDQ for any reason other than (i) circumstances caused by the gross negligence or willful misconduct of Customer, (ii) circumstances caused by the inability of Customer to deliver to Processor a minimum of * MMBtu of Gas per Day, or (iii) the inability or failure of (A) upstream transporters to deliver Customer Gas at the Point of Delivery, or (B) downstream transporters to receive Customer Residue Gas or Customer Plant Products at the Point of Redelivery or the NGL Delivery Point, Customer will provide written notice to Processor along with Customer’s determination of the volume of such Customer Gas for which Processor is unable to provide processing services (“Permanent Affected Volume”), which volume will equal the Daily average of such Customer Gas for which Processor was unable to provide processing services during such twelve (12) Month period. If the Parties have not reached agreement on a solution to such service interruption prior to the end of fourteen (14) Days after Customer notifies Processor, then no later than five (5) Business Days after the end of such fourteen (14) Day period, the senior management of the Parties will meet in person (a “Senior Management Meeting”) and negotiate in good faith in an attempt to reach agreement on an acceptable solution to such service interruption. If the Parties are unable to reach agreement on an acceptable solution to such service interruption during the Senior Management Meeting, then Processor shall, at Customer’s option, permanently release all or part of the Permanent Affected Volume from the Dedication by delivering written notice thereof to Processor. The Parties

 

 

 

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Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

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acknowledge and agree that the one-hundred fifty (150) Days referenced in this Section 3.8(c) shall not include periods of time during which Processor is unable to provide processing services due to (i) any act or omission of any Governmental Authority, (ii) any inability, despite the exercise of commercially reasonable efforts, to acquire replacement equipment used in Plant operations, or (iii) during the pendency of any application for any license, permit or other approval required by any Governmental Authority, in each case, that prevents Processor from providing processing services hereunder, other than due to such occurrences caused by the negligence of Processor, provided that the provisions of Section  3.8(b) would continue to apply during such period.

3.9 Operation of the Plant. Processor shall at all times be entitled to full and complete operational control of the Plant. Processor shall at all times be entitled to manage, operate and reconfigure the Plant and its other facilities in its discretion, and shall have the right to commingle Customer Gas received by Processor with other Gas.

3.10 Delivery of Customer Plant Products. If Processor is not responsible for the marketing of Customer Plant Products, Customer, or Customer’s designee, shall accept delivery of such Plant Products at the NGL Delivery Point. Customer acknowledges that (i) Customer Plant Products will likely be commingled with Plant Products belonging to other parties using Processor’s facilities, and (ii) to the extent Processor is not responsible for marketing Customer Plant Products, Customer will be responsible for making arrangements regarding the further shipment and/or sale of Customer Plant Products. Notwithstanding anything herein contained to the contrary, if Processor is not responsible for the marketing of Customer Plant Products, and if Customer or Customer’s designee fails to accept delivery of such Customer Plant Products at the NGL Delivery Point at any time, Processor shall have the option, but not the obligation, without the need to obtain further authorization from Customer, to (i) sell any such unaccepted volumes of Customer Plant Products either (A) pursuant to the terms of a separate marketing agreement between Customer and Processor in which such parties will negotiate in good faith, or (B) if no such separate marketing agreement is entered into between Customer and Processor, Processor shall pay to Customer the net proceeds of such sale (deducting all of Processor’s costs and expenses related thereto) less a marketing fee of $0.05 per Gallon, and/or (ii) refuse acceptance of or curtail Customer Gas hereunder.

ARTICLE IV.

NOMINATIONS AND BALANCING

4.1 Nomination Procedures. Customer shall nominate gas for processing at the Plant in accordance with Processor’s currently effective nomination procedures. Processor’s nomination procedures will generally comply with the North American Energy Standards Board’s nomination policies and timeline, Processor reserves the right to modify its nomination procedures at any time provided that any modification will not take effect until Processor provides Customer with at least thirty (30) Days’ written notice of such modification.

4.2 Balancing. The Parties shall reasonably cooperate with each other in an effort to keep imbalances at the Plant and with interconnecting residue pipelines to a minimum and trending to zero.

 

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4.3 Allocation of Received Gas. Processor shall allocate the total quantity of Gas received hereunder on each Day pro rata based upon the actual flows of Customer Gas and Gas from all other customers to the Point of Delivery on such Day.

4.4 Plant Product Allocation Procedure. Each measurement period, Processor shall allocate one hundred percent (100%) of the Plant Products recovered at the Plant based on the hydrocarbon content and fractional analysis of Customer Gas delivered to the Plant, relative to the hydrocarbon content and fractional analysis of all other Gas delivered to the Plant during such measurement period, in each case, as such hydrocarbon content and fractional analysis is determined at the Point of Delivery.

ARTICLE V.

QUALITY

5.1 Gas Quality Specifications. Customer Gas delivered hereunder shall meet each of the quality specifications set forth in Exhibit C attached hereto (collectively, the “Specifications”) at the Point of Delivery. Customer Residue Gas delivered hereunder shall meet the quality specifications of the applicable downstream pipelines connecting to the Point of Redelivery.

5.2 Non-Conforming Gas.

(a) If Customer becomes aware that any Customer Gas fails to conform to the Specifications (such Gas, “Non-Conforming Gas”), Customer, as soon as reasonably possible after becoming aware of such condition, shall give written notice to Processor of the Non-Conforming Gas and the manner in which such Non-Conforming Gas does not conform to the Specifications.

(b) If Processor becomes aware that Non-Conforming Gas is being delivered by Customer hereunder before receiving such written notice from Customer, Processor shall, as soon as reasonably possible after becoming aware thereof, deliver to Customer written notice of such Non-Conforming Gas, which notice may also serve as Processor’s notice of acceptance or rejection of such Non-Conforming Gas pursuant to Section 5.2(c) below.

(c) If any Non-Conforming Gas is tendered for processing by Customer at the Point of Delivery at any time, Processor may in its sole discretion choose to accept or to reject such Non-Conforming Gas.

(i) If Processor chooses to accept Non-Conforming Gas, Processor shall provide written notice to Customer of its acceptance of such Non-Conforming Gas, and the manner in which such Non-Conforming Gas does not conform to the Specifications. Such acceptance will not constitute a waiver of this provision with respect to any future receipt of Non-Conforming Gas. Processor’s option to refuse to accept receipt of Non-Conforming Gas is in addition to other remedies available to Processor under this Agreement. If Processor accepts such Non-Conforming Gas, Customer shall reimburse Processor for the out-of-pocket costs incurred by Processor to accept such Non-Conforming Gas. If Processor determines, in its sole discretion, at any time that the continued acceptance of such Non-Conforming Gas is not operationally feasible, Processor may notify Customer that it intends to discontinue accepting such Non-Conforming Gas.

 

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(ii) If Processor chooses to reject Non-Conforming Gas, Processor may in its sole discretion shut in such Gas at any time. Processor shall follow up the rejection of Non-Conforming Gas with a written notice of such rejection to Customer, which notice shall specify the manner in which such Non-Conforming Gas does not conform to the Specifications.

(d) If any Non-Conforming Gas is delivered into the Plant, Customer will indemnify, defend, release and hold Processor harmless from and against all Claims arising from or out of the quality deficiency of such Non-Conforming Gas, except that Customer shall have no liability to Processor for any Claims arising from or out of any such Non-Conforming Gas accepted by Processor pursuant to Section 5.2(c)(i) above, but only with respect to, and to the extent of, the exceptions to the Specifications set forth in the applicable written notice of acceptance.

5.3 Hazardous Substances. Gas tendered by Customer for processing hereunder shall not contain any substance that is determined to be a contaminant or a hazardous waste or substance under the Resource Conservation and Recovery Act, 42 U.S.C. Section 1857, et seq., as amended from time to time, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., as amended from time to time, and the regulations issued thereunder, including 40 C.F.R. Parts 302 and 355, together with any other applicable environmental, health, or safety statutes (other than hydrocarbons and/or the natural constituent elements thereof) (collectively, “Hazardous Substances”).

5.4 Environmental, Health and Safety Laws. Customer warrants that, with respect to the Gas tendered at the Point of Delivery, it has complied or caused others to comply with all environmental, health, and/or safety statutes and regulations.

ARTICLE VI.

MEASUREMENT AND TESTING

6.1 Measurement Equipment. Processor shall install, maintain and operate, or cause to be installed, maintained and operated, suitable meters and/or other necessary equipment of ample size and proper type for accurate measurement of the following:

(a) the volume of each type of Plant Product extracted from Gas delivered to the Plant for processing;

(b) the volume, Gross Heating Value and components of Gas used as Plant Fuel in processing Gas in the Plant;

(c) the volume, Gross Heating Value and components of Gas delivered to the Plant inlet for processing, including the mass, flowing density, and sampling necessary to the determination of liquid yield, by component; and

(d) the volume, Gross Heating Value and components of Residue Gas.

 

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6.2 Measurement Standards. Measurement facilities installed, owned, operated and maintained by Processor or its designees hereunder and processing of the data obtained therefrom shall be done so in accordance with generally accepted measurement standards as prescribed in, but not limited to, the latest versions of:

(a) ANSI/API 2530, AGA Report No. 3, API 14.3, GPA 8185 “Orifice Metering of Natural Gas and Other Related Hydrocarbon Fluids”;

(b) GPA 8182, API 14.7 “Mass Measurement of Natural Gas Liquids”;

(c) GPA 8173, API 14.4 “Converting Mass of Natural Gas Liquids and Vapors to Equivalent Liquid Volumes”;

(d) GPA 2172, API 14.5, “Calculation of Gross Heating Value, Specific Gravity, and Compressibility of Natural Gas Mixtures from Compositional Analysis”;

(e) API 14.6 “Installing and Proving Density Meters”;

(f) API 21 “Flow Measurement Using Electronic Metering Systems”;

(g) API 14.8 “Liquefied Petroleum Gas Measurement”;

(h) API 5.6 “Measurement of Liquid Hydrocarbons by Coriolis Meters”;

(i) AGA Report No.8, API 14.2 “Compressibility Factors of Natural Gas and Other Related Hydrocarbon Gases” per “Detailed Methodology”;

(j) GPA 2165 “Standard for Analysis of Natural Gas Liquid Mixtures by Gas Chromatography”; and

(k) GPA 2166 “GPA Methods of Obtaining Natural Gas Samples for Analysis by Gas Chromatography”.

Where electronic gas measurement (“EGM”) and flow computers are used, the Parties will use and accept the electronic derivations, measurements and calculations in lieu of mechanical recordings, chart integration and subsequent calculations. The official EGM data from the measuring equipment will remain the property of Processor, or its designee, but upon request by Customer, Processor, or its designee, will submit its records and EGM data, together with calculations to Customer for inspection and verification, subject to their return to Processor, or its designee, within thirty-five (35) Days after their receipt.

6.3 Measurement Factors. As related to Gas measurement hereunder:

(a) The unit of volume shall be one (1) cubic foot of Gas at a base temperature of sixty degrees Fahrenheit (60°F) and at a base pressure of fourteen and sixty-five hundredths (14.65) pounds per square inch absolute. The atmospheric pressure shall be assumed to be a constant, determined by elevation and specific site location, regardless of the variations of such atmospheric pressure from time to time.

 

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(b) Temperature shall be determined by use of a recording thermometer so installed that it may continuously record the temperature of Gas passing the meters.

(c) The specific gravity shall be determined by calculation from fractional analyses of proportional samples taken at Processor’s measurement facilities.

(d) Corrections for deviation from Ideal Gas Laws shall be made for all Gas metered hereunder as prescribed in the applicable standards.

(e) The Daily arithmetical flow weighted average recorded for temperature, the factor for specific gravity, and the corresponding correction for deviation from Ideal Gas Laws applicable during each Day shall be used to make computations of volumes hereunder.

6.4 Measurement Accuracy Verification.

(a) Custody Transfer Meters. The accuracy of the measurement facilities specified herein and used for custody transfer of Customer Gas shall be verified at least once each year. Customer shall be given reasonable notice and shall have the right to be present at the time of any installing, reading, cleaning, changing, repairing, inspecting, testing, calibrating, or adjusting done in connection with Processor’s measuring equipment hereunder. If after notice, Customer fails to have a representative present, the results of the tests shall, nevertheless, be considered accurate until the next tests are made and upon request by Customer, Processor shall furnish Customer a written copy of such test results. The costs of all tests of such measuring equipment shall be borne by Processor except that the costs for additional tests requested by Customer shall be borne by Customer.

(b) Non Custody Transfer Meters. The accuracy of the measurement facilities specified herein and used for applications other than custody transfer shall be verified at least once each year.

6.5 Measurement Error. If at any time any of the measuring or testing equipment is found to be out of service or registering inaccurately in any percentage, it shall be adjusted to read accurately, within the limits prescribed by the manufacturer. If at any time any of the measuring or testing equipment used for custody transfer is out of service or inaccurate by an amount exceeding five percent (5%) at a reading corresponding to the average rate of flow for the period since the last preceding test, the previous readings of such equipment shall be disregarded for any period definitely known or agreed upon, or for a period of one-half of the time elapsed since the last test of the measuring equipment affected, not to exceed fifteen (15) Days. The volume measured during such period shall be estimated by (a) using the data recorded by any check measuring equipment if installed and registering accurately, or if not installed or not registering accurately, (b) by correcting the error if the percentage of error is ascertainable by calibration, test, or mathematical calculation, or if neither (a) or (b) is feasible, (c) by estimating the quantity or quality measured, based upon deliveries under similar conditions during a period when the equipment was registering accurately. No correction shall be made for recorded inaccuracies of five percent (5%) or less.

6.6 Customer’s Right of Inspection. At all times during business hours, Customer shall have the right to inspect measurement equipment used for custody transfer purposes that is installed or furnished by Processor, or its designee, and the charts and other measurement or testing data

 

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retained by Processor. The reading, calibration and adjustment of all metering equipment and changing of charts hereunder shall be done only by Processor or Processor’s designee. Processor shall preserve all original test data, charts, and other similar records for a period of at least one (1) year or longer if required by law or regulation.

6.7 Gross Heating Value Determination. The Gross Heating Value of Customer Gas shall be determined each Month by taking flow proportional stream samples at the Point of Delivery, or any other mutually agreed point, using a continuous proportional to flow sampling device. The samples will be collected for testing prior to the end of each Month. Processor shall compute, or cause to be computed, the Gross Heating Value from fractional analysis of the sample. The result shall be controlling and effective in the Month succeeding the Month in which the sample is obtained. The Gross Heating Value of Customer Gas to be used for the first Month of production after initial flow has begun will be determined from spot samples which will be collected at each Point of Measurement approximately one (1) week after initial flow begins. The Gross Heating Value so determined shall be corrected from the condition of testing to a dry basis.

6.8 Hydrocarbon Content. Processor shall determine, or cause to be determined, the hydrocarbon content of Customer Gas, Gas from other sources delivered to the Plant for processing, Residue Gas, and Plant Fuel by a test conducted each Month. Such samples shall be taken at a flow rate, pressure and temperature which will yield equitable and representative test results.

6.9 Fractional Analysis. Fractional analysis of test samples shall be performed by Processor at the laboratory of Processor’s choosing, through the use of gas chromatography equipment or such other method as may be commonly used in the industry. From such fractional analysis, Processor shall determine the composition in mole percent of each of the following chemical compounds: (a) carbon dioxide, (b) nitrogen, (c) methane, (d) ethane, (e) propane, (f) iso-butane, (g) normal butane, (h) iso-pentane, (i) normal pentane and (j) hexanes and heavier hydrocarbons. Processor shall compute or cause to be computed, the Gross Heating Value, specific gravity, Plant Products content and correction factors for deviation from Ideal Gas Laws from this fractional analysis of samples. The results from these analyses shall be controlling and effective in the Month succeeding the Month in which the sample is obtained and shall apply to all subsequent deliveries until such time as new samples are obtained and analyzed. Processor shall furnish to Customer each such fractional analysis and Gross Heating Value which will accompany the statement described in Section 12.1 herein.

6.10 Modifications to Measurement Procedures. Processor reserves the right, in consultation with Customer, to modify the measurement procedures from time to time in order to conform with the measurement standards set forth in Section 6.2 herein for the Plant and/or to remove any inequities which may be found to exist, and it is agreed that any such modification will be applicable to this Agreement; provided, however:

(a) Processor shall give Customer at least thirty (30) Days’ written notice prior to any change or modification to such measurement procedures; and

(b) Such modification shall be in accordance with Gas Processors Association and API measurement standards and practices; and

 

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(c) Any change or modification to such measurement procedures shall be consistently applied to all customers who deliver Gas to the Plant for processing.

6.11 Measurement Disputes. Any dispute, controversy, or claim arising out of or in connection with this Article VI (a “Measurement Dispute”) which the Parties are unable to resolve shall be referred to and determined by an expert agreed upon by both Parties in good faith (the “Measurement Expert”), as the sole and exclusive remedy of the Parties as to the Measurement Dispute. The decision of the Measurement Expert shall be final and binding upon the Parties.

ARTICLE VII.

PLANT PRODUCTS AND CUSTOMER RESIDUE GAS

7.1 Conveyance of Rights to Processor. Customer does hereby grant, bargain, sell, transfer, convey and assign to Processor, its successors and assigns, (i) the right to consume Customer Gas as Plant Fuel, Shrinkage and Lost and Unaccounted for Gas, (ii) the right to sell Customer Plant Products for the account of Customer pursuant to Section 3.11 hereof, and (iii) the right to sell Customer Gas, Customer Residue Gas, and/or Customer Plant Products pursuant to Section 12.6 hereof.

7.2 Title to Customer Gas and Plant Products. Subject to other terms and conditions hereof, title to Customer Gas and all constituents thereof, including, without limitation, Customer Plant Products, shall remain in Customer’s name at all times.

ARTICLE VIII.

PLANT FUEL, LOST AND UNACCOUNTED FOR AND SHRINKAGE

8.1 Calculation of Plant Fuel and Lost and Unaccounted for Gas. The Thermal Content of Customer Gas that is consumed as Plant Fuel and Lost and Unaccounted for Gas in the processing of Customer Gas during a given Month shall be determined by multiplying (i) the total quantity of Btus consumed as Plant Fuel and Lost and Unaccounted for Gas in Plant operations during such Month by (ii) a fraction, the numerator of which is the total Gallons of Customer Plant Products recovered and saved during such Month, and the denominator of which is the total Gallons of Plant Products recovered and saved in the Plant from all Gas processed at the Plant during such Month.

8.2 Calculation of Shrinkage. Customer’s share of Shrinkage shall be calculated by Processor each Month by multiplying (i) the number of Gallons of each produced component of the mixed stream of Plant Products as determined and allocated to Customer Gas pursuant to the terms of this Agreement, by (ii) the Btu equivalent of each such component as set forth in the GPA Technical Standards Publication No. 2145-03, as revised from time to time, and as adjusted to sixty degrees Fahrenheit (60°F) and 14.65 psia pressure base, with the aggregate Btus of all such components constituting Customer’s share of Shrinkage hereunder.

8.3 Plant Fuel, Shrinkage and Lost and Unaccounted for Gas. Customer shall bear one hundred percent (100%) of the Plant Fuel, Shrinkage and Lost and Unaccounted for Gas attributable to processing Customer Gas, which will be deducted in determining Customer Residue Gas. For the avoidance of doubt, Customer shall not bear any costs related to third-party gas, if any.

 

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ARTICLE IX.

COMPENSATION AND FEES

9.1 Processing Fee. Processor shall invoice Customer at the end of each Month, and Customer shall pay Processor, a fee equal to the product of (i) (a) * per MMBtu for all Customer Gas up to the MDQ, and (b) * per MMBtu for all Interruptible Gas, as adjusted pursuant to Section 9.3 below (the “Processing Fee”), multiplied by (ii) the actual quantity of Gas and vaporized condensate (in MMBtu) delivered to and processed in the Plant as measured and allocated to Customer at the Point of Delivery hereunder during such Month.

9.2 Stabilization Facilities. The Parties acknowledge and agree that any condensate or drip liquids recovered from the Gathering System at or near the Point of Delivery may be vaporized and processed at the Plant. If Customer desires Processor to install stabilization facilities to stabilize and treat any condensate or drip liquids recovered from the Gathering System at or near the Point of Delivery, Customer shall notify Processor in writing of such desire. Customer and Processor shall negotiate in good faith to enter into a separate agreement for providing such stabilization services upon mutually agreeable terms.

9.3 Fee Adjustment. One half of the Processing Fee shall be adjusted on each anniversary of the Plant Operational Date by a factor, the numerator of which is the PPI for the latest available month that is no longer subject to revision prior to the date on which such adjustment is being made, and the denominator of which is the PPI (using the same base date) for the corresponding month in the preceding calendar year; provided, however, if such calculation would result in a factor of less than 1.00, then such factor shall be deemed to equal 1.00.

9.4 Minimum Quantity Commitment. Subject to the terms hereof, beginning on the Plant Operational Date, Customer agrees to make available at the Points of Measurement for delivery to the Plant on the Gathering System, (i) for each six (6) Month period of time as set forth in the table below (each, a “Semiannual Period”), at least the quantity of Customer Gas (in MMBtu/day) set forth in the table below for such Semiannual Period (the “Semiannual Gas Commitment”) and (ii) on or before the end of the fifteenth (15th) Annual Period following the Plant Operational Date (such fifteen (15) Annual Periods, the “MQ Period”), at least an aggregate quantity of * MMBtu of Customer Gas (the “Total Gas Commitment”). The first Semiannual Period in the table below will commence on the Plant Operational Date.

 

Semiannual

Period

   Semiannual Gas
Commitment

(in MMBtu/day)
   Cumulative Gas
Commitment

(in MMBtu)

First Six Months of Annual Period 1

   *    *

Second Six Months of Annual Period 1

   *    *

First Six Months of Annual Period 2

   *    *

Second Six Months of Annual Period 2

   *    *

First Six Months of Annual Period 3

   *    *

Second Six Months of Annual Period 3

   *    *

First Six Months of Annual Period 4

   *    *

 

 

 

*

-

Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

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Semiannual

Period

   Semiannual Gas
Commitment

(in MMBtu/day)
   Cumulative Gas
Commitment

(in MMBtu)

Second Six Months of Annual Period 4

   *    *

First Six Months of Annual Period 5

   *    *

Second Six Months of Annual Period 5

   *    *

First Six Months of Annual Period 6

   *    *

Second Six Months of Annual Period 6

   *    *

First Six Months of Annual Period 7

   *    *

Second Six Months of Annual Period 7

   *    *

First Six Months of Annual Period 8

   *    *

Second Six Months of Annual Period 8

   *    *

First Six Months of Annual Period 9

   *    *

Second Six Months of Annual Period 9

   *    *

First Six Months of Annual Period 10

   *    *

Second Six Months of Annual Period 10

   *    *

First Six Months of Annual Period 11

   *    *

Second Six Months of Annual Period 11

   *    *

First Six Months of Annual Period 12

   *    *

Second Six Months of Annual Period 12

   *    *

First Six Months of Annual Period 13

   *    *

Second Six Months of Annual Period 13

   *    *

First Six Months of Annual Period 14

   *    *

Second Six Months of Annual Period 14

   *    *

First Six Months of Annual Period 15

   *    *

Second Six Months of Annual Period 15

   *    *

9.5 Deficiency Payments. If a Semiannual Deficiency Quantity (as defined below) exists as of the end of any Semiannual Period, then Customer shall pay to Processor an amount equal to the product of * (such product being the “Deficiency Payment”). “Semiannual Deficiency Quantity” means *. Any such Deficiency Payments made by Customer shall be treated by Processor as prepayment of the Processing Fee for Customer Gas that may be delivered by Customer after the date on which Customer has delivered the Total Gas Commitment and shall be credited by Processor to the payment of the Processing Fee that otherwise would be payable hereunder for such quantities of Customer Gas delivered during the Primary Term until such prepaid fees have been exhausted. Deficiency Payments due by Customer hereunder shall be paid by Processor as provided in Article XII.

9.6 Certain Other Payments.

(a) Greenhouse Gas Surcharge. If, as a result of any new or amended law, rule or regulation, Processor incurs additional costs related to any Greenhouse Gas attributable to Customer Gas hereunder or any additional costs related to any Greenhouse Gas are imposed

 

 

 

*

-

Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

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with respect to Processor’s operations hereunder (any such additional cost, a “Greenhouse Gas Surcharge”), then Processor shall be responsible for and shall pay up to twenty percent (20%) of such Greenhouse Gas Surcharge and Customer shall reimburse Processor for the remaining eighty percent (80%) of such Greenhouse Gas Surcharge. Notwithstanding the foregoing, Customer shall retain ownership of and sole responsibility for any carbon emissions and/or other Greenhouse Gases contained within or removed from the Gas received by Processor at the Point of Delivery. If Customer is required to make any payment hereunder with respect to a Greenhouse Gas Surcharge imposed on the Plant generally, and not specifically with respect to Customer Gas, Customer shall only be responsible for its ratable share of such Greenhouse Gas Surcharge based on the average volume of Customer Gas delivered to the Plant and the average volume of all other Gas delivered to the Plant.

(b) If, exclusive of any Greenhouse Gas Surcharge, any material fee or charge is assessed upon Processor by a Governmental Authority after the Effective Date in connection with the performance of services for Customer Gas on behalf of Customer hereunder, excluding normal fees or charges that are incurred by Processor irrespective of whether Processor provides the services on behalf of Customer and excluding Taxes addressed in Article XVI, then Processor may increase the then-effective Processing Fee by up to ten percent (10%) to account for such fees or charges (to the extent such fees or charges are attributable to Customer Gas); provided, however, the cumulative effect of all such increases pursuant to this Section 9.6(b) (but exclusive of any Greenhouse Gas Surcharges or any adjustment pursuant to Section 9.3) during the Primary Term may not exceed thirty percent (30%) of the initial Processing Fee (as the same may be adjusted pursuant to Section 9.3 from time to time). If, in Processor’s reasonable judgment, an increase in the Processing Fee of more than ten percent (10%) would be required to place Processor in substantially the same economic position as it was in prior to the imposition or assessment of such fees or charges, Processor may call for a Senior Management Meeting to take place within thirty (30) Days of written notice to Customer, and the Parties shall negotiate in good faith to amend the provisions of this Agreement such that the Parties are in substantially the same relative economic position as they were in prior to the imposition or assessment of such fees or charges. If the Parties are unable to agree on an economic adjustment within sixty (60) Days of the Senior Management Meeting, then Processor may, in its sole discretion, terminate this Agreement without penalty by delivering Customer written notice of Processor’s intent to terminate. Such termination shall be effective, at the option of Customer, (i) as of 9:00 a.m. on the first Day of the Month which follows the Month that Processor delivered its notice of intent to terminate, or (ii) as of 9:00 a.m. on the first Day of the Month which is twelve (12) Months after such date, provided that the Processing Fee for such twelve (12) Month period before such termination shall be increased to place Processor in substantially the same economic position as it was in prior to the imposition or assessment of such fees, charges, or costs. Customer shall exercise such option by delivery of written notice to Processor of Customer’s election within ten (10) Business Days of receipt of Processor’s notice to terminate, provided that if Customer has not responded to Processor by the time described in clause (i) above, the Agreement shall continue pursuant to clause (ii) above.

(c) Customer shall be entitled to audit Processor’s applicable books and records for the limited purpose of determining if the amount of any increase pursuant to this Section

 

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9.6 is justified by the actually-incurred and reasonable amount of the aggregate costs and/or expenses relating to the Plant. If such audit shall reflect that such increase was not justifiable in accordance with the foregoing, Processor shall promptly credit the amount of such discrepancy to Customer, unless Processor disagrees with the results of such audit, in which case the matter shall be resolved pursuant to the dispute resolution provisions set forth in Section 15.3 hereof.

9.7 Electric Compression Reimbursement. If Processor installs electric-driven compression in lieu of or in addition to Gas-driven compression at the Plant, then, each Month, Customer shall pay Processor an amount determined by multiplying (i) 90% of the total cost of electricity at the Plant during such Month used for compression by (ii) a fraction, the numerator of which is the total Gallons of Customer Plant Products recovered and saved during such Month, and the denominator of which is the total Gallons of Plant Products recovered and saved in the Plant from all Gas processed at the Plant during such Month. If Customer or Processor at any time believes that the determination in the preceding sentence does not reflect the costs of electric-driven compression at the Plant that should be allocated to Customer hereunder, either Party may provide notice to such other Party. Upon the delivery of such notice, the Parties agree to discuss and negotiate in good faith whether any changes in such allocation are appropriate under the circumstances.

ARTICLE X.

ROYALTIES; WARRANTY OF TITLE

10.1 Royalties. As between Processor and Customer, Customer shall at all times have the obligation to account for and pay or cause to be paid all royalties, overriding royalties, and other sums due on production and to make settlement with all other Persons having an interest in Customer Gas delivered hereunder. Customer shall indemnify, defend and hold Processor harmless against all loss, damage, and expense, including reasonable attorney’s fees, of every character on account of adverse claims to all such Gas delivered to Processor hereunder, and royalties, taxes, payment, or other charges due thereon or attributable thereto.

10.2 Title; Warranties Regarding Title. Customer warrants that it will have, at the time of receipt of Gas at the Point of Delivery for processing hereunder, control of and good title to and/or the full right and authority to deliver such Gas to Processor for processing hereunder. Customer warrants that the Gas delivered to Processor hereunder shall be free and clear of all liens, encumbrances, and claims whatsoever (other than liens, encumbrances and claims granted by Company to secure any credit facility or indebtedness), and that it will have at such time of receipt good right and title to the Gas or the right to process such Gas hereunder. If any claim is made challenging Customer’s right to deliver such Gas to Processor, Processor has the right to suspend receipt or deliveries of such Gas hereunder until such issue is finally resolved to the reasonable satisfaction of Processor. Processor shall not take any action that would result in the creation of any liens, encumbrances or claims created by, through or under Processor on Customer Gas or the Residue Gas and Plant Products attributable thereto.

 

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ARTICLE XI.

TERM

11.1 Term. This Agreement shall commence on the Effective Date and, unless otherwise terminated as provided herein, shall continue in full force and effect until fifteen (15) years after the Plant Operational Date (the “Primary Term”). The term of this Agreement shall continue for additional terms of one year each (each an “Additional Term”) unless this Agreement is terminated by either Party as of the end of the Primary Term or an Additional Term, as applicable, by providing not less than one-hundred eighty (180) Days prior written notice of termination to the other Party.

11.2 Termination for Cause. This Agreement may be terminated upon (i) a breach termination date, or (ii) exercise by a Party of its rights under any provision of this Agreement expressly providing such Party termination rights. For purposes of this Section 11.2, “breach termination date” means the date on which either Processor or Customer, upon written notice to the other Party, terminates this Agreement upon (x) a material breach by such other Party of this Agreement and (y) the failure by the breaching party to cure such breach (A) within sixty (60) Days after receipt of written notice thereof from the terminating party, or (B) if such breach is not curable within such sixty (60) Day period, failure by the breaching party to diligently pursue its cure within thirty (30) Days after receipt of written notice thereof from the terminating party (provided, however, that notwithstanding the foregoing, the non-defaulting Party may terminate this Agreement if such breach is not cured within seventy-five (75) Days of written notice of breach); further provided, however, that (i) in order to exercise such termination right, the terminating party shall not be in material breach of this Agreement; and (ii) the cure period for undisputed payments shall be ten (10) Days.

ARTICLE XII.

STATEMENTS AND PAYMENTS

12.1 Invoices and Statements. On or before the fifteenth (15th) Day of each Month, Processor shall provide to Customer an invoice and statement for the previous Month setting forth the calculation of the net amount due hereunder to Processor, and with respect to Customer Plant Products that are marketed by Processor, the net amount due to Customer.

12.2 Payment of Statements. Within fifteen (15) Days following receipt of each of Processor’s invoices and statements, Customer or Processor, as applicable, shall make payment to the other Party of all undisputed amounts by wire transfer, in accordance with the account information provided herein, unless another form of payment is agreed to in writing by the Parties. Should a Party fail to make payment in full of all undisputed amounts within such time period, interest shall accrue on the unpaid balance at the Default Interest Rate, but not to exceed any lesser maximum legal rate. If Customer fails to pay Processor amounts due hereunder and such failure is not cured within ten (10) Business Days’ written notice from Processor to Customer, Processor may suspend receipt and delivery of Customer Gas without prejudice to any other available remedies at law or in equity.

12.3 Billing Disputes. If a good faith dispute arises as to any amount payable hereunder, the Party responsible for payment shall nevertheless pay when due the amount not in dispute. Such payment shall not be deemed to be a waiver of the right to recoup any overpayment. If either Party withholds payment of any disputed amount as authorized herein, such Party shall, within ten (10)

 

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Days after the due date of the statement for the Month to which the disputed amount pertains, submit to the other Party a written explanation of the dispute and any available supporting documentation. The Parties shall then cooperate in good faith to resolve such dispute as expeditiously as possible. If either Party fails to forward the entire undisputed amount due to the other Party when same is due, interest on the unpaid portion shall accrue at the Default Interest Rate, from time to time, or the maximum legal rate, whichever is the lesser, from the date such payment is due until the same is paid.

12.4 Audit Rights. Each Party or its designated representatives shall, upon reasonable notice to the other Party, have the right, no more frequently than one (1) time per twelve (12) consecutive Months, at its own expense, at reasonable times and during normal business hours, to examine the books and records of such other Party to the extent necessary to verify the accuracy of any statement, charge, computation, or demand made under or pursuant to this Agreement. Each Party agrees to keep records and books of the account in accordance with generally accepted accounting principles and practices in the industry. Each invoice and statement shall be final as to both Parties unless questioned in writing within twenty four (24) Months following such invoice and statement.

12.5 Creditworthiness. If Processor has reasonable grounds for doubting the ability of Customer to perform its obligations hereunder, Processor shall have the right to request and receive from Customer adequate assurance of performance (“Performance Assurance”) which shall mean sufficient security in a form, an amount and for the term reasonably specified by Processor. Customer at its option may then provide one of the following forms of security:

(a) Post an irrevocable standby letter of credit in a form and from a bank satisfactory to Processor; or

(b) Provide a prepayment or a deposit.

If the credit of Customer’ s guarantor is deemed to be satisfactory in Processor’ s opinion, the demand for Performance Assurance can be satisfied with a guarantee issued on behalf of Customer in a form, amount and tenor acceptable to Processor, but only for as long as the credit of Customer’ s guarantor continues to be acceptable to Processor.

Should Customer or its guarantor fail to provide Performance Assurance within ten (10) Business Days after receipt of written demand for such assurance, then Processor shall have the right to suspend performance under this Agreement until such time as Customer furnishes Performance Assurance.

12.6 Intentionally Deleted.

12.7 Intentionally Deleted.

ARTICLE XIII.

LIABILITY OF THE PARTIES

13.1 Control and Possession of Gas and Plant Products. As between Customer and Processor, Customer shall be deemed in control and possession of the Gas delivered for processing

 

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hereunder and responsible for any Claims or Losses caused thereby until such Gas shall have been delivered at the Point of Delivery. As between Customer and Processor, Processor shall be deemed in control and possession of the Gas delivered for processing hereunder and Plant Products recovered from such Gas and, except as provided in Section 5.2(d), Section 9.6, Article X, Section 13.3, Section 16.2 and Section 19.10, shall be responsible for any Claims or Losses caused thereby until Residue Gas shall have been delivered to Customer or its designee at the Point of Redelivery, and Customer Plant Products have been delivered to Customer or its designee at the NGL Delivery Point. Except as otherwise provided in Section 5.2(d), Section 9.6, Article X, Section 13.3, Section 16.2 and Section 19.10, the Party who has control and possession of the Gas or Plant Products shall be responsible for and shall indemnify the other Party for any Claims or Losses caused thereby and occurring while the Gas or Plant Products is in the indemnifying Party’s control and possession.

13.2 Waiver of Certain Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY, ANY SUCCESSORS IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE OF THIS AGREEMENT FOR ANY EXEMPLARY OR PUNITIVE DAMAGES OR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER, INCLUDING LOSS OF USE, LOST PROFITS OR REVENUES, COST OF CAPITAL, CANCELLATION OF PERMITS, UNABSORBED TRANSPORTATION OR STORAGE CHARGES, TERMINATION OF CONTRACTS, OR TORT OR CONTRACT CLAIMS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY BREACH HEREOF, IRRESPECTIVE OF WHETHER CLAIMS FOR SUCH DAMAGES ARE BASED UPON CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. THIS SECTION 13.2 SHALL APPLY NOTWITHSTANDING THE SOLE, JOINT OR CONCURRENT NEGLIGENCE, FAULT OR RESPONSIBILITY OF THE PARTY WHOSE LIABILITY IS LIMITED BY THIS PROVISION, OR ANY OTHER EVENT OR CONDITION, WHETHER ANTICIPATED OR UNANTICIPATED, AND REGARDLESS OF WHETHER PRE-EXISTING PRIOR TO THE DATE OF THIS AGREEMENT.

13.3 Inert Constituents. Customer shall retain title to all Inert Constituents in Gas (collectively, whether any such Inert Constituents are removed from the Gas or not, “Customer’s Inert Constituents”), delivered by Customer under this Agreement. To the extent that Processor removes Customer’s Inert Constituents from such Gas and Customer has not made arrangements to utilize, market or dispose of Customer’s Inert Constituents, Processor may, but is not required to, dispose of Customer’s Inert Constituents by venting or other methods. If (i) venting Customer’s Inert Constituents is ever prohibited or disallowed for any reason or is deemed by Processor to be uneconomic, or (ii) additional costs are required to vent, dispose of or handle Customer’s Inert Constituents due to rules, regulations or other laws, then Customer shall promptly (A) make alternate arrangements to utilize, market and/or dispose of Customer’s Inert Constituents at Customer’s sole cost and expense, (B) notify Processor in writing and in reasonable detail of such alternate arrangements, and (C) reimburse Processor for any costs incurred by Processor in delivering Customer’s Inert Constituents for such utilization, marketing and/or disposal. If Customer fails to comply with Customer’s obligations under the immediately preceding sentence, Processor shall have the right, but not the obligation, without notice to Customer, to make arrangements for utilization, marketing and/or disposal of Customer’s Inert Constituents for

 

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Customer’s account and at Customer’s sole cost and expense; and Customer shall promptly reimburse Processor upon demand for any costs and expenses incurred by Processor in connection with such arrangements by Processor. CUSTOMER HEREBY RELEASES, INDEMNIFIES, DEFENDS AND HOLDS HARMLESS PROCESSOR AND PROCESSOR’S MEMBERS, DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, DAMAGES, LIABILITIES, EXPENSES, ACTIONS, CAUSES OF ACTION, LIABILITIES, LOSSES, TAXES, PENALTIES AND FEES ARISING OUT OF OR IN ANY WAY RELATING TO (I) CUSTOMER’S INERT CONSTITUENTS, INCLUDING, WITHOUT LIMITATION, THE UTILIZATION, MARKETING OR DISPOSAL THEREOF, AND/OR (II) ANY PERSONAL INJURY, DEATH, PROPERTY DAMAGE, ENVIRONMENTAL DAMAGE, POLLUTION, OR CONTAMINATION ARISING OUT OF OR RELATING TO CUSTOMER’S INERT CONSTITUENTS, EXCEPT TO THE EXTENT THAT ANY SUCH CLAIMS, DEMANDS, DAMAGES, LIABILITIES, EXPENSES, ACTIONS, CAUSES OF ACTION, LIABILITIES, LOSSES, TAXES, PENALTIES OR FEES ARE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY SUCH INDEMNITEE.

13.4 Indemnification. (a) SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTIONS 13.2 AND 13.3, PROCESSOR SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS CUSTOMER AND CUSTOMER’S MEMBERS, DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS AND LOSSES, INCLUDING THIRD PARTY CLAIMS, ARISING OUT OF OR RELATING TO: (i) THE OPERATIONS CONDUCTED HEREUNDER OR IN CONNECTION HEREWITH BY PROCESSOR TO THE EXTENT RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF PROCESSOR, EXCEPT TO THE EXTENT THAT SUCH CLAIMS OR LOSSES ARE ATTRIBUTABLE TO THE NEGLIGENCE OR WILLFUL MISCONDUCT OF CUSTOMER OR ANY OF CUSTOMER’S MEMBERS, DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES, AND (ii) ANY BREACH OF THIS AGREEMENT BY PROCESSOR.

(b) SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 13.2, CUSTOMER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS PROCESSOR AND PROCESSOR’S MEMBERS, DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS AND LOSSES, INCLUDING THIRD PARTY CLAIMS, ARISING OUT OF OR RELATING TO: (i) THE OPERATIONS CONDUCTED HEREUNDER OR IN CONNECTION HEREWITH BY CUSTOMER TO THE EXTENT RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CUSTOMER, EXCEPT TO THE EXTENT THAT SUCH CLAIMS OR LOSSES ARE ATTRIBUTABLE TO THE NEGLIGENCE OR WILLFUL MISCONDUCT OF PROCESSOR OR ANY OF PROCESSOR’S MEMBERS, DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES, AND (ii) ANY BREACH OF THIS AGREEMENT BY CUSTOMER.

 

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ARTICLE XIV.

FORCE MAJEURE

14.1 Suspension of Obligations. If either Customer or Processor is rendered unable, wholly or in part, by reason of Force Majeure, from carrying out its obligations under this Agreement (other than the obligation to make payment of amounts due hereunder), then upon said Party’s giving written notice and reasonably full particulars of such Force Majeure to the other Party, which shall be done as soon as practicable after the occurrence of the cause relied on, the obligations of the Party giving such notice (other than the obligation to make payment of amounts due hereunder), so far as they are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall be remedied with all reasonable dispatch.

14.2 Definition of Force Majeure. The term “Force Majeure” shall mean acts of God, acts of any Governmental Authority, compliance with rules, regulations or orders of any Governmental Authority, strikes, lockouts or other industrial disturbances, acts of the public enemy, acts of terrorism, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, extreme temperatures, storms, hurricanes, floods, or other adverse weather conditions, washouts, arrests and restraint of rulers and people, civil disturbances, explosions, breakage or accident to equipment, machinery or lines of pipes, freezing of wells or lines of pipes, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive Gas or Plant Products or increases in pressure of upstream or downstream pipelines or facilities, requisitions, directives, diversions, embargoes, priorities or expropriations of Governmental Authorities, legal or de facto, whether purporting to act under some constitution, decree, law or otherwise, the necessity for making repairs, alterations, enlargements or connections to, or performing maintenance on, machinery or facilities, inability to secure rights of way, transportation embargoes or failures or delays in transportation or poor road conditions, and, without limitation by enumeration, any other cause or causes, whether of the kind herein enumerated or otherwise, not reasonably within the control of the Party claiming suspension, which, by the exercise of due diligence, such Party shall not have been able to avoid.

14.3 Strikes. The settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty. The requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party, when such is deemed inadvisable in the discretion of the Party having the difficulty.

ARTICLE XV.

GOVERNING LAW; VENUE; DISPUTE RESOLUTION

15.1 Governing Law. This Agreement is entered into in the State of Louisiana and shall be governed, interpreted and construed in accordance with the laws of the State of Louisiana without regard to the conflicts of laws provisions thereof.

15.2 Venue. Exclusive venue for any suit, action or proceeding brought by either Party in connection with this Agreement or arising out of the terms or conditions hereof shall be in the state or federal courts situated in Lincoln Parish, Louisiana. The Parties hereby irrevocably and unconditionally waive, to the fullest extent they may legally and effectively do so, any objection

 

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they may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in the state and federal courts situated in Lincoln Parish, Louisiana.

15.3 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence of such dispute. If the Parties have failed to resolve the dispute within fifteen (15) Business Days after such notice was given, the Parties shall seek to resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within thirty (30) Business Days after the original notice of dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 15.3 shall not limit a Party’s right to initiate litigation prior to the expiration of the time periods set forth in this Section 15.3 if application of such limitations would prevent a Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g., statutes of limitation, prescription, etc.).

ARTICLE XVI.

TAXES

16.1 Taxes on Processing and Plant Products. Any Tax in the nature of a processing Tax, or any Tax on Plant Products resulting from the processing of Customer Gas, or the sale of Plant Products extracted therefrom, and any and all other Taxes now or hereafter levied, assessed, or collected on Plant Products extracted, saved and sold from Customer Gas, shall be borne by Customer. In the event Processor is liable and/or required to pay any such Tax for or on behalf of Customer, Customer shall reimburse Processor for such taxes pursuant to Processor’s invoice for the same.

16.2 Other Taxes. Customer shall pay, or cause to be paid, all production, severance, gross receipts, ad valorem and similar or other Taxes levied or imposed with respect to Customer Gas, and Customer shall bear and pay all Taxes levied or imposed with respect to Customer Residue Gas. In the event Processor is required to pay or remit any such Tax for Customer, Customer shall reimburse Processor for such taxes pursuant to Processor’s invoice for the same. Customer hereby agrees to indemnify, defend and hold harmless Processor from and against any and all Claims and Losses arising out of or related to such Taxes. This indemnity and defense obligation shall survive the expiration or termination of this Agreement.

16.3 Taxes on Processing Facilities. Notwithstanding anything in this Agreement to the contrary, Customer shall not be liable hereunder for any (x) Taxes (including ad valorem taxes) assessed against Processor based on Processor’s income, revenues, gross receipts, net worth or ownership of the Plant or any equipment or facilities related thereto, and (y) state franchise, license and similar Taxes required for the maintenance of Processor’s corporate existence.

ARTICLE XVII.

ASSIGNMENT

17.1 Restrictions on Assignment. This Agreement may not be assigned, disposed of, alienated or otherwise transferred by either Party, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, except as provided below.

 

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17.2 Permitted Assignments. Notwithstanding the foregoing, (i) either Party may assign this Agreement to an Affiliate of such Party without the consent of the other Party, (ii) either Party may pledge this Agreement to secure any credit facility or indebtedness of such Party or its Affiliates without the consent of the other Party, (iii) Processor may assign this Agreement without Customer’s consent in connection with the sale or transfer of the Plant, and (iv) Customer may assign or partially assign this Agreement without Processor’s consent in connection with the sale or transfer of all or part of Customer’s Interests subject to the Dedication, provided that such assignee has a credit rating reasonably acceptable to Customer at the time of such sale or transfer. If any such transfer described in (i) through (iv) above occurs, (a) the transferee (other than any grantee under any lien, pledge, encumbrance or security interest) shall assume in writing the obligations and liabilities of the transferor under this Agreement (the “Assumed Obligations”); (b) in the case of transfers under clause (iv) above, the transferor shall be released from its obligations and liabilities under this Agreement to the extent of the Assumed Obligations, provided that Processor’s combined obligations to Customer and to any partial transferee of Customer shall be no greater than Customer’s obligations prior to such transfer; and (c) no transfer or succession to the interest of Customer hereunder, wholly or partially, shall affect or bind Processor until the first of the month following the date Processor has received a copy of the recorded transfer document or other proof satisfactory to Processor that the claimant is legally entitled to such interest.

ARTICLE XVIII.

NOTICES AND STATEMENTS

18.1 Notice. Any notice, statement, payment, claim or other communication required or permitted hereunder shall be in writing and shall be sent by: (i) facsimile transmission; (ii) delivered by hand; (iii) sent by United States mail with all postage fully prepaid; or (iv) by courier with charges paid in accordance with the customary arrangements established by such courier, in each of the foregoing cases addressed to the Party at the following addresses:

 

Processor:    NOTICES AND CORRESPONDENCE:
  

PennTex Midstream Partners, LLC

Attn: Thomas Karam, Chief Executive Officer

11931 Wickchester Lane, Suite 300

  

Houston, Texas 77043

Fax:                         

   ACCOUNTING MATTERS:
  

PennTex Midstream Partners, LLC

Attn:                     

11931 Wickchester Lane, Suite 300

  

Houston, Texas 77043

Fax:                         

 

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   PAYMENT BY WIRE OR ACH:
   PennTex Midstream Partners, LLC
   ABA:             
   Account No.:             
Customer:    NOTICES AND CORRESPONDENCE:
   WildHorse Resources, LLC
   Attn: Anthony Bahr, Chief Executive Officer9805 Katy Freeway, Suite 400
   Houston, Texas 77024
   with a copy to:
   Memorial Resource Development LLC
   Attn: General Counsel
   1301 McKinney Street, Suite 2100
   Houston, TX 77010
   ACCOUNTING MATTERS:
   WildHorse Resources, LLC
   Attn: Revenue Accounting9805 Katy Freeway, Suite 400
   Houston, Texas 77024
   PAYMENT BY WIRE OR ACH:
   [                    ]

Such notices, statements, payments, claims or other communications shall be deemed received as follows: (i) if delivered personally, upon delivery; (ii) if sent by United States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the Day receipt is refused or is confirmed orally or in writing by the receiving Party; (iii) if sent by a courier service, upon delivery; or (iv) if sent by facsimile, on the Business Day following the Day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed orally or in writing by the receiving Party.

18.2 Change of Address. Notices of change of address of either of the Parties shall be given in writing to the other Party in the manner aforesaid and shall be observed in the giving of all future notices, statements, payments, claims or other communications required or permitted to be given hereunder.

 

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ARTICLE XIX.

MISCELLANEOUS

19.1 Entire Agreement. This Agreement, including any attachments, constitutes the entire agreement between the Parties pertaining to the subject matter hereof, supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties with respect thereto, and may not be amended or modified except by a written instrument signed by both Parties expressly identifying it as an amendment or modification hereof.

19.2 Confidentiality . The Parties agree that the terms of this Agreement shall be considered confidential, shall be kept confidential and shall not be disclosed during the term of this Agreement to any Person that is not a Party, except:

(a) to an Affiliate or an owner or indirect owner of such Party;

(b) to the extent such information is required to be furnished in compliance with applicable law, or pursuant to any legal proceedings or because of any order of any Governmental Authority binding upon a Party;

(c) to prospective purchasers of the assets or equity interests of a Party;

(d) to prospective or actual attorneys engaged by either Party where disclosure of such information is essential to such attorney’s work for such Party;

(e) to prospective or actual contractors and consultants engaged by either Party where disclosure of such information is essential to such contractor’s or consultant’s work for such Party;

(f) to a bank or other financial institution to the extent appropriate to a Party arranging for funding;

(g) to the extent such information must be disclosed pursuant to any rules or requirements of any stock exchange having jurisdiction over such Party or its Affiliates;

(h) to its respective employees, subject to each Party taking customary precautions to ensure such information is kept confidential; and

(i) any information which, through no fault of a Party, becomes a part of the public domain.

Except as provided in subsection 19.2(b) above, any third party receiving information pursuant to this Section  19.2 shall first execute a confidentiality agreement with the Parties prior to receiving such information.

19.3 Waiver. Any failure by either Party to comply with any of its obligations, agreements or conditions herein contained may only be waived in writing in an instrument specifically identified as a waiver and signed by the Party to whom such compliance is owed. No waiver of, or consent to a change in, any provision of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, any other provisions hereof, nor shall such waiver constitute a continuing waiver unless expressly provided in the waiver.

 

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19.4 No Third Party Beneficiaries. Except for Persons indemnified hereunder, this Agreement is not for the benefit of any third party and nothing herein, expressed or implied, confers any right or remedy upon any Person not a party hereto other than Persons which become successors or assigns pursuant to Article XVII hereof.

19.5 No Partnership. It is not the intention of the Parties to create, nor is there created hereby, a partnership, trust, joint venture or association. The status of each Party hereunder is solely that of an independent contractor.

19.6 Published Indices. Unless expressly provided otherwise herein, if any published price index referred to in this Agreement ceases to be published, the Parties shall mutually agree to an alternative published price index representative of the published price index referred to in this Agreement.

19.7 Headings. The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms and provisions hereof.

19.8 Contract Interpretation. In this Agreement, unless a clear contrary intention appears:

(a) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;

(b) the singular number includes the plural number and vice versa;

(c) reference to any gender includes each other gender;

(d) reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof;

(e) reference to any law means such law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated hereunder, and reference to any section or other provision of any law means that provision of such law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

(f) “hereunder,” “hereof,” “hereto,” “herein,” “hereby,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision hereof;

(g) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

 

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(h) “or” is used in the inclusive sense of “and/or”;

(i) with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”;

(j) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto;

(k) examples shall not be construed to limit, expressly or by implication, the matter they illustrate; and

(l) all references in this Agreement to an “Article,” “Section,” “subsection,” or “Exhibit” shall be to an Article, Section, subsection, or Exhibit of this Agreement, unless the context requires otherwise.

19.9 Agreement Subject to Laws. This Agreement is subject to all applicable state and federal laws and to all applicable orders, rules, and regulations of any Governmental Authority having jurisdiction. If either Party is ordered or required to do any act inconsistent with the provisions of this Agreement, then this Agreement shall continue nevertheless and shall be deemed modified to conform with the requirements of such law or regulation.

19.10 Federal Jurisdiction. Customer shall take no action that, directly or indirectly, could result in Processor being subjected to federal regulation, other than as to safety, under the Natural Gas Act or Section 311 of the Natural Gas Policy Act. If Customer takes any such action, in addition to all other remedies available to it in connection with such breach, Processor shall have the right to terminate this Agreement immediately. Customer shall be responsible and pay for and shall release, defend, indemnify and hold harmless Processor to the maximum extent permitted under applicable laws, from any and all Claims and Losses arising from or out of any act or omission of Customer which results in Processor or its Affiliates becoming subject to federal regulation, other than as to safety, under the Natural Gas Act or Section 311 of the Natural Gas Policy Act. In addition to the foregoing, Processor may terminate this Agreement without penalty if Processor or the Plant becomes subject to federal regulation, other than as to safety, under the Natural Gas Act or Section 311 of the Natural Gas Policy Act, and Processor elects to discontinue providing processing or other service to all customers on the Plant.

19.11 Reports to Governmental Authorities. Processor does not represent or warrant that any information it may furnish to Customer under the provisions of this Agreement will satisfy any of the requirements that may be imposed by any applicable state or federal laws and by any applicable orders, rules, and regulations of any Governmental Authorities having jurisdiction. Further, Processor does not assume the responsibility for the making of any reports to any Governmental Authorities that are required to be made by or on behalf of Customer.

19.12 Material Adverse Change. If a federal or state statute, regulation or order enacted or imposed by a Governmental Authority after the Effective Date effects a change to a substantive provision of this Agreement that has a material adverse impact upon the performance or benefits of either Party under this Agreement, including, without limitation, the imposition of terms, conditions, or rate restrictions that materially adversely affect the economic positions of the Parties under this Agreement, then the Parties will enter into good faith negotiations to attempt to revise this

 

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Agreement and any other ancillary agreements between Customer and Processor so that (a) performance under this Agreement is no longer impacted in a material adverse fashion and (b) this Agreement and any other ancillary agreements between Customer and Processor are revised in a manner that preserves, to the maximum extent possible, the respective economic positions of the Parties. Each Party will provide reasonable and prompt notice to the other Party as to any proposed law, regulations or any regulatory proceeding or actions that could cause such Party to invoke its rights under this Section 19.12. If, despite their good faith efforts, the Parties are unable to revise this Agreement in accordance with the above within ninety (90) Days from written notice of the occurrence, then the Party whose performance and/or benefits is impacted in a material adverse fashion will have the right to suspend or terminate this Agreement upon written notice delivered to the other Party within thirty (30) Days after expiration of the ninety (90) Day period with such suspension or termination to be effective no sooner than twelve (12) Months after the date of such written notice. Until such time as this Agreement is suspended or terminated, each Party will meet all obligations under this Agreement, unless otherwise prohibited by law.

19.13 Severability. The invalidity of any one or more provisions of this Agreement will not affect the validity of this Agreement as a whole, and in case of any such invalidity, this Agreement will be construed as if the invalid provision had not been included herein so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party. Upon such determination that one or more provisions of this Agreement are invalid, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

19.14 Expenses. Each Party shall pay its own legal fees and other costs and expenses incurred by it in connection with the execution and delivery of this Agreement.

19.15 Joint Preparation. The Parties acknowledge and mutually agree that this Agreement and all contents herein were jointly prepared by the Parties.

19.16 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement.

19.17 No Inducements. No director, employee, or agent of any Party shall give or receive any commission, fee, rebate, gift, or entertainment of significant cost or value in connection with this Agreement.

19.18 Counterpart Execution. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, and all of which shall be considered one and the same instrument. Any signature delivered by a Party by facsimile transmission or electronically shall be deemed an original signature.

19.19 Survival. The respective indemnification obligations of the Parties set forth in this Agreement and the limitations of liability set forth in Section 13.2 shall survive the expiration of the Term and any termination of this Agreement.

 

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19.20 Customer-Affiliate-Subsidiary Obligations. Customer shall not, and shall not permit its Subsidiaries to, seek to avoid its obligations hereunder by acting through an Affiliate which is not a Subsidiary.

[Signature Page Follows]

 

38


This Agreement is executed by the authorized representatives of the Parties, to be effective on the date first set forth above.

 

CUSTOMER:

WildHorse Resources, LLC

By:

 

/s/ Anthony Bahr

Name:

  Anthony Bahr

Title:

  Chief Executive Officer

 

39


This Agreement is executed by the authorized representatives of the Parties, to be effective on the date first set forth above.

 

PROCESSOR:
PennTex North Louisiana, LLC
By:  

/s/ Thomas F. Karam

Name:   Thomas F. Karam
Title:   CEO


EXHIBIT A

MAXIMUM DAILY QUANTITY (MDQ)

 

     MDQ
(MMBtu per Day)
 

Annual Period 1

     *   

Annual Period 2

     *   

Annual Period 3

     *   

Annual Period 4

     *   

Annual Period 5

     *   

Annual Period 6

     *   

Annual Period 7

     *   

Annual Period 8

     *   

Annual Period 9

     *   

Annual Period 10

     *   

Annual Period 11

     *   

Annual Period 12

     *   

Annual Period 13

     *   

Annual Period 14

     *   

 

EXHIBIT A – Page -1-

 

*

-

Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.


EXHIBIT B

MEMORANDUM OF GAS PROCESSING AGREEMENT

THIS MEMORANDUM OF GAS PROCESSING AGREEMENT (this “Memorandum”) is made and entered into effective as of March 17, 2014 (the “Effective Date”), by and between PennTex North Louisiana, LLC, a Delaware limited liability company (Processor), with an address of 11931 Wickchester Lane, Suite 300, Houston, Texas 77043, and WildHorse Resources, LLC, a Delaware limited liability company (Customer), with an address of 9805 Katy Freeway, Suite 400, Houston, Texas 77024. Processor and Customer are sometimes referred to herein individually as a Party and collectively as the Parties.”

WHEREAS, Customer and Processor entered into that certain Gas Processing Agreement dated as of the Effective Date, as amended from time to time (the Agreement).

WHEREAS, the Parties desire to file this Memorandum in the applicable real property records to give notice of the existence of the Agreement and certain provisions contained therein.

NOW THEREFORE, for and in consideration of the premises and mutual covenants contained in the Agreement, the Parties hereby agree as follows:

AGREEMENT

 

1. Term. The term of the Agreement commenced on the Effective Date and, unless terminated sooner in accordance with its terms, continues in effect until fifteen (15) years after the Plant Operational Date (the Primary Term), and shall continue for successive one year terms thereafter (each an Additional Term”) unless the Agreement is terminated by either Party as of the end of the Primary Term or an Additional Term, as applicable.

 

2. Definitions.

Customer Dedicated Leases” means (i) the oil and gas leases described in Schedule 1 attached hereto and (ii) any undeveloped oil and gas leases acquired by Customer or any other Subsidiary in the Dedicated Area after the Effective Date (whether directly from a lessor or acquisitions from other third-parties as lessees).

 

3. Dedication. As used herein, the Dedicated Area shall mean the area described on the plat attached hereto as Schedule 2. Subject to the terms and conditions of the Agreement, Customer has dedicated for processing under the Agreement and, commencing on the Effective Date, shall deliver to Processor the following (the Dedication, and the Gas that is the subject of the Dedication, being herein referred to as the Customer Gas):

(a) all Gas produced and saved from wells now or hereafter located on lands covered by the Customer Dedicated Leases or on lands pooled or unitized therewith to the extent such Gas is attributable to Interests now owned by Customer and/or any other Subsidiary or hereafter acquired by Customer and/or any other Subsidiary, and their respective successors and assigns, and not delivered or used in lease operations as permitted pursuant to the Agreement or otherwise excluded as provided in the Agreement; and

 

EXHIBIT B – Page -1-


(b) with respect to such wells for which Customer and/or any other Subsidiary is the operator, Gas produced from such wells that is attributable to Interests in such wells owned by other working interest owners and royalty owners which is not (i) taken “in-kind” by such working interest owners and royalty owners (and which Customer has the contractual right to deliver under the Agreement) or (ii) delivered or used in lease operations as permitted pursuant to the Agreement, and for which Customer and/or such other Subsidiary has the right and/or obligation to deliver such Gas; provided, however, with respect to Customer Gas that is subject to a Prior Dedication, subject to the Dedication, such Customer Gas may be delivered in accordance with such Prior Dedication.

 

4. Processing Services. Processor has agreed to receive, process, and redeliver Customer Gas and the Plant Products attributable thereto for the fees and on and subject to the terms and conditions provided in the Agreement.

 

5. Covenant Running with the Land. So long as the Agreement is in effect, the Agreement shall (i) be a covenant running with the Interests now owned by Customer and/or any other Subsidiary or hereafter acquired by Customer and/or any other Subsidiary and their respective successors and assigns in the Dedicated Area and (ii) be binding on and enforceable by each Party and its successors and assigns against the other Party and its successors and assigns.

 

6. Incorporation of Terms. The terms and conditions of the Agreement are incorporated herein and made a part hereof for all purposes by this reference. This Memorandum is executed and recorded solely for the purpose of giving notice and shall not amend nor modify the Agreement in any way. Capitalized terms used herein, but not defined herein, shall have the meanings given to such terms in the Agreement.

 

7. Counterparts. This Memorandum may be executed in one or more originals, but all of which together shall constitute one and the same instrument.

[Signature Pages Follow]

 

EXHIBIT B – Page 2


IN WITNESS WHEREOF, this Memorandum has been signed by or on behalf of each of the Parties on the dates set forth in their acknowledgements below, but effective as of the Effective Date.

 

CUSTOMER:
WildHorse Resources, LLC
By:   [Exhibit - Not for Signature]
Name:    
Title:    
PROCESSOR:
PennTex North Louisiana, LLC
By:    
Name:    
Title:    

 

STATE OF TEXAS    §
   §
COUNTY OF HARRIS    §

The foregoing instrument was acknowledged before me by             , the             of WildHorse Resources, LLC, a Delaware limited liability company, on behalf of said limited liability company this             day of             , 2014.

 

   
  Notary Public in and for the State of [            ]

 

EXHIBIT B – Page 3


STATE OF [            ]    §
   §
COUNTY OF [            ]    §

The foregoing instrument was acknowledged before me by             , the             of PennTex North Louisiana, LLC, a Delaware limited liability company, on behalf of said limited liability company this             day of             , 2014.

 

   
  Notary Public in and for the State of [            ]

 

EXHIBIT B – Page 4


EXHIBIT C

SPECIFICATIONS

Gas received at the Point of Delivery shall meet each specification set forth below:

 

*

 

* - Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

EXHIBIT C – Page -1-


EXHIBIT D

AMI

All lands in the State of Louisiana lying north of the township line between townships 14N and 15N, such lands being more particularly depicted as being all lands lying north of the bold red line in the attached map.


 

LOGO


Exhibit “E”

 

Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-ADA0001-001

   RUBY F HAMNER ET AL    GEBCO INC      2/11/1975       359    91    W4204    LA    Bienville

LA-ADA0001-002

   LUCILLE HAMNER COLE ET AL    GEBCO INC      2/17/1975       361    99    W5229    LA    Bienville
            327    17    U9593      

LA-ADA0002-000

   MARY COURTNEY BRYMER ET VIR    GEBCO INC      2/7/1972       327    17    U9593    LA    Bienville

LA-ADA0003-000

   JOE ROSS ET UX    GEBCO INC      3/17/1975       361    10    W4681    LA    Bienville

LA-ADA0004-001

   BESSIE LATHAN    GEBCO INC      7/17/1975       361    132    W5305    LA    Bienville

LA-ADA0004-002

   WILLIE LEE LATHAN    GEBCO INC      4/28/1975       361    88    W5179    LA    Bienville

LA-ADA0004-003

   HAROLD LATHAN    GEBCO INC      4/28/1975       366    149    W7239    LA    Bienville

LA-ADA0005-001

   CORBITT LATHAN    GEBCO INC      2/25/1975       359    99    W4272    LA    Bienville

LA-ADA0005-002

   ERA HAWK JOHNSON ESTATE    GEBCO INC      7/17/1975       361    133    W5306    LA    Bienville

LA-ADA0005-003

   ALICE HAWK BROCKS    GEBCO INC      7/17/1975       361    153    W5471    LA    Bienville

LA-ADA0005-004

   ERA JEAN HENDERSON DAVIS    GEBCO INC      7/17/1975       363    2    W5632    LA    Bienville

LA-ADA0005-005

   JOHN HENDERSON    GEBCO INC      7/17/1975       363    34    W5718    LA    Bienville

LA-ADA0005-006

   HORACE HAWK    GEBCO INC      7/17/1975       363    72    W5931    LA    Bienville

LA-ADA0005-007

   THERESA HAWK    GEBCO INC      7/17/1975       361    151    W5469    LA    Bienville

LA-ADA0005-008

   BERTA HAWK ALLUMS    GEBCO INC      7/17/1975       361    130    W5303    LA    Bienville

LA-ADA0005-009

   WINFRED HAWK    GEBCO INC      8/1/1975       361    131    W5304    LA    Bienville

LA-ADA0005-010

   ROY HAWK    GEBCO INC      12/18/1975       366    113    W6891    LA    Bienville

LA-ADA0005-011

   LORENZO HAWK    GEBCO INC      5/8/1975       361    152    W5470    LA    Bienville

LA-ADA0005-012

   LESTER HAWK    GEBCO INC      4/25/1975       361    159    W5477    LA    Bienville

LA-ADA0007-000

   POLLY AUBREY ET AL    GEBCO INC      2/9/1972       327    16    U9592    LA    Bienville

LA-ADA0008-000

   JERRY W RUSHING    GEBCO INC      7/17/1975       363    52    W5785    LA    Bienville

LA-ADA0009-001

   FANNIE ROSS ROCHELLE ET AL    GEBCO INC      3/27/1975       361    16    W4730    LA    Bienville

LA-ADA0009-002

   ROBERT J ROCHELLE    GEBCO INC      4/2/1975       361    42    W4872    LA    Bienville

LA-ADA0010-001

   DAVID J ROCHELLE JR    FRANKS PETROLEUM INC      1/26/1971       316    2    U4776    LA    Bienville

LA-ADA0010-002

   DASIE MAE ROCHELLE WALKER    FRANKS PETROLEUM INC      1/26/1971       316    3    U4777    LA    Bienville

LA-ARW0001-000

   STEVEN ROCHELLE    KCS MEDALLION RESOURCES INC      12/19/2000       899    138    2001-447    LA    Bienville

LA-ARW0003-000

   EARLY LEE ROCHELLE    KCS MEDALLION RESOURCES INC      5/19/1998       817    199    98-1843    LA    Bienville

LA-ARW0004-000

   BARBARA HARPER RICHARDSON ET AL    LACE OPERATING      7/30/1993       687    246    93-2544    LA    Bienville

LA-ARW0005-000

   HAYNESVILLE MERCANTILE CO    SKLARCO LLC      1/5/2005             20051030    LA    Bienville

LA-ARW0006-001

   MARIE GREER BUTLER S/P    KCS MEDALLION RESOURCES INC      10/4/2000       901    275    2001-748    LA    Bienville

LA-ARW0006-002

   CARL JUSTIN GREER S/P    KCS MEDALLION RESOURCES INC      10/4/2000       895    192    2001-77    LA    Bienville

LA-ARW0006-003

   DARLENE LEE GILMER S/P ET AL    KCS MEDALLION RESOURCES INC      10/27/2000       895    208    2001-82    LA    Bienville

LA-ARW0006-004

   HENRY WILSON GREER S/P    KCS MEDALLION RESOURCES INC      10/4/2000       895    229    2001-89    LA    Bienville

LA-ARW0006-005

   DON D WEBBER S/P    KCS MEDALLION RESOURCES INC      10/12/2000       895    189    2001-76    LA    Bienville

LA-ARW0006-006

   THOMAS L GILMER S/P    KCS MEDALLION RESOURCES INC      10/4/2000       895    183    2001-74    LA    Bienville

LA-ARW0006-007

   GORDIE T GREEN III S/P    KCS MEDALLION RESOURCES INC      10/12/2000       895    259    2001-99    LA    Bienville

LA-ARW0006-008

   BENNIE GREEN MANSHACK SP    KCS MEDALLION RESOURCES INC      10/23/2000       895    265    2001-101    LA    Bienville

LA-ARW0006-009

   EVERETT LEE EDWARDS JR ET UX    KCS MEDALLION RESOURCES INC      10/3/2000       895    271    2001-103    LA    Bienville

LA-ARW0006-010

   MYRTIS LILLIAN JACKS NOLAN S/P    KCS MEDALLION RESOURCES INC      10/4/2000       895    280    2001-106    LA    Bienville

LA-ARW0006-011

   LYNETTE MITCHELL SP    KCS MEDALLION RESOURCES INC      10/18/2000       895    283    2001-107    LA    Bienville

LA-ARW0006-012

   EARL NEWTON GREER SP    KCS MEDALLION RESOURCES INC      10/18/2000       895    289    2001-109    LA    Bienville

LA-ARW0006-013

   GLORIA ANN MADDRY ET AL    KCS MEDALLION RESOURCES INC      10/3/2000       895    292    2001-110    LA    Bienville

LA-ARW0006-014

   PAM ANTHONY SP    KCS MEDALLION RESOURCES INC      10/18/2000       895    322    2001-129    LA    Bienville

LA-ARW0006-015

   JOHN THOMAS GREER SP    KCS MEDALLION RESOURCES INC      10/3/2000       895    223    2001-87    LA    Bienville

LA-ARW0006-016

   BONNIE FAYE FAY SP    KCS MEDALLION RESOURCES INC      10/6/2000       895    328    2001-131    LA    Bienville

LA-ARW0006-017

   LOYD T HAMMONTREE S/P    KCS MEDALLION RESOURCES INC      10/3/2000       895    238    2001-092    LA    Bienville

LA-ARW0006-018

   MARY LEE GREEN LATINO S/P    KCS MEDALLION RESOURCES INC      10/3/2000       895    241    2001-93    LA    Bienville

LA-ARW0006-019

   MARY LUCILLE CHAPMAN S/P    KCS MEDALLION RESOURCES INC      10/4/2000       895    217    2001-85    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-ARW0006-020

   BOBBY GENE GILMER S/P    KCS MEDALLION RESOURCES INC      10/4/2000       895    220    2001-86    LA    Bienville

LA-ARW0006-021

   RONALD WAYNE GILMER S/P    KCS MEDALLION RESOURCES INC      10/6/2000       899    41    2001-398    LA    Bienville

LA-ARW0006-022

   BETH GREEN MERICLE S/P    KCS MEDALLION RESOURCES INC      10/9/2000       896    11    2001-138    LA    Bienville
   BERTIE LEE O’QUIN ET AL                     

LA-ARW0006-023

   WILLIAM AVERY O’QUINN, III    KCS MEDALLION RESOURCES INC      10/3/2000       903    311    2001-969    LA    Bienville

LA-ARW0007-001

   DOROTHY HAMNER STEWART S/P ET AL    KCS MEDALLION RESOURCES INC      10/17/2000       895    232    2001-90    LA    Bienville

LA-ARW0007-002

   IRENE HAMNER HOLDER S/P    KCS MEDALLION RESOURCES INC      10/6/2000       895    274    2001-104    LA    Bienville
   PATRICIA COLE DICKSON S/P                     

LA-ARW0007-003

   C/O ARGENT PROPERTY SERVICES, LLC    KCS MEDALLION RESOURCES INC      10/17/2000       895    186    2001-75    LA    Bienville

LA-ARW0007-004

   COMMUNITY FOUNDATION OF SHREVEPORT-BOSSIER    KCS MEDALLION RESOURCES INC      10/27/2000       895    226    2001-88    LA    Bienville

LA-ARW0007-005

   WASHINGTON & LEE UNIVERSITY    KCS MEDALLION RESOURCES INC      10/30/2000       895    195    2001-78    LA    Bienville

LA-ARW0007-006

   KATHRYN COLE EEDS S/P    KCS MEDALLION RESOURCES INC      10/17/2000       895    250    2001-96    LA    Bienville

LA-ARW0007-007

   GENE ANNE MARTIN REYNOLDS S/P    KCS MEDALLION RESOURCES INC      11/1/2000       895    268    2001-102    LA    Bienville

LA-ARW0007-008

   TIMOTHY H ATKINS S/P    KCS MEDALLION RESOURCES INC      1/24/2001       901    272    2001-747    LA    Bienville
   LEE PATTERSON FUTCH S/P, USAA INVESTMENT MANAGEMENT COMPANY                     

LA-ARW0008-001

   JOHN M FUTCH, AGENT & AIF    KCS MEDALLION RESOURCES INC      10/16/2000       895    325    2001-130    LA    Bienville

LA-ARW0008-002

   BERYL LOUISE WHITE SAUCER S/P    KCS MEDALLION RESOURCES INC      10/6/2000       895    256    2001-98    LA    Bienville

LA-ARW0008-003

   BEVERLY STEWART OSTROSKA S/P    KCS MEDALLION RESOURCES INC      10/16/2000       895    286    2001-108    LA    Bienville

LA-ARW0008-004

   THOMAS B WHITE JR S/P    KCS MEDALLION RESOURCES INC      10/16/2000       895    277    2001-105    LA    Bienville
   ROBERT SINGLETON INDIV AND                     
   AS AGENT AND A-I-F FOR BELEN M SINGLETON                     
   WILLIAM SINGLETON, HUSBAND OF SANDRA                     

LA-ARW0008-005

   SINGLETON    KCS MEDALLION RESOURCES INC      10/2/2000       895    205    2001-81    LA    Bienville

LA-ARW0009-001

   ALBERT L FAULK S/P    KCS MEDALLION RESOURCES INC      12/1/2000       895    198    2001-79    LA    Bienville

LA-ARW0009-002

   MARGARET MELTON MALONE S/P    KCS MEDALLION RESOURCES INC      10/18/2000       895    214    2001-84    LA    Bienville

LA-ARW0009-003

   ELEANOR MELTON RIORDAN S/P    KCS MEDALLION RESOURCES INC      10/23/2000       895    253    2001-97    LA    Bienville

LA-ARW0009-004

   MARCELLE MARIE MASTERSON S/P    KCS MEDALLION RESOURCES INC      10/30/2000       895    247    2001-95    LA    Bienville

LA-ARW0009-005

   JAMES L LOE ET UX    KCS MEDALLION RESOURCES INC      10/18/2000       895    244    2001-94    LA    Bienville

LA-ARW0009-006

   SIDNEY P HUFF III, S/P    KCS MEDALLION RESOURCES INC      10/23/2000       895    211    2001-83    LA    Bienville

LA-ARW0009-007

   H D MELTON III S/P    KCS MEDALLION RESOURCES INC      10/27/2000       899    44    2001-399    LA    Bienville

LA-ARW0009-008

   CAROLYN MELTON MARSH S/P    KCS MEDALLION RESOURCES INC      10/30/2000       895    262    2001-100    LA    Bienville
   HENRY DAYTON THRASH IND & EXEC FOR JANET                     

LA-ARW0009-009

   SMITH THRASH    KCS MEDALLION RESOURCES INC      10/19/2000       895    235    2001-91    LA    Bienville
   LAKEWAY DEVELOPMENT, REPRESENTED BY ROBERT J                     

LA-ARW0010-001

   MCCORMICK, PRESIDENT    KCS RESOURCES INC      2/21/2002       937    293    2002-823    LA    Bienville

LA-ARW0010-002

   MARY BELLE TAYLOR HOLSTEAD ET AL    KCS MEDALLION RESOURCES INC      10/30/2000       895    201    2001-80    LA    Bienville

LA-ARW0010-003

   JACK TURNER TAYLOR JR S/P    KCS MEDALLION RESOURCES INC      10/30/2000       896    14    2001-139    LA    Bienville
   MOSLEY CUSTODIAL TRUST REP NATL INDEPENDENT                     

LA-ARW0010-004

   TRUST CO    KCS MEDALLION RESOURCES INC      2/13/2001       902    222    2001-827    LA    Bienville
   MARY MOSLEY NEWSOM TRUST TRUST COMPANY OF                     

LA-ARW0010-005

   LOUISIANA    KCS MEDALLION RESOURCES INC      10/27/2000       905    323    2001-1189    LA    Bienville

LA-ARW0011-000

   ROBERT PITTS THOMAS S/P    KCS MEDALLION RESOURCES INC      1/13/2001       899    146    2001-448    LA    Bienville

LA-ARW0012-001

   VIRGINIA LEE ROGERS    KCS MEDALLION RESOURCES INC      12/10/2001       947    14    2002-2050    LA    Bienville

LA-ARW0012-002

   TROY S BROWN ET AL    KCS MEDALLION RESOURCES INC      12/7/2000       899    150       LA    Bienville

LA-ARW0012-003

   CHARLES H JOWERS ET UX    KCS MEDALLION RESOURCES INC      12/7/2000       899    155    2001-450    LA    Bienville

LA-ARW0013-001

   LORRAINE R GRAY ET AL    KCS MEDALLION RESOURCES INC      4/30/2001       912    259    2001-2248    LA    Bienville

LA-ARW0013-002

   RUBY DELITHA GRAY S/P    KCS MEDALLION RESOURCES INC      4/30/2001       912    262    2001-2247    LA    Bienville

LA-ARW0013-003

   JOE OREN HARPER JR    WHB EXPLORATION, INC      1/23/1978       390    70       LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   RUBYS WHITLOCK                     

LA-ARW0014-000

   REPRESENTED BY SHIRLEY H JOINER A-I-F    KCS RESOURCES INC      2/14/2002       937    286    2002-822    LA    Bienville
   JIMMIE LEE PARISH BOOKER S/P                     

LA-ARW0025-001

   JUDY TURNER MORRIS, CURATOR    JENCO RESOURCES INC      6/10/1998       819    78    98-2037    LA    Bienville

LA-ARW0025-002

   WILLA B HILL GORDON    JENCO RESOURCES INC      6/1/1998       819    83    98-2040    LA    Bienville

LA-ARW0025-003

   DARYL C HILL    JENCO RESOURCES INC      6/10/1998       821    193    98-2388    LA    Bienville

LA-ARW0025-004

   LYNNWOOD J M HILL    JENCO RESOURCES INC      6/10/1998       835    260    99-238    LA    Bienville

LA-ARW0025-005

   PAULINE HILL CRITTON    JENCO RESOURCES INC      6/1/1998       819    85    98-2041    LA    Bienville

LA-ARW0025-006

   JACQUELINE M HILL VERNON S/P    JENCO RESOURCES INC      6/10/1998       819    87    98-2042    LA    Bienville

LA-ARW0025-007

   DORIS RICHARDSON ET AL    PAR MINERALS CORPORATION      8/16/2001       922    120    2001-3636    LA    Bienville

LA-ARW0025-008

   RODNEY HAYWARD HILL S/P    KCS MEDALLION RESOURCES INC      9/28/2001       926    269    2001-4247    LA    Bienville
   JIMMIE LEE PARISH BOOKER S/P                     

LA-ARW0025-009

   JUDY TURNER MORRIS, CURATOR    PAR MINERALS CORPORATION      7/28/2000       886    175    2000-3390    LA    Bienville

LA-ARW0025-010

   WILLA B HILL GORDON    PAR MINERALS CORPORATION      7/28/2000       886    173    2000-3389    LA    Bienville

LA-ARW0026-000

   DONNA GRIFFITH TOWNS    PAR MINERALS CORPORATION      7/5/2000       886    163    2000-3384    LA    Bienville

LA-ARW0027-001

   CANDY LYNN HORNER S/P    KCS MEDALLION RESOURCES INC      10/10/2001       927    272    2001-4397    LA    Bienville

LA-ARW0027-002

   BENNIE MAE ROCHELLE CATO ET AL    PAR MINERALS CORPORATION      7/6/2000       886    169    2000-3387    LA    Bienville

LA-ARW0027-003

   CURTIS JOHNSON    PAR MINERALS CORPORATION      7/10/2000       892    128    2000-4095    LA    Bienville
   KATHRYN HATTAWAY BROWN INDIV & EXECUTRIX                     

LA-ARW0028-000

   FOR WESLEY H BROWN SR ES    PAR MINERALS CORPORATION      7/5/2000       886    159    2000-3382    LA    Bienville

LA-ARW0029-000

   JAMES Y HATTAWAY ET UX    PAR MINERALS CORPORATION      7/5/2000       886    161    2000-3383    LA    Bienville

LA-ARW0030-001

   JANET ANN MERRITT ROBINSON SEPARATE PROPERTY    JENCO RESOURCES INC      7/9/1998       821    229    98-2406    LA    Bienville

LA-ARW0030-002

   JUDY MERRITT CARTER SEPARATE PROPERTY    JENCO RESOURCES INC      7/9/1998       824    232    98-2407    LA    Bienville

LA-ARW0030-003

   MEREDITH LYNN NOEL DAY    KCS MEDALLION RESOURCES INC      12/15/2000       899    53    2001-402    LA    Bienville

LA-ARW0030-004

   JOHN C MERRITT SEPARATE PROPERTY    JENCO RESOURCES INC      7/8/1998       825    92    98-3032    LA    Bienville

LA-ARW0030-005

   BEVERLY GANTT MAZZA    KCS MEDALLION RESOURCES INC      12/14/2000       899    56    2001-403    LA    Bienville

LA-ARW0030-006

   VERONICA LANDRY HARRIS S/P    KCS MEDALLION RESOURCES INC      12/18/2000       899    160    2001-451    LA    Bienville

LA-ARW0030-007

   JOHN FOREST BAKER S/P    KCS MEDALLION RESOURCES INC      1/16/2001       900    71    2001-552    LA    Bienville

LA-ARW0030-008

   PATSY BAKER CRAMER S/P    KCS MEDALLION RESOURCES INC      12/14/2000       899    83    2001-414    LA    Bienville

LA-ARW0030-009

   JAMES NATHAN STEWART    KCS MEDALLION RESOURCES INC      1/18/2001       899    320    2001-502    LA    Bienville

LA-ARW0030-010

   JAMES KEITH BAKER II    KCS MEDALLION RESOURCES INC      12/14/2000       899    59    2001-404    LA    Bienville

LA-ARW0030-011

   JUAN R BAKER    KCS MEDALLION RESOURCES INC      1/16/2001       899    323    2001-503    LA    Bienville

LA-ARW0030-012

   LISA LANDRY MATHEWS S/P    KCS MEDALLIAN RESOURCES INC      12/18/2000       906    1    2001-1190    LA    Bienville

LA-ARW0031-000

   JOHN T PYLES A SINGLE MAN    PAR MINERALS CORPORATION      7/10/2000       886    171    2000-3388    LA    Bienville

LA-ARW0032-000

   RANDY L EWING ET AL    JENCO RESOURCES INC      8/7/2000       883    277    2000-3116    LA    Bienville

LA-ARW0033-000

   JOHN CHARLES THURMOND ET AL    JENCO RESOURCES INC      3/31/1998       817    123    98-1800    LA    Bienville

LA-ARW0034-000

   ROBERT L KIDD ET UX    JENCO RESOURCES INC      6/23/1998       819    91    98-2044    LA    Bienville

LA-ARW0035-000

   DEE D JOWERS ET UX    PAR MINERALS CORPORATION      9/25/2000       886    282    2000-3423    LA    Bienville

LA-ARW0036-000

   WILLAMETTE INDUSTRIES INC    JENCO RESOURCES INC      8/31/2000       883    285    2000-3117    LA    Bienville

LA-ARW0037-001

   DANIEL WESLEY REED SP    JENCO RESOURCES INC      6/9/1998       821    237    98-2409    LA    Bienville

LA-ARW0037-002

   ROWLAND EVANS REED SP    JENCO RESOURCES INC      6/9/1998       821    239    98-2410    LA    Bienville

LA-ARW0037-003

   ROBERT MANRY REED A SINGLE MAN    JENCO RESOURCES INC      10/16/1998       830    16    98-3648    LA    Bienville

LA-ARW0037-004

   REBECCA MONTANO AKA REBECCA REED WRIGHT    PAR MINERALS CORPORATION      7/10/2000       886    167    2000-3386    LA    Bienville

LA-ARW0038-000

   HORACE RAY CREASY ET UX    JENCO RESOURCES INC      4/1/1998       817    126    98-1801    LA    Bienville

LA-ARW0039-000

   JOHNNY W BOOKER    JENCO RESOURCES INC      3/30/2001       908    142    2001-1583    LA    Bienville

LA-ARW0040-001

   JOHN BAKER BARR A WIDOWER    JENCO RESOURCES INC      7/21/1998       825    80    98-3028    LA    Bienville

LA-ARW0040-002

   DON OTHO MCGEE BAKER JR SP    PAR MINERALS CORPORATION      7/6/2000       886    165    2000-3385    LA    Bienville

LA-ARW0040-003

   CAROLE B BENNETT SP    JENCO RESOURCES INC      7/21/1998       825    83    98-3029    LA    Bienville

LA-ARW0040-004

   BAKER FORESTS LP    JENCO RESOURCES INC      7/21/1998       825    97    98-3034    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-ARW0040-005

   LEWIS TURNER BAKER JR SP    JENCO RESOURCES INC      7/21/1998       825    89    98-3031    LA    Bienville

LA-ARW0040-006

   ANNE B JONES A WIDOW ET AL    JENCO RESOURCES INC      7/21/1998       825    86    98-3030    LA    Bienville

LA-ARW0040-007

   GENE MAXWELL BAKER SEPARATE PROPERTY    KCS RESOURCES INC      5/24/2002       945    149    2002-1827    LA    Bienville

LA-ARW0041-001

   MARY ALMA COURTNEY BRYMER A WIDOW    JENCO RESOURCES INC      6/23/1998       821    181    98-2382    LA    Bienville

LA-ARW0041-002

  

BARBARA COURTNEY LAND SP

FRANCIS W COURTNEY AKA CHARLEEN W COURTNEY

   JENCO RESOURCES INC      6/23/1998       821    183    98-2383    LA    Bienville

LA-ARW0041-003

   SP    JENCO RESOURCES INC      6/23/1998       821    185    98-2384    LA    Bienville

LA-ARW0041-004

   LOUISE B COURTNEY A WIDOW    JENCO RESOURCES INC      6/23/1998       821    189    98-2386    LA    Bienville

LA-ARW0041-P05

   JACK M LAND JR    JENCO RESOURCES INC      6/23/1998       821    187    98-2385    LA    Bienville

LA-ARW0042-000

   BARBARA COURTNEY LAND ET VIR    JENCO RESOURCES INC      6/23/1998       821    191    98-2387    LA    Bienville

LA-ARW0043-000

   ROBERT RICHARDSON JR ET UX    JENCO RESOURCES INC      5/26/1998       817    128    98-1802    LA    Bienville

LA-ARW0044-000

   PRENTIS LATHAN ET AL    JENCO RESOURCES INC      4/21/1998       817    119    98-1798    LA    Bienville

LA-ARW0045-000

   VERNON LATHAN S/P    JENCO RESOURCES INC      6/9/1998       819    89    98-2043    LA    Bienville

LA-ARW0046-000

   RUTH ANN LATHAN SCOTT    JENCO RESOURCES INC      4/24/1998       819    79    98-2038    LA    Bienville

LA-ARW0047-000

   RUBY ANN LATHAN SCOTT SP    JENCO RESOURCES INC      4/24/1998       819    81    98-2039    LA    Bienville

LA-ARW0048-000

   HENDERSON LATHAN A SINGLE MAN    JENCO RESOURCES INC      4/22/1998       817    117    98-1797    LA    Bienville

LA-ARW0049-000

   ORA LEE LATHAN HUNTER A SINGLE WOMAN    JENCO RESOURCES INC      5/11/1998       817    130    98-1803    LA    Bienville

LA-ARW0050-000

   POLLY LATHAN SANDERS SP    JENCO RESOURCES INC      4/22/1998       817    121    98-1799    LA    Bienville

LA-ARW0053-001

   VIRGINIA DELL RHODES A SINGLE WOMAN    JENCO RESOURCES INC      7/16/1998       825    211    98-3092    LA    Bienville

LA-ARW0053-002

   BETTY RHODES BRADLEY SP    JENCO RESOURCES INC      7/16/1998       825    213    98-3093    LA    Bienville

LA-ARW0053-003

   WILLIE MAE RHODES DANIEL SP    JENCO RESOURCES INC      7/16/1998       825    215    98-3094    LA    Bienville

LA-ARW0053-004

   ANNIE MAE RHODES ROSS SP    JENCO RESOURCES INC      7/16/1998       825    217    98-3095    LA    Bienville

LA-ARW0053-005

   ALBERTA RHODES KING SP    JENCO RESOURCES INC      7/16/1998       825    219    98-3096    LA    Bienville

LA-ARW0053-006

   ESTER RHODES JR A SINGLE MAN    JENCO RESOURCES INC      7/16/1998       821    241    98-2411    LA    Bienville

LA-ARW0054-000

   C A KIDD JR ET UX    JENCO RESOURCES INC      7/1/1998       821    207    98-2395    LA    Bienville

LA-ARW0055-000

   PHILIP L TOWNS ET UX    KCS MEDALLION RESOURCES INC      9/28/2001       926    3    2001-4152    LA    Bienville

LA-ARW0056-000

   VIRGINIA RHEA AUBREY HARVEY    JENCO RESOURCES INC      7/27/1998       825    208    98-3091    LA    Bienville

LA-ARW0057-000

   ORA ELIZABETH HUCKABAY TOWNS S/P    JENCO RESOURCES INC      5/26/1998       817    132    98-1804    LA    Bienville

LA-ARW0058-000

   MT LEBANON BAPTIST CHURCH    JENCO RESOURCES INC      7/15/1998       822    56    98-2486    LA    Bienville

LA-ARW0059-000

   MT LEBANON HISTORICAL SOCIETY    JENCO RESOURCES INC      7/15/1998       822    52    98-2485    LA    Bienville

LA-ARW0060-000

   STEVEN P STROUD ET UX    KCS MEDALLION RESOURCES INC      12/1/2000       899    50    2001-401    LA    Bienville

LA-ARW0061-000

   PHILLIP L TOWNS    JENCO RESOURCES INC      7/17/1998       821    243    98-2412    LA    Bienville

LA-ARW0062-001

   LANNIS BRACKENS ET AL    PAR MINERALS CORPORATION      4/20/1999       847    36    99-1989    LA    Bienville

LA-ARW0062-002

   EDWARD BRACKENS    PAR MINERALS CORPORATION      4/20/1999       847    34    99-1988    LA    Bienville

LA-ARW0063-001

   KIMBERLY HILL BRAGDON    PAR MINERALS CORPORATION      4/27/1999       847    97    99-2018    LA    Bienville

LA-ARW0063-002

   ANTHONY BRYANT AKA A W BRYANT    PAR MINERALS CORPORATION      4/27/1999       847    95    99-2017    LA    Bienville

LA-ARW0063-003

   BARBARA ANN HILL S/P    PAR MINERALS CORPORATION      4/27/1999       847    129    99-2034    LA    Bienville

LA-ARW0063-004

   TODD J HILL S/P    PAR MINERALS CORPORATION      4/27/1999       847    99    99-2019    LA    Bienville

LA-ARW0063-005

   EVELYN HILL JACKSON ET UX    PAR MINERALS CORPORATION      4/27/1999       847    89    99-2014    LA    Bienville

LA-ARW0063-006

   OREATHA HILL REYNOLDS S/P    PAR MINERALS CORPORATION      4/27/1999       847    119    99-2029    LA    Bienville

LA-ARW0063-007

   BERNICE HILL WATSON S/P    PAR MINERALS CORPORATION      4/27/1999       847    123    99-2031    LA    Bienville

LA-ARW0063-008

   JERRY HILL S/P ET AL    PAR MINERALS CORPORATION      4/27/1999       847    101    99-2020    LA    Bienville

LA-ARW0064-001

   WAYNE P SUTTON    PAR MINERALS CORPORATION      4/14/1999       847    57    99-1998    LA    Bienville

LA-ARW0064-002

   LAURA J SUTTON HUNTER    PAR MINERALS CORPORATION      4/14/1999       847    55    99-1997    LA    Bienville

LA-ARW0065-001

   PAUL HARLAN ET UX    PAR MINERALS CORPORATION      5/4/1999       847    43    99-1991    LA    Bienville

LA-ARW0065-002

   MARY PYE CONDREN    PAR MINERALS CORPORATION      5/12/1999       847    51    99-1995    LA    Bienville

LA-ARW0065-003

   FRANCES PYE MCELVEEN    PAR MINERALS CORPORATION      5/12/1999       847    49    99-1994    LA    Bienville

LA-ARW0065-004

   BETTY GLEN PYE SIMON    PAR MINERALS CORPORATION      5/12/1999       847    45    99-1992    LA    Bienville

LA-ARW0065-005

   CYNTHIA PYE WHITTLE    PAR MINERALS CORPORATION      5/12/1999       847    47    99-1993    LA    Bienville

LA-ARW0065-006

   NELL PYE SWEETEN    PAR MINERALS CORPORATION      5/12/1999       847    53    99-1996    LA    Bienville

LA-ARW0066-001

   LULA B ANDERSON S/P    PAR MINERALS CORPORATION      4/20/1999       847    73    99-2006    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-ARW0066-002

   OLETHA STROMAN BELL S/P    PAR MINERALS CORPORATION      4/12/1999       847    79    99-2009    LA    Bienville

LA-ARW0066-003

   FLOYD BRYANT    PAR MINERALS CORPORATION      5/26/1999       847    131    99-2035    LA    Bienville

LA-ARW0066-004

   CHARLES BRYANT JR    PAR MINERALS CORPORATION      5/26/1999       850    313    99-2606    LA    Bienville

LA-ARW0066-005

   SYBELLINE L CHANDLER    PAR MINERALS CORPORATION      5/24/1999       847    105    99-2022    LA    Bienville

LA-ARW0066-006

   EARNESTINE HILL CLARK S/P    PAR MINERALS CORPORATION      4/1/1999       847    77    99-2008    LA    Bienville

LA-ARW0066-007

   LOU ELLA COCKERHAM    PAR MINERALS CORPORATION      4/13/2000       883    36    2000-2972    LA    Bienville

LA-ARW0066-008

   HATTIE MAE HILL COOPER S/P ET AL    PAR MINERALS CORPORATION      4/20/1999       883    69    99-2004    LA    Bienville

LA-ARW0066-009

   LONNIE DAVIS S/P ET AL    PAR MINERALS CORPORATION      4/7/1999       883    81    99-2010    LA    Bienville

LA-ARW0066-010

   A EUGENE FRAZIER    PAR MINERALS CORPORATION      4/22/1999       883    93    99-2016    LA    Bienville

LA-ARW0066-011

   ELBERT GIPSON    PAR MINERALS CORPORATION      6/9/1999       850    315    99-2607    LA    Bienville

LA-ARW0066-012

   JOHN L GIPSON    PAR MINERALS CORPORATION      6/9/1999       883    46    2000-2977    LA    Bienville

LA-ARW0066-013

   ORA SANDERS GREEN    PAR MINERALS CORPORATION      4/13/1999       847    59    99-1999    LA    Bienville

LA-ARW0066-014

   ARTHUR RAY HARDY S/P    PAR MINERALS CORPORATION      4/24/1999       847    111    99-2025    LA    Bienville

LA-ARW0066-015

   OLA L HARRIS S/P    PAR MINERALS CORPORATION      4/20/1999       847    65    99-2002    LA    Bienville

LA-ARW0066-016

   BOBBY JOE HILL S/P    PAR MINERALS CORPORATION      3/16/2000       883    38    2000-2973    LA    Bienville

LA-ARW0066-017

   SANDRA GAIL HILL S/P    PAR MINERALS CORPORATION      4/15/1999       847    109    99-2024    LA    Bienville

LA-ARW0066-018

   WILLIAM HILL S/P    PAR MINERALS CORPORATION      4/17/1999       847    83    99-2011    LA    Bienville

LA-ARW0066-019

   T W HILL S/P    PAR MINERALS CORPORATION      4/17/1999       847    107    99-2023    LA    Bienville

LA-ARW0066-020

   WILLIAM M HILL S/P    PAR MINERALS CORPORATION      4/7/1999       847    85    99-2012    LA    Bienville

LA-ARW0066-021

   ANNIE MAE LYLES S/P    PAR MINERALS CORPORATION      4/10/2000       828    225    2000-2398    LA    Bienville

LA-ARW0066-022

   BERNICE JOHNSON S/P    PAR MINERALS CORPORATION      4/7/1999       847    75    99-2007    LA    Bienville

LA-ARW0066-023

   JUDGE HILL III S/P    PAR MINERALS CORPORATION      3/16/2000       883    48    2000-2978    LA    Bienville

LA-ARW0066-024

   JOHN HILL S/P ET AL    PAR MINERALS CORPORATION      5/8/1999       47    113    99-2026    LA    Bienville

LA-ARW0066-025

   JOHN MOORE JR    PAR MINERALS CORPORATION      5/24/1999       847    103    99-2021    LA    Bienville

LA-ARW0066-026

   RILEY MURPHY    PAR MINERALS CORPORATION      6/10/1999       847    125    99-2032    LA    Bienville

LA-ARW0066-027

   CURTIS L MURPHY SR    PAR MINERALS CORPORATION      6/10/1999       847    121    99-2030    LA    Bienville

LA-ARW0066-028

   LIZA MURPHY NELSON    PAR MINERALS CORPORATION      6/10/1999       847    127    99-2033    LA    Bienville

LA-ARW0066-029

   RUTH LEE NEWMAN    PAR MINERALS CORPORATION      5/24/1999       847    117    99-2028    LA    Bienville

LA-ARW0066-030

   BARBARA ANN PEOPLES S/P    PAR MINERALS CORPORATION      5/8/1999       847    115    99-2027    LA    Bienville

LA-ARW0066-031

   J W SANDERS JR S/P    PAR MINERALS CORPORATION      4/12/1999       847    87    99-2013    LA    Bienville

LA-ARW0066-032

   LINDA HILL SNEED S/P    PAR MINERALS CORPORATION      3/12/2000       883    28    2000-2968    LA    Bienville

LA-ARW0066-033

   VIDELURE H STRINGFELLOW S/P    PAR MINERALS CORPORATION      4/15/1999       847    91    99-2015    LA    Bienville

LA-ARW0066-034

   DIMP ST ROMAN S/P    PAR MINERALS CORPORATION      4/15/1999       847    61    99-2000    LA    Bienville

LA-ARW0066-035

   JETHRO STROMAN S/P    PAR MINERALS CORPORATION      4/15/1999       847    63    99-2001    LA    Bienville

LA-ARW0066-036

   JOHN S TURNER JR S/P    PAR MINERALS CORPORATION      3/20/2000       883    32    2000-2970    LA    Bienville

LA-ARW0066-037

   BRENDA JOYCE HILL WARE S/P ET AL    PAR MINERALS CORPORATION      4/17/1999       878    221    2000-2396    LA    Bienville

LA-ARW0066-038

   GEORGIA H WASHINGTON S/P    PAR MINERALS CORPORATION      4/18/1999       847    71    99-2005    LA    Bienville

LA-ARW0066-039

   ETHEL MAE WILLIS S/P    PAR MINERALS CORPORATION      4/10/2000       883    30    2000-2969    LA    Bienville

LA-ARW0066-040

   ESSIE H WINZER S/P    PAR MINERALS CORPORATION      4/20/1999       847    67    99-2003    LA    Bienville

LA-ARW0066-041

   BOBBY RAY PEOPLES S/P    PAR MINERALS CORPORATION      11/30/2000       952    968    2002-3533    LA    Bienville

LA-ARW0066-042

   LESTER RAY SANDERS S/P    PAR MINERALS CORPORATION      12/4/2000       952    962    2002-3530    LA    Bienville

LA-ARW0066-043

   JOHN BRYANT III S/P    PAR MINERALS CORPORATION      5/30/2000       889    112    2000-3792    LA    Bienville

LA-ARW0066-044

   MONICA ELDER S/P    PAR MINERALS CORPORATION      5/30/2000       952    960    2002-3529    LA    Bienville

LA-ARW0066-045

   LEO BRYANT AKA LEO L BRYANT S/P    PAR MINERALS CORPORATION      5/30/2000       952    958    2002-3528    LA    Bienville

LA-ARW0066-046

   EMMA LEE QUALLS S/P    PAR MINERALS CORPORATION      4/10/2000       878    229    2000-2400    LA    Bienville

LA-ARW0066-047

   EUGENE HARDY S/P    PAR MINERALS CORPORATION      5/18/2000       878    227    2000-2399    LA    Bienville

LA-ARW0066-048

   JOHN D BRYANT JR S/P    PAR MINERALS CORPORATION      5/30/2000       883    42    2000-2975    LA    Bienville

LA-ARW0066-049

   JOHN W HILL S/P    PAR MINERALS CORPORATION      8/29/2000       887    126    2000-3535    LA    Bienville

LA-ARW0067-000

   BETTY WOODARD EVANS    PAR MINERALS CORPORATION      3/12/1999       847    32    99-1987    LA    Bienville

LA-BCR0001-000

   GEORGE D PIPES ET AL    C H MURPHY JR      10/22/1947       171    48    14317    LA    Bienville

LA-BCR0002-001

   HODGE-HUNT LUMBER CO    C H MURPHY JR      4/28/1948       174    128       LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-BCR0003-000

   ANGELA R. VOIVEDICH REVOCABLE TRUST OF 1999    ANADARKO PETROLEUM CORPORATION      5/14/2005             2005-5023    LA    Bienville

LA-BCR0004-000

   DAVIS BROTHERS, AGENTS    DAVIS BROTHERS AGENTS      4/21/2008             2008-1787    LA    Bienville

LA-CTR0001-001

   KINGFISHER RESOURCES INC    STRAT LAND EXPL CO      1/27/2004       969    256       LA    Bienville

LA-CTR0001-002

   HUNT PETROLEUM CORPORATION    STRAT LAND EXPL CO      12/9/2002       954    886       LA    Bienville

LA-CTR0001-003

   PETRO-HUNT LLC    STRAT LAND EXPL CO      1/14/2003       955    159       LA    Bienville

LA-CTR0002-001

   NELWYN WHITLEY HAWKINS    STRAT LAND EXPL CO      12/21/2002       955    662       LA    Bienville

LA-CTR0002-002

   DELWYN WHITLEY PRIEST ET AL    STRAT LAND EXPL CO      12/21/2002       955    659       LA    Bienville
   FAYE H NAZON, INDIV & AS SUCCESSOR TRUSTEE                     
   UNDER THE FAYE H NAZON DECLARATION OF TRUST                     

LA-CTR0003-000

   DTD 06/27/01    STRAT LAND EXPL CO      11/1/2002       955    791       LA    Bienville
   WEYERHAEUSER COMPANY                     

LA-CTR0004-000

   BY DAVID L GODWIN DIRECTOR MINERAL RESOURCES    STRAT LAND EXPL CO      9/29/2004             2005-1536    LA    Bienville
                  2008-1235      

LA-LBH0001-001

   WEYERHAEUSER COMPANY    PLANTATION OPERATING LLC      1/8/2008             20112282    LA    Bienville
                  2008-0389      

LA-LBH0001-002

   WEYERHAEUSER COMPANY    PLANTATION OPERATING LLC      1/8/2008             20112283    LA    Bienville
                  2007-2924      
                  20112302      
                  20101854      
                  2007-2924      
   LOUISIANA MINERALS LTD., A TEXAS LIMITED                20112302      

LA-LBH0002-001

   PARTNERSHIP    ANADARKO PETROLEUM CORPORATION      5/14/2007             20101854    LA    Bienville
                  2008-1625      

LA-LBH0002-002

   KENNETH R HOLLEY S/P    TAGCO INC      3/12/2008             20081625    LA    Bienville
   MARY E. MCILWAIN JOHNSON                2008-1628      

LA-LBH0002-003

   S/P    TAGCO INC      3/12/2008             2008-1628    LA    Bienville
   LANE ALLISON SEIBERT LARSON                2008-1630      

LA-LBH0002-004

   S/P    TAGCO INC      3/11/2008             2008-1630    LA    Bienville
                  2008-1631      

LA-LBH0002-005

   MARY LOIS FLEMING MCILWAIN S/P    TAGCO INC      2/20/2008             2008-1631    LA    Bienville
                  2008-1629      

LA-LBH0002-006

   JOHN C. KRONER, IV, S/P    TAGCO INC      3/18/2008             2008-1629    LA    Bienville
   MARGARET H. MOORE REVOCABLE TRUST, BY                2008-1633      

LA-LBH0002-007

   MARGARET H. MOORE, TRUSTEE    TAGCO INC      3/18/2008             2008-1633    LA    Bienville
                  2008-1632      

LA-LBH0002-008

   LISA KRONER MILLER, S/P    TAGCO INC      3/1/2008             2008-1632    LA    Bienville
                  2008-2957      

LA-LBH0002-009

   T. HUNT PAYNE, S/P    TAGCO INC      6/3/2008             2008-2957    LA    Bienville
                  2008-1637      

LA-LBH0002-010

   SUSAN ALCIE SEIBERT MULLINS    TAGCO INC      3/11/2008             2008-1637    LA    Bienville
   JOHN T. PAYNE, A SINGLE MAN DEALING WITH HIS                     

LA-LBH0002-011

   SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1639    LA    Bienville
                  2008-2958      

LA-LBH0002-012

   JOSEPH FRANCOIS PECARRERE, SR., A WIDOWER    TAGCO INC      3/25/2008             2008-2958    LA    Bienville
                  2008-1626      

LA-LBH0002-013

   NANCY HOLLEY HORTON, S/P    TAGCO INC      3/12/2008             2008-1626    LA    Bienville
   ALBERT J. HOLLEY, JR., DEALING WITH HIS SEPARATE                2008-1624      

LA-LBH0002-014

   PROPERTY    TAGCO INC      3/19/2008             2008-1624    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   JANE FLEMING PANCHERI, A MARRIED PERSON                     

LA-LBH0002-015

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-1638    LA    Bienville
   THOMAS M. HUNT, WIDOWER OF ADELAIDE                     

LA-LBH0002-016

   MURDOCK HUNT    TAGCO INC      2/7/2008                LA    Bienville
   DANNY C. BAIRD, A MARRIED PERSON DEALING WITH                     

LA-LBH0002-017

   HIS SEPARATE PROPERTY    TAGCO INC      3/1/2008             2008-1609    LA    Bienville
   MARY HUNT BOUTWELL, A MARRIED PERSON                     

LA-LBH0002-018

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1611    LA    Bienville
   JULIA M. KRONER ADAMS, A MARRIED PERSON                     

LA-LBH0002-019

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      3/1/2008             2008-1608    LA    Bienville
   JAYNE HODGE BLACK, A MARRIED PERSON DEALING                     

LA-LBH0002-020

   WITH HER SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-1610    LA    Bienville
   ANN TURBEVILLE CAMPBELL, A MARRIED PERSON                     

LA-LBH0002-021

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1612    LA    Bienville
   CAROLYN HODGE TURNER, A MARRIED PERSON                     

LA-LBH0002-022

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1652    LA    Bienville

LA-LBH0002-023

   MICHELLE BETH SLUNG, A SINGLE PERSON    TAGCO INC      3/12/2008             2008-1644    LA    Bienville
   MARY MARGARET HODGE SOUR, A WIDOW, DEALING                     

LA-LBH0002-024

   WITH HER SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1648    LA    Bienville
   MARSHA FLEMING EATHERTON, A MARRIED PERSON                     

LA-LBH0002-025

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1617    LA    Bienville
   ROBERT HODGE TURBEVILLE, A MARRIED PERSON                     

LA-LBH0002-026

   DEALING WITH HIS SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1651    LA    Bienville
   MARY JAYNE TURBEVILLE FOGERTY, A MARRIED                     

LA-LBH0002-027

   PERSON    TAGCO INC      2/20/2008             2008-1620    LA    Bienville
   DARNELL HOLDINGS, LLC, BY JULIA TURBEVILLE                     

LA-LBH0002-028

   DARNELL, MANAGER    TAGCO INC      2/20/2008             2008-1613    LA    Bienville
   JOHN M. SOUR, A MARRIED PERSON DEALING WITH                     

LA-LBH0002-029

   HIS SEPARATE PROPERTY    TAGCO INC      3/1/2008             2008-1646    LA    Bienville
   KATHLEEN FERGUSON HART, A SINGLE PERSON                     

LA-LBH0002-030

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-2162    LA    Bienville
   ESTHER H. WELCH, A MARRIED PERSON DEALING                     

LA-LBH0002-031

   WITH HER SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-1654    LA    Bienville
   THOMAS FINCH, DEALING WITH HIS SEPARATE                     

LA-LBH0002-032

   PROPERTY    TAGCO INC      3/12/2008             2008-1619    LA    Bienville

LA-LBH0002-033

   DEREK WILLIAM SEIBERT, SINGLE    TAGCO INC      3/11/2008             2008-1642    LA    Bienville

LA-LBH0002-034

   JOHN A. HICKMAN, SINGLE    TAGCO INC      3/12/2008             2008-1623    LA    Bienville

LA-LBH0002-035

   MELISSA K. MCILWAIN STARLING    TAGCO INC      3/12/2008             2008-1649    LA    Bienville

LA-LBH0002-036

   ERIC JOHN SEIBERT, SINGLE    TAGCO INC      3/11/2008             2008-1643    LA    Bienville
   JOHN GLASSELL, III, TESTAMENTARY TRUST, BY                     

LA-LBH0002-037

   CAROLYN HODGE TURNER AS TRUSTEE    TAGCO INC      2/20/2008             2008-1621    LA    Bienville
   BENJAMIN NEWTON HARGIS, SEPARATE PROPERTY,                     

LA-LBH0002-038

   SUSAN FRANCIS HARGIS    TAGCO INC      3/14/2008             2008-1622    LA    Bienville
   HARRY B. FLEMING, IV, A MARRIED PERSON DEALING                     

LA-LBH0002-039

   WITH HIS SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-2951    LA    Bienville
   STEWART HUNT, A MARRIED PERSON DEALING WITH                     

LA-LBH0002-040

   HIS SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1627    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   COMADORA MILLARD FERGUSON, JR., DEALING WITH                     

LA-LBH0002-041

   HIS SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-1618    LA    Bienville
   LUCY HUNT DETERDING, A MARRIED PERSON DEALING                     

LA-LBH0002-042

   WITH HER SEPARATE PROPERTY    TAGCO INC      2/20/2008             2008-1614    LA    Bienville
   TRACY FINCH CAIN, A MARRIED PERSON DEALING                     

LA-LBH0002-043

   WITH HER SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-4304    LA    Bienville
   ROBERT BATT DAVIS, REVOCABLE TRUST, BY ROBERT                     

LA-LBH0002-044

   BATT DAVIS, JR., TRUSTEE    TAGCO INC      3/12/2008             2008-1641    LA    Bienville

LA-LBH0002-045

   RICHARD L. DUBBS, A WIDOWER    TAGCO INC      3/12/2008             2008-1615    LA    Bienville
   JPMORGAN CHASE FOUNDATION OF NORTHWEST                     

LA-LBH0002-046

   LOUISIANA, JPMORGAN CHASE BANK, N.A., TRUSTEE    TAGCO INC      4/4/2008             2008-2955    LA    Bienville

LA-LBH0002-047

   JOAN L. WARREN, A WIDOW    TAGCO INC      3/19/2008             2008-1653    LA    Bienville
   RUBY HOLLEY PETERSON, A MARRIED PERSON                     

LA-LBH0002-048

   DEALING WITH HER SEPARATE PROPERTY    TAGCO INC      3/12/2008             2008-1640    LA    Bienville

LA-LBH0002-049

   LEWIS HAMILTON EATHERTON, III    TAGCO INC      3/12/2008             2008-1616    LA    Bienville
   EDWIN W. SOUR, MARRIED AND DEALING WITH HIS                     

LA-LBH0002-050

   SEPARATE PROPERTY    TAGCO INC      3/1/2008             2008-1645    LA    Bienville

LA-LBH0002-051

   MARGARET STACY SOUR, A SINGLE WOMAN    TAGCO INC      3/1/2008             2008-1647    LA    Bienville

LA-LBH0002-052

   FRANK FINCH    FRANK FINCH      9/29/2008             2009-0822    LA    Bienville

LA-LBH0002-053

   TIMOTHY FINCH    TAGCO INC      9/29/2008             2009-1812    LA    Bienville
   CHARLES C. MOORE III, A MARRIED PERSON DEALING                     

LA-LBH0002-054

   WITH HIS SEPARATE PROPERTY    TAGCO INC      3/18/2008             2008-1634    LA    Bienville
   CHESTER HALL MOORE, A MARRIED PERSON DEALING                     

LA-LBH0002-055

   WITH HIS SEPARATE PROPERTY    TAGCO INC      3/18/2008             2008-2161    LA    Bienville
   CLIFTON S. MOORE, A MARRIED PERSON DEALING                     

LA-LBH0002-056

   WITH HIS SEPARATE PROPERTY    TAGCO INC      3/18/2008             2008-1635    LA    Bienville

LA-LBH0002-057

   MARGARET E. MOORE, A SINGLE PERSON    TAGCO INC      3/18/2008             2008-1636    LA    Bienville
   LOUISIANA MINERALS LTD., A TEXAS LIMITED                     

LA-LBH0002-058

   PARTNERSHIP    ANADARKO PETROLEUM CORPORATION      5/13/2006             2006-2608    LA    Bienville

LA-LBH0002-059

   THOMAS HARLAN FINCH, JR.    GOLDSTON OIL CORPORATION      7/31/2008             2008-5371    LA    Bienville
   JOAN L. WARREN, WIDOW OF JAMES BENJAMIN                     

LA-LBH0002-060

   WARREN; J. BENJAMIN WARREN, JR    TAPPER RESOURCES INC      10/31/2008             2008-5009    LA    Bienville

LA-LBH0002-061

   MARGARET H. MOORE, WIDOW OF CHARLES C. MOOR GOLDSTON OIL CORPORATION         6/5/2008             2008-3142    LA    Bienville

LA-LBH0002-062

   SHELIA M. HOLLEY ALSUP, A SINGLE WOMAN    GOLDSTON OIL CORPORATION      2/4/2008             2008-4744    LA    Bienville

LA-LBH0002-063

   MARTHA N. SURLINE, WIFE OF HARRY D. SURLINE    GOLDSTON OIL CORPORATION      5/19/2008             2008-3986    LA    Bienville

LA-LBH0002-064

   TRACY FINCH CAIN, WIFE OF JOHN M. CAIN    GOLDSTON OIL CORPORATION      7/31/2008             2008-3985    LA    Bienville

LA-LBH0002-065

   JOHN A. HICKMAN, SINGLE    GOLDSTON OIL CORPORATION      8/4/2008             2008-3984    LA    Bienville
   JPMORGAN CHASE FOUNDATION OF NORTHWEST                     

LA-LBH0002-066

   LOUISIANA    GOLDSTON OIL CORPORATION      7/7/2008             2008-3307    LA    Bienville

LA-LBH0002-067

   HARRY B. FLEMING, HUSBAND OF GAYLE F. FLEMING    GOLDSTON OIL CORPORATION      5/22/2008             2008-3148    LA    Bienville
   MARY E. MCILWAIN JOHNSON, WIFE OF JOHN L.                     

LA-LBH0002-068

   JOHNSON    GOLDSTON OIL CORPORATION      2/11/2008             2008-3147    LA    Bienville
   BENJAMIN N. HARGIS, SUSAN FRANCES HARGIS, JOHN                     

LA-LBH0002-069

   GOLDING THOMPSON, III    GOLDSTON OIL CORPORATION      5/21/2008             2008-2622    LA    Bienville

LA-LBH0002-070

   DEREK WILLIAM SEIBERT, SINGLE    GOLDSTON OIL CORPORATION      5/23/2008             2008-2621    LA    Bienville

LA-LBH0002-071

   CARO P. DOUGHTY, WIFE OF SEVERN C. DOUGHTY    GOLDSTON OIL CORPORATION      5/20/2008             2008-2620    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   SUSAN ALICE SEIBERT MULLINS, WIFE OF BRIAN                     

LA-LBH0002-072

   MULLINS    GOLDSTON OIL CORPORATION      5/23/2008             2008-2619    LA    Bienville

LA-LBH0002-073

   MELISSA K. STARLING, SINGLE    GOLDSTON OIL CORPORATION      5/22/2008             2008-2618    LA    Bienville

LA-LBH0002-074

   DANNY C. BAIRD, HUSBAND OF GERALDINE R. BAIRD    GOLDSTON OIL CORPORATION      5/22/2008             2008-2617    LA    Bienville

LA-LBH0002-075

   ESTHER W. WELCH, WIFE OF KENNETH WELCH    GOLDSTON OIL CORPORATION      5/22/2008             2008-2616    LA    Bienville
   THOMAS M. HUNT, WIDOWER OF ADELAIDE                     

LA-LBH0002-076

   MURDOCK HUNT    GOLDSTON OIL CORPORATION      1/7/2008             2008-2278    LA    Bienville
   JULIA M. KRONER ADAMS, WIFE OF JOHN W. ADAMS,                     

LA-LBH0002-077

   DEALING IN HER SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2233    LA    Bienville
   JOHN M. SOUR, HUSBAND OF TERRI JEAN BROOKS                     

LA-LBH0002-078

   SOUR    GOLDSTON OIL CORPORATION      2/4/2008             2008-2232    LA    Bienville
   MARY MARGARET HODGE SOUR, WIDOW OF ARTHUR                     

LA-LBH0002-079

   W. SOUR, JR.    GOLDSTON OIL CORPORATION      2/4/2008             2008-2231    LA    Bienville

LA-LBH0002-080

   THE JOHN GLASSELL, III, TESTAMENTARY TRUST    GOLDSTON OIL CORPORATION      2/4/2008             2008-2230    LA    Bienville
   CAROLYN HODGE TURNER, WIFE OF JOHN S. TURNER,                     

LA-LBH0002-081

   DEALING IN HER SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2229    LA    Bienville
   LISA KRONER MILLER, DEALING IN HER SEPARATE                     

LA-LBH0002-082

   PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2228    LA    Bienville

LA-LBH0002-083

   EDWIN W. SOUR, HUSBAND OF DORA MURPHY SOUR    GOLDSTON OIL CORPORATION      2/4/2008             2008-2227    LA    Bienville

LA-LBH0002-084

   MARGARET STACY SOUR, A SINGLE WOMAN    GOLDSTON OIL CORPORATION      2/4/2008                LA    Bienville

LA-LBH0002-085

   ERIK JOHN SEIBERT, A SINGLE MAN    GOLDSTON OIL CORPORATION      2/4/2008             2008-2223    LA    Bienville

LA-LBH0002-086

   JOHN C. KRONER, IV, A SINGLE MAN    GOLDSTON OIL CORPORATION      2/11/2008             2008-2222    LA    Bienville

LA-LBH0002-087

   MARY HUNT BOUTWELL, WIFE OF STEVE BOUTWELL    GOLDSTON OIL CORPORATION      2/18/2008             2008-2221    LA    Bienville
   STEWART HUNT, HUSBAND OF KARLA HUNT, HEREIN                     

LA-LBH0002-088

   DEALING WITH HIS SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/18/2008             2008-2220    LA    Bienville
   LUCY HUNT DETERDING, WIFE OF JOHN C. DETERDING,                     

LA-LBH0002-089

   JR    GOLDSTON OIL CORPORATION      2/18/2008             2008-2219    LA    Bienville
   MARY JAYNE TURBEVILLE FOGERTY, WIFE OF BRUCE                     

LA-LBH0002-090

   FOGERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2218    LA    Bienville
   DOROTHY HELEN MILLER SLUNG, WIDOW OF RAFAEL                     

LA-LBH0002-091

   SLUNG    GOLDSTON OIL CORPORATION      2/4/2008             2008-2217    LA    Bienville
   JANE HODGE BLACK, WIFE OF ACE BLACK, DEALING IN                     

LA-LBH0002-092

   HER SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2216    LA    Bienville
   COMADORA MILLARD FERGUSON, JR., HUSBAND OF                     

LA-LBH0002-093

   JO ELLEN GAVIN FERGUSON    GOLDSTON OIL CORPORATION      2/11/2008             2008-2215    LA    Bienville

LA-LBH0002-094

   MICHELE BETH SLUNG, A SINGLE WOMAN    GOLDSTON OIL CORPORATION      2/4/2008             2008-2214    LA    Bienville
   RICHARD L. DUBBS, WIDOWER OF MARY E. HOLLEY                     

LA-LBH0002-095

   DUBBS    GOLDSTON OIL CORPORATION      2/4/2008             2008-2213    LA    Bienville

LA-LBH0002-096

   ALBERT J. HOLLEY, JR., HUSBAND OF SUSAN HOLLEY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2212    LA    Bienville
   T. HUNT PAYNE, HUSBAND OF VICKIE BESCOE PAYNE,                     

LA-LBH0002-097

   DEALING IN HIS SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2211    LA    Bienville
   RUBY H. PETERSON, WIFE OF RICHARD L. PETERSON,                     

LA-LBH0002-098

   DEALING IN HER SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2210    LA    Bienville
   ANN TURBEVILLE CAMPBELL, WIFE OF MICHAEL                     

LA-LBH0002-099

   CAMPBELL    GOLDSTON OIL CORPORATION      2/4/2008             2008-2209    LA    Bienville

 


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   DARNELL HOLDINGS, LLC, A LOUISIANA LIMITED                     

LA-LBH0002-100

   LIABILITY COMPANY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2208    LA    Bienville
   ROBERT BATT DAVIS, JR., REVOCABLE TRUST DATED                     

LA-LBH0002-101

   SEPTEMBER 13, 1999    GOLDSTON OIL CORPORATION      2/4/2008             2008-2207    LA    Bienville

LA-LBH0002-102

   JOHN T. PAYNE, A SINGLE MAN    GOLDSTON OIL CORPORATION      2/4/2008             2008-2206    LA    Bienville

LA-LBH0002-103

   MARY LOIS FLEMING MCILWAIN, A SINGLE WOMAN    GOLDSTON OIL CORPORATION      2/4/2008             2008-2205    LA    Bienville
   KENNETH R. HOLLEY, HUSBAND OF ALCIE BROWER                     

LA-LBH0002-104

   HOLLEY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2204    LA    Bienville
   NANCY HOLLEY HORTON, WIFE OF HERMAN H.                     

LA-LBH0002-105

   HORTON    GOLDSTON OIL CORPORATION      2/4/2008             2008-2203    LA    Bienville
   ROBERT HODGE TURBEVILLE, HUSBAND OF MARYY                     

LA-LBH0002-106

   ANN H. TURBEVILLE    GOLDSTON OIL CORPORATION      2/4/2008             2008-2202    LA    Bienville
   KATHLEEN FERGUSON HART, DEALING HEREIN WITH                     

LA-LBH0002-107

   HER SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2197    LA    Bienville
   MARSHA FLEMING EATHERTON AND LEWIS                     

LA-LBH0002-108

   HAMILTON EATHERTON, WIFE AND HUSBAND    GOLDSTON OIL CORPORATION      1/7/2008             2008-2195    LA    Bienville
   LANE ALLISON SEIBERT LARSON, A MARRIED WOMAN,                     

LA-LBH0002-109

   DEALING IN HER SEPARATE PROPERTY    GOLDSTON OIL CORPORATION      2/4/2008             2008-2194    LA    Bienville

LA-LBH0002-110

   MARGARET E. MOORE, A SINGLE WOMAN,    GOLDSTON OIL CORPORATION      6/5/2008             2008-3143    LA    Bienville
   CLIFTON S. MOORE, HUSBAND OF JEANETTE M.                     

LA-LBH0002-111

   MOORE    GOLDSTON OIL CORPORATION      6/5/2008             2008-3144    LA    Bienville
   CHESTER HALL MOORE, HUSBAND OF LAURA LEA M.                     

LA-LBH0002-112

   MOORE    GOLDSTON OIL CORPORATION      6/5/2008             2008-3306    LA    Bienville
   CHARLES C. MOORE III, HUSBAND OF MICHELLE T.                     

LA-LBH0002-113

   MOORE    GOLDSTON OIL CORPORATION      6/5/2008             2008-3983    LA    Bienville
                  4974      

LA-LBH0002-114

   SHELIA M HOLLEY ALSUP    TAGCO INC      9/26/2008             4974    LA    Bienville
                  4998      

LA-LBH0002-115

   MARTHA JEAN NORRIS SURLINE    TAGCO INC      9/26/2008             4998    LA    Bienville

LA-LBH0003-001

   CHARLES A. HARRISON, JR    ANADARKO PETROLEUM CORPORATION      6/22/2005                LA    Bienville

LA-LBH0003-002

   HARRISON-SMITH PROPERTIES, LLC    ANADARKO PETROLEUM CORPORATION      4/1/2005                LA    Bienville
   SARAH JANE H. GREER, DEALING WITH SEPARATE AND                     

LA-LBH0003-003

   PARAPHERNAL PROPERTY    CSC INTERESTS INC      4/9/2003                LA    Bienville
   O DELTON HARRISON, DEALING HEREIN WITH HIS                     

LA-LBH0003-004

   SEPARATE PROPERTY    ANADARKO PETROLEUM CORPORATION      5/3/2005                LA    Bienville
   ADELAIDE H. SMITH, DEALING HEREIN WITH HER                     

LA-LBH0003-005

   SEPARATE PROPERTY    ANADARKO PETROLEUM CORPORATION      5/3/2005                LA    Bienville
   WEYERHAEUSER COMPANY, A WASHINGTON                     

LA-LBH0004-000

   CORPORATION    PLANTATION OPERATING LLC      8/2/2004                LA    Bienville

LA-LBH0005-001

   DOROTHY HELEN MILLER SLUNG, A WIDOW    ANADARKO PETROLEUM CORPORATION      1/18/2005             2005-2736    LA    Bienville

LA-LBH0005-002

   SUCCESSION OF ARTHUR W. SOUR, JR    ANADARKO PETROLEUM CORPORATION      2/10/2005             2005-1744    LA    Bienville

LA-LBH0005-003

   JOY AILEEN NORRIS, A SINGLE PERSON    ANADARKO PETROLEUM CORPORATION      4/11/2005             2005-3829    LA    Bienville

LA-LBH0005-004

   JAMES A. NORRIS, III, A SINGLE PERSON    ANADARKO PETROLEUM CORPORATION      4/11/2005             2005-3828    LA    Bienville
                       
                       


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-LBH0005-005

   MARY E. HOLLEY DUBBS    ANADARKO PETROLEUM CORPORATION      3/3/2005             2005-1758    LA    Bienville
   RUBY K. PETERSON, A MARRIED WOMAN, DEALING                     

LA-LBH0005-006

   HEREIN WITH HER SEPARATE PROPERTY    ANADARKO PETROLEUM CORPORATION      3/3/2005             2005-1760    LA    Bienville
   HARRY BRADFORD FLEMING AND LUCINDA STEWART                     

LA-LBH0005-007

   FLEMING    ANADARKO PETROLEUM CORPORATION      1/5/2005             2005-1733    LA    Bienville
   THE ONE FOUNDATION, REPRESENTED BY BANK ONE                     

LA-LBH0005-008

   TRUST CO. N.A., TRUSTEE    ANADARKO PETROLEUM CORPORATION      4/5/2005             2005-3089    LA    Bienville

LA-LBH0005-009

   MARGARET STACY SOUR, A SINGLE WOMAN    ANADARKO PETROLEUM CORPORATION      1/14/2005                LA    Bienville

LA-LBH0005-010

   MARY E. MCILWAIN JOHNSON, A MARRIED WOMAN    ANADARKO PETROLEUM CORPORATION      2/28/2005             2005-189    LA    Bienville
   LOUISIANA MINERALS LTD., A TEXAS LIMITED                     

LA-LBH0005-011

   PARTNERSHIP    ANADARKO PETROLEUM CORPORATION      5/12/2003                LA    Bienville
   KENNETH R. HOLLEY, A MARRIED MAN, DEALING                     

LA-LBH0005-012

   HEREIN WITH HIS SEPARATE PROPERTY    ANADARKO PETROLEUM CORPORATION      3/3/2005                LA    Bienville

LA-LBH0005-013

   THOMAS HARLAN FINCH, A WIDOWER    ANADARKO PETROLEUM CORPORATION      3/8/2005             2005-1749    LA    Bienville

LA-LBH0005-014

   SHELIA M. HOLLEY ALSUP    ANADARKO PETROLEUM CORPORATION      3/3/2005             2005-1757    LA    Bienville

LA-LBH0006-001

   C. P. ANDERSON, HUSBAND OF ESSIE B. ANDERSON    TAPPER RESOURCES INC      3/11/2008             2008-2200    LA    Bienville

LA-LBH0006-002

   DELLA ANDERSON LANG, WIFE OF HAWKINS LANG, JR    TAPPER RESOURCES INC      7/4/2008             2008-2279    LA    Bienville

LA-LBH0006-003

   JAMES TYRONE ANDERSON, A SINGLE MAN    TAPPER RESOURCES INC      7/4/2008             2008-2184    LA    Bienville

LA-LBH0006-004

   KENNETH BELTON, SINGLE    GOLDSTON OIL CORPORATION      10/21/2008             2008-5370    LA    Bienville
   MICHAEL WYSINGER, SHARON WYSINGER MARSHALL,                     

LA-LBH0006-005

   CLIFTON WYSINGER    TAPPER RESOURCES INC      10/28/2008             2008-5369    LA    Bienville
   WILLIAM J. WYSINGER, CLINTON HAROLD WYSINGER,                     

LA-LBH0006-006

   CARLTON WYSINGER, AND EMMETT WYSINGER    TAPPER RESOURCES INC      10/28/2008             2008-5368    LA    Bienville
   DUNCAN E. WYSINGER, HUSBAND OF ANNIE                     

LA-LBH0006-007

   WYSINGER    TAPPER RESOURCES INC      10/28/2008             2008-5367    LA    Bienville

LA-LBH0006-008

   KEVIN JACKSON, SINGLE    GOLDSTON OIL CORPORATION      10/21/2008             2008-5012    LA    Bienville
   BARBARA BELTON, BEVERLY BELTON, RONALD                     

LA-LBH0006-009

   BELTON, DAVID BELTON, AND JAMES M BELTON    GOLDSTON OIL CORPORATION      10/21/2008             2008-5011    LA    Bienville
   WANDA GAIL CLARK WILLIAMS, LINDA NELL CLARK                     

LA-LBH0006-010

   BROWN, SHEILA CLARK JONES    GOLDSTON OIL CORPORATION      10/20/2008             2008-5010    LA    Bienville

LA-LBH0006-011

   RUTH ANDERSON HENRY, A SINGLE WOMAN    TAPPER RESOURCES INC      4/2/2008             2008-2185    LA    Bienville

LA-LBH0006-012

   ANTONIO CORTEZ ANDERSON    TAPPER RESOURCES INC      4/2/2008             2008-3146    LA    Bienville

LA-LBH0006-013

   ROBERT GAINES, HUSBAND OF RUTH KNOX GAINES    TAPPER RESOURCES INC      4/2/2008             2008-3145    LA    Bienville

LA-LBH0006-014

   ARDELL CLARK, WIDOW OF JERRY CLARK    TAPPER RESOURCES INC      4/3/2008             2008-2625    LA    Bienville
   DOROTHY CAMPBELL, WIDOW OF MILTON CAMPBELL,                     

LA-LBH0006-015

   DEALING IN HER SEPARATE PROPERTY    TAPPER RESOURCES INC      4/3/2008             2008-2623    LA    Bienville
   CHARLIE RAY ANDERSON, HUSBAND OF GAIL                     

LA-LBH0006-016

   ANDERSON    TAPPER RESOURCES INC      4/3/2008             2008-2288    LA    Bienville

LA-LBH0006-017

   VIRGIL J. ANDERSON, JR., ASINGLE MAN      TAPPER RESOURCES INC      4/2/2008             2008-2287    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-LBH0006-018

   AUSTIN ANDERSON, HUSBAND OF KATIE ANDERSON    TAPPER RESOURCES INC      4/3/2008             2008-2286    LA    Bienville
   CLEOPHUS ANDERSON, A SINGLE MAN, DEALING                     

LA-LBH0006-019

   HEREIN WITH HIS SEPARATE PROPERTY    TAPPER RESOURCES INC      4/2/2008             2008-2285    LA    Bienville
   MORLEE ANDERSON, HUSBAND OF ADA WHITE                     

LA-LBH0006-020

   ANDERSON    TAPPER RESOURCES INC      4/2/2008             2008-2284    LA    Bienville

LA-LBH0006-021

   CHRISTINE A. JENKINS, A SINGLE WOMAN    TAPPER RESOURCES INC      4/2/2008             2008-2283    LA    Bienville
   VERNON J. ANDERSON, SR., HUSBAND OF                     

LA-LBH0006-022

   YOWANDALYN ANDERSON    TAPPER RESOURCES INC      4/2/2008             2008-2183    LA    Bienville

LA-LBH0006-023

   RUTH ANDERSON, WIDOW OF JOHN LEE ANDERSON    TAPPER RESOURCES INC      4/2/2008             2008-2225    LA    Bienville

LA-LBH0006-024

   AUTHOR DESHON ANDERSON    TAPPER RESOURCES INC      4/2/2008             2008-2224    LA    Bienville
   J.C. ANDERSON, A SINGLE MAN; AND NAOMI                     

LA-LBH0006-025

   ANDERSON HOWARD, A SINGLE WOMAN    TAPPER RESOURCES INC      4/3/2008             2008-2199    LA    Bienville

LA-LBH0006-026

   MARY ANDERSON WILSON, A SINGLE WOMAN    TAPPER RESOURCES INC      4/2/2008             2008-2193    LA    Bienville
   HELEN ANDERSON PATTERSON, WIFE OF TRULEY                     

LA-LBH0006-027

   PATTERSON    TAPPER RESOURCES INC      4/3/2008             2008-2192    LA    Bienville
   TINA ANDERSON FERMAINT, WIFE OF JOSEPH                     

LA-LBH0006-028

   FERMAINT    TAPPER RESOURCES INC      4/2/2008             2008-2190    LA    Bienville
   ROSIE COLEMAN, WIFE OF EUREL COLEMAN, DEALING                     

LA-LBH0006-029

   HEREIN WITH HER SEPARATE PROPERTY    TAPPER RESOURCES INC      4/2/2008             2008-2188    LA    Bienville

LA-LBH0006-030

   VERA CALAHAN, WIFE OF LEROY CALAHAN    TAPPER RESOURCES INC      4/2/2008             2008-2187    LA    Bienville

LA-LBH0006-031

   BOBBY ANDERSON, HUSBAND OF ALICE G. ANDERSON    TAPPER RESOURCES INC      4/3/2008             2008-2186    LA    Bienville
   VIRGINIA COLEMAN, DEALING IN HER SEPARATE                     

LA-LBH0006-032

   PROPERTY    TAPPER RESOURCES INC      4/2/2008             2008-2624    LA    Bienville

LA-LBH0006-033

   J.D. ANDERSON, HUSBAND OF LINDA FAY ANDERSON    TAPPER RESOURCES INC      4/2/2008             2008-2282    LA    Bienville
   JIMMY ANDERSON, DEALING HEREIN WITH HIS                     

LA-LBH0006-034

   SEPARATE PROPERTY    TAPPER RESOURCES INC      4/2/2008             2008-2280    LA    Bienville
   SHIRLEY ANDERSON, REPRESENTED HEREIN BY HER                     

LA-LBH0006-035

   AGENT AND ATTORNEY IN FACT    TAPPER RESOURCES INC      4/2/2008             2008-2189    LA    Bienville

LA-LBH0007-000

   SAINT PAUL MISSIONARY BAPTIST CHURCH    TAPPER RESOURCES INC      4/3/2008             2008-2185    LA    Bienville
   MARTIN TIMBER COMPANY, LLC, A LOUISIANA                     

LA-LBH0008-000

   LIMITED LIABILITY COMPANY    ANADARKO PETROLEUM CORPORATION      11/9/2004             2005-0837    LA    Bienville
   MARY JANET CALDWELL STREBECK, WIFE OF CLAYTON                     

LA-LBH0009-001

   L. STREBECK    TAPPER RESOURCES INC      1/28/2008             2008-2198    LA    Bienville
   WILLIAM DAVID CALDWELL, HUSBAND OF CHARLOTTE                     

LA-LBH0009-002

   EDWARDS CALDWELL    TAPPER RESOURCES INC      1/28/2008             2008-2196    LA    Bienville
   PRISCILLAGAYLE ANDERSON, DEALING HEREIN WITH                     

LA-LBH0010-001

   HER SEPARATE PROPERTY    TAPPER RESOURCES INC      4/2/2008             2008-2281    LA    Bienville
   C.P. ANDERSON AND ESSIE B. ANDERSON, HUSBAND                     

LA-LBH0011-000

   AND WIFE    TAPPER RESOURCES INC      1/17/2008             2008-2201    LA    Bienville

LA-LBH0012-000

   RUTH ANDERSON HENRY, A SINGLE WOMAN    TAPPER RESOURCES INC      4/2/2008             2008-2191    LA    Bienville
   WEYERHAEUSER COMPANY, A WASHINGTON                2011-2286      

LA-LBH0013-000

   CORPORATION    GOLDSTON OIL CORPORATION      11/8/2007             2008-2182    LA    Bienville
   THE KANSAS CITY SOUTHERN RAILWAY COMPANY, A                     

LA-LBH0014-000

   MISSOURI CORPORATION    PLANTATION OPERATING LLC      4/28/2005             2005-3077    LA    Bienville

LA-LBH0015-000

   LOUISIANA MINERALS LTD.    PLANTATION OPERATING LLC        10/27/2010             2010-4775    LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   MARTIN TIMBER COMPANY LLC                     

LA-LKY0001-000

   BY ELLIS S MARTIN, AGENT    STRAT LAND EXPL CO      8/1/2000       884    294       LA    Bienville

LA-LKY0002-000

   JAMES F WALKER ET UX    STRAT LAND EXPL CO      3/20/2000       884    310       LA    Bienville

LA-LKY0006-001

   OSCAR D PATTERSON ET UX    STRAT LAND EXPL CO      4/22/2001       913    158       LA    Bienville

LA-LKY0006-002

   RUDOLPH PATTERSON ET UX    STRAT LAND EXPL CO      6/14/2001       915    298       LA    Bienville

LA-LKY0008-000

   DONALD RAY SANDERS ET UX    STRAT LAND EXPL CO      5/1/2001       913    133       LA    Bienville

LA-LKY0009-000

   DOUGLAS W SANDERS ET UX    STRAT LAND EXPL CO      5/1/2001       913    129       LA    Bienville

LA-LKY0010-000

   VERNON C SHAFFER    STRAT LAND EXPL CO      8/10/2000       884    312       LA    Bienville

LA-LKY0011-000

   MILDRED P SANDERS    STRAT LAND EXPL CO      5/1/2001       913    135       LA    Bienville

LA-LKY0012-000

   BONNIE D JACKSON    STRAT LAND EXPL CO      5/1/2001       913    131       LA    Bienville

LA-LKY0013-000

   BOBBY J BOSTON ET UX    STRAT LAND EXPL CO      5/12/2001       913    155       LA    Bienville

LA-LKY0014-001

   SAMUEL LEE ENSLEY    STRAT LAND EXPL CO      3/26/2001       913    145       LA    Bienville
            913    140         

LA-LKY0014-002

   CLARENCE ENSLEY    STRAT LAND EXPL CO      3/26/2001       913    140       LA    Bienville
            925    50         

LA-LKY0014-003

   MERLETTA KING JOHNSON    STRAT LAND EXPL CO      9/11/2001       925    50       LA    Bienville

LA-LKY0014-P04

   HAL R HENDERSON ET UX    STRAT LAND EXPLORATION COMPANY      5/15/2003       957    536    2106    LA    Bienville

LA-LKY0015-000

   CARL D PORTER    STRAT LAND EXPL CO      3/26/2001       913    149       LA    Bienville

LA-LKY0017-000

   MICHAEL RYAN MADDEN    STRAT LAND EXPL CO      3/26/2001       913    143       LA    Bienville

LA-LKY0018-000

   LEE EDWARD TOBIN    STRAT LAND EXPL CO      4/22/2001       913    126       LA    Bienville

LA-LKY0019-000

   JAMES MARTIN    STRAT LAND EXPL CO      5/12/2001       913    153       LA    Bienville

LA-LKY0021-000

   LOUISIANA MINERALS LTD    PIONEER NATURAL RESOURCES USA INC      11/27/2002       953    618       LA    Bienville

LA-LKY0022-001

   BETTY JEAN DAVIS CONNER    STRAT LAND EXPL CO      6/11/2001       918    303       LA    Bienville

LA-LKY0022-002

   NORMA JEAN DAVIS TYLER    STRAT LAND EXPL CO      6/11/2001       918    306       LA    Bienville

LA-LKY0023-000

   FAYE HASKIN NAZON    STRAT LAND EXPL CO      3/31/2001       913    137       LA    Bienville

LA-LKY0024-001

   RADIAN LAWSON HENNIGAN ET AL    STRAT LAND EXPL CO      3/20/2001       957    621       LA    Bienville

LA-LKY0024-002

   MARY LOE SHUCKROW ET VIR    STRAT LAND EXPL CO      4/6/2001       913    147       LA    Bienville

LA-LKY0024-003

   PRENTISS W JOHNSON    STRAT LAND EXPL CO      6/14/2001       921    65       LA    Bienville

LA-LKY0024-004

   GEORGE WOODS ET AL    STRAT LAND EXPL CO      3/20/2000       883    211       LA    Bienville

LA-LKY0092-001

   PETRO-HUNT LLC    STRAT LAND EXPL CO      5/25/2000       878    59       LA    Bienville

LA-LKY0092-002

   HUNT PETROLEUM CORPORATION    STRAT LAND EXPL CO      5/30/2000       884    155       LA    Bienville

LA-LKY0092-003

   KINGFISHER RESOURCES INC    STRAT LAND EXPL CO      3/21/2000       878    51       LA    Bienville

LA-LKY0093-000

   DAVID REDDING ET AL    STRAT LAND EXPL CO      5/12/2001       915    295       LA    Bienville

LA-LKY0094-000

   DAVID REDDING ET AL    STRAT LAND EXPL CO      6/11/2001       918    315       LA    Bienville

LA-LKY0095-000

   MAE N COTTINGHAM EPPERSON    STRAT LAND EXPL CO      6/12/2001       918    309       LA    Bienville

LA-LKY0099-000

   ROBERT R POLAND SR ET UX    STRAT LAND EXPL CO      3/20/2000       883    209       LA    Bienville

LA-LKY0102-001

   DOROTHY RUSHING FIELDER    STRAT LAND EXPL CO      6/9/2001       918    312       LA    Bienville

LA-LKY0102-002

   JAMES MOORE ET UX    STRAT LAND EXPL CO      6/9/2001       915    301       LA    Bienville

LA-LKY0104-001

   FANNIE C TOBIN ET AL    STRAT LAND EXPL CO      3/20/2000       883    213       LA    Bienville

LA-LKY0104-002

   VELMA DRODGERS ET AL    STRAT LAND EXPL CO      3/20/2000       883    207       LA    Bienville

LA-LKY0105-000

   LOUISIANA MINERALS LTD    EL PASO PRODUCTION COMPANY      5/21/2001       916    330    MEMORANDUM    LA    Bienville
   PETRO-HUNT LLC                     

LA-LKY0116-001

   BY BRUCE W HUNT, PRESIDENT    PIONEER NATURAL RESOURCES USA INC      10/15/2002       953    618       LA    Bienville
   HUNT PETROLEUM CORPORATION                     

LA-LKY0116-002

   BY WILLIAM C NELSON, SENIOR VICE PRESIDENT    STRAT LAND EXPL CO      7/23/2002       950    219       LA    Bienville
   KINGFISHER RESOURCES INC                     

LA-LKY0116-003

   BY GARY TARABA, VICE-PRESIDENT    STRAT LAND EXPL CO      7/25/2002       949    178       LA    Bienville

LA-LKY0117-000

   JOHN HILL    STRAT LAND EXPL CO      3/26/2001       913    151       LA    Bienville
   JEFFERY SCOTT AND TERRI L. ADAMS         1/8/2013                LA    Bienville
   MICHAELS. AND BRENDA CRAWFORD ANTEE           10/24/2013                LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   ARCADIA HAVEN, INC.         8/5/2013             20132261    LA    Bienville
   ARCADIA PLACE, INC.         8/5/2013             20132260    LA    Bienville
   RONEY BOBBY AND RESSIE BAKER         8/8/2013             20132266    LA    Bienville
   WARNIES. AND WALTER, JR. BALLARD         10/19/2012                LA    Bienville
   CLARENCE LOYS AND PEGGY VENOR BATTON, JR.         3/4/2013             20131075    LA    Bienville
   RALPH STANLEY AND CATHERINE CULPEPPER BEARD         7/1/2013             20131658    LA    Bienville
   STEPHEN F BEARD         7/1/2013             20131757    LA    Bienville
   LANNY MICHAEL BEARD         7/8/2013             20131847    LA    Bienville
   AMY REBECCA YARBROUGH BLUNSCHI         11/9/2012                LA    Bienville
   GARYW. AND AMY ELIZABETH PERKINS BOURGEOIS         4/16/2013             20131066    LA    Bienville
   JARRETT EVAN BOWMAN         3/25/2013             20131071    LA    Bienville
   DOROTHY R BRACKIN         2/14/2013             20131243    LA    Bienville
   EDDIE BRICE AND VALINA BRICE         7/30/2013             20132264    LA    Bienville
   LEE DIANE COLE BROWN         12/10/2012             20130488    LA    Bienville
   JASON ANDTOMMIE BROWN         4/16/2013             20131246    LA    Bienville
   AUTREYANDJEAN HAMILTON CARPENTER         11/16/2012             20130033    LA    Bienville
   JOE W CASKEY         11/7/2012             20130044    LA    Bienville
   DAVE P. CHAMPAGNE, SR.         10/25/2013                   Bienville
   MATTHEW CHRISTOPHER CHANDLER         11/21/2013                LA    Bienville
   PAUL DAVID CHILDRESS         3/11/2013             20131065    LA    Bienville
   GLORIA ANN CRANE         10/25/2013                LA    Bienville
   DARIN WOODS WELDING SERVICES, LLC         11/19/2012                LA    Bienville
   JAMES W DAVIS         1/9/2013                LA    Bienville
   ANNEGRET PAULA BEUMKER DAVIS         3/14/2013             20131064    LA    Bienville
   PAMELA ATTERIDGE DAVIS         4/4/2013             20131068    LA    Bienville
   PAMELA ATTERIDGE DAVIS         4/4/2013             20131067    LA    Bienville
   PAMELA ATTERIDGE DAVIS         4/4/2013             20131069    LA    Bienville
   GEORGE R DUPUIS         4/29/2013             20131245    LA    Bienville
   GEORGET. ANDSHERRILL P. EDWARDS         11/28/2012                LA    Bienville
   GAP FARMS, LLC         1/29/2013                LA    Bienville
   JOHN KENDEL AND DONNA KAY JOHNSON GARNER         3/28/2013             2013077    LA    Bienville
   LILIAN P GARRETT         7/1/2013             20131659    LA    Bienville
   RICHARD H. AND REBECCA J. GARRETT         7/1/2013             20131760    LA    Bienville
   ARDIS AND SYBIL JOHNSON GREEN         10/12/2012                LA    Bienville
   DALE ALLEN AND LANETTE WOODARD HALVERSON         12/21/2012             20130246    LA    Bienville
   ELIZABETH MARIE MORGAN HAMILTON         11/29/2012             20131236    LA    Bienville
   CLINTON H. AND BARBARA JOHNSON HAMPTON         11/14/2012             20130035    LA    Bienville
   DONALDT. HANLEY         10/19/2012                LA    Bienville
   ROBERT I. AND GAYLE WALKER HANSON         10/25/2012                LA    Bienville
   GAYLE HANSON         10/25/2012             20130038    LA    Bienville
   TINE HENRY HARRISON         7/24/2013             20131844    LA    Bienville
   WILLIAM EUGENE,JR. AND JENNIFER C. HAWKINS         7/15/2013             20131846    LA    Bienville
   DANNY HAROLD AND DEBORAH HARTMAN HENLEY         9/21/2012                LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   BENNY ADDISON HOLLIS         10/19/2012             20131367    LA    Bienville
   STEVE ADDISON AND SARA PATTON HOLLIS         10/22/2012             20122837    LA    Bienville
   WILLIAM L. AND JUDY CHANDLER HOLMES         1/16/2014                LA    Bienville
   HORIZON APPLICATORS, INC.         4/10/2013             20131572    LA    Bienville
   WILLIE AND JACQUELINE BYRD JAMES         1/15/2013             20131237    LA    Bienville
   ROYCEGRESHAM JENKINS         4/10/2013             20131061    LA    Bienville
   JESSE CURTIS AND STACIE JIMERSON         6/3/2013             20131759    LA    Bienville
   JOANNE WILLIAMS TRUST         6/7/2013             20131848    LA    Bienville
   RANDY ARVELLE AND VICKI JOHNSON         8/8/2013             20132263    LA    Bienville
   JAMES RICHARD AND DONNA MARIE QUIN JOHNSON         9/5/2013                LA    Bienville
   JAMES RICHARD JOHNSON         9/5/2013                LA    Bienville
   BRIDGET SUZANNE CROWELL LANGLEY         4/9/2013             20131845    LA    Bienville
   JARED LAY         3/21/2013             20131365    LA    Bienville
   ELLIOTT E LETLOW         10/15/2012                LA    Bienville
   NOLBERT AND TREXINE JOHNSON LEWIS         11/14/2012                LA    Bienville
   M.B. EDWARDS PROPERTIES, LLC         12/19/2012             20131241    LA    Bienville
   RAYMOND HARDY AND DIANE STEVENS MADDEN, III         4/10/2013             20131060    LA    Bienville
   MCHALE FAMILY TRUST         11/29/2012             20130247    LA    Bienville
   STEPHEN WAYNE MILLICAN         7/16/2013             20132262    LA    Bienville
   GENE MOON         6/7/2013             20131758    LA    Bienville
   ROBERT WILLIAM MORGAN         5/28/2013             20131663    LA    Bienville
   DOROTHY MULLINS MORRIS         6/7/2013             20131660    LA    Bienville
   MURPHY BROTHERS PARTNERSHIP, LLC         12/28/2012             20130248    LA    Bienville
   NEOMA O’‘KELLEY O’‘BRIEN         12/5/2012                LA    Bienville
   MILTON TRUETT AND FAYE BURKS ODOM         5/21/2013             20131368    LA    Bienville
   WILLIAM CECIL O’‘KELLEY         9/25/2012             20130053    LA    Bienville
   JUDYCONNALLYPERRIT         11/8/2012                LA    Bienville
   CARL EVERETT AND BETTYE RUTH RUSH PERRY         11/25/2013                LA    Bienville
   KENNETH ROGER AND SHARALYN GWEN VALENTINE                     
   PICKETT         5/23/2013                LA    Bienville
   SHIRLEY DAVIS POOLE         1/7/2013             2013239    LA    Bienville
   RACKLA RIVER RESOURCES, LLC         4/26/2013             20131569    LA    Bienville
   ALBERT H RHODES         6/11/2013             20131656    LA    Bienville
   VICTOR W ROGERS         6/28/2013             20131662    LA    Bienville
   ULYSSES ROGERS, JR.         4/9/2013             20131247    LA    Bienville
   WILLIAM R ROWELL         11/6/2012                LA    Bienville
   BARBARASUMLIN SANDERSON         1/29/2013             20131058    LA    Bienville
   SHELBYLANE, LLC         10/9/2012                LA    Bienville
   WILLIAM ANDREW AND JESSICA WALSWORTH SIMS         2/6/2013             20131078    LA    Bienville
   PATRICK H. SMITH AND FRAN WALKER SMITH         10/23/2012             20130037    LA    Bienville
   SHIRLEY FARRAR SMITH         6/17/2013             20131655    LA    Bienville
   ROY E. AND JANICE LYNN SOUTHERN         11/9/2012                LA    Bienville
   WILLIAM CURTIS AND SUSAN M. TAYLOR         11/6/2012                LA    Bienville
   WILLIAM DAVID AND JUDITH E. TAYLOR         2/28/2013             20131074    LA    Bienville
   TRISHNA CORPORATION, INC.         12/12/2012             20131242    LA    Bienville
   MIKELD. ANDSHONDALYN KAY TUCKER         2/4/2013             20131056    LA    Bienville
   TONY R WAITS         11/9/2012             20130046    LA    Bienville
   DEREK AND LAUREN KIDD WARREN         12/4/2012                LA    Bienville


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   JACK CARL AND CHARLIE JO WATSON         8/8/2013             20132265    LA    Bienville
   DARIN ANDREW WOODS         11/19/2012                LA    Bienville
   SHARRA CHANDLER WOODS         1/9/2013             20131054    LA    Bienville
   BOBBY LEE WOODWARD         6/7/2013             20131664    LA    Bienville
   JAMES W DAVIS    SCHOEFFLER ENERGY LLC      1/7/2013                LA    Bienville
   LANCE WAYNE AND REBECCA ANNE BROWNE KELPE    SCHOEFFLER ENERGY LLC      10/23/2013                LA    Bienville
   MARILYN KAY MOREAU AND ALLEN KEITH HOLLOWAY         10/22/2012             20130024    LA    Bienville
and
Claiborne
   KEN B MURPHY         12/28/2012             20130241    LA    Bienville
and
Claiborne
   RAYMOND CLAY AND LEE ANNE PARKER MCDONALD                     
   MCDONALD         10/30/2012             20122687    LA    Bienville
and
Lincoln
   WADE HINES AND JUDY POTTS PERRITT         10/12/2012                LA    Bienville
and
Lincoln
   SHANNON R. AND WANDA F. WILHITE         10/29/2012       1322    38    F128775    LA    Bienville
and
Lincoln
   RUSSELL LAND & TIMBER, LLC         12/6/2012             20131248    LA    Bienville,
Claiborne,
and
Lincoln
            1440       928198      
            1440       928198      

LA-NCV0001-001

   HUNT PETROLEUM CORPORATION    KCS RESOURCES, INC.      2/1/2008       1440       928198    LA    Bossier
            C1440    156    928199      
                  928199      

LA-NCV0001-002

   KINGFISHER RESOURCES INC    KCS RESOURCES, INC.      10/30/2007             928199    LA    Bossier
            1440    189    928208      
            1440       928208      

LA-NCV0001-003

   PETRO-HUNT LLC    KCS RESOURCES, INC.      10/31/2007       1440       928208    LA    Bossier

LA-RLD0018-001

   GARY L HILBURN    WINCHESTER PROD CO.      7/28/2006             888455    LA    Bossier

LA-RLD0018-002

   JACK BUFORD HILBURN JR    WINCHESTER PROD CO.      7/3/2006             888453    LA    Bossier

LA-RLD0018-003

   JUDITH HILBURN YOUNG    WINCHESTER PROD CO.      7/3/2006             888454    LA    Bossier

LA-RLD0035-001

   JACK ROY MAY III    WINCHESTER PROD CO.      7/15/2006             888424    LA    Bossier

LA-RLD0035-002

   SAMUEL EDWIN MAY ET UX    WINCHESTER PROD CO.      7/15/2006             888425    LA    Bossier

LA-RLD0036-000

   JACK ROY MAY JR ET UX    WINCHESTER PRODUCTION CO      7/7/2006                LA    Bossier
                  888414      
                  888414      

LA-RLD0054-001

   HERSHELMALONE ET UX    WINCHESTER PROD CO      8/16/2006             888414    LA    Bossier

LA-RLD0070-001

   FRANK R TROWBRIDGE JR    WINCHESTER PROD CO.      6/27/2006             890041    LA    Bossier

LA-RLD0070-002

   ANN TROWBRIDGE MUIR    WINCHESTER PROD CO.      6/27/2006             890042    LA    Bossier

LA-RLD0070-003

   GAIL ELAINE TROWBRIDGE FOSTER    WINCHESTER PROD CO.      6/27/2006             890043    LA    Bossier

LA-RLD0070-004

   DAVID I TROWBRIDGE    WINCHESTER PROD CO.      6/21/2007             903862    LA    Bossier

LA-RLD0070-005

   CORNELL TROWBRIDGE STEWART    WINCHESTER PROD CO.      6/21/2007             903861    LA    Bossier

LA-RLD0094-001

   NANCY LEE KEOUN MCCOMB    WINCHESTER PROD CO      1/30/2007             893612    LA    Bossier
                  893630      

LA-RLD0094-002

   GRACE ELIZABETH KEOUN REASOR    WINCHESTER PROD CO      1/30/2007             893630    LA    Bossier

LA-RLD0099-001

   JACK C ROBERSON    WINCHESTER PRODUCTION CO      4/3/2007             895091    LA    Bossier

LA-RLD0099-002

   MARY KATHLEEN ROBERSON HART    WINCHESTER PRODUCTION CO      4/3/2007             895093    LA    Bossier

LA-RLD0099-003

   JAMES MICHAEL ROBERSON    WINCHESTER PRODUCTION CO      4/3/2007             895092    LA    Bossier

LA-RLD0099-004

   RUTHIEJ ROBERSON MIEARS    WINCHESTER PRODUCTION CO      4/3/2007             895089    LA    Bossier

LA-RLD0099-005

   MARVIS MARIE ROBERSON GRISHAM    WINCHESTER PRODUCTION CO      4/3/2007             895090    LA    Bossier

LA-RLD0106-000

   JIMMIE RAY BANDY ET UX    WINCHESTER PROD CO      7/13/2007       1413       905326    LA    Bossier

LA-RLD0131-000

   LT GOODWIN    R W FAIR      4/27/1955       258    151    102460    LA    Bossier

LA-RLD0150-001

   JOSEPH CLINTON ALLEN ET UX    WINCHESTER PROD CO      5/22/2007             903868    LA    Bossier

LA-RLD0150-002

   TREY JOSEPH ALLEN    WINCHESTER PROD CO      5/22/2007             903867    LA    Bossier

LA-RLD0151-000

   WEYERHAEUSER COMPANY    WINCHESTER PROD CO.        3/20/2007       1408    121    899895    LA    Bossier


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RLD0155-000

   WEYERHAEUSER COMPANY    WINCHESTER PROD CO.      7/26/2007             MEMO    LA    Bossier

LA-RLD0273-000

   FLORENCE DODSON BARNETT ET AL    LL ROBINSON      3/7/1952       237    45    85015    LA    Bossier

LA-RLD0275-000

   M R BOLINGER    R W FAIR      10/13/1953       248    163    92693    LA    Bossier

LA-RLD0277-001

   CLIFFORD EDENS CHESHIRE ET AL    SUNRAY MID-CONTINENT OIL CO      12/10/1955       273    99    107124    LA    Bossier

LA-RLD0277-002

   EDRAL CHESHIRE ET AL    SUNRAY MID-CONTINENT OIL CO      12/10/1955       273    229    108441    LA    Bossier
            232    34    83124      

LA-RLD0278-001

   CECIL O COVINGTON    SUNRAY OIL CORP      10/16/1951       232    34    83124    LA    Bossier
            230    524    83088      

LA-RLD0278-002

   DANIEL M COVINGTON    SUNRAY OIL CORP      10/16/1951       230    524    83088    LA    Bossier
            230    518    83087      

LA-RLD0278-003

   J M COVINGTON    SUNRAY OIL CORP      10/16/1951       230    518    83087    LA    Bossier
            232    24    83090      

LA-RLD0278-004

   MW COVINGTON    SUNRAY OIL CORP      10/13/1951       232    24    83090    LA    Bossier
            230    511    83086      

LA-RLD0278-005

   G E COVINGTON ET AL    SUNRAY OIL CORP      10/13/1951       230    511    83086    LA    Bossier
            232    40    83125      

LA-RLD0278-006

   RH COVINGTON JR    SUNRAY OIL CORP      10/16/1951       232    40    83125    LA    Bossier
            230    535    83123      

LA-RLD0278-007

   CARRIE COVINGTON MYRICK    SUNRAY OIL CORP      10/16/1951       230    535    83123    LA    Bossier
            232    18    83089      

LA-RLD0278-008

   CLIFFORD COVINGTON SHANNON    SUNRAY OIL CORP      10/13/1951       232    18    83089    LA    Bossier

LA-RLD0280-001

   DORIS GAMBLE DEJEAN    M R BOLINGER      10/23/1948       197    107    64461    LA    Bossier

LA-RLD0280-002

   CHRISTINE KEOUN BROWNE    M R BOLINGER      10/23/1948       197    99    64457    LA    Bossier

LA-RLD0280-003

   ROBERT C KEOUN ET AL    M R BOLINGER      10/23/1948       197    113    64464    LA    Bossier

LA-RLD0282-000

   T SANDERS GOODWIN    DG DUNBAR      2/8/1950       211    179    73368    LA    Bossier

LA-RLD0285-000

   M R JOHNSON    C M FUTCH      11/12/1953       248    205    93262    LA    Bossier

LA-RLD0286-000

   WA JOHNSON    DG DUNBAR      10/11/1948       197    37    64236    LA    Bossier

LA-RLD0287-000

   W A JOHNSON ET AL    DG DUNBAR      10/9/1948       197    39    64237    LA    Bossier

LA-RLD0290-000

   JESSIE RAY CHESHIRE KNOBEL ET AL    R W FAIR      10/11/1953       248    165    92694    LA    Bossier

LA-RLD0294-000

   W H RODGERS    R R ROBINSON      2/16/1956       273    133    107511    LA    Bossier
   S H BOLINGER AND COMPANY LTD                     

LA-RLD0298-000

   J C BOLINGER, VP    DG DUNBAR      7/25/1949       207    575    69676    LA    Bossier

LA-RLD0300-000

   FRANK R TROWBRIDGE ET AL    R W FAIR      1/14/1957       281    98    113892    LA    Bossier

LA-RLD0306-000

   R B KILGORE ET AL    TEXACO INC      7/10/1963       370    464    167619    LA    Bossier

LA-RLD0307-000

   S H BOLINGER & COMPANY LTD    JOHN LCOPELAND      3/23/1964       348    169    172319    LA    Bossier

LA-RLD0308-000

   FRANCES FLOYD BAIN    JOHN LCOPELAND      4/6/1964       388    189    174840    LA    Bossier

LA-RLD0309-000

   JEREW WILKINSON    THE TEXAS COMPANY      8/10/2022       67    525    35628    LA    Bossier

LA-RLD0310-001

   ARA VAY K HOLTZCLAW    JAMES CGALBRAITH      3/23/1964       388    191    174841    LA    Bossier

LA-RLD0310-002

   CECIL KBAUMGARDNER    JOHN LCOPELAND      3/23/1964       388    194    174842    LA    Bossier

LA-RLD0310-003

   BONNIE ANDERSON KILGORE ET AL    JAMES CGALBRAITH      3/18/1964       384    177    172320    LA    Bossier

LA-RLD0311-000

   HENRY ROSE MERCANTILE & MANUFACTURING CO    WARREN GIBBS      1/12/2023       68    554    36906    LA    Bossier

LA-RLD0312-000

   UNITED STATES OF AMERICA—BLM #071443    TEXACO INC      9/1/1963       386    421    173365    LA    Bossier

LA-RLD0313-001

   ANTHONY FOREST PRODUCTS CO    WINCHESTER PROD CO      2/28/2007             893649    LA    Bossier

LA-RLD0317-000

   J M COVINGTON    R W FAIR      10/12/1953       248    167    92695    LA    Bossier

LA-RMT0017-000

   B GLENN HAM ET UX    BROAD OAK ENERGY INC      12/14/2006             901658    LA    Bossier

LA-RMT0018-000

   KENNETH R COILE JR    BROAD OAK ENERGY INC      12/14/2006             901660    LA    Bossier
   COLEMAN FAMILY LIVING TRUST                     
   GERALD C COLEMAN & CATHERINE LYLES COLEMAN,                     

LA-RMT0022-000

   CO-TRUSTEES      BROAD OAK ENERGY INC      1/15/2007             901663    LA    Bossier


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RMT0026-001

   ROBERTS BLEWER    BROAD OAK ENERGY INC      1/2/2007             901653    LA    Bossier
   LA CUEVA INVESTMENTS LP                     

LA-RMT0026-002

   EDWIN L BLEWER    BROAD OAK ENERGY INC      1/2/2007             901654    LA    Bossier

LA-RMT0046-000

   WILLIAM H BOUNDS JR    SOUTHERN LAND & EXPLORATION, LLC      9/26/2006             889919    LA    Bossier

LA-RMT0047-000

   FREDDIE HUGH HAGAN SR ET UX    SOUTHERN LAND & EXPLORATION LLC      6/21/2006             889925    LA    Bossier
   THE ANTRIM TRUST                     

LA-RMT0048-000

   REGIONS BANKTRUSTEE    SOUTHERN LAND & EXPLORATION, LLC      3/23/2007             896687    LA    Bossier

LA-RMT0049-001

   HEROLD-WINKS-VALLHONRAT LLC ET AL    SOUTHERN LAND & EXPLORATION, LLC      10/31/2006             891349    LA    Bossier

LA-RMT0049-002

   PATTY COLVIN HALL    SOUTHERN LAND & EXPLORATION, LLC      11/27/2006             891345    LA    Bossier

LA-RMT0049-003

   GUS WCOLVIN JR    SOUTHERN LAND & EXPLORATION, LLC      11/27/2006             891347    LA    Bossier

LA-RMT0049-004

   JANE COLVIN HUBBARD    SOUTHERN LAND & EXPLORATION, LLC      11/27/2006             891346    LA    Bossier

LA-RMT0050-000

   BARBARA ROSS BOUNDS ET AL    SOUTHERN LAND & EXPLORATION, LLC      6/28/2006             889918    LA    Bossier
   BANGO FAMILY LIMITED PARTNERSHIP OF HOT SPRINGS                     

LA-RMT0051-000

   BY LOUISE M BANGO, GENERAL MANAGING PARTNER    SOUTHERN LAND & EXPLORATION, LLC      11/27/2006             891340    LA    Bossier

LA-RMT0052-000

   RICHARD A MCDONALD ET UX    SOUTHERN LAND & EXPLORATION, LLC      1/24/2007             889927    LA    Bossier

LA-RMT0053-000

   MICHAEL MCBETH ET AL    SOUTHERN LAND & EXPLORATION, LLC      7/26/2006             889926    LA    Bossier

LA-RMT0054-000

   JENNIFER LYNN ARCHER GRIFFIN    SOUTHERN LAND & EXPLORATION, LLC      6/22/2006             889924    LA    Bossier

LA-RMT0055-001

   DAWN RITTERGALLET    SOUTHERN LAND & EXPLORATION, LLC      12/6/2006             891372    LA    Bossier

LA-RMT0055-002

   RODNEY KREGG ODOM    SOUTHERN LAND & EXPLORATION, LLC      12/19/2006             891354    LA    Bossier

LA-RMT0055-003

   PHILLIP EDWARD RITTER    SOUTHERN LAND & EXPLORATION, LLC      12/6/2006             891369    LA    Bossier

LA-RMT0055-004

   JAMES MICHAEL RITTER    SOUTHERN LAND & EXPLORATION, LLC      12/6/2006             891367    LA    Bossier

LA-RMT0055-005

   GREGORY STEVEN RITTER    SOUTHERN LAND & EXPLORATION, LLC      12/6/2006             891366    LA    Bossier

LA-RMT0055-006

   GLEN DOUGLAS RITTER    SOUTHERN LAND & EXPLORATION, LLC      12/6/2006             891364    LA    Bossier

LA-RMT0055-007

   BARRY RONALD ODOM ET UX    SOUTHERN LAND & EXPLORATION, LLC      12/6/2006             891355    LA    Bossier

LA-RMT0057-001

   JAMES P DODSON    BROAD OAK ENERGY INC      6/26/2007             903418    LA    Bossier

LA-RMT0057-002

   THERESA F DODSON    BROAD OAK ENERGY INC      6/26/2007             905603    LA    Bossier

LA-RMT0087-000

   THOMAS PARNELL JONES ET UX    SAMSON CONTOUR ENERGY E&P LLC      6/30/2006             874347    LA    Bossier
   THE MARAK PARTNERSHIP                     

LA-RMT0133-000

   BY HENRY MARTIN MARAK    SNYDER OIL CORPORATION      11/12/1998             669688    LA    Bossier

LA-RMT0134-001

   CALVIN RAY BANDIERA ET AL    KT EXPLORATION LLC      12/5/1996             629341    LA    Bossier

LA-RMT0134-002

   JERRY CROUCH ET AL    KT EXPLORATION LLC      12/18/1996             633074    LA    Bossier

LA-RMT0134-003

   KATHY A CROUCH SIZEMORE    KT EXPLORATION LLC      12/18/1996             633075    LA    Bossier

LA-RMT0135-001

   PRESCOTT LAND & TIMBER COMPANY    KT EXPLORATION LLC      12/26/1996             629344    LA    Bossier

LA-RMT0135-002

   THELMA RUTH MONTGOMERY ET AL    KT EXPLORATION LLC      12/6/1996             629345    LA    Bossier

LA-RMT0135-003

   ROGER LGALATAS    KT EXPLORATION LLC      12/16/1996             630255    LA    Bossier

LA-RMT0136-000

   MARSHALL COVINGTON ET UX    KT EXPLORATION LLC      12/5/1996             629348    LA    Bossier

LA-RMT0137-000

   ANTHONY FOREST PRODUCTS CO    KT EXPLORATION LLC      12/2/1996             629352    LA    Bossier
   WILLIAMETTE INDUSTRIES INC                     

LA-RMT0138-001

   BY DAVID H HILL, VP    KT EXPLORATION LLC      12/31/1996       1124    80    629353    LA    Bossier
   WILLIAMETTE INDUSTRIES INC                     

LA-RMT0138-002

   BY DAVID H HILL, VP    STRAT LAND EXPL CO      6/7/2000             703651    LA    Bossier
   JACKIE RAI SHAVER HUDSON                     

LA-RMT0139-000

   A/K/A JACKIE SHAVER HUDSON    SNYDER OIL CORPORATION      6/16/1998             658726    LA    Bossier

LA-RMT0140-001

   HATTIE HAZEL RUSSELL ET VIR    SNYDER OIL CORPORATION      6/30/1998             660115    LA    Bossier

LA-RMT0140-002

   RUBY BOUNDS WISE    SNYDER OIL CORPORATION      6/18/1998             661189    LA    Bossier

LA-RMT0140-003

   RANDY CLYDE RICH    SNYDER OIL CORPORATION      9/14/1998             667981    LA    Bossier

LA-RMT0140-004

   ROBERT BLANCHARD BOUNDS    SNYDER OIL CORPORATION      9/14/1998             668477    LA    Bossier

LA-RMT0141-000

   CLARA CHRISTINE COLEMAN    MCCAULEYO BULLOCK JR INC      6/11/1996             627453    LA    Bossier

LA-RMT0142-000

   THOMAS MICHAEL MCKINNEY ET AL    MCCAULEYO BULLOCK JR INC        1/9/1997             632241    LA    Bossier


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RMT0143-000

   ROBERT E MCDOWELL ET AL    SNYDER OIL CORPORATION      8/17/1998             663615    LA    Bossier
   INVESTORS MORTGAGE CORP OF SHREVEPORT                     

LA-RMT0144-000

   BY DONALD L WILSON, AGENT    SNYDER OIL CORPORATION      8/31/1998             667886    LA    Bossier

LA-RMT0145-000

   SYDNEY W MCKINNEY ET UX    MCCAULEYO BULLOCK JR INC      6/6/1996             627435    LA    Bossier
   SNYDER OIL CORPORATION                     

LA-RMT0146-000

   BY SCOTT CHAPMAN, A/I/F    SOCO LOUISIANA LEASING INC      5/4/1999             925034    LA    Bossier
   MARY ANN SHEPARD SIMPSON QUALIFIED TRUST                     

LA-RMT0147-000

   BY WAYNE L SIMPSON, TRUSTEE    SNYDER OIL CORPORATION      5/5/1997             639445    LA    Bossier

LA-RMT0148-001

   BRUCE D FRANKLIN ET UX    SNYDER OIL CORPORATION      4/1/1997             639429    LA    Bossier

LA-RMT0148-002

   FANNE L CONKLING    SNYDER OIL CORPORATION      3/25/1997             639431    LA    Bossier

LA-RMT0148-003

   JAMES SMITH FARRIN    SNYDER OIL CORPORATION      10/26/1998             669687    LA    Bossier
   ARCHIBALD C HEWES RESIDUARY TRUST                     

LA-RMT0148-004

   BY HARRY P HEWES, TRUSTEE    SNYDER OIL CORPORATION      9/11/1998             669503    LA    Bossier

LA-RMT0148-005

   VIRGINIA A SPOTSWOOD    SNYDER OIL CORPORATION      9/11/1998             669502    LA    Bossier
   ANTRIM TRUST                     

LA-RMT0149-000

   COMMERCIAL NATL BANK IN SHREVEPORT, TRUSTEE    SNYDER OIL CORPORATION      6/11/1997             667263    LA    Bossier

LA-RMT0150-000

   SUE SLACK SULLIVAN    SNYDER OIL CORPORATION      5/14/1998             658723    LA    Bossier

LA-RMT0151-000

   NELL SLACK BICE    SNYDER OIL CORPORATION      5/14/1998             658722    LA    Bossier

LA-RMT0152-000

   FRANK WENDELL SLACK    SNYDER OIL CORPORATION      5/14/1998             661180    LA    Bossier

LA-RMT0153-000

   ELIZABETH BUSCH MILLER    SNYDER OIL CORPORATION      5/13/1998             658721    LA    Bossier
   DELTIC TIMBER CORPORATION                     
   SUCCESSOR BY MERGER TO DELTIC FARM & TIMBER CO INC                     

LA-RMT0154-000

   BY RON L PEARCE, PRESIDENT    SNYDER OIL CORPORATION      9/1/1998             674527    LA    Bossier

LA-RMT0155-000

   JOHNSON DAVIS MCCALL ET UX    DISCUS OIL CORP & WLS CORP      5/30/1996             624138    LA    Bossier

LA-RMT0156-000

   WAYLAN ROSS NATTIN ET UX    SNYDER OIL CORPORATION      4/1/1997             658727    LA    Bossier

LA-RMT0157-000

   JETTA-X-2 LP    BROAD OAK ENERGY INC      2/1/2008             924780    LA    Bossier
   ANTHONY FOREST PRODUCTS COMPANY                     

LA-RMT0164-000

   BY CLARY ANTHONY SR, PRESIDENT    KT EXPLORATION LLC      12/2/1996             629352    LA    Bossier

LA-SLI0001-000

   AUDREY MURFFSHEPPARD ET AL    TRIANGLE DRILLING COMPANY INC      12/31/1938       139    529    31049    LA    Bossier

LA-SLI0002-000

   HATTIE ROSCOE SNIDER ET AL    UNITED GAS PUBLIC SERVICE COMPANY      10/20/1936       126    148    23950    LA    Bossier

LA-SLI0003-001

   H L SKANNAL ET AL    TRIANGLE DRILLING COMPANY INC      6/29/1934       110    475    16721    LA    Bossier

LA-SLI0004-000

   G W SMITH    MAGNOLIA PETROLEUM COMPANY      3/22/2027       84    303       LA    Bossier

LA-SLI0005-000

   FRANK B TREAT ET AL    TRIANGLE DRILLING COMPANY INC      8/18/1930       101    208    8600    LA    Bossier

LA-CPI0001-001

   J J PARTNERSHIP    KCS RESOURCES INC      4/18/2006             2046786    LA    Caddo
   MOLLY J DUGGAN IND AND TRUSTEE FOR DONALD H                     

LA-CPI0001-002

   DUGGAN TRUST    KCS RESOURCES INC      4/18/2006       3862    407    2041024    LA    Caddo

LA-DIX0002-000

   BARRY MAXWELL GREER    KCS RESOURCES INC      2/8/2007             2088374    LA    Caddo

LA-DIX0003-000

   JEAN C BRIERRE    KCS RESOURCES INC      2/14/2007             2088375    LA    Caddo

LA-DIX0004-000

   JOHNNIE BELL    KCS RESOURCES INC      3/21/2007             2088381    LA    Caddo

LA-DIX0005-001

   VERLENE WATKINS HARRIS    KCS RESOURCES INC      3/14/2007             2088380    LA    Caddo

LA-DIX0005-002

   LOUISE LYNN WATKINS CALVIN    KCS RESOURCES INC      3/14/2007             2088379    LA    Caddo

LA-DIX0005-003

   ANDREW B WATKINS    KCS RESOURCES INC      3/14/2007             2088378    LA    Caddo

LA-DIX0005-004

   JUNE WATKINS JR    KCS RESOURCES INC      3/14/2007             2088377    LA    Caddo

LA-DIX0005-005

   EMMIE JEAN WATKINS HARPER      KCS RESOURCES INC      3/14/2007             2088376    LA    Caddo


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference   ST    County
                  2089135     
                  2089135     
                  2089135     

LA-DIX0006-001

   GEORGE SMITH    KCS RESOURCES INC      2/12/2007             2089135   LA    Caddo
                  2088382     

LA-DIX0006-002

   WILLIE GREEN    KCS RESOURCES INC      3/21/2007             2088382   LA    Caddo
                  2089136     

LA-DIX0006-003

   LELA GREEN TATE    KCS RESOURCES INC      2/27/2007             2089136   LA    Caddo
                  2102683     

LA-DIX0006-004

   SAM GREEN JR    KCS RESOURCES, INC.      2/12/2007             2102683   LA    Caddo
                  2102679     

LA-DIX0006-005

   PRISCILLA GREEN JAMES    KCS RESOURCES, INC.      3/21/2007             2102679   LA    Caddo
                  2102942     
                  2102942     

LA-DIX0006-006

   CURLEE GREEN WATSON    KCS RESOURCES, INC.      3/3/2007               LA    Caddo
                  2117092     

LA-DIX0006-007

   CAROLINE MILLER    KCS RESOURCES INC      3/21/2007             2117092   LA    Caddo
                  2089137     

LA-DIX0007-001

   PEARLIE BLAZE KNOX    KCS RESOURCES INC      2/12/2007             2089137   LA    Caddo

LA-DIX0007-002

   ROBERT BLAZE    KCS RESOURCES INC      3/7/2007             2092831   LA    Caddo

LA-DIX0007-003

   JESSIE JAMES BLAZE    KCS RESOURCES INC      2/12/2007             2088373   LA    Caddo

LA-DIX0008-000

   GEORGIA MAE WALKER    KCS RESOURCES INC      2/12/2007             2102675   LA    Caddo

LA-DIX0009-000

   OLEY BRADFORD    KCS RESOURCES INC      2/13/2007             2102674   LA    Caddo

LA-DIX0010-000

   LYNDORIA THOMAS TAYLOR    KCS RESOURCES INC      3/6/2007             2102672   LA    Caddo

LA-DIX0011-000

   ROXIE DAVENPORT ASHLEY    KCS RESOURCES INC      2/12/2007             2102944   LA    Caddo

LA-DIX0012-000

   JEAN C BRIERRE    KCS RESOURCES INC      5/8/2007             2102682   LA    Caddo

LA-DIX0013-000

   BEAULAH T CARRY    KCS RESOURCES INC      2/12/2007             2102678   LA    Caddo
   CURLEE GREEN WATSON INDIV AND                    

LA-DIX0014-001

   AS USUFRUCT ETHEL MAE WATSON STEVENS    KCS RESOURCES, INC.      3/6/2007             2102684   LA    Caddo

LA-DIX0015-001

   JOHN LEE BROOKS    KCS RESOURCES, INC.      2/12/2007             DOC.
#2102676
  LA    Caddo

LA-DIX0016-001

   LEON BROOKS    KCS RESOURCES, INC.      2/12/2007             2102685   LA    Caddo

LA-DIX0016-002

   TERRY RAY BROOKS    KCS RESOURCES, INC.      2/12/2007             2102673   LA    Caddo

LA-DIX0017-000

   CHARLIE CALDWELL    KCS RESOURCES, INC.      4/19/2007             2145942   LA    Caddo
                  2117055     
                  2117055     
                  2117055     
                  2117055     
                  2117055     

LA-DIX0018-001

   EDWARD RAY VOLENTINE ET UX    KCS RESOURCES, INC.      7/23/2007             2117055   LA    Caddo
                  2117115     

LA-DIX0018-002

   PATTIE PITTMAN GILBERT    KCS RESOURCES, INC.      7/23/2007             2117115   LA    Caddo
   SUCCESSION OF DAVID C CROW DECEASED                    
   REPRESENTED BY JOHN DAVID CROW, INDEP EXECUTOR AND                    

LA-DIX0018-003

   GRETCHEN SMITH    KCS RESOURCES, INC      8/9/2007             2117090   LA    Caddo

LA-LGW0192-000

   WILLIAM R DUDLEY ET UX    PETROHAWK PROPERTIES LP      5/14/2008             2167210   LA    Caddo
            1291    67    528457     

LA-LGW0261-000

   E T CURRIE ET AL    GEORGE A HADDAD JR      2/10/1971       1291    67    528457   LA    Caddo

LA-LGW0262-001

   VIRGINIA WOOD MOORE ET VIR    LEE KINNEBREW      12/1/1978       1713    189    785357   LA    Caddo

LA-LGW0263-001

   EUGENIA WOOD TULLOS ET VIR      LEE KINNEBREW      1/2/1979       1713    194    785358   LA    Caddo


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
                  2127675      
                  2127675      
                  2127675      

LA-LGW0287-000

   STATE OF LOUISIANA #19501    KCS RESOURCES, INC.      10/10/2007             2127675    LA    Caddo

LA-LGW0359-000

   MARJORIE CURRIE LACOUR    MOORINGSPORT ENERGY PROD CORP      12/7/1982          505    933262    LA    Caddo

LA-LGW0360-000

   BILL W SMITH ET UX    MOORINGSPORT ENERGY PROD CORP      12/13/1982       1993    509    933263    LA    Caddo

LA-LGW0361-000

   JULIA DAVIS HUTCHINSON    MOORINGSPORT ENERGY PROD CORP      1/4/1983       1993    500    933261    LA    Caddo

LA-LGW0362-000

   SUSAN F ROBERTS ET AL    VECTOR INVESTMENTS ET AL      3/1/1983       2008    404    939711    LA    Caddo

LA-LGW0363-000

   STATE OF LOUISIANA #10643    JOHN D BERNHARDT      3/14/1983       2031    347    949961    LA    Caddo

LA-LGW0364-000

   H A CUSHMAN ET AL    GEORGE A HADDAD JR      3/1/1971       1289    684    528010    LA    Caddo
                  2171083      

LA-LGW0368-000

   TIMOTHY S HEFFERN    PETROHAWK PROPERTIES LP      7/15/2008             2171083    LA    Caddo
                  2248054      
                  2248054      
                  2248054      

LA-LGW0370-001

   BRONNER FAMILY INVESTMENTS LLC    PETROHAWK PROPERTIES LP      6/11/2009             2248054    LA    Caddo

LA-LBN0012-000

   OTIS WELCH    F B KING JR      6/17/1961       267    233    226703    LA    Claiborne

LA-LBN0013-000

   JOHN MERRILL ET AL    F B KING JR      6/17/1961       267    279    226727    LA    Claiborne

LA-LBN0014-000

   HOWARD A LEE    F B KING JR      6/24/1961       267    275    226726    LA    Claiborne

LA-LBN0015-000

   W W (EVA) BENNETT ET AL    F B KING JR      11/21/1960       263    137    225647    LA    Claiborne

LA-LBN0016-000

   PAULINE BARHAM DREWETT    F B KING JR      11/27/1961       263    297    225732    LA    Claiborne

LA-LBN0017-000

   JOHN S PATTON    F B KING JR      1/30/1961       263    301    225733    LA    Claiborne

LA-LBN0018-000

   FRED B COLVIN ET AL    F B KING JR      1/30/1961       263    305    225734    LA    Claiborne

LA-LBN0019-000

   FRED B COLVIN ET AL    F B KING JR      1/30/1961       263    309    225735    LA    Claiborne

LA-LBN0020-000

   LISBON UNITED METHODIST CHURCH    GULF OIL CORPORATION      3/30/1959       238    256    219939    LA    Claiborne

LA-LBN0021-001

   B W WHITE ET AL    F B KING JR      3/21/1961       267    41    226598    LA    Claiborne

LA-LBN0021-002

   B W WHITE    G T WHITE      3/21/1960       252    334    223196    LA    Claiborne

LA-LBN0022-000

   T F GREESON ET AL    FRANK J HALL      5/24/1960       254    484    223739    LA    Claiborne

LA-LBN0023-000

   JOHN S PATTON    C C BARHAM      1/26/1956             208301    LA    Claiborne
            176    380    183306      

LA-LBN0024-000

   G T DAWSON ET AL    LEONARD W PHILLIPS      10/12/1949       176    380    208301    LA    Claiborne

LA-LBN0025-000

   CURTIS KILLGORE ET UX    F B KING JR      5/19/1961       266    138    226463    LA    Claiborne

LA-LBN0026-000

   LUCILLE DOSS    F B KING JR      6/19/1961       267    229    226702    LA    Claiborne

LA-LBN0027-001

   F M LOWREY ET AL    F B KING JR      11/8/1960       260    321    225145    LA    Claiborne
            260    325    225146      
            273    137    228148      

LA-LBN0027-002

   DALE LOWREY    F B KING JR      11/8/1960       292    327    232535    LA    Claiborne

LA-LBN0028-000

   JACK COPELAND    GULF OIL CORP      10/23/1962       283    361    230500    LA    Claiborne

LA-LBN0029-000

   L C STARR    SKYLAR OIL CO      3/23/1959       237    494    93408    LA    Claiborne
   B W BAILEY                     

LA-LBN0030-000

   A/K/A ELLA BAILEY    SKYLAR OIL CO      3/12/1959       235    314    93407    LA    Claiborne

LA-LBN0031-000

   C S L PATTON ET AL    F B KING      1/21/1958       230    274    215638    LA    Claiborne

LA-LBN0032-000

   C E PATTON    F B KING      1/21/1958       230    275    215639    LA    Claiborne
            165    124    174231      

LA-LBW0001-001

   PEARL WHITE ET AL    O A ROBINSON      12/31/1947       165    124    174231    LA    Claiborne

LA-LBW0002-001

   CHRISTINE LANEY HEATH ET AL    G H VAUGHN JR AND JACK C VAUGHN      4/7/1958             216408    LA    Claiborne

LA-LBW0002-002

   ELIZABETH ANN WASSEN GLEASON    G H VAUGHN JR AND JACK C VAUGHN      5/7/1958             216714    LA    Claiborne

LA-LBW0002-003

   LINDSEY LAND COMPANY ET AL    G H VAUGHN JR AND JACK C VAUGHN      5/20/1958             217323    LA    Claiborne

LA-LBW0003-001

   M W AYCOCK ET AL    G G NESBITT JR      7/18/1958             217561    LA    Claiborne

LA-LBW0003-002

   ESTATE OF B F WHITAKER DECD ET AL    G H VAUGHN PRODUCTION COMPANY      7/22/1958       235    107    217476    LA    Claiborne

LA-LBW0003-003

   THOMAS W KILLGORE JR ET AL      WILLIAM J NESBITT      7/20/1958             217562    LA    Claiborne


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-LBW0003-004

   MARJORIE WELCH    WILLIAM J NESBITT      7/21/1958             217563    LA    Claiborne

LA-LBW0004-001

   ARTHUR HENRY ET AL    JACK T EVERETT      1/8/1949       172    255       LA    Claiborne

LA-LBW0004-002

   FRANKLIN R HENRY    TXO PRODUCTION CORP      10/12/1980       757    136    341323    LA    Claiborne

LA-LBW0004-003

   ARLIVIA HENRY WHITE    TXO PRODUCTION CORP      1/5/1988       744    299    340273    LA    Claiborne

LA-LBW0004-004

   JOSEPH A HENRY    TXO PRODUCTION CORP      1/5/1988       744    199    340235    LA    Claiborne

LA-LBW0004-005

   BOBBY HENRY    TXO PRODUCTION CORP      1/5/1988       743    254    340162    LA    Claiborne

LA-LBW0004-006

   ARTHUR LEE HENRY ET UX    TXO PRODUCTION CORP      1/5/1988       743    159    340123    LA    Claiborne

LA-LBW0004-007

   ANVIL HENRY ET UX    TXO PRODUCTION CORP      1/5/1988       734    99    339772    LA    Claiborne

LA-LBW0004-008

   MILTON HENRY    TXO PRODUCTION CORP      1/5/1988       731    272    339460    LA    Claiborne

LA-LBW0004-009

   JEWELL MCCRARY HENRY    TXO PRODUCTION CORP      1/5/1988       725    173    338850    LA    Claiborne

LA-LBW0004-010

   ALLEN B HENRY    TXO PRODUCTION CORP      1/5/1988       724    80    338771    LA    Claiborne

LA-LBW0004-011

   OCIE JEAN FORTUNE    TXO PRODUCTION CORP      1/5/1988       723    58    338585    LA    Claiborne

LA-LBW0004-012

   E E HENRY ET UX    TXO PRODUCTION CORP      1/5/1988       723    54    338584    LA    Claiborne

LA-LBW0004-013

   MARGARET N HENRY WOODS    TXO PRODUCTION CORP      1/5/1988       717    94    338033    LA    Claiborne

LA-LBW0005-000

   R O PRYOR    UNION PRODUCING COMPANY      8/19/1948       169    204    176834    LA    Claiborne

LA-LBW0006-000

   R O PRYOR    UNION PRODUCING COMPANY      8/19/1948       169    201    176833    LA    Claiborne

LA-LBW0007-000

   M B ENGLISH    O A ROBINSON      1/3/1948             174230    LA    Claiborne

LA-LBW0009-000

   F B KING ET AL    THE TEXAS COMPANY      4/9/1946             167785    LA    Claiborne

LA-LBW0010-000

   JOSEPHINE WILLIS ETVIR    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    234    220239    LA    Claiborne

LA-LBW0011-001

   GUSSIE WEST ET VIR    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    239    220241    LA    Claiborne

LA-LBW0011-002

   O N MEADOWS ET UX    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    243    220242    LA    Claiborne

LA-LBW0011-003

   O S MIDDLEBROOK ET UX    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    247    220243    LA    Claiborne

LA-LBW0011-004

   WIDEMAN WATSON ET UX    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    251    220244    LA    Claiborne

LA-LBW0011-005

   E W GILL ET UX    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    255    220245    LA    Claiborne

LA-LBW0011-006

   A B ATKINS ET UX    G H VAUGHN PRODUCTION COMPANY      4/30/1959       239    259    220246    LA    Claiborne

LA-LBW0012-000

   NODIE WEST WIFE OF KING WEST    G H VAUGHN PRODUCTION COMPANY      7/8/1959       244    256    221443    LA    Claiborne

LA-LBW0013-000

   J MELTON OAKES ET AL    THE TEXAS COMPANY      7/28/1953             199044    LA    Claiborne

LA-LBW0014-001

   MARY AYCOCK LANEY ET AL    W J BUDD      3/14/1952             194635    LA    Claiborne

LA-LBW0014-002

   ELIZABETH ANN W GLEASON ET AL    W J BUDD      5/10/1952             194764    LA    Claiborne

LA-LBW0014-003

   H E PATTON ET AL    F M ROOME      8/26/1952             195698    LA    Claiborne

LA-LBW0015-001

   KETHA KING WOODARD ET VIR    MEDALLION PRODUCTION COMPANY      12/10/1995       1060    222    375210    LA    Claiborne

LA-LTC0001-001

   JAKE WALKER    CHARLES L MEADOWS      3/3/1975       409    73       LA    Claiborne

LA-LTC0002-001

   JAMES K GLADNEY ET AL    PERRY G HOLLOWAY      12/28/1974       406    364       LA    Claiborne

LA-LTC0002-002

   MARY GLADNEY HAYS    PERRY G HOLLOWAY      1/6/1975       506    560       LA    Claiborne

LA-PCK0001-001

   TYRELLE MEADOWS MAYBERRY ET AL    PETROFUNDS INC      3/23/1977       438    5    279280    LA    Claiborne

LA-PCK0001-002

   LUCY ANN DEASON    PETROFUNDS INC      3/28/1977       439    550    279809    LA    Claiborne

LA-PCK0002-000

   MRS LULA SKINNER ET AL    F B KING      3/7/1940       117    291    134089    LA    Claiborne

LA-PCK0003-000

   DAUCIE BUTLER PRATT ET AL    DAL LONG OIL COMPANY      11/18/1968       351    213    249065    LA    Claiborne

LA-PCK0004-001

   HENRY LEON BRENNER    PETROFUNDS INC      5/19/1969       355    119       LA    Claiborne

LA-PCK0004-002

   DR REASE MITCHAM ANNA WGILLER TRUST    MATLOOK OIL CORPORATION      12/6/1969       358    156    251939    LA    Claiborne

LA-PCK0004-003

   WALTER J GILLER MANAGING TRUSTEE    PETROFUNDS INC      4/19/1969       354    798       LA    Claiborne

LA-PCK0004-004

   MABEL L KLEIN DEER    MATLOCK OIL CORPORATION      12/11/1969       358    148    251937    LA    Claiborne

LA-PCK0004-005

   R U MADDOX ET AL    MATLOCK OIL CORPORATION      12/11/1969       358    152    251938    LA    Claiborne

LA-PCK0005-000

   JAMES R FULLER ET AL    DAL LONG OIL CO      11/19/1968       351    219    249066    LA    Claiborne

LA-PCK0006-000

   HILTON E REYNOLDS    PETROFUNDS INC      4/23/1969       354    794       LA    Claiborne

LA-PCK0007-001

   FAIR BUTLER DIGBY    PETROFUNDS INC      4/29/1969       354    766    250562    LA    Claiborne

LA-PCK0007-002

   VERA THOMPSON ET AL    PETROFUNDS INC      4/29/1969       354    528    250468    LA    Claiborne

LA-PCK0007-003

   VERNA T GILL ET AL    PETROFUNDS INC      4/21/1969       354    786    250567    LA    Claiborne

LA-PCK0007-004

   DR REASE MITCHAM    PETROFUNDS INC      4/21/1969       354    782    250566    LA    Claiborne

LA-PCK0007-005

   G C HICKS ET AL      C H C GERARD      9/19/1969       356    546    251312    LA    Claiborne


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-PCK0007-006

   DAUCIE BUTLER PRATT ET AL    MATLOCK OIL CORPORATION      8/26/1969       356    478    251278    LA    Claiborne

LA-PCK0008-000

   CLARE C CLARK ET AL    PAT N MASON      6/29/1968       350    440    248666    LA    Claiborne

LA-SGC0011-000

   EDDIE RAY ALLEN    HOOD PETROLEUM INC      4/5/2005       1359    162    416076    LA    Claiborne

LA-SGC0012-000

   ROBERT JOSEPH KING    HOOD PETROLEUM INC      5/6/2005       1359    165    416077    LA    Claiborne
   OZLEY D LTD REPRESENTED BY OZLEY D LLC                     

LA-SGC0019-001

   LAMAR E OZLEY JR AS MANAGER    KCS RESOURCES INC      9/7/2005       1372    49    417733    LA    Claiborne
   OZLEY A LTD REPRESENTED BY OZLEY A LLC                     

LA-SGC0019-002

   LAMAR E OZLEY JR AS MANAGER    KCS RESOURCES INC      9/7/2005       1372    46    417732    LA    Claiborne
            1424    63    424514      
            1221    471    F84581      
            1181    513    F67893      

LA-SGC0020-000

   JAMES B SMITH ET UX    KCS RESOURCES INC      8/30/2005       1379    88    418797    LA    Claiborne

LA-SGC0021-001

   DAVID R COX    KCS RESOURCES INC      12/14/2005       1375    135    418231    LA    Claiborne

LA-SGC0022-001

   GEORGE H MEADORS ET UX    KCS RESOURCES INC      8/16/2005       1181    516       LA    Claiborne
            1394    177    420895      

LA-SGC0022-002

   JAMES O SMITH III    KCS RESOURCES INC      3/2/2006       1394    177    420895    LA    Claiborne

LA-SGC0022-003

   W MARSHALL SHAW JR ET AL    KCS RESOURCES, INC.      5/2/2008       1477    151    430653    LA    Claiborne
            1371    62    417659      
            1376    275    418418      
            1371    62    417659      
            1376    275    418418      
            1371    62    417659      

LA-SGC0022-004

   MAXCO PROPERTIES LC    HOOD PETROLEUM INC      8/20/2005       1376    275    418418    LA    Claiborne
            1366    53    416922      

LA-SGC0022-005

   RUTH GILL JAMES    HOOD PETROLEUM INC      8/10/2005       1366    53    416922    LA    Claiborne
   THE PAIGE ELIZABETH PRINCE TRUST          1369    152    417361      

LA-SGC0022-008

   JOHN COLLIER PATTON AT TRUSTEE    HOOD PETROLEUM INC      8/29/2005       1369    152    417361    LA    Claiborne
            1369    158    417362      

LA-SGC0022-009

   JOHN COLLIER PATTON    HOOD PETROLEUM INC      8/29/2005       1369    158    417362    LA    Claiborne
            1367    1    417029      

LA-SGC0022-010

   RENE’ LEWIS DROUIN ET UX    HOOD PETROLEUM INC      8/26/2005       1367    1    417029    LA    Claiborne
   ELIZABETH ANN MEADORS HUEY          1369    146    417360      

LA-SGC0022-011

   GEORGE H MEADORS AS AGENT & ATTORNEY IN FACT    HOOD PETROLEUM INC      8/29/2005       1369    146    417360    LA    Claiborne
            1366    59    416923      

LA-SGC0022-012

   PAULYN GILL DOUGHERTY    HOOD PETROLEUM INC      8/10/2005       1366    59    416923    LA    Claiborne
   JOHN M CARPENTER TESTAMENTARY TRUST          1372    187    417798      

LA-SGC0022-013

   MARY WILKES MEADORS CARPENTER AS TRUSTEE    HOOD PETROLEUM INC      8/29/2005       1372    187    417798    LA    Claiborne
            1372    181    417797      

LA-SGC0022-014

   MARY WILKES MEADORS CARPENTER    HOOD PETROLEUM INC      8/29/2005       1372    181    417797    LA    Claiborne
   CAROLYN GILL TOPP                     
   VIRGINIA GILL SCHNEIDER AS AGENT & ATTORNEY IN          1370    298    417631      

LA-SGC0022-015

   FACT    HOOD PETROLEUM INC      8/20/2005       1370    298    417631    LA    Claiborne
   JOHN TORBERT GILL                     
   VIRGINIA GILL SCHNEIDER AS AGENT & ATTORNEY IN          1374    191    418117      

LA-SGC0022-016

   FACT    HOOD PETROLEUM INC      8/20/2005       1374    191    418117    LA    Claiborne
   GLEN RICHARD GILL                     
   VIRGINIA GILL SCHNEIDER AS AGENT & ATTORNEY IN          1371    07    417633      

LA-SGC0022-017

   FACT      HOOD PETROLEUM INC      8/20/2005       1371    07    417633    LA    Claiborne


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   MARY GILL BRYANT                     
   VIRGINIA GILL SCHNEIDER AS AGENT & ATTORNEY IN          1371    13    417634      

LA-SGC0022-018

   FACT    HOOD PETROLEUM INC      8/20/2005       1371    13    417634    LA    Claiborne
            1371    19    417635      

LA-SGC0022-019

   VIRGINIA GILL SCHNEIDER    HOOD PETROLEUM INC      8/20/2005       1371    19    417635    LA    Claiborne
            1437    85    425989      

LA-SGC0052-009

   ROY ROBERSON    CLAYTON WILLIAMS ENERGY INC      7/24/2007       1228    344    F87348    LA    Claiborne

LA-SGC0052-010

   RUFUS ALLEN    CLAYTON WILLIAMS ENERGY INC      7/30/2007       1437    82    425988    LA    Claiborne

LA-SGC0053-000

   NANCY LOUISE SPENCER KALLUS    KCS RESOURCES INC      7/1/2005       1364    9    416608    LA    Claiborne

LA-SGC0054-000

   LAWANA K JOHNSON    KCS RESOURCES INC      7/7/2005       1366    113    416946    LA    Claiborne

LA-SGC0055-000

   BARBARA KILPATRICK RAY    KCS RESOURCES INC      7/14/2005       1366    167    416964    LA    Claiborne

LA-SGC0056-000

   ROBERT L WOODARD    KCS RESOURCES INC      7/20/2005       1366    170    416965    LA    Claiborne

LA-SGC0057-000

   MARY MARGARET KILPATRICK MCKINNEY    KCS RESOURCES INC      7/14/2005       1366    176    416967    LA    Claiborne
            1366    179    416968      

LA-SGC0058-000

   DAVID ABE PERSINGER    KCS RESOURCES INC      7/14/2005       1185    635    F69745    LA    Claiborne
            1366    185    416970      

LA-SGC0059-000

   B J KILPATRICK    KCS RESOURCES INC      7/12/2005       1380    263    418967    LA    Claiborne
                  67400      

LA-SGC0062-000

   FANNIE L BROWNFIELD ET AL    TRIANGLE DRILLING CO. INC      2/6/2029       71    578    70709    LA    Claiborne
                  67298      
                  57298      
            73    47    71966      
            78    7    67298      
            73    47    71966      
                  67298      
            73    47    71966      
            73    47    67298      

LA-SGC0063-001

   A J HODGES ET AL    TRIANGLE DRILLING CO INC      2/18/2029       73    47    71966    LA    Claiborne
                  69727      
                  69727      
                  69727      

LA-SGC0063-002

   L M MOFFITT    TRIANGLE DRILLING CO INC      12/19/2029             69727    LA    Claiborne
   SOUTHLAND ROYALTY CO REPRESENTED BY P B                     

LA-SGC0063-003

   LAWRENCE AS PRESIDENT    TRIANGLE DRILLING CO INC      4/23/2029       71    559       LA    Claiborne

LA-SGC0063-004

   J F LUCEY ET UX    TRIANGLE DRILLING CO INC      6/12/2029             68614    LA    Claiborne
                  67312      

LA-SGC0064-001

   A J HODGES ET AL    TRIANGLE DRILLING CO INC      2/19/2029             67312    LA    Claiborne

LA-SGC0064-002

   J P HAWK    TRIANGLE DRILLING CO INC      1/15/2029             67326    LA    Claiborne

LA-SGC0064-003

   H R TREADWELL    TRIANGLE DRILLING CO INC      10/18/2029             69324    LA    Claiborne

LA-SGC0064-004

   FANNIE L BROWNFIELD ET AL    TRIANGLE DRILLING CO INC      2/28/2029       83    595    67328    LA    Claiborne

LA-SGC0064-005

   A J TREADWELL ET AL    TRIANGLE DRILLING CO INC      10/30/2029                LA    Claiborne
   O’BRIEN BROS INC REPRESENTED BY GEORGE P                     
   MORAN AS VICE-PRESIDENT AND W J O’BRIEN JR AS                     

LA-SGC0065-001

   SECRETARY    SUGAR CREEK PRODUCING COMPANY      1/9/1979       469    203    289769    LA    Claiborne

LA-SGC0065-002

   ALVIN J STEVENSON JR    SUGAR CREEK PRODUCING COMPANY      3/31/1979       469    198    289768    LA    Claiborne
            469    216    289772      

LA-SGC0065-003

   VERA STEVENSON FRYE ET VIR    SUGAR CREEK PRODUCING COMPANY      4/12/1979       469    216    289772    LA    Claiborne
            469    221    289773      

LA-SGC0065-004

   MARGUERITE STEVENSON HALL      SUGAR CREEK PRODUCING COMPANY      3/28/1979       469    221    289773    LA    Claiborne


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            471    472    290470      

LA-SGC0065-005

   JOHN T STEVENSON    SUGAR CREEK PRODUCING COMPANY      4/5/1979       471    472    290470    LA    Claiborne
   MILLARD P SNYDER AS AGENT AND A-I-F FOR MARIE                     

LA-SGC0065-006

   PATRICIA SNYDER ET AL    SUGAR CREEK PRODUCING COMPANY      1/17/1979       469    208    289770    LA    Claiborne

LA-SGC0065-007

   LINDA MERCER FLOYD    SUGAR CREEK PRODUCING COMPANY      1/17/1979       469    212    289771    LA    Claiborne

LA-SGC0065-008

   WILLIAM H MERCER    SUGAR CREEK PRODUCING COMPANY      1/17/1979       469    254    289781    LA    Claiborne
   B H SNYDER INDIVIDUALLY AND AS AGENT AND A-I-F                     

LA-SGC0065-009

   FOR W M SNYDER JR ET UX    SUGAR CREEK PRODUCING COMPANY      1/17/1979       469    258    289782    LA    Claiborne
   MILLARD P SNYDER AS AGENT AND A- I-F FOR JOSEPH                     

LA-SGC0065-010

   L HODGES JR ET AL    SUGAR CREEK PRODUCING COMPANY      1/17/1979       469    262    289783    LA    Claiborne
   JAMES MERCER VARGO IRREVOCABLE TRUST                     
   FIRST NATIONAL BANK OF SHREVEPORT TRUSTEE                     
   REPRESENTED BY IRENE WRIGHT AS VP & TRUST                     

LA-SGC0065-011

   OFFICER    SUGAR CREEK PRODUCING COMPANY      1/25/1979       469    274    289786    LA    Claiborne

LA-SGC0065-012

   GEORGE H MILLS    SUGAR CREEK PRODUCING COMPANY      8/30/1979       476    558    292181    LA    Claiborne

LA-SGC0065-013

   CORINNE ROY KELLY    SUGAR CREEK PRODUCING COMPANY      3/21/1979       469    226    289774    LA    Claiborne

LA-SGC0065-014

   ROBERT A ROY    SUGAR CREEK PRODUCING COMPANY      3/21/1979       469    230    289775    LA    Claiborne

LA-SGC0065-015

   JANE B GABLE ET VIR    SUGAR CREEK PRODUCING COMPANY      1/25/1979       469    234    289776    LA    Claiborne

LA-SGC0065-016

   LAURA COLEMAN ET VIR    SUGAR CREEK PRODUCING COMPANY      1/25/1979       469    238    289777    LA    Claiborne
   THE WILL OF CHARLES ALLEN FRANSWORTH MEMPHIS BANK AND TRUST CO TRUSTEE                     

LA-SGC0065-017

   REPRESENTED BY JOHN PITREE VP TRUST OFFICER    SUGAR CREEK PRODUCING COMPANY      1/25/1979       469    242    289778    LA    Claiborne

LA-SGC0065-018

   SARA M ROBERTS ET VIR    SUGAR CREEK PRODUCING COMPANY      1/25/1979       469    246    289779    LA    Claiborne

LA-SGC0065-019

   DR THAD M MOSELEY ET UX    SUGAR CREEK PRODUCING COMPANY      1/10/1979       469    250    289780    LA    Claiborne

LA-SGC0065-020

   CLAUDIA P MOSS    SUGAR CREEK PRODUCING COMPANY      1/10/1979       469    270    289785    LA    Claiborne

LA-SGC0065-021

   MCKENZIE AND BAER LAW FIRM    SUGAR CREEK PRODUCING COMPANY      6/1/1979       471    464    290468    LA    Claiborne
   SUSIE L WADLEY TESTAMENTARY TRUST #2                     

LA-SGC0065-022

   ROBERT SINCLAIR SUCCESSOR TRUSTEE    SUGAR CREEK PRODUCING COMPANY      4/16/1979       471    468    290469    LA    Claiborne
   ATCHLEY, RUSSELL, WALDROP AND HLAVINKA LAW                     

LA-SGC0065-023

   FIRM    SUGAR CREEK PRODUCING COMPANY      6/1/1979       471    877    290611    LA    Claiborne

LA-SGC0065-024

   EMILY W DEWARE ET AL    SUGAR CREEK PRODUCING COMPANY      6/1/1979       473    893    291171    LA    Claiborne

LA-SGC0065-025

   HOMER BURROWS ET UX    SUGAR CREEK PRODUCING COMPANY      1/25/1979       477    261    292418    LA    Claiborne
   MILLARD P SNYDER AS AGENT AND A-I-F FOR JOHN A                     

LA-SGC0065-026

   LOHMAN AND NANCY LOHMAN STAUB    SUGAR CREEK PRODUCING COMPANY      1/17/1979       469    266    289784    LA    Claiborne

LA-SGC0065-027

   EXXON CORPORATION    SUGAR CREEK PRODUCING CO.      11/1/1979       521    455    306945    LA    Claiborne
            929    40    358962      
            929    40    358962      
            929    40    358962      

LA-SGC0065-028

   EXXON CORPORATION    SUGAR CREEK PRODUCING COMPANY      1/1/1992       929
929
   40
40
   358962
358962
   LA    Claiborne

LA-SGC0067-001

   EASIE KEEN    UNION PRODUCING COMPANY      8/21/1956       221    151       LA    Claiborne
            95    52         
            95    52         

LA-SGC0068-000

   TONY DURRETT ETAL    SUGAR CREEK SYNDICATE INC ET AL      6/22/1934       95    52       LA    Claiborne

LA-SGC0069-000

   W J KEEN    A G BIRDWELL      3/21/1952       193    300    194393    LA    Claiborne

LA-SGC0070-000

   L E OZLEY    B G BYARS      8/14/1956       221    190    210534    LA    Claiborne

LA-SGC0071-000

   BEULAH FORTSON    UNION PRODUCING COMPANY ET AL      8/22/1956       221    210    210652    LA    Claiborne

LA-SGC0072-001

   ADDIE DURRETT    LA GLORIA OIL AND GAS COMPANY      3/1/1957       225    271    212707    LA    Claiborne

LA-SGC0072-002

   JOHN DURRETT    LA GLORIA OIL AND GAS COMPANY      3/1/1957       225    285    212767    LA    Claiborne


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SGC0072-003

   FRANK DURRETT    LA GLORIA OIL AND GAS COMPANY      3/1/1957       225    286    212768    LA    Claiborne

LA-SGC0073-001

   L E OZLEY    TIDEWATER OIL COMPANY      9/17/1957             214580    LA    Claiborne

LA-SGC0073-P02

   LAMAR E OZLEY    SUGAR CREEK PRODUCING CO      4/4/1978       454    843       LA    Claiborne
      HAYNES B OWNBY DRILLING COMPANY ET       230    218    214935      

LA-SGC0074-000

   ELLA MAE HASSELL ET AL    AL      11/11/1957       230    218    214935    LA    Claiborne

LA-SGC0075-001

   R A HASSELL ET AL    LA GLORIA OIL AND GAS COMPANY      3/14/1957       230    317    216230    LA    Claiborne
            298    146    233780      

LA-SGC0075-002

   R A HASSELL ET AL    HOOD GOLDSBERRY      1/3/1964       298    146    233780    LA    Claiborne

LA-SGC0076-001

   J RALPH GOFF    SUGAR CREEK PRODUCING COMPANY      8/17/1977       445    591    281713    LA    Claiborne

LA-SGC0076-002

   MARIE IVEY CASKEY    SUGAR CREEK PRODUCING COMPANY      8/25/1977       446    164    281872    LA    Claiborne
   W M DOBBINS NATURAL TUTOR FOR THE MINORS                     
   LON HENDERSON, ERLINE AND CLOYE MILDRED    STANDARD OIL COMPANY OF LOUISIANA ET                  

LA-SGC0077-000

   DOBBINS    AL      10/28/1931       86    165       LA    Claiborne

LA-SGC0078-P02

   J M KILPATRICK ET AL    TRIANGLE DRILLING CO INC      2/28/2029       73    152    68615    LA    Claiborne
            73    45    67296      
            74    248    69788      

LA-SGC0079-000

   W M DOBBINS ET AL    TRIANGLE DRILLING CO INC      12/12/2028       86    167    80691    LA    Claiborne
            73    57    67309      

LA-SGC0080-000

   J W STEVENSON ET AL    TRIANGLE DRILLING CO INC      11/27/2028       74    249    69789    LA    Claiborne

LA-SGC0082-000

   L C GARDNER    A R WHERRITT      7/6/1951       192    162       LA    Claiborne
            225    16         
            195    415         
            195    423         
            195    422         

LA-SGC0083-001

   MARY L BAILEY ET AL    UNION PRODUCING CO ET AL      9/5/1956       195    428       LA    Claiborne

LA-SGC0084-000

   SAM ANDREWS ET AL    TRIANGLE DRILLING CO INC      3/7/2029       73    56       LA    Claiborne
            73    83         

LA-SGC0085-001

   A J HODGES ET AL    TRIANGLE DRILLING CO INC      2/18/2029       73    83       LA    Claiborne
   T W AUBREY, NATURAL TUTOR FOR THE MINOR FLORA                     

LA-SGC0085-002

   AUBREY AND LAWRENCE BROWN    L M MOFFITT      2/8/1930       76    2       LA    Claiborne

LA-SGC0085-003

   J G WILSON    L M MOFFITT      2/11/1930       76    3       LA    Claiborne

LA-SGC0086-000

   ADDIE ANDREWS DARRETT    J M MOSLEY      2/1/1930       73    183       LA    Claiborne

LA-SGC0087-000

   ANNIE HARRIS ET AL    TRIANGLE DRILLING CO INC      8/4/1930       79    415       LA    Claiborne

LA-SGC0088-001

   RUFUS SIMS ET AL    TRIANGLE DRILLING CO INC      1/1/2029       73    62       LA    Claiborne

LA-SGC0088-002

   RUFUS SIMS ET AL    UNITED GAS PUBLIC SERVICE CO ET AL      5/31/1933       88    411       LA    Claiborne

LA-SGC0089-000

   ANNE HARRIS ET AL    UNITED GAS PUBLIC SERVICE CO ET AL      5/31/1933       88    419       LA    Claiborne

LA-SGC0090-001

   DAYTON SIMS    UNION PRODUCING COMPANY ET AL      3/9/1957       230    2       LA    Claiborne

LA-SGC0090-P02

   DAYTON SIMS ET AL    SUGAR CREEK PRODUCING COMPANY      7/20/1978       459    600       LA    Claiborne

LA-SGC0091-000

   LESTER SIMS ET AL    UNION PRODUCING CO ET AL      3/9/1957       230    1       LA    Claiborne
   COMMERICAL BANK OF ARCADIA REPRESENTED BY B R                     

LA-SGC0092-000

   FELTS ET AL    TRAINGLE DRILLING CO INC      11/7/2028       73    52    67303    LA    Claiborne

LA-SGC0094-000

   ELVYE BYRD WATSON ET AL    MCRAE EXPLORATION INC      9/10/1976       429    722    276608    LA    Claiborne
   BIENVILLE INVESTMENTS                     

LA-SGC0095-001

   REPRESENTED BY JOHN B BARR, AS PARTNER    WILDHORSE RESOURCES LLC      6/15/2012       1612    7    446508    LA    Claiborne

LA-SGC0095-002

   DANA MARIE DAWKINS    WILDHORSE RESOURCES LLC      4/26/2012       1608    274    446180    LA    Claiborne

LA-SGC0095-003

   JAMES PHILLIP DAWKINS    WILDHORSE RESOURCES LLC      4/26/2012       1609    150    446245    LA    Claiborne

LA-SGC0095-004

   KEVIN WEBB DAWKINS    WILDHORSE RESOURCES LLC      4/26/2012       1608    278    446181    LA    Claiborne
   ROY HENRY AND HILDA JEAN SMITH ANTEE         10/27/2012       1635    292    448980    LA    Claiborne
   WILLIAM CHRISTOPHER AND RACHEL GRIFFIN                     
   BASSETT         1/28/2013       1648    210    450477    LA    Claiborne
   SUMMER SIMPSON BOURN         11/5/2012       1635    279    448978    LA    Claiborne


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   BONNIE KELLEY BRACKIN         10/1/2012       1627    242    448214    LA    Claiborne
   DONALD J BYRD         3/14/2013       1648    240    450482    LA    Claiborne
   KATHY ANN CHANDLER         10/28/2012       1635    251    448976    LA    Claiborne
   ROBIN D KEEN DOBBINS         10/1/2012       1627    264    448218    LA    Claiborne
   GARY RONALD AND BRENDA KAY SCHMIDT                     
   GOODNIGHT         5/14/2013       1652    1    450891    LA    Claiborne
   MARY WILL JORDAN GRIFFIN         10/1/2012       1627    246    448215    LA    Claiborne
   GARY W. AND LELA A. HOLLEY         9/11/2012       1627    297    448224    LA    Claiborne
   SAMMIE L HOWELL, JR.         9/11/2012                LA    Claiborne
   MARION JEANETTE KEEN         10/1/2012       1627    252    448216    LA    Claiborne
   MOLLY SUE KEEN         10/1/2012       1627    258    448217    LA    Claiborne
   MARION JEANETTE KEEN         10/1/2012       1627    270    448219    LA    Claiborne
   REBECCA MOAK KEEN         6/10/2013       1656    164    451383    LA    Claiborne
   ELIZABETH CHERRY KELLEY         10/1/2012       1627    238    448213    LA    Claiborne
   BRIDGET SUZANNE CROWELL LANGLEY         10/15/2012                LA    Claiborne
   ROBERT DANLEY AND ANNA HARKINS LEWIS         10/1/2012       1627    205    448208    LA    Claiborne
   GAYLON L. AND PATSY BLACKWELL MARKS         10/15/2012       1627    291    448223    LA    Claiborne
   DARREN SCOTT AND KIMBERLY H. MOAK         12/6/2012       1637    130    449242    LA    Claiborne
   WILLIAM E. AND OLIVE REBECCA PARDUE MOORE         12/19/2012                LA    Claiborne
   MUDD HOLDINGS, L.L.C         3/8/2013       1648    220    450479    LA    Claiborne
   MARCUS LANE MURPHY         12/31/2012       1637    121    449240    LA    Claiborne
   RUTH CHILDRESS MURRAY         9/7/2012       1628    12    448227    LA    Claiborne
   DELAIN DREAZEALE PEARSON         10/1/2012       1627    209    448209    LA    Claiborne
   DANNY B PEARSON         10/1/2012       1635    268    448976    LA    Claiborne
   CHRISTOPHER ERIC AND STEPHANIE B. PERRY         12/19/2012       1648    267    450485    LA    Claiborne
   PULLIG HOLDINGS, L.L.C.         3/8/2013       1648    215    450478    LA    Claiborne
   GARY D. AND TRACIENNE M. REINHOLT         10/16/2012       1635    255    448974    LA    Claiborne
   ROBERT DANE RICH         1/10/2013       1650    260    450748    LA    Claiborne
   CARROLL DAVIS RICH         1/10/2013       1650    255    450747    LA    Claiborne
   EDNA LINDSEY ROBINSON         4/1/2013       1648    232    450481    LA    Claiborne
   CARSON HINES ROGERS         12/21/2012       1650    265    450749    LA    Claiborne
   MARTIN DANIEL ROLLINSON         1/29/2013       1648    247    450483    LA    Claiborne
   RUSSELL LAND & TIMBER, LLC         12/6/2012       1650    274    450751    LA    Claiborne
   CALVIN C. AND DOROTHY FAYE SIMPSON         10/15/2012                LA    Claiborne
   JERRY LANE AND PAMELA RUSSELL SIMPSON         11/5/2012       1635    272    448977    LA    Claiborne
   MARGARET B SIMPSON (USUFRUCT)         10/24/2012       1627    198    448207    LA    Claiborne
   MYRTIS COOK SPRINGER         10/15/2012       1627    280    448221    LA    Claiborne
   SUCCESSION OF LUMMIE RAY WAITS         11/9/2012       1635    296    449891    LA    Claiborne
   SUCCESSION OF LUMMIE RAY WAITS         12/27/2012       1648    272    450486    LA    Claiborne
   SUGAR CREEK FARMS, INC.         9/26/2012       1627    213    448210    LA    Claiborne
   THE ADAMS LIVING TRUST OF 1993         11/1/2012       1635    286    448979    LA    Claiborne
   CHRISTINE RENEE ELLIS TRAHAN         1/9/2013       1650    270    450750    LA    Claiborne
   RUDI BETH YOUNG         11/1/2012       1648    206    450476    LA    Claiborne

LA-SGC0052-001

   CLEVON ROBERSON ET AL    CLAYTON WILLIAMS ENERGY INC      11/5/2007       1235    341    F90184    LA    Claiborne and Lincoln

LA-SGC0052-002

   ESTHER ALLEN KING ET AL    HOOD PETROLEUM INC      6/15/2005       1178    124    F66193    LA    Claiborne and Lincoln

LA-SGC0052-004

   MILDRED ALLEN BARNES ET AL    HOOD PETROLEUM INC      6/15/2005       1369    164    417363    LA    Claiborne and Lincoln

LA-SGC0052-005

   CYNTHIA WALKER STEINACKER    HOOD PETROLEUM INC      3/23/2006       1197    717    F75036    LA    Claiborne and Lincoln

LA-SGC0052-006

   TAMMY LYNN WALKER    HOOD PETROLEUM INC      3/15/2006       1197    711    F75034    LA    Claiborne and Lincoln

LA-SGC0052-007

   JOHN WAYNE WALKER    HOOD PETROLEUM INC      3/23/2006       1197    714    F75035    LA    Claiborne and Lincoln

LA-SGC0052-008

   DEBRA LOUISE WALKER    HOOD PETROLEUM INC      3/23/2006       1197    708    F75033    LA    Claiborne and Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SGC0052-003

   RUFUS ALLEN    HOOD PETROLEUM INC      6/15/2005       1178    131    F66195    LA    Claiborne and
Lincoln
Claiborne

LA-HYN0001-MIN

   ABERDEEN MINERALS    DEVON PRODUCTION      1/1/2001                LA    Lincoln
   DONNA JEAN DUNCAN FORD INDIVIDUALLY AND AS                     
   USUFRUCT                     
   INCOME BENEFICIARY AND TRUSTEE OF THE FORD          1366    47    416921       Claiborne

LA-SGC0022-006

   FAMILY INVESTMENT COMPANY    HOOD PETROLEUM INC      8/10/2005       1366    47    416921    LA    Lincoln
            1367    82    417068       Claiborne

LA-SGC0022-007

   PANTALOON HOLDING L P    HOOD PETROLEUM INC      8/29/2005       1367    82    417068    LA    Lincoln

LA-BEN0006-000

   SUSTAINABLE FORESTS LLC    KCS RESOURCES INC      8/10/2005       854    333    621058    LA    De Soto

LA-BEN0011-000

   LA BOKAY CORPORATION    KCS RESOURCES INC      3/1/2006       999    628    661973    LA    De Soto

LA-BEN0012-001

   ALLEN L EVANS ET UX    KCS RESOURCES INC      1/5/2005       843    135    616597    LA    De Soto

LA-BEN0013-000

   STEVEN LEWIS CONFAIR ET UX    KCS RESOURCES INC      9/14/2004       841    1    615624    LA    De Soto

LA-BEN0014-000

   VICTOR F JACKSON    KCS RESOURCES INC      11/1/2004       841    46    615636    LA    De Soto

LA-BEN0015-000

   JO ANNE HILL COPELAND    KCS RESOURCES INC      11/1/2004       841    50    615637    LA    De Soto

LA-BEN0016-000

   BERTHA M JACKSON JONES    KCS RESOURCES INC      11/1/2004       841    9    615626    LA    De Soto

LA-BEN0017-001

   JAMES F GREER ET UX    KCS RESOURCES INC      9/22/2004       841    67    615641    LA    De Soto
   R A TIMBER INC                     

LA-BEN0017-002

   LOIS BOEMER GREER    KCS RESOURCES INC      10/1/2004       841    55    615638    LA    De Soto

LA-BEN0017-003

   BO RISINGER ET UX    KCS RESOURCES INC      10/1/2004       841    59    615639    LA    De Soto

LA-BEN0017-004

   ROBERT G GREER ET UX    KCS RESOURCES INC      9/22/2004       841    63    615640    LA    De Soto

LA-BEN0017-005

   RONNIE BORDERS INC    KCS RESOURCES INC      5/14/2007       932    42    644873    LA    De Soto

LA-BEN0018-000

   DOROTHY FAYE STANLEY    KCS RESOURCES INC      11/2/2004       841    12    615627    LA    De Soto

LA-BEN0019-000

   WHITLOCK ENTERPRISES LLC    KCS RESOURCES INC      9/1/2004       841    26    615631    LA    De Soto
   LEONARD CARL WHITLOCK INDIV & AS TRUSTEE                     

LA-BEN0020-000

   OF THE CLAUDINE WHITLOCK TESTAMENTARY TRUST    KCS RESOURCES INC      9/1/2004       841    30    615632    LA    De Soto

LA-BEN0021-001

   JAMES J PHARES ET UX    KCS RESOURCES INC      9/29/2004       841    15    615628    LA    De Soto

LA-BEN0021-002

   NABORS PROPERTIES LLC    KCS RESOURCES INC      11/1/2005       864    23    624400    LA    De Soto

LA-BEN0022-001

   WAYMON GUITON    KCS RESOURCES INC      9/22/2004       841    79    615644    LA    De Soto

LA-BEN0022-002

   MAUDICE O GUITON GENTRY    KCS RESOURCES INC      9/22/2004       840    876    615618    LA    De Soto

LA-BEN0022-003

   IDA B GUITON BOYETTE    KCS RESOURCES INC      9/22/2004       841    71    615642    LA    De Soto

LA-BEN0022-004

   LULA MAE GUITON WILLIAMS    KCS RESOURCES INC      9/22/2004       841    75    615643    LA    De Soto

LA-BEN0022-005

   JESSE GUITON JONES    KCS RESOURCES INC      2/8/2005       847    715    618543    LA    De Soto

LA-BEN0022-006

   TEOLA GUITON SANDERS    KCS RESOURCES INC      2/8/2005       847    723    618545    LA    De Soto

LA-BEN0022-007

   NICHELE GUITON KINLOW    KCS RESOURCES INC      2/8/2005       849    333    619178    LA    De Soto

LA-BEN0022-008

   ANTONIO ALLEN    KCS RESOURCES INC      2/2/2005       848    521    618878    LA    De Soto

LA-BEN0022-009

   OSCAR V GUITON    KCS RESOURCES INC      10/7/2004       854    666    621200    LA    De Soto

LA-BEN0022-010

   BIRDIE DILWORTH GUITON    KCS RESOURCES INC      10/7/2004       856    194    621656    LA    De Soto

LA-BEN0022-011

   FELICE MELLIEON MARTINEZ    KCS RESOURCES INC      12/5/2005       863    872    624389    LA    De Soto

LA-BEN0022-012

   LESLIE G BENIN    KCS RESOURCES INC      12/29/2005       872    354    627083    LA    De Soto

LA-BEN0022-013

   LATANYA GUITON    KCS RESOURCES INC      1/29/2006       868    461    625817    LA    De Soto
   NELWYN HAMILTON ADAMS INDIVIDUALLY AND                     
   AS AGENT AND A-I-F FOR JAMES R ADAMS AND                     

LA-BEN0023-000

   WILLIAMS C ADAMS    KCS RESOURCES INC      10/7/2004             613611    LA    De Soto

LA-BEN0024-000

   DANIEL WARREN COLLINS ET AL    KCS RESOURCES INC      12/9/2005       864    1    624395    LA    De Soto

LA-BEN0025-000

   JESSE JAMES JACKSON    KCS RESOURCES INC      11/1/2004       864    38    624403    LA    De Soto

LA-BEN0026-000

   HEWITT LAND INVESTMENTS LLC    KCS RESOURCES INC      5/20/2006       907    666    636836    LA    De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-BEN0027-000

   BLACKSTONE MINERALS CO ET AL    KCS RESOURCES INC      10/11/2004       840    50    615233    LA    De Soto

LA-BEN0028-000

   CPS TIMBERLANDS LLC    KCS RESOURCES INC      12/15/2004       840    48    615232    LA    De Soto

LA-BEN0029-001

   GARY W ELZEN    KCS RESOURCES INC      9/22/2004       841    22    615630    LA    De Soto

LA-BEN0029-002

   FRED T ELZEN    KCS RESOURCES INC      9/10/2004       841    34    615633    LA    De Soto

LA-BEN0029-003

   YVONNE BROWN HENAGAN    KCS RESOURCES INC      9/10/2004       840    895    615622    LA    De Soto

LA-BEN0029-004

   PATRICIA BROWN HILBURN    KCS RESOURCES INC      9/10/2004       841    42    615635    LA    De Soto

LA-BEN0029-005

   GAYLE JOSEPH JOBE    KCS RESOURCES INC      9/10/2004       840    899    615623    LA    De Soto

LA-BEN0029-006

   TERESA JOSEPH ROOSE    KCS RESOURCES INC      9/10/2004       841    38    615634    LA    De Soto

LA-BEN0029-007

   JOE ANTHONY ELZEN III    KCS RESOURCES INC      9/22/2004       841    18    615629    LA    De Soto

LA-BEN0029-P08

   JOE ANTHONY ELZEN III    PETROHAWK PROPERTIES LP      5/29/2008       949    161    649540    LA    De Soto

LA-BEN0029-P09

   FRED T ELZEN    PETROHAWK PROPERTIES LP      5/28/2008       949    169    649542    LA    De Soto

LA-BEN0029-P10

   PATRICIA BROWN WILLIAMSON    PETROHAWK PROPERTIES LP      5/28/2008       949    165    649541    LA    De Soto

LA-BEN0029-P11

   YVONNE BROWN HENAGAN    PETROHAWK PROPERTIES LP      5/28/2008       949    173    649543    LA    De Soto

LA-BEN0029-P12

   TERESA JOSEPH ROOSE    PETROHAWK PROPERTIES LP      5/29/2008       949    177    649544    LA    De Soto

LA-BEN0029-P13

   MARSHALL W JOBE    PETROHAWK PROPERTIES LP      6/4/2008       949    410    649644    LA    De Soto

LA-BEN0032-P00

   STEVEN LEWIS CONFAIR ET UX    PETROHAWK PROPERTIES LP      6/2/2008       949    181    649545    LA    De Soto

LA-BEN0033-000

   DANIEL WARREN COLLINS ET AL    KCS RESOURCES LLC      6/30/2009       1024    483    667457    LA    De Soto

LA-BEN0034-000

   LA BOKAY CORPORATION    PETROHAWK PROPERTIES LP      8/15/2009       1029    784    668626    LA    De Soto

LA-LGP0001-001

   ANDREW J HODGES III ET AL    KCS RESOURCES INC      5/2/2006       875    886    628214    LA    De Soto
   MARFEL                     

LA-LGP0002-000

   BY DR KENT E ANTHONY MANAGING PARTNER    KCS RESOURCES INC      2/16/2007       907    670    636837    LA    De Soto

LA-LGP0003-001

   SANDRA S HOLLAND ET AL    KCS RESOURCES INC      3/13/2007       912    483    638447    LA    De Soto

LA-LGP0004-000

   NBC PROPERTY MANAGEMENT LLC    KCS RESOURCES INC      3/9/2007       912    488    638448    LA    De Soto

LA-LGP0005-000

   DONNA B STEARNS ETAL    KCS RESOURCES INC      3/29/2007       932    123    644893    LA    De Soto

LA-LGP0006-000

   GAY N B REYNOLDS MAY    PETROHAWK PROPERTIES LP      9/24/2009       1039    792    670675    LA    De Soto

LA-LGP0007-000

   JOHNNY RAY BOOKER    PETROHAWK PROPERTIES LP      9/28/2009       1039    767    670670    LA    De Soto

LA-LGP0008-000

   SUELLA F B COOPER ET VIR    PETROHAWK PROPERTIES LP      9/25/2009       1039    777    670672    LA    De Soto
            1039    772    670671      

LA-LGP0009-001

   TEANA R CHADWICK ET VIR    PETROHAWK PROPERTIES LP      9/29/2009       1039    772    670671    LA    De Soto

LA-LGP0009-002

   LISA MARIE SNEAD    PETROHAWK PROPERTIES LP      9/29/2009       1039    797    670676    LA    De Soto

LA-LGP0009-003

   MARY J CANIPE    PETROHAWK PROPERTIES LP      9/29/2009       1043    681    671530    LA    De Soto

LA-LGP0038-001

   OLLIE COLEMAN MALLORY ET AL    SIDNEY E PINKSTON JR      7/13/1979       428    700    417125    LA    De Soto

LA-LGP0038-002

   J B WOOD    SIDNEY E PINKSTON JR      7/13/1979       428    704    417126    LA    De Soto
      TEXAS GENERAL PETROLEUM             408278      

LA-LGP0039-000

   DOROTHY NELL CREECH STRONG ET AL    CORPORATION      6/29/1978       416    709    408321    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0040-000

   GRAHAM CREECH ET AL    CORPORATION      6/29/1978       416    697    408275    LA    De Soto

LA-LGP0041-000

   JAMES BOOKER ET UX    TRANSCO EXPLORATION COMPANY      9/9/1980       441    333    429174    LA    De Soto

LA-LGP0042-000

   BILL BURCH ET UX    TRANSCO EXPLORATION COMPANY      3/12/1980       434    117    424445    LA    De Soto

LA-LGP0043-000

   MARIE LEE NABORS ET AL    SIDNEY E PINKSTON JR      8/15/1979       432    99    421618    LA    De Soto
   MABEL B CALHOUN                     

LA-LGP0044-001

   A/K/A MABLE B CALHOUN    TRANSCO EXPLORATION COMPANY      3/25/1982       505    939    448941    LA    De Soto

LA-LGP0044-002

   NITA CALHOUN SMITH    TRANSCO EXPLORATION COMPANY      3/25/1982       505    943    448942    LA    De Soto

LA-LGP0044-003

   S LOUIS CREECH    TRANSCO EXPLORATION COMPANY      3/14/1982       505    947    448943    LA    De Soto
      TEXAS GENERAL PETROLEUM       416    673    408269      

LA-LGP0045-001

   MYRTLE CREECH ET AL    CORPORATION      6/29/1978       416    673    408269    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0045-002

   GARY R DOLEZAL    CORPORATION      8/9/1978       428    633    417104    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0045-003

   MARICE SEIBER    CORPORATION      8/9/1978       428    617    417100    LA    De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
      TEXAS GENERAL PETROLEUM                  

LA-LGP0045-004

   JOYCE ANN GLAU    CORPORATION      8/9/1978       428    621    417101    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0045-005

   BILLIE JANE DAVIS    CORPORATION      8/9/1978       428    625    417102    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0045-006

   MATTIE CREECH    CORPORATION      8/9/1978       428    613    417099    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0045-007

   DONALD C DOLEZAL    CORPORATION      8/9/1978       428    629    417103    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0046-001

   HERBERT FULTS    CORPORATION      12/14/1979       432    563    422684    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0046-002

   GARY R DOLEZAL    CORPORATION      7/10/1978       416    693    408274    LA    De Soto

LA-LGP0046-003

   EVA LOIS JONES FARGO    SIDNEY E PINKSTON JR      6/13/1978       415    717    407543    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0046-004

   DONALD C DOLEZAL    CORPORATION      7/10/1978       416    689    408273    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0046-005

   JOYCE ANN GLAU    CORPORATION      7/10/1978       428    590    417093    LA    De Soto
            435    660    426752      

LA-LGP0046-006

   META CREECH GRIGG    TRANSCO EXPLORATION COMPANY      5/27/1980       435    660    426752    LA    De Soto
      TEXAS GENERAL PETROLEUM       416    677    408270      

LA-LGP0046-007

   MARICE SEIBER    CORPORATION      7/10/1978       416    677    408270    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0046-008

   MATTIE CREECH    CORPORATION      7/10/1978       416    681    408271    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0046-009

   BILLIE JANE DAVIS    CORPORATION      7/10/1978       416    685    408272    LA    De Soto
            416    668    408268      
            416    668    408268      
      TEXAS GENERAL PETROLEUM       416    668    408268      

LA-LGP0047-001

   E CARLTON MCCOY ET AL    CORPORATION      6/29/1978       416    668    408268    LA    De Soto
      TEXAS GENERAL PETROLEUM       428    597    417095      

LA-LGP0047-002

   WILLIE CREECH ANDREWS    CORPORATION      9/8/1978       428    597    417095    LA    De Soto

LA-LGP0047-003

   FRANCES ROUGEOT    SIDNEY E PINKSTON JR      4/13/1978       415    713    407542    LA    De Soto

LA-LGP0047-004

   THOMAS DENNISON    TRANSCO EXLORATION COMPANY      6/10/1980       435    656    426751    LA    De Soto
      TEXAS GENERAL PETROLEUM                  

LA-LGP0047-005

   JANIE LOU CREECH    CORPORATION      12/5/1978       428    601    417096    LA    De Soto
      TEXAS GENERAL PETROLEUM       416    654    408265      

LA-LGP0047-006

   CARLTON VERNON MCCOY    CORPORATION      6/29/1978       416    654    408265    LA    De Soto

LA-LGP0048-000

   J P TODD ET UX    PHILLIPS PETROLEUM COMPANY      2/25/1955       209    287    242190    LA    De Soto
            217    439    249886      

LA-LGP0049-001

   DOVIE WEEKS LITTON WADDELL    PHILLIPS PETROLEUM CO.      2/28/1956       217    439    249886    LA    De Soto

LA-LGP0049-002

   J A WEEKS    PHILLIPS PETROLEUM COMPANY      2/28/1956       217    441    249887    LA    De Soto

LA-LGP0050-000

   J H SIMS    PHILLIPS PETROLEUM COMPANY      2/21/1956       217    393    249761    LA    De Soto

LA-LGP0051-001

   J V CHRISTIAN    SKELLY OIL COMPANY      11/26/1954       207    625    240335    LA    De Soto

LA-LGP0051-002

   J H SIMS    PHILLIPS PETROLEUM COMPANY      10/8/1956       222    347    254645    LA    De Soto

LA-LGP0052-000

   GERTRUDE ATKINS ET AL    THE OHIO OIL COMPANY      4/4/1955       210    245    243150    LA    De Soto

LA-LGP0053-000

   RACHAL CHRISTIAN ET AL    JOHN ALBAN      3/29/1945       154    271    167156    LA    De Soto

LA-LGP0054-001

   MARY A RENTHY PALMER ANDERSON ET AL    C P SCURLOCK      5/31/1945       158    87    169303    LA    De Soto

LA-LGP0054-002

   MARK ANDERSON    C P SCURLOCK      5/31/1945       158    64    169301    LA    De Soto

LA-LGP0054-003

   CLARA HOBBS    C P SCURLOCK      5/31/1945       158    61    169300    LA    De Soto

LA-LGP0055-000

   J G AUSTIN    J H SIMS      4/9/1946       161    545    174847    LA    De Soto

LA-LGP0056-001

   IVA MAE SIMMONS    JULIAN M FARMER      6/10/1955       213    193    244277    LA    De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-LGP0056-002

   MARK W ANDERSON    JULIAN M FARMER      6/10/1955       213    191    244276    LA    De Soto

LA-LGP0056-003

   BESSIE A GRISSOM ET AL    JULIAN M FARMER      6/10/1955       213    195    244278    LA    De Soto

LA-LGP0056-004

   CLARA JONES HOBBS    JULIAN M FARMER      6/10/1955       213    189    244275    LA    De Soto

LA-LGP0056-005

   ELLEN A BONDS    OLIN OIL & GAS CORPORATION      8/11/1955       213    569    245456    LA    De Soto

LA-LGP0057-000

   FA HOELL    J H SIMS      4/26/1946       164    55    175557    LA    De Soto

LA-LGP0058-000

   FROST LUMBER INDUSTRIES INC    JOHN ALBAN      4/9/1945       151    573    169938    LA    De Soto
            210    175    243011      

LA-LGP0059-000R

   REBA ANTHONY THOMPSON    PHILLIPS PETROLEUM COMPANY      3/31/1955       210    175    243011    LA    De Soto
            210    177    243012      

LA-LGP0060-000R

   J B ANTHONY ET UX    PHILLIPS PETROLEUM COMPANY      4/20/1955       210    177    243012    LA    De Soto
            209    437    242343      
            209    437    242343      
            209    437    242343      

LA-LGP0061-000R

   JOHN J BOOKER    WILLIAM J NESBITT      3/25/1955       209    437    242343    LA    De Soto
            207    333    239301      

LA-LGP0062-000R

   MARY KATHARINE MOATS HOLLOWAY    SKELLY OIL COMPANY      10/8/1954       207    333    239301    LA    De Soto
            220    521    252923      

LA-LGP0063-001R

   WILLIE B COLEMAN    G G NESBITT JR      8/8/1956       220    521    252923    LA    De Soto
            220    519    252921      

LA-LGP0063-002R

   KEITH D WARD    G G NESBITT JR      8/8/1956       220    519    252921    LA    De Soto
            220    517    252919      

LA-LGP0064-000R

   PEARL ODOM    G G NESBITT JR      8/8/1956       220    517    252919    LA    De Soto
            220    543    253228      

LA-LGP0065-000R

   ETHEL CHRISTIAN BRYANT ET VIR    MONSANTO CHEMICAL COMPANY      8/9/1956       220    543    253228    LA    De Soto
            233    107    261395      

LA-LGP0066-000R

   ETHEL CHRISTIAN BRYANT ET VIR    MONSANTO CHEMICAL COMPANY      8/9/1957       233    107    261395    LA    De Soto
            210    125    242947      

LA-LGP0067-000R

   JOHN BOONE BOOKER    PHILLIPS PETROLEUM COMPANY      3/28/1955       210    125    242947    LA    De Soto
            210    181    243014      

LA-LGP0068-001R

   G E MOATS ET AL    PHILLIPS PETROLEUM COMPANY      4/4/1955       210    181    243014    LA    De Soto
                  248371      
            210    183    243015      

LA-LGP0068-002R

   JOSHUA M CRUSE ET AL    PHILLIPS PETROLEUM COMPANY      4/4/1955       210    183    243015    LA    De Soto
            0214    0231    246448      

LA-LGP0069-000R

   G E MOATS    PHILLIPS PETROLEUM COMPANY      9/22/1955       0214    0231    246448    LA    De Soto
            210    59    242843      

LA-LGP0070-000R

   WILLIE B BOOKER WARD COLEMAN    PHILLIPS PETROLEUM COMPANY      3/24/1955       210    59    242843    LA    De Soto

LA-SPI0002-000

   KETCO CORPORATION    ST MARY LAND & EXPLORATION      3/10/2004       821    69    608761    LA    De Soto

LA-SPI0003-000

   LARRY RODNEY CROCKER    ST MARY LAND & EXPLORATION      3/15/2004       821    83    608765    LA    De Soto

LA-SPI0004-000

   BENJAMIN GEORGE CROCKER    ST MARY LAND & EXPLORATION      3/15/2004       821    86    608766    LA    De Soto
            427    441    415330      

LA-SPI0201-001R

   JANE LESH MURPHY    JAMES N BURGIN      1/17/1979       427    441    415330    LA    De Soto
            427    437    415329      

LA-SPI0201-002R

   LUCY D LESH ET AL    JAMES N BURGIN      1/17/1979       427    437    415329    LA    De Soto
            427    639    415715      

LA-SPI0201-003R

   JEROME TEMPLETON    JAMES N BURGIN      2/21/1979       427    639    415715    LA    De Soto
            427    239    414772      

LA-SPI0201-004R

   DUDLEY J LEBLANC JR ET AL    JAMES N BURGIN      12/20/1978       427    239    414772    LA    De Soto
  

ROWENA ARMISTEAD

         427    248    414774      

LA-SPI0201-005R

   AKA ROWENA P ARMISTEAD    JAMES N BURGIN      1/16/1979       427    248    414774    LA    De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            427    252    414775      

LA-SPI0201-006R

   CS MCCALLSR ET AL    JAMES N BURGIN      1/16/1979       427    252    414775    LA    De Soto
            427    634    415714      

LA-SPI0201-007R

   BEULAH CAIN SCHOONMAKER    TRANSCO EXPLORATION COMPANY      4/26/1979       427    634    415714    LA    De Soto
   ERNIE KSKIDMORE INDIV AND AS AGENT ANDA-I-F                     
   FOR THE ESTATE OF T H WILLIAMS, EDWARD C          427    243    414773      

LA-SPI0201-008R

   SKIDMORE AND ETHEL V SKIDMORE    JAMES N BURGIN      12/28/1978       427    243    414773    LA    De Soto
            428    137    416524      

LA-SPI0202-001R

   BERTIE T REEVES ET AL    TRANSCO EXPLORATION COMPANY      5/29/1979       428    137    416524    LA    De Soto
            425    431    412249      

LA-SPI0202-002R

   CLARICE BOWDEN TAYLOR ET AL    JAMES N BURGIN      1/4/1979       425    431    412249    LA    De Soto
            428    133    416523      

LA-SPI0202-003R

   MABLE F BOWDEN ET AL    JAMES N BURGIN      5/23/1979       428    133    416523    LA    De Soto
            428    173    416533      
            428    173    416533      
   THE HUNTER COMPANY INC          428    173    416533      

LA-SPI0203-001R

   REPRESENTED BY WILLIS L MEADOWS AS PRESIDENT    TRANSCO EXPLORATION COMPANY      5/1/1979       428    173    416533    LA    De Soto
            428    825    417171      

LA-SPI0203-002R

   WILLIAM J NESBITT ET UX    TRANSCO EXPLORATION COMPANY      6/29/1979       428    825    417171    LA    De Soto
            429    77    417411      
            429    77    417411      
            429    77    417411      

LA-SPI0203-003R

   ALVIN M JACKSON ET UX    TRANSCO EXPLORATION COMPANY      7/4/1979       429    77    417411    LA    De Soto
            429    81    417412      
            429    81    417412      
            429    81    417412      

LA-SPI0203-004R

   M F MCCAIN ET UX    TRANSCO EXPLORATION COMPANY      7/4/1979       429    81    417412    LA    De Soto
            429    85    417413      
            429    85    417413      
            429    85    417413      

LA-SPI0203-005R

   JOHN C MARSHALL    TRANSCO EXPLORATION COMPANY      7/11/1979       429    85    417413    LA    De Soto
            429    89    417414      

LA-SPI0203-006R

   FLOSSIE H COURTNEY ET AL    TRANSCO EXPLORATION COMPANY      7/20/1979       429    89    417414    LA    De Soto
            429    93    417415      

LA-SPI0203-007R

   ELLEN LANDERS GAMBLE ET AL    TRANSCO EXPLORATION COMPANY      7/19/1979       429    93    417415    LA    De Soto
            429    97    417416      
            429    97    417416      
            429    97    417416      

LA-SPI0203-008R

   EVANS CALVERT    TRANSCO EXPLORATION COMPANY      7/19/1979       429    97    417416    LA    De Soto
   WILFRED A NABORS INDIVIDUALLY AND AS AGENT                     
   AND ATTORNEY IN FACT FOR SARAH NABORS                     
   MULLINS, BIRDIE LOUISE NABORS, AND MARGARET          429    300    418000      

LA-SPI0203-009R

   NABORS PECKHAM    TRANSCO EXPLORATION COMPANY      7/19/1979       429    23    418000    LA    De Soto
            429    648    418398      

LA-SPI0203-010R

   MILDRED NUSSER DARPHIN ET AL    TRANSCO EXPLORATION COMPANY      8/14/1979       429    648    418398    LA    De Soto
            429    652    418399      

LA-SPI0203-011R

   R M WILSON ET UX    TRANSCO EXPLORATION COMPANY      8/2/1979       429    652    418399    LA    De Soto
   THE FIRST NATIONAL BANK OF MANSFIELD          429    656    418400      

LA-SPI0203-012R

   BY THOMAS B BATEMAN, PRESIDENT    TRANSCO EXPLORATION COMPANY      8/9/1979       429    656    418400    LA    De Soto
            430    81    418898      

LA-SPI0203-013R

   ROGER HAROLD FINCHER ET AL    TRANSCO EXPLORATION COMPANY      8/1/1979       430    81    418898    LA    De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book      Page      Reference      ST      County  
              430         85         418899         

LA-SPI0203-014R

   SH DAVIS CO ET AL    TRANSCO EXPLORATION COMPANY      8/29/1979         430         85         418899         LA         De Soto   
              430         89         418900         

LA-SPI0203-015R

   ST GERMAIN COMPANY    TRANSCO EXPLORATION COMPANY      8/29/1979         430         89         418900         LA         De Soto   
              430         462         419413         

LA-SPI0203-016R

   DALETHAUWALD    TRANSCO EXPLORATION COMPANY      8/30/1979         430         462         419413         LA         De Soto   
              430         466         419414         

LA-SPI0203-017R

   ELIZABETH HALL HUNTER ET AL    TRANSCO EXPLORATION COMPANY      8/1/1979         430         466         419414         LA         De Soto   
              430         470         419415         

LA-SPI0203-018R

   HELEN BALLSCHNIEWIND    TRANSCO EXPLORATION COMPANY      8/29/1979         430         470         419415         LA         De Soto   
              430         474         419416         

LA-SPI0203-019R

   MARIAN BALL THAYER    TRANSCO EXPLORATION COMPANY      8/29/1979         430         474         419416         LA         De Soto   
              430         478         419417         

LA-SPI0203-020R

   WESCHOENECKET UX    TRANSCO EXPLORATION COMPANY      8/24/1979         430         478         419417         LA         De Soto   
              411         408         405410         

LA-SPI0203-021R

   ANNE HEWITT BELVILLE ET AL    PENNZOIL PRODUCING COMPANY      5/1/1978         411         408         405410         LA         De Soto   
              396         25         395376         

LA-SPI0203-022R

   WILLIAM EARL ROBBINS    PENNZOIL PRODUCING COMPANY      5/19/1977         396         25         395376         LA         De Soto   
              783         366         591181         

LA-SPI0203-023R

   JAQUE LACHEZ CHARDONNAY    VASTAR RESOURCES INC      12/13/2001         783         366         591181         LA         De Soto   
              783         370         591182         

LA-SPI0203-024R

   CLADIE MAE LONDON BUNKLEY    VASTAR RESOURCES INC      11/5/2001         783         370         591182         LA         De Soto   
              428         141         416525         

LA-SPI0204-001R

   HARRY KEITH DUGAN    TRANSCO EXPLORATION COMPANY      5/28/1979         428         141         416525         LA         De Soto   
              428         145         416526         

LA-SPI0204-002R

   HAZEL BAILEY HASKINS    TRANSCO EXPLORATION COMPANY      5/17/1979         428         145         416526         LA         De Soto   
              428         149         416527         

LA-SPI0204-003R

   RUTH JEAN GOUDEAU DUNCAN    TRANSCO EXPLORATION COMPANY      5/17/1979         428         149         416527         LA         De Soto   
              428         153         416528         

LA-SPI0204-004R

   SARA LAVERNE PARIS MAGGIO    TRANSCO EXPLORATION COMPANY      5/31/1979         428         153         416528         LA         De Soto   
              428         157         416529         

LA-SPI0204-005R

   GLORIA A PARIS COSMEA    TRANSCO EXPLORATION COMPANY      5/31/1979         428         157         416529         LA         De Soto   
              428         161         416530         

LA-SPI0204-006R

   BETTY Y PARIS MATHESON    TRANSCO EXPLORATION COMPANY      5/31/1979         428         161         416530         LA         De Soto   
              428         165         416531         

LA-SPI0204-007R

   JOE M TOOMBS JR    TRANSCO EXPLORATION COMPANY      5/17/1979         428         165         416531         LA         De Soto   
   WILLIAM E HAYES INDIVIDUALLY AND AS THE DULY                     
   QUALIFIED NATURALTUTOR OF MELANIE E HAYES            430         768         419797         

LA-SPI0204-008R

   AND HOLLY A HAYES    TRANSCO EXPLORATION COMPANY      9/25/1979         430         768         419797         LA         De Soto   
              637         582         540792         

LA-SPI0204-009R

   SUE WINN    P&P PRODUCING INC      6/18/1994         637         582         540792         LA         De Soto   
              637         578         540791         

LA-SPI0204-010R

   BLANCHE BROUSSARD ET AL    P&P PRODUCING INC      6/18/1994         637         578         540791         LA         De Soto   
              134         468         141150         

LA-SPI0205-001R

   S H BATES ET AL    THE HUNTER COMPANY      9/3/1940         134         468         141150         LA         De Soto   
                    167542         

LA-SPI0205-002R

   S H BATES ET AL    A W PHILLIPS      3/23/1945               167542         LA         De Soto   
              164         0105         175882         

LA-SPI0205-003R

   L R BATES ET AL    E P JARVIS ET AL      5/31/1946         164         0105         175882         LA         De Soto   
              161         631         175229         

LA-SPI0208-000R

   JEWELL J HAMITER    J LEE YOUNGBLOOD      4/26/1946         161         631         175229         LA         De Soto   


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            0134    0237    140317      

LA-SPI0209-001R

   DUDLEY J LEBLANC    THE HUNTER COMPANY INC      7/15/1940       0134    0237    140317    LA    De Soto
            134    175    140046      

LA-SPI0209-002R

   MARGARET M ANDERS    THE HUNTER COMPANY INC      6/25/1940       134    175    140046    LA    De Soto
            164    65    175622      

LA-SPI0210-000R

   W B HEWITT    J LEE YOUNGBLOOD      5/20/1946       164    65    175622    LA    De Soto
            147    440    163059      

LA-SPI0211-001R

   L E COLVIN    KERLYN OIL CO      7/13/1944       147    440    163059    LA    De Soto
            147    442    163060      

LA-SPI0211-002R

   W W FINCHER    KERLYN OIL COMPANY      7/13/1944       147    442    163060    LA    De Soto
            147    444    163061      

LA-SPI0211-003R

   S W LONG    KERLYN OIL COMPANY      7/13/1944       147    444    163061    LA    De Soto
            147    445    163062      

LA-SPI0211-004R

   EDWARD JAMES DEAS    KERLYN OIL COMPANY      7/21/1944       147    445    163062    LA    De Soto
            147    447    163063      

LA-SPI0211-005R

   E J FORSYTH    KERLYN OIL COMPANY      7/11/1944       147    447    163063    LA    De Soto
            147    449    163064      

LA-SPI0211-006R

   B W CAMPBELL    KERLYN OIL COMPANY      7/26/1944       147    449    163064    LA    De Soto
            147    405    162969      

LA-SPI0211-007R

   ADA H DEAS ET AL    KERLYN OIL COMPANY      7/14/1944       147    405    162969    LA    De Soto
            147    578    163462      

LA-SPI0211-008R

   JOSEPHINE CAMPBELL BELL    KERLYN OIL COMPANY      8/31/1944       147    578    163462    LA    De Soto
            150    172    163749      

LA-SPI0211-009R

   LUTHER DEAS    KERLYN OIL COMPANY      8/7/1944       150    172    163749    LA    De Soto
            0161    0233    172730      

LA-SPI0213-000R

   HOWARD MITCHELL ET UX    TRAVIS O WRIGHT      1/7/1946       0161    0233    172730    LA    De Soto
            173    67    185751      
            173    67    185751      
            173    67    185751      
            173    67    185751      
            173    67    185751      

LA-SPI0214-001R

   FRANK M GILLILAND    KERR-MCGEE OIL INDUSTRIES ET AL      6/1/1947       173    67    185751    LA    De Soto
            191    273    216528      
            191    273    216528      
            191    273    216528      

LA-SPI0214-002R

   ELIZABETH DYER    PHILLIPS PETROLEUM COMPANY      4/23/1951       191    273    216528    LA    De Soto
            0161    0371    173994      

LA-SPI0215-001R

   MILTON GANT    J LEE YOUNGBLOOD      3/6/1946       0161    0371    173994    LA    De Soto
   GEORGIA ELLER GANT          0161    0375    173996      

LA-SPI0215-002R

   NATURAL TUTRIX FOR CHARLIE GANT JR    J LEE YOUNGBLOOD      3/13/1946       0161    0375    173996    LA    De Soto
            0161    0373    173995      

LA-SPI0215-003R

   OVADER GANT    J LEE YOUNGBLOOD      3/11/1946       0161    0373    173995    LA    De Soto
            161    533    174682      

LA-SPI0215-004R

   ADELINE GANT S/P    J LEE YOUNGBLOOD      3/27/1946       161    533    174682    LA    De Soto
            0169    0555    184673      

LA-SPI0215-005R

   VIRGIL ADAMS    M J RYAN      5/27/1947       0169    0555    184673    LA    De Soto
            0169    0557    184674      

LA-SPI0215-006R

   COURTNEY DAVIS    M J RYAN      5/27/1947       0169    0557    184674    LA    De Soto
            0169    0575    184819      

LA-SPI0215-007R

   LARMIE DAVIS ET AL    M J RYAN          5/29/1947       0169    0575    184819    LA    De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            0169    0577    184820      

LA-SPI0215-008R

   IVORY DAVIS    M J RYAN      5/29/1947       0169    0577    184820    LA    De Soto
            191    295    216686      

LA-SPI0215-009R

   NOBLE GANT    M J RYAN      5/2/1951       191    295    216686    LA    De Soto
            0140    0365    156615      

LA-SPI0215-010R

   ELIZABETH SIMS LOFTUS ET AL    G C SCHOONMAKER      3/31/1943       0140    0365    156615    LA    De Soto
            173    21    185284      

LA-SPI0215-P11R

   OVADER GANT    M J RYAN      6/27/1947       173    21    185284    LA    De Soto
            0425    0581    412477      
            0425    0581    412477      
            0425    0581    412477      

LA-SPI0218-001R

   MAE LEE ELLIS    JAMES N BURGIN      1/24/1979       0425    0581    412477    LA    De Soto
            426    330    413367      
            426    330    413367      
            426    330    413367      

LA-SPI0218-002R

   RUTH E SIMS    JAMES N BURGIN      1/29/1979       426    330    413367    LA    De Soto
            425    423    412226      

LA-SPI0218-003R

   HATTIE MAE SANTIFER ET VIR    JAMES N BURGIN      12/28/1978       425    423    412226    LA    De Soto
            425    427    412227      

LA-SPI0218-004R

   ARTIS HOGAN    JAMES N BURGIN      12/30/1978       425    427    412227    LA    De Soto
            426    206    413175      

LA-SPI0218-005R

   ELVESSIE GREGGS ET AL    JAMES N BURGIN      1/24/1979       426    206    413175    LA    De Soto
            425    585    412428      

LA-SPI0218-006R

   HUEY P HOGAN    JAMES N BURGIN      1/24/1979       425    585    412428    LA    De Soto
  

J H COLVIN JR INDIV

                    
  

AND AS TESTAMENTARY EXECUTOR OF L E COLVIN

         427    129    414610      

LA-SPI0218-007R

   ESTATE    JAMES N BURGIN      1/9/1979       427    129    414610    LA    De Soto
            427    429    415327      

LA-SPI0218-008R

   ESSIE RAY WALTON    JAMES N BURGIN      1/24/1979       427    429    415327    LA    De Soto
                  382300      
                  382300      
                  382300      

LA-SPI0218-009R

   AMOS GREEN ET UX    B & D INVESTMENTS      10/30/1975             382300    LA    De Soto
                  382218      
                  382218      
                  382218      

LA-SPI0218-010R

   MARIE WIGGINS    B & D INVESTMENTS      11/3/1975             382218    LA    De Soto
                  379473      

LA-SPI0218-011R

   LOYD C SIMS JR    B & D INVESTMENTS      6/10/1975             379473    LA    De Soto
                  379482      

LA-SPI0218-012R

   SUDIE HOGAN MCKINNEY ET AL    B & D INVESTMENTS      6/11/1975             379482    LA    De Soto
                  247442      

LA-SPI0218-013R

   ROBERT HOGAN ET AL    PHILLIPS PETROLEUM COMPANY      11/14/1955             247442    LA    De Soto
            217    463    250058      
            217    463    250058      

LA-SPI0218-014R

   REED HOGAN ET AL    PHILLIPS PETROLEUM COMPANY      2/17/1956       217    463    250058    LA    De Soto
            415    229    407151      

LA-SPI0218-015R

   HATTIE MAE SANTIFER    MAROSKI INC      7/15/1978       415    229    407151    LA    De Soto
            419    298    409012      

LA-SPI0218-016R

   ARTIS HOGAN    MAROSKI INC      8/10/1978       419    298    409012    LA    De Soto


Lease No.

 

Lessor

 

Lessee

  Lease date     Book     Page     Reference     ST   County
          419        430        409249       

LA-SPI0218-017R

  HUEY HOGAN ET AL   MAROSKI INC     6/27/1978        419        430        409249      LA   De Soto
              379770       

LA-SPI0218-018R

  SOLOMON FORD ET AL   B & D INVESTMENTS     6/10/1975            379770      LA   De Soto
              379471       

LA-SPI0218-019R

  RILEY SMITH FORD ET AL   B & D INVESTMENTS     6/10/1975            379471      LA   De Soto
              379472       

LA-SPI0218-020R

  LOYD C SIMS JR   B & D INVESTMENTS     6/10/1975            379472      LA   De Soto
              379474       

LA-SPI0218-021R

  P J LOFTUS ET UX   B & D INVESTMENTS     6/11/1975            379474      LA   De Soto
          0427        0433        415328       

LA-SPI0219-001R

  MARVIN C THOMPSON ET AL   JAMES N BURGIN     5/2/1979        0427        0433        415328      LA   De Soto
          0428        0821        417170       

LA-SPI0219-002R

  JAN ROY ALLEN   JAMES N BURGIN     5/14/1979        0428        0821        417170      LA   De Soto
          0428        0169        416532       

LA-SPI0219-003R

  LINDA JO BARFIELD   JAMES N BURGIN     5/14/1979        0428        0169        416532      LA   De Soto
          0428        0025        416311       

LA-SPI0219-004R

  ROBERT R ALLEN   JAMES N BURGIN     5/14/1979        0428        0025        416311      LA   De Soto
          0429        0297        417999       

LA-SPI0219-005R

  GUY V ALLEN   TRANSCO EXPLORATION COMPANY     7/13/1979        0429        0297        417999      LA   De Soto
          0412        0341        406223       

LA-SPI0219-006R

  WILEY H HEARD   TRANSCO EXPLORATION COMPANY     6/9/1978        0412        0341        406223      LA   De Soto
          0412        0345        406224       

LA-SPI0219-007R

  G M COUCH JR   TRANSCO EXPLORATION COMPANY     5/23/1978        0412        0345        406224      LA   De Soto
          425        419        412225       

LA-SPI0219-008R

  ELIZABETH R JONES ETVIR   JAMES N BURGIN     12/26/1978        425        419        412225      LA   De Soto

LA-SPI0219-009

  CORA MAY GAY   TRANSCO EXPLORATION COMPANY     11/28/1978        424        531        411002      LA   De Soto
          194        377        225182       

LA-SPI0220-001R

  JOHN L WOFFORD   S E DAVIES     6/27/1952        194        377        225182      LA   De Soto
          194        395        225374       

LA-SPI0220-P02R

  JAMES H DUGAN   S E DAVIES     6/19/1952        194        395        225374      LA   De Soto
  BLANCHE WEMPLE GOUDEAU NATURAL TUTRIX OF         194        413        225634       

LA-SPI0220-P03R

  THE MINOR RUTH JEAN GOUDEAU   S E DAVIES     7/31/1952        194        413        225634      LA   De Soto
          0416        0774        408327       

LA-SPI0222-000R

  JOHN LEE WOFFORD ET UX   TRANSCO EXPLORATION COMPANY     7/27/1978        0416        0774        408327      LA   De Soto
          0194        0331        224630       

LA-SPI0223-000R

  W B HEWITT   S E DAVIES     6/4/1952        0194        0331        224630      LA   De Soto
          194        507        226194       

LA-SPI0224-000R

  IVA STRIBLING BAKER ET AL   S E DAVIES     7/2/1952        194        507        226194      LA   De Soto
          0209        0295        242243       

LA-SPI0226-000R

  P C REEVES ET AL   PHILLIPS PETROLEUM COMPANY ET AL     2/17/1955        0209        0295        242243      LA   De Soto
          186        429        212494       

LA-SPI0227-000R

  STUART PROVOST ET AL   KERR-MCGEE OIL INDUSTRIES INC     10/4/1950        186        429        212494      LA   De Soto
          161        167        172455       

LA-SPI0228-001R

  P C REEVES ET AL   J LEE YOUNG BLOOD     12/26/1945        161        167        172455      LA   De Soto
          161        163        172407       

LA-SPI0228-002R

  R J AYCOCK   J LEE YOUNG BLOOD     1/3/1946        161        163        172407      LA   De Soto
          161        209        172582       

LA-SPI0228-003R

  DORIS AYCOCK   J LEE YOUNG BLOOD     12/26/1945        161        209        172582      LA   De Soto
          161        235        172737       

LA-SPI0228-004R

  ELIZABETH R JONES   J LEE YOUNG BLOOD     12/26/1945        161        235        172737      LA   De Soto


Lease No.

 

Lessor

 

Lessee

  Lease date     Book   Page   Reference   ST   County
        194   435   225743    

LA-SPI0229-000R

  CEDAR HILL BAPTIST CHURCH   PHILLIPS PETROLEUM COMPANY     7/25/1952      194   435   225743   LA   De Soto
        0203   0025   235095    

LA-SPI0230-000R

  CEDAR HILL BAPTIST CHURCH   J H SIMS     3/25/1954      0203   0025   235095   LA   De Soto
        412   381   406232    

LA-SPI0231-000R

  TERRELL S TEMPLE   TRANSCO EXPLORATION COMPANY     6/12/1978      412   381   406232   LA   De Soto
        424   696   411458    

LA-SPI0232-000R

  CATHERINE ERWIN MORRIS ET AL   TRANSCO EXPLORATION COMPANY     12/11/1978      424   696   411458   LA   De Soto
        416   786   408358    

LA-SPI0233-000R

  ALVIN DALE METCALF ET UX   TRANSCO EXPLORATION COMPANY     10/8/1978      416   786   408358   LA   De Soto
        415   860   407692    
        446   32   420008    
        415   860   407692    

LA-SPI0234-000R

  BENOYD TEMPLE ET AL   TRANSCO EXPLORATION COMPANY     6/15/1978      446   32   420008   LA   De Soto
        415   92   407008    

LA-SPI0235-000R

  JIM R BATH ET AL   TRANSCO EXPLORATION COMPANY     7/14/1978      415   92   407008   LA   De Soto
        412   377   406231    

LA-SPI0236-000R

  TRUMAN P BLUE ET UX   TRANSCO EXPLORATION COMPANY     6/12/1978      412   377   406231   LA   De Soto
        412   373   406230    

LA-SPI0237-000R

  AUBREY LEE MANTOOTH ET UX   TRANSCO EXPLORATION COMPANY     6/12/1978      412   373   406230   LA   De Soto
        353   858   379485    

LA-SPI0238-000R

  RUDOLPH D PHARIS   B & D INVESTMENTS     6/17/1975      353   858   379485   LA   De Soto
        411   527   405584    

LA-SPI0239-000R

  DAVID NINIAN GLANCY ET UX   TRANSCO EXPLORATION COMPANY     5/23/1978      411   527   405584   LA   De Soto
        415   40   406996    

LA-SPI0240-001R

  GUY BERTON LOVE   TRANSCO EXPLORATION COMPANY     6/15/1978      415   40   406996   LA   De Soto
        411   522   405583    

LA-SPI0240-002R

  HUGH B GLANCY   TRANSCO EXPLORATION COMPANY     5/23/1978      411   522   405583   LA   De Soto
 

SHADY GROVE UNITED METHODIST CHURCH

      426   202   413174    

LA-SPI0241-000R

  REV GEORGE L THOMAS, PASTOR   JAMES N BURGIN     2/1/1979      426   202   413174   LA   De Soto
        359   34   382410    

LA-SPI0242-000R

  OLLIE MOSLEY ET AL   B & D INVESTMENTS     6/20/1975      359   34   382410   LA   De Soto
        353   815   379476    

LA-SPI0244-001R

  NORMA LEE HOGAN   B & D INVESTMENTS     6/10/1975      353   815   379476   LA   De Soto
        353   811   379475    

LA-SPI0244-002R

  PINK HOGAN   B & D INVESTMENTS     6/14/1975      353   811   379475   LA   De Soto
        355   202   379774    

LA-SPI0245-000R

  THOMAS FRED WALL ET AL   B & D INVESTMENTS     5/28/1975      355   202   379774   LA   De Soto
        353   819   379477    

LA-SPI0246-000R

  JAMES H TAYLOR ET AL   B & D INVESTMENTS     6/5/1975      353   819   379477   LA   De Soto
        412   337   406222    

LA-SPI0248-000R

  JUANITA CHRISTIAN PARKER   TRANSCO EXPLORATION COMPANY     6/9/1978      412   337   406222   LA   De Soto


Lease No.

 

Lessor

 

Lessee

  Lease date     Book     Page     Reference   ST   County
          505        801      448622    
          505        801      448622    
          505        801      448622    
          505        801      448622    
          505        801      448622    
          505        801      448622    
          505        801      448622    
          505        801      448622    
          505        801      448622    

LA-SPI0250-001R

  PAUL D PRESTON   TRANSCO EXPLORATION COMPANY     7/17/1982        505        801      448622   LA   De Soto
          505        807      448623    

LA-SPI0250-002R

  JOE ATKINS   TRANSCO EXPLORATION COMPANY     2/20/1982        505        807      448623   LA   De Soto
          435        767      426867    

LA-SPI0250-003R

  JOE ATKINS   TRANSCO EXPLORATION COMPANY     5/13/1980        435        767      426867   LA   De Soto
          209        473      242420    
          209        473      242420    
          209        473      242420    

LA-SPI0254-000R

  J V CHRISTIAN   PHILLIPS PETROLEUM COMPANY     3/11/1955        209        473      242420   LA   De Soto
          257        285      297205    

LA-SPI0263-001

  EVANS CALVERT   PHILLIPS PETROLEUM COMPANY     1/15/1963        257        285      297205   LA   De Soto
          257        305      297258    

LA-SPI0263-002

  J MURRAY KIDD   PHILLIPS     1/17/1963        257        305      297258   LA   De Soto
          257        287      297206    

LA-SPI0263-003

  A A KIDD   PHILLIPS PETROLEUM COMPANY     1/15/1963        257        287      297206   LA   De Soto
          257        289      297207    

LA-SPI0263-004

  J W CARAWAY   PHILLIPS PETROLEUM COMPANY     1/15/1963        257        289      297207   LA   De Soto
 

L R HEWITT INDIVIDUALLY AND AS AGENT AND

             
 

ATTORNEY IN FACT FOR DOROTHY PRESTRIDGE AND

        257        291      297208    

LA-SPI0264-000

  ANNE BELVILLE   PHILLIPS PETROLEUM COMPANY     1/19/1963        257        291      297208   LA   De Soto
          257        355      298116    

LA-SPI0265-001

  ELLA P HOLLINGSWORTH   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        355      298116   LA   De Soto
          257        357      298117    

LA-SPI0265-002

  LENNA PETTY JENKINS   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        357      298117   LA   De Soto
          257        359      298118    

LA-SPI0265-003

  DAISY P HUNTER   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        359      298118   LA   De Soto
          257        361      298119    

LA-SPI0265-004

  DON G PETTY   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        361      298119   LA   De Soto
          257        363      298120    

LA-SPI0265-005

  FRANCES PETTY EDGE   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        363      298120   LA   De Soto
          257        365      298121    

LA-SPI0265-006

  DON H FORD ET AL   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        365      298121   LA   De Soto
          257        369      298498    

LA-SPI0265-007

  FRANK A PETTY ET AL   PHILLIPS PETROLEUM COMPANY     2/7/1963        257        369      298498   LA   De Soto
          257        271      297002    

LA-SPI0266-000

  MARY B BILLINGSLEY   PHILLIPS PETROLEUM COMPANY     1/3/1963        257        271      297002   LA   De Soto
          257        533      300742    

LA-SPI0267-001

  FRED A WESTMORELAND   PHILLIPS PETROLEUM COMPANY     8/13/1963        257        533      300742   LA   De Soto
          257        531      300741    

LA-SPI0267-002

  HARMON PALMER   PHILLIPS PETROLEUM COMPANY     8/13/1963        257        531      300741   LA   De Soto
          257        529      300740    

LA-SPI0267-003

  LEAH PALMER WILSON   PHILLIPS PETROLEUM COMPANY     8/13/1963        257        529      300740   LA   De Soto


Lease No.

 

Lessor

 

Lessee

  Lease date     Book   Page   Reference   ST   County
        257   727   300739    

LA-SPI0267-004

  ADA PALMER PARR   PHILLIPS PETROLEUM COMPANY     8/13/1963      257   727   300739   LA   De Soto
        257   571   300917    

LA-SPI0267-005

  ELIZABETH WESTMORELAND GOODENOUGH   PHILLIPS PETROLEUM COMPANY     8/13/1963      257   571   300917   LA   De Soto
            469993    

LA-SPI0268-001

  ZORA B ANTHONY   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   477   585687   LA   De Soto
            469991    

LA-SPI0268-002

  MATTIE B BUTLER   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   469   585682   LA   De Soto
            469992    
            585686    
            585685    

LA-SPI0268-003

  MILTON M BAKER   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   473   585684   LA   De Soto
            469990    

LA-SPI0268-004

  ALICE B CHRISTIAN   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   465   585673   LA   De Soto
            469994    

LA-SPI0268-005

  JANIS B VANDEWERKER   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   481   585679   LA   De Soto
            470179    

LA-SPI0268-006

  IVA B HILBURN   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   555   585683   LA   De Soto
            470178    

LA-SPI0268-007

  DOROTHY JEAN B MCFADDEN   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   551   585794   LA   De Soto
            470496    

LA-SPI0268-008

  RODNEY BAKER   PHILLIPS PETROLEUM COMPANY     8/27/1984      545   608   585681   LA   De Soto
            470495    

LA-SPI0268-009

 

JERRY TILLEY

CHARLIE P BAKER SUCCESSION REPRESENTED BY MARY KATHRYN BAKER AS

  PHILLIPS PETROLEUM COMPANY     8/27/1984      545   604   585688
481475
  LA   De Soto

LA-SPI0268-010

  ANCILLARY SUCCESSOR ADMINISTRATRIX   PHILLIPS PETROLEUM COMPANY     10/28/1985      590   1   585680-1   LA   De Soto
            499073    

LA-SPI0268-011

  WALTER ROBERT BILLINGSLEY ET AL   PHILLIPS PETROLEUM COMPANY     12/15/1987      593   319   585795   LA   De Soto

LA-SPI0269-001

  CARLTON LUMBER COMPANY INC   TRANSCO EXPLORATION COMPANY     6/14/1978      415   74   407004   LA   De Soto

LA-SPI0269-002

  DOVIE WEEKS WADDELL   TRANSCO EXPLORATION COMPANY     6/28/1978      415   79   407005   LA   De Soto

LA-SPI0272-000

  MILTON M BAKER ET AL DESOTO OIL AND GAS TRUST   TRANSCO EXPLORATION COMPANY PHILLIPS PETROLEUM COMPANY AND KERR     4/14/1978      412   364   406228   LA   De Soto

LA-SPI0273-000

  JAMES S GILLILAND AS TRUSTEE   MCGEE CORPORATION     11/1/1989      649   762   513409   LA   De Soto
        169   399   183796    
        169   399   183796    
        169   399   183796    

LA-SPI0279-000R

  C J PROVOST ET AL   E A CHAMBERLAIN     3/22/1947      169   399   183796   LA   De Soto
        169   481   184353    

LA-SPI0280-001

  HATTIE MOATS CRUSE ET AL   J H SIMS     4/18/1947      169   481   184353   LA   De Soto

LA-SPI0280-002

  NELLIE MOATS DIXON   J H SIMS     4/18/1947      173   23   185285   LA   De Soto

LA-SPI0280-P03

  J H SIMS   SINCLAIR OIL & GAS COMPANY     4/12/1957      227   343   257852   LA   De Soto
        181   533   206006    

LA-SPI0281-001R

  SMITH FORD SR   M J RYAN     2/2/1950      181   533   206006   LA   De Soto
        198   425   230142    

LA-SPI0281-P02R

  FRANK MEIER   PHILLIPS PETROLEUM COMPANY     2/12/1953      198   425   230142   LA   De Soto
        203   1   234821    

LA-SPI0281-P03R

  FRANK MEIER   PHILLIPS PETROLEUM COMPANY     12/22/1953      203   1   234821   LA   De Soto

LA-SPI0282-000

  HEARTFIELD DAVIS   J LEE YOUNGBLOOD     12/31/1945      161   133   172366   LA   De Soto


Lease No.

 

Lessor

 

Lessee

  Lease date     Book   Page   Reference   ST   County
        411   368   405213    
        411   368   405213    

LA-SPI0283-000R

  JOHN PAUL CULPEPPER ET UX   DALLAS EXPLORATION INC     5/23/1978      411   368   405213   LA   De Soto
    KERR-MCGEE OIL INDUSTRIES INC AND     173   61   185748    

LA-SPI0284-000

  FRANK M GILLILAND   PHILLIPS PEROLEUM COMPANY     6/1/1947      173   61   185748   LA   De Soto

LA-SPI0285-001

  SOLOMON FORD ET AL   PHILLIPS PETROLEUM COMPANY     2/1/1956      217   235   248986   LA   De Soto

LA-SPI0285-002

  LOUIS FORD JR   J H SIMS     9/22/1955      214   163   246228   LA   De Soto
  ARMENIA FORD WESLEY GUARDIAN OF THE MINORS              

LA-SPI0285-003

  MARY FRANCES FORD ET AL   KERR- MCGEE OIL INDUSTRIES INC     4/27/1957      227   415   258121   LA   De Soto
  VIVA PAXTON SAUNDERS INDIVIDUALLY AND AS              

LA-SPI0286-000

  AGENT AND A-I-F FOR WILLIAM P SAUNDERS ET AL   PHILLIPS PETROLEUM COMPANY     5/7/1952      194   307   224210   LA   De Soto
        149   646      

LA-SPI0287-000

  HEARTFIELD DAVIS   RUTHT ABNEY     12/4/1944      162   168   164483   LA   De Soto
        161   627      

LA-SPI0288-000

  LOUISIANA LAND & INVESTMENT COMPANY LTD   W C NABORS     5/3/1945      162   198   175220   LA   De Soto
        416   766   408325    

LA-SPI0289-000R

  JOHN LEE WOFFORD ET UX   TRANSCO EXPLORATION COMPANY     7/27/1978      416   766   408325   LA   De Soto
        415   87   407007    

LA-SPI0290-001

  DELTA S BAKER   TRANSCO EXPLORATION COMPANY     6/22/1978      415   87   407007   LA   De Soto
        415   96   407009    

LA-SPI0290-002

  GORDON B CHRISTIAN ET UX   TRANSCO EXPLORATION COMPANY     6/9/1978      415   96   407009   LA   De Soto
        415   44   406997    

LA-SPI0290-003

  IVA NELL B HILBURN ET AL   TRANSCO EXPLORATION COMPANY     4/14/1978      415   44   406997   LA   De Soto
        416   770   408326    

LA-SPI0291-000R

  JOHN LEE WOFFORD ET UX   TRANSCO EXPLORATION COMPANY     7/27/1978      416   770   408326   LA   De Soto

LA-SPI0292-000

  FLORENCE M ANTHONY ET AL   TRANSCO EXPLORATION COMPANY     4/24/1978      412   369   406229   LA   De Soto

LA-SPI0293-000

  MILTON M BAKER ET AL   TRANSCO EXPLORATION COMPANY     4/14/1978      412   354   406226   LA   De Soto

LA-SPI0294-000

  REBA ANTHONY THOMPSON   TRANSCO EXPLORATION COMPANY     4/24/1978      415   66   407002   LA   De Soto
  THE NEW BETHANY CUMBERLAND PRESBYTERIAN              
  CHURCH              
  REPRESENTED BY MILTON M BAKER AND J P AUSTIN              

LA-SPI0295-000

  AT DULY APPOINTED DEACONS   TRANSCO EXPLORATION COMPANY     6/20/1978      415   70   407003   LA   De Soto
  MCCOY BROS LUMBER COMPANY INC       357   46   380920    

LA-SPI0296-000R

  E CARLTON MCCOY PRESIDENT   PHILLIPS PETROLEUM COMPANY     4/16/1975      357   46   380920   LA   De Soto

LA-SPI0297-000R

  E CARLTON MCCOY ET AL   TRANSCO EXPLORATION COMPANY     1/9/1980      432   817   423074   LA   De Soto

LA-SPI0298-000

  ROBERT PEYTON BAKER   P & P PRODUCING INC     4/25/1994      637   636   541015   LA   De Soto
            541018    

LA-SPI0299-000

  MILTON M BAKER ET AL   P & P PRODUCING INC     4/22/1994      637   648   542409   LA   De Soto
            541019    

LA-SPI0300-000

  MILTON M BAKER   P & P PRODUCING INC     4/22/1994      637   652   542408   LA   De Soto
            541016    

LA-SPI0301-000

  JERE DALE HILBURN   P & P PRODUCING INC     4/25/1994      637   640   542413   LA   De Soto
            541014    

LA-SPI0302-000

  STEPHEN STRIBLING BAKER   P & P PRODUCING INC     4/22/1994      637   632   542410   LA   De Soto
            541017    

LA-SPI0303-000

  IVA NELL TANGUIS   P & P PRODUCING INC     4/25/1994      637   644   542411   LA   De Soto

LA-SPI0304-000

  C P SCURLOCK ESTATE   PARKER & PARSLEY DEVELOPMENT L P     1/30/1995      638   81   542407   LA   De Soto

LA-SPI0305-000

  MILTON M BAKER ET AL   TRANSCO EXPLORATION COMPANY     4/14/1978      412   359   406227   LA   De Soto


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference   ST    County
            164    125    175989     
            164    125    175989     
            164    125    175989     
            164    125    175989     
            164    125    175989     

LA-SPI0306-001R

   J P WEMPLE TUTOR OF IMOGEN MADING    J LEE YOUNGBLOOD      6/11/1946       164    125    175989   LA    De Soto

LA-SPI0306-002

   ELIZABETH DYER    PHILLIPS PETROLEUM COMPANY      8/18/1953       200    255    232241   LA    De Soto
            173    65    185750     
            173    65    185750     
            173    65    185750     
            173    65    185750     
      KERR-MCGEE OIL INDUSTRIES AND PHILLIPS       173    65    185750     

LA-SPI0306-003

   FRANK M GILLILAND    PETROLEUM COMPANY      6/1/1947       173    65    185750   LA    De Soto
               569    174994     
                  174994     
               569    174994     
               569    174994     
               569    174994     

LA-SPI0306-004R

   FRANK W GILLILAND ET AL    KERR-MCGEE OIL INDUSTRIES INC      4/15/1946          569    174994   LA    De Soto
     

E P JARVIS, A MARCELL AND G CV

      156    207    168633     

LA-SPI0308-001R

   J H DUGAN    SCHOONMAKER      5/29/1945       156    207    168633   LA    De Soto
            176    105    187991     

LA-SPI0308-002R

   M J RYAN    G C SCHOONMAKER      11/5/1947       176    105    187991   LA    De Soto
            176    103    187971     

LA-SPI0308-003R

   H W BOWDEN    M J RYAN      10/31/1947       176    103    187971   LA    De Soto

LA-SPI0310-000R

   TOMMY GORDON CASSEL ET UX    DALLAS EXPLORATION, INC      6/8/1973       412    522    406450   LA    De Soto

LA-SPI0311-MIN

   BP AMERICA PRODUCTION CO    WILDHORSE RESOURCES LLC      11/4/2010       1137    605    691675   LA    De Soto
            390    841    395229     

LA-SPI0312-000

   MINNIE JONES EVANS    E R MUSGRAVE      6/2/1977       795    302    591179   LA    De Soto
            396    95    395444     

LA-SPI0313-000

   JOE LEE JONES    E R MUSGRAVE      6/3/1977       795    304    591180   LA    De Soto
            390    792    395177     

LA-SPI0314-000

   ARLINGTON E ATWOOD ET UX    E R MUSGRAVE      5/19/1977       794    546    590586   LA    De Soto
            353    823    379478     

LA-SPI0315-000R

   PAUL D WINDHAM    B & D INVESTMENTS      5/30/1975       353    823    379478   LA    De Soto

LA-VER0001-000

   MARY EDITH FREUDENDORF    HOOD PETROLEUM INC      9/20/2004       363    484    FILE #359156   LA    Jackson

LA-VER0002-000

   TERRY O EWING ET AL    HOOD PETROLEUM INC      10/13/2004       363    487    FILE #359157   LA    Jackson

LA-VER0003-000

   TOPPER CORPORATION    HOOD PETROLEUM INC      10/13/2004       363    493    FILE #359158   LA    Jackson

LA-VER0004-001

   JOHNSON O’NEAL WALPOLE ET AL    HOOD PETROLEUM INC      10/13/2004       363    500    FILE #359159   LA    Jackson

LA-VER0004-002

   MARY DIANE WALPOLE HENNIGAN    HOOD PETROLEUM INC      10/13/2004       363    507    FILE #359160   LA    Jackson

LA-VER0005-000

   MARCIA ANNE POOL    HOOD PETROLEUM INC      7/19/2005       372    997    FILE #364092   LA    Jackson

LA-CAL0001-000

   DAVID LAMAR SPILLERS ET UX    STRAT LAND EXPL CO      9/9/1998       1034    344    7186   LA    Lincoln

LA-CAL0002-000

   LULA ORA SMITH ET AL    SOUTHWEST GAS PROD CO INC      1/2/1959       66    211    C-14984   LA    Lincoln

LA-CAL0003-000

   JAMES R HOLSTEAD    SOUTHWEST GAS PROD CO INC      1/13/1959       66    253    C-15037   LA    Lincoln

LA-CAL0004-000

   HENRY H DAVIS ET UX    STRAT LAND EXPL CO      9/9/1998       1034    346    7187   LA    Lincoln

LA-CAL0005-000

   B B MCCLENDON ET AL    CRESLENN OIL COMPANY      3/28/1958       60    623    C-9802   LA    Lincoln

LA-CAL0006-000

   LOU SIMS COX ET AL    N A RANDALL      3/19/1958       61    289    C-10240   LA    Lincoln

LA-CAL0007-000

   BELVIN BENNETT    JAMES M BOGAN      2/18/1954       69    96      LA    Lincoln

LA-CAL0008-000

   RICHARD L REA ET UX    KCS MEDALLION RESOURCES, INC.      1/29/1998       1019    41    3546   LA    Lincoln

LA-CHO0001-000

   THOMAS DURWARD CHANDLER ET UX      FRANKS PETROLEUM INC      5/19/1978       231    145      LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
      SOUTHWEST NATURAL PRODUCTION                  

LA-CHO0002-001

   FLORENCE ISABEL CALHOUN    COMPANY      10/18/1954       71       N-128792    LA    Lincoln

LA-CHO0003-000

   FLORENCE ISABEL CALHOUN ET AL    UNITED CARBON COMPANY      5/31/1944       34    367       LA    Lincoln

LA-CHO0004-000

   LULA MAE LAWHON LINER ET AL    FRANKS PETROLEUM INC      1/24/1979       247    43       LA    Lincoln

LA-CHO0005-000

   MADIE OPAL BARRETT GIMBERT    FRANKS PETROLEUM INC      5/10/1978       237    113       LA    Lincoln

LA-CHO0006-001

   VIRGINIA B MCROBBIE    FRANKS PETROLEUM INC      5/4/1978       231    158       LA    Lincoln

LA-CHO0006-002

   MAE T BURGESS ET AL    FRANKS PETROLEUM INC      5/4/1978       229    684       LA    Lincoln

LA-CHO0007-000

   ESTHER B PATTON    FRANKS PETROLEUM INC      5/5/1978       229    692       LA    Lincoln

LA-FTA0001-000

   FELIX EUGENE LUEG    WILDHORSE RESOURCES LLC      2/24/2011       1299    431    F117517    LA    Lincoln

LA-FTA0002-000

   ALTON RAY KILGORE ET UX    WILDHORSE RESOURCES LLC      2/22/2011       1299    457    F117522    LA    Lincoln
   DOROTHY STAFFORD NOLAN INDIVIDUALLY AND AS          1299    451    F117521      

LA-FTA0003-001

  

USUFRUCTUARY ET AL

   WILDHORSE RESOURCES LLC      3/1/2011       1299    451    F117521    LA    Lincoln

LA-FTA0004-000

   EVELYN WILDER GRAY    WILDHORSE RESOURCES LLC      3/10/2011       1299    446    F117520    LA    Lincoln

LA-FTA0005-000

   PHALA HARTZOG SIMMONS ET AL    WILDHORSE RESOURCES LLC      2/25/2011       1299    436    F117518    LA    Lincoln

LA-FTA0006-000

   GLENDA FAYE COLVIN KNOWLES    WILDHORSE RESOURCES LLC      3/15/2011       1299    478    F117527    LA    Lincoln

LA-FTA0007-000

   MITZI ELIZABETH HAMILTON WERNER    WILDHORSE RESOURCES LLC      3/10/2011       1299    475    F117526    LA    Lincoln
            1299    472    F117525      

LA-FTA0008-001

   RICHARD WESLEY EMERSON ET UX    WILDHORSE RESOURCES LLC      3/15/2011       1299    472    F117525    LA    Lincoln
            1299    492    F117531      

LA-FTA0008-002

  

FRANCES LEIGH TRAYLOR

   WILDHORSE RESOURCES LLC      3/31/2011       1299    472    F117525    LA    Lincoln

LA-FTA0008-003

   MITZI ELIZABETH HAMILTON WERNER    WILDHORSE RESOURCES LLC      8/9/2011       1306    607    F120750    LA    Lincoln

LA-FTA0008-004

   JIMMIE L CATES    WILDHORSE RESOURCES LLC      8/9/2011       1306    611    F120751    LA    Lincoln

LA-FTA0008-005

   DONALD RANDOLPH STUEART ET AL    WILDHORSE RESOURCES LLC      3/29/2011       1306    603    F120749    LA    Lincoln

LA-FTA0009-000

   DONALD RANDOLPH STUEART ET AL    WILDHORSE RESOURCES LLC      3/22/2011       1299    462    F117523    LA    Lincoln

LA-FTA0010-000

   JAMES ALBERT REYNOLDS ET UX    WILDHORSE RESOURCES LLC      4/7/2011       1299    488    F117530    LA    Lincoln

LA-FTA0011-000

   THOMAS EDWARD FORD ET UX    WILDHORSE RESOURCES LLC      3/7/2011       1299    484    F117529    LA    Lincoln

LA-FTA0012-000

   BRENDA BALES TAYLOR    WILDHORSE RESOURCES LLC      3/24/2011       1299    481    F117528    LA    Lincoln

LA-FTA0013-000

   FUTCH PROPERTIES LLC    WILDHORSE RESOURCES LLC      2/22/2011       1299    466    F117524    LA    Lincoln

LA-FTA0014-000

   JACQUELYN LEWIS BREWER    WILDHORSE RESOURCES LLC      3/1/2011       1299    441    F117519    LA    Lincoln

LA-FTA0015-000

   MURRAY P RASBURY ET UX    WILDHORSE RESOURCES LLC      3/28/2011       1305    826    F120393    LA    Lincoln

LA-FTA0016-000

   J ROBERT SUMLIN ET UX    WILDHORSE RESOURCES LLC      4/13/2011       1305    912    F120412    LA    Lincoln
   DAVID NOLAN AND EVELYN Z NOLAN 1996 TRUST                     

LA-FTA0017-000

   DAVID NOLAN AND EVELYN Z NOLAN AS CO-TRUSTEES    WILDHORSE RESOURCES LLC      4/15/2011       1305    902    F120410    LA    Lincoln

LA-FTA0018-000

   WILLIAM CLAUDE CHIPMON ET UX    WILDHORSE RESOURCES LLC      4/20/2011       1305    907    F120411    LA    Lincoln
   LOUISIANA UNITED METHODIST CHILDREN AND                     

LA-FTA0019-000

   FAMILY SERVICES INC    WILDHORSE RESOURCES LLC      4/27/2011       1305    974    F120423    LA    Lincoln

LA-FTA0021-000

   DAVID LAYNE MANUEL ET UX    WILDHORSE RESOURCES LLC      5/3/2011       1305    897    F120409    LA    Lincoln
   DONALD MORGAN MITCHELL INDIVIDUALLY AND AS                     

LA-FTA0023-001

   AGENT AND A-I-F FOR JERRY WAYNE MITCHELL    WILDHORSE RESOURCES LLC      5/3/2011       1305    949    F120419    LA    Lincoln

LA-FTA0024-000

   JIMMY L RICHARDSON    WILDHORSE RESOURCES LLC      5/5/2011       1305    944    F120418    LA    Lincoln

LA-FTA0025-001

   THOMAS G DAVIDSON JR    WILDHORSE RESOURCES LLC      5/13/2011       1305    804    F120389    LA    Lincoln

LA-FTA0025-002

   MARIANNE JENNIE DAVIDSON    WILDHORSE RESOURCES LLC      5/17/2011       1305    800    F120388    LA    Lincoln

LA-FTA0025-003

   JOHN BOOTH DAVIDSON ET UX    WILDHORSE RESOURCES LLC      5/10/2011       1305    776    F120383    LA    Lincoln

LA-FTA0025-004

   BARBARA LEE DAVIDSON    WILDHORSE RESOURCES LLC      4/19/2011       1305    723    F120372    LA    Lincoln

LA-FTA0025-005

   JENNIFER LYN LINDENSTEIN    WILDHORSE RESOURCES LLC      4/18/2011       1305    719    F120371    LA    Lincoln

LA-FTA0025-006

   HOLLY A DAVIDSON      WILDHORSE RESOURCES LLC      10/13/2011       1309    225    F121986    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-FTA0026-000

   MICHAEL LANE REYNOLDS ET UX    WILDHORSE RESOURCES LLC      5/12/2011       1305    711    F120369    LA    Lincoln

LA-FTA0027-001

   PHILLIP BROWNING CARROLL ET UX    WILDHORSE RESOURCES LLC      5/16/2011       1305    707    F120368    LA    Lincoln

LA-FTA0028-000

   GARY LANE BRAZZEL    WILDHORSE RESOURCES LLC      5/17/2011       1305    703    F120367    LA    Lincoln

LA-FTA0029-000

   GENE S BRAZZEL ET UX    WILDHORSE RESOURCES LLC      5/16/2011       1306    623    F120754    LA    Lincoln
   DONALD MORGAN MITCHELL AS AGENT AND                     

LA-FTA0030-000

   ATTORNEY IN FACT FOR JERRY WAYNE MITCHELL    WILDHORSE RESOURCES LLC      5/12/2011       1305    784    F120385    LA    Lincoln

LA-FTA0032-000

   MILTON THOMAS MURPHY ET UX    WILDHORSE RESOURCES LLC      5/30/2011       1305    808    F120390    LA    Lincoln

LA-FTA0033-000

   MILTON THOMAS MURPHY ET UX    WILDHORSE RESOURCES LLC      5/30/2011       1305    780    F120384    LA    Lincoln

LA-FTA0034-000

   MICHAEL JOSEPH GRILLOT ET UX    WILDHORSE RESOURCES LLC      5/16/2011       1305    699    F120366    LA    Lincoln

LA-FTA0035-000

   CODY SCOTT RICHARD ET UX    WILDHORSE RESOURCES LLC      5/18/2011       1305    838    F120396    LA    Lincoln

LA-FTA0036-001

   BETTY FRANKLIN MARTIN ET AL    WILDHORSE RESOURCES LLC      5/31/2011       1305    819    F120392    LA    Lincoln

LA-FTA0036-002

  

PHILLIP WAYNE MARTIN

   WILDHORSE RESOURCES LLC      5/31/2011       1305    746    F120378    LA    Lincoln

LA-FTA0037-000

   JOHN C MORRIS III ET AL    WILDHORSE RESOURCES LLC      6/16/2011       1305    935    F120416    LA    Lincoln

LA-FTA0038-001

   JOYCE D WOODY    WILDHORSE RESOURCES LLC      6/6/2011       1306    595    F120747    LA    Lincoln

LA-FTA0038-002

   BOBBY D HOLLOWAY    WILDHORSE RESOURCES LLC      6/10/2011       1305    845    F120398    LA    Lincoln

LA-FTA0038-003

   CHARLES B DELONY    WILDHORSE RESOURCES LLC      6/13/2011       1305    842    F120397    LA    Lincoln

LA-FTA0038-004

   PAULA D RILEY    WILDHORSE RESOURCES LLC      6/13/2011       1305    715    F120370    LA    Lincoln

LA-FTA0038-005

   PATRICIA DELONY    WILDHORSE RESOURCES LLC      6/13/2011       1305    940    F120417    LA    Lincoln

LA-FTA0038-006

   SUSAN D PARSONS    WILDHORSE RESOURCES LLC      6/13/2011       1305    766    F120381    LA    Lincoln
   WILLIAM H RAMSDELL AND VIRGINIA G RAMSDELL                     
   REVOCABLE TRUST REPRESENTED BY VIRGINIA G                     

LA-FTA0043-001

   RAMSDELL AS TRUSTEE    WILDHORSE RESOURCES LLC      6/30/2011       1305    984    F120425    LA    Lincoln
   VIRGINIA MERSHON TRUST REPRESENTED BY MARK                     

LA-FTA0043-002

   MERSHON AS TRUSTEE    WILDHORSE RESOURCES LLC      6/30/2011       1305    991    F120426    LA    Lincoln

LA-FTA0043-003

   GEORGE ROSS LAUGHEAD    WILDHORSE RESOURCES LLC      6/30/2011       1306    1    F120427    LA    Lincoln
   FRED LEE RAMSDELL TRUST REPRESENTED BY A                     

LA-FTA0043-004

   PATRICIA RAMSDELL TRUSTEE    WILDHORSE RESOURCES LLC      6/30/2011       1305    862    F120401    LA    Lincoln

LA-FTA0043-005

   CHARLES MICHAEL RAMSDELL    WILDHORSE RESOURCES LLC      6/30/2011       1306    8    F120428    LA    Lincoln

LA-FTA0043-006

   HUNT TIMBERLAND LLC    WILDHORSE RESOURCES LLC      8/19/2011       1305    692       LA    Lincoln
   JAMES MARSHALL LAUGHEAD FAMILY TRUST                     

LA-FTA0043-007

   REPRESENTED BY LISA OTT LAKY AS TRUSTEE    WILDHORSE RESOURCES LLC      6/30/2011       1306    628    F120755    LA    Lincoln

LA-FTA0044-000

   CHARLES EDWARD OGDEN ET AL    WILDHORSE RESOURCES LLC      8/2/2011       1306    615    F120752    LA    Lincoln

LA-FTA0045-000

   BARRY WADE MITCHELL ET AL    WILDHORSE RESOURCES LLC      8/2/2011       1306    619    F120753    LA    Lincoln

LA-FTA0046-000

   JOE CALVIN AULDS ET UX    WILDHORSE RESOURCES LLC      3/9/2011       1305    739    F120376    LA    Lincoln

LA-FTA0047-000

   LUTHER GRAHAM HARVEY ET UX    WILDHORSE RESOURCES LLC      3/14/2011       1305    742    F120377    LA    Lincoln

LA-FTA0048-000

   NIEL BROWN TRAYLOR JR ET UX    WILDHORSE RESOURCES LLC      3/25/2011       1305    735    F120375    LA    Lincoln

LA-FTA0049-001

   GWENDOLYN BLACKWELL WILHITE    WILDHORSE RESOURCES LLC      5/27/2011       1305    731    F120374    LA    Lincoln

LA-FTA0049-002

   STEPHANIE CHAISSON DARK    WILDHORSE RESOURCES LLC      5/27/2011       1305    727    F120373    LA    Lincoln

LA-FTA0050-000

   ROY THOMAS WILTCHER ET AL    WILDHORSE RESOURCES LLC      5/31/2011       1305    795    F120387    LA    Lincoln
   NELDA CHRISTINE WILTCHER MARTIN AKA CHRISTINE                     

LA-FTA0051-000

   WILTCHER MARTIN ET AL    WILDHORSE RESOURCES LLC      5/31/2011       1305    789    F120386    LA    Lincoln

LA-FTA0052-001

   BILLY G MARTIN ET AL    WILDHORSE RESOURCES LLC      5/31/2011       1305    954    F120420    LA    Lincoln

LA-FTA0052-002

   BETTYE RUTH MARTIN JAMES    WILDHORSE RESOURCES LLC      5/31/2011       1305    855    F120400    LA    Lincoln

LA-FTA0052-003

   PHILLIP WAYNE MARTIN    WILDHORSE RESOURCES LLC      5/31/2011       1305    753    F120379    LA    Lincoln

LA-FTA0053-001

   BETTY FRANKLIN MARTIN ET AL    WILDHORSE RESOURCES LLC      5/31/2011       1305    812    F120391    LA    Lincoln

LA-FTA0053-002

   PHILLIP WAYNE MARTIN    WILDHORSE RESOURCES LLC      5/31/2011       1305    759    F120380    LA    Lincoln
   HARRIS LIVING TRUST REPRESENTED BY CARL C                     

LA-FTA0054-000

   HARRIS AS TRUSTEE    WILDHORSE RESOURCES LLC      8/15/2011       1305    893    F120408    LA    Lincoln

LA-FTA0055-000

   CRAIG M KENT ET UX    WILDHORSE RESOURCES LLC      8/23/2011       1306    739    F120815    LA    Lincoln

LA-FTA0056-000

   TIMOTHY CLAY ELLIOTT ET UX      WILDHORSE RESOURCES LLC      3/18/2011       1309    229    F121987    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-FTA0057-000

   BENJAMIN C LARY    WILDHORSE RESOURCES LLC      8/22/2011       1306    600    F120748    LA    Lincoln

LA-FTA0058-000

   JAMES HOUSTON HALL ET UX    WILDHORSE RESOURCES LLC      6/8/2011       1306    15    F120429    LA    Lincoln
            1305    889    F120407      
   PRISCILLA HEARD BOWMAN INDIVIDUALLY AND AS          1305    877    F120404      

LA-FTA0059-000

   USUFRUCTUARY ET AL    WILDHORSE RESOURCES LLC      7/25/2011       1305    869    F120402    LA    Lincoln
            1305    885    F120406      
   PRISCILLA HEARD BOWMAN INDIVIDUALLY AND AS          1305    881    F120405      

LA-FTA0060-000

   USUFRUCTUARY ET AL    WILDHORSE RESOURCES LLC      7/25/2011       1305    873    F120403    LA    Lincoln
            1296    513    F116294      

LA-FTA0061-000

   SANDRA KILGORE WILLIAMSON ET AL    WILDHORSE RESOURCES LLC      2/21/2011       1296    513    F116294    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS       934    289    E77391      

LA-HKN0001-000

   M L COOK ET UX    PROPERTIES      10/12/1993       883    105    E67956    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0003-001

   JERRY S DREWETT ET UX    PROPERTIES      6/13/1994       891    189    E69442    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0003-002

   JOHN COLVIN DREWETT    PROPERTIES      6/13/1994       891    179    E69440    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0003-003

   PATTON BARHAM DREWETT    PROPERTIES      6/13/1994       891    184    E69441    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0003-004

   JEFFRESS MALONE DREWETT    PROPERTIES      6/13/1994       891    149    E69434    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0004-001

   ERNESTINE LOVELADY TATUM    PROPERTIES      6/13/1994       891    194    69443    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0004-002

   RUTH TATUM DELONY    PROPERTIES      6/13/1994       891    194    69444    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0004-003

   TERRI TATUM JOHNSON    PROPERTIES      6/13/1994       891    166    69437    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0004-004

   JAMES EGAN FULLER    PROPERTIES      6/22/1994       891    154    69435    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0004-005

   PHYLLIS SUZANNE W BLACKWELL    PROPERTIES      6/13/1994       891    161    69436    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0005-000

   GARY E PATTERSON    PROPERTIES      7/1/1994       891    170    E69438    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0006-000

   JOAN BLONDIN    PROPERTIES      8/25/1994       902    162    71204    LA    Lincoln
      CLARK ENERGY COMPANY INC OIL & GAS                  

LA-HKN0007-001

   TYRONE A LITTLETON    PROPERTIES      1/12/1995       910    340    F72517    LA    Lincoln
            935    100    72881      
            935    98    72881      
      CLARK ENERGY COMPANY INC OIL & GAS       935    99    72881      

LA-HKN0008-000

   DOROTHY HARRELL GOFF    PROPERTIES      2/6/1995       912    280    72881    LA    Lincoln
   R W NORTON ART FOUNDATION                     

LA-HKN0009-001  

   COMMERICAL NATL BANK IN SHREVPORT, TRUSTEE    MEDALLION PRODUCTION CO      11/3/1995       937    316    78006    LA    Lincoln

LA-HKN0010-001

   LOUISE C WATTS    TXO PRODUCTION CORP      6/27/1983       440    24       LA    Lincoln
   A T HUNT SR ET UX                     
   BY HOWARD W WRIGHT, JR, AGENT AND AIF FOR A T                     

LA-HKN0010-002

   HUNT, SR; ALVERNE DAVIS HUNT    TXO PRODUCTION CORP      6/24/1983       439    146       LA    Lincoln

LA-HKN0010-003

   DONALD KEITH HUDDLESTON    TXO PRODUCTION CORP      6/27/1983       443    227       LA    Lincoln

LA-HKN0010-004

   LLOYD MILLER FREY    TXO PRODUCTION CORP.      6/27/1983       444    64       LA    Lincoln

LA-HKN0010-005

   VIRGINIA COLVIN MEADORS    TXO PRODUCTION CORP.      3/31/1982       377    264       LA    Lincoln

LA-HKN0010-006

   CLYDE C COLVIN JR      TXO PRODUCTION CORP.      3/31/1982       377    260       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            486    122         

LA-HKN0010-007

   ROBERT LANE FULLER ET AL    TXO PRODUCTION CORP      3/17/1982       375    36       LA    Lincoln

LA-HKN0010-008

   GEORGE B HOLSTEAD JR ET AL    TXO PRODUCTION CORP.      1/26/1984       462    39       LA    Lincoln

LA-HKN0010-009

   ISRAEL DUNN    TXO PRODUCTION CORP.      6/30/1983       440    318       LA    Lincoln

LA-HKN0010-010

   OTHELL DUNN ET AL    TXO PRODUCTION CORP      7/18/1983       451    139       LA    Lincoln

LA-HKN0010-011

   SAVANNAH RAE DUNN SANTA MARIA ET VIR    TXO PRODUCTION CORP.      7/18/1983       445    113       LA    Lincoln
            432    205         

LA-HKN0011-001

   JAMES H COLVIN SR ET AL    TXO PRODUCTION CORP      4/1/1983       430    58       LA    Lincoln
            432    204         

LA-HKN0011-002

   JULIA ANN COLVIN NICHOLS    TXO PRODUCTION CORP      4/1/1983       430    62       LA    Lincoln
            432    206         

LA-HKN0011-003

  

LITTLETON PARKS COLVIN III

   TXO PRODUCTION CORP      4/1/1983       430    54       LA    Lincoln

LA-HKN0011-004

   F COLBURN PLATT    TXO PRODUCTION CORP      4/1/1983       428    237       LA    Lincoln

LA-HKN0011-005

   ALVERNE COLVIN COOK    TXO PRODUCTION CORP      4/1/1983       428    241       LA    Lincoln

LA-HKN0011-006

   DOLLIE OPHELIA COLVIN CAMPBELL    TXO PRODUCTION CORP      4/1/1983       428    249       LA    Lincoln

LA-HKN0011-007

   WILLIAM LOSSE COLVIN JR    TXO PRODUCTION CORP      4/1/1983       430    23       LA    Lincoln

LA-HKN0011-008

   HENRY L STUM ET AL    TXO PRODUCTION CORP      6/28/1983       439    150       LA    Lincoln

LA-HKN0011-009

   JOY COLVIN AUDIRSCH    TXO PRODUCTION CORP      4/1/1983       430    19       LA    Lincoln

LA-HKN0011-010

   WILLIAM DON SMITH    TXO PRODUCTION CORP      4/1/1983       432    46       LA    Lincoln

LA-HKN0011-011

  

W A COLVIN III

   TXO PRODUCTION CORP      4/1/1983       428    245       LA    Lincoln

LA-HKN0011-012

   JOYCE LEFETTE DANIEL HENRY    TXO PRODUCTION CORP      4/1/1983       428    302       LA    Lincoln

LA-HKN0011-013

   WALTER RAY FARRAR JR    TXO PRODUCTION CORP      4/1/1983       428    298       LA    Lincoln

LA-HKN0012-000

   REBECCA MCGINNIS WILLIAMS    TXO PRODUCTION CORP      4/1/1983       428    306       LA    Lincoln

LA-HKN0013-001

   ROBERT E BARHAM    TXO PRODUCTION CORP      5/5/1983       434    299    D49514    LA    Lincoln

LA-HKN0013-002

   CHARLES C BARHAM    TXO PRODUCTION CORP      5/5/1983       432    259    D49253    LA    Lincoln

LA-HKN0014-000

   PAULINE BARHAM DREWETT    TXO PRODUCTION CORP      7/8/1983       442    37    D50638    LA    Lincoln
   T L JAMES & CO INC                     

LA-HKN0015-000

   BY THOMAS D JAMES EXECUTIVE VP    TXO PRODUCTION CORP      8/8/1986       592    5    E16339    LA    Lincoln

LA-HKN0016-000

   NANCY HART CALHOUN ET AL    TXO PRODUCTION CORP      12/1/1983       455    308    D53089    LA    Lincoln

LA-HKN0017-000

   M L COOK ET UX    TXO PRODUCTION CORP.      11/17/1983       454    106    D52802    LA    Lincoln

LA-HKN0018-000

   TRINITY ROYALTY CO INC    TXO PRODUCTION CORP      9/25/1983       449    335    D52117    LA    Lincoln

LA-HKN0020-001

   JERRY BLACKMON    R & O ENERGY LLC      3/6/2007       1216    611    F82667    LA    Lincoln

LA-HKN0021-001

   L W SUGAR LIMITED PARTNERSHIP    CLAYTON WILLIAMS ENERGY INC      3/20/2007       1218    638    F83404    LA    Lincoln
            648    259    E-25114      

LA-HKN0021-002

   ELIZABETH NOBLES LARSON ET AL    SONAT EXPLORATION COMPANY      2/19/1988       648    259    E-25114    LA    Lincoln

LA-HKN0021-003

   L W SUGAR LIMITED PARTNERSHIP    CLAYTON WILLIAMS ENERGY INC      3/20/2007       1218    635    F83403    LA    Lincoln

LA-HKN0021-005

   BRIAN ALAN SUGAR ET AL    SONAT EXPLORATION COMPANY      4/5/1988       656    176    E-26288    LA    Lincoln

LA-HKN0021-006

   LOTTIE WILLIAMS SUGAR ET AL    PHILLIPS PETROLEUM COMPANY      8/14/1985       555    130    E-10141    LA    Lincoln
            289    305    D-27635      

LA-HKN0021-007

   HOWARD EDWIN NOBLES ET UX    AMOCO PRODUCTION COMPANY INC      4/30/1980       289    305    D-27635    LA    Lincoln
            648    255    E-25113      

LA-HKN0021-P04

   HOWARD E NOBLES    SONAT EXPLORATION COMPANY      2/19/1988       648    255    E-25113    LA    Lincoln

LA-HKN0023-001

   STANLEY A COLVIN    KCS RESOURCES INC      6/28/2002       1135    42    40120    LA    Lincoln

LA-HKN0023-002

   WANDA K MATLOCK    KCS RESOURCES INC      6/28/2002       1135    45    40121    LA    Lincoln

LA-HKN0023-003

  

LLOYD D COLVIN ET AL

   KCS RESOURCES INC      7/1/2002       1135    50    40123    LA    Lincoln

LA-HKN0024-000

   JOHN EARL JIMMERSON ET UX    KCS RESOURCES INC      7/3/2002       1135    48    40122    LA    Lincoln
   NANCY W BAGGETTE TRUST NO 2                     

LA-HKN0025-000

   WADE R BAGGETT TRUSTEE    KCS RESOURCES INC      6/19/2002       1135    33    40118    LA    Lincoln

LA-HKN0026-001

   MARK EDWIN BARNHILL    KCS RESOURCES INC      3/15/2002       1132    768    38576    LA    Lincoln

LA-HKN0026-002

   DAISY LAVERNE HANNA ANDERSON    KCS RESOURCES INC      3/15/2002       1132    771    38577    LA    Lincoln

LA-HKN0026-003

   DORIS ANN HANNA WHISENAND    KCS RESOURCES INC      3/15/2002       1132    777    38579    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-HKN0026-004

   WILLIAM HARRIS GREEN ET UX    KCS RESOURCES INC      3/26/2002       1132    774    38578    LA    Lincoln

LA-HKN0026-005

   DORIS ANN HANNA WHISENAND    KCS RESOURCES INC      6/7/2002       1134    587    39805    LA    Lincoln

LA-HKN0026-006

   MARK EDWIN BARNHILL    KCS RESOURCES INC      6/7/2002       1134    581    39803    LA    Lincoln

LA-HKN0026-007

   DAISY LAVERNE HANNA ANDERSON    KCS RESOURCES INC      6/7/2002       1134    584    39804    LA    Lincoln

LA-HKN0027-000

   BRETT GRAHAM NOBLES ET UX    KCS RESOURCES INC      3/26/2002       1132    780    38580    LA    Lincoln

LA-HKN0028-000

   EVA PEARL JACKSON ET AL    KCS RESOURCES INC      7/12/2002       1135    35    40119    LA    Lincoln
            1176    240    F65239      

LA-HKN0030-001

   HAZEL NOLAN SMITH    KCS RESOURCES INC      2/9/2005       1176    240    F65239    LA    Lincoln

LA-HKN0033-000

   VIRGINIA ANN MITCHELL    ACADIAN LAND SERVICES LLC      5/24/2004       1165    662    59501    LA    Lincoln

LA-HKN0034-000

   MARTHA WEST WYCHE ET AL    ACADIAN LAND SERVICES LLC      6/23/2004       1165    638    59497    LA    Lincoln

LA-HKN0035-000

   LOUISIANA MINERALS LTD    ACADIAN LAND SERVICES LLC      10/5/2004       1165    678    59506    LA    Lincoln
   CLEM B FAMILY LTD PTNRSHIP                     
   JERRY STEPHEN DREWETT A GENERAL AND LIMITED                     
   PARTNER                     
   MARGIE MARIE NORMAND DREWETT A GENERAL AND                     
   LIMITED PARTNER                     
   PATRICK STEPHEN DREWETT A GENERAL AND LIMITED                     

LA-HKN0037-000

   PARTNER    KCS RESOURCES INC      3/5/2007       1216    670    F82686    LA    Lincoln

LA-HKN0038-000

   MICHAEL EUGENE CRAFT ET UX    KCS RESOURCES INC      3/27/2007       1224    604    F85920    LA    Lincoln

LA-HKN0040-000

   WHITE SOLOMON GRAVES III ET UX    KCS RESOURCES INC      11/23/2004       1167    179    60346    LA    Lincoln

LA-HKN0041-000

   TAMMY DIANNE OTWELL VEDROS    KCS RESOURCES INC      11/24/2004       1167    11    60257    LA    Lincoln

LA-HKN0042-000

   ROY C DELONY    KCS RESOURCES INC      2/1/2005       1170    475    62132    LA    Lincoln

LA-HKN0044-001

   SARA NELL HUMPHREYS    KCS RESOURCES, INC.      9/18/2007       1239    485    91865    LA    Lincoln

LA-HKN0044-002

   RICHARD HARDIN VICKERS    KCS RESOURCES, INC.      9/18/2007       1239    488    91866    LA    Lincoln

LA-HKN0044-003

   RUDMAN PARTNERSHIP LTD    KCS RESOURCES, INC.      9/18/2007       1239    491    91867    LA    Lincoln

LA-HKN0044-004

   RUDMAN PARTNERSHIP LTD    KCS RESOURCES, INC.      9/6/2007       1239    494    91868    LA    Lincoln
   HEIRS OF GLADYS NOBLES DELONY                     

LA-HKN0044-005

   REPRESENTED BY DONNY MACK HOOD    KCS RESOURCES, INC.      9/6/2007       1239    612    91941    LA    Lincoln
   HEIRS OF GLADYS NOBLES DELONY                     

LA-HKN0044-006

   REPRESENTED BY JAMES A DELONEY    KCS RESOURCES, INC.      9/6/2007       1239    609    91940    LA    Lincoln

LA-HKN0044-007

   MOSBACHER USA INC    KCS RESOURCES, INC.      3/2/2007       1226    600    F86722    LA    Lincoln

LA-HKN0044-008

   GEORGE GRAHAM CAVER    KCS RESOURCES INC      2/22/2007       1224    591    F85916    LA    Lincoln

LA-HKN0044-009

   YOUNGBLOOD LIMITED LP    KCS RESOURCES INC      3/14/2007       1224    594    F85917    LA    Lincoln

LA-HKN0044-010

   MARILYN JO SWINT YOUNG    KCS RESOURCES INC      2/27/2007       1224    601    F85919    LA    Lincoln

LA-HKN0044-011

   LOUISIANA METHODIST CHILDRENS ORPHANAGE INC    KCS RESOURCES, INC.      11/2/2005       1189    559    F71523    LA    Lincoln
            1225    195    F86111      

LA-HKN0044-012

   POGO PRODUCING COMPANY    CLAYTON WILLIAMS ENERGY INC      4/20/2007       1225    195    F86111    LA    Lincoln

LA-HKN0044-013

   RONNIE MCCULLIN    R & O ENERGY, LLC      9/5/2007       1231    50    F88497    LA    Lincoln

LA-HKN0044-014

   JO ANNE DELONY RAINEY    R & O ENERGY, LLC      10/15/2007       1236    231    F90437    LA    Lincoln

LA-HKN0044-015

   JUDITH LORAINE DELONY WASSON    R & O ENERGY, LLC      10/15/2007       1235    251    F90141    LA    Lincoln

LA-HKN0044-016

   BOKF NA AS AGENT FOR PRINCIPA CORPORATION    WILDHORSE RESOURCES LLC      4/27/2011       1301    648    F118565    LA    Lincoln

LA-HKN0044-017

   BILLYE MARGARET SNIDER HUFF    COMSTOCK OIL & GAS LOUISIANA LLC      2/1/2007       1217    654    F83073    LA    Lincoln

LA-HKN0044-018

   BARBARA FOREE WALLACE TRUST ET AL    COMSTOCK OIL & GAS LOUISIANA LLC      1/24/2007       1218    124    F83181    LA    Lincoln

LA-HKN0044-019

   L S YOUNGBLOOD COMPANY    COMSTOCK OIL & GAS LOUISIANA LLC      1/31/2007       1218    163    F83201    LA    Lincoln

LA-HKN0044-020

   RICHARD H VICKERS INDIV ET AL    EASON OIL COMPANY INC      9/10/1984       500    170    E-2731    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   L W SUGAR LIMITED PARTNERSHIP                     
   REPRESENTED BY BRIAN ALAN SUGAR                     
   BRIAN ALAN SUGAR                     
   FRANCES JEANNE S HURWITZ                     

LA-HKN0044-022

   NEE SUGAR    CLAYTON WILLIAMS ENERGY INC      5/9/2007       1223    169    F85198    LA    Lincoln
            247    671    D-19756      
            247    671    D-19756      
            247    671    D-19756      

LA-HKN0044-023

   THOMAS G RUSSELL    AMOCO PRODUCTION COMPANY INC      3/14/1979       247    671    D-19756    LA    Lincoln
            248    486    D-19968      
            248    486    D-19968      
            248    486    D-19968      
            248    486    D-19968      

LA-HKN0044-024

   ALBERT G BLANKE JR    AMOCO PRODUCTION COMPANY INC      4/10/1979       248    486    D-19968    LA    Lincoln
   L W SUGAR LIMITED PARTNERSHIP                     

LA-HKN0044-025

   BRIAN ALAN SUGAR AS GENERAL PARTNER    KCS RESOURCES INC      12/8/2005       1194    89    F73736    LA    Lincoln
            247    686         
            247    686         
            247    686         

LA-HKN0044-027

   MARLIN EXPLORATION INC    AMOCO PRODUCTION COMPANY INC      3/15/1979       247    686       LA    Lincoln
            247    657         
            247    657         
            247    657         

LA-HKN0044-028

   NANCY WRIGHT SMALL ET AL    AMOCO PRODUCTION COMPANY INC      3/14/1979       247    657       LA    Lincoln

LA-HKN0044-029

   C W WILLIAMS JR, A SINGLE MAN    EASON OIL COMPANY INC      8/30/1984       496    9    E-2115    LA    Lincoln

LA-HKN0044-030

   GLADYS M W DREESEN ET VIR    EASON OIL COMPANY INC      8/30/1984       496    1    E-2113    LA    Lincoln

LA-HKN0044-031

   SARA NELL VICKERS HUMPHREYS    EASON OIL COMPANY INC      9/10/1984       500    186    E-2735    LA    Lincoln

LA-HKN0044-032

   C H MURPHY JR ET UX    EASON OIL COMPANY INC      11/20/1984       506    120    E-3481    LA    Lincoln

LA-HKN0044-033

   BETTYE VICKERS GRAY INDIV ET AL    EASON OIL COMPANY INC      9/10/1984       506    116    E-3480    LA    Lincoln

LA-HKN0044-034

   RICKY LYNN DELONY    EASON OIL COMPANY INC      10/2/1984       500    214    E-2742    LA    Lincoln

LA-HKN0044-035

   JAMES DELONY    EASON OIL COMPANY INC      10/4/1984       528    195    E-6473    LA    Lincoln

LA-HKN0044-036

   GEORGE MICHAEL DELONY    EASON OIL COMPANY INC      10/4/1984       512    174    E-4239    LA    Lincoln

LA-HKN0044-037

   F H CALLAWAY ET UX    PAUL E MAEDER      10/18/1976       492    263       LA    Lincoln

LA-HKN0044-038

   PRINCIPIA CORPORATION    CARROLL G JONES      2/3/1982       379    59    D-41554    LA    Lincoln
            640    331    E-24101      

LA-HKN0044-039

   TILMON LEWIS S/P    SONAT EXPLORATION COMPANY      12/24/1987       640    331    E-24101    LA    Lincoln
            644    176    E-24632      

LA-HKN0044-040

   AMOS LEWIS S/P    SONAT EXPLORATION COMPANY      1/6/1988       644    176    E-24632    LA    Lincoln

LA-HKN0044-041

   HERMAN SINGER ET UX    SONAT EXPLORATION COMPANY      2/19/1988       661    334    E-27184    LA    Lincoln

LA-HKN0044-042

   C W WILLIAMS JR ET AL    SONAT EXPLORATION COMPANY      3/24/1988       663    340    E-27561    LA    Lincoln

LA-HKN0044-043

   DONNA L S FONTENOT ET AL    SONAT EXPLORATION COMPANY      9/8/1988       677    228    E-29790    LA    Lincoln

LA-HKN0044-044

   L S YOUNGBLOOD COMPANY    SONAT EXPLORATION COMPANY      2/17/1988       650    66    E-25341    LA    Lincoln

LA-HKN0044-045

   GEORGE W CAVER JR    SONAT EXPLORATION COMPANY      2/9/1988       649    331    E-25283    LA    Lincoln

LA-HKN0044-046

   JOHN E DELONY    SONAT EXPLORATION COMPANY      2/10/1988       649    327    E-25282    LA    Lincoln

LA-HKN0044-047

   BILLYE MARGARET SNIDER HUFF    SONAT EXPLORATION COMPANY      2/11/1988       649    303    E-25276    LA    Lincoln

LA-HKN0044-048

   EVELYN DELONY MCCULLIN    SONAT EXPLORATION COMPANY      2/15/1988       649    323    E-25281    LA    Lincoln

LA-HKN0044-049

   LAVERNE DELONY JEFCOAT    SONAT EXPLORATION COMPANY      2/10/1988       649    311    E-25278    LA    Lincoln

LA-HKN0044-050

   JUDITH LORAINE DELONY WASSON    SONAT EXPLORATION COMPANY      2/10/1988       649    307    E-25277    LA    Lincoln

LA-HKN0044-051

   JO ANNE DELONY RAINEY    SONAT EXPLORATION COMPANY      2/10/1988       649    315    E-25279    LA    Lincoln

LA-HKN0044-052

   FOREE TRUSTS    SONAT EXPLORATION COMPANY      2/17/1988       651    99    E-25587    LA    Lincoln

LA-HKN0044-053

   LOUISIANA METHODIST ORPHANAGE    SONAT EXPLORATION COMPANY      2/23/1988       649    299    E-25275    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-HKN0044-054

   BETTY JEAN DELONY HOOD    SONAT EXPLORATION COMPANY      2/10/1988       649    319    E-25280    LA    Lincoln

LA-HKN0044-055

   CLINTON I SMULLYAN JR    SONAT EXPLORATION COMPANY      5/20/1988       667    21    E-28053    LA    Lincoln

LA-HKN0044-056

   BENNETT EMIL SMULLYAN    SONAT EXPLORATION COMPANY      5/20/1988       667    25    E-28054    LA    Lincoln

LA-HKN0044-057

   ROBERT A MOSBACHER    SONAT EXPLORATION COMPANY      5/20/1988       667    17    E-28052    LA    Lincoln

LA-HKN0044-058

   JOHN D JERABECK    SONAT EXPLORATION COMPANY      6/14/1988       686    303    E-31182    LA    Lincoln
            644    180    E-24633      

LA-HKN0044-059

   CLEOPHUS LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       644    180    E-24633    LA    Lincoln
            644    184    E-24634      

LA-HKN0044-060

   ELIZABETH LEWIS LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       644    184    E-24634    LA    Lincoln
            644    188    E-24635      

LA-HKN0044-061

   CAMILLE LEWIS MILLER    SONAT EXPLORATION COMPANY      1/6/1988       644    188    E-24635    LA    Lincoln
            646    58    E-24844      

LA-HKN0044-062

   THOMAS LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       646    58    E-24844    LA    Lincoln
            646    38    E-24839      

LA-HKN0044-063

   JAMES LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       646    38    E-24839    LA    Lincoln
            646    54    E-24843      

LA-HKN0044-064

   BENJAMIN LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       646    54    E-24843    LA    Lincoln
            646    50    E-24842      

LA-HKN0044-065

   IDA MAE LEWIS WILLIAMS    SONAT EXPLORATION COMPANY      1/6/1988       646    50    E-24842    LA    Lincoln
            646    46    E-24841      

LA-HKN0044-066

   RUTH LEWIS MYLES    SONAT EXPLORATION COMPANY      1/6/1988       646    46    E-24841    LA    Lincoln
            646    42    E-24840      

LA-HKN0044-067

   LUCENDIA LEWIS SPIVEY    SONAT EXPLORATION COMPANY      1/6/1988       646    42    E-24840    LA    Lincoln
            646    151    E-24872      

LA-HKN0044-068

   JOHN RAY LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       646    151    E-24872    LA    Lincoln
            647    221    E-24959      

LA-HKN0044-069

   BETTY JEAN LEWIS TOLBERT    SONAT EXPLORATION COMPANY      1/6/1988       647    221    E-24959    LA    Lincoln
            650    197    E-25440      

LA-HKN0044-070

   NAOMI LEWIS    SONAT EXPLORATION COMPANY      1/6/1988       650    197    E-25440    LA    Lincoln

LA-HKN0044-071

   PAULINE BARHAM DREWETT    SONAT EXPLORATION COMPANY      2/18/1988       649    283    E-25271    LA    Lincoln

LA-HKN0044-072

   M L HOOD ET AL    SONAT EXPLORATION COMPANY      11/25/1987       639    136    E-23851    LA    Lincoln
   IRMA R COOK ET AL                     
   INDIVIDUALLY AND AS GENERAL PARTNER OF COOK                     

LA-HKN0044-073

   ROYALTIES    SONAT EXPLORATION COMPANY      2/19/1988       649    295    E-25274    LA    Lincoln

LA-HKN0044-074

   BETTY SHELOR MORRIS    SONAT EXPLORATION COMPANY      2/19/1988       649    335    E-25284    LA    Lincoln

LA-HKN0044-075

   MARY LYNN SHELOR CASON    SONAT EXPLORATION COMPANY      2/19/1988       655    100    E-26129    LA    Lincoln
   MARY JOHN SPENCE TRUST                     
   LEMUEL C HUTCHINS ANCILLARY TRUSTEE FOR MARY                     
   JOHN SPENCE U/W/O L A GRELLING, AND MARY JOHN                     

LA-HKN0044-076

   SPENCE U/W/O MAE KYLE GRELLING    SONAT EXPLORATION COMPANY      3/28/1988       656    298    E-26346    LA    Lincoln

LA-HKN0044-077

   CHARLES FLOYD SHELOR    SONAT EXPLORATION COMPANY      2/19/1988       657    120    E-26385    LA    Lincoln

LA-HKN0044-078

   THOMAS G RUSSELL ESTATE    SONAT EXPLORATION COMPANY      2/22/1988       658    35    E-26510    LA    Lincoln
            649    287    E-25272      

LA-HKN0044-079

   ELIZABETH WRIGHT WRIGHT    SONAT EXPLORATION COMPANY      2/18/1988       649    287    E-25272    LA    Lincoln
            649    291    E-25273      

LA-HKN0044-080

   NANCY WRIGHT SMALL    SONAT EXPLORATION COMPANY      2/18/1988       649    291    E-25273    LA    Lincoln
            649    274    E-25269      

LA-HKN0044-081

   MARLIN EXPLORATION INC    SONAT EXPLORATION COMPANY      3/1/1988       649    274    E-25269    LA    Lincoln
            652    233    E-25745      

LA-HKN0044-082

   ARTHUR BROGNA ET UX    SONAT EXPLORATION COMPANY      2/19/1988       652    233    E-25745    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            653    32    E-25824      

LA-HKN0044-083

   MARY A CONNELLY    SONAT EXPLORATION COMPANY      2/19/1988       653    32    E-25824    LA    Lincoln
            657    306         

LA-HKN0044-084

   NORTH CENTRAL OIL CORPORATION    SONAT EXPLORATION COMPANY      4/15/1988       723    7    E-26459    LA    Lincoln

LA-HKN0044-085

   AMOCO PRODUCTION COMPANY    SONAT EXPLORATION COMPANY      3/2/1988       700    26    E-33491    LA    Lincoln

LA-HKN0044-086

   MILTON LAVELLE HOOD ET AL    PETROHOOD CORPORATION      9/10/2007       1231    502    F88793    LA    Lincoln

LA-HKN0044-087

   PETROHOOD CORPORATION    HOOD PETROLEUM INC      9/10/2007       1231    510    F88795    LA    Lincoln
            1236    732    F90700      
            1236    732    F90700      

LA-HKN0044-088

   RYAN CONNELLY LLC    COMSTOCK OIL & GAS LOUISIANA LLC      10/23/2007       1236    732    F90700    LA    Lincoln

LA-HKN0044-089

   MARY JOHN SPENCE TRUST I & II    COMSTOCK OIL & GAS LOUISIANA LLC      8/8/2007       1229    430    F87848    LA    Lincoln

LA-HKN0044-090

   MARY A CONNELLY    SONAT EXPLORATION COMPANY      2/4/1991       759    189    E-43984    LA    Lincoln
            1218    445    F83309      

LA-HKN0044-091

   ROBERT C NOLAN ET AL    COMSTOCK OIL & GAS LOUISIANA LLC      3/13/2007       1218    445    F83309    LA    Lincoln
            663    307    E-27551      

LA-HKN0044-092

   ROBERT C NOLAN ET AL    SONAT EXPLORATION COMPANY      3/29/1988       663    307    E-27551    LA    Lincoln

LA-HKN0044-093

   AMOCO PRODUCTION COMPANY    PRAETORIAN RESOURCES      6/1/1981                LA    Lincoln
            202    23    D-1926      

LA-HKN0044-094

   WILLIAM C HARRELL ET UX    PAUL E MAEDER      10/5/1976       202    23    D-1926    LA    Lincoln

LA-HKN0044-095

   JAMES E WRIGHT    SONAT EXPLORATION COMPANY      4/22/1991       766    199    E-45322    LA    Lincoln

LA-HKN0044-096

   ELEANOR WRIGHT MCCULLIN    SONAT EXPLORATION COMPANY      4/22/1991       766    194    E-45321    LA    Lincoln

LA-HKN0044-097

   THOMAS E WRIGHT    SONAT EXPLORATION COMPANY      3/16/1990       729    203    E-38591    LA    Lincoln

LA-HKN0044-098

   JAMES GORDON MCCULLIN    COMSTOCK OIL & GAS LOUISIANA LLC      9/21/2007       1243    42    F93168    LA    Lincoln
            56       C-5117      

LA-HKN0044-099

   J FLOYD HODGE    JULIAN M FARMER      5/11/1957             C-5117    LA    Lincoln

LA-HKN0044-101

   CORDER S REYNOLDS JR    SONAT EXPLORATION COMPANY      3/1/1992       807    268    E-52758    LA    Lincoln

LA-HKN0044-102

   DAVID EUGENE HANNA    SONAT EXPLORATION COMPANY      1/18/1991       759    183    E-43983    LA    Lincoln

LA-HKN0044-103

   EDITH LUCILLE WRIGHT    SONAT EXPLORATION COMPANY      5/3/1991       769    163    E-45777    LA    Lincoln

LA-HKN0044-104

   BRIAN ALAN SUGAR ET AL    SONAT EXPLORATION COMPANY      2/15/1988       755    283    E-43425    LA    Lincoln

LA-HKN0044-105

   EDWINA WRIGHT COLVIN    SONAT EXPLORATION COMPANY      3/2/1988       649    279    E-25270    LA    Lincoln
            755    288    E-43426      

LA-HKN0044-106

   EDWINA WRIGHT COLVIN    SONAT EXPLORATION COMPANY      1/12/1991       809    275    E-53256    LA    Lincoln
            755    283    E-43425      

LA-HKN0044-107

   ARMEDE WRIGHT HARRELL    SONAT EXPLORATION COMPANY      1/12/1991       809    277    E-53257    LA    Lincoln

LA-HKN0044-108

   ARMEDE WRIGHT HARRELL    SONAT EXPLORATION COMPANY      3/2/1988       649    339    E-25285    LA    Lincoln
            247    715         
            247    715         

LA-HKN0044-109

   JOHN D JERABECK    AMOCO PRODUCTION COMPANY INC      3/13/1979       247    715       LA    Lincoln

LA-HKN0044-110

   CHARLES E SHELOR JR    AMOCO PRODUCTION COMPANY INC      3/13/1979       246    301    D-19196    LA    Lincoln
            201    529    D-1717      

LA-HKN0044-111

   LOUIS D COLVIN ET UX    PAUL E MAEDER      10/5/1976       201    529    D-1717    LA    Lincoln
            1176    624    F65463      

LA-HKN0044-112

   CONSOLIDATED CRESCENT LLC    HOOD PETROLEUM INC      5/26/2005       1283    768    F110284    LA    Lincoln

LA-HKN0044-113

   S B F DINK INC    KCS RESOURCES INC      12/15/2005       1194    770    F73731    LA    Lincoln

LA-HKN0044-115

   CLINTON L DAVIDSON ET AL    COWGILL & ASSOCIATES LLC      4/4/2002       1131    926    38210    LA    Lincoln

LA-HKN0044-116

   GARY WAYNE LEWIS ET UX    COWGILL & ASSOCIATES LLC      2/12/2002       1131    932    38212    LA    Lincoln

LA-HKN0044-117

   MARGARET GAYLE RANDALL VAN ZILE    COWGILL & ASSOCIATES LLC      4/17/2002       1133    769    39282    LA    Lincoln

LA-HKN0044-118

   JAMES LARRY DEASON ET UX    COWGILL & ASSOCIATES LLC      3/7/2002       1133    767    39281    LA    Lincoln

LA-HKN0044-119

   EXERB LEWIS RANDALL INDIV & AS USUF    COWGILL & ASSOCIATES LLC      5/24/2002       1133    324    38892    LA    Lincoln

LA-HKN0044-121

   PRUDENCY ANN LEWIS BLACKMON    COMSTOCK OIL & GAS LOUISIANA LLC      6/12/2007       1225    622    F86382    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            33    331    N-58614      

LA-HKN0045-000

   T L MCCRARY    JOE B CLARK      3/3/1944       33    331       LA    Lincoln
            295    286    D-28640      

LA-HKN0046-001

   MARIE COLVIN JEFCOAT ET AL    AMOCO PRODUCTION COMPANY INC      6/10/1980       295    286    D-28640    LA    Lincoln
            202    625    D-2183      

LA-HKN0047-000

   F H CALLAWAY ET UX    PAUL E MAEDER      10/18/1976       202    625    D-2183    LA    Lincoln
            1181    504    F67882      

LA-HKN0048-000

   CECIL MAX KING ET UX    HOOD PETROLEUM, INC.      7/22/2005       1283    68    F110284    LA    Lincoln

LA-HKN0049-001

   PAULINE DREWETT ET AL    SONAT EXPLORATION COMPANY      1/9/1991       755    23    R-43308    LA    Lincoln

LA-HKN0049-002

   GEORGE B HOLSTEAD JR    SONAT EXPLORATION COMPANY      1/15/1991       755    293    E-43427    LA    Lincoln

LA-HKN0049-003

   PATTON BARHAM DREWETT    SONAT EXPLORATION COMPANY      1/12/1991       763    178    E-44728    LA    Lincoln

LA-HKN0049-004

   JOHN COLVIN DREWETT    SONAT EXPLORATION COMPANY      1/12/1991       758    189    E-43841    LA    Lincoln

LA-HKN0049-005

   J JEFF HOLSTEAD    SONAT EXPLORATION COMPANY      1/15/1991       756    176    E-43565    LA    Lincoln

LA-HKN0049-006

   JEFFRESS MALONE DREWETT    SONAT EXPLORATION COMPANY      1/12/1991       762    94    E-44514    LA    Lincoln

LA-HKN0049-007

   HOLLY ANN HOLSTEAD    SONAT EXPLORATION COMPANY      1/15/1991       761    127    E-44301    LA    Lincoln

LA-HKN0050-000

   LAVERNE D JEFCOAT ET AL    SONAT EXPLORATION COMPANY      1/14/1991       759    180    E-43982    LA    Lincoln
            1179    533    F66901      

LA-HKN0067-001

   JAMES GORDON MCCULLIN    KCS RESOURCES INC      6/10/2005       1179    533    F66901    LA    Lincoln

LA-HKN0069-000

   GLYNN DAVID ST ANDRE ET UX    HOOD PETROLEUM INC      6/23/2005       1178    179    F66229    LA    Lincoln
            1176    233    F65236      

LA-HKN0071-000

   CLYDE LEE AYCOCK ET UX    KCS RESOURCES INC      2/2/2005       1176    233    F65236    LA    Lincoln
                  F89842      

LA-HKN0072-000

   JOHN K POLAND ET UX    KCS RESOURCES INC      10/23/2007             F89842    LA    Lincoln
                  F89843      

LA-HKN0073-000

   VOLLIE HOLTZCLAW COOK    KCS RESOURCES INC      10/19/2007             F89843    LA    Lincoln

LA-HKN0075-000

   CONNIE ARMSTRONG WATTS ET AL    KCS RESOURCES INC      6/21/2007       1232    608    F89322    LA    Lincoln

LA-HKN0077-001

   EDWARD L ROTENBERG    KCS RESOURCES INC      12/5/2005       1194    777    F73733    LA    Lincoln

LA-HKN0077-002

   ANNE KLEIN ROTENBERG    KCS RESOURCES INC      12/5/2005       1194    774    F73732    LA    Lincoln

LA-HKN0077-003

   STEPHEN J ROTENBERG    KCS RESOURCES INC      12/5/2005       1194    786    F73735    LA    Lincoln

LA-HKN0077-004

   STEWART M MADISON ET AL    KCS RESOURCES INC      11/17/2005       1194    780    F73734    LA    Lincoln

LA-HKN0077-005

   DOUGLAS M ROTENBERG    KCS RESOURCES INC      5/2/2007       1239    482    F91864    LA    Lincoln

LA-HKN0077-006

   JOE H NOBLES ET AL    SONAT EXPLORATION COMPANY      2/15/1991       760    313    E-44175    LA    Lincoln

LA-HKN0077-007

   JOE H NOBLES ET AL    SONAT EXPLORATION COMPANY      1/23/1988       645    239    E-24750    LA    Lincoln

LA-HKN0077-008

   NOWERY FAMILY LLC    COMSTOCK OIL & GAS LOUISIANA LLC      10/29/2007       1235    630    F90283    LA    Lincoln

LA-HKN0077-010

   A M LEARY ET UX    SONAT EXPLORATION COMPANY      4/6/1988       657    223    E-26432    LA    Lincoln

LA-HKN0077-011

   EDWIN ROY KELLY    SONAT EXPLORATION COMPANY      3/25/1988       657    116    E-26384    LA    Lincoln

LA-HKN0077-012

   JOHN M MADISON ET AL    SONAT EXPLORATION COMPANY      4/5/1988       657    231    E-26433    LA    Lincoln
   BUCKEYE INVESTMENTS LLC                     

LA-HKN0077-013

   REPRESENTED BY WEYMAN H ODEN JR    ROBERT E MCKELLAR      8/22/2007       1231    75    F88518    LA    Lincoln
   BERTHA KLEIN S/P ET AL                     

LA-HKN0077-014

   ANNE D KLEIN ROTENBERG S/P    SONAT EXPLORATION COMPANY      4/6/1988       657    253    E-26436    LA    Lincoln
            663    148    E-27419      

LA-HKN0077-015

   HELEN DALZELL LEARY ET AL    SONAT EXPLORATION COMPANY      4/6/1988       657    245    E-26435    LA    Lincoln

LA-HKN0077-016

   BEVERLY PRINCE LASKEY ET AL    SONAT EXPLORATION COMPANY      8/12/1988       688    17    E-31380    LA    Lincoln
            679    40    E-30007      
            656    335    E-26353      

LA-HKN0077-017

   MARTHA JONES MOORE ET AL    SONAT EXPLORATION COMPANY      3/30/1988       665    31    E-27758    LA    Lincoln

LA-HKN0077-018

   FRANCIS S KELLY III    SONAT EXPLORATION COMPANY      3/25/1988       669    341    E-28595    LA    Lincoln

LA-HKN0077-019

   CORRINE ROY KELLY ET AL    SONAT EXPLORATION COMPANY      3/25/1988       656    61    E-26233    LA    Lincoln

LA-HKN0077-020

   TOM L HOLCOME ET UX    SONAT EXPLORATION COMPANY      3/29/1988       656    327    E-26348    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   ERNEST A MERKLEIN JR S/P ET AL          659    159    E-26716      

LA-HKN0077-021

   MARY SUE MERKLEIN S/P    SONAT EXPLORATION CO      4/13/1988       659    167    E-26717    LA    Lincoln

LA-HKN0077-022

   MARY SUE MERKLEIN HUGHES S/P    COMSTOCK OIL & GAS LOUISIANA LLC      1/7/2008       1240    643    F92361    LA    Lincoln

LA-HKN0077-023

   ERNEST A MERKLEIN JR S/P    COMSTOCK OIL & GAS LOUISIANA LLC      1/7/2008       1240    646    F92362    LA    Lincoln

LA-HKN0078-000

   THOMAS JERALD DINGLER ET UX    KCS RESOURCES INC      2/2/2005       1176    228    F65234    LA    Lincoln

LA-HKN0079-000

   DOROTHY STAFFORD NOLAN ET AL    KCS RESOURCES INC      2/9/2005       1176    237    F65238    LA    Lincoln

LA-HKN0080-000

   CHRISTOPHER LEE MURRAY ET UX    KCS RESOURCES INC      2/2/2005       1176    226    F65233    LA    Lincoln

LA-HKN0081-000

   TAMMY M NOLAN AINSWORTH    KCS RESOURCES INC      2/2/2005       1176    231    F65235    LA    Lincoln

LA-HKN0082-000

   KEVIN SHAWN NOLAN    KCS RESOURCES INC      2/2/2005       1176    235    F65237    LA    Lincoln

LA-HKN0083-000

   RONALD H THOMPSON ET UX    KCS RESOURCES INC      2/2/2005       1176    496    F65374    LA    Lincoln

LA-HKN0084-000

   CATHERINE C TILLMAN    ACADIAN LAND SERVICES LLC      8/5/2004       1165    675    59505    LA    Lincoln

LA-HKN0085-000

   VALERIE A TERRELL    ACADIAN LAND SERVICES LLC      8/5/2004       1165    666    59502    LA    Lincoln

LA-HKN0086-000

   DALE LAMAR HARPER JR    ACADIAN LAND SERVICES LLC      8/5/2004       1165    672    59504    LA    Lincoln

LA-HKN0088-000

   G A ADAMS    J LEE & JUANITA YOUNGBLOOD      7/7/1944       35    159    N-60396    LA    Lincoln
            32    595    N-57799      

LA-HKN0089-000

   MRS W W FARLEY ET AL    C E BARHAM      1/3/1944       32    595    N-57799    LA    Lincoln
            32    599    N-57801      

LA-HKN0090-000

   J A BRITT ET AL    C E BARHAM      1/3/1944       32    599    N-57801    LA    Lincoln

LA-HKN0091-000

   W C BARNETT    C E BARHAM      1/3/1944       32    603    N-57803    LA    Lincoln
            32    605    N-57804      

LA-HKN0092-000

   C R BRITT    C E BARHAM      1/3/1944       32    605    N-57804    LA    Lincoln

LA-HKN0093-000

   PHIL MAY    C E BARHAM      1/6/1944       33    89    N-58102    LA    Lincoln

LA-HKN0094-000

   JOSIE COLVIN ET AL    C E BARHAM      2/28/1944       33    209    N-58386    LA    Lincoln

LA-HKN0096-000

   J B YOUNG    C E BARHAM      2/27/1946       40       N-67786    LA    Lincoln

LA-HKN0097-000

   JESSE LOYD ET AL    C E BARHAM      3/11/1946       40    153    N-68107    LA    Lincoln

LA-HKN0101-001

   JIM PETERSON    THE CALIFORNIA COMPANY      1/13/1943       31    41    N-53930    LA    Lincoln

LA-HKN0101-002

   C E BARHAM ET AL    THE CALIFORNIA COMPANY      10/24/1945       38    629    N-65998    LA    Lincoln

LA-HKN0101-P03

   HATTIE GIDDENS EWING ET AL    THE CALIFORNIA COMPANY      12/19/1945       39    419    N-67202    LA    Lincoln

LA-HKN0101-P04

   JIM PETERSON    THE CALIFORNIA COMPANY      6/22/1942       37    481    N-64428    LA    Lincoln

LA-HKN0102-001

   PAUL G BENEDUM    J LEE & JUANITA YOUNGBLOOD      5/24/1944       36    275    N-61474    LA    Lincoln

LA-HKN0102-002

   NETTIE RICHARDSON SIMONTON GREEN    J LEE YOUNGBLOOD      5/24/1944       34       N-59934    LA    Lincoln

LA-HKN0102-003

   MRS NORWOOD LYKES ET AL    THE CALIFORNIA COMPANY      5/11/1946       40    337    N-68727    LA    Lincoln

LA-HKN0106-001

   E B TATUM    THE CALIFORNIA COMPANY      1/11/1943       31    20    N-53915    LA    Lincoln
            31    16    N-53914      

LA-HKN0108-001

   W A COLVIN    THE CALIFORNIA COMPANY      1/10/1943       31    16    N-53914    LA    Lincoln

LA-HKN0115-000

   MARY LEE BROUGHTON    J R BOZEMAN      8/7/1945       38    75    N-64932    LA    Lincoln

LA-HKN0116-001

   DOROTHY D RITCHIE ET AL    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1179    224    F66695    LA    Lincoln

LA-HKN0116-002

   ALEX T HUNT JR ET AL    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1180    145    F67119    LA    Lincoln

LA-HKN0116-003

   ANN MARIE LASKEY KILPATRICK    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1179    226    F66696    LA    Lincoln

LA-HKN0116-004

   ANN LOUISE KILPATRICK LEATHERBURY    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1182    598    F68418    LA    Lincoln

LA-HKN0116-005

   ANTOINETTE BARKSDALE TERRY    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1179    228    F66697    LA    Lincoln

LA-HKN0116-006

   DOROTHY DELL BARKSDALE BUFFINGTON    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1182    596    F68417    LA    Lincoln

LA-HKN0116-007

   MARY HELEN BARKSDALE BRADFORD    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1179    230    F66698    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page      Reference    ST    County

LA-HKN0116-008

   VIRGINIA K RUSSELL    COMSTOCK OIL & GAS - LOUISIANA, LLC      7/13/2005       1182      594       F68416    LA    Lincoln

LA-HKN0116-009

   ELIZABETH K SEAVER    COMSTOCK OIL & GAS - LOUISIANA LLC      6/19/2007       1226      592       F86713    LA    Lincoln

LA-HKN0117-000

   ASA PROPERTIES LTD PARTNERSHIP ET AL    COMSTOCK OIL & GAS - LOUISIANA, LLC      10/20/2005       1185      724       F69784    LA    Lincoln

LA-HKN0118-001

   DECIE LEMORA MARSHALL    J LEE YOUNGBLOOD      7/5/1944       36      39       N-61101    LA    Lincoln

LA-HKN0118-002

   MAXINE WHITE    THE CALIFORNIA COMPANY      12/23/1947       45      217       N-78918    LA    Lincoln

LA-HKN0118-003

   FANNIE DUNN HAYES    THE CALIFORNIA COMPANY      12/8/1947       45      218       N-78919    LA    Lincoln

LA-HKN0118-004

   EDNA MASON    J LEE YOUNGBLOOD      7/5/1944       35      335       N-60605    LA    Lincoln

LA-HKN0118-005

   JIM MEZEAKE HUGHES ET AL    J LEE YOUNGBLOOD      7/6/1944       35      187       N-60433    LA    Lincoln

LA-HKN0118-006

   SAMUEL J DUNN    J LEE YOUNGBLOOD      7/5/1944       35      311       N-60839    LA    Lincoln

LA-HKN0118-007

   SAMANTHA DUNN WHITE ET AL    J LEE YOUNGBLOOD      7/5/1944       35      363       N-60653    LA    Lincoln

LA-HKN0118-008

   JESSE WILSON ET AL    J LEE YOUNGBLOOD      7/5/1944       35      189       N-60434    LA    Lincoln

LA-HKN0121-001

   FEDERAL INTERMEDIATE CREDIT BANK    SONAT EXPLORATION COMPANY      12/14/1988       684      57       E-30782    LA    Lincoln

LA-HKN0133-000

   LARRY J SIMONTON ET UX    COWGILL & ASSOCIATES LLC      4/13/2002       1132      697       38537    LA    Lincoln

LA-HKN0134-000

   RUBY FRANKLIN SIMONTON    COWGILL & ASSOCIATES LLC      3/25/2002       1131      956       38223    LA    Lincoln

LA-HKN0135-000

   JOE D PAGE ET UX    COWGILL & ASSOCIATES LLC      4/13/2002       1131      954       38222    LA    Lincoln

LA-HKN0136-000

   BENNY JOE SIMONTON ET UX    COWGILL & ASSOCIATES LLC      3/25/2002       1131      952       38221    LA    Lincoln

LA-HKN0138-000

   MARVIN E DAVIDSON ET UX    COWGILL & ASSOCIATES LLC      4/4/2002       1131      929       38211    LA    Lincoln

LA-HKN0139-000

   ELIZABETH PILGREEN BROWN ET AL    COWGILL & ASSOCIATES LLC      3/7/2002       1131      940       38215    LA    Lincoln

LA-HKN0140-000

   JOHN KEITH POLAND ET UX    COWGILL & ASSOCIATES LLC      2/4/2002       1131      913       38204    LA    Lincoln

LA-HKN0141-000

   JAMES W NOBLES ET AL    COWGILL & ASSOCIATES LLC      3/7/2002       1131      938       38214    LA    Lincoln

LA-HKN0142-000

   TAMMY MARIE SMITH HANSON    COWGILL & ASSOCIATES LLC      2/4/2002       1131      920       38207    LA    Lincoln

LA-HKN0143-000

   MICHAEL PAIGE MURPHY ET UX    COWGILL & ASSOCIATES LLC      2/17/2002       1131      924       38209    LA    Lincoln

LA-HKN0144-000

   MIKE ODELL SMITH    COWGILL & ASSOCIATES LLC      2/5/2002       1131      922       38208    LA    Lincoln

LA-HKN0146-001

   STELLA MAE SIMONTON BOWIE    COWGILL & ASSOCIATES LLC      3/25/2002       1132      699       38538    LA    Lincoln

LA-HKN0146-002

   DORIS SIMONTON HAMMOCK    COWGILL & ASSOCIATES LLC      3/25/2002       1132      20       38281    LA    Lincoln

LA-HKN0146-003

   JIMMY LEE SIMONTON    COWGILL & ASSOCIATES LLC      3/25/2002       1132      16       38279    LA    Lincoln

LA-HKN0146-004

   EDDIE LEE SIMONTON    COWGILL & ASSOCIATES LLC      3/25/2002       1132      14       38278    LA    Lincoln

LA-HKN0146-005

   LUTHER SIMONTON JR ET AL    COWGILL & ASSOCIATES LLC      3/25/2002       1131      944       38217    LA    Lincoln

LA-HKN0146-006

   LUTHER L SIMONTON    COWGILL & ASSOCIATES LLC      3/25/2002       1132      18       38280    LA    Lincoln

LA-HKN0146-007

   K P SIMONTON    COWGILL & ASSOCIATES LLC      3/25/2002       1131      950       38220    LA    Lincoln

LA-HKN0146-008

   MARY ELLA EVANS CLEMONS    COWGILL & ASSOCIATES LLC      3/25/2002       1131      942       38216    LA    Lincoln

LA-HKN0146-009

   BENNY JOE SIMONTON ET AL    COWGILL & ASSOCIATES LLC      3/25/2002       1131      946       38218    LA    Lincoln

LA-HKN0146-010

   ETTA SIMONTON GANT    COWGILL & ASSOCIATES LLC      3/25/2002       1131      948       38219    LA    Lincoln

LA-HKN0147-001

   S D HUFFMAN ET AL    COWGILL & ASSOCIATES LLC      1/25/2002       1131      916       38205    LA    Lincoln

LA-HKN0147-002

   DENNIS R HUFFMAN    COWGILL & ASSOCIATES LLC      1/25/2002       1131      918       38206    LA    Lincoln

LA-MDF0001-001

   O ESTON PAYNE ET UX    KCS RESOURCES INC      5/16/2002       1134      371       39620    LA    Lincoln

LA-MDF0001-002

   JOHN LANE NORRIS    KCS RESOURCES INC      8/27/2003       1150      580       50121    LA    Lincoln

LA-MDF0002-000

   JAMES E DAVISON ET UX    KCS RESOURCES INC      5/16/2002       1143      347       45409    LA    Lincoln

LA-MDF0003-000

   HAYS HARDWICK COLVIN ET UX    KCS RESOURCES INC      9/12/2002       1137      484       41750    LA    Lincoln

LA-MDF0004-000

   W D WILLIAMS    KCS RESOURCES INC      9/10/2002       1137      491       41757    LA    Lincoln
   ROBERT L AND HELEN D ALEXANDER TRUST                     

LA-MDF0005-001

   ROBERT L ALEXANDER TRUSTEE    KCS RESOURCES INC      5/28/2003       1148      390       48722    LA    Lincoln

LA-MDF0005-002

   DORIS WARREN ALEXANDER    KCS RESOURCES INC      5/28/2003       1148      384       48721    LA    Lincoln

LA-MDF0006-000

   BOBBY GENE BENNETT    KCS RESOURCES INC      6/11/2003       1147      355       47978    LA    Lincoln

LA-MDF0007-000

   BOBBY GENE COLVIN ET UX    KCS RESOURCES INC      5/26/2003       1145      626       46949    LA    Lincoln

LA-MDF0008-000

   MARY TUBBS ROBERSON ET AL    KCS RESOURCES INC      6/11/2003       1147      370       47991    LA    Lincoln

LA-MDF0009-001

   SOUTHERN LAND & MINERALS II    KCS RESOURCES INC      5/26/2003       1148      379       48716    LA    Lincoln

LA-MDF0009-002

   ROBERT J MCCORMICK ET UX    KCS RESOURCES INC      5/26/2003       1148      374       48715    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   THE SUCCESSION OF BOBBY GENE CAMPBELL                     

LA-MDF0010-000

   SUSAN CAMPBELL TIDWELL EXECUTRIX    KCS RESOURCES INC      8/12/2004       1165    221    59205    LA    Lincoln

LA-MDF0011-001

   MICKEY WALLER JORDAN    KCS RESOURCES INC      5/15/2002       1133    762    39277    LA    Lincoln

LA-MDF0011-002

   BRUCE NORRIS WALLER    KCS RESOURCES INC      5/15/2002       1133    524    39084    LA    Lincoln

LA-MDF0012-001

   MAE STEPHENS NORRIS ET AL    KCS RESOURCES INC      5/15/2002       1133    370    38945    LA    Lincoln

LA-MDF0012-P02

   STEPHEN E NORRIS    KCS RESOURCES INC      5/15/2002       1133    368    38944    LA    Lincoln

LA-MDF0013-001

   MAXINE DAVIDSON BECKHAM    KCS RESOURCES INC      5/16/2002       1133    759    F39276    LA    Lincoln

LA-MDF0013-002

   MADISON LANE BECKHAM    KCS RESOURCES INC      5/16/2002       1133    372    38946    LA    Lincoln

LA-MDF0013-003

   SAMMY DELOY DAVIDSON    KCS RESOURCES INC      5/16/2002       1135    306    40304    LA    Lincoln

LA-MDF0014-000

   RACHAEL LEWIS GAY ET AL    THOMAS A DURHAM      7/9/1975       188    497    94319    LA    Lincoln

LA-MDF0015-000

   RANDALL LEWIS    THOMAS A DURHAM      7/9/1975       188    501    94320    LA    Lincoln

LA-MDF0016-001

   JOSEPH MITCHELL SMITH ET AL    HUNTER ENERGY CORPORATION      5/9/1997       992    88    90229    LA    Lincoln

LA-MDF0016-002

   FLORENCE CARROLL SMITH ET AL    HUNTER ENERGY CORPORATION      5/9/1997       992    89    90230    LA    Lincoln

LA-MDF0016-003

   PRISCILLA PEARMAN SMITH ET AL    HUNTER ENERGY CORPORATION      5/9/1997       992    92    90231    LA    Lincoln

LA-MDF0016-004

   MARTHA JANE SMITH BELL    HUNTER ENERGY CORPORATION      5/9/1997       992    95    90232    LA    Lincoln

LA-MDF0017-000

   JOE BURNS HAMILTON ET AL    HUNTER ENERGY CORPORATION      5/9/1997       992    98    90233    LA    Lincoln

LA-MDF0018-001

   ROBERT W JENSEN    HUNTER ENERGY CORPORATION      5/9/1997       992    102    90234    LA    Lincoln

LA-MDF0018-002

   PAMELA LEWIS BROWN    HUNTER ENERGY CORPORATION      5/9/1997       992    105    90235    LA    Lincoln

LA-MDF0019-001

   MYRTLE M MCGEE ET AL    HUNTER ENERGY CORPORATION      5/9/1997       992    111    90237    LA    Lincoln

LA-MDF0020-000

   HOWARD GENE BARNETT ET UX    HUNTER ENERGY CORPORATION      5/9/1997       992    108    90236    LA    Lincoln

LA-MDF0022-000

   T L JAMES & CO INC    FRANKS PETROLEUM INC.      8/11/1986       589    134       LA    Lincoln

LA-RTN0006-000

   CHRISTINE WILTCHER MARTIN ET AL    STRAT LAND EXPL CO      6/2/1997       1000    311    92029    LA    Lincoln

LA-RTN0008-000

   LOYD P WALKER ET UX    STRAT LAND EXPL CO      5/23/1997       1000    313    92030    LA    Lincoln
            1000    315    092031      

LA-RTN0009-001

   JAMES H KILGORE ET UX    STRAT LAND EXPL CO      5/29/1997       1000    315    092031    LA    Lincoln

LA-RTN0010-001

   DIXIE MARIE SYLVESTER BUNTON    STRAT LAND EXPL CO      5/12/1997       1002    288    92464    LA    Lincoln

LA-RTN0010-002

   PATRICIA LOUISE SYLVESTER WOODS    STRAT LAND EXPL CO      5/12/1997       100    323    92034    LA    Lincoln

LA-RTN0010-003

   ROBERT DIXON SYLVESTER    STRAT LAND EXPL CO      5/12/1997       1000    325    92035    LA    Lincoln

LA-RTN0010-004

   WILLIE JUDITH SYLVESTER    STRAT LAND EXPL CO      5/12/1997       1000    327    92036    LA    Lincoln

LA-RTN0010-005

   STEPHANIE RENEE DIXON    STRAT LAND EXPL CO      5/12/1997       1000    329    92037    LA    Lincoln

LA-RTN0010-006

   SHERIDAN KATE SYLVESTER    STRAT LAND EXPL CO      5/12/1997       1000    331    92038    LA    Lincoln

LA-RTN0010-007

   MYRTLE JANE DELANEY DIXON    STRAT LAND EXPL CO      5/12/1997       1000    335    92040    LA    Lincoln

LA-RTN0010-008

   HAROLD MERRITT DIXON    STRAT LAND EXPL CO      5/12/1997       1000    337    92041    LA    Lincoln

LA-RTN0010-009

   OTIS EARL DIXON    STRAT LAND EXPL CO      5/12/1997       1000    321    92033    LA    Lincoln

LA-RTN0010-010

   JAMES LAMAR GOODWIN JR    STRAT LAND EXPL CO      5/12/1997       1000    333    92039    LA    Lincoln

LA-RTN0011-001

   BOBBY GEORGE MCCULLIN    STRAT LAND EXPL CO      9/17/1997       1002    290    92465    LA    Lincoln

LA-RTN0011-002

   CONNIE ARMSTRONG WATTS    STRAT LAND EXPL CO      9/17/1997       1002    292    92466    LA    Lincoln

LA-RTN0012-000

   JAMES H KILGORE ET AL    STRAT LAND EXPL CO      5/29/1997       1000    318    92032    LA    Lincoln

LA-RTN0013-000

   WALTER CARROLL BURTON    STRAT LAND EXPL CO      7/10/1997       1000    350    92044    LA    Lincoln
   RUBY SELPH STURGIS TRUST          1000    344    092043      

LA-RTN0014-001

   LEON HELMS TRUSTEE    STRAT LAND EXPL CO      8/21/1997       1000    344    092043    LA    Lincoln
   STURGIS NIX LUMBER COMPANY                     
   W H STURGIS                     
   PAULINE H STURGIS                     
   WILLIAM G NIX                     
   JOHN R STURGIS JR IND & TRUSTEE          1000    339    092042      

LA-RTN0014-002

   JOHN R STURGIS TRUST    STRAT LAND EXPL CO      3/24/1997       1000    339    092042    LA    Lincoln


Lease No.

 

Lessor

 

Lessee

  Lease date     Book   Page   Reference   ST   County
  WILLIAM GARY NIX AND THERESE HAFFEY NIX              
  HUSBAND AND WIFE INDIVIDUALLY AS              
  REPRESENTATIVES OF STURGIS-NIX LUMBER              

LA-RTN0014-003

  COMPANY LP AND MANAGING PARTNERS OF NIX AND COMPANY LLC   WILDHORSE RESOURCES LLC     11/4/2010      1297   195   F116583   LA   Lincoln
  THE RUBY SELPH STURGIS TRUST FBO RICHARD              
  STURGIS ET AL              
  THE RUBY SELPH STURGIS TRUST FBO THOMAS              
  CHRISTOPHER CHILDS              
  THE RUBY SELPH STURGIS TRUST FBO JOHN JASON              
  CHILDS AND              
  THE RUBY SELPH STURGIS TRUST FBO JOHN M.              
  STURGIS              
  ALL REPRESENTED BY JOSEPH J COLLIER AS VICE              

LA-RTN0014-004

  PRESIDENT FOR THE REGIONS BANK AS TRUSTEE   WILDHORSE RESOURCES LLC     3/21/2011      1299   516   F117537   LA   Lincoln
  JOHN R STURGIS INDIVIDUALLY AND AS TRUSTEE OF              
  THE TRUST A AND TRUST B CREATED UNDER THE              
  TERMS OF THE LAST WILL AND TESTAMENT OF JOHN P              

LA-RTN0014-005

  STURGIS   WILDHORSE RESOURCES LLC     10/12/2010      1297   190   F116582   LA   Lincoln

LA-RTN0015-000

  CLAUDIA M PHILLIPS LYLES   STRAT LAND EXPL CO     5/1/1998      1026   102   4901   LA   Lincoln
        1000   306   092027    

LA-RTN0016-001

  PATRICIA ANN GOODWIN   STRAT LAND EXPL CO     3/12/1997      1000   306   092027   LA   Lincoln
        1000   302   092025    

LA-RTN0016-002

  WILLIAM L GOODWIN ET UX   STRAT LAND EXPL CO     3/10/1997      1000   302   092025   LA   Lincoln
        1000   304   092026    

LA-RTN0016-003

  JEANNIE GOODWIN SHER   STRAT LAND EXPL CO     3/12/1997      1000   304   092026   LA   Lincoln
        1000   300   092024    

LA-RTN0017-001

  GLADYS DELONY KASPAR   STRAT LAND EXPL0 CO     3/3/1997      1000   300   092024   LA   Lincoln

LA-RTN0017-002

  WILBUR P ROUGELOT ET UX   STRAT LAND EXPL CO     4/1/1997      1000   308   92028   LA   Lincoln

LA-RTN0017-003

  ENTERGY LOUISIANA INC   STRAT LAND EXPL CO     4/21/1997      1006   339   588   LA   Lincoln

LA-RTN0033-000

  JIMMIE CORNEL BRASHER ET UX   CLAYTON WILLIAMS ENERGY INC     9/22/2009      1277   694   F107492   LA   Lincoln
        1000   279   092017    

LA-RTN0067-001

  EUGENIA HALLEY SMITH TESTAMENTARY TRUST   STRAT LAND EXPL CO     2/20/1997      1000   279   092017   LA   Lincoln
        1000   294   092022    

LA-RTN0067-002

  ALICE HESTER PERRY   STRAT LAND EXPL CO     2/20/1997      1000   294   092022   LA   Lincoln
        1000   288   092020    

LA-RTN0067-003

  M WICKLIFF LAURENCE   STRAT LAND EXPL CO     2/20/1997      1000   288   092020   LA   Lincoln
        1000   282   092018    

LA-RTN0067-004

  GEORGE M STRICKLER JR   STRAT LAND EXPL CO     2/20/1997      1000   282   092018   LA   Lincoln
        1000   297   092023    

LA-RTN0067-005

  VIRGINIA RUTH BALLARD HAMMONS   STRAT LAND EXPL CO     2/20/1997      1000   297   092023   LA   Lincoln
        1000   285   092019    

LA-RTN0067-006

  JAMES FRANKLIN BALLARD   STRAT LAND EXPL CO     2/20/1997      1000   285   092019   LA   Lincoln
        1000   291   092021    

LA-RTN0067-007

  DOROTHY CLAIRE BELL   STRAT LAND EXPL CO     2/20/1997      1000   291   092021   LA   Lincoln

LA-RTN0082-001

  ELAINE M CAUSEY A/K/A ELAINE M. MCVEY   CLARK ENERGY COMPANY INC     8/25/1993      861   272   E-64192   LA   Lincoln

LA-RTN0082-002

  TOM S SALE III A/K/A THOMAS SANDERSON SALE   MEDALLION PRODUCTION COMPANY     2/7/1994      870   218   E-65745   LA   Lincoln

LA-RTN0083-001

  ALONZO CURTIS DAVID   CLARK ENERGY COMPANY INC     9/29/1993      861   301   E-64799   LA   Lincoln

LA-RTN0083-002

  PAUL PATRICK DAVID   CLARK ENERGY COMPANY INC     10/1/1993      861   305   E-64200   LA   Lincoln

LA-RTN0083-003

  FLORENCE PAYER DAVID   CLARK ENERGY COMPANY INC     10/1/1993      861   325   E-64205   LA   Lincoln

LA-RTN0083-004

  LOTHA DAVID STUBY   CLARK ENERGY COMPANY INC     9/29/1993      861   329   E-64206   LA   Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0083-005

   FLORA DAVID    CLARK ENERGY COMPANY INC      11/2/1993       861    337    E-64208    LA    Lincoln

LA-RTN0083-006

   DIXIE ANN WHITE    CLARK ENERGY COMPANY INC      11/2/1993       861    341    E-64209    LA    Lincoln

LA-RTN0083-007

   THELMA DAVID    CLARK ENERGY COMPANY INC      11/18/1993       861    345    E-64210    LA    Lincoln

LA-RTN0083-008

   DOROTHY JEAN HOLT    CLARK ENERGY COMPANY INC      11/1/1993       862    88    E-64229    LA    Lincoln

LA-RTN0083-009

   DR LOUIS STRONG ROCKETT    CLARK ENERGY COMPANY INC      12/17/1993       868    236    E-65384    LA    Lincoln

LA-RTN0083-010

   ROSS L ROCKETT ET AL    CLARK ENERGY COMPANY INC      2/3/1994       874    145    E-66482    LA    Lincoln

LA-RTN0083-011

   JAMES W SPEARS JR ET AL    CLARK ENERGY COMPANY INC      11/24/1993       868    217    E-65380    LA    Lincoln
            862    92    E64230      

LA-RTN0083-012

   JAMES W SPEARS ET AL    CLARK ENERGY COMPANY INC      11/19/1993                LA    Lincoln

LA-RTN0084-001

   ISAAC T BRASSEAL ET UX    CLARK ENERGY COMPANY INC      10/8/1993       861    313    E-64202    LA    Lincoln

LA-RTN0085-001

   EDWIN CORDELL ORR ET UX    CLARK ENERGY COMPANY INC      10/12/1993       861    309    E-64201    LA    Lincoln

LA-RTN0086-001

   RICHARD WAYNE CALDWELL ET UX    CLARK ENERGY COMPANY INC      10/29/1993       861    333    E-64207    LA    Lincoln

LA-RTN0087-001

   PAUL EDWARD SPEARS ET UX    CLARK ENERGY COMPANY INC      12/3/1993       862    76    E-64226    LA    Lincoln

LA-RTN0088-001

   JACK CLARK MCCURDY II    CLARK ENERGY COMPANY INC      12/10/1993       862    80    E-64227    LA    Lincoln

LA-RTN0090-001

   RAYMOND LEON EDWARDS ET UX    CLARK ENERGY COMPANY INC      12/20/1993       868    245    E-65386    LA    Lincoln

LA-RTN0091-001

   WILLIAM C WARD ET UX    CLARK ENERGY COMPANY INC      12/22/1993       868    249    E-65387    LA    Lincoln

LA-RTN0092-001

   KELLEY GILE PECANTY ET UX    CLARK ENERGY COMPANY INC      1/18/1994       868    195    E-65376    LA    Lincoln

LA-RTN0093-001

   RONALD ALAN SMITH ET UX    CLARK ENERGY COMPANY INC      1/24/1994       868    240    65385    LA    Lincoln

LA-RTN0094-001

   BERNARD A GEMELLI JR ET UX    CLARK ENERGY COMPANY INC      6/9/1994       885    343    E-68394    LA    Lincoln

LA-RTN0095-001

   H STUART GREEN JR    CLARK ENERGY COMPANY INC      11/3/1993       862    1    E-64211    LA    Lincoln

LA-RTN0095-002

   ROGER C DIXON    CLARK ENERGY COMPANY INC      11/3/1993       862    6    E-64212    LA    Lincoln

LA-RTN0095-003

   HENRY B GREEN    CLARK ENERGY COMPANY INC      11/3/1993       862    11    E-64213    LA    Lincoln

LA-RTN0095-004

   ANN B NOBLE    CLARK ENERGY COMPANY INC      11/3/1993       862    16    E-64214    LA    Lincoln

LA-RTN0095-005

   KIRK BROWNING    CLARK ENERGY COMPANY INC      11/3/1993       862    21    E-64215    LA    Lincoln
   ANN SCOTT DIXON                     

LA-RTN0095-006

   REPRESENTED ROGER C DIXON CURATOR    CLARK ENERGY COMPANY INC      11/3/1993       862    26    E-64216    LA    Lincoln

LA-RTN0095-007

   WILLIAM H BROWNING II    CLARK ENERGY COMPANY INC      11/3/1993       862    31    E-64217    LA    Lincoln

LA-RTN0095-008

   ALFRED E THURBER JR    CLARK ENERGY COMPANY INC      11/3/1993       862    36    E-64218    LA    Lincoln

LA-RTN0095-009

   JOSEPHINE B PIERCE    CLARK ENERGY COMPANY INC      11/3/1993       862    41    E-64219    LA    Lincoln

LA-RTN0095-010

   KATHERINE M BROWNING    CLARK ENERGY COMPANY INC      11/3/1993       862    46    E-64220    LA    Lincoln

LA-RTN0095-011

   THERESE BROWNING HOLMES    CLARK ENERGY COMPANY INC      11/3/1993       862    51    E-64221    LA    Lincoln

LA-RTN0095-012

   KATHERINE T O’BOYLE    CLARK ENERGY COMPANY INC      11/3/1993       862    56    E-64222    LA    Lincoln

LA-RTN0095-013

   THOMAS W KENSLER    CLARK ENERGY COMPANY INC      11/3/1993       862    61    E-64223    LA    Lincoln
   MARJORIE B DICKINSON ESTATE                     

LA-RTN0095-014

   GEORGE S DICKINSON JR EXECUTOR    CLARK ENERGY COMPANY INC      11/3/1993       862    66    E-64224    LA    Lincoln

LA-RTN0095-015

   NATALIE S HIGGS    CLARK ENERGY COMPANY INC      11/3/1993       862    71    E-64225    LA    Lincoln
   NANCY G PARKER ESTATE                     

LA-RTN0095-016

   T ANTHONY BROOKS EXECUTOR    CLARK ENERGY COMPANY INC      11/3/1993       868    253    E-65388    LA    Lincoln
   MARY T MENTZ TRUST                     

LA-RTN0095-017

   TRACY T GROSS AS SUCCESSOR TRUSTEE    CLARK ENERGY COMPANY INC      11/3/1993       868    199    E-65377    LA    Lincoln

LA-RTN0095-018

   SLOANE C WULF    CLARK ENERGY COMPANY INC      11/3/1993       868    204    E-65378    LA    Lincoln

LA-RTN0095-019

   GRANT D SMALL    CLARK ENERGY COMPANY INC      11/3/1993       874    151    E-66484    LA    Lincoln

LA-RTN0095-020

   GEORGE K CAMPBELL JR    MEDALLION PRODUCTION COMPANY      3/27/1995       921    144    E-74517    LA    Lincoln

LA-RTN0095-021

   ELIZABETH CAMPBELL PETERSON    MEDALLION PRODUCTION COMPANY      3/27/1995       921    139    E-74516    LA    Lincoln
            862    96    E-64231      

LA-RTN0096-000

   TOMMIE GRAY COLVIN ET AL    CLARK ENERGY COMPANY INC      12/9/1993       862    101    E-64232    LA    Lincoln
            868    179    E-65371      
            879    252    E-67290      

LA-RTN0097-001

   ROBERTA GREEN HINTON ET AL    CLARK ENERGY COMPANY INC      11/22/1993       868    184    E-65373    LA    Lincoln

LA-RTN0098-001

   ROSEMARY LORIA FICKLIN    CLARK ENERGY COMPANY INC      1/4/1994       868    258    E-65389    LA    Lincoln

LA-RTN0098-002

   JOSEPH D LORIA    CLARK ENERGY COMPANY INC      1/4/1994       868    231    E-65383    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0099-000

   DEWEY JADELL STEWART ET UX    CLARK ENERGY COMPANY INC      12/30/1993       868    263    E-65390    LA    Lincoln

LA-RTN0100-001

   VERA ALEXANDER GUNSAULLUS    CLARK ENERGY COMPANY INC      2/1/1994       868    209    E-65410    LA    Lincoln

LA-RTN0100-002

   MARGUERITE ALEXANDER BOOTH    CLARK ENERGY COMPANY INC      1/19/1994       868    213    E-65379    LA    Lincoln

LA-RTN0100-003

   MARTHA LEIGH AYO    CLARK ENERGY COMPANY INC      2/2/1994       868    185    E-65374    LA    Lincoln
            870    209    E-65744      

LA-RTN0101-000

   TOM S SALE III ET AL    MEDALLION PRODUCTION COMPANY      2/7/1994       874    179    E-66483    LA    Lincoln

LA-RTN0102-000

   THOMAS H COLVIN ET UX    CLARK ENERGY COMPANY INC      12/7/1993       878    36    E-67124    LA    Lincoln
            906    274    E-71888      

LA-RTN0103-000

   GLADYS S RHYMES MCKEE ET AL    MEDALLION PRODUCTION COMPANY      12/9/1994       906    278    E-71889    LA    Lincoln

LA-RTN0104-001

   THEREESE SPINKS DAVIDSON ET AL    J S WISE      11/17/1943       32    354    N-57315    LA    Lincoln

LA-RTN0105-000

   PETER JOSEPH HANLON ET UX    KCS MEDALLION RESOURCES INC      7/21/1997       1004    43       LA    Lincoln

LA-RTN0106-000

   CECIL SMITH ET UX    CLARK ENERGY COMPANY INC      8/23/1993       861    267    E-64191    LA    Lincoln

LA-RTN0107-000

   KENT ANDERSON ET UX    CLARK ENERGY COMPANY INC      9/14/1993       861    277    E-64193    LA    Lincoln

LA-RTN0108-000

   MATTIE SUE SIMMONS LARANCE ET AL    CLARK ENERGY COMPANY INC      9/13/1993       861    281    E-64194    LA    Lincoln

LA-RTN0109-001

   ADDISON W THOMPSON ET UX    CLARK ENERGY COMPANY INC      9/15/1993       861    285    E-64195    LA    Lincoln

LA-RTN0109-002

   LARKIN BREED ET UX    CLARK ENERGY COMPANY INC      9/15/1993       861    289    E-64196    LA    Lincoln

LA-RTN0109-003

   ROSEMARY BREED WYSS    CLARK ENERGY COMPANY INC      9/15/1993       861    317    E-64203    LA    Lincoln

LA-RTN0109-004

   LLEWELLYN BREED WHITE    CLARK ENERGY COMPANY INC      9/15/1993       861    321    E-64204    LA    Lincoln

LA-RTN0110-000

   EVELYN DAVIDSON TANNEHILL    CLARK ENERGY COMPANY INC      9/1/1993       861    293    E-64197    LA    Lincoln

LA-RTN0111-001

   DELLA ANN RABB GRAFTON ET VIR    CLARK ENERGY COMPANY INC      9/23/1993       861    297    E-64198    LA    Lincoln

LA-RTN0111-002

   FLORENCE PERRITT RABB FEAZEL    CLARK ENERGY COMPANY INC      1/19/1994       868    221    E-65381    LA    Lincoln

LA-RTN0111-003

   MICHAEL PERRITT RABB    CLARK ENERGY COMPANY INC      1/19/1994       868    226    E-65382    LA    Lincoln

LA-RTN0111-004

   LARRY NEWBLOCK RABB    CLARK ENERGY COMPANY INC      1/19/1994       868    190    E-65375    LA    Lincoln
   JOHN BROOKS HARRIS TESTAMENTARY TRUST FOR                     
   MARY ELIZABETH HARRIS SUTTON                     
   CAROL FRANCIS HARRIS HUDSON                     
   JOHN BROOKS HARRIS JR                     
   THE TRUST COMPANY OF LOUISIANA AS SUCCESSOR                     

LA-RTN0112-001

   TRUSTEE    CLARK ENERGY COMPANY INC      1/24/1994       879    281    E-67298    LA    Lincoln

LA-RTN0112-002

   MARY ELIZABETH HARRIS SUTTON    CLARK ENERGY COMPANY INC      2/18/1994       879    285    E-67299    LA    Lincoln

LA-RTN0113-001

   PEGGY JOE TERRILL HULL    CLARK ENERGY COMPANY INC      4/11/1994       879    314    E-67306    LA    Lincoln

LA-RTN0113-002

   CAROLYN A TERRILL BOND    CLARK ENERGY COMPANY INC      4/11/1994       879    319    E-67307    LA    Lincoln

LA-RTN0113-003

   AMANDA CHRISTINE SLATON TEAGUE    CLARK ENERGY COMPANY INC      4/11/1994       879    324    E-67308    LA    Lincoln

LA-RTN0113-004

   PHYLLIS MCCARY BEACOM    CLARK ENERGY COMPANY INC      5/10/1994       891    227    E-69451    LA    Lincoln

LA-RTN0113-005

   PHILLIP H MCCARY III    CLARK ENERGY COMPANY INC      5/10/1994       891    231    E-69452    LA    Lincoln

LA-RTN0113-006

   LINDA KATHERINE TERRILL WHITE GAY    CLARK ENERGY COMPANY INC      4/11/1994       891    235    E-69453    LA    Lincoln

LA-RTN0113-007

   JAMES CALVIN SLATON    CLARK ENERGY COMPANY INC      4/11/1994       891    240    E-69454    LA    Lincoln

LA-RTN0113-008

   ANTOINETTE BARKSDALE TERRY    CLARK ENERGY COMPANY INC      5/18/1994       891    202    E-69445    LA    Lincoln
   ALVERNE DAVIS HUNT INDIVIDUALLY & AS                     
   USUFRUCTUARY OF MINERAL SERVITUDE                     

LA-RTN0113-009

   REPRESENTED HEREIN BY HOWARD W WRIGHT JR    CLARK ENERGY COMPANY INC      11/25/1994       905    24    E-71643    LA    Lincoln

LA-RTN0113-010

   MARY HELEN BARKSDALE BRADFORD    CLARK ENERGY COMPANY INC      5/18/1994       897    191    E-70470    LA    Lincoln

LA-RTN0113-011

   BILLY E LEACHMAN ET UX    CLARK ENERGY COMPANY INC      9/9/1994       897    212    E-70476    LA    Lincoln

LA-RTN0113-012

   ADELAIDE NEWCOMB RIDGEWAY    CLARK ENERGY COMPANY INC      10/6/1994       897    217    E-70477    LA    Lincoln

LA-RTN0113-013

   DOROTHY DELL BARKSDALE BUFFINGTON    CLARK ENERGY COMPANY INC      5/18/1994       897    222    E-70478    LA    Lincoln

LA-RTN0113-014

   HELEN DAVIS BARKSDALE    CLARK ENERGY COMPANY INC      5/18/1994       897    227    E-70479    LA    Lincoln
   GLENN EUGENE LASKEY GRANDCHILDRENS CLASS                     

LA-RTN0113-015

   TRUST REPRESENTED BY H CECIL KILPATRICK TRUSTEE    CLARK ENERGY COMPANY INC      11/25/1994       905    34    E-71644    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0113-016

   ANNE MARIE LASKEY KILPATRICK ET AL    CLARK ENERGY COMPANY INC      11/25/1994       905    44    E-71645    LA    Lincoln
            891    207    E-69446      

LA-RTN0114-001

   ELAINE MEEKS CAUSEY    CLARK ENERGY COMPANY INC      7/1/1994       891    207    E-69446    LA    Lincoln

LA-RTN0114-002

   JAMES BUFORD GOSS    CLARK ENERGY COMPANY INC      7/22/1994       891    211    E-69447    LA    Lincoln

LA-RTN0114-003

   LUCRETIA BOLT JESTER    CLARK ENERGY COMPANY INC      7/14/1994       891    215    E-69448    LA    Lincoln
            891    219    E-69449      
            897    198    E-70472      
            898    127    E-70579      

LA-RTN0114-004

   ETTA MAE THOMPSON ET AL    CLARK ENERGY COMPANY INC      7/19/1994       897    196    E-70471    LA    Lincoln

LA-RTN0114-007

   NETTIE ELIZABETH RISINGER BLACKWELDER    CLARK ENERGY COMPANY INC      8/12/1994       897    200    E-70473    LA    Lincoln

LA-RTN0114-008

   JOHN BAXTER RISINGER    CLARK ENERGY COMPANY INC      8/12/1994       897    182    E-70468    LA    Lincoln
   MOUNT HARMONY MISSIONARY BAPTIST CHURCH INC                     

LA-RTN0115-000

   REPRESENTED BY SYLVESTER LEWIS    CLARK ENERGY COMPANY INC      10/21/1994       897    232    E-70480    LA    Lincoln

LA-RTN0116-001

   WILLIAM KING MCELVANEY ET UX    CLARK ENERGY COMPANY INC      2/24/1994       879    289    E-67300    LA    Lincoln

LA-RTN0116-002

   CHLOTIELDE LUCILLE WACTOR RINEHART    CLARK ENERGY COMPANY INC      3/3/1994       879    293    E-67301    LA    Lincoln

LA-RTN0116-003

   MARTHA RINEHART MCGEE    CLARK ENERGY COMPANY INC      3/3/1994       879    297    E-67302    LA    Lincoln
   POLLY RINEHART MEISNER                     

LA-RTN0116-004

   A/K/A MARGIE REBECCA RINEHART MEISNER    CLARK ENERGY COMPANY INC      3/3/1994       879    301    E-67303    LA    Lincoln

LA-RTN0116-005

   MAURINE RINEHART BUCHANAN    CLARK ENERGY COMPANY INC      3/3/1994       879    305    E-67304    LA    Lincoln
   REL L GRAY ET UX                     

LA-RTN0116-006

   JOANNA WILKINSON GRAY    CLARK ENERGY COMPANY INC      3/11/1994       879    309    E-67305    LA    Lincoln

LA-RTN0116-007

   JOSEPH MITCHELL SMITH ET UX    CLARK ENERGY COMPANY INC      5/10/1994       897    186    E-70469    LA    Lincoln

LA-RTN0117-000

   DHU THOMPSON ET AL    SOUTHWEST NATURAL GAS COMPANY      4/13/1948       46    121       LA    Lincoln

LA-RTN0118-001

   KENNETH A MILLER ET AL    CLARK ENERGY COMPANY INC      7/7/1994       891    223    E-69450    LA    Lincoln

LA-RTN0118-002

   HOWARD N SANDERS    CLARK ENERGY COMPANY INC      7/7/1994       897    204    E-70474    LA    Lincoln

LA-RTN0118-003

   ALBERT L SANDERS    CLARK ENERGY COMPANY INC      7/7/1994       897    208    E-70475    LA    Lincoln

LA-RTN0118-004

   JOE ALBERT BEDFORD    CLARK ENERGY COMPANY INC      8/24/1994       897    178    E-70467    LA    Lincoln
      SOUTHWEST NATURAL PRODUCTION                  

LA-RTN0119-000

   E J LINER    COMPANY      6/28/1948             N-82462    LA    Lincoln

LA-RTN0120-000

   E W CAUSEY    SOUTHWEST NATURAL GAS COMPANY      9/3/1946       41    459    N-71031    LA    Lincoln

LA-RTN0121-000

   CLEM WRIGHT    SOUTHWEST NATURAL GAS COMPANY      9/12/1946       41    513    N-71168    LA    Lincoln

LA-RTN0122-000

   J A CLEATON    H R SCIVALLY      4/29/1948       47    55    N-82014    LA    Lincoln
      SOUTHWEST NATURAL PRODUCTION                  

LA-RTN0123-000

   ALBERT SANDERS ET AL    COMPANY      8/17/1948       47    465       LA    Lincoln
            1180    651    F67473      

LA-RTN0130-001

   LARRY N RABB ET UX    KCS RESOURCES INC      7/1/2005       1180    651    F67473    LA    Lincoln

LA-RTN0131-001

   SHARON K SINGER    FRANKS PETROLEUM INC      5/4/1978       231    150       LA    Lincoln

LA-RTN0131-002

   GERTRUDE ELAINE KURYLLO    FRANKS PETROLEUM INC      5/22/1978       235    60       LA    Lincoln

LA-RTN0131-003

   LORIECE K PULLEN    FRANKS PETROLEUM INC      5/3/1978       229    668       LA    Lincoln

LA-RTN0131-004

   IRMA WILLIS KORNEGAY    FRANKS PETROLEUM INC      4/14/1980       286    80       LA    Lincoln

LA-RTN0143-003

   ERIC ANTHONY GUILLORY ET UX    WILDHORSE RESOURCES LLC      11/16/2010       1297    220    F116589    LA    Lincoln
            1237    377    F90980      

LA-RTN0150-001

   L GARY RAINEY, AKA LESTER GARY RAINEY    INDIGO MINERALS LLC      6/13/2007                LA    Lincoln

LA-RTN0150-002

   HERSHEL SHANNON PARDUE ET UX    INDIGO MINERALS LLC      6/21/2007       1237    382    F90982    LA    Lincoln

LA-RTN0150-003

   DON DURRETT ET UX    INDIGO MINERALS LLC      10/2/2007       1237    380    F90981    LA    Lincoln

LA-RTN0150-004

   DON DURRETT ET UX    INDIGO MINERALS LLC      10/2/2007       1237    384    F90983    LA    Lincoln

LA-RTN0151-000

   JOHN RAGAN COLVIN ET AL    INDIGO MINERALS LLC      6/14/2007       1237    386    F90984    LA    Lincoln

LA-RTN0152-000

   BEVERLY GATES SLOCUM    INDIGO MINERALS LLC      6/14/2007       1237    389    F90985    LA    Lincoln

LA-RTN0153-000

   PATRICIA KATHERINE VANDIVER BLOXOM ET AL    INDIGO MINERALS LLC      6/19/2007       1237    391    F90986    LA    Lincoln

LA-RTN0154-000

   JAMES VESTER ALBRITTON    INDIGO MINERALS LLC      6/20/2007       1237    394    F90987    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0155-000

   JEAN WASHAM HOLLIS, INDIVIDUALLY & AS    INDIGO MINERALS LLC      6/21/2007       1237    397    F90988    LA    Lincoln

LA-RTN0156-000

   WILLIAM THOMAS BURT ET UX    INDIGO MINERALS LLC      6/25/2007       1237    400    F90989    LA    Lincoln

LA-RTN0157-000

   GLEN E NEAVILLE ET UX    INDIGO MINERALS LLC      6/25/2007       1237    403    F90990    LA    Lincoln

LA-RTN0158-000

   JOHN RAGAN COLVIN ET UX MARGARET    INDIGO MINERALS LLC      6/14/2007       1237    406    F90991    LA    Lincoln

LA-RTN0159-000

   KYLE BIRCH ET UX    INDIGO MINERALS LLC      6/28/2007       1237    409    F90992    LA    Lincoln

LA-RTN0160-000

   ODESSA HARRISON DUNN    INDIGO MINERALS LLC      8/20/2007       1237    595    F91074    LA    Lincoln

LA-RTN0161-001

   RICKEY GLENN HICKMAN    INDIGO MINERALS LLC      6/26/2007       1237    412    F90993    LA    Lincoln

LA-RTN0161-002

   KRISTY DIANNE ROBERTSON HICKMAN    INDIGO MINERALS LLC      6/26/2007       1237    415    F90994    LA    Lincoln

LA-RTN0162-001

   GLEN LEE MITCHELL    INDIGO MINERALS LLC      7/2/2007       1237    418    F90995    LA    Lincoln

LA-RTN0162-002

   BRENDA DUFOUR MITCHELL    INDIGO MINERALS LLC      7/2/2007       1237    421    F90996    LA    Lincoln
            1237    424    F90997      

LA-RTN0163-000

   WILLIAM L GARNER JR    INDIGO MINERALS LLC      6/25/2007       1237    424    F90997    LA    Lincoln
            1237    427    F90998      
            1237    427    F90998      

LA-RTN0164-001

   JOHN M ARMSTRONG, JR ET UX    INDIGO MINERALS LLC      7/11/2007       1237    427    F90998    LA    Lincoln
            1237    430    F90999      
            1237    430    F90999      

LA-RTN0164-002

   THE BROWNLAND CORPORATION    INDIGO MINERALS LLC      7/11/2007       1237    430    F90999    LA    Lincoln
            1237    434    F91000      
            1237    434    F91000      

LA-RTN0164-003

   ELEANOR HARRIS BROWN    INDIGO MINERALS LLC      7/11/2007       1237    434    F91000    LA    Lincoln
            1237    437    F91001      
            1237    437    F91001      

LA-RTN0164-004

   ROBERT WILLIAM TEMPLE ET UX    INDIGO MINERALS LLC      7/18/2007       1237    437    F91001    LA    Lincoln
            1237    440    F91002      
            1237    440    F91002      

LA-RTN0164-005

   MELANIE CARSON HARRIS ZACHRY    INDIGO MINERALS LLC      7/18/2007       1237    440    F91002    LA    Lincoln

LA-RTN0164-006

   PRISCILLA HEARD BOWMAN    INDIGO MINERALS LLC      10/8/2007       1237    443    F91003    LA    Lincoln

LA-RTN0164-007

   CARRIE LEE HEARD LINK    INDIGO MINERALS LLC      10/8/2007       1237    446    F91004    LA    Lincoln
            1260    19    F99499      
            1276    142    F106650      
            1260    19    F99499      

LA-RTN0164-008

   JOHNNY ROY PAPPA    INDIGO MINERALS LLC      9/24/2008       1260    19    F99499    LA    Lincoln
            1260    22    F99500      
            1276    144    F106651      
            1260    22    F99500      

LA-RTN0164-009

   ANNA THERESA PAPPA KERN ANGELLE    INDIGO MINERALS LLC      9/24/2008       1260    22    F99500    LA    Lincoln

LA-RTN0164-010

   JOHN C MORRIS III ET AL    INDIGO MINERALS LLC      2/10/2009       1267    769    F102703    LA    Lincoln

LA-RTN0164-011

   ALICE HEARD ET AL    PRESTIGE EXPLORATION INC      9/15/2006       1213    601    F102274    LA    Lincoln

LA-RTN0165-001

   RONALD WAYNE BROWN    INDIGO MINERALS LLC      7/6/2007       1237    449    F91006    LA    Lincoln

LA-RTN0165-002

   IVA GOLDSMITH DAVIS    INDIGO MINERALS LLC      7/11/2007       1237    451    F91007    LA    Lincoln

LA-RTN0165-003

   WILLIE GOLDSMITH JACKSON    INDIGO MINERALS LLC      7/11/2007       1237    453    F91008    LA    Lincoln

LA-RTN0165-004

   MILTON YOUNGER    INDIGO MINERALS LLC      7/12/2007       1237    455    F91009    LA    Lincoln

LA-RTN0165-005

   HOWARD DONELL YOUNGER    INDIGO MINERALS LLC      7/12/2007       1237    457    F91010    LA    Lincoln

LA-RTN0165-006

   BILLY RAY YOUNGER    INDIGO MINERALS LLC      7/12/2007       1237    459    F91011    LA    Lincoln

LA-RTN0165-007

   VIVIAN YOUNGER PERRY    INDIGO MINERALS LLC      7/17/2007       1237    461    F91012    LA    Lincoln

LA-RTN0165-008

   VICKI GOLDSMITH JACKSON    INDIGO MINERALS LLC      7/17/2007       1237    463    F91013    LA    Lincoln

LA-RTN0165-009

   NELLA FAYE WILLIAMS COOPER    INDIGO MINERALS LLC      7/14/2007       1237    465    F91014    LA    Lincoln

LA-RTN0165-010

   ZENOBIA YOUNGER PERRY    INDIGO MINERALS LLC      7/16/2007       1237    467    F91015    LA    Lincoln

LA-RTN0165-011

   LEVELL YOUNGER    INDIGO MINERALS LLC      7/19/2007       1237    469    F91016    LA    Lincoln

LA-RTN0165-012

   ROBERT G JAMES    INDIGO MINERALS LLC      7/30/2007       1237    471    F91017    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0165-013

   E JOSEPH BLEICH ET UX    INDIGO MINERALS LLC      7/30/2007       1237    474    F91018    LA    Lincoln

LA-RTN0165-014

   FLORA DOWDY WRIGHT    INDIGO MINERALS LLC      7/30/2007       1237    477    F91019    LA    Lincoln

LA-RTN0165-015

   JOSEPH LEWIS    INDIGO MINERALS LLC      8/16/2007       1237    480    F91020    LA    Lincoln

LA-RTN0165-016

   FRED LEWIS    INDIGO MINERALS LLC      8/16/2007       1237    482    F91021    LA    Lincoln

LA-RTN0165-017

   MITZI LEWIS    INDIGO MINERALS LLC      8/16/2007       1237    484    F91022    LA    Lincoln

LA-RTN0165-018

   HUGH L HYLAND, III    INDIGO MINERALS LLC      8/16/2007       1237    486    F91023    LA    Lincoln

LA-RTN0165-019

   FREDERICK N HYLAND    INDIGO MINERALS LLC      8/16/2007       1237    488    F91024    LA    Lincoln

LA-RTN0165-020

   ROSALYN GOLDSMITH CROWDER    INDIGO MINERALS LLC      7/17/2007       1237    490    F91025    LA    Lincoln

LA-RTN0165-021

   MICHAEL HYLAND    INDIGO MINERALS LLC      8/16/2007       1237    492    F91026    LA    Lincoln

LA-RTN0165-022

   STEWART G HYLAND    INDIGO MINERALS LLC      8/16/2007       1237    494    F91027    LA    Lincoln

LA-RTN0166-001

   WILLIE GOLDSMITH JACKSON    INDIGO MINERALS LLC      7/11/2007       1237    496    F91028    LA    Lincoln

LA-RTN0166-002

   HOWARD DONELL YOUNGER    INDIGO MINERALS LLC      7/12/2007       1237    498    F91029    LA    Lincoln

LA-RTN0166-003

   MILTON YOUNGER    INDIGO MINERALS LLC      7/12/2007       1237    500    F91030    LA    Lincoln

LA-RTN0166-004

   BILLY RAY YOUNGER    INDIGO MINERALS LLC      7/12/2007       1237    502    F91031    LA    Lincoln

LA-RTN0166-005

   IVA GOLDSMITH DAVIS    INDIGO MINERALS LLC      7/11/2007       1237    504    F91032    LA    Lincoln

LA-RTN0166-006

   VICKI GOLDSMITH JACKSON    INDIGO MINERALS LLC      7/17/2007       1237    506    F91033    LA    Lincoln

LA-RTN0166-007

   VIVIAN YOUNGER PERRY    INDIGO MINERALS LLC      7/17/2007       1237    508    F91034    LA    Lincoln

LA-RTN0166-008

   ZENOBIA YOUNGER PERRY    INDIGO MINERALS LLC      7/16/2007       1237    510    F91035    LA    Lincoln

LA-RTN0166-009

   LEVELL YOUNGER    INDIGO MINERALS LLC      7/17/2007       1237    512    F91036    LA    Lincoln

LA-RTN0166-010

   MARVA GOLDSMITH JOHNSON    INDIGO MINERALS LLC      7/23/2007       1237    514    F91037    LA    Lincoln

LA-RTN0166-011

   JOSEPH LEWIS    INDIGO MINERALS LLC      8/16/2007       1237    516    F91038    LA    Lincoln

LA-RTN0166-012

   FRED LEWIS    INDIGO MINERALS LLC      8/16/2007       1237    518    F91039    LA    Lincoln

LA-RTN0166-013

   MITZI LEWIS    INDIGO MINERALS LLC      8/16/2007       1237    520    F91040    LA    Lincoln

LA-RTN0166-014

   FREDERICK N HYLAND    INDIGO MINERALS LLC      8/16/2007       1237    522    F91041    LA    Lincoln

LA-RTN0166-015

   HUGH L HYLAND, III    INDIGO MINERALS LLC      8/16/2007       1237    524    F91042    LA    Lincoln

LA-RTN0166-016

   ROSALYN GOLDSMITH CROWDER    INDIGO MINERALS LLC      7/17/2007       1237    526    F91043    LA    Lincoln

LA-RTN0166-017

   MICHAEL HYLAND    INDIGO MINERALS LLC      8/16/2007       1237    528    F91044    LA    Lincoln

LA-RTN0166-018

   STEWART G HYLAND    INDIGO MINERALS LLC      8/16/2007       1237    530    F91045    LA    Lincoln

LA-RTN0167-000

   CLIFTON ALLEN SANDIFER ET UX    INDIGO MINERALS LLC      7/18/2007       1237    534    F91047    LA    Lincoln

LA-RTN0168-000

   MICHAEL JAMES CORIE ET UX    INDIGO MINERALS LLC      7/18/2007       1237    539    F91049    LA    Lincoln

LA-RTN0169-000

   SAMUEL EDWARD SPEARMAN ET UX    INDIGO MINERALS LLC      7/23/2007       1237    541    F91050    LA    Lincoln

LA-RTN0170-000

   DAVID R VOLENTINE ET UX    INDIGO MINERALS LLC      7/24/2007       1237    544    F91051    LA    Lincoln

LA-RTN0171-001

   GLADYS DELONY KASPAR    INDIGO MINERALS LLC      7/18/2007       1237    547    F91052    LA    Lincoln

LA-RTN0171-002

   BRODIE D TELFORD ET UX    INDIGO MINERALS LLC      10/23/2007       1237    549    F91053    LA    Lincoln

LA-RTN0172-000

   VIVIAN YOUNGER PERRY    INDIGO MINERALS LLC      7/17/2007       1237    551    F91054    LA    Lincoln

LA-RTN0173-001

   GEORGE HYOT BRASHEAR, AKA    INDIGO MINERALS LLC      6/29/2007       1237    553    F91055    LA    Lincoln

LA-RTN0173-002

   MARJORIE LINDA BRASHEAR LOVE    INDIGO MINERALS LLC      6/27/2007       1237    555    F91056    LA    Lincoln

LA-RTN0174-000

   ZENOBIA YOUNGER PERRY    INDIGO MINERALS LLC      7/9/2007       1237    563    F91060    LA    Lincoln

LA-RTN0175-000

   JOHNNY WALTER HASSEN    INDIGO MINERALS LLC      7/25/2007       1237    566    F91061    LA    Lincoln

LA-RTN0176-001

   NELDA CHRISTINE WILTCHER MARTIN, AKA    INDIGO MINERALS LLC      7/16/2007       1237    568    F91062    LA    Lincoln

LA-RTN0176-002

   ROY THOMAS WILTCHER    INDIGO MINERALS LLC      7/16/2007       1237    570    F91063    LA    Lincoln

LA-RTN0177-000

   RANDALL BRYAN GAY ET UX    INDIGO MINERALS LLC      7/6/2007       1237    574    F91065    LA    Lincoln

LA-RTN0178-000

   JERRY WILLIS GRIFFIN ET UX    INDIGO MINERALS LLC      7/25/2007       1237    576    F91066    LA    Lincoln

LA-RTN0179-000

   ARTHUR H MAY ET UX    INDIGO MINERALS LLC      8/9/2007       1237    578    F91067    LA    Lincoln

LA-RTN0180-000

   MITCHELL DARNELL YOUNGER    INDIGO MINERALS LLC      7/22/2007       1237    583    F91069    LA    Lincoln

LA-RTN0181-000

   LEVELL YOUNGER    INDIGO MINERALS LLC      7/19/2007       1237    585    F91070    LA    Lincoln

LA-RTN0182-000

   MARY ETTA ROGERS ROANE    INDIGO MINERALS LLC      8/11/2007       1237    587    F91071    LA    Lincoln

LA-RTN0183-000

   CHARLIE RAY HUDSON ET UX    INDIGO MINERALS LLC      8/7/2007       1237    590    F91072    LA    Lincoln

LA-RTN0184-000

   THERESA LEWIS MOORE WYATT, AKA    INDIGO MINERALS LLC      8/6/2007       1237    593    F91073    LA    Lincoln

LA-RTN0185-001

   JOE EDWARD MITCHAM SR ET UX    CARROLLTON RESOURCES CORPORATION      8/23/1996       979    105    87305    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            979    111    087306      

LA-RTN0185-002

   JOE EDWARD MITCHAM JR ET UX    CARROLLTON RESOURCES CORPORATION      8/23/1996       979    111    087306    LA    Lincoln
            979    117    087307      

LA-RTN0186-001

   BILLY JACK PRICE ET UX    CARROLLTON RESOURCES CORPORATION      8/23/1996       979    117    087307    LA    Lincoln

LA-RTN0186-002

   VIRGINIA LOUISE WILDER PRICE ET VIR    CARROLLTON RESOURCES CORPORATION      8/23/1996       979    124    87308    LA    Lincoln
            979    131    087309      
            979    131    087309      
            979    131    087309      

LA-RTN0186-003

   ROBERT E WILDER JR    CARROLLTON RESOURCES CORPORATION      8/26/1996       979    131    087309    LA    Lincoln
            979    137    087310      
            979    137    087310      
            979    137    087310      

LA-RTN0186-004

   NANCY ELIZABETH MCLEAN EDWARDS ET VIR    CARROLLTON RESOURCES CORPORATION      8/26/1996       979    137    087310    LA    Lincoln
            979    142    087311      
            979    137    087310      
            979    137    087310      

LA-RTN0186-005

   ANNE WILDER MCLEAN HESS ET VIR    CARROLLTON RESOURCES CORPORATION      8/26/1996       979    137    087310    LA    Lincoln
            979    147    087312      
            979    147    087312      
            979    147    087312      

LA-RTN0186-006

   CHARLES EDWARD MCLEAN ET UX    CARROLLTON RESOURCES CORPORATION      9/4/1996       979    147    087312    LA    Lincoln
            979    152    087313      
            979    152    087313      
            979    152    087313      

LA-RTN0186-007

   STUART BOWDEN MCLEAN ET UX    CARROLLTON RESOURCES CORPORATION      9/4/1996       979    152    087313    LA    Lincoln
            979    157    087314      
            979    157    087314      
            979    157    087314      

LA-RTN0186-008

   SARAH AMANDA WILDER MCLEAN    CARROLLTON RESOURCES CORPORATION      8/26/1996       979    157    087314    LA    Lincoln

LA-RTN0186-009

   MARBURY BUILDING CORPORATION    CARROLLTON RESOURCES CORPORATION      9/12/1996       979    164    87315    LA    Lincoln

LA-RTN0186-010

   DELLA LYNN HUDSON BEARD ET VIR    CARROLLTON RESOURCES CORPORATION      9/17/1996       979    170    87316    LA    Lincoln

LA-RTN0186-011

   RICHARD W HUDSON ET UX    CARROLLTON RESOURCES CORPORATION      9/17/1996       979    270    87340    LA    Lincoln

LA-RTN0186-012

   RICHARD GREGORY HUDSON    CARROLLTON RESOURCES CORPORATION      9/19/1996       979    241    87333    LA    Lincoln

LA-RTN0186-013

   JAMES ROBERT PRICE ET UX    CARROLLTON RESOURCES CORPORATION      11/19/1996       979    252    87336    LA    Lincoln

LA-RTN0186-014

   GLENN ALLEN SCRIBER ET UX    CARROLLTON RESOURCES CORPORATION      11/23/1996       1026    106    4902    LA    Lincoln

LA-RTN0186-015

   GLENN ALLEN SCRIBER ET UX    CARROLLTON RESOURCES CORPORATION      7/21/1998       1033    301    6825    LA    Lincoln

LA-RTN0186-016

   CURTIS L TUBBS ET UX    CARROLLTON RESOURCES CORPORATION      7/17/1998       1033    331    6837    LA    Lincoln

LA-RTN0187-001

   MICHAEL WAYNE GRAHAM    CARROLLTON RESOURCES CORPORATION      9/16/1996       979    179    87318    LA    Lincoln

LA-RTN0187-002

   STEVEN CRAIG GRAHAM    CARROLLTON RESOURCES CORPORATION      10/14/1996       979    275    87341    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0187-003

   LARRY KENT GRAHAM    CARROLLTON RESOURCES CORPORATION      10/14/1996       979    280    87342    LA    Lincoln

LA-RTN0188-000

   LAVON ANDERSON ET VIR    CARROLLTON RESOURCES CORPORATION      9/26/1996       979    188    87320    LA    Lincoln

LA-RTN0189-000

   MARGIE MAY LYONS    INDIGO MINERALS LLC      8/16/2007       1237    626    F91085    LA    Lincoln

LA-RTN0190-000

   SEDONIA MAY GIVENS    INDIGO MINERALS LLC      8/16/2007       1237    629    F91086    LA    Lincoln

LA-RTN0191-000

   VINSON LEE CRAWFORD ET UX    INDIGO MINERALS LLC      7/30/2007       1237    632    F91087    LA    Lincoln

LA-RTN0192-000

   LINCOLN TOTAL COMMUNITY ACTION, INC    INDIGO MINERALS LLC      8/7/2007       1237    635    F91088    LA    Lincoln

LA-RTN0193-000

   TIMOTHY L MOORE ET UX    INDIGO MINERALS LLC      7/26/2007       1237    639    F91089    LA    Lincoln

LA-RTN0194-000

   VELTON BOWDEN, JR    INDIGO MINERALS LLC      8/13/2007       1237    642    F91090    LA    Lincoln

LA-RTN0195-000

   DELORES MAY ELLIS    INIGO MINERALS LLC      8/16/2007       1237    645    F91091    LA    Lincoln

LA-RTN0196-000

   DEBORAH SHELTON REED    INDIGO MINERALS LLC      8/23/2007       1237    675    F91101    LA    Lincoln

LA-RTN0197-000

   JACKIE ADAMS    INDIGO MINERALS LLC      8/29/2007       1237    677    F91102    LA    Lincoln

LA-RTN0198-000

   ELSIE SHELTON MALCOLM    INDIGO MINERALS LLC      8/16/2007       1237    680    F91103    LA    Lincoln

LA-RTN0199-000

   ELSIE COSETTA MALCOLM    INDIGO MINERALS LLC      8/20/2007       1237    682    F91104    LA    Lincoln

LA-RTN0200-000

   WILLIE R SHELTON, JR    INDIGO MINERALS LLC      8/16/2007       1237    684    F91105    LA    Lincoln

LA-RTN0201-000

   JAMES THOMAS    INDIGO MINERALS LLC      9/7/2007       1237    714    F91117    LA    Lincoln

LA-RTN0202-000

   CHARLIE B DUNN    INDIGO MINERALS LLC      9/7/2007       1237    716    F91118    LA    Lincoln

LA-RTN0203-000

   JEWEL THOMAS    INDIGO MINERALS LLC      9/7/2007       1237    718    F91119    LA    Lincoln

LA-RTN0204-000

   MILDRED MAY DOUGLAS    INDIGO MINERALS LLC      8/16/2007       1237    720    F91120    LA    Lincoln

LA-RTN0205-000

   IRMA DUNN MOORE    INDIGO MINERALS LLC      9/17/2007       1237    735    F91127    LA    Lincoln

LA-RTN0206-000

   BONNIE DUNN    INDIGO MINERALS LLC      9/17/2007       1237    737    F91128    LA    Lincoln

LA-RTN0207-000

   WILLIAM PATRICK DUNN    INDIGO MINERALS LLC      9/17/2007       1237    739    F91129    LA    Lincoln

LA-RTN0208-000

   RAY TORBOR    INDIGO MINERALS LLC      9/14/2007       1237    741    F91130    LA    Lincoln

LA-RTN0209-000

   JAMES LEO DUNN ET UX    INDIGO MINERALS LLC      9/12/2007       1237    743    F91131    LA    Lincoln

LA-RTN0210-000

   EARLINE BAKER MYLES    INDIGO MINERALS LLC      9/19/2007       1237    745    F91132    LA    Lincoln

LA-RTN0211-000

   LINDA LANE NEWTON    INDIGO MINERALS LLC      9/14/2007       1237    747    F91133    LA    Lincoln
            1237    749    F91134      

LA-RTN0212-000

   MARY JANE ADAMS STEPHENSON    INDIGO MINERALS LLC      9/15/2007       1237    753    F91136    LA    Lincoln

LA-RTN0213-000

   JOHN NICHOLS MURAD ET UX    INDIGO MINERALS LLC      9/12/2007       1237    755    F91138    LA    Lincoln

LA-RTN0214-000

   JACQUELINE CARR FIGG    INDIGO MINERALS LLC      8/17/2007       1237    777    F91149    LA    Lincoln
            1237    780    F91150      

LA-RTN0215-000

   ANITA SHELTON FORD    INDIGO MINERALS LLC      9/7/2007       1237    780    F91150    LA    Lincoln

LA-RTN0216-000

   KYLE SCOTT DAVENPORT    INDIGO MINERALS LLC      9/15/2007       1237    794    F91154    LA    Lincoln

LA-RTN0217-000

   KYLE SCOTT DAVENPORT    INDIGO MINERALS LLC      9/15/2007       1237    797    F91155    LA    Lincoln

LA-RTN0218-000

   DAVID WILLIAM CRAIG ET UX    INDIGO MINERALS LLC      7/16/2007       1237    800    F91156    LA    Lincoln

LA-RTN0219-000

   ROBERT MARVIN ELLIS, JR ET UX    INDIGO MINERALS LLC      9/24/2007       1237    802    F91157    LA    Lincoln

LA-RTN0220-000

   SANDRA ELLIS HOGG    INDIGO MINERALS LLC      9/24/2007       1237    804    F91158    LA    Lincoln

LA-RTN0221-000

   SAMUEL F WHEAT ET UX    INDIGO MINERALS LLC      9/13/2007       1237    806    F91159    LA    Lincoln

LA-RTN0222-000

   PEARLYNE BAKER FIELDS    INDIGO MINERALS LLC      9/19/2007       1237    838    F91171    LA    Lincoln

LA-RTN0223-000

   GROVER L BROWN    INDIGO MINERALS LLC      10/3/2007       1238    21    F91195    LA    Lincoln

LA-RTN0224-000

   DORIS C SMITH    INDIGO MINERALS LLC      10/2/2007       1238    25    F91197    LA    Lincoln

LA-RTN0225-000

   EARL BAKER    INDIGO MINERALS LLC      9/19/2007       1238    29    F91199    LA    Lincoln

LA-RTN0226-000

   BOBBY CHARLES COOPER ET UX    INDIGO MINERALS LLC      10/4/2007       1238    33    F91201    LA    Lincoln

LA-RTN0227-000

   WILLIE JEAN WATTS SINGLETON    INDIGO MINERALS LLC      10/10/2007       1238    39    F91205    LA    Lincoln

LA-RTN0228-001

   ODESSA HARRISON DUNN    INDIGO MINERALS LLC      8/20/2007       1237    597    F91075    LA    Lincoln

LA-RTN0228-002

   CALDWELL DUNN    INDIGO MINERALS LLC      8/21/2007       1237    600    F91076    LA    Lincoln

LA-RTN0228-003

   CAROLIN DUNN BOWMAN    INDIGO MINERALS LLC      8/21/2007       1237    603    F91077    LA    Lincoln

LA-RTN0228-004

   BENJAMIN DUNN    INDIGO MINERALS LLC      8/21/2007       1237    606    F91078    LA    Lincoln

LA-RTN0228-005

   AGNES DUNN SUDDS    INDIGO MINERALS LLC      8/21/2007       1237    609    F91079    LA    Lincoln

LA-RTN0228-006

   DELLA RUTH DUNN POWELL    INDIGO MINERALS LLC      8/21/2007       1237    612    F91080    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0228-007

   LOU ORIEL DUNN SMITH    INDIGO MINERALS LLC      8/21/2007       1237    615    F91081    LA    Lincoln

LA-RTN0228-008

   JOHN ARTHUR DUNN    INDIGO MINERALS LLC      8/21/2007       1237    618    F91082    LA    Lincoln

LA-RTN0228-009

   KEITH CONRAD DUNN    INDIGO MINERALS LLC      8/21/2007       1231    621    F91083    LA    Lincoln

LA-RTN0229-000

   RICHARD J GALLOT    INDIGO MINERALS LLC      10/30/2007       1238    180    F91262    LA    Lincoln

LA-RTN0230-000

   THOMAS PAUL WOODARD ET UX    INDIGO MINERALS LLC      10/8/2007       1238    145    F91248    LA    Lincoln

LA-RTN0231-000

   HARRISON WILEY, JR    INDIGO MINERALS LLC      10/23/2007       1238    147    F91249    LA    Lincoln

LA-RTN0232-000

   CLAUDE BRITTON III    INDIGO MINERALS LLC      10/16/2007       1238    149    F91250    LA    Lincoln

LA-RTN0233-000

   SEDONIA MAY GIVENS ET AL    INDIGO MINERALS LLC      10/18/2007       1238    57    F91212    LA    Lincoln
            1238    60    F91213      
            1238    63    F91214      
            1238    64    F91215      
            1238    65    F91216      

LA-RTN0234-000

   CHARLES E WOODARD    INDIGO MINERALS LLC      10/19/2007       1238    66    F91217    LA    Lincoln
            1238    35    F91202      
            1238    37    F91203      

LA-RTN0235-000

   THELMA WATTS HAMMOCK    INDIGO MINERALS LLC      10/10/2007       1238    38    F91204    LA    Lincoln

LA-RTN0236-000

   MATTHEW AYRES JAMES ET UX    INDIGO MINERALS LLC      10/11/2007       1238    42    F91206    LA    Lincoln

LA-RTN0237-001

   JAMES EDWARD WILLIAMS    INDIGO MINERALS LLC      10/2/2007       1237    857    F91179    LA    Lincoln

LA-RTN0237-002

   EARNEST LEE WILLIAMS    INDIGO MINERALS LLC      10/1/2007       1237    854    F91178    LA    Lincoln

LA-RTN0237-003

   GEORGIA MAE FRANKLIN ROSE    INDIGO MINERALS LLC      9/14/2007       1237    860    F91180    LA    Lincoln

LA-RTN0237-004

   ARTHUR LEE FRANKLIN    INDIGO MINERALS LLC      9/14/2007       1238    12    F91192    LA    Lincoln

LA-RTN0237-005

   ELSIE WILLIAMS    INDIGO MINERALS LLC      10/9/2007       1238    15    F91193    LA    Lincoln

LA-RTN0237-006

   PATRICIA ANN FRANKLIN    INDIGO MINERALS LLC      9/14/2007       1238    18    F91194    LA    Lincoln

LA-RTN0238-001

   LEONARD MAYFIELD    INDIGO MINERALS LLC      8/27/2007       1237    648    F91092    LA    Lincoln

LA-RTN0238-002

   JAMES EARL WILLIAMS    INDIGO MINERALS LLC      8/17/2007       1237    651    F91093    LA    Lincoln

LA-RTN0238-003

   ETHEL MAE WARREN    INDIGO MINERALS LLC      8/29/2007       1237    654    F91094    LA    Lincoln

LA-RTN0238-004

   CURTIS MAE HAULCY    INDIGO MINERALS LLC      8/20/2007       1237    657    F91095    LA    Lincoln

LA-RTN0238-005

   DEIDRE BYRD    INDIGO MINERALS LLC      8/29/2007       1237    660    F91096    LA    Lincoln

LA-RTN0238-006

   SHEILA WILLIAMS    INDIGO MINERALS LLC      9/17/2007       1237    663    F91097    LA    Lincoln

LA-RTN0238-007

   FRIDAY WILLIAMS    INDIGO MINERALS LLC      9/17/2007       1237    666    F91098    LA    Lincoln

LA-RTN0238-008

   JOHNATHAN WILLIAMS    INDIGO MINERALS LLC      9/17/2007       1237    669    F91099    LA    Lincoln

LA-RTN0238-009

   CLIFFORD WILLIAMS    INDIGO MINERALS LLC      10/13/2007       1237    672    F91100    LA    Lincoln

LA-RTN0238-010

   ROSIE ETTER CLINTON    INDIGO MINERALS LLC      10/29/2007       1241    779    F92818    LA    Lincoln

LA-RTN0238-011

   CHARLOTTE S MALCOM ROUSE    INDIGO MINERALS LLC      4/1/2008       1250    653    F96364    LA    Lincoln

LA-RTN0238-012

   BETSY MALCOLM DISHROOM REDMOND    INDIGO MINERALS LLC      4/1/2008       1250    657    F96365    LA    Lincoln

LA-RTN0238-013

   GAYNA C MALCOLM PACKNETT    INDIGO MINERALS LLC      4/1/2008       1250    661    F96366    LA    Lincoln

LA-RTN0238-014

   TYRONE L MALCOLM SR    INDIGO MINERALS LLC      4/1/2008       1250    665    F96367    LA    Lincoln

LA-RTN0238-015

   MILDRED L ALLEN    INDIGO MINERALS LLC      4/1/2008       1250    669    F96368    LA    Lincoln

LA-RTN0238-016

   ARTHUR L MALCOLM    INDIGO MINERALS LLC      4/1/2008       1250    673    F96369    LA    Lincoln

LA-RTN0238-017

   ROY M MALCOLM    INDIGO MINERALS LLC      4/1/2008       1250    677    F96370    LA    Lincoln

LA-RTN0238-018

   KOBI JAMES MALCOLM    INDIGO MINERALS LLC      4/1/2008       1251    581    F96838    LA    Lincoln

LA-RTN0238-019

   JEANETTE JONES    INDIGO MINERALS LLC      10/24/2008       1262    434    F100510    LA    Lincoln

LA-RTN0238-020

   WILLIE P SINGLETON    INDIGO MINERALS LLC      9/25/2008       1263    201    F100815    LA    Lincoln

LA-RTN0238-021

   PATRICIA JONES COOK    INDIGO MINERALS LLC      10/24/2008       1263    204    F100816    LA    Lincoln

LA-RTN0238-022

   CHRISTOPHER A WILLIAMS, IND & AIF    INDIGO MINERALS LLC      10/14/2011       1306    506    F120661    LA    Lincoln

LA-RTN0239-000

   RUBY WOODARD SMITH    INDIGO MINERALS LLC      10/8/2007       1238    31    F91200    LA    Lincoln

LA-RTN0240-000

   FAITH ANNE HURST    INDIGO MINERALS LLC      9/24/2007       1238    27    F91198    LA    Lincoln

LA-RTN0241-000

   GREGGORY O MAY ET UX    INDIGO MINERALS LLC      10/24/2007       1238    167    F91256    LA    Lincoln

LA-RTN0242-000

   CARNELL BROWN    INDIGO MINERALS LLC      10/15/2007       1238    195    F91269    LA    Lincoln

LA-RTN0243-000

   P C PIERCE    INDIGO MINERALS LLC      11/5/2007       1238    203    F91273    LA    Lincoln

LA-RTN0244-000

   MARY ETTA ROGERS ROANE    INDIGO MINERALS LLC      11/7/2007       1238    205    F91274    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST      County  

LA-RTN0245-000

   RICHARD C MAY ET UX    INDIGO MINERALS LLC      10/24/2007       1238    227    F91285      LA         Lincoln   

LA-RTN0246-000

   KENNETH O PORTIS ET UX    INDIGO MINERALS LLC      10/30/2007       1238    230    F91286      LA         Lincoln   

LA-RTN0247-000

   JOHN ALLEN HOLLAND ET UX    INDIGO MINERALS LLC      11/16/2007       1238    232    F91287      LA         Lincoln   

LA-RTN0248-000

   LOUISE HOUSTON HUDSON    INDIGO MINERALS LLC      11/16/2007       1238    234    F91288      LA         Lincoln   

LA-RTN0249-001

   CHARLES EDWARD WOODARD    INDIGO MINERALS LLC      10/19/2007       1238    67    F91218      LA         Lincoln   

LA-RTN0249-002

   THOMAS PAUL WOODARD    INDIGO MINERALS LLC      10/22/2007       1238    70    F91219      LA         Lincoln   

LA-RTN0249-003

   SUE WOODARD GRUNDY    INDIGO MINERALS LLC      10/25/2007       1238    73    F91220      LA         Lincoln   

LA-RTN0249-004

   MILDRED WOODARD LITTLETON    INDIGO MINERALS LLC      10/25/2007       1238    76    F91221      LA         Lincoln   

LA-RTN0249-005

   CARRIE WOODARD WILLIAMS    INDIGO MINERALS LLC      10/22/2007       1238    79    F91222      LA         Lincoln   

LA-RTN0249-006

   RUBY WOODARD SMITH    INDIGO MINERALS LLC      10/22/2007       1238    82    F91223      LA         Lincoln   

LA-RTN0249-007

   ELAINE WOODARD WILLIAMS    INDIGO MINERALS LLC      10/25/2007       1238    85    F91224      LA         Lincoln   

LA-RTN0249-008

   ALFONZO WOODARD    INDIGO MINERALS LLC      10/25/2007       1238    88    F91225      LA         Lincoln   

LA-RTN0249-009

   MILTON WOODARD    INDIGO MINERALS LLC      10/25/2007       1238    91    F91226      LA         Lincoln   

LA-RTN0250-001

   THE BROWNLAND CORPORATION    INDIGO MINERALS LLC      10/11/2007       1238    94    F91227      LA         Lincoln   

LA-RTN0250-002

   JOHN M ARMSTRONG, JR ET UX    INDIGO MINERALS LLC      10/11/2007       1238    98    F91228      LA         Lincoln   

LA-RTN0250-003

   PRISCILLA HEARD BOWMAN    INDIGO MINERALS LLC      10/11/2007       1238    101    F91229      LA         Lincoln   

LA-RTN0250-004

   CARRIE LEE HEARD LINK    INDIGO MINERALS LLC      10/11/2007       1238    104    F91230      LA         Lincoln   

LA-RTN0250-005

   MARY ELEANOR HARRIS TEMPLE    INDIGO MINERALS LLC      10/11/2007       1238    107    F91231      LA         Lincoln   

LA-RTN0250-006

   MELANIE CARSON HARRIS ZACHRY    INDIGO MINERALS LLC      10/11/2007       1238    110    F91232      LA         Lincoln   

LA-RTN0250-007

   ELEANOR HARRIS BROWN    INDIGO MINERALS LLC      10/11/2007       1238    113    F91233      LA         Lincoln   

LA-RTN0250-008

   JOHN C MORRIS III    INDIGO MINERALS LLC      6/4/2009       1274    372    F105806      LA         Lincoln   

LA-RTN0250-009

   RAYMOND H MORRIS    INDIGO MINERALS LLC      6/4/2009       1274    361    F105802      LA         Lincoln   

LA-RTN0250-010

   RICHARD A MORRIS    INDIGO MINERALS LLC      6/4/2009       1274    355    F105800      LA         Lincoln   

LA-RTN0250-011

   MARY ALICE HEARD TESTAMENTARY TRUST    INDIGO MINERALS LLC      6/4/2009       1274    358    F105801      LA         Lincoln   

LA-RTN0251-001

   DOROTHY MAE HEARD TORBOR    INDIGO MINERALS LLC      9/11/2007       1237    757    F91139      LA         Lincoln   

LA-RTN0251-002

   ROBERT HEARD    INDIGO MINERALS LLC      9/13/2007       1237    761    F91141      LA         Lincoln   

LA-RTN0251-003

   NUCARUI HEARD    INDIGO MINERALS LLC      9/12/2007       1237    763    F91142      LA         Lincoln   

LA-RTN0251-004

   MARY HEARD SCOTT    INDIGO MINERALS LLC      9/18/2007       1237    765    F91143      LA         Lincoln   

LA-RTN0251-005

   PRINCESS MARIE DAVIS    INDIGO MINERALS LLC      9/14/2007       1237    767    F91144      LA         Lincoln   

LA-RTN0251-006

   MARY RUTH HEARD GULLATT    INDIGO MINERALS LLC      9/24/2007       1237    769    F91145      LA         Lincoln   

LA-RTN0251-007

   WILLIE DEAN HEARD    INDIGO MINERALS LLC      9/10/2007       1237    771    F91146      LA         Lincoln   

LA-RTN0251-008

   SEDONIA KIDD    INDIGO MINERALS LLC      10/8/2007       1237    773    F91147      LA         Lincoln   

LA-RTN0251-009

   HENRIETTA WALKER    INDIGO MINERALS LLC      9/24/2007       1237    775    F91148      LA         Lincoln   

LA-RTN0251-010

   JAMES HEARD    INDIGO MINERALS LLC      6/17/2008       1264    606    F101372      LA         Lincoln   

LA-RTN0252-001

   JACKIE ADAMS & BOBBIE J ADAMS    INDIGO MINERALS LLC      10/18/2007       1238    48    F91209      LA         Lincoln   

LA-RTN0252-002

   THERESA ADAMS    INDIGO MINERALS LLC      11/1/2007       1238    51    F91210      LA         Lincoln   

LA-RTN0252-003

   SANDRA ADAMS WILSON    INDIGO MINERALS LLC      11/1/2007       1238    54    F91211      LA         Lincoln   

LA-RTN0253-001

   MONICA WOODARD    INDIGO MINERALS LLC      10/23/2007       1238    137    F91244      LA         Lincoln   

LA-RTN0253-002

   RONNIE WOODARD    INDIGO MINERALS LLC      10/23/2007       1238    139    F91245      LA         Lincoln   

LA-RTN0253-003

   ANTHONY WOODARD    INDIGO MINERALS LLC      10/23/2007       1238    141    F91246      LA         Lincoln   

LA-RTN0253-004

   MARVIN WOODARD    INDIGO MINERALS LLC      10/23/2007       1238    143    F91247      LA         Lincoln   

LA-RTN0254-001

   MILDRED HENDERSON    INDIGO MINERALS LLC      10/16/2007       1238    170    F91257      LA         Lincoln   

LA-RTN0254-002

   GLORIA OSBORNE    INDIGO MINERALS LLC      11/1/2007       1238    172    F91258      LA         Lincoln   

LA-RTN0255-001

   SHIRLEY ANN HALL WHITE    INDIGO MINERALS LLC      10/12/2007       1238    174    F91259      LA         Lincoln   

LA-RTN0255-002

   ESTHER MAE HALL MUMFORD    INDIGO MINERALS LLC      10/11/2007       1238    176    F91260      LA         Lincoln   

LA-RTN0255-003

   DEBRA SAPP    INDIGO MINERALS LLC      10/15/2007       1238    178    F91261      LA         Lincoln   

LA-RTN0256-001

   FRED GOREE    INDIGO MINERALS LLC      10/24/2007       1238    223    F91283      LA         Lincoln   

LA-RTN0256-002

   JEAN MARIE GOREE BOWMAN    INDIGO MINERALS LLC      10/24/2007       1238    225    F91284      LA         Lincoln   

LA-RTN0257-001

   JAMES H ROLAND    INDIGO MINERALS LLC      10/17/2007       1238    182    F91263      LA         Lincoln   

LA-RTN0257-002

   MELLIE BELL ROLLING LYONS    INDIGO MINERALS LLC      11/15/2007       1238    185    F91264      LA         Lincoln   

LA-RTN0257-003

   CHERYL WAGNER STANDIFER    INDIGO MINERALS LLC      11/15/2007       1238    188    F91265      LA         Lincoln   


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST      County  

LA-RTN0257-004

   EMMIE JEAN ROLAND    INDIGO MINERALS LLC      11/16/2007       1238    190    F91266      LA         Lincoln   

LA-RTN0257-005

   AUDREY WAGNER ROSS    INDIGO MINERALS LLC      11/16/2007       1247    111    F94818      LA         Lincoln   

LA-RTN0257-006

   GALA WAGNER    INDIGO MINERALS LLC      3/3/2008       1247    113    F94819      LA         Lincoln   

LA-RTN0258-001

   JACKIE ADAMS    INDIGO MINERALS LLC      8/29/2007       1237    690    F91108      LA         Lincoln   

LA-RTN0258-002

   BOBBIE J ADAMS    INDIGO MINERALS LLC      8/29/2007       1237    693    F91109      LA         Lincoln   

LA-RTN0258-003

   SANDRA ADAMS WILSON    INDIGO MINERALS LLC      8/29/2007       1237    696    F91110      LA         Lincoln   

LA-RTN0258-004

   THERESA ADAMS    INDIGO MINERALS LLC      8/29/2007       1237    699    F91111      LA         Lincoln   

LA-RTN0259-001

   MELLIE BELL ROLLING LYONS    INDIGO MINERALS LLC      11/15/2007       1238    213    F91278      LA         Lincoln   

LA-RTN0259-002

   CHERYL WAGNER STANDIFER    INDIGO MINERALS LLC      11/15/2007       1238    215    F91279      LA         Lincoln   

LA-RTN0259-003

   HURIE TOLSTON    INDIGO MINERALS LLC      11/15/2007       1238    217    F91280      LA         Lincoln   

LA-RTN0259-004

   EMMIE JEAN ROLAND    INDIGO MINERALS LLC      11/16/2007       1238    219    F91281      LA         Lincoln   

LA-RTN0259-005

   AUDREY WAGNER ROSS    INDIGO MINERALS LLC      11/16/2007       1247    127    F94826      LA         Lincoln   

LA-RTN0259-006

   GALA WAGNER    INDIGO MINERALS LLC      3/3/2008       1247    130    F94827      LA         Lincoln   

LA-RTN0260-001

   BOBBIE RAY BRITTON    INDIGO MINERALS LLC      9/19/2007       1237    808    F91160      LA         Lincoln   

LA-RTN0260-002

   JAMES EARL WILLIAMS    INDIGO MINERALS LLC      9/19/2007       1237    811    F91161      LA         Lincoln   

LA-RTN0260-003

   JACKIE LAMAR BRITTON    INDIGO MINERALS LLC      9/19/2007       1237    815    F91162      LA         Lincoln   

LA-RTN0260-004

   CLAUDE BRITTON III    INDIGO MINERALS LLC      9/19/2007       1237    818    F91163      LA         Lincoln   

LA-RTN0261-001

   STERLING LEWIS    INDIGO MINERALS LLC      9/13/2007       1237    829    F91168      LA         Lincoln   

LA-RTN0261-002

   JOE LEWIS    INDIGO MINERALS LLC      10/3/2007       1237    832    F91169      LA         Lincoln   

LA-RTN0261-003

   HATTIE LEWIS WILLIAMS    INDIGO MINERALS LLC      10/3/2007       1237    835    F91170      LA         Lincoln   

LA-RTN0261-004

   JUANITA LEWIS    INDIGO MINERALS LLC      10/3/2007       1241    779    F92819      LA         Lincoln   

LA-RTN0261-005

   EMMA JEAN ROLLING    INDIGO MINERALS LLC      1/22/2008       1241    782    F92820      LA         Lincoln   

LA-RTN0261-006

   DANNY LEWIS    INDIGO MINERALS LLC      10/3/2007       1241    785    F92821      LA         Lincoln   

LA-RTN0261-007

   ROSE M DIAL    INDIGO MINERALS LLC      1/22/2008       1241    788    F92822      LA         Lincoln   

LA-RTN0261-008

   GAIL LEWIS    INDIGO MINERALS LLC      1/23/2008       1241    791    F92823      LA         Lincoln   

LA-RTN0261-009

   BOBBY COOPER    INDIGO MINERALS LLC      10/3/2007       1241    794    F92824      LA         Lincoln   

LA-RTN0261-010

   EDWARD LEWIS    INDIGO MINERALS LLC      1/24/2008       1244    608    F93941      LA         Lincoln   

LA-RTN0261-011

   CAROLYN MAXINE LEWIS    INDIGO MINERALS LLC      1/24/2008       1244    611    F93942      LA         Lincoln   

LA-RTN0261-012

   JERRY LEWIS    INDIGO MINERALS LLC      8/11/2008       1264    166    F101170      LA         Lincoln   

LA-RTN0262-001

   FRIDAY WILLIAMS    INDIGO MINERALS LLC      9/17/2007       1237    844    F91173      LA         Lincoln   

LA-RTN0262-002

   SHEILA WILLIAMS    INDIGO MINERALS LLC      9/17/2007       1237    846    F91174      LA         Lincoln   

LA-RTN0262-003

   JOHNATHAN WILLIAMS    INDIGO MINERALS LLC      9/17/2007       1237    848    F91175      LA         Lincoln   

LA-RTN0262-004

   PEARL C MILLER WILLIAMS    INDIGO MINERALS LLC      10/13/2007       1237    850    F91176      LA         Lincoln   

LA-RTN0262-005

   CLIFFORD WILLIAMS    INDIGO MINERALS LLC      10/13/2007       1237    852    F91177      LA         Lincoln   

LA-RTN0262-006

   CHRISTOPHER A WILLIAMS    INDIGO MINERALS LLC      8/3/2011       1304    371    F119652      LA         Lincoln   

LA-RTN0263-001

   CALDWELL DUNN ET UX    INDIGO MINERALS LLC      10/17/2007       1238    44    F91207      LA         Lincoln   

LA-RTN0263-002

   BENJAMIN DUNN ET UX    INDIGO MINERALS LLC      10/17/2007       1238    46    F91208      LA         Lincoln   

LA-RTN0264-001

   MARY ANN HUDSON MALCOLM    INDIGO MINERALS LLC      8/14/2007       1237    702    F91112      LA         Lincoln   

LA-RTN0264-002

   MARLONDA KENISE MALCOLM    INDIGO MINERALS LLC      8/14/2007       1237    705    F91113      LA         Lincoln   

LA-RTN0265-001

   CASCILE WOODARD WILDER, REPRESENTED    INDIGO MINERALS LLC      9/26/2007       1237    821    F91164      LA         Lincoln   

LA-RTN0265-002

   RICHARD DORSEY    INDIGO MINERALS LLC      6/24/2007       1237    823    F91165      LA         Lincoln   

LA-RTN0265-003

   REGINA WILDER    INDIGO MINERALS LLC      9/24/2007       1237    825    F91166      LA         Lincoln   

LA-RTN0265-004

   DELESHA WILDER POUNCY    INDIGO MINERALS LLC      10/4/2007       1237    827    F91167      LA         Lincoln   

LA-RTN0265-005

   NIKIA WILDER    INDIGO MINERALS LLC      5/21/2009       1278    404    F107854      LA         Lincoln   

LA-RTN0266-001

   FREDERICK ADAMS    INDIGO MINERALS LLC      10/3/2007       1238    116    F91234      LA         Lincoln   

LA-RTN0266-002

   WILLIAM E ADAMS    INDIGO MINERALS LLC      10/3/2007       1238    119    F91235      LA         Lincoln   

LA-RTN0266-003

   JESSIEL ADAMS EVANS    INDIGO MINERALS LLC      10/3/2007       1238    122    F91236      LA         Lincoln   

LA-RTN0266-004

   JOSEPH ADAMS    INDIGO MINERALS LLC      10/3/2007       1238    125    F91237      LA         Lincoln   

LA-RTN0266-005

   VIRGIA LEE ADAMS MOORE    INDIGO MINERALS LLC      10/3/2007       1238    128    F91238      LA         Lincoln   

LA-RTN0266-006

   SHARON ADAMS    INDIGO MINERALS LLC      2/21/2008       1244    615    F93943      LA         Lincoln   

LA-RTN0266-007

   CRAIG ADAMS    INDIGO MINERALS LLC      2/22/2008       1244    617    F93944      LA         Lincoln   


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST      County  

LA-RTN0266-008

   JOHN ADAMS    INDIGO MINERALS LLC      2/27/2008       1247    108    F94817      LA         Lincoln   

LA-RTN0266-009

   GRAYLEN ADAMS    INDIGO MINERALS LLC      2/21/2008       1247    105    F94816      LA         Lincoln   

LA-RTN0267-001

   WILLIE R SHELTON JR    INDIGO MINERALS LLC      8/16/2007       1237    688    F91107      LA         Lincoln   

LA-RTN0267-002

   ELSIE SHELTON MALCOLM    INDIGO MINERALS LLC      8/16/2007       1237    686    F91106      LA         Lincoln   

LA-RTN0268-001

   PHILIP D MAY, JR    INDIGO MINERALS LLC      10/24/2007       1238    152    F91251      LA         Lincoln   

LA-RTN0268-002

   GREGGORY O MAY    INDIGO MINERALS LLC      10/24/2007       1238    155    F91252      LA         Lincoln   

LA-RTN0268-003

   MILTON L MAY    INDIGO MINERALS LLC      10/24/2007       1238    158    F91253      LA         Lincoln   

LA-RTN0268-004

   GUSSIE L MAY    INDIGO MINERALS LLC      10/24/2007       1238    161    F91254      LA         Lincoln   

LA-RTN0268-005

   RICHARD C MAY    INDIGO MINERALS LLC      10/24/2007       1238    164    F91255      LA         Lincoln   

LA-RTN0269-001

   JOYCE AUGUSTINE ELMORE    INDIGO MINERALS LLC      9/4/2007       1237    723    F91121      LA         Lincoln   

LA-RTN0269-002

   EMILE MORRIS AUGUSTINE    INDIGO MINERALS LLC      9/6/2007       1237    725    F91122      LA         Lincoln   

LA-RTN0269-003

   JACQUELINE AUGUSTINE FOSTER    INDIGO MINERALS LLC      9/4/2007       1237    727    F91123      LA         Lincoln   

LA-RTN0269-004

   DONARDO AUGUSTINE    INDIGO MINERALS LLC      9/6/2007       1237    729    F91124      LA         Lincoln   

LA-RTN0269-005

   BARON RICHARD AUGUSTINE    INDIGO MINERALS LLC      9/6/2007       1237    731    F91125      LA         Lincoln   

LA-RTN0269-006

   JUDITH L DUREN    INDIGO MINERALS LLC      10/30/2007       1237    733    F91126      LA         Lincoln   

LA-RTN0270-001

   JAMES EARL WILLIAMS ET UX    INDIGO MINERALS LLC      9/19/2007       1237    840    F91172      LA         Lincoln   

LA-RTN0270-002

   MICHAEL FORD    INDIGO MINERALS LLC      11/26/2007       1258    18    F98795      LA         Lincoln   

LA-RTN0270-003

   DARRYL FORD    INDIGO MINERALS LLC      6/24/2008       1262    438    F100512      LA         Lincoln   

LA-RTN0271-001

   MILTON CANDLER    INDIGO MINERALS LLC      10/2/2007       1238    23    F91196      LA         Lincoln   
            1238    192    F91267      

LA-RTN0272-001

   WILLIE BELL SIMPSON JACKSON    INDIGO MINERALS LLC      11/2/2007       1238    194    F91268      LA         Lincoln   

LA-RTN0272-002

   EDNA BERNADENE JACKSON CARTER    INDIGO MINERALS LLC      12/7/2007       1241    797    F92825      LA         Lincoln   

LA-RTN0272-003

   OPAL WILLIAMS    INDIGO MINERALS LLC      11/7/2007       1241    799    F92826      LA         Lincoln   

LA-RTN0272-004

   RUDOLPH FELTON JACKSON    INDIGO MINERALS LLC      11/13/2007       1241    801    F92827      LA         Lincoln   

LA-RTN0272-005

   ALTON ROANE    INDIGO MINERALS LLC      12/12/2007       1241    803    F92828      LA         Lincoln   

LA-RTN0272-006

   RODNEY JACKSON    INDIGO MINERALS LLC      1/10/2008       1241    805    F92829      LA         Lincoln   

LA-RTN0272-007

   JERRELL SCOTT    INDIGO MINERALS LLC      1/15/2008       1241    807    F92830      LA         Lincoln   

LA-RTN0272-008

   RECIO JACKSON    INDIGO MINERALS LLC      1/4/2008       1241    809    F92831      LA         Lincoln   

LA-RTN0272-009

   HOWARD JACKSON    INDIGO MINERALS LLC      3/5/2008       1244    619    F93945      LA         Lincoln   

LA-RTN0272-010

   WILLIE GENE SCOTT    INDIGO MINERALS LLC      3/5/2008       1244    621    F93946      LA         Lincoln   

LA-RTN0272-011

   WILLIE JAMES SCOTT    INDIGO MINERALS LLC      3/5/2008       1244    623    F93947      LA         Lincoln   

LA-RTN0272-012

   CEDRICK S JACKSON    INDIGO MINERALS LLC      3/6/2008       1244    625    F93948      LA         Lincoln   

LA-RTN0272-013

   EVELYN JACKSON DEVINE    INDIGO MINERALS LLC      3/4/2008       1244    627    F93949      LA         Lincoln   

LA-RTN0272-014

   PATRICK M JOHNSON    INDIGO MINERALS LLC      1/31/2008       1244    629    F93950      LA         Lincoln   

LA-RTN0272-015

   TRACY L RICHARDSON    INDIGO MINERALS LLC      3/4/2008       1247    115    F94820      LA         Lincoln   

LA-RTN0272-016

   LYDIA S JACKSON    INDIGO MINERALS LLC      3/6/2008       1247    117    F94821      LA         Lincoln   

LA-RTN0272-017

   CLAUDE JACKSON    INDIGO MINERALS LLC      1/22/2008       1247    121    F94823      LA         Lincoln   

LA-RTN0272-018

   SHADONNA OLUGU    INDIGO MINERALS LLC      1/31/2008       1247    119    F94822      LA         Lincoln   

LA-RTN0272-019

   HAROLD EDWARD JACKSON    INDIGO MINERALS LLC      3/5/2008       1247    123    F94824      LA         Lincoln   

LA-RTN0272-020

   PHYLLIS J SMOOTS    INDIGO MINERALS LLC      3/4/2008       1247    125    F94825      LA         Lincoln   

LA-RTN0272-021

   STEVE JACKSON    INDIGO MINERALS LLC      3/10/2008       1252    216    F97115      LA         Lincoln   

LA-RTN0272-022

   CHRISTOPHER JACKSON    INDIGO MINERALS LLC      6/10/2008       1262    436    F100511      LA         Lincoln   

LA-RTN0272-023

   KATHY JACKSON ROSS    INDIGO MINERALS LLC      3/4/2008       1244    639    F93955      LA         Lincoln   

LA-RTN0272-024

   MARGE ALANA ADAMS    INDIGO MINERALS LLC      9/2/2009       1278    398    F107852      LA         Lincoln   

LA-RTN0272-025

   NORMAN O JACKSON JR    INDIGO MINERALS LLC      8/31/2009       1278    415    F107858      LA         Lincoln   

LA-RTN0272-026

   BRENDA ANN JACKSON    INDIGO MINERALS LLC      8/31/2009       1279    681    F108500      LA         Lincoln   

LA-RTN0272-027

   MAURICE DARVEZ JACKSON    INDIGO MINERALS LLC      10/12/2009       1279    690    F108503      LA         Lincoln   

LA-RTN0273-001

   JAMES C RICHARD    INDIGO MINERALS LLC      11/7/2007       1238    197    F91270      LA         Lincoln   

LA-RTN0273-002

   LAMAR RICHARD    INDIGO MINERALS LLC      11/7/2007       1241    811    F92832      LA         Lincoln   

LA-RTN0273-003

   THOMAS G RICHARD    INDIGO MINERALS LLC      11/12/2007       1241    813    F92833      LA         Lincoln   

LA-RTN0273-004

   PAMELA MADISON    INDIGO MINERALS LLC      11/7/2007       1241    815    F92834      LA         Lincoln   


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST      County  

LA-RTN0273-005

   JAMES R RICHARD    INDIGO MINERALS LLC      11/26/2007       1244    631    F93951      LA         Lincoln   

LA-RTN0274-001

   JAMES C RICHARD    INDIGO MINERALS LLC      11/7/2007       1238    199    F91271      LA         Lincoln   

LA-RTN0274-002

   LAMAR RICHARD    INDIGO MINERALS LLC      11/7/2007       1241    817    F92835      LA         Lincoln   

LA-RTN0274-003

   PAMELA MADISON    INDIGO MINERALS LLC      11/7/2007       1241    819    F92836      LA         Lincoln   

LA-RTN0274-004

   THOMAS G RICHARD    INDIGO MINERALS LLC      11/12/2007       1241    821    F92837      LA         Lincoln   

LA-RTN0274-005

   JAMES R RICHARD    INDIGO MINERALS LLC      11/26/2007       1241    823    F92838      LA         Lincoln   

LA-RTN0275-001

   EARNEST JEAN NELSON    INDIGO MINERALS LLC      11/5/2007       1238    201    F91272      LA         Lincoln   

LA-RTN0275-002

   KATTYE L GILES    INDIGO MINERALS LLC      11/5/2007       1241    825    F92839      LA         Lincoln   

LA-RTN0275-003

   VERNICE GILES    INDIGO MINERALS LLC      11/5/2007       1241    828    F92840      LA         Lincoln   

LA-RTN0276-001

   HURIE TOLSTON    INDIGO MINERALS LLC      11/15/2007       1238    221    F91282      LA         Lincoln   

LA-RTN0277-000

   CARRIE WOODARD WILLIAMS    INDIGO MINERALS LLC      10/22/2007       1238    131    F91239      LA         Lincoln   

LA-RTN0278-000

   IDELL MOORE SHELTON ET AL    INDIGO MINERALS LLC      11/7/2007       1238    208    F91275      LA         Lincoln   

LA-RTN0279-001

   REYNELL FORD WILLIAMS    INDIGO MINERALS LLC      11/8/2007       1241    830    F92841      LA         Lincoln   

LA-RTN0279-002

   MAVIS DENIA FORD PERRY HOOF    INDIGO MINERALS LLC      11/24/2007       1238    256    F91293      LA         Lincoln   

LA-RTN0279-003

   RONALD FORD    INDIGO MINERALS LLC      6/24/2008       1256    54    F98283      LA         Lincoln   

LA-RTN0280-000

   ANGELA RENAE HOUSTON    INDIGO MINERALS LLC      9/25/2007       1241    832    F92842      LA         Lincoln   

LA-RTN0281-001

   LENARD GAULDEN    INDIGO MINERALS LLC      11/19/2007       1238    258    F91294      LA         Lincoln   

LA-RTN0281-002

   FELECIA VANLANDINGHAM    INDIGO MINERALS LLC      11/14/2007       1238    261    F91295      LA         Lincoln   

LA-RTN0282-001

   PATRICIA MAY    INDIGO MINERALS LLC      11/30/2007       1238    264    F91296      LA         Lincoln   

LA-RTN0282-002

   DEBORAH JENKINS    INDIGO MINERALS LLC      11/30/2007       1238    266    F91297      LA         Lincoln   

LA-RTN0282-003

   JERRY BROWN    INDIGO MINERALS LLC      12/4/2007       1238    268    F91298      LA         Lincoln   

LA-RTN0282-004

   LORRAINE LEWIS    INDIGO MINERALS LLC      12/4/2007       1241    834    F92843      LA         Lincoln   

LA-RTN0282-005

   DARLENE WALLACE    INDIGO MINERALS LLC      11/30/2007       1241    836    F92844      LA         Lincoln   

LA-RTN0282-006

   JESSE BROWN    INDIGO MINERALS LLC      12/3/2007       1244    633    F93952      LA         Lincoln   

LA-RTN0282-007

   HENRY L BROWN    INDIGO MINERALS LLC      12/11/2007       1248    665    F95356      LA         Lincoln   

LA-RTN0282-008

   WILLARD BROWN JR    INDIGO MINERALS LLC      11/23/2009       1281    605    F109317      LA         Lincoln   

LA-RTN0283-001

   EDWARD T FOX JR    INDIGO MINERALS LLC      12/5/2007       1238    270    F91299      LA         Lincoln   

LA-RTN0284-001

   OTHA RAY BURKS, JR    INDIGO MINERALS LLC      11/28/2007       1238    272    F91300      LA         Lincoln   

LA-RTN0285-001

   CHARLES H OWENS    INDIGO MINERALS LLC      12/3/2007       1238    274    F91301      LA         Lincoln   

LA-RTN0285-002

   REGINALD OWENS    INDIGO MINERALS LLC      12/3/2007       1238    277    F91302      LA         Lincoln   

LA-RTN0285-003

   VERONICA OWENS    INDIGO MINERALS LLC      11/30/2007       1238    280    F91303      LA         Lincoln   

LA-RTN0285-004

   LANA SIMPSON    INDIGO MINERALS LLC      11/30/2007       1238    283    F91304      LA         Lincoln   

LA-RTN0285-005

   PREVIA OWENS    INDIGO MINERALS LLC      11/30/2007       1241    838    F92845      LA         Lincoln   

LA-RTN0285-006

   DON OWENS    INDIGO MINERALS LLC      11/30/2007       1241    841    F92846      LA         Lincoln   

LA-RTN0286-000

   BEVERLY FAYE SHERMAN ARCHIE    INDIGO MINERALS LLC      8/16/2007       1241    844    F92847      LA         Lincoln   

LA-RTN0287-000

   CATHERINE LEE HASSEN BOWDEN    INDIGO MINERALS LLC      10/3/2007       1241    847    F92848      LA         Lincoln   

LA-RTN0288-001

   ROBERT EARL CANNON    INDIGO MINERALS LLC      12/11/2007       1241    850    F92849      LA         Lincoln   

LA-RTN0288-002

   CHARLES GARR JR    INDIGO MINERALS LLC      12/4/2007       1242    1    F92850      LA         Lincoln   

LA-RTN0288-003

   KENNETH GARR    INDIGO MINERALS LLC      12/4/2007       1242    3    F92851      LA         Lincoln   

LA-RTN0288-004

   KIMBERLY GARR    INDIGO MINERALS LLC      12/4/2007       1242    5    F92852      LA         Lincoln   

LA-RTN0288-005

   EDWARD CANNON    INDIGO MINERALS LLC      12/14/2007       1260    25    F99501      LA         Lincoln   

LA-RTN0288-006

   HENRY EARL GARR    INDIGO MINERALS LLC      10/28/2008       1263    598    F100983      LA         Lincoln   

LA-RTN0289-000

   JESSIE JENKINS    INDIGO MINERALS LLC      12/18/2007       1242    7    F92853      LA         Lincoln   
            1242    009    F92854      
            1242    009    F92854      

LA-RTN0290-000

   WAFER CREEK RANCH LLC    INDIGO MINERALS LLC      12/10/2007       1242    009    F92854      LA         Lincoln   

LA-RTN0291-000

   ABIGAIL ELAINE ARMSTRONG    INDIGO MINERALS LLC      12/10/2007       1242    12    F92855      LA         Lincoln   

LA-RTN0292-001

   CHARLES GARR JR    INDIGO MINERALS LLC      12/4/2007       1242    15    F92856      LA         Lincoln   

LA-RTN0292-002

   KIMBERLY GARR    INDIGO MINERALS LLC      12/4/2007       1242    17    F92857      LA         Lincoln   

LA-RTN0292-003

   KENNETH GARR    INDIGO MINERALS LLC      12/4/2007       1242    19    F92858      LA         Lincoln   

LA-RTN0292-004

   HENRY EARL GARR    INDIGO MINERALS LLC      10/28/2008       1263    596    F100984      LA         Lincoln   


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0293-000

   TERRY P CHEEKS ET UX    INDIGO MINERALS LLC      8/29/2007       1242    21    F92859    LA    Lincoln

LA-RTN0294-001

   HOWARD JACKSON    INDIGO MINERALS LLC      1/7/2008       1242    23    F92860    LA    Lincoln

LA-RTN0294-002

   HAROLD JACKSON    INDIGO MINERALS LLC      1/7/2008       1242    25    F92861    LA    Lincoln

LA-RTN0294-003

   WILLIE JAMES SCOTT    INDIGO MINERALS LLC      1/7/2008       1242    27    F92862    LA    Lincoln

LA-RTN0294-004

   WILLIE GENE SCOTT    INDIGO MINERALS LLC      1/7/2008       1242    29    F92863    LA    Lincoln

LA-RTN0294-005

   JERRELL SCOTT    INDIGO MINERALS LLC      1/7/2008       1242    31    F92864    LA    Lincoln

LA-RTN0294-006

   EVELYN JACKSON DEVINE    INDIGO MINERALS LLC      1/7/2008       1242    33    F92865    LA    Lincoln

LA-RTN0294-007

   RODNEY JACKSON    INDIGO MINERALS LLC      1/7/2008       1242    35    F92866    LA    Lincoln

LA-RTN0294-008

   TRACY L RICHARDSON    INDIGO MINERALS LLC      1/7/2008       1244    635    F93953    LA    Lincoln

LA-RTN0294-009

   CEDRICK S JACKSON    INDIGO MINERALS LLC      3/6/2008       1244    637    F93954    LA    Lincoln

LA-RTN0294-010

   KATHY JACKSON ROSS    INDIGO MINERALS LLC      3/4/2008       1271    499    F104438    LA    Lincoln

LA-RTN0294-011

   LYDIA S JACKSON    INDIGO MINERALS LLC      3/6/2008       1247    132    F94828    LA    Lincoln

LA-RTN0294-012

   SHADONNA OLUGU    INDIGO MINERALS LLC      1/7/2008       1247    134    F94829    LA    Lincoln

LA-RTN0294-013

   PHYLLIS J SMOOTS    INDIGO MINERALS LLC      3/4/2008       1247    136    F94830    LA    Lincoln

LA-RTN0294-014

   RECIO JACKSON    INDIGO MINERALS LLC      4/16/2008       1250    681    F96371    LA    Lincoln

LA-RTN0294-015

   STEVE JACKSON    INDIGO MINERALS LLC      7/7/2008       1252    218    F97116    LA    Lincoln

LA-RTN0294-016

   CLAUDE F JACKSON    INDIGO MINERALS LLC      3/10/2008       1256    71    F98289    LA    Lincoln

LA-RTN0295-001

   RODNEY JACKSON    INDIGO MINERALS LLC      1/10/2008       1242    37    F92867    LA    Lincoln

LA-RTN0295-002

   RECIO JACKSON    INDIGO MINERALS LLC      1/4/2008       1242    39    F92868    LA    Lincoln

LA-RTN0296-000

   LEON SMITH ET UX    INDIGO MINERALS LLC      1/16/2008       1242    41    F92869    LA    Lincoln

LA-RTN0297-001

   LEON SMITH ET UX    INDIGO MINERALS LLC      1/16/2008       1242    45    F92870    LA    Lincoln

LA-RTN0297-002

   JOHN D BARABIN JR    INDIGO MINERALS LLC      1/16/2008       1242    49    F92871    LA    Lincoln

LA-RTN0298-001

   KATHIE G ANDERSON    INDIGO MINERALS LLC      1/23/2008       1242    53    F92872    LA    Lincoln

LA-RTN0298-002

   JENNIFER B HENDERSON    INDIGO MINERALS LLC      1/23/2008       1242    57    F92873    LA    Lincoln

LA-RTN0298-003

   ROSALIND HENDERSON HARRIS    INDIGO MINERALS LLC      1/23/2008       1242    61    F92874    LA    Lincoln

LA-RTN0299-001

   DENNIS DAVID OBANION    INDIGO MINERALS LLC      1/30/2008       1242    71    F92877    LA    Lincoln

LA-RTN0299-002

   NELWYN ANN OBANION BIRCH    INDIGO MINERALS LLC      10/26/2007       1242    74    F92878    LA    Lincoln

LA-RTN0300-000

   ALBERT GROVER GRAHAM ET UX    INDIGO MINERALS LLC      1/28/2008       1242    79    F92880    LA    Lincoln
            1242    81    F92881      
            1242    81    F92881      

LA-RTN0301-000

   ALBERT GROVER GRAHAM ET AL    INDIGO MINERALS LLC      1/28/2008       1242    81    F92881    LA    Lincoln

LA-RTN0302-001

   VANESSA KING    INDIGO MINERALS LLC      1/17/2008       1242    77    F92879    LA    Lincoln

LA-RTN0302-002

   LARRY FORD    INDIGO MINERALS LLC      1/17/2008       1244    641    F93956    LA    Lincoln

LA-RTN0303-000

   LOUIS C FORD    BETA LAND SERVICES LLC      8/11/2006       1222    359    F84858    LA    Lincoln

LA-RTN0304-000

   EDDIE JOE NELSON    BETA LAND SERVICES LLC      6/16/2006       1222    362    F84859    LA    Lincoln

LA-RTN0305-000

   WILLIS REED ET UX    BETA LAND SERVICES LLC      8/18/2006       1222    397    F84870    LA    Lincoln

LA-RTN0306-001

   RENNETH Y REED    BETA LAND SERVICES LLC      8/23/2006       1222    435    F84882    LA    Lincoln

LA-RTN0306-002

   DAISY REED HAMILTON    INDIGO MINERALS LLC      7/1/2009       1274    377    F105808    LA    Lincoln

LA-RTN0306-003

   ROSIE REED FLANIGAN    INDIGO MINERALS LLC      7/1/2009       1274    379    F105809    LA    Lincoln

LA-RTN0306-004

   CARRIE REED DEVAUGHN    INDIGO MINERALS LLC      7/1/2009       1274    381    F105810    LA    Lincoln

LA-RTN0306-005

   THEODORE MACEO REED    INDIGO MINERALS LLC      7/1/2009       1274    383    F105811    LA    Lincoln

LA-RTN0306-006

   TALMAGE BELANDA REED    INDIGO MINERALS LLC      7/1/2009       1274    385    F105812    LA    Lincoln

LA-RTN0306-007

   MARY DELORES GUNNELS    INDIGO MINERALS LLC      7/1/2009       1274    387    F105813    LA    Lincoln

LA-RTN0306-008

   CHARLENE DENISE WILLIAMS    INDIGO MINERALS LLC      7/1/2009       1274    389    F105814    LA    Lincoln

LA-RTN0306-009

   MICHAEL ANTHONY WILLIAMS    INDIGO MINERALS LLC      7/1/2009       1275    351    F106275    LA    Lincoln

LA-RTN0307-000

   MAVIS FORD HOOF    BETA LAND SERVICES LLC      11/17/2006       1222    507    F84904    LA    Lincoln

LA-RTN0308-000

   DENRICK EARL LEWIS ET UX    BETA LAND SERVICES LLC      8/10/2006       1222    356    F84857    LA    Lincoln

LA-RTN0309-000

   RITA DAVENPORT DAVIS ET AL    BETA LAND SERVICES LLC      7/27/2006       1222    323    F84847    LA    Lincoln

LA-RTN0310-000

   HOWARD LEE BROWN, ET UX    BETA LAND SERVICES LLC      6/21/2006       1222    272    F84831    LA    Lincoln

LA-RTN0311-000

   KYLE SCOTT DAVENPORT    BETA LAND SERVICES LLC      7/28/2006       1222    438    F84883    LA    Lincoln

LA-RTN0312-001

   PRISCILLA HEARD BOWMAN    BETA LAND SERVICES LLC      4/13/2006       1221    850    F84752    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0312-002

   DR JOHN M ARMSTRONG III    BETA LAND SERVICES LLC      4/13/2006       1222    1    F84753    LA    Lincoln

LA-RTN0312-003

   THE BROWNLAND CORPORATION    BETA LAND SERVICES LLC      4/20/2006       1222    5    F84754    LA    Lincoln

LA-RTN0312-004

   MARY ELEANOR HARRIS TEMPLE    BETA LAND SERVICES LLC      4/27/2006       1222    9    F84755    LA    Lincoln

LA-RTN0312-005

   ELEANOR H BROWN    BETA LAND SERVICES LLC      4/27/2006       1222    14    F84756    LA    Lincoln

LA-RTN0312-006

   CARRIE LEE HEARD LINK    BETA LAND SERVICES LLC      5/3/2006       1222    19    F84757    LA    Lincoln

LA-RTN0312-007

   ALICE HEARD    BETA LAND SERVICES LLC      5/3/2006       1222    23    F84758    LA    Lincoln

LA-RTN0312-008

   MELANIE CARSON HARRIS ZACHRY    BETA LAND SERVICES LLC      9/21/2006       1222    27    F84759    LA    Lincoln

LA-RTN0313-001

   WILLIAM L GARNER JR    INDIGO MINERALS LLC      1/23/2008       1242    65    F92875    LA    Lincoln

LA-RTN0313-002

   MIRIAM GARNER ANTOINE    INDIGO MINERALS LLC      1/23/2008       1242    68    F92876    LA    Lincoln

LA-RTN0314-000

   ALICE OSBORNE DANNER    INDIGO MINERALS LLC      1/29/2008       1244    643    F93957    LA    Lincoln

LA-RTN0315-001

   CONNIE CANDLER    INDIGO MINERALS LLC      11/30/2007       1244    645    F93958    LA    Lincoln

LA-RTN0315-002

   BETTY CANDLER    INDIGO MINERALS LLC      11/30/2007       1247    138    F94831    LA    Lincoln

LA-RTN0315-003

   GRACIE TAYLOR    INDIGO MINERALS LLC      11/30/2007       1247    140    F94832    LA    Lincoln

LA-RTN0315-004

   JACKIE PHILLIPS    INDIGO MINERALS LLC      11/30/2007       1247    142    F94833    LA    Lincoln

LA-RTN0315-005

   GERRY CANDLER    INDIGO MINERALS LLC      11/30/2007       1251    585    F96839    LA    Lincoln

LA-RTN0316-001

   MARY FRANCES COMBS    INDIGO MINERALS LLC      3/6/2008       1244    647    F93959    LA    Lincoln

LA-RTN0316-002

   CORENE CAMP    INDIGO MINERALS LLC      3/6/2008       1244    649    F93960    LA    Lincoln

LA-RTN0316-003

   GEORGE COLEMAN JR    INDIGO MINERALS LLC      3/6/2008       1244    651    F93961    LA    Lincoln

LA-RTN0316-004

   LASHAWN MIGGINS    INDIGO MINERALS LLC      3/6/2008       1244    653    F93962    LA    Lincoln

LA-RTN0316-005

   ANNETTE HOLLOWAY    INDIGO MINERALS LLC      3/6/2008       1247    144    F94834    LA    Lincoln

LA-RTN0316-006

   YVONNE HARRIS    INDIGO MINERALS LLC      3/6/2008       1247    147    F94835    LA    Lincoln

LA-RTN0316-007

   BARBARA MORGAN    INDIGO MINERALS LLC      3/6/2008       1247    150    F94836    LA    Lincoln

LA-RTN0316-008

   ROBERT COLEMAN    INDIGO MINERALS LLC      3/6/2008       1250    683    F96372    LA    Lincoln

LA-RTN0316-009

   IDA TIMES    INDIGO MINERALS LLC      3/6/2008       1252    220    F97117    LA    Lincoln

LA-RTN0317-000

   RUEBEN ANTON BAKKAR    INDIGO MINERALS LLC      1/28/2008       1244    655    F93963    LA    Lincoln

LA-RTN0318-000

   ALFRED WAYNE WHITE ET UX    INDIGO MINERALS LLC      3/18/2008       1247    152    F94837    LA    Lincoln

LA-RTN0319-000

   P B COLVIN, JR ET UX    CARROLLTON RESOURCES CORPORATION      9/13/1996       979    179    87317    LA    Lincoln

LA-RTN0320-000

   DAVID TINDALL III    INDIGO MINERALS LLC      1/24/2008       1247    156    F94838    LA    Lincoln

LA-RTN0321-001

   SAMANTHA ANDRADA    INDIGO MINERALS LLC      5/5/2008       1250    685    F96373    LA    Lincoln

LA-RTN0321-002

   BILLY RAY WASHINGTON    INDIGO MINERALS LLC      1/20/2009       1267    774    F102705    LA    Lincoln

LA-RTN0321-003

   JESSIE WASHINGTON    INDIGO MINERALS LLC      4/27/2009       1274    369    F105805    LA    Lincoln

LA-RTN0322-000

   HAROLD ALBRITTON    INDIGO MINERALS LLC      6/18/2008       1251    587    F96840    LA    Lincoln

LA-RTN0323-001

   CHARLES EDMOND CANNON    INDIGO MINERALS LLC      7/7/2008       1252    222    F97118    LA    Lincoln

LA-RTN0323-002

   JOE ANN CANNON MCCOY    INDIGO MINERALS LLC      7/7/2008       1252    225    F97119    LA    Lincoln

LA-RTN0323-003

   GLORIA MARIE CANNON ALLEN    INDIGO MINERALS LLC      7/7/2008       1252    228    F97120    LA    Lincoln

LA-RTN0323-004

   ANNA ROY CANNON FULLER    INDIGO MINERALS LLC      7/7/2008       1252    231    F97121    LA    Lincoln

LA-RTN0323-005

   VERNON CANNON    INDIGO MINERALS LLC      7/7/2008       1252    234    F97122    LA    Lincoln

LA-RTN0323-006

   LEROY CANNON JR    INDIGO MINERALS LLC      7/7/2008       1256    56    F98284    LA    Lincoln

LA-RTN0323-007

   ELTON CANNON    INDIGO MINERALS LLC      7/7/2008       1256    59    F98285    LA    Lincoln

LA-RTN0323-008

   FREDERICK CANNON    INDIGO MINERALS LLC      7/7/2008       1256    64    F98286    LA    Lincoln

LA-RTN0323-009

   FRANCES ELAINE CANNON WALKER    INDIGO MINERALS LLC      7/11/2008       1256    65    F98287    LA    Lincoln

LA-RTN0323-010

   CAROL LEE CANNON WILLIAMS    INDIGO MINERALS LLC      7/11/2008       1256    68    F98288    LA    Lincoln

LA-RTN0323-011

   TONYA HICKS    INDIGO MINERALS LLC      11/19/2008       1263    751    F101053    LA    Lincoln

LA-RTN0323-012

   MARIE HARRIS    INDIGO MINERALS LLC      11/19/2008       1263    741    F101050    LA    Lincoln

LA-RTN0323-013

   EDWARD CANNON    INDIGO MINERALS LLC      11/19/2008       1263    744    F101051    LA    Lincoln

LA-RTN0323-014

   GERALDINE SAMPRACT    INDIGO MINERALS LLC      11/19/2008       1263    748    F101052    LA    Lincoln

LA-RTN0323-015

   O B GLADYNESS    INDIGO MINERALS LLC      11/19/2008       1264    169    F101171    LA    Lincoln

LA-RTN0323-016

   RUBY CANNON POOLE    INDIGO MINERALS LLC      11/19/2008       1264    172    F101172    LA    Lincoln

LA-RTN0323-017

   VASIA HOUSTON    INDIGO MINERALS LLC      11/19/2008       1264    500    F101307    LA    Lincoln

LA-RTN0323-018

   PAULINE METCALF    INDIGO MINERALS LLC      11/19/2008       1264    503    F101308    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0323-019

   JERRY SAMPRACT    INDIGO MINERALS LLC      11/19/2008       1265    251    F101570    LA    Lincoln

LA-RTN0323-020

   PATRICIA PALMER    INDIGO MINERALS LLC      11/19/2008       1265    254    F101571    LA    Lincoln

LA-RTN0323-021

   ROBERT CANNON    INDIGO MINERALS LLC      11/19/2008       1265    615    F101727    LA    Lincoln

LA-RTN0323-022

   ETHEN J WILLIS JR    INDIGO MINERALS LLC      11/19/2008       1265    612    F101726    LA    Lincoln

LA-RTN0323-023

   SAMUEL HICKS    INDIGO MINERALS LLC      11/19/2008       1266    13    F101869    LA    Lincoln

LA-RTN0323-024

   REGINA L DYKES    INDIGO MINERALS LLC      11/19/2008       1266    16    F101870    LA    Lincoln

LA-RTN0323-025

   DAVID GLADYNESS    INDIGO MINERALS LLC      11/19/2008       1266    19    F101871    LA    Lincoln

LA-RTN0323-026

   CHARLES EDWARD CANNON    INDIGO MINERALS LLC      11/19/2008       1266    696    F102197    LA    Lincoln

LA-RTN0323-027

   JENNIFER SIMS    INDIGO MINERALS LLC      11/19/2008       1267    102    F102363    LA    Lincoln

LA-RTN0323-028

   LINDA HONORE WALDON    INDIGO MINERALS LLC      11/19/2008       1269    66    F103185    LA    Lincoln

LA-RTN0323-029

   STACEE LACOUR    INDIGO MINERALS LLC      11/19/2008       1269    69    F103186    LA    Lincoln

LA-RTN0323-030

   DARRELL LACOUR    INDIGO MINERALS LLC      11/19/2008       1269    72    F103187    LA    Lincoln

LA-RTN0323-031

   GREGORY LACOUR    INDIGO MINERALS LLC      11/19/2008       1269    75    F103188    LA    Lincoln

LA-RTN0323-032

   SAMANTHA LACOUR-WILLIAMS    INDIGO MINERALS LLC      11/19/2008       1269    78    F103189    LA    Lincoln

LA-RTN0323-033

   FREDDIE GLADYNESS    INDIGO MINERALS LLC      11/19/2008       1269    652    F103486    LA    Lincoln

LA-RTN0323-034

   KRISTIAN LOVE    INDIGO MINERALS LLC      11/19/2008       1270    400    F103871    LA    Lincoln

LA-RTN0323-035

   CONNIE CLARK LEE    INDIGO MINERALS LLC      11/19/2008       1274    87    F105602    LA    Lincoln

LA-RTN0324-001

   LAJUANTA DIANE GAULDEN    INDIGO MINERALS LLC      12/16/2008       1265    257    F101572    LA    Lincoln

LA-RTN0324-002

   MICHAEL A UNDERWOOD    INDIGO MINERALS LLC      12/16/2008       1266    699    F102198    LA    Lincoln

LA-RTN0324-003

   BARRY W UNDERWOOD    INDIGO MINERALS LLC      12/16/2008       1267    105    F102364    LA    Lincoln

LA-RTN0325-000

   ROBERT HILL    INDIGO MINERALS LLC      1/22/2009       1267    107    F102365    LA    Lincoln

LA-RTN0326-001

   DEBORAH DENISE PARNELL WISTERMAN    INDIGO MINERALS LLC      2/9/2009       1267    778    F102706    LA    Lincoln

LA-RTN0326-002

   AMY C PARNELL    INDIGO MINERALS LLC      4/20/2009       1271    392    F104373    LA    Lincoln

LA-RTN0327-000

   JASON HAMBLIN ET UX    INDIGO MINERALS LLC      2/12/2009       1267    781    F102707    LA    Lincoln

LA-RTN0328-000

   CHRISTOPHER HEATH WILLIAMS    INDIGO MINERALS LLC      2/12/2009       1267    784    F102708    LA    Lincoln

LA-RTN0329-000

   JAMES EDWARD PATTON ET UX    INDIGO MINERALS LLC      3/17/2009       1269    711    F103539    LA    Lincoln

LA-RTN0330-000

   JILL MARIA BORDELON    INDIGO MINERALS LLC      3/31/2009       1270    294    F103818    LA    Lincoln

LA-RTN0331-000

   JERRY WAYNE WARD ET UX    INDIGO MINERALS LLC      3/31/2009       1270    292    F103817    LA    Lincoln

LA-RTN0332-001

   JAMES H ROLAND ET UX    INDIGO MINERALS LLC      3/24/2009       1270    818    F104097    LA    Lincoln

LA-RTN0333-000

   DIANNA MCNAIR DILLY ET VIR    INDIGO MINERALS LLC      4/3/2009       1271    394    F104374    LA    Lincoln

LA-RTN0334-000

   DEWAYNE BERNALDO WARREN ET UX    INDIGO MINERALS LLC      4/3/2009       1271    387    F104371    LA    Lincoln

LA-RTN0335-001

   WOODROW A DEAN ET UX    INDIGO MINERALS LLC      3/24/2009       1270    816    F104096    LA    Lincoln

LA-RTN0336-001

   JAMES H ROLAND ET UX    INDIGO MINERALS LLC      3/24/2009                LA    Lincoln

LA-RTN0337-000

   WILLIE THOMAS BRATTON ET UX    INDIGO MINERALS LLC      5/6/2009       1274    375    F105807    LA    Lincoln

LA-RTN0338-000

   MARY STEELE ARNOLD MOEGLE ET VIR    INDIGO MINERALS LLC      3/31/2009       1275    364    F106280    LA    Lincoln

LA-RTN0339-001

   GARDNER CLARK    INDIGO MINERALS LLC      6/29/2009       1275    369    F106282    LA    Lincoln

LA-RTN0339-002

   ELAINE BUSHNELL CLARK    INDIGO MINERALS LLC      6/29/2009       1275    367    F106281    LA    Lincoln

LA-RTN0340-001

   CHARLES MILTON FULLER JR    INDIGO MINERALS LLC      7/7/2009       1275    388    F106289    LA    Lincoln

LA-RTN0340-002

   GLORIA GENNETT FULLER PEARSON    INDIGO MINERALS LLC      7/7/2009       1275    382    F106287    LA    Lincoln

LA-RTN0340-003

   TANYA ESTELLE FULLER DAVIS    INDIGO MINERALS LLC      7/7/2009       1275    385    F106288    LA    Lincoln

LA-RTN0340-004

   GEORGE JAMES FULLER    INDIGO MINERALS LLC      7/7/2009       1275    379    F106286    LA    Lincoln

LA-RTN0340-005

   BETTY H FULLER    INDIGO MINERALS LLC      7/7/2009       1275    376    F106285    LA    Lincoln

LA-RTN0341-001

   FRED GOLDSMITH    INDIGO MINERALS LLC      6/29/2009       1275    371    F106283    LA    Lincoln

LA-RTN0341-002

   MATTIE L GOLDSMITH    INDIGO MINERALS LLC      6/29/2009       1275    373    F106284    LA    Lincoln

LA-RTN0341-003

   DORA MAE GOLDSMITH HARBER    INDIGO MINERALS LLC      7/15/2009       1276    596    F106903    LA    Lincoln

LA-RTN0342-001

   GREGORY L MCCLAM    INDIGO MINERALS LLC      7/3/2009       1276    599    F106904    LA    Lincoln

LA-RTN0342-002

   KAREN D MCCLAM REYNOLDS    INDIGO MINERALS LLC      7/3/2009       1276    603    F106906    LA    Lincoln

LA-RTN0342-003

   IRIS D MCCLAM MORGAN    INDIGO MINERALS LLC      7/3/2009       1276    607    F106908    LA    Lincoln

LA-RTN0342-004

   MURIEL MCCLAM HOLLIMON    INDIGO MINERALS LLC      7/3/2009       1276    605    F106907    LA    Lincoln

LA-RTN0342-005

   DONNA MCCLAM WHITE    INDIGO MINERALS LLC      7/3/2009       1276    618    F106912    LA    Lincoln

LA-RTN0342-006

   JEANETTE MCCLAM COX    INDIGO MINERALS LLC      7/3/2009       1276    601    F106905    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-RTN0342-007

   MONIQUE MCCLAM    INDIGO MINERALS LLC      7/3/2009       1276    587    F106899    LA    Lincoln

LA-RTN0342-008

   ZENOBIA R MCCLAM LEWIS    INDIGO MINERALS LLC      6/17/2009       1276    589    F106900    LA    Lincoln

LA-RTN0343-000

   MIKE COLEMAN OSBORNE JR    INDIGO MINERALS LLC      11/19/2009       1280    575    F108817    LA    Lincoln
            1279    687    F108502      

LA-RTN0344-001

   ROBERT HOUSTON    INDIGO MINERALS LLC      10/27/2009                LA    Lincoln
            1281    594    F109315      

LA-RTN0344-002

   JASHONTRA L SLAUGHTER    INDIGO MINERALS LLC      11/4/2009                LA    Lincoln
            1281    609    F109318      

LA-RTN0344-003

   LAQUANTRA L SLAUGHTER    INDIGO MINERALS LLC      11/4/2009                LA    Lincoln
            1285    688    F111241      

LA-RTN0344-004

   ORIA JOHNSON HOUSTON, IND & USUFRUCT    INDIGO MINERALS LLC      10/27/2009                LA    Lincoln

LA-RTN0345-001

   ROBERT D OSBORNE    INDIGO MINERALS LLC      1/13/2010       1281    587    F109312    LA    Lincoln

LA-RTN0345-002

   ORA LEE OSBORNE WILLIAMS    INDIGO MINERALS LLC      1/13/2010       1281    585    F109311    LA    Lincoln

LA-RTN0345-003

   KISSIE A TRAVELER    INDIGO MINERALS LLC      1/13/2010       1283    622    F110204    LA    Lincoln

LA-RTN0345-004

   ODIS D OSBORNE    INDIGO MINERALS LLC      1/13/2010       1283    625    F110205    LA    Lincoln

LA-RTN0345-005

   GEORGE A OSBORNE    INDIGO MINERALS LLC      1/13/2010       1283    636    F110209    LA    Lincoln

LA-RTN0346-000

   CECIL A HOOD ET UX    INDIGO MINERALS LLC      8/13/2007       1237    624    F91084    LA    Lincoln

LA-RTN0347-000

   BOBBY GENE YOUNG    INDIGO MINERALS LLC      10/1/2009       1282    31    F109445    LA    Lincoln

LA-RTN0348-000

   WILLIAM L GARNER JR    INDIGO MINERALS LLC      5/21/2010       1287    141    F111720    LA    Lincoln

LA-RTN0349-001

   MARY ELEANOR HARRIS TEMPLE    CSC ENERGY CORP      10/25/2004       1167    327    F60403    LA    Lincoln

LA-RTN0349-002

   MELANIE CARSON HARRIS ZACHRY    CSC ENERGY CORP      10/25/2004       1167    339    F60407    LA    Lincoln

LA-RTN0349-003

   THE BROWNLAND CORPORATION ET AL    CSC ENERGY CORP      10/28/2004       1167    324    F60402    LA    Lincoln

LA-RTN0349-004

   ANNA THERESA PAPPA KERN    CSC ENERGY CORP      10/25/2004       1167    342    F60408    LA    Lincoln

LA-RTN0349-005

   JOHNNY ROY PAPPA    CSC ENERGY CORP      10/25/2004       1167    321    F60401    LA    Lincoln

LA-RTN0349-006

   CARRIE LEE HEARD LINK    CSC ENERGY CORP      10/25/2004       1167    330    F60404    LA    Lincoln

LA-RTN0349-007

   PRISCILLA HEARD BOWMAN    CSC ENERGY CORP      10/25/2004       1167    333    F60405    LA    Lincoln

LA-RTN0349-008

   ALICE HEARD    CSC ENERGY CORP      10/25/2004       1167    336    F60406    LA    Lincoln

LA-RTN0349-009

   JOHN M ARMSTRONG JR    CSC ENERGY CORP      11/10/2004       1167    318    F60400    LA    Lincoln

LA-RTN0350-001

   VIRGINIA BAILEY SELLE    CSC ENERGY CORP      10/25/2004       1167    347    F60410    LA    Lincoln

LA-RTN0350-002

   ELLIS CARROLL BAILEY    CSC ENERGY CORP      10/25/2004       1167    349    F60411    LA    Lincoln

LA-RTN0350-003

   GEFFREY WAYNE FORRESTER    CSC ENERGY CORP      10/25/2004       1167    345    F60409    LA    Lincoln

LA-RTN0377-000

   SANDRA KILGORE WILLIAMSON ET AL    WILDHORSE RESOURCES LLC      2/21/2011       1296    518    F116295    LA    Lincoln

LA-RTN0378-001

   JAMES H KILGORE ET AL    WILDHORSE RESOURCES LLC      2/21/2011       1296    523    F116296    LA    Lincoln

LA-SBW0001-000

   NORA ELIZABETH HIGDON ROGERS    COWGILL & ASSOCIATES L L C      8/19/1997       1020    347    3805    LA    Lincoln
   AVIS JOY HIGDON BARRETT                     
   THE TRUST COMPANY OF LOUISIANA ACTING AS                     

LA-SBW0002-000

   LIMITED CURATOR    COWGILL & ASSOCIATES L L C      7/2/1998       1029    137    F5675    LA    Lincoln

LA-SBW0003-001

   DONALD MARSHALL    COWGILL & ASSOCIATES L L C      2/9/1998       1029    154    F5680    LA    Lincoln

LA-SBW0003-002

   JANIE R LYNN    COWGILL & ASSOCIATES L L C      2/9/1998       1029    150    F5679    LA    Lincoln

LA-SBW0003-003

   JOANNE MAYO    COWGILL & ASSOCIATES L L C      2/9/1998       1029    162    F5682    LA    Lincoln
   HELEN JANE MARSHALL JORDON                     

LA-SBW0003-004

   A/K/A HELEN JANE APPLE    COWGILL & ASSOCIATES L L C      2/9/1998       1020    329    3800    LA    Lincoln

LA-SBW0003-005

   HILDA MARSHALL HUDEC    COWGILL & ASSOCIATES L L C      2/9/1998       1020    322    3798    LA    Lincoln

LA-SBW0003-006

   JOYCE WILLIAMS    COWGILL & ASSOCIATES L L C      2/9/1998       1022    21    4062    LA    Lincoln

LA-SBW0003-007

   JAN BYERS    COWGILL & ASSOCIATES L L C      2/9/1998       1020    272    3784    LA    Lincoln

LA-SBW0003-008

   FAYE BATCHELOR    COWGILL & ASSOCIATES L L C      2/9/1998       1029    158    F5681    LA    Lincoln

LA-SBW0003-009

   MAYE FRANCIS MARSHALL BUCHANAN    COWGILL & ASSOCIATES L L C      2/9/1998       1020    268    3783    LA    Lincoln

LA-SBW0003-010

   JEFFERY STOLET    COWGILL & ASSOCIATES L L C      5/3/1999       1061    325    13530    LA    Lincoln

LA-SBW0003-011

   CLIFFORD E MARSHALL    COWGILL & ASSOCIATES L L C      9/23/1999       1075    245       LA    Lincoln

LA-SBW0004-001

   CAROLINE LOUISE DUNN BOWMAN    COWGILL & ASSOCIATES L L C      2/9/1998       1020    266    3782    LA    Lincoln

LA-SBW0004-002

   LOU ORIEL DUNN SMITH    COWGILL & ASSOCIATES L L C      2/9/1998       1021    4    3807    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0004-003

   AGNES DUNN SUDDS    COWGILL & ASSOCIATES L L C      2/9/1998       1021    14    3810    LA    Lincoln

LA-SBW0004-004

   DELLA RUTH DUNN POWELL    COWGILL & ASSOCIATES L L C      2/9/1998       1020    344    3804    LA    Lincoln
   BENJAMIN DUNN ET AL                     

LA-SBW0004-005

   KEITH CONRAD DUNN    COWGILL & ASSOCIATES L L C      2/9/1998       1020    288    3788    LA    Lincoln

LA-SBW0004-006

   JOHN ARTHUR DUNN    COWGILL & ASSOCIATES L L C      2/9/1998       1020    305    3793    LA    Lincoln

LA-SBW0004-007

   CALDWELL DUNN    COWGILL & ASSOCIATES L L C      2/9/1998       1020    296    3790    LA    Lincoln

LA-SBW0004-008

   ODESSA HARRISON DUNN    COWGILL & ASSOCIATES L L C      2/9/1998       1020    308    3794    LA    Lincoln

LA-SBW0004-009

   PRENTICE HARRISON    COWGILL & ASSOCIATES L L C      2/20/1998       1020    319    3797    LA    Lincoln
            60    21         
            60    21         

LA-SBW0005-001

   JAMES H NAPPER ET AL    PLYMOUTH OIL COMPANY      12/19/1957       60    21       LA    Lincoln
            1054    212    011672      

LA-SBW0005-002

   JAMES C SKINNER    COWGILL & ASSOCIATES L L C      12/3/1998       1054    212    011672    LA    Lincoln
            1054    208    011671      

LA-SBW0005-003

   DAVID S SKINNER    COWGILL & ASSOCIATES L L C      12/3/1998       1054    208    011671    LA    Lincoln
            1054    201    011669      

LA-SBW0005-004

   LEE ROY SKINNER    COWGILL & ASSOCIATES L L C      12/3/1998       1054    201    011669    LA    Lincoln
            1061    315         
            1072    168         
            1061    315         

LA-SBW0005-005

   LINDA SUE HENRY    COWGILL & ASSOCIATES L L C      4/30/1999       1072    168       LA    Lincoln
            1072    164    016295      
            1072    164    016295      

LA-SBW0005-006

   KATHRYNE RENEE CARAWAY    COWGILL & ASSOCIATES L L C      8/19/1999       1072    164    016295    LA    Lincoln
            1073    183    016482      
            1073    183    016482      

LA-SBW0005-007

   LLOYD B CARAWAY    COWGILL & ASSOCIATES L L C      8/19/1999       1073    183    016482    LA    Lincoln
            1072    160    016294      
            1072    160    016294      

LA-SBW0005-008

   CHARLES W DAVENPORT    COWGILL & ASSOCIATES L L C      8/19/1999       1072    160    016294    LA    Lincoln
            1070    127         
            1070    127         

LA-SBW0005-009

   GENEVA LEGE    COWGILL & ASSOCIATES L L C      8/19/1999       1070    127       LA    Lincoln

LA-SBW0007-002

   SELMA R SUMLIN    COWGILL & ASSOCIATES L L C      2/9/1998       1021    17    3811    LA    Lincoln
            1045    83    009738      
            1045    83    009738      

LA-SBW0007-004

   MICKEY H SUMRALL    COWGILL & ASSOCIATES L L C      10/27/1998       1045    83    009738    LA    Lincoln
            1063    125    013910      
            1063    125    013910      

LA-SBW0007-005

   CAROLYN JEAN BOLT AKA CAROLYN BOLT SUMRALL    STEPHEN M JENKINS & ASSOC      6/15/1999       1063    125    013910    LA    Lincoln

LA-SBW0007-P01

   WILLIAM R SUMLIN JR    COWGILL & ASSOCIATES L L C      2/9/1998       1021    20    3812    LA    Lincoln

LA-SBW0007-P03

   COWGILL & ASSOCIATES L L C    COWGILL & ASSOCIATES, L.L.C.      2/9/1998       1020    281    3786    LA    Lincoln

LA-SBW0007-P06

   ESSERLEAN GOREE ROUGELEY    COWGILL & ASSOCIATES L L C      2/24/1999       1054    205    11670    LA    Lincoln

LA-SBW0008-001

   T L LIVINGSTON    COWGILL & ASSOCIATES L L C      2/10/1998       1020    337    3802    LA    Lincoln

LA-SBW0008-002

   T L LIVINGSTON II AKA TILLMAN L LIVINGSTION II    COWGILL & ASSOCIATES L L C      12/16/1998       1044    341    9655    LA    Lincoln

LA-SBW0008-003

   CARL E DELONEY JR    COWGILL & ASSOCIATES L L C      4/3/1998       1029    144    F5677    LA    Lincoln

LA-SBW0008-004

   LISA DELONEY    COWGILL & ASSOCIATES L L C      4/3/1998       1029    147    F5678    LA    Lincoln

LA-SBW0008-005

   ROBERT EARNEST LIVINGSTON    COWGILL & ASSOCIATES L L C      5/25/1999       1063    120    13909    LA    Lincoln

LA-SBW0008-006

   BOOKER TELEFERRIO LIVINGSTON    COWGILL & ASSOCIATES L L C      5/25/1999       1063    115    13908    LA    Lincoln

LA-SBW0008-007

   BARBARA JEAN LIVINGSTON BANKSTON    COWGILL & ASSOCIATES L L C      5/25/1999       1063    110    13907    LA    Lincoln

LA-SBW0008-008

   GLORIA DEAN DELONEY POTTS    COWGILL & ASSOCIATES L L C      7/16/1999       1069    346    15534    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
LA-SBW0008-009    ELOUISE DELONEY MCMULLEN    COWGILL & ASSOCIATES L L C      7/16/1999       1069    349    15535    LA    Lincoln
LA-SBW0009-000    GEORGE J HYMON ET AL    COWGILL & ASSOCIATESL L C      1/26/1998       1020    326    3799    LA    Lincoln
            1020    314    003796      
LA-SBW0010-001    REL L GRAY ET AL    COWGILL & ASSOCIATES LLC      2/9/1998       1020    314    003796    LA    Lincoln
            1020    276    003785      
            1308    304    F121523      
            1020    276    003785      
            1308    304    F121523      
            1020    276    003785      
            1308    304    F121523      
            1020    276    003785      
LA-SBW0010-002    KENNETH W CAMPBELL    COWGILL & ASSOCIATES, L.L.C.      2/13/1998       1308    304    F121523    LA    Lincoln
LA-SBW0012-000    LINCOLN RENTALS INC    COWGILL & ASSOCIATES L L C      7/30/1997       1020    333    3801    LA    Lincoln
LA-SBW0013-001    MALVIN STAFF AND RUTH STAFF    COWGILL & ASSOCIATES L L C      7/26/1997       1021    10    3809    LA    Lincoln
LA-SBW0013-002    SADIE PEARL ALLEN LUDLEY ET VIR    COWGILL & ASSOCIATES L L C      7/26/1997       1020    340    3803    LA    Lincoln
LA-SBW0014-000    ARMORZELL COLEMAN CARTER    COWGILL & ASSOCIATES L L C      8/2/1997       1020    204    3787    LA    Lincoln
LA-SBW0015-000    ELEANOR HARRIS BROWN ET AL    COWGILL & ASSOCIATES L L C      11/1/1997       1022    25    4063    LA    Lincoln
            1020    311    003795      
            1020    311    003795      
            1020    311    003795      
LA-SBW0019-001    VESTA MAE WILLIAMS GANT    COWGILL & ASSOCIATES L L C      2/13/1998       1020    311    003795    LA    Lincoln
            1061    17    013237      
            1061    17    013237      
LA-SBW0019-002    JOHN M HOOD    COWGILL & ASSOCIATES L L C      5/28/1999       1061    17    013237    LA    Lincoln
            1061    321    013529      
LA-SBW0019-003    ANNA MAE WILLIAMS JACKSON    COWGILL & ASSOCIATES L L C      2/23/1999       1061    321    013529    LA    Lincoln
LA-SBW0019-004    ANNA MAE WILLIAMS JACKSON    KCS MEDALLION RESOURCES INC      8/1/2001       1125    847    33821    LA    Lincoln
            1020    299    003791      
LA-SBW0019-005    CALDWELL DUNN ET UX    COWGILL & ASSOCIATES L L C      2/9/1998       1020    299    003791    LA    Lincoln
            1029    141    F5676      
            1029    141    F5676      
LA-SBW0020-001    DIANE E ARRINGTON    COWGILL & ASSOCIATES L L C      2/13/1998       1029    141    F5676    LA    Lincoln
            1020    257    003779      
            1020    257    003779      
LA-SBW0020-002    DARRYL J ARRINGTON    COWGILL & ASSOCIATES L L C      2/13/1998       1020    257    003779    LA    Lincoln
            1020    302    003792      
LA-SBW0020-003    CALDWELL DUNN ET UX    COWGILL & ASSOCIATES L L C      2/9/1998       1020    302    003792    LA    Lincoln
            1021    1    003806      
LA-SBW0020-004    LAURA ARRINGTON ROSE    COWGILL & ASSOCIATES L L C      2/13/1998       1021    1    003806    LA    Lincoln
            1020    260    003780      
LA-SBW0020-005    JOHN D ARRINGTON JR    COWGILL & ASSOCIATES L L C      2/13/1998       1020    260    003780    LA    Lincoln
            1020    263    003781      
LA-SBW0020-006    WANDA ARRINGTON AKOREDE ET AL CALDWELL DUNN AND ELAINE WOODWARD DUNN H/W    COWGILL & ASSOCIATES L L C      2/13/1998       1020
1020
   263
291
   003781
003789
   LA    Lincoln
LA-SBW0020-007    ELAINE WOODWARD DUNN    COWGILL & ASSOCIATES L L C      4/6/1998       1020    291    003789    LA    Lincoln
LA-SBW0020-008    JOHN ED BARNES    KCS MEDALLION RESOURCES INC      12/9/1999       1080    162    18287    LA    Lincoln
LA-SBW0022-000    BLANCHE NAPPER STEPRO    PLYMOUTH OIL COMPANY      11/30/1957       59    323       LA    Lincoln
LA-SBW0023-001    ROSEMARY NAPER WALKER    KCS RESOURCES INC      7/1/2003       1151    686    51045    LA    Lincoln
LA-SBW0024-001    P D OIL COMPANY    COWGILL & ASSOCIATES L L C      1/31/1958       60    411       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   WPS INDUSTRIES INC                     
LA-SBW0025-000    REPRESENTED BY MICHAEL E CLARK    JPD ENERGY INC      1/6/2003       1144    195    O45907    LA    Lincoln
            1137    474    041744      
LA-SBW0026-001    JIMMY CHOATE    KCS RESOURCES INC      8/13/2002       1137    474    041744    LA    Lincoln
LA-SBW0027-001    HARVEY GENE WILLIS ET AL    KCS RESOURCES INC      3/5/2003       1145    51    46456    LA    Lincoln
LA-SBW0028-000    T R B HOUSING LLC    KCS RESOURCES INC      3/11/2003       1145    57    46458    LA    Lincoln
LA-SBW0029-000    JOSEPH N REED ET UX    KCS RESOURCES INC      3/5/2003       1145    54    46457    LA    Lincoln
LA-SBW0030-000    B DENNIS WHITTEN ET UX    KCS RESOURCES INC      10/1/2003       1153    640    52245    LA    Lincoln
LA-SBW0031-000    ARNETA PHILLIPS CARNAHAN ET VIR    KCS MEDALLION RESOURCES INC      11/1/2001       1127    463    35076    LA    Lincoln
LA-SBW0032-000    FLOY BELLE PHILLIPS DELONEY ET AL    KCS MEDALLION RESOURCES INC      11/6/2001       1127    483    35082    LA    Lincoln
LA-SBW0033-001    CHARLES DAVID MOSHINSKIE    KCS MEDALLION RESOURCES INC      11/9/2001       1127    460    35075    LA    Lincoln
LA-SBW0033-002    JAMES FRANCIS MOSHINSKIE    KCS MEDALLION RESOURCES INC      11/9/2001       1127    474    35080    LA    Lincoln
   WILLIAM DOUGLAS DURRETT INDIVIDUALLY                     
   AND AS PRESIDENT OF DURRETT CONSTRUCTION CO          1145    47    046455      
LA-SBW0034-001    INC    KCS RESOURCES INC      3/6/2003       1145    47    046455    LA    Lincoln
LA-SBW0035-000    MARGARET BURT MADDEN ET AL    KCS RESOURCES INC      11/26/2004       1169    428    61575    LA    Lincoln
LA-SBW0036-000    MARY ANNE NAPPER COLE    KCS RESOURCES INC      12/6/2004       1169    426    61574    LA    Lincoln
            1021    7    003808      
LA-SBW0037-001    LOU ORIEL DUNN SMITH    COWGILL & ASSOCIATES LLC      2/9/1998       1021    7    003808    LA    Lincoln
LA-SBW0038-000    MARY ANNE NAPPER COLE    PLYMOUTH OIL COMPANY      11/30/1957       60    23       LA    Lincoln
LA-SBW0039-000    JOHN C COLVIN    JOHN L ROBERTSON      7/20/2007       1228    300    F87321    LA    Lincoln
LA-SBW0040-000    RODNEY K COLVIN ET UX    JOHN L ROBERTSON      7/20/2007       1228    303    F87322    LA    Lincoln
LA-SBW0041-000    R M DAVIS JR ET AL    PAR OIL CORPORATION      1/12/1979       243    136    D-17938    LA    Lincoln
LA-SBW0042-000    ROCKEY VALLEY MISSIONARY BAPTIST CHURCH ET AL    PAR OIL CORPORATION      4/24/1979       247    613    D-19742    LA    Lincoln
LA-SBW0043-000    RUBY EVANS HARRIS    PAR OIL CORPORATION      12/29/1978       242    375       LA    Lincoln
            243    132    D-17937      
            243    132    D-17937      
LA-SBW0044-000    ALYMER EVANS ET AL    PAR OIL CORPORATION      12/29/1978       243    132    D-17937    LA    Lincoln
LA-SBW0045-000    ROSIE R KILLEN    PAR OIL CORPORATION      10/17/1979       265    270    D-24205    LA    Lincoln
LA-SBW0046-000    LARRY DON DURRETT ET VIR    PAR OIL CORPORATION      10/4/1979       261    217    D-23586    LA    Lincoln
LA-SBW0047-001    ALEX T HUNT    PAR OIL CORPORATION      9/28/1979       265    219    D-24197    LA    Lincoln
LA-SBW0047-002    EDWIN W HODGE    PAR OIL CORPORATION      9/28/1979       265    231    D-24198    LA    Lincoln
LA-SBW0048-000    DIVISION OF INDIAN HEAD INC    PAR OIL CORPORATION      7/2/1979       265    276    D-24206    LA    Lincoln
LA-SBW0049-000    JAMES H NAPPER ET AL    PLYMOUTH OIL COMPANY      12/19/1957       60    21    C-8984    LA    Lincoln
LA-SBW0050-000    LOUISIANA MINERALS LTD    THE PROSPECTIVE INVESTMENT & TRADING CO LTD      9/14/2000       1106    52    24647    LA    Lincoln
LA-SBW0051-001    CHARLES F LEE ET UX    HOOD PETROLEUM INC      4/28/2000       1087    237    20263    LA    Lincoln
LA-SBW0052-001    FRED W MITCHELL    HOOD PETROLEUM INC      4/20/2000       1087    233    20262    LA    Lincoln
LA-SBW0053-001    DOROTHY LEE HUGHES MORRIS    HOOD PETROLEUM INC      5/3/2000       1087    249    20266    LA    Lincoln
LA-SBW0053-002    MICHAEL JOSEPH MCDANIEL ET UX    HOOD PETROLEUM INC      5/3/2000       1087    245    20265    LA    Lincoln
LA-SBW0054-001    SHEILA LOUISE EDMISTON THOMAS    HOOD PETROLEUM INC      5/2/2000       1096    165    22247    LA    Lincoln
LA-SBW0054-002    RUBY JEAN MAYS RUSSELL ET AL    HOOD PETROLEUM INC      5/2/2000       1087    241    20264    LA    Lincoln
LA-SBW0054-003    HELEN MARIE M EDMISTON    HOOD PETROLEUM INC      5/2/2000       1088    231    20519    LA    Lincoln
LA-SBW0054-004    SHARON RENEE E COLE    HOOD PETROLEUM INC      5/2/2000       1088    346    20603    LA    Lincoln
LA-SBW0055-000    VIRGINIA LOMAX MARBURY    THE PROSPECTIVE INVESTMENT & TRADING CO LTD      9/15/2000             23659    LA    Lincoln
LA-SBW0056-000    SHERI LEWIS BURT    THE PROSPECTIVE INVESTMENT & TRADING CO LTD      9/15/2000       1100    231    23514    LA    Lincoln
LA-SBW0057-000    JERRY DUANE ROGERS ET UX    THE PROSPECTIVE INVESTMENT & TRADING CO LTD      6/12/2000             21195    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0058-000

   LENWARD EARL GOREE ET UX    AS IS INVESTMENTS LLC      4/1/2001       1117    675    F27874    LA    Lincoln

LA-SBW0059-001

   LENWARD EARL GOREE ET AL    AS IS INVESTMENTS LLC      4/1/2001       1117    691    27880    LA    Lincoln

LA-SBW0059-002

   FLOSSIE M GOREE DAVIS    AS IS INVESTMENTS LLC      4/1/2001       1117    687    27879    LA    Lincoln

LA-SBW0059-003

   MITTIE P GOREE ALEXANDER    AS IS INVESTMENTS LLC      4/1/2001       1117    703    27883    LA    Lincoln

LA-SBW0059-004

   HERBERT GOREE JR    AS IS INVESTMENTS LLC      4/1/2001       1117    695    27881    LA    Lincoln

LA-SBW0059-005

   NELVIN MARVIN GOREE    AS IS INVESTMENTS LLC      4/1/2001       1117    699    27882    LA    Lincoln

LA-SBW0060-000

   JON E GIVENS    AS IS INVESTMENTS LLC      4/1/2001       1117    677    27875    LA    Lincoln

LA-SBW0061-000

   JESSIELYNN PIRKLE OEST    AS IS INVESTMENTS LLC      3/30/2001       1117    685    F27878    LA    Lincoln

LA-SBW0062-000

   EUGENIA HALLEY SMITH TSTMNTRY TRUST    AS IS INVESTMENTS LLC      4/1/2001       1117    683    27877    LA    Lincoln
            1118    731    F28640      

LA-SBW0063-001

   PATRICIA GIVENS    AS IS INVESTMENTS LLC      4/1/2001       1118    731    028632    LA    Lincoln
            1118    728    028632      

LA-SBW0063-002

   MARTIN GIVENS    AS IS INVESTMENTS LLC      4/1/2001       1118    728    028632    LA    Lincoln

LA-SBW0063-003

   JON E GIVENS ET AL    AS IS INVESTMENTS LLC      4/1/2001       1117    680    27876    LA    Lincoln

LA-SBW0064-000

   MATTIE N HILL IND AND AGENT AND AIF    AS IS INVESTMENTS LLC      4/1/2001       1118    725    28631    LA    Lincoln

LA-SBW0065-000

   LOUISIANA MINERALS LTD    AS IS INVESTMENTS LLC      4/11/2001       1117    712    27887    LA    Lincoln
            275    103         
            275    103         

LA-SBW0066-000

   ST OF LA NO 8086    PAR OIL CORPORATION      5/9/1979       275    103       LA    Lincoln
            205    732    D-3111      
            205    732    D-3111      

LA-SBW0068-001

   ALLIE FRAZIER HILL ET AL    PAR OIL CORPORATION      11/11/1976       205    732    D-3111    LA    Lincoln
            298    120    D-28938      
            298    120    D-28938      

LA-SBW0068-002

   MINNIE LEE W DAWSON ET AL    PAR OIL CORPORATION      1/11/1980       298    120    D-28938    LA    Lincoln
            298    124    D-28939      
            298    120    D-28938      

LA-SBW0068-003

   JAMES WALKER    PAR OIL CORPORATION      6/12/1980       298    120    D-28938    LA    Lincoln
            204    485    D-3010      
            204    485    D-3010      

LA-SBW0069-000

   LUGENE YOUNGER ET AL    PAR OIL CORPORATION      11/11/1976       204    485    D-3010    LA    Lincoln
            204    725    D-3109      
            204    725    D-3109      

LA-SBW0070-001

   JOSIE SPRINGS DOUGLAS ET AL    PAR OIL CORPORATION      11/15/1976       204    725    D-3109    LA    Lincoln
            204    521    D-3020      
            204    521    D-3020      

LA-SBW0071-000

   EARL MILES, ET AL    PAR OIL CORPORATION      11/12/1976       204    521    D-3020    LA    Lincoln
            204    554         
            204    554         

LA-SBW0072-000

   ALICE GOREE WALKER ET AL    PAR OIL CORPORATION      11/15/1976       204    554       LA    Lincoln
            206    446    D-3730      
            206    446    D-3730      

LA-SBW0073-000

   NORMAN GENE PERRY ET VIR    PAR OIL CORPORATION      2/15/1977       206    446    D-3730    LA    Lincoln
            231    622    D-13765      
            231    622    D-13765      

LA-SBW0074-000

   WILLIAM R SUMLIN ET UX    PAR OIL CORPORATION      6/3/1978       231    622    D-13765    LA    Lincoln
            241    363    D-17410      
            241    363    D-17410      

LA-SBW0075-000

   B H RAINWATER JR ET AL    PAR OIL CORPORATION      12/12/1978       241    363    D-17410    LA    Lincoln
            241    371         

LA-SBW0076-001

   MONK SALLEY    PAR OIL CORPORATION      12/14/1978       241    371       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            253    36         

LA-SBW0076-002

   MAYME C HEARD ET AL    PAR OIL CORPORATION      2/21/1979       241    371       LA    Lincoln

LA-SBW0076-003

   JOHN M ARMSTRONG JR ET AL    PAR OIL CORPORATION      2/5/1980       282    202       LA    Lincoln

LA-SBW0076-004

   PRISCILLA H BOWMAN    JOHN L SCHOBER JR      2/5/1980       282    202    D-26711    LA    Lincoln
            231    618    D-13764      
            231    618    D-13764      
            231    618    D-13764      

LA-SBW0077-001

   DEWEY MILES ET UX    PAR OIL CORPORATION      6/6/1978       231    618    D-13764    LA    Lincoln
            241    399    D-17436      
            241    399    D-17436      
            241    399    D-17436      

LA-SBW0077-002

   RAY GIVENS ET UX    PAR OIL CORPORATION      12/15/1978       241    399    D-17436    LA    Lincoln
            268    226    D-24565      
            268    226    D-24565      

LA-SBW0078-000

   JAMES GOREE JR ET UX    MINERAL RESOURCES CORPORATION      12/12/1979       268    226    D-24565    LA    Lincoln
            324    57    D-33323      
            324    57    D-33323      

LA-SBW0079-000

   LEROY JAMISON ET UX    W B MOBLEY JR      3/3/1981       324    57    D-33323    LA    Lincoln
            206    475    D-3740      
            206    475    D-3740      

LA-SBW0080-000

   EFFIE MAE WILLS    HOOD GOLDSBERRY      1/13/1977       206    475    D-3740    LA    Lincoln
            206    479    D-3741      
            206    479    D-3741      

LA-SBW0081-000

   JAMES E PERRY    HOOD GOLDSBERRY      1/13/1977       206    479    D-3741    LA    Lincoln

LA-SBW0082-000

   GERTRUDE PEARSON BRIDGES ET VIR    MINERAL RESOURCES CORPORATION      1/24/1977       205    383       LA    Lincoln

LA-SBW0083-000

   ANNIE MAE THOMAS    PAR OIL COMPANY      11/5/1976       204    516    D-3019    LA    Lincoln

LA-SBW0084-000

   LINCOLN BANK AND TRUST COMPANY    PAR OIL COMPANY      11/10/1976       204    534       LA    Lincoln

LA-SBW0085-000

   RICHARD LUDLEY    PAR OIL COMPANY      11/17/1979       265    199    D-24193    LA    Lincoln

LA-SBW0086-000

   WILLIS REED    MINERAL RESOURCES CORPORATION      6/27/1977       214    195    D-6752    LA    Lincoln

LA-SBW0087-001

   REBA JEAN SUMLIN HARRISON    PAR OIL CORPORATION      10/17/1979       265    214    D-24196    LA    Lincoln

LA-SBW0087-002

   PEGGY JANE SUMLIN TUCKER    PAR OIL CORPORATION      11/16/1979       265    209    D-24195    LA    Lincoln

LA-SBW0087-003

   JAMES ROBERT SUMLIN    PAR OIL CORPORATION      10/17/1979       265    204    D-24194    LA    Lincoln

LA-SBW0088-000

   GERTRUDE PEARSON BRIDGES ET VIR    MINERAL RESOURCES CORPORATION      1/28/1977       205    792       LA    Lincoln

LA-SBW0089-000

   HENRY L BROWN    PAR OIL CORPORATION      2/3/1979       244    348    D-18405    LA    Lincoln

LA-SBW0090-000

   ETHEL YOUNGER FLEMON ET VIR    MINERAL RESOURCES CORPORATION      1/27/1977       205    490    D-3335    LA    Lincoln

LA-SBW0091-000

   MILTON YOUNGER    PAR OIL CORPORATION      11/4/1976       204    560       LA    Lincoln

LA-SBW0092-000

   SCOTT WILLIAM    PAR OIL CORPORATION      11/4/1976       204    526    D-3021    LA    Lincoln

LA-SBW0093-001

   JOHNISE PERRY ET AL    MINERAL RESOURCES CORPORATION      2/15/1977       206    438    D-3728    LA    Lincoln

LA-SBW0093-002

   MICHAEL LENORD PERRY    O B MOBLEY JR      12/20/1979       270    329    D-24976    LA    Lincoln

LA-SBW0094-000

   NORMAN G PERRY ET AL    MINERAL RESOURCES CORPORATION      2/15/1977       206    442    D-3729    LA    Lincoln

LA-SBW0095-000

   ELTON RAY FROST ET UX    MINERAL RESOURCES CORPORATION      1/27/1977       205    486    D-3334    LA    Lincoln
            204    507         
            204    507         

LA-SBW0096-001

   MILTON YOUNGER ET AL    PAR OIL CORPORATION      11/4/1976       204    507       LA    Lincoln
            204    543         
            204    543         

LA-SBW0096-002

   LOUISE YOUNGER SCOTT    PAR OIL CORPORATION      11/23/1976       204    543       LA    Lincoln
            204    539         
            204    539         

LA-SBW0096-003

   ETHEL YOUNGER FLEMON ET VIR    PAR OIL CORPORATION      9/23/1976       204    539       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            204    492    D-3011      
            204    492    D-3011      

LA-SBW0096-004

   JESSIE L FORD FROST ET AL    PAR OIL CORPORATION      11/4/1976       204    492    D-3011    LA    Lincoln

LA-SBW0097-001

   MOLLIE T GARR PATTERSON ET AL    PAR OIL CORPORATION      1/20/1977       207    603    D-4124    LA    Lincoln

LA-SBW0097-002

   VERA GARR FISHER ET AL    PAR OIL CORPORATION      2/24/1977       207    610    D-4125    LA    Lincoln

LA-SBW0097-003

   JUNNICE GARR MISHEE    ENERGY DEVELOPMENT CORPORATION      5/5/1993       850    68    61752    LA    Lincoln

LA-SBW0098-000

   JOHN H LA RUE    PAR OIL CORPORATION      12/13/1978       850    68    61752    LA    Lincoln
            206    487         

LA-SBW0099-000

   JAMES I NUGENT ET UX    HOOD GOLDSBERRY      1/20/1977       206    487       LA    Lincoln

LA-SBW0100-000

   PERRY ROSIELER    HOOD GOLDSBERRY      1/13/1977       206    483    D-3742    LA    Lincoln

LA-SBW0101-000

   JESSIE B PERRY    HOOD GOLDSBERRY      1/13/1977       206    467    D-3738    LA    Lincoln

LA-SBW0102-000

   MARGIE BELL ET AL    HOOD GOLDSBERRY      1/31/1977       206    491    D-3744    LA    Lincoln

LA-SBW0103-000

   DANIEL BENJAMIN DURRETT    INDIGO MINERALS LLC      7/25/2007       1237    374    F90979    LA    Lincoln
            1237    353    F90971      

LA-SBW0104-001

   ARTIE BETH CRANFORD RUNYON    INDIGO MINERALS LLC      6/16/2007       1237    353    F90971    LA    Lincoln
            1237    355    F90972      

LA-SBW0104-002

   REBECCA ANN CRANFORD ROBERTS    INDIGO MINERALS LLC      6/19/2007       1237    355    F90972    LA    Lincoln
            1237    357    F90973      

LA-SBW0104-003

   JIMMY RAN CRANFORD    INDIGO MINERALS LLC      6/18/2007       1237    357    F90973    LA    Lincoln
            1244    658    F93964      

LA-SBW0104-004

   STEVEN THOMAS CRANFORD    INDIGO MINERALS LLC      3/14/2008       1244    658    F93964    LA    Lincoln
            1225    401    F86221      

LA-SBW0104-005

   GEORGE MICHAEL CRANFORD    WAC INVESTMENT COMPANY LLC      6/9/2007       1225    401    F86221    LA    Lincoln

LA-SBW0105-000

   JEAN LOGUE AUSTIN    INDIGO MINERALS LLC      6/5/2007       1237    351    F90970    LA    Lincoln

LA-SBW0106-000

   GEFFREY WAYNE FORRESTER    INDIGO MINERALS LLC      6/18/2007       1237    359    F90974    LA    Lincoln

LA-SBW0107-000

   GEFFREY WAYNE FORRESTER ET UX    INDIGO MINERALS LLC      6/18/2007       1237    361    F90975    LA    Lincoln
            1237    369    F90977      

LA-SBW0108-000

   DON DURRETT ET UX    INDIGO MINERALS LLC      6/18/2007       1237    369    F90977    LA    Lincoln
            1237    372    F90978      

LA-SBW0109-000

   LEE ANTHONY RODGERS ET UX    INDIGO MINERALS LLC      6/15/2007       1237    372    F90978    LA    Lincoln

LA-SBW0110-000

   MAUDINE PEPPER JEFFCOATS (USUFRUCT)    INDIGO MINERALS LLC      6/18/2007       1237    364    F90976    LA    Lincoln
            202    188         

LA-SBW0111-000

   LORAINE N HOWARD    PAR OIL CORPORATION      11/1/1976       202    188       LA    Lincoln

LA-SBW0112-001

   SHELTON EARL DUNN ET UX    FRANKS PETROLEUM INC      1/11/1978       242    471       LA    Lincoln

LA-SBW0112-002

   NELLIE MARIE DUNN KNIGHT    FRANKS PETROLEUM INC      1/14/1979       242    467       LA    Lincoln

LA-SBW0112-003

   THERESA DUNN CALDWELL    FRANKS PETROLEUM INC      1/11/1979       242    590       LA    Lincoln

LA-SBW0112-004

   THERON J DUNN    FRANKS PETROLEUM INC      1/14/1979       242    594       LA    Lincoln

LA-SBW0112-005

   NELLIE BURKS DUNN    FRANKS PETROLEUM INC      1/11/1979       242    475       LA    Lincoln

LA-SBW0113-001

   THOMAS E STRAIN, JR    O B MOBLEY JR      6/9/1980       304    210       LA    Lincoln

LA-SBW0113-002

   DAVID CRAWFORD STRAIN    O B MOBLEY JR      6/10/1980       304    206       LA    Lincoln

LA-SBW0113-003

   DANIEL STEWART STRAIN    O B MOBLEY JR      6/10/1980       304    198       LA    Lincoln

LA-SBW0113-004

   KEITH ELLIOT STRAIN    O B MOBLEY JR      6/10/1980       304    202       LA    Lincoln

LA-SBW0113-005

   LILA STRAIN PRIME    O B MOBLEY JR      6/10/1980       304    194       LA    Lincoln

LA-SBW0113-006

   LUCY STRAIN MORGAN    O B MOBLEY JR      6/9/1980       304    190       LA    Lincoln

LA-SBW0113-007

   LAURA STRAIN FRASER    O B MOBLEY JR      6/10/1980       310    98       LA    Lincoln

LA-SBW0113-008

   T E STRAIN ET AL    PAR OIL CORPORATION      11/9/1976       204    503       LA    Lincoln

LA-SBW0114-001

   RUBY D DAVENPORT    GREGORY P MOBLEY      6/11/1980       294    108       LA    Lincoln

LA-SBW0114-002

   JEWEL DAVENPORT ET AL    MINERAL RESOURCES CORPORATION      1/26/1977       219    543       LA    Lincoln

LA-SBW0115-000

   ALFONZA PERRY    MINERAL RESOURCES CORPORATION      1/26/1977       205    414       LA    Lincoln

LA-SBW0116-000

   WILLIAM R SUMLIN ET UX    PAR OIL CORPORATION      6/3/1978       231    626       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0117-000

   GENE B WASHBURN    PAR OIL CORPORATION      6/8/1978       231    630       LA    Lincoln

LA-SBW0118-000

   WILLIAM RICHARD ROGERS ET UX    INDIGO MINERALS LLC      4/4/2008       1247    48    F94798    LA    Lincoln

LA-SBW0119-000

   JERRY D DAVIS    INDIGO MINERALS LLC      4/4/2008       1247    51    F94799    LA    Lincoln

LA-SBW0120-000

   LOUISIANA MINERALS, LTD    INDIGO MINERALS LLC      5/2/2008       1248    240    F95175    LA    Lincoln

LA-SBW0121-000

   FRANCES LOUISE SIMS GAMBRELL    WAC EXPLORATION COMPANY LLC      5/15/2007             F85752    LA    Lincoln

LA-SBW0122-000

   BILLY JOE JACOBS ET UX    WAC EXPLORATION COMPANY LLC      5/11/2007             F85747    LA    Lincoln

LA-SBW0123-000

   GAIL LOGUE JACOBS    WAC EXPLORATION COMPANY LLC      5/9/2007             F85748    LA    Lincoln

LA-SBW0124-001

   BETTY ALEXANDER KNOBLOCH    WAC EXPLORATION COMPANY LLC      5/25/2007             F85753    LA    Lincoln

LA-SBW0124-002

   MONETTE ALEXANDER BELL    WAC EXPLORATION COMPANY LLC      5/25/2007             F85754    LA    Lincoln

LA-SBW0125-000

   HARRIETT BROWN SPANBERG    WAC INVESTMENT COMPANY LLC      5/5/2007             F85749    LA    Lincoln

LA-SBW0126-000

   EUNICE WILKERSON HARRIS    WAC INVESTMENT COMPANY LLC      5/2/2007             F85750    LA    Lincoln

LA-SBW0127-000

   JAMES MICHAEL JACKSON ET UX    WAC EXPLORATION COMPANY LLC      8/10/2007             F88202    LA    Lincoln

LA-SBW0128-000

   MARY ELIZABETH THOMPSON    WAC EXPLORATION COMPANY LLC      8/11/2007             F88203    LA    Lincoln

LA-SBW0129-000

   ANTHONY TUMINELLO III ET UX    WAC EXPLORATION COMPANY LLC      8/10/2007             F88204    LA    Lincoln

LA-SBW0130-000

   HUEY EDWARD THOMPSON ET UX    WAC EXPLORATION COMPANY LLC      8/11/2007             F88205    LA    Lincoln

LA-SBW0131-000

   HERBERT J WELLS ET UX    WAC EXPLORATION COMPANY LLC      8/10/2007             F88206    LA    Lincoln

LA-SBW0132-000

   D PAUL PETERSON ET UX    WAC EXPLORATION COMPANY LLC      7/1/2007             F86736    LA    Lincoln

LA-SBW0133-001

   JOHN C KRONER IV    WAC EXPLORATION COMPANY LLC      10/1/2007             F90271    LA    Lincoln

LA-SBW0133-002

   DARNELL HOLDINGS, LLC    WAC EXPLORATION COMPANY LLC      10/1/2007             F90272    LA    Lincoln

LA-SBW0133-003

   JULIA M KRONER ADAMS    WAC EXPLORATION COMPANY LLC      10/1/2007             F90274    LA    Lincoln

LA-SBW0133-004

   EDWIN W SOUR ET AL    WAC EXPLORATION COMPANY LLC      10/1/2007             F90275    LA    Lincoln

LA-SBW0133-005

   ALEX T HUNT JR ET AL    WAC EXPLORATION COMPANY LLC      9/18/2007             F90276    LA    Lincoln

LA-SBW0133-006

   LISA KRONER MILLER    WAC EXPLORATION COMPANY LLC      10/1/2007             F90277    LA    Lincoln

LA-SBW0133-007

   ROBERT HODGE TURBEVILLE    WAC EXPLORATION COMPANY LLC      10/1/2007             F90278    LA    Lincoln

LA-SBW0133-008

   ANN TURBEVILLE CAMPBELL    WAC EXPLORATION COMPANY LLC      10/1/2007             F90279    LA    Lincoln

LA-SBW0133-009

   MARY JANE TURBEVILLE FOGERTY    WAC EXPLORATION COMPANY LLC      10/1/2007             F90273    LA    Lincoln

LA-SBW0134-000

   ROCKEY VALLEY MISSIONARY BAPTIST CHURCH    PAR OIL CORPORATION      4/24/1979       247    613       LA    Lincoln

LA-SBW0135-000

   NEWMAN S ATTAWAY, JR ET UX    WHELESS INDUSTRIES INC      5/2/1984       474    325    D-55742    LA    Lincoln

LA-SBW0136-000

   FLOY A TAYLOR ET AL    WHELESS INDUSTRIES INC      6/2/1981       336    99    D-35155    LA    Lincoln

LA-SBW0137-000

   MODE CHOATE, JR    TIERRA PETROLEUM CORP      5/8/1981       332    145    D-34516    LA    Lincoln

LA-SBW0138-000

   HOWARD WAYNE ROBERSON ET UX    TIERRA PETROLEUM CORP      5/26/1981       339    145    D-35705    LA    Lincoln

LA-SBW0139-000

   THOMAS R GRAY ET UX    TIERRA PETROLEUM CORP      5/8/1981       332    149    D-34517    LA    Lincoln

LA-SBW0140-000

   MARVIN J HYATT ET UX OLLIE GRAY HYATT    TIERRA PETROLEUM CORP      5/8/1981       332    153    D-34518    LA    Lincoln

LA-SBW0141-000

   BESSIE LEE NOBLE LAZARUS ET AL    TIERRA PETROLEUM CORP      5/18/1981       333    295    D-34759    LA    Lincoln

LA-SBW0142-000

   LURLINE HOWELL EVANS    TIERRA PETROLEUM CORP      5/6/1981       331    298    D-34417    LA    Lincoln

LA-SBW0143-001

   F JAMES FOSTER ET UX    TIERRA PETROLEUM CORP      7/27/1981       343    246    D-36475    LA    Lincoln

LA-SBW0143-002

   RUBY JEAN RUSSELL ET AL    TIERRA PETROLEUM CORP      5/18/1981       333    291    D34758    LA    Lincoln

LA-SBW0143-003

   HELEN MARIE MAYS EDMISTON ET VIR    TIERRA PETROLEUM CORP      5/18/1981       334    159    D34887    LA    Lincoln

LA-SBW0144-000

   BOBBY RAY RUSSELL ET UX    TIERRA PETROLEUM CORP      5/28/1981       339    149    D-35706    LA    Lincoln

LA-SBW0145-000

   J L GOODWIN ET UX    TIERRA PETROLEUM CORP      5/28/1981       339    141    D-35704    LA    Lincoln

LA-SBW0146-000

   CONTRACTORS FINANCE CO, INC    TIERRA PETROLEUM CORP      6/4/1981       339    137    D-35703    LA    Lincoln

LA-SBW0147-000

   ROBERSON LUMBER COMPANY    TIERRA PETROLEUM CORP      5/19/1981       339    133    D-35702    LA    Lincoln

LA-SBW0148-000

   CHARLES CHOATE ET UX    TIERRA PETROLEUM CORP      6/2/1981       339    153    D-35707    LA    Lincoln

LA-SBW0149-000

   WALTER R LEDBETTER ET UX    TIERRA PETROLEUM CORP      9/16/1981       348    326    D-37273    LA    Lincoln

LA-SBW0150-000

   LESTER F HOLLOWAY, JR ET UX    TIERRA PETROLEUM CORP      5/28/1981       335    130    D-35002    LA    Lincoln

LA-SBW0151-000

   LORETTA SHADOW OWENS ET AL    WHELESS INDUSTRIES INC      3/30/1984       469    28    D-55147    LA    Lincoln

LA-SBW0152-001

   ALICE RAGAN M MILAM ET AL    WHELESS INDUSTRIES INC      12/13/1984       505    90       LA    Lincoln
            426    146         

LA-SBW0153-000

   STATE OF LOUISIANA OPERATING AGREEMENT/LEASE    WHELESS INDUSTRIES INC      3/14/1986       583    196       LA    Lincoln

LA-SBW0154-001

   BILLIE ADAMS JR    WHELESS INDUSTRIES INC      5/20/1983       435    1       LA    Lincoln

LA-SBW0154-002

   MINNIE LEE HOLBERT ADAMS    WHELESS INDUSTRIES INC      5/20/1983       600    324       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0155-001

   WALTER LEON KING ET UX    WHELESS INDUSTRIES INC      6/9/1983       438    47       LA    Lincoln

LA-SBW0155-002

   LENNIE MAE KING FORD    WHELESS INDUSTRIES INC      6/9/1983       438    147       LA    Lincoln

LA-SBW0156-000

   CTC MINERALS, INC    WHELESS INDUSTRIES INC      7/22/1983       442    202       LA    Lincoln

LA-SBW0157-000

   MARY J ELLIS    WHELESS INDUSTRIES INC      5/19/1983       445    100       LA    Lincoln

LA-SBW0158-000

   BOBBIE JEAN DAVIS    WHELESS INDUSTRIES INC      7/24/1984       501    160       LA    Lincoln

LA-SBW0159-000

   JAVA HARRIS JACKSON    WHELESS INDUSTRIES INC      7/23/1984       501    164       LA    Lincoln

LA-SBW0160-001

   ROSETTA J BOWDEN    WHELESS INDUSTRIES INC      7/23/1984       501    168       LA    Lincoln

LA-SBW0160-002

   FLORESE JACKSON HUNT    WHELESS INDUSTRIES INC      7/19/1984       501    172       LA    Lincoln

LA-SBW0160-003

   LA RUTH J WILSON    WHELESS INDUSTRIES INC      7/20/1984       501    176       LA    Lincoln

LA-SBW0160-004

   PONDEXTER JACKSON    WHELESS INDUSTRIES INC      1/10/1985       513    232       LA    Lincoln

LA-SBW0161-001

   OTIS JACKSON    WHELESS INDUSTRIES INC      7/20/1984       501    180       LA    Lincoln

LA-SBW0161-002

   RALPH JACKSON    WHELESS INDUSTRIES INC      7/20/1984       501    184       LA    Lincoln

LA-SBW0161-003

   FAIRY BELL J HENDERSON    WHELESS INDUSTRIES INC      7/20/1984       501    188       LA    Lincoln

LA-SBW0161-004

   AUGUSTA JACKSON    WHELESS INDUSTRIES INC      8/3/1984       501    192       LA    Lincoln

LA-SBW0161-005

   JAMES J JACKSON    WHELESS INDUSTRIES INC      8/30/1984       501    197       LA    Lincoln

LA-SBW0161-006

   TERESA CHRISTOPHE    WHELESS INDUSTRIES INC      8/13/1984       501    202       LA    Lincoln

LA-SBW0161-007

   NORMA JACKSON WOODARD    WHELESS INDUSTRIES INC      9/4/1984       501    207       LA    Lincoln

LA-SBW0161-008

   PEARLIE MAE J CAMPBELL    WHELESS INDUSTRIES INC      1/7/1985       519    182       LA    Lincoln

LA-SBW0162-001

   JAVA HARRIS JACKSON    WHELESS INDUSTRIES INC      7/24/1984       501    212       LA    Lincoln

LA-SBW0162-002

   GWENDOLYN SUTSON LOVELACE    WHELESS INDUSTRIES INC      9/4/1984       501    217       LA    Lincoln

LA-SBW0162-003

   JAMESETTA SUTSON STEWART    WHELESS INDUSTRIES INC      8/31/1984       501    222       LA    Lincoln

LA-SBW0162-004

   DIANNE SUTSON MCKINNEY    WHELESS INDUSTRIES INC      8/1/1984       502    114       LA    Lincoln
            501    227         
            501    227         

LA-SBW0163-001

   CYNTHIA HAMLIN OZENE    WHELESS INDUSTRIES INC      8/9/1984       501    227       LA    Lincoln
            501    232         
            501    232         

LA-SBW0163-002

   WILBERT C GARNER    WHELESS INDUSTRIES INC      8/6/1984       501    232       LA    Lincoln
            501    237         
            501    237         

LA-SBW0163-003

   CHRISTINE BRIM FULLER    WHELESS INDUSTRIES INC      8/15/1984       501    237       LA    Lincoln
            501    242         

LA-SBW0163-004

   ICELIA REAMOR LAND ET VIR    WHELESS INDUSTRIES INC      8/2/1984       501    242       LA    Lincoln
            501    247         
            501    247         

LA-SBW0163-005

   LAWRENCE E GARNER    WHELESS INDUSTRIES INC      8/2/1984       501    247       LA    Lincoln
            501    252         

LA-SBW0163-006

   BENOIT T REAMOR    WHELESS INDUSTRIES INC      8/6/1984       501    252       LA    Lincoln
            501    257         

LA-SBW0163-007

   WILLIE BURSON    WHELESS INDUSTRIES INC      8/6/1984       501    257       LA    Lincoln
            501    262         
            501    262         

LA-SBW0163-008

   KATHRYN GARNER MANADIER    WHELESS INDUSTRIES INC      8/15/1984       501    262       LA    Lincoln
            501    63         
            501    63         

LA-SBW0163-009

   ALBERT L GARNER    WHELESS INDUSTRIES INC      8/8/1984       501    63       LA    Lincoln
            501    68         
            501    68         

LA-SBW0163-010

   MARY BRIM CAPERS    WHELESS INDUSTRIES INC      8/20/1984       501    68       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            501    73         
            501    73         
            501    73         

LA-SBW0163-011

   JEAN F OSBORNE ET VIR    WHELESS INDUSTRIES INC      8/6/1984       501    73       LA    Lincoln
            501    78         
            501    78         

LA-SBW0163-012

   WILLIE MAE BRIM    WHELESS INDUSTRIES INC      8/28/1984       501    78       LA    Lincoln
            501    83         
            501    83         

LA-SBW0163-013

   LUTHER HAMLIN JR    WHELESS INDUSTRIES INC      8/20/1984       501    83       LA    Lincoln
            501    88         
            501    88         

LA-SBW0163-014

   CATHERINE BRIM WILSON    WHELESS INDUSTRIES INC      8/16/1984       501    88       LA    Lincoln
            501    93         

LA-SBW0163-015

   SAMUEL J WILLIAMS    WHELESS INDUSTRIES INC      8/9/1984       501    93       LA    Lincoln
            501    98         
            501    98         

LA-SBW0163-016

   MILDRED BRIM BEAL    WHELESS INDUSTRIES INC      8/23/1984       501    98       LA    Lincoln
            501    103         

LA-SBW0163-017

   JOHNNIE B RAMSEY    WHELESS INDUSTRIES INC      8/15/1984       501    103       LA    Lincoln
            501    108         
            501    108         

LA-SBW0163-018

   JAMES WILLIAMS BRIM    WHELESS INDUSTRIES INC      8/31/1984       501    108       LA    Lincoln
            501    113         
            501    113         

LA-SBW0163-019

   DOROTHY BRIM BURR    WHELESS INDUSTRIES INC      8/23/1984       501    113       LA    Lincoln
            501    118         
            501    118         

LA-SBW0163-020

   MELVIN BRIM    WHELESS INDUSTRIES INC      8/23/1984       501    118       LA    Lincoln
            501    123         

LA-SBW0163-021

   ALTHEA COLLIER MITCHELL    WHELESS INDUSTRIES INC      8/16/1984       501    123       LA    Lincoln
            501    128         

LA-SBW0163-022

   BEVERLY COLLIER CLAY    WHELESS INDUSTRIES INC      8/16/1984       501    128       LA    Lincoln
            502    105         

LA-SBW0163-023

   RALPH WAYNE COLLIER    WHELESS INDUSTRIES INC      8/16/1984       502    105       LA    Lincoln
            503    110         

LA-SBW0163-024

   MARVA COLLIER    WHELESS INDUSTRIES INC      8/16/1984       503    110       LA    Lincoln
            505    99         

LA-SBW0163-025

   REGINALD COLLIER    WHELESS INDUSTRIES INC      10/31/1984       505    99       LA    Lincoln
            505    104         
            505    104         

LA-SBW0163-026

   WALTER STEVE BRIM    WHELESS INDUSTRIES INC      11/1/1984       505    104       LA    Lincoln
            505    109         
            505    109         

LA-SBW0163-027

   MAXINE BRIM    WHELESS INDUSTRIES INC      11/1/1984       505    109       LA    Lincoln
            505    109         
            505    258         

LA-SBW0163-028

   PATRICIA A BRIM FISHER    WHELESS INDUSTRIES INC      11/1/1984       505    258       LA    Lincoln
            516    65         
            516    65         

LA-SBW0163-029

   JOHNETTE B BRIM    WHELESS INDUSTRIES INC      11/1/1984       516    65       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0164-001

   T W AUBREY    WHELESS INDUSTRIES INC      5/23/1983       433    289       LA    Lincoln

LA-SBW0164-002

   MATTIE LEE BERRY    WHELESS INDUSTRIES INC      5/26/1983       435    5       LA    Lincoln

LA-SBW0164-003

   ESTELLA WALKER    WHELESS INDUSTRIES INC      5/26/1983       435    5       LA    Lincoln

LA-SBW0164-004

   MAUDE WASHINGTON ET AL    WHELESS INDUSTRIES INC      5/23/1983       435    5       LA    Lincoln

LA-SBW0164-005

   HENRY ALLEN WILSON    WHELESS INDUSTRIES INC      5/26/1983       435    5       LA    Lincoln

LA-SBW0165-000

   B H HUMPHREY ET UX    WHELESS INDUSTRIES INC      5/24/1983       433    273       LA    Lincoln

LA-SBW0166-000

   RUBY HARRIS BROWN ET AL    WHELESS INDUSTRIES INC      6/6/1983       434    337       LA    Lincoln

LA-SBW0167-000

   CLIFTON H JACKSON ET UX    WHELESS INDUSTRIES INC      6/2/1983       434    345       LA    Lincoln

LA-SBW0168-000

   CONNIE D COLE ET UX    WHELESS INDUSTRIES INC      5/26/1983       434    341       LA    Lincoln

LA-SBW0169-000

   OPHELIA C AUSTIN    WHELESS INDUSTRIES INC      11/23/1982       417    320       LA    Lincoln

LA-SBW0170-001

   AUBREY LAND ET AL    WHELESS INDUSTRIES INC      5/23/1983       433    70       LA    Lincoln

LA-SBW0170-002

   JULIA F PAYNE    WHELESS INDUSTRIES INC      5/23/1983       433    285       LA    Lincoln

LA-SBW0170-003

   ROBERT FRAZIER    WHELESS INDUSTRIES INC      5/23/1983       433    281       LA    Lincoln

LA-SBW0170-004

   LEVESTER LAND    WHELESS INDUSTRIES INC      5/24/1983       433    265       LA    Lincoln

LA-SBW0170-005

   VERA M TAYLOR, ADMIN    WHELESS INDUSTRIES INC      5/24/1983       435    9       LA    Lincoln

LA-SBW0170-006

   LILLIE E MALONE GREEN    WHELESS INDUSTRIES INC      5/24/1983       435    13       LA    Lincoln

LA-SBW0170-007

   CLYDE D STREET    WHELESS INDUSTRIES INC      6/9/1983       438    51       LA    Lincoln
            417    294         

LA-SBW0171-001

   CYNTHIA C RHONE ET VIR    WHELESS INDUSTRIES INC      11/23/1982       417    294       LA    Lincoln
            417    155         

LA-SBW0171-002

   CECELIA C PAGE ET VIR    WHELESS INDUSTRIES INC      11/23/1982       417    294       LA    Lincoln
            417    145         

LA-SBW0171-003

   JAMES M CORNWELL ET UX    WHELESS INDUSTRIES INC      11/23/1982       417    145       LA    Lincoln
            417    150         

LA-SBW0171-004

   HAROLD CORNWELL ET UX    WHELESS INDUSTRIES INC      11/22/1982       417    150       LA    Lincoln

LA-SBW0171-005

   LAVERNE C BURKS    WHELESS INDUSTRIES INC      12/20/1982       417    263       LA    Lincoln

LA-SBW0171-006

   ALVERN BELTON    WHELESS INDUSTRIES INC      12/8/1982       417    268       LA    Lincoln
            421    106         

LA-SBW0171-007

   ROBERT C CORNWELL ET UX    WHELESS INDUSTRIES INC      2/3/1983       421    106       LA    Lincoln

LA-SBW0171-008

   DENNIS CORNWELL    WHELESS INDUSTRIES INC      5/24/1983       433    80       LA    Lincoln

LA-SBW0171-009

   MABEL MCLAUGHLIN    WHELESS INDUSTRIES INC      5/19/1983       433    293       LA    Lincoln

LA-SBW0172-000

   WILLIE COLVIN SCOTT ET UX ROSIE CANDLER SCOTT    WHELESS INDUSTRIES INC      5/25/1983       433    269       LA    Lincoln

LA-SBW0173-000

   GEORGIA CARTER SCOTT    WHELESS INDUSTRIES INC      5/25/1983       433    269       LA    Lincoln

LA-SBW0174-000

   LIBERTY HILL BAPTIST ASSOCIATION, INC    WHELESS INDUSTRIES INC      10/23/1984       501    137       LA    Lincoln

LA-SBW0175-000

   THEODIS WILLIAMS ET UX ELAINE WILLIAMS    WHELESS INDUSTRIES INC      11/1/1984       501    142       LA    Lincoln

LA-SBW0176-001

   BILLIE ADAMS, JR    WHELESS INDUSTRIES INC      10/3/1984       501    146       LA    Lincoln

LA-SBW0176-002

   GRACIE ADAMS WATSON    WHELESS INDUSTRIES INC      10/3/1984       501    151       LA    Lincoln

LA-SBW0176-003

   LORENE ADAMS TAYLOR    WHELESS INDUSTRIES INC      11/16/1984       502    119       LA    Lincoln

LA-SBW0176-004

   AZZIE LEE ADAMS PARKS    WHELESS INDUSTRIES INC      11/23/1984       502    124       LA    Lincoln

LA-SBW0176-005

   AZZIE LEE ADAMS PARKS    WHELESS INDUSTRIES INC      11/16/1984       502    129       LA    Lincoln

LA-SBW0176-006

   BOYD ADAMS    WHELESS INDUSTRIES INC      11/23/1984       502    135       LA    Lincoln

LA-SBW0176-007

   CLEOPHAS ADAMS    WHELESS INDUSTRIES INC      12/4/1984       507    130       LA    Lincoln

LA-SBW0176-008

   CLARENCE ADAMS    WHELESS INDUSTRIES INC      10/31/1984       511    239       LA    Lincoln

LA-SBW0176-009

   PRINCE ADAMS    WHELESS INDUSTRIES INC      1/24/1985       516    218       LA    Lincoln

LA-SBW0176-010

   CHARLES T ADAMS    WHELESS INDUSTRIES INC      1/15/1985       516    223       LA    Lincoln

LA-SBW0177-000

   CLARENCE TAYLOR ET UX    WHELESS INDUSTRIES INC      11/16/1984       502    110       LA    Lincoln

LA-SBW0178-000

   IRMA G MCHENRY, AGENT & AIF FOR    WHELESS INDUSTRIES INC      12/7/1984       503    234       LA    Lincoln

LA-SBW0179-000

   AUBREY LAND ET UX ICELIA REAMOR LAND    WHELESS INDUSTRIES INC      12/11/1984       505    94       LA    Lincoln

LA-SBW0180-000

   ANTHONY J JONES, II ET UX    WHELESS INDUSTRIES INC      10/28/1982       405    193       LA    Lincoln

LA-SBW0181-000

   EULA JACKSON    WHELESS INDUSTRIES INC      11/9/1982       418    56       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0182-001

   LOUVENIA CHARLES WILLIAMS    WHELESS INDUSTRIES INC      2/6/1985       516    61       LA    Lincoln

LA-SBW0182-002

   ANNA MAE JACKSON    WHELESS INDUSTRIES INC      10/29/1986       600    320       LA    Lincoln

LA-SBW0182-003

   VESTA WILLIAMS GANT    WHELESS INDUSTRIES INC      10/29/1986       603    327       LA    Lincoln

LA-SBW0183-001

   MARY ELLEN LEWIS    WHELESS INDUSTRIES INC      1/28/1985       518    180       LA    Lincoln

LA-SBW0183-002

   CLIFTON JACKSON    TXO PRODUCTION COMPANY      7/5/1984       485    93       LA    Lincoln

LA-SBW0183-003

   ANDREW JACKSON    TXO PRODUCTION COMPANY      7/5/1984       485    97       LA    Lincoln

LA-SBW0183-004

   MAGNOLIA BENNETT RENTZ    TXO PRODUCTION COMPANY      7/5/1984       486    21       LA    Lincoln

LA-SBW0183-005

   NICEY BENNETT GRIFFIN    TXO PRODUCTION COMPANY      7/5/1984       486    25       LA    Lincoln

LA-SBW0183-006

   ETHILENE Y CARTER ET AL    TXO PRODUCTION COMPANY      7/8/1984       487    80       LA    Lincoln

LA-SBW0183-007

   PUELLA GILES    TXO PRODUCTION COMPANY      7/5/1984       487    84       LA    Lincoln

LA-SBW0183-008

   PAUL L YOUNGER    TXO PRODUCTION COMPANY      7/8/1984       490    97       LA    Lincoln

LA-SBW0184-001

   ALLEEN KING CAREY, INDIVIDUALLY AND AS    WHELESS INDUSTRIES INC      1/9/1987       614    146       LA    Lincoln

LA-SBW0185-000

   L D MOORE ET UX SHIRLEY M MOORE    WHELESS INDUSTRIES INC      2/7/1985       516    49       LA    Lincoln

LA-SBW0186-000

   LORENE LEWIS FRANKLIN    WHELESS INDUSTRIES INC      10/19/1982       405    189       LA    Lincoln

LA-SBW0187-000

   LEATHA LEWIS WILSON ET VIR    WHELESS INDUSTRIES INC      10/19/1982       406    152       LA    Lincoln

LA-SBW0188-000

   JULIA JACKSON    WHELESS INDUSTRIES INC      5/25/1983       433    75       LA    Lincoln

LA-SBW0189-000

   WILLIE GENE JACKSON    WHELESS INDUSTRIES INC      12/7/1982       417    329       LA    Lincoln

LA-SBW0190-000

   LEROY BURKS ET UX    WHELESS INDUSTRIES INC      11/15/1982       417    93       LA    Lincoln

LA-SBW0191-000

   MOUNT ZION BAPTIST CHURCH    WHELESS INDUSTRIES INC      12/5/1982       417    341       LA    Lincoln

LA-SBW0192-000

   IDA V LEE    WHELESS INDUSTRIES INC      8/24/1984       501    133       LA    Lincoln

LA-SBW0193-000

   REVIE F WILLIAMS ET AL    WHELESS INDUSTRIES INC      7/8/1983       445    104       LA    Lincoln

LA-SBW0194-000

   L C LEWIS ET UX    WHELESS INDUSTRIES INC      10/14/1982       403    292       LA    Lincoln

LA-SBW0195-000

   SENTELIA ISAAC LEWIS    WHELESS INDUSTRIES INC      10/14/1982       403    296       LA    Lincoln

LA-SBW0196-001

   JOHN T JACKSON, JR    WHELESS INDUSTRIES INC      11/22/1982       418    25       LA    Lincoln

LA-SBW0196-002

   MINNIE J BETTERS ET VIR    WHELESS INDUSTRIES INC      12/1/1982       417    80       LA    Lincoln

LA-SBW0197-000

   STEVEN BOLT SUMRALL    INDIGO MINERALS LLC      12/5/2008       1264    509    F101312    LA    Lincoln

LA-SBW0198-000

   STEVEN THOMAS CRANFORD SR    INDIGO MINERALS LLC      11/20/2008       1263    600    F100985    LA    Lincoln

LA-SBW0199-000

   THE KANSAS CITY SOUTHERN RAILWAY COMPANY    INDIGO MINERALS LLC      3/9/2009       1269    523    F103436    LA    Lincoln

LA-SBW0200-001

   JOYCE DIANE SMITH ROAN    TENSAS DELTA EXPLORATION COMPANY LLC      11/21/2005       1192    477    F72680    LA    Lincoln

LA-SBW0200-002

   BILLY GENE SMITH    TENSAS DELTA EXPLORATION COMPANY LLC      11/21/2005       1192    480    F72681    LA    Lincoln

LA-SBW0201-000

   WPS INDUSTRIES INC    TENSAS DELTA EXPLORATION COMPANY LLC      1/31/2006       1193    244    F73048    LA    Lincoln

LA-SBW0202-000

   HARRY LEE JONES ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      12/1/2005       1192    483    F72682    LA    Lincoln

LA-SBW0203-001

   NELWYN BELL GRIFFIN    TENSAS DELTA EXPLORATION COMPANY LLC      12/10/2005       1192    486    F72683    LA    Lincoln

LA-SBW0203-002

   DANNY LEE BELL    TENSAS DELTA EXPLORATION COMPANY LLC      12/10/2005       1192    489    F72684    LA    Lincoln

LA-SBW0204-000

   THE KANSAS CITY SOUTHERN RAILWAY COMPANY    TENSAS DELTA EXPLORATION COMPANY LLC      11/4/2005       1192    466    F72679    LA    Lincoln

LA-SBW0205-000

   WILLIAM W SMITH III ET UX    TENSAS DELTA EXPLORATIONS COMPANY LLC      4/13/2006             F73858    LA    Lincoln

LA-SBW0206-000

   WEYERHAEUSER COMPANY    TENSAS DELTA EXPLORATION COMPANY LLC      4/6/2006       1195    708    F74117    LA    Lincoln

LA-SBW0207-000

   FAZAL ENTERPRISES INC    TENSAS DELTA EXPLORATION COMPANY LLC      4/13/2006       1195    814    F74192    LA    Lincoln

LA-SBW0208-000

   JERRY LEN WHITE ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      4/27/2006       1196    109    F74256    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0209-000

   HERBERT LEE HOLLAND    TENSAS DELTA EXPLORATION COMPANY LLC      5/1/2006       1196    106    F74255    LA    Lincoln
            1197    354    F74865      

LA-SBW0210-000

   HOMER ALLEN BRASHEAR    TENSAS DELTA EXPLORATION COMPANY LLC      5/12/2006             F74865    LA    Lincoln

LA-SBW0211-000

   TRB HOUSING LLC    TENSAS DELTA EXPLORATION COMPANY LLC      5/15/2006       1197    363    F74868    LA    Lincoln

LA-SBW0212-000

   JOSEPH N REED ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      5/18/2006       1197    360    F74867    LA    Lincoln
            1197    357    F74866      

LA-SBW0213-001

   JIMMY CHOATE    TENSAS DELTA EXPLORATION COMPANY LLC      5/15/2006             F74866    LA    Lincoln
            1197    348    F74863      

LA-SBW0213-002

   LINDA BOUNDS CHOATE    TENSAS DELTA EXPLORATION COMPANY LLC      5/15/2006             F74863    LA    Lincoln

LA-SBW0213-003

   CHARLES CHOATE JR ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      3/1/2007       1217    522    F83024    LA    Lincoln

LA-SBW0214-000

   ALICE BOWERS CHOATE    TENSAS DELTA EXPLORATION COMPANY LLC      5/15/2006       1197    351    F74864    LA    Lincoln

LA-SBW0215-000

   ROCKY VALLEY MISSIONARY BAPTIST CHURCH    TENSAS DELTA EXPLORATION COMPANY LLC      5/28/2006       1198    431    F75387    LA    Lincoln

LA-SBW0216-000

   JOHN ROBERT CHERRY ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      5/12/2006       1198    436    F75388    LA    Lincoln

LA-SBW0217-000

   MICHAEL JOE MCDANIEL ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      5/28/2009       1198    439    F75389    LA    Lincoln

LA-SBW0218-000

   THOMAS JEFFERSON NAPPER ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      8/11/2006       1202    553    F77256    LA    Lincoln

LA-SBW0219-000

   ROBERT EMMETT BEST    TENSAS DELTA EXPLORATION COMPANY LLC      9/11/2006       1205    335    F78530    LA    Lincoln

LA-SBW0220-000

   M & S GRINDING SERVICE, LLC    TENSAS DELTA EXPLORATION COMPANY LLC      9/12/2006       1204    734    F78267    LA    Lincoln

LA-SBW0221-000

   SAINT GOBAIN CONTAINERS INC    TENSAS DELTA EXPLORATION COMPANY LLC      8/31/2006       1205    653    F78739    LA    Lincoln

LA-SBW0222-000

   BARRY REGINALD CANTERBURY ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      10/19/2006       1206    237    F78916    LA    Lincoln

LA-SBW0223-000

   DON DURRETT ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      10/19/2006       1206    234    F78915    LA    Lincoln

LA-SBW0224-000

   MICHAEL BRIAN CANTERBURY    TENSAS DELTA EXPLORATION COMPANY LLC      11/3/2006       1207    18    F79226    LA    Lincoln

LA-SBW0225-000

   LONNIE KIMBRELL ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      10/26/2006       1207    15    F79225    LA    Lincoln

LA-SBW0226-000

   MARY ANN NAPPER COLE    KCS RESOURCES INC      12/6/2004       1169    426    F61574    LA    Lincoln

LA-SBW0227-000

   MARGARET BURT MADDEN ET AL    KCS RESOURCES INC      11/26/2004       1169    428    F61575    LA    Lincoln

LA-SBW0228-001

   CHARLES DAVID MOSHINSKIE    KCS MEDALLION RESOURCES INC      11/9/2001       1127    460    F35075    LA    Lincoln

LA-SBW0228-002

   JAMES FRANCIS MOSHINSKIE    KCS MEDALLION RESOURCES INC      11/9/2001       1127    474    35080    LA    Lincoln
            1167    166    F60331      

LA-SBW0229-001

   ODIS ARNOLD MATTHEWS ET AL    HOOD PETROLEUM INC      11/23/2004       1167    166    060331    LA    Lincoln

LA-SBW0230-001

   KEITH HAROLD RATCLIFF ET UX    HOOD PETROLEUM INC      11/30/2004       1167    469    F60493    LA    Lincoln
            1187    020    F70209      
            1187    022    F70209      

LA-SBW0231-001

   RICHARD KEITH CANTERBURY ET UX    PETROHOOD CORPORATION      11/18/2005       1187    022    F70209    LA    Lincoln
            1189    240    F71317      
            1189    242    F71317      

LA-SBW0231-002

   DURRETT CONSTRUCTION COMPANY INC ET AL    PETROHOOD CORPORATION      11/18/2005       1189    242    F71317    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SBW0232-001

   AUBREY L RICHARDSON ET UX    PETROHOOD CORPORATION      2/15/2006       1192    229    F72542    LA    Lincoln

LA-SBW0233-000

   PULPWOOD PRODUCERS INC    COWGILL & ASSOCIATES LLC      12/28/2001       1128    465    35787    LA    Lincoln

LA-SBW0234-000

   CHARLES THOMAS DURRETT ET UX    COWGILL & ASSOCIATES LLC      12/31/2001       1128    424    35773    LA    Lincoln

LA-SBW0235-000

   JAMES MONROE SIMS    COWGILL & ASSOCIATES LLC      12/31/2001       1128    427    35774    LA    Lincoln

LA-SBW0236-000

   BOBBY JAMES CONVILLE ET UX    COWGILL & ASSOCIATES LLC      1/3/2002       1128    430    35775    LA    Lincoln

LA-SBW0237-000

   KILPATRICK INVESTMENTS INC    COWGILL & ASSOCIATES LLC      1/7/2002       1128    438    35778    LA    Lincoln

LA-SBW0238-000

   LARRY EUGENE WALDRON ET UX    COWGILL & ASSOCIATES LLC      1/10/2002       1128    433    35776    LA    Lincoln

LA-SBW0239-000

   WILLIAM BURETT SIMMS ET UX    COWGILL & ASSOCIATES LLC      1/16/2002       1128    436    35777    LA    Lincoln

LA-SBW0240-000

   LOUIS LEMUEL LEE ET UX    COWGILL & ASSOCIATES LLC      1/21/2002       1128    446    35780    LA    Lincoln

LA-SBW0241-000

   THOMAS WAYNE UPSHAW ET UX    COWGILL & ASSOCIATES LLC      1/15/2002       1128    444    35779    LA    Lincoln

LA-SBW0242-000

   JAMES LYNN NEWSOM ET UX    COWGILL & ASSOCIATES LLC      4/11/2002       1133    26    38687    LA    Lincoln

LA-SBW0243-000

   HAROLD W LUNDY ET UX    COWGILL & ASSOCIATES LLC      2/7/2002       1134    307    39580    LA    Lincoln

LA-SBW0244-000

   JOHN D BARABIN JR    INDIGO MINERALS LLC      3/17/2009       1270    119    F103698    LA    Lincoln

LA-SBW0245-000

   C A REEVES ET UX    WHELESS INDUSTRIES INC      5/9/1989       708    88    E34939    LA    Lincoln

LA-SBW0246-000

   STEPHEN L YEICH ET UX    WHELESS INDUSTRIES INC      5/9/1989       708    100    E34941    LA    Lincoln

LA-SBW0247-000

   CTC MINERALS, INC    WHELESS INDUSTRIES INC      6/14/1989       708    111    E34943    LA    Lincoln

LA-SBW0248-000

   BUTLER REAL ESTATE & CONSTRUCTION INC ET AL    WHELESS INDUSTRIES INC      5/9/1989       708    105    E34942    LA    Lincoln

LA-SBW0249-000

   WILLIAMETTE INDUSTRIES, INC    WHELESS INDUSTRIES INC      7/18/1989       708    117    E34944    LA    Lincoln

LA-SBW0250-000

   BALL-INCON GLASS PKG CORP    WHELESS INDUSTRIES INC      6/8/1989       708    94    E34940    LA    Lincoln

LA-SBW0251-000

   LINCOLN PARISH POLICE JURY (#13594)    WHELESS INDUSTRIES INC      9/13/1989       711    107    E35440    LA    Lincoln

LA-SBW0252-000

   STATE OF LOUISIANA 13582    WHELESS INDUSTRIES INC      9/13/1989       711    122    E35441    LA    Lincoln

LA-SBW0253-001

   JOHNNIE B CRAWFORD GOREE    WHELESS INDUSTRIES INC      11/19/1982       418    163    D47150    LA    Lincoln

LA-SBW0253-002

   BH HUMPHREY ET UX    WHELESS INDUSTRIES INC      11/9/1982       417    111    D47061    LA    Lincoln

LA-SBW0254-001

   IRA G WALKER    WHELESS INDUSTRIES INC      11/9/1982       454    128    D52818    LA    Lincoln

LA-SBW0254-002

   EMMETT J WALKER    WHELESS INDUSTRIES INC      11/11/1982       417    278    D47098    LA    Lincoln

LA-SBW0254-003

   ELDRED B WALKER TOSTON    WHELESS INDUSTRIES INC      11/9/1982       417    76    D47053    LA    Lincoln

LA-SBW0254-004

   ALICE GOREE WALKER    WHELESS INDUSTRIES INC      11/11/1982       418    104    D47137    LA    Lincoln

LA-SBW0254-005

   WILLIE MAE WALKER MOORE    WHELESS INDUSTRIES INC      11/11/1982       418    88    D47133    LA    Lincoln

LA-SBW0254-006

   HERBERT R WALKER    WHELESS INDUSTRIES INC      11/9/1982       417    286    D47100    LA    Lincoln

LA-SBW0254-007

   LEROY WALKER    WHELESS INDUSTRIES INC      11/9/1982       418    96    D47135    LA    Lincoln

LA-SBW0255-001

   LINCOLN PARISH POLICE JURY    WHELESS INDUSTRIES INC      11/10/1982       408    66    D45803    LA    Lincoln

LA-SBW0255-002

   FIBREBOARD CORPORATION    WHELESS INDUSTRIES INC      11/18/1982       416    16    D46909    LA    Lincoln

LA-SBW0256-000

   SIDNEY BRANCH ET UX    WHELESS INDUSTRIES INC      10/15/1982       454    8    D52761    LA    Lincoln

LA-SBW0257-000

   AUBREY LAND ET UX    WHELESS INDUSTRIES INC      10/29/1982       418    127    D47142    LA    Lincoln

LA-SBW0258-000

   NEVADA JENSON HILL    WHELESS INDUSTRIES INC      5/19/1983       433    85    D49330    LA    Lincoln

LA-SBW0259-000

   ROSETTA J BOWDEN    WHELESS INDUSTRIES INC      7/23/1984       501    156    E2842    LA    Lincoln
            503    115    E3088      

LA-SBW0260-001

   PINKIE PUELLA GILES    WHELESS INDUSTRIES INC      11/29/1984       503    115    E3088    LA    Lincoln

LA-SBW0260-002

   MOUNT ZION BAPTIST CHURCH OF GRAMBLING    WHELESS INDUSTRIES INC      1/23/1985       516    54    E4614    LA    Lincoln

LA-SBW0261-000

   STEVEN THOMAS CRANFORD    INDIGO MINERALS LLC      3/14/2008       1244    660    F93965    LA    Lincoln
            1261    674    F100231      

LA-SBW0262-001

   ALEX T HUNT JR ET AL    INDIGO MINERALS LLC      7/18/2008       1261    674    F100231    LA    Lincoln
            1261    670    F100230      

LA-SBW0262-002

   VIRGIL DAVIS HUNT JR ET AL    INDIGO MINERALS LLC      7/18/2008       1261    670    F100230    LA    Lincoln
            1261    702    F100240      

LA-SBW0262-003

   MARGARET STACY SOUR    INDIGO MINERALS LLC      7/18/2008       1261    702    F100240    LA    Lincoln
            1261    699    F100239      

LA-SBW0262-004

   LISA KRONER MILLER    INDIGO MINERALS LLC      7/18/2008       1261    699    F100239    LA    Lincoln
            1261    696    F100238      

LA-SBW0262-005

   ROBERT HODGE TURBEVILLE    INDIGO MINERALS LLC      7/18/2008       1261    696    F100238    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            1261    693    F100237      

LA-SBW0262-006

   JOHN M SOUR    INDIGO MINERALS LLC      7/18/2008       1261    693    F100237    LA    Lincoln
            1261    690    F100236      

LA-SBW0262-007

   JULIA KRONER ADAMS    INDIGO MINERALS LLC      7/18/2008       1261    690    F100236    LA    Lincoln
            1261    687    F100235      

LA-SBW0262-008

   EDWIN W SOUR    INDIGO MINERALS LLC      7/18/2008       1261    687    F100235    LA    Lincoln
            1261    684    F100234      

LA-SBW0262-009

   MARY JAYNE TURBEVILLE FOGERTY    INDIGO MINERALS LLC      7/18/2008       1261    684    F100234    LA    Lincoln
            1261    677    F100232      

LA-SBW0262-010

   ANN TURBEVILLE CAMPBELL    INDIGO MINERALS LLC      7/18/2008       1261    677    F100232    LA    Lincoln
            1261    680    F100233      

LA-SBW0262-011

   DARNELL HOLDINGS, LLC    INDIGO MINERALS LLC      7/18/2008       1261    680    F100233    LA    Lincoln

LA-SBW0264-001

   DENNIS DAVID OBANION    STEVEN B SUMRALL      12/13/2008       1265    343    F101636    LA    Lincoln

LA-SBW0264-002

   NELWYN ANN OBANION BIRCH    STEVEN B SUMRALL      12/22/2008       1264    812    F101485    LA    Lincoln

LA-SBW0264-003

   NORMCRIEF INC    STEVEN B SUMRALL      7/16/2009       1274    479    F105855    LA    Lincoln

LA-SBW0265-000

   LOUISIANA MINERALS LTD    PETROHOOD CORPORATION      11/11/2008       1263    530    F100945    LA    Lincoln

LA-SBW0266-000

   LARRY D KENT ET UX    INDIGO MINERALS LLC      3/30/2010       1283    864    F110318    LA    Lincoln

LA-SBW0269-000

   FREDERICK RAY CARTER ET UX    INDIGO MINERALS LLC      11/9/2011       1309    283    F122012    LA    Lincoln

LA-SBW0270-000

   WILLIAM RAY HARRIS ET UX    INDIGO MINERALS LLC      11/10/2011       1309    279    F122010    LA    Lincoln

LA-SBW0271-000

   JAMES CURTIS ODOM ET UX    INDIGO MINERALS LLC      11/9/2011       1309    281    F122011    LA    Lincoln

LA-SBW0272-000

   JOAN SALLY CRAWFORD BARNES    INDIGO MINERALS LLC      12/6/2011       1311    580    F123156    LA    Lincoln

LA-SBW0273-000

   CLAUDE ALWYN DURRETT JR    INDIGO MINERALS LLC      12/17/2011       1311    577    F123155    LA    Lincoln

LA-SBW0274-000

   VIOLET GOHMAN FLETCHER    INDIGO MINERALS LLC      12/14/2011       1311    571    F123153    LA    Lincoln

LA-SBW0275-000

   COLUMBUS CLAYTON PICKETT JR ET UX    INDIGO MINERALS LLC      11/21/2011       1311    573    F123154    LA    Lincoln

LA-SBW0276-000

   TERRY LYNNE TUMINELLO COLEMAN    INDIGO MINERALS LLC      11/17/2011       1311    552    F123145    LA    Lincoln

LA-SBW0277-000

   JAMES ROBERT FERGUSON ET UX    INDIGO MINERALS LLC      11/9/2011       1311    550    F123144    LA    Lincoln

LA-SBW0278-000

   MYRTLE JUANITA WILLIAMS COLVIN    INDIGO MINERALS LLC      11/10/2011       1311    554    F123146    LA    Lincoln

LA-SBW0279-000

   RONALD JEFFERY MADDEN    INDIGO MINERALS LLC      11/22/2011       1311    548    F123143    LA    Lincoln

LA-SBW0280-000

   THOMAS WAYNE NEUROTH ET UX    INDIGO MINERALS LLC      12/8/2011       1311    566    F123151    LA    Lincoln

LA-SBW0281-000

   FLOYD BLANCHARD ODOM ET UX    INDIGO MINERALS LLC      11/30/2011       1311    559    F123148    LA    Lincoln

LA-SBW0282-000

   CHARLES WOODS ET UX    INDIGO MINERALS LLC      11/30/2011       1311    563    F123150    LA    Lincoln

LA-SBW0283-000

   BRENDA CRIPPS YOUNG    INDIGO MINERALS LLC      12/2/2011       1311    561    F123149    LA    Lincoln

LA-SBW0285-001

   WILLIAM THOMAS BURT    INDIGO MINERALS LLC      1/11/2012       1311    530    F123138    LA    Lincoln

LA-SBW0285-002

   ROBERT EMMETT BURT, III    INDIGO MINERALS LLC      1/11/2012       1311    541    F123141    LA    Lincoln

LA-SBW0285-003

   JOAN MARIE BURT EDINGER    INDIGO MINERALS LLC      1/11/2012       1311    537    F123140    LA    Lincoln

LA-SBW0286-001

   DANNY LEE BELL    INDIGO MINERALS LLC      12/14/2011       1311    545    F123142    LA    Lincoln

LA-SBW0286-002

   BOBBY JOE BELL    INDIGO MINERALS LLC      1/9/2012       1311    517    F123134    LA    Lincoln

LA-SBW0286-003

   NELWYN BELL GRIFFIN    INDIGO MINERALS LLC      12/19/2011       1311    582    F123157    LA    Lincoln

LA-SBW0286-004

   JEANANNE CANTERBURY MIGALA    INDIGO MINERALS LLC      12/19/2011       1311    568    F123152    LA    Lincoln

LA-SBW0286-005

   JAMES REX BELL    INDIGO MINERALS LLC      12/16/2011       1311    556    F123147    LA    Lincoln

LA-SBW0287-001

   CLAUDE ALWYN DURRETT JR    INDIGO MINERALS LLC      12/24/2011       1311    527    F123137    LA    Lincoln

LA-SBW0288-000

   JOHN E FINCH JR ET UX    INDIGO MINERALS LLC      1/24/2012       1311    524    F123136    LA    Lincoln

LA-SBW0289-000

   BERTRAM HAYS JONES ET UX    INDIGO MINERALS LLC      1/11/2012       1311    520    F123135    LA    Lincoln
            1311    534    F123139      

LA-SBW0290-001

   RAGAN BURT MADDEN    INDIGO MINERALS LLC      1/12/2012                LA    Lincoln
            1311    511    F123132      

LA-SBW0290-002

   BETTY MADDEN HARRISON    INDIGO MINERALS LLC      1/23/2012                LA    Lincoln
            1311    514    F123133      

LA-SBW0290-003

   MARILYN MADDEN HILL    INDIGO MINERALS LLC      1/23/2012                LA    Lincoln

LA-SBW0291-000

   JIMMY DALE CLEMENTS ET UX    INDIGO MINERALS LLC      1/13/2012       1311    508    F123131    LA    Lincoln

LA-SBW0292-000

   DENNIS HAYS COLVIN    INDIGO MINERALS LLC      1/13/2012       1311    506    F123130    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference   ST    County

LA-SBW0293-000

   JOHN ANTHONY WYNNE ET UX    INDIGO MINERALS LLC      1/13/2012       1311    504    F123129   LA    Lincoln

LA-SBW0294-000

   RICHARD H CANTERBURY ET UX    INDIGO MINERALS LLC      2/27/2012       1313    412    F124070   LA    Lincoln

LA-SBW0295-000

   WILLIAM RICHARD ROGERS ET UX    INDIGO MINERALS LLC      12/1/2011       1312    661    F123791   LA    Lincoln

LA-SBW0296-000

   VILLAGE OF SIMSBORO    INDIGO MINERALS LLC      4/3/2012       1312    664    F123792   LA    Lincoln

LA-SBW0297-000

   ALFONZA PERRY    HOOD GOLDSBERRY      1/13/1977       206    463      LA    Lincoln

LA-SBW0298-000

   BOOKER T PERRY    HOOD GOLDSBERRY      1/13/1977       206    471      LA    Lincoln

LA-SBW0299-000

   LOUIS FORD    PAR OIL CORPORATION      11/4/1976       204    530      LA    Lincoln

LA-SBW0300-000

   NORMAN GENE PERRY    MINERAL RESOURCES COMPANY      2/15/1977       206    446      LA    Lincoln

LA-SBW0301-000

   BEVERLY C MEEKS, AGENT AND AIF FOR    WILL-DRILL RESOURCES INC      7/28/2000       1098    249    F-22939   LA    Lincoln

LA-SBW0302-001

   AVA H MORGAN    WILL-DRILL RESOURCES INC      8/18/2000       1102    46      LA    Lincoln

LA-SGC0009-000

   P-B FARMS INC    HOOD PETROLEUM INC      2/17/2005       1176    636    1359 - 159 (C)   LA    Lincoln

LA-SGC0010-001

   EDDIE RAY ALLEN    HOOD PETROLEUM INC      4/5/2005       1176    691    1390 - 104 (C)   LA    Lincoln

LA-SGC0010-002

   LINDA ANN ALLEN    HOOD PETROLEUM INC      4/11/2005       1176    694    1390 - 107 (C)   LA    Lincoln

LA-SGC0010-003

   DELLA ANN ALLEN DAVISON    HOOD PETROLEUM INC      4/5/2005       1176    697    1390 - 110 (C)   LA    Lincoln

LA-SGC0010-004

   GEORGIA MAE ALLEN ARMSTRONG ET AL    HOOD PETROLEUM INC      4/11/2005       1176    700    1390 - 113 (C)   LA    Lincoln
            1176    609        

LA-SGC0010-005

   CLAUDE ALLEN JR    HOOD PETROLEUM INC      4/11/2005       1413    210    F65458   LA    Lincoln

LA-SGC0013-000

   DONNA MARIE KING MCCONATHY    HOOD PETROLEUM, INC.      5/6/2005       1176    612    1359 - 156 (C)   LA    Lincoln

LA-SGC0014-000

   KIMBERLY ANN PERRITT CRAIG    HOOD PETROLEUM INC      7/20/2005       1179    347    F66799   LA    Lincoln

LA-SGC0015-000

   BENJAMIN HOWARD ET UX    HOOD PETROLEUM INC      7/11/2005       1179    353    F66801   LA    Lincoln

LA-SGC0016-000

   JAMES E DAVIS    HOOD PETROLEUM INC      7/11/2005       1179    368    F66806   LA    Lincoln

LA-SGC0017-000

   MARY ROBERSON CHESTER    CLAYTON WILLIAMS ENERGY INC      1/12/2007       1214    810    F81982   LA    Lincoln

LA-SGC0018-001

   JENICE R BUCHANAN    CLAYTON WILLIAMS ENERGY INC      7/20/2007       1228    338    F87346   LA    Lincoln

LA-SGC0018-002

   LUE R JACKSON    CLAYTON WILLIAMS ENERGY INC      7/20/2007       1228    335    F87345   LA    Lincoln

LA-SGC0018-003

   JENNIFER R LAWSON    CLAYTON WILLIAMS ENERGY INC      7/20/2007       1228    758    F87582   LA    Lincoln

LA-SGC0018-004

   LESTER ROBERSON    CLAYTON WILLIAMS ENERGY INC      7/30/2007       1228    755    F87581   LA    Lincoln

LA-SGC0018-005

   MINNIE R SCOTT    CLAYTON WILLIAMS ENERGY INC      7/20/2007       1228    752    F87580   LA    Lincoln

LA-SGC0018-006

   LENORA R PATTON    CLAYTON WILLIAMS ENERGY INC      7/30/2007       1229    215    F87710   LA    Lincoln

LA-SGC0018-007

   JULIA R PATTON    CLAYTON WILLIAMS ENERGY INC      8/5/2007       1230    73    F88051   LA    Lincoln
            1176    688    F65484     

LA-SGC0061-000

   DONALD L ROBBINS ET UX    HOOD PETROLEUM INC      2/24/2005       1389    24    420115   LA    Lincoln

LA-SGC0078-001

   J V KILPATRICK ET AL    MRS FALERA PALMER      2/11/1930       73    216    70463   LA    Lincoln
   KLARE EUGENIA THOMAS INDIVIDUALLY AND AS                    
   USUFRUCT IN SUCCESSION OF JOSEPH RICHARD          1305    294    F120149     

LA-SMB0043-000

   THOMAS SR ET AL    MINERAL VENTURES INC      8/25/2011       1305    294    F120149   LA    Lincoln
            1307    800    F121293     
            1307    800    F121293     
            1307    800    F121293     

LA-SMB0044-001

   VELMA S LEWIS ESTATE    MINERAL VENTURES INC      10/31/2011       1307    800    F121293   LA    Lincoln

LA-SMB0044-002

   RYMAN MAY ET UX    MINERAL VENTURES INC      9/15/2011       1305    296    F120150   LA    Lincoln
            1307    810    F121298     
            1307    810    F121298     
            1307    810    F121298     

LA-SMB0045-001

   FREUDENDORF SISTERS LLC    MINERAL VENTURES INC.      11/2/2011       1307    810    F121298   LA    Lincoln
            1305    303    F120152     
            1305    303    F120152     
  

THURMAN FAMILY LLC

         1305    303    F120152     

LA-SMB0045-002

   WILLIAM C THURMON JR AS MANAGER    MINERAL VENTURES INC.      8/26/2011       1305    303    F120152   LA    Lincoln
            1305    301    F120151     

LA-SMB0045-003

   DAVID E GULLATT ET AL    MINERAL VENTURES INC      8/5/2011       1305    301    F120151   LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   SUZANNE THURMON          1305    311    F120154      

LA-SMB0045-004

   PERRY D REED AS INDEPENDENT EXECUTOR    MINERAL VENTURES INC      9/7/2011       1305    311    F120154    LA    Lincoln
            1305    327    F120162      

LA-SMB0045-005

   JULES ZANG JOHNSON JR ET AL    MINERAL VENTURES INC      7/28/2011       1305    327    F120162    LA    Lincoln
            1306    249    F120561      

LA-SMB0045-006

   KARL COLE ET AL    MINERAL VENTURES INC      9/23/2011       1306    249    F120561    LA    Lincoln

LA-SMB0046-000

   JAMES MICHAEL HAYS    MINERAL VENTURES INC      11/3/2011       1307    802    F121294    LA    Lincoln
            1305    333    F120165      

LA-SMB0047-001

   LAMAR FELTON TRAYLOR    MINERAL VENTURES INC      8/26/2011       1305    333    F120165    LA    Lincoln
   PATRICK ANDREW TRAYLOR INDIVIDUALLY AND AS                     
   POWER OF ATTORNEY FOR FREDERICK MICHAEL                     

LA-SMB0047-002

   TRAYLOR AND AMY DENISE TRAYLOR    MINERAL VENTURES INC      11/2/2011       1307    812    F121299    LA    Lincoln
            1305    331    F120164      
            1305    331    F120164      
            1305    331    F120164      
   JAMES DAVID HAYS INDIV AND AS AGENT FOR JULIE          1305    331    F120164      

LA-SMB0048-001

   WELLS HAYS ET AL    MINERAL VENTURES INC      8/29/2011       1305    331    F120164    LA    Lincoln
   DAVID MICHAEL HENRY DEALING WITH HIS SEPARATE                     

LA-SMB0049-001

   PROPERTY    MINERAL VENTURES INC      10/18/2011       1307    817    F121300    LA    Lincoln
   LINDA GAYLE DOSS FOX DEALING HEREIN WITH HER          1305    325    F120161      

LA-SMB0050-001

   SEPARATE PROPERTY    MINERAL VENTURES INC      8/1/2011       1305    325    F120161    LA    Lincoln
   ARCHIE BURNS DOSS JR DEALNG HEREIN WITH HIS          1305    323    F120160      

LA-SMB0050-002

   SEPARATE PROPERTY    MINERAL VENTURES INC      7/8/2011       1305    323    F120160    LA    Lincoln
   SHERRIE KAY DOSS LANDRUM DEALING HEREIN WITH          1306    251    F120562      

LA-SMB0050-003

   HER SEPARATE PROPERTY    MINERAL VENTURES INC      8/1/2011       1306    251    F120562    LA    Lincoln
   CHUCK DAVEY DOSS DEALING HEREIN WITH HIS          1306    272    F120571      

LA-SMB0050-004

   SEPARATE PROPERTY    MINERAL VENTURES INC      10/9/2011       1306    272    F120571    LA    Lincoln
   SHELIA FAY DOSS RODEN DEALING HEREIN WITH HER          1306    253    F120563      

LA-SMB0050-005

   SEPARATE PROPERTY    MINERAL VENTURES INC      9/29/2011       1306    253    F120563    LA    Lincoln
   MICHAEL LANE DOSS DEALING HEREIN WITH HIS          1305    321    F120159      

LA-SMB0050-006

   SEPARATE PROPERTY    MINERAL VENTURES INC      8/8/2011       1305    321    F120159    LA    Lincoln
   EDDIE J BARNES SR DEALING HEREIN WITH HIS                     

LA-SMB0051-000

   SEPARATE PROPERTY    MINERAL VENTURES INC      10/3/2011       1306    259    F120566    LA    Lincoln
   MARGARET FERNE BREWER MCDANIEL DEALING          1306    263    F120568      

LA-SMB0052-000

   HEREIN WITH HER SEPARATE PROPERTY    MINERAL VENTURES INC      10/14/2011       1306    263    F120568    LA    Lincoln
   CHARLES C MEEK DEALING HEREIN WITH HIS          1306    257    F120565      

LA-SMB0053-001

   SEPARATE PROPERTY    MINERAL VENTURES INC      7/28/2011       1306    257    F120565    LA    Lincoln
   THOMAS T MEEK DEALING HEREIN WITH HIS          1305    342    F120168      

LA-SMB0053-002

   SEPARATE PROPERTY    MINERAL VENTURES INC.      7/29/2011       1305    342    F120168    LA    Lincoln
   JULIA MEEK GAINEY DEALING HEREIN WITH HER          1305    344    F120169      

LA-SMB0053-003

   SEPARATE PROPERTY    MINERAL VENTURES INC      8/1/2011       1305    344    F120169    LA    Lincoln

LA-SMB0054-000

   ALCIDE BOWIE ET UX    MINERAL VENTURES INC      8/23/2011       1305    319    F120158    LA    Lincoln
   RANDALL RAY HARRISON DEALING HEREIN WITH HIS          1305    340    F120167      

LA-SMB0055-001

   SEPARATE PROPERTY    MINERAL VENTURES INC      8/2/2011       1305    340    F120167    LA    Lincoln
   KAREN KAY HARRISON SCHNEIDER DEALING HEREIN                     

LA-SMB0055-002

   WITH HER SEPARATE PROPERTY    MINERAL VENTURES INC      8/16/2011                LA    Lincoln
   TIMOTHY LEE HARRISON DEALING HEREIN WITH HIS                     

LA-SMB0055-003

   SEPARATE PROPERTY    MINERAL VENTURES INC      8/13/2011       1305    335    F120166    LA    Lincoln
   LISA ANNE HARRISON MCCONATHY DEALING HEREIN          1305    329    F120163      

LA-SMB0055-004

   WITH HER SEPARATE PROPERTY    MINERAL VENTURES INC      9/26/2011       1305    329    F120163    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   VERONICA ELLIS DEALING WITH HER SEPARATE          1307    808    F121297      

LA-SMB0056-000

   PROPERTY    MINERAL VENTURES INC      11/11/2011       1307    808    F121297    LA    Lincoln
   FRANKE LIVING TRUST REPRESENTED BY EDWARD          1305    317    F120157      

LA-SMB0057-001

   WILLIAM AND GARNETT AUGUSTA FRANKE TRUSTEES    MINERAL VENTURES INC      8/31/2011       1305    317    F120157    LA    Lincoln
   SILVERTEEN WILLIAMS DEALING WITH HIS SEPARATE          1306    261    F120567      

LA-SMB0057-002

   PROPERTY    MINERAL VENTURES INC      10/7/2011       1306    261    F120567    LA    Lincoln
   ALBERT R DENNIS III DEALING WITH HIS SEPARATE          1307    823    F121303      

LA-SMB0057-003

   PROPERTY    MINERAL VENTURES INC      11/15/2011       1307    823    F121303    LA    Lincoln
   GERALDINE P JAMES DEALING HEREIN WITH HER          1307    804    F121295      

LA-SMB0057-004

   SEPARATE PROPERTY    MINERAL VENTURES INC      11/10/2011       1307    804    F121295    LA    Lincoln
   MICHAEL E ROBINSON DEALING HEREIN WITH HIS          1307    798    F121292      

LA-SMB0057-005

   SEPARATE PROPERTY    MINERAL VENTURES INC      11/8/2011       1307    798    F121292    LA    Lincoln

LA-SMB0057-006

   LINDA PICKERING ELISAIA DEALING HEREIN WITH HER SEPARATE PROPERTY    MINERAL VENTURES INC      8/26/2011       1305    315    F120156    LA    Lincoln
   FRED HEARN JR DEALING HEREIN WITH HIS SEPARATE          1306    265    F120569      

LA-SMB0057-007

   PROPERTY    MINERAL VENTURES INC      10/13/2011       1306    265    F120569    LA    Lincoln
   AUSTRIAL HEARN DEALING HEREIN WITH HER          1306    255    F120564      

LA-SMB0057-008

   SEPARATE PROPERTY    MINERAL VENTURES INC      9/28/2011       1306    255    F120564    LA    Lincoln
   MARY SMITH DEALING HEREIN WITH HER SEPARATE          1307    819    F121301      

LA-SMB0057-009

   PROPERTY    MINERAL VENTURES INC      10/31/2011       1307    819    F121301    LA    Lincoln
   LEE MARK HANNA DEALING HEREIN WITH HIS          1305    313    F120155      

LA-SMB0058-000

   SEPARATE PROPERTY    MINERAL VENTURES INC      8/16/2011       1305    313    F120155    LA    Lincoln

LA-SMB0059-000

   CYNTHIA JOANN KING RYALS DEALING HEREIN WITH HER SEPARATE PROPERTY    MINERAL VENTURES INC      10/12/2011       1306    267    F120570    LA    Lincoln

LA-SMB0060-001

   ARKANSAS LOUISIANA GAS COMPANY    PAN-AM SOUTHERN CORP ET AL      4/4/1951       58    561    105756    LA    Lincoln

LA-SMB0060-002

   CAROLYN S BUFORD    PAN-AM SOUTHERN CORP ET AL      3/3/1951       57    439    104075    LA    Lincoln

LA-SMB0060-003

   E G MOREHEAD    PAN-AM SOUTHERN CORP ET AL      2/23/1951       57    435    104074    LA    Lincoln

LA-SMB0060-004

   CASE-POMEROY OIL CORP    PAN-AM SOUTHERN CORP ET AL      2/23/1951       57    447    104077    LA    Lincoln

LA-SMB0060-005

   MRS R F HASSELL ET AL    PAN-AM SOUTHERN CORP ET AL      2/24/1951       57    443    104076    LA    Lincoln

LA-SMB0060-006

   MARACAIBO OIL EXPLOR CORP    PAN-AM SOUTHERN CORP ET AL      2/27/1951       57    451    104078    LA    Lincoln

LA-SMB0060-007

   BURFORD OIL COMPANY ET AL    PAN-AM SOUTHERN CORP ET AL      2/27/1951       57    427    104072    LA    Lincoln

LA-SMB0060-008

   ELISA BETH LACEY ROGERS    PAN-AM SOUTHERN CORP ET AL      2/23/1951       57    431    104073    LA    Lincoln

LA-SMB0061-000

   JEFF DAVIS STREET    ABE B HARRIS      9/18/1950       54    413    N100058    LA    Lincoln

LA-SMB0062-000

   TALMADGE BUTLER    ABE B HARRIS      9/16/1950       54    409    N-100056    LA    Lincoln

LA-SMB0063-000

   OSCAR C CRAWFORD    ABE B HARRIS      9/20/1950       54    635    N-100653    LA    Lincoln

LA-SMB0064-001

   CULLEN HINTON ET UX    ABE B HARRIS      11/30/1948       49    245    N-86479    LA    Lincoln

LA-SMB0065-001

   MARY LIVINGSTON, ET AL    ABE B HARRIS      1/24/1949       49    253    N-86484    LA    Lincoln

LA-SMB0065-002

   MARY BERNICE LIVINGSTON, ET AL    ABE B HARRIS      2/14/1949       49    256    N-86485    LA    Lincoln

LA-SMB0066-000

   E G CARROLL    ABE B HARRIS      1/10/1949       49    251    N-86483    LA    Lincoln

LA-SMB0067-000

   DONIE ELLIS NEE CRAWFORD    ABE B HARRIS      9/20/1950       55    1    N-100676    LA    Lincoln

LA-SMB0068-001

   SUSIE WRIGHT, ET AL    ABE B HARRIS      9/28/1950       54    467    N-100199    LA    Lincoln

LA-SMB0068-002

   DOROTHY MAE WIMBERLY, ET AL    ABE B HARRIS      9/28/1950       54    483    N-100259    LA    Lincoln

LA-SMB0068-003

   PICCOLA WRIGHT MALONE, ET AL    ABE B HARRIS      9/28/1950       54    577    N-100461    LA    Lincoln

LA-SMB0068-004

   CHARLIE LEE GIPSON, ET AL    ABE B HARRIS      9/28/1950             N-100726    LA    Lincoln

LA-SMB0068-005

   EFFIE WRIGHT WILLIS    ABE B HARRIS      9/28/1950             N-100791    LA    Lincoln

LA-SMB0068-006

   SAMUEL GIPSON    MURPHY CORPORATION      6/5/1958       63    74    C-12050    LA    Lincoln

LA-SMB0068-007

   CASCILE GIPSON CARODINE, ETAL    MURPHY CORPORATION      6/5/1958       63       C-12049    LA    Lincoln

LA-SMB0068-008

   OLA POWELL, INTERDICT    MURPHY CORPORATION      6/1/1957       56       C-5342    LA    Lincoln

LA-SMB0068-009

   FELIX GIPSON ET AL    MURPHY OIL CORPORATION      4/21/1980       290    46    D-27689    LA    Lincoln

LA-SMB0069-000

   FLEMING BUTLER    ABE B HARRIS      9/18/1950       55    39    100761    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SMB0070-000

   R P GOREE    ABE B HARRIS      3/14/1951       58    159    N-104960    LA    Lincoln

LA-SMB0071-000

   R L SUMLIN    MIDSTATES OIL CORPORATION      9/16/1950       54       N-100318    LA    Lincoln

LA-SMB0072-000

   W J BELTON    ABE B HARRIS      11/29/1948       49    239    N-86475    LA    Lincoln

LA-SMB0073-000

   CARL C BELTON    ABE B HARRIS      11/29/1948       49    241    N-86477    LA    Lincoln

LA-SMB0074-000

   ROBERT PRENTISS BELTON    ABE B HARRIS      11/29/1948       49    243    N-86478    LA    Lincoln

LA-SMB0075-001

   WILLIAM LAMAR LEE, INTERDICT    ABE B HARRIS      2/28/1949       49    326    N-86857    LA    Lincoln

LA-SMB0075-002

   ROGER W LEE AND RAYMOND H LEE    ABE B HARRIS      12/15/1948       49    247    N-86481    LA    Lincoln

LA-SMB0076-000

   WILLIAM LAMAR LEE, INTERDICT    ABE B HARRIS      2/28/1949       49    330    N-86858    LA    Lincoln

LA-SMB0077-000

   JAMES B WATTS    ABE B HARRIS      4/2/1949       50    79    N-87751    LA    Lincoln

LA-SMB0078-000

   OTO C SIMS    ABE B HARRIS      4/22/1949       50       N-88569    LA    Lincoln

LA-SMB0079-001

   FLORENCE WEST ET AL    ABE B HARRIS      12/15/1948       51    171    N-91285    LA    Lincoln

LA-SMB0079-002

   GORDON JACK WEST    ABE B HARRIS      6/21/1949       51    177    N-91288    LA    Lincoln

LA-SMB0079-003

   INEZ W TAYLOR    ABE B HARRIS      5/30/1949       51    173    N-91286    LA    Lincoln

LA-SMB0079-004

   ALLEN WEST    ABE B HARRIS      6/20/1949       51    175    N-91287    LA    Lincoln

LA-SMB0080-001

   ROSIE MCCONATHY MCGUIRE ET AL    MURPHY CORPORATION      2/18/1953       64       N-118520    LA    Lincoln

LA-SMB0080-002

   DAVID RICHARDSON    MURPHY CORPORATION      2/18/1953       65       N-119533    LA    Lincoln

LA-SMB0080-003

   JOHN L MCGUIRE    MURPHY CORPORATION      2/17/1955       71       N-131017    LA    Lincoln

LA-SMB0081-000

   PLEASANT HILL BAPTIST CHURCH    MURPHY CORPORATION      3/2/1953       65       N-118714    LA    Lincoln

LA-SMB0082-001

   ELMER GRIGSBY ET AL    MURPHY CORPORATION      3/27/1953       66    325    N-120698    LA    Lincoln

LA-SMB0082-002

   VIRGINIA GRIGSBY DURHAM ET AL    MURPHY CORPORATION      3/27/1953       66    330    N-120699    LA    Lincoln

LA-SMB0082-003

   IVA GRIGSBY THOMPSON ET AL    MURPHY CORPORATION      3/27/1953       66       N-121624    LA    Lincoln

LA-SMB0082-004

   JUANITA GRIGSBY CHESHIRE    MURPHY CORPORATION      8/11/1953       67    1    N-121658    LA    Lincoln

LA-SMB0082-005

   VIRGINIA GRIGSBY GOODWIN    MURPHY CORPORATION      3/27/1953       67    117    N-121907    LA    Lincoln
            50    225    N-88309      

LA-SMB0083-001

   OLMSTEAD, W K, ET AL    ABE B HARRIS      4/7/1949       50    225    N-88309    LA    Lincoln
            51    376    N-92181      

LA-SMB0083-002

   BETTIE LYNN SCARBOROUGH ET AL    ABE B HARRIS      11/12/1949       51    376    N-92181    LA    Lincoln

LA-SMB0084-001

   RA TANNER, CURATOR OF    HUNT OIL COMPANY      12/14/1949       51    513       LA    Lincoln

LA-SMB0084-002

   FANNIE TANNER ANDERSON ET AL    HUNT OIL COMPANY      12/7/1948       48    47       LA    Lincoln

LA-SMB0085-001

   CHARLES C BARHAM ET AL    MURPHY OIL CORPORATION      6/28/1974       178    57    C-89349    LA    Lincoln

LA-SMB0086-001

   FERN PALMER LEWIS ET AL    MURPHY OIL CORPORATION      7/9/1974       178    61    C-89350    LA    Lincoln

LA-SMB0087-001

   FANNIE MAE MITCHELL ROGERS    MURPHY OIL CORPORATION      7/17/1974       178    73    C-89353    LA    Lincoln

LA-SMB0087-002

   MARTEL ELLIS MAYFIELD    MURPHY OIL CORPORATION      7/10/1974       178    65    C-89351    LA    Lincoln

LA-SMB0087-003

   ANNIE LEE MITCHELL MAMON ET AL    MURPHY OIL CORPORATION      7/15/1974       178    69    C-89352    LA    Lincoln

LA-SMB0088-000

   HERMAN G GIVENS ET AL    MURPHY CORPORATION      9/17/1952       63    149    N-116375    LA    Lincoln
            52    463    N-95766      

LA-SMB0089-001

   OWAISSA GIVENS    J I ROBERTS      2/28/1950       52    463    N-95766    LA    Lincoln
            52    283    N-94839      

LA-SMB0089-002

   ANNIE LOUISE GIVENS ET AL    J I ROBERTS      2/28/1950       52    283    N-94839    LA    Lincoln
            47    352    N-83146      

LA-SMB0089-003

   GIVENS, ANNIE LOUISE, ET AL    C H MURPHY JR      5/7/1948       47    352    N-83146    LA    Lincoln
            47    348    N-83145      

LA-SMB0089-004

   ANNIE LOUISE GIVENS ET AL    C H MURPHY JR      5/7/1948       47    348    N-83145    LA    Lincoln
            47    345    N-83144      

LA-SMB0089-005

   ANNIE LOUISE GIVENS ET AL    C H MURPHY JR      5/7/1948       47    345    N-83144    LA    Lincoln

LA-SMB0090-000

   DOCIE LAND ET AL    ABE B HARRIS      12/6/1948       49    107    N-86003    LA    Lincoln

LA-SMB0091-001

   ARKANSAS FUEL OIL CO    PAN-AM SOUTHERN CORP ET AL      7/10/1951       59       N-106895    LA    Lincoln

LA-SMB0092-000

   ESME OB RUTLEDGE ET AL    ABE B HARRIS      12/9/1948       49    109    N-86004    LA    Lincoln

LA-SMB0093-000

   JOHN WILLIS BARNETT ET AL    PENTAD ENERGY LLC      1/28/2005       1170    561    62205    LA    Lincoln

LA-SMB0094-001

   PATRICK N FOX    PENTAD ENERGY LLC      1/18/2005       1171    507    62770    LA    Lincoln

LA-SMB0094-002

   OLIVIA OLMSTEAD FOX OLIVER    PENTAD ENERGY LLC      1/18/2005       1170    558    62204    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SMB0094-003

   E NORMAN DILLARD JR    PENTAD ENERGY LLC      1/18/2005       1170    555    62203    LA    Lincoln

LA-SMB0094-004

   SANDRA JEAN STROTHER MCLEAN ET AL    PENTAD ENERGY LLC      1/18/2005       1170    552    62202    LA    Lincoln

LA-SMB0095-001

   VIRGINIA GAHAGAN RAMSDELL ET VIR    TENSAS DELTA EXPLORATION COMPANY LLC      5/25/2005             F67775    LA    Lincoln

LA-SMB0095-002

   LAWRENCE O GAHAGAN    TENSAS DELTA EXPLORATION COMPANY LLC      5/25/2005             F67769    LA    Lincoln

LA-SMB0096-001

   FRANK M CORDARO ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      6/30/2005             F67784    LA    Lincoln

LA-SMB0096-002

   MILDRED GOREE EVANS    TENSAS DELTA EXPLORATION COMPANY LLC      6/21/2005             F67768    LA    Lincoln

LA-SMB0096-003

   ETTA GOREE DIXON    TENSAS DELTA EXPLORATION COMPANY LLC      6/27/2005             F67778    LA    Lincoln

LA-SMB0096-004

   LINDA GOREE OLIVA    TENSAS DELTA EXPLORATION COMPANY LLC      6/27/2005             F67780    LA    Lincoln

LA-SMB0096-005

   FOSTER CALVIN GOREE    TENSAS DELTA EXPLORATION COMPANY LLC      6/27/2005             F67766    LA    Lincoln

LA-SMB0096-006

   LESTER LOUIS WALKER    TENSAS DELTA EXPLORATION COMPANY LLC      6/27/2005             F67781    LA    Lincoln

LA-SMB0096-007

   KATHLEEN WALKER MORTON    TENSAS DELTA EXPLORATION COMPANY LLC      6/27/2005             F67779    LA    Lincoln

LA-SMB0097-001

   ALYCE GENTRY HUMBLE IVIE    TENSAS DELTA EXPLORATION COMPANY LLC      6/7/2005             F67772    LA    Lincoln

LA-SMB0097-002

   CHARLES THOMAS GENTRY    TENSAS DELTA EXPLORATION COMPANY LLC      6/13/2005             F67767    LA    Lincoln

LA-SMB0098-001

   VICKIE MIKULIS HUDSON    TENSAS DELTA EXPLORATION COMPANY LLC      6/9/2005             F67783    LA    Lincoln

LA-SMB0099-001

   ANCILLARY SUCCESSION OF KATHLEEN SHAW BRYANS & CHARLES COLEMAN BRYANS    TENSAS DELTA EXPLORATION COMPANY LLC      9/20/2005             F69153    LA    Lincoln

LA-SMB0100-001

   MICHAEL ANDREW MIKULIS    TENSAS DELTA EXPLORATION COMPANY LLC      7/20/2005             F68866    LA    Lincoln

LA-SMB0101-001

   OPAL DAVIS BAUER    TENSAS DELTA EXPLORATION COMPANY LLC      6/9/2005             F67773    LA    Lincoln

LA-SMB0101-002

   ROWENA DAVIS LARSEN    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67771    LA    Lincoln

LA-SMB0101-003

   RALPH A DAVIS, II    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67776    LA    Lincoln

LA-SMB0101-004

   JOHN DAVIS    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67770    LA    Lincoln

LA-SMB0102-000

   RUTH ELLEN JOHNSON SUMLIN LEE    TENSAS DELTA EXPLORATION COMPANY LLC      6/10/2005             F67774    LA    Lincoln

LA-SMB0103-000

   JUDY JENKINS PRINGLE    TENSAS DELTA EXPLORATION COMPANY LLC      7/14/2005             F67765    LA    Lincoln

LA-SMB0104-000

   BILLY JOE JOHNSON ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      7/16/2005       1185    187    F69563    LA    Lincoln

LA-SMB0105-001

   ALLEN THORNBURGH    TENSAS DELTA EXPLORATION COMPANY LLC      1/23/2006       1192    241    F72550    LA    Lincoln

LA-SMB0106-001

   CHARLOTTE SUMLIN CANTWELL    TENSAS DELTA EXPLORATION COMPANY LLC      1/15/2006       1192    243    F72551    LA    Lincoln

LA-SMB0106-002

   WILLIAM R SUMLIN JR    TENSAS DELTA EXPLORATION COMPANY LLC      1/15/2006       1192    246    F72552    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SMB0107-001

   KERRY N PARNELL    TENSAS DELTA EXPLORATION COMPANY LLC      1/10/2006             F72678    LA    Lincoln

LA-SMB0108-001

   DAVID SMITH JR ET UX    TENSAS DELTA EXPLORATION COMPANY LLC      3/15/2006             F73417    LA    Lincoln

LA-SMB0109-001

   ONEIDA HARRIS JACKSON ET AL    TENSAS DELTA EXPLORATION COMPANY LLC      3/21/2006             F73416    LA    Lincoln

LA-SMB0110-000

   MICHAEL ANDREW MIKULIS    TENSAS DELTA EXPLORATION COMPANY LLC      4/20/2006             F74193    LA    Lincoln

LA-SMB0111-001

   BANK ONE LOUISIANA MANAGED ASSETS    TENSAS DELTA EXPLORATION COMPANY LLC      3/15/2005             F73518    LA    Lincoln

LA-SMB0112-000

   SHRINERS HOSPITAL FOR CHILDREN    COWGILL & ASSOCIATES LLC      7/1/2004       1163    357    F58001    LA    Lincoln

LA-SMB0113-000

   THREE G PLANTATION, LLC    COWGILL & ASSOCIATES LLC      10/20/2004       1168    268    F60991    LA    Lincoln

LA-SMB0114-000

   LOUISIANA MINERALS, LTD    COWGILL & ASSOCIATES LLC      5/10/2005       1175    491    F64855    LA    Lincoln

LA-SMB0115-000

   THREE G PLANTATION, LLC    COWGILL & ASSOCIATES LLC      10/20/2004       1168    265    F60990    LA    Lincoln

LA-SMB0116-001

   JOICE MANGHAM DUNN    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F68867    LA    Lincoln

LA-SMB0116-002

   WILLIAM HARRIS, JR    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67762    LA    Lincoln

LA-SMB0116-003

   WILLIAM S MANGHAM, JR    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67757    LA    Lincoln

LA-SMB0116-004

   RUSSELL D MANGHAM    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67756    LA    Lincoln

LA-SMB0116-005

   ALTON J MANGHAM    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67758    LA    Lincoln

LA-SMB0116-006

   ROBERT E MANGHAM, SR    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67759    LA    Lincoln

LA-SMB0116-007

   FLORA MANGHAM LEE    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67760    LA    Lincoln

LA-SMB0116-008

   CELESTINE MANGHAM WALDON    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67761    LA    Lincoln

LA-SMB0116-009

   HENRY D MANGHAM    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67763    LA    Lincoln

LA-SMB0116-010

   QUENTELLA M MANGHAM    TENSAS DELTA EXPLORATION COMPANY LLC      6/15/2005             F67764    LA    Lincoln

LA-SMB0116-011

   PATSY WILSON BOLDS ET AL, MAXINE WILSON,    WHELESS INDUSTRIES INC      5/8/1978       230    585    D13316    LA    Lincoln

LA-SMB0117-001

   ADD THOMSON ET UX LOIS OLIVER HOLSTEAD    WHELESS INDUSTRIES INC      4/17/1974       177    269    C89082    LA    Lincoln

LA-SMB0117-002

   JAMES H WILSON ET UX ANITA KAY WILSON    WHELESS INDUSTRIES INC      5/14/1974       177    273    C89083    LA    Lincoln

LA-SMB0117-003

   LALLAGE FEAZEL WALL    WHELESS INDUSTRIES INC      7/16/1974       177    163    C89236    LA    Lincoln

LA-SMB0117-004

   MRS G M ANDERSON ET AL, WIDOW;    WHELESS INDUSTRIES INC      7/16/1974       177    617    C89237    LA    Lincoln

LA-SMB0117-005

   JOHN S SIMONTON ET UX EVA RODGER    WHELESS INDUSTRIES INC      7/19/1974       178    851    C89832    LA    Lincoln

LA-SMB0117-006

   JOHN S SIMONTON ET UX EVA RODGER    WHELESS INDUSTRIES INC      8/5/1975       190    840    C95415    LA    Lincoln

LA-SMB0118-001

   WILLIAM C THURMAN ET AL    WHELESS INDUSTRIES INC      4/15/1974       177    277    C89084    LA    Lincoln

LA-SMB0118-002

   EVELYN PONDER STELLE    WHELESS INDUSTRIES INC      4/15/1974       177    281    C89085    LA    Lincoln

LA-SMB0118-003

   R A THURMON    WHELESS INDUSTRIES INC      5/16/1974       177    285    C89086    LA    Lincoln

LA-SMB0118-004

   E D RHEA    WHELESS INDUSTRIES INC      4/11/1974       177    289    C89087    LA    Lincoln

LA-SMB0118-005

   ELIAS HARRIS    WHELESS INDUSTRIES INC      5/31/1974       177    293    C89088    LA    Lincoln

LA-SMB0118-006

   F B JAMES    WHELESS INDUSTRIES INC      5/14/1974       177    297    C89089    LA    Lincoln

LA-SMB0118-007

   G WILLIAMS JAMES    WHELESS INDUSTRIES INC      5/14/1974       177    301    C89090    LA    Lincoln

LA-SMB0118-008

   NORMA M STROTHER ET AL    WHELESS INDUSTRIES INC      5/14/1974       177    305    C89091    LA    Lincoln

LA-SMB0118-009

   LAVERNE TRAYLOR ET AL,    WHELESS INDUSTRIES INC      5/16/1974       177    309    C89092    LA    Lincoln

LA-SMB0120-001

   ROY JAMES ELLIS ET AL    DAVID A RANDALL      7/19/1974       177    414    C89160    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SMB0120-002

   BRUCE ALLEN    DAVID A RANDALL      8/15/1974       178    352    C89533    LA    Lincoln

LA-SMB0120-003

   LONNIE FRAZIER ET AL, PRENTIS FRAZIER,    DAVID A RANDALL      11/2/1974       186    825    C93623    LA    Lincoln

LA-SMB0121-001

   MRS T J FORD ET AL    WHELESS INDUSTRIES INC      5/31/1974       177    717    C89278    LA    Lincoln

LA-SMB0121-002

   WILLIAM MANGHAM    DAVID A RANDALL      10/22/1974       180    258    C90587    LA    Lincoln

LA-SMB0122-001

   PINKIE MCGUIRE HOWELL    WHELESS DRILLING COMPANY      2/21/1956       73       N-135405    LA    Lincoln

LA-SMB0125-001

   ELLON SKINNER BERRY    HASSIE HUNT TRUST      12/2/1948             N-84978    LA    Lincoln

LA-SMB0126-001

   A R WHERRITT    ABE B HARRIS      10/15/1949       51       91844    LA    Lincoln

LA-SMB0126-002

   BROWN, HERMAN    ABE B HARRIS      8/26/1949             91377    LA    Lincoln

LA-SMB0126-003

   EDGAR MONTEITH ET AL    ABE B HARRIS      8/26/1949       51    361    92004    LA    Lincoln

LA-SMB0126-004

   DICK TOWERY ET AL    ABE B HARRIS      10/19/1949       51       91983    LA    Lincoln

LA-SMB0126-005

   GEORGE BROWN ET AL    ABE B HARRIS      5/17/1950       53       97811    LA    Lincoln

LA-SMB0126-006

   ABE B HARRIS JR    ABE B HARRIS      12/6/1950       55       101586    LA    Lincoln
            58       105592      
            58       105592      

LA-SMB0126-007

   PATRICIA BURKHART    PAN-AM SOUTHERN CORPORATION      4/28/1951       58       105592    LA    Lincoln

LA-SMB0127-000

   MRS R F HASSELL ET AL    ABE B HARRIS      3/23/1950       52       95604    LA    Lincoln

LA-SMB0128-001

   BROWN, HERMAN    ABE B HARRIS      11/24/1950             101451    LA    Lincoln

LA-SMB0128-002

   C R BENNETT    ABE B HARRIS      10/12/1950       55    17       LA    Lincoln

LA-SMB0128-003

   MRS R F HASSELL ET AL    ABE B HARRIS      9/18/1950       54    475       LA    Lincoln
            51    185    91292      

LA-SMB0129-001

   PRICE (R P) GOREE    ABE B HARRIS      5/9/1949       51    185    91292    LA    Lincoln
            51    191    91295      

LA-SMB0129-002

   WILLARD P GOREE    ABE B HARRIS      5/13/1949       51    191    91295    LA    Lincoln
            51    187    91293      

LA-SMB0129-003

   SALLIE E GOREE MATHEWS    ABE B HARRIS      5/9/1949       51    187    91293    LA    Lincoln
            51    189    91294      

LA-SMB0129-004

   PINKIE G COVINGTON    ABE B HARRIS      5/13/1949       51    189    91294    LA    Lincoln
            51    193    91296      

LA-SMB0129-005

   CALVIN WILKERSON    ABE B HARRIS      5/27/1949       51    193    91296    LA    Lincoln
            51    203    91301      

LA-SMB0129-006

   SALTMOUNT OIL COMPANY    ABE B HARRIS      5/26/1949       51    203    91301    LA    Lincoln
            51    197    91298      

LA-SMB0129-007

   WILLIAM L PICKENS    ABE B HARRIS      5/24/1949       51    197    91298    LA    Lincoln
            51    201    91300      

LA-SMB0129-008

   MARACABIO OIL EXPLORATION CORP    ABE B HARRIS      5/20/1949       51    201    91300    LA    Lincoln
            51    195    91297      

LA-SMB0129-009

   S C (CLAUDE) GOREE    ABE B HARRIS      7/11/1949       51    195    91297    LA    Lincoln
            54    399    100051      

LA-SMB0129-010

   BROWN, HERMAN    ABE B HARRIS      8/26/1950       51    399    100051    LA    Lincoln
            54    401    100 052      

LA-SMB0129-011

   DAVID M LIDE    ABE B HARRIS      8/26/1950       54    401    100 052    LA    Lincoln
            54    405    100 054      

LA-SMB0129-012

   SUMMERFIELD G ROBERTS    ABE B HARRIS      8/26/1950       54    405    100 054    LA    Lincoln
            54    511    100308      

LA-SMB0129-013

   GEORGE J GREER    ABE B HARRIS      8/26/1950       54    511    100308    LA    Lincoln
            58    145    104889      

LA-SMB0129-014

   C N HOUSH    PAN-AM SOUTHERN CORPORATION      4/3/1951       58    145    104889    LA    Lincoln

LA-SMB0129-015

   JOHN B GREER    ABE B HARRIS      8/26/1950       54    403    N-100053    LA    Lincoln

LA-SMB0129-016

   J M JACKSON    ABE B HARRIS      9/28/1950       54    407    N-100055    LA    Lincoln

LA-SMB0129-017

   R F BUCHANAN    ABE B HARRIS      8/26/1950       54    421    N-100132    LA    Lincoln

LA-SMB0129-018

   MARACAIBO OIL EXPLORATION    PAN-AM SOUTHERN CORPORATION      2/22/1951       57    521    N-104294    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SMB0129-019

   HERMAN BROWN    ABE B HARRIS      2/21/1951       57    423    N-104063    LA    Lincoln

LA-SMB0129-020

   DAVID M LIDE    PAN-AM SOUTHERN CORPORATION      2/23/1951       57    547    N-104388    LA    Lincoln

LA-SMB0129-021

   GEORGE J GREER    PAN-AM SOUTHERN CORPORATION      2/27/1951       57    593    N-104483    LA    Lincoln

LA-SMB0129-022

   SUMMERFIELD G ROBERTS    PAN-AM SOUTHERN CORPORATION      2/23/1951       58    219    N-105182    LA    Lincoln

LA-SMB0130-001

   LUTHER E (CAL) GARDNER    PAN-AM SOUTHERN CORPORATION      9/15/1950       54    351    N-99839    LA    Lincoln

LA-SMB0130-002

   NULL GARDNER    PAN-AM SOUTHERN CORPORATION      6/23/1950       53    38    N-97815    LA    Lincoln

LA-SMB0130-003

   T GRADY GARDNER    PAN-AM SOUTHERN CORPORATION      6/23/1950       53    381    N-97814    LA    Lincoln

LA-SMB0130-004

   LOUIE GARDNER BARBEE    PAN-AM SOUTHERN CORPORATION      6/23/1950       53    379    N-97813    LA    Lincoln

LA-SMB0130-005

   FIRST NATIONAL BANK OF RUSTON    PAN-AM SOUTHERN CORPORATION      10/27/1950       53    20       LA    Lincoln

LA-SMB0130-006

   JULIA GARDNER NICHOLSON ET AL    PAN-AM SOUTHERN CORPORATION      6/23/1950       53    378    N-97812    LA    Lincoln

LA-SMB0131-001

   OWAISSA GIVENS    J I ROBERTS      2/28/1950       52    466    N-95767    LA    Lincoln

LA-SMB0131-002

   GIVENS, ANNIE LOUISE, ET AL    C H MURPHY      5/7/1948       47    357    N-83147    LA    Lincoln

LA-SMB0131-003

   GIVENS, ANNIE LOUISE, ET AL    J I ROBERTS      2/28/1950       52    285    N-94840    LA    Lincoln
            1196    624    F74533      

LA-SMB0132-001

   HUNTER FARMS & TIMBER, LLC    CHESAPEAKE LOUISIANA L P      6/29/2005       1196    624    F74533    LA    Lincoln
                  N-86000      

LA-SMB0133-001

   JOHNNIE & J L SHERRARD    CHESAPEAKE LOUISIANA L P      11/30/1949             N-86000    LA    Lincoln

LA-SMB0134-001

   LUCILE CALAHAN    CHESAPEAKE LOUISIANA L P      12/3/1948             N-86002    LA    Lincoln

LA-SMB0135-001

   MARY LIVINGSTON    CHESAPEAKE LOUISIANA L P      1/24/1949       49    249    N-86482    LA    Lincoln

LA-SMB0136-001

   PINKIE MCGUIRE HOWELL    CHESAPEAKE LOUISIANA L P      9/18/1950       654    543    N-100379    LA    Lincoln

LA-SMB0137-001

   LULA B JONES    CHESAPEAKE LOUISIANA L P      6/10/1950       53    505    N-98347    LA    Lincoln
            49    313    N-86796      

LA-SMB0138-001

   ADD THOMPSON    ABE B HARRIS      1/25/1949             N-86796    LA    Lincoln
            54    613    N-100526      

LA-SMB0139-001

   MATT BUTLER, ET AL    ABE B HARRIS      9/18/1950       54    613    N-100526    LA    Lincoln

LA-SMB0140-001

   JAMES GOREE    CHESAPEAKE LOUISIANA L P      10/10/1950       55    117    N-101059    LA    Lincoln
            49    203    N-86315      

LA-SMB0141-001

   JONAS FRAZIER    CHESAPEAKE LOUISIANA L P      2/8/1949       49    203    N-86315    LA    Lincoln
            58    378    N-105592      
            58    378    N-105592      
            58    378    N-105592      
            58    378    N-105592      

LA-SMB0142-001

   CARL BURKHART, JR    PAN-AM SOUTHERN CORPORATION      4/28/1951       58    378    N-105592    LA    Lincoln

LA-SMB0143-001

   DON & MARTHA G DURRETT    CHESAPEAKE LOUISIANA L P      9/28/2005       1184    791    69465    LA    Lincoln

LA-SMB0144-001

   WAYNE L SIMPSON    CHESAPEAKE LOUISIANA L P      9/2/2005       1184    795    F69466    LA    Lincoln
            1188    463    F71005      

LA-SMB0145-001

   LINDA HUNT    CHESAPEAKE LOUISIANA L P      9/26/2005       1188    463    F71005    LA    Lincoln
            1196    335    F74408      

LA-SMB0145-002

   RICKEY YOUNG    CHESAPEAKE LOUISIANA L P      5/11/2006       1196    335    F74408    LA    Lincoln

LA-SMB0146-000

   BERTHA NELSON BUTLER    MURPHY CORPORATION      9/26/1958       64    186    12568    LA    Lincoln

LA-SMB0147-000

   EDITH CANN THURMON, ET AL    MURPHY CORPORATION      9/29/1958       64    191    12569    LA    Lincoln

LA-SMB0148-000

   FLEMING BUTLER, ET AL    MURPHY CORPORATION      9/24/1958       64    194    12570    LA    Lincoln

LA-SMB0149-000

   ROBERT E WITT, ET AL    MURPHY CORPORATION      9/25/1958       64    182    12566    LA    Lincoln

LA-SMB0150-000

   MOZEL JACKSON BUTLER NORRIS    MURPHY CORPORATION      2/21/1959       67    95    12863    LA    Lincoln

LA-SMB0151-001

   W C SIMONTON    ABE B HARRIS      5/23/1949       51    223    N-91311    LA    Lincoln

LA-SMB0151-002

   LOIS OLIVER HOLSTEAD, ET AL    ABE B HARRIS      6/1/1949       51    215    N-91307    LA    Lincoln

LA-SMB0151-003

   ROGER E WHELESS    ABE B HARRIS      5/31/1949       51    213    N-91306    LA    Lincoln

LA-SMB0151-004

   GEORGE J GREER, ET UX    ABE B HARRIS      6/23/1949       51    207    N-91303    LA    Lincoln

LA-SMB0151-005

   ADD THOMPSON    ABE B HARRIS      5/21/1949       51    221    N-91310    LA    Lincoln

LA-SMB0151-006

   SUMMERFIELD G ROBERTS    ABE B HARRIS      7/12/1949       51    211    N-91305    LA    Lincoln

LA-SMB0151-007

   DAVID M LIDE    ABE B HARRIS      6/28/1949       51    209    N-91304    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-SMB0151-008

   HERMAN BROWN    ABE B HARRIS      8/26/1949       51    205    N-91302    LA    Lincoln

LA-SMB0151-009

   E R HAYS    ABE B HARRIS      4/11/1950       52    483    N-95885    LA    Lincoln

LA-SMB0151-010

   J FLOYD HODGE    ABE B HARRIS      6/1/1949       51    225    N-91312    LA    Lincoln

LA-SMB0151-011

   A R WHERRITT    ABE B HARRIS      10/15/1949       51    315    N-91845    LA    Lincoln

LA-SMB0151-012

   C E BARHAM    ABE B HARRIS      5/21/1949       51    219    N-91309    LA    Lincoln

LA-SMB0151-013

   C C BARNHAM    ABE B HARRIS      5/21/1949       51    217    N-91308    LA    Lincoln

LA-SMB0152-000

   LAURA MAE AND JOSEPH STREETS    ABE HARRIS      9/20/1950       54    411       LA    Lincoln

LA-TER0001-000

   MILTON LAVELLE HOOD ET AL    KCS RESOURCES INC      11/20/2003       1154    803    52904    LA    Lincoln

LA-TER0002-001

   M L HOOD ET AL    CYPRESS OPERATING INC      1/10/2001       1115    263    F26819    LA    Lincoln

LA-TER0002-002

   MILTON LAVELLE HOOD ET AL    KCS RESOURCES INC      4/12/2006       1200    545    F76136    LA    Lincoln

LA-TER0003-001

   REAM INTERESTS INC    MIDNITE ENERGY INC      6/4/2004       1162    247    57541    LA    Lincoln
   BENJAMIN MINERALS INC                     

LA-TER0003-002

   WILLIAM MENTE BENJAMIN AS PRESIDENT    MIDNITE ENERGY INC      6/1/2004       1162    256    57543    LA    Lincoln

LA-TER0003-003

   EXOTIC OIL & GAS LLC    MIDNITE ENERGY INC      4/8/2004       1162    243    57540    LA    Lincoln

LA-TER0003-004

   DOROTHY HOGG LEACH    MIDNITE ENERGY INC      4/20/2004       1162    239    57539    LA    Lincoln

LA-TER0003-005

   S D RESOURCES LTD ET AL    MIDNITE ENERGY INC      4/1/2004       1162    260    57544    LA    Lincoln
   LOUISIANA UNITED METHODIST CHILDREN AND                     

LA-TER0003-006

   FAMILY SERVICES INC    MIDNITE ENERGY INC      6/2/2004       1162    252    F57542    LA    Lincoln
   BARBARA FOREE WALLACE TRUST                     
   BARBARA FOREE WALLACE TRUSTEE                     
   ELIZABETH FOREE LEE TRUST                     
   ELIZABETH FOREE LEE TRUSTEE                     
   NANCI LEE FOREE TRUST                     

LA-TER0003-007

   NANCI LEE FOREE TRUSTEE    MIDNITE ENERGY INC      5/16/2004       1162    365    F57567    LA    Lincoln

LA-TER0003-008

   MOSBACHER USA INC    MIDNITE ENERGY INC      11/19/2004       1170    674    62270    LA    Lincoln
            1162    272    057547      
            1162    272    057547      

LA-TER0003-009

   C W WILLIAMS JR ET AL    MIDNITE ENERGY INC      3/20/2004       1162    272    057547    LA    Lincoln
   PAUL D SMITH JR ESTATE                     

LA-TER0003-010

   JAMES W COBURN AS INDEPENDENT EXECUTOR    MIDNITE ENERGY INC      7/14/2004       1186    513    F70069    LA    Lincoln

LA-TER0003-011

   LAVERNE DELONY JEFCOAT    MIDNITE ENERGY INC      7/15/2005       1186    488    F70065    LA    Lincoln

LA-TER0003-012

   JUDITH DELONY WASSON    MIDNITE ENERGY INC      7/18/2005       1189    726    F71600    LA    Lincoln

LA-TER0003-013

   GEORGE GRAHAM CAVER    MIDNITE ENERGY INC      7/15/2005       1186    497    F70067    LA    Lincoln

LA-TER0003-014

   GEORGE MICHAEL DELONEY    MIDNITE ENERGY INC      7/22/2005       1186    483    F70064    LA    Lincoln

LA-TER0003-015

   JAMES ARNOLD DELONEY    MIDNITE ENERGY INC      7/22/2005       1186    522    F70071    LA    Lincoln

LA-TER0003-016

   RICKY LYNN MORISON    MIDNITE ENERGY INC      8/16/2005       1186    526    F70072    LA    Lincoln

LA-TER0003-017

   RONNIE LEE MCCULLIN    MIDNITE ENERGY INC      7/14/2005       1186    530    F70073    LA    Lincoln
   ROBERT C NOLAN ET AL                     
   CHARLES M NOLAN                     
   WILLIAM C NOLAN JR                     

LA-TER0003-018

   THEODOSIA M NOLAN RODDY    MIDNITE ENERGY INC      7/14/2005       1186    543    F70076    LA    Lincoln

LA-TER0003-019

   MELBA N KOLB    MIDNITE ENERGY INC      9/8/2005       1186    539    F70075    LA    Lincoln

LA-TER0003-020

   SUSAN G SCHROEDER ET AL    MIDNITE ENERGY INC      6/30/2005       1186    534    F70074    LA    Lincoln
   PAULINE N ANTILLEY                     

LA-TER0003-021

   REPRESENTED BY BRADLEY NOBLES JOHNSON A-I-F    MIDNITE ENERGY INC      8/30/2005       1188    794    F71186    LA    Lincoln

LA-TER0003-022

   CHARLES H MURPHY JR ESTATE ET AL    MIDNITE ENERGY INC      8/5/2005       1188    802    F71188    LA    Lincoln

LA-TER0003-023

   L S YOUNGBLOOD COMPANY    MIDNITE ENERGY INC      10/29/2004       1170    670    62269    LA    Lincoln

LA-TER0003-026

   PEGGY JO DELONEY    MIDNITE ENERGY INC      7/26/2005       1188    798    F71187    LA    Lincoln

LA-TER0003-027

   HELEN RUTH BURTON    MIDNITE ENERGY INC      4/6/2004       1162    277    57548    LA    Lincoln

LA-TER0003-028

   WILMOTH INTERESTS INC    MIDNITE ENERGY INC      4/1/2004       1166    436    59964    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0003-029

   CCW INTEREST INC    MIDNITE ENERGY INC      6/4/2004       1165    312    59259    LA    Lincoln

LA-TER0003-030

   CYNTHIA R DORFMAN    MIDNITE ENERGY INC      6/28/2004       1165    317    59260    LA    Lincoln

LA-TER0003-031

   SHELLEY D ROBERTS    MIDNITE ENERGY INC      6/28/2004       1165    321    59261    LA    Lincoln
   PRINCIPIA CORPORATION BANK OF OKLAHOMA                     

LA-TER0003-032

   AGENT    MIDNITE ENERGY INC      6/30/2004       1165    328    59263    LA    Lincoln

LA-TER0003-033

   NORTH CENTRAL OIL CORPORATION    MIDNITE ENERGY INC      6/9/2005       1186    502    F70068    LA    Lincoln
   PHILLIP B HOWELL & MARY AMELIA WHITED HOWELL                     
   REVOCABLE TRUST                     

LA-TER0003-034

   AND THE FROST FOUNDATION    MIDNITE ENERGY INC      7/22/2005       1186    517    F70070    LA    Lincoln
            1166    442    059965      

LA-TER0003-035

   S & P CO    MIDNITE ENERGY INC      9/2/2004       1166    442    059965    LA    Lincoln
            1189    718    F71599      

LA-TER0003-036

   SKLARCO LLC    MIDNITE ENERGY INC      12/1/2004       1189    718    F71599    LA    Lincoln

LA-TER0003-037

   DORA THATCHER FRATELLI    MIDNITE ENERGY INC      9/8/2004       1166    448    59966    LA    Lincoln

LA-TER0003-038

   REGINALD R JONES JR    MIDNITE ENERGY INC      9/8/2004       1166    452    59967    LA    Lincoln

LA-TER0003-039

   MARIANNE HAMITER WILLIAMS    MIDNITE ENERGY INC      9/8/2004       1166    456    59968    LA    Lincoln

LA-TER0003-040

   JUANITA E YOUNGBLOOD TRUST    MIDNITE ENERGY INC      6/30/2004       1165    325    59262    LA    Lincoln

LA-TER0003-041

   L S YOUNGBLOOD COMPANY    MIDNITE ENERGY INC      6/23/2005       1186    493    F70066    LA    Lincoln

LA-TER0003-042

   DAURLINE TANNER    ROBERT E MCKELLAR      4/14/2005       1173    508    63756    LA    Lincoln

LA-TER0003-043

   BILLYE MARGARET SNIDER HUFF    ROBERT E MCKELLAR      4/18/2005       1174    639    F64414    LA    Lincoln

LA-TER0003-044

   OLEN LAVELLE SINGLETON ET AL    KCS RESOURCES INC      7/26/2007       1237    87    F90828    LA    Lincoln
            1170    671         

LA-TER0003-045

   RUDMAN PARTNERSHIP LTD    MIDNITE ENERGY INC      12/1/2004       1170    677       LA    Lincoln
            1162    309    057554      
            1162    309    057554      

LA-TER0003-046

   MATTIE JEAN HEDGEPETH THOMAS DYE    MIDNITE ENERGY INC      2/20/2004       1162    309       LA    Lincoln
            1162    291    057551      
            1162    291    057551      
            1162    291    057551      

LA-TER0003-047

   MORITA THOMAS BAXTER PALMER    MIDNITE ENERGY INC      12/8/2003       1162    291    057551    LA    Lincoln
            1162    297    057552      
            1162    297    057552      

LA-TER0003-048

   CHERYL ANN BAXTER MONROE    MIDNITE ENERGY INC      12/8/2003       1162    297    057552    LA    Lincoln
            1162    303    057553      
            1162    303    057553      

LA-TER0003-049

   FRANCES V HARRISON    MIDNITE ENERGY INC      2/20/2004       1162    303    057553    LA    Lincoln

LA-TER0003-050

   JOYCE LAFETTE DANIEL HENRY    MIDNITE ENERGY INC      8/12/2004       1165    285    59252    LA    Lincoln

LA-TER0003-051

   STEPHANIE Y MONNIN    MIDNITE ENERGY INC      10/25/2004       1170    662    62267    LA    Lincoln

LA-TER0003-052

   MARCUS W MONNIN    MIDNITE ENERGY INC      10/25/2004       1170    666    62268    LA    Lincoln

LA-TER0003-053

   CATHERINE FOLSE COLVIN ET AL    ROBERT E MCKELLAR      12/3/2003       1154    549    52747    LA    Lincoln

LA-TER0003-054

   JAMES H COLVIN    ROBERT E MCKELLAR      12/4/2003       1154    155    52487    LA    Lincoln

LA-TER0003-055

   JULIA ANN NICHOLS ET VIR    ROBERT E MCKELLAR      12/3/2003       1153    771    52336    LA    Lincoln

LA-TER0003-056

   LITTLETON P COLVIN JR ET UX    ROBERT E MCKELLAR      12/4/2003       1153    804    52361    LA    Lincoln

LA-TER0003-057

   VELDA JANE GIBBS KAY KENT    ROBERT E MCKELLAR      12/5/2003       1153    800    52360    LA    Lincoln

LA-TER0003-058

   KATHRYN JEAN WARD    MIDNITE ENERGY INC      8/5/2004       1165    289    59253    LA    Lincoln

LA-TER0003-059

   FRANCES LUCILLE BURFORD    MIDNITE ENERGY INC      8/5/2004       1165    293    59254    LA    Lincoln

LA-TER0003-060

   WALTER RAY FARRAR JR    MIDNITE ENERGY INC      8/5/2004       1165    297    59255    LA    Lincoln

LA-TER0003-061

   HARRY R COOK JR    MIDNITE ENERGY INC      8/5/2004       1165    301    59256    LA    Lincoln

LA-TER0003-062

   WILLIAM DON SMITH    MIDNITE ENERGY INC      8/11/2004       1166    465    59970    LA    Lincoln

LA-TER0003-063

   LUCILLE E C FULLER    MIDNITE ENERGY INC      8/20/2004       1166    469    59971    LA    Lincoln

LA-TER0003-064

   HELEN HOLLIS COLVIN    MIDNITE ENERGY INC      8/11/2004       1165    305    59257    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0003-065

   THOMAS M MONCRIEF ET AL    MIDNITE ENERGY INC      8/10/2004       1166    460    59969    LA    Lincoln
            492    267         
            492    267         
            492    267         

LA-TER0003-067

   FRANCES NOBLES GURRADO ET VIR    EASON OIL COMPANY INC      9/5/1984       492    267       LA    Lincoln
            492    263    E-1608      
            492    263    E-1608      
            492    263    E-1608      

LA-TER0003-068

   MAURINE NOBLES JACKSON    EASON OIL COMPANY INC      9/5/1984       492    263    E-1608    LA    Lincoln
            430    209    D-48893      
            430    209    D-48893      
            430    209    D-48893      

LA-TER0003-069

   J LEE YOUNGBLOOD ET UX    P L YOUNGBLOOD      4/8/1983       430    209    D-48893    LA    Lincoln
            503    254         
            503    254         
            503    254         

LA-TER0003-070

   MELBA NOBLES KOLB    EASON OIL COMPANY INC      9/5/1984       503    254       LA    Lincoln
            494    328         
            494    328         
            494    328         

LA-TER0003-071

   PAULINE NOBLES ANTILLEY    EASON OIL COMPANY INC      9/5/1984       494    328       LA    Lincoln

LA-TER0003-075

   MILTON LAVELLE HOOD ET UX    PETROHOOD CORPORATION      12/15/2007       1256    231    F98352    LA    Lincoln

LA-TER0003-P24

   R PETE SMITH ET AL    MIDNITE ENERGY INC      8/9/2005       1186    552    F70078    LA    Lincoln

LA-TER0003-P25

   EMMA MARY SMITH    MIDNITE ENERGY INC      9/6/2005       1186    548    F70077    LA    Lincoln

LA-TER0003-P73

   ROY FREDERICK BAXTER ET UX    MIDNITE ENERGY INC      12/8/2003       1162    285    57550    LA    Lincoln

LA-TER0004-000

   DOROTHY COLVIN NAPPER    MIDNITE ENERGY INC      11/20/2003       1162    315       LA    Lincoln

LA-TER0005-001

   THOMAS C COLVIN JR ET UX    MIDNITE ENERGY INC      11/20/2003       1162    323    57557    LA    Lincoln

LA-TER0005-002

   PATRICK M MCGOWAN ET UX    MIDNITE ENERGY INC      12/3/2003       1162    319    57556    LA    Lincoln

LA-TER0005-003

   DISCUS OIL CORPORATION    KCS RESOURCES INC      1/22/2006       1197    673    F75013    LA    Lincoln

LA-TER0005-004

   WAYNE L SIMPSON    KCS RESOURCES INC      1/22/2006       1197    664    F75010    LA    Lincoln

LA-TER0005-005

   TERESA S CRAWFORD    KCS RESOURCES INC      1/22/2006       1197    670    F75012    LA    Lincoln

LA-TER0005-006

   CARLA S MAXWELL    KCS RESOURCES INC      1/22/2006       1197    677    F75014    LA    Lincoln

LA-TER0005-007

   WILLIAM D PITTMAN    MIDNITE ENERGY INC      6/29/2005                LA    Lincoln

LA-TER0005-008

   ALICE G PITTMAN ET AL    MIDNITE ENERGY INC      8/25/2004       1170    658    F62266    LA    Lincoln

LA-TER0005-009

   DON DURRETT    MIDNITE ENERGY INC      8/3/2004       1165    309    59258    LA    Lincoln

LA-TER0005-010

   LESLEY S JAMES    KCS RESOURCES INC      1/22/2006       1197    667    F75011    LA    Lincoln

LA-TER0007-000

   RICHARD SPESS ET UX    MIDNITE ENERGY INC      3/19/2004       1162    281    57549    LA    Lincoln

LA-TER0009-000

   JAMES A GODWIN ET UX    KCS RESOURCES INC      11/11/2003       1159    162    55334    LA    Lincoln

LA-TER0010-000

   SIDNEY GLEN MCCULLIN ET AL    CYPRESS OPERATING INC.      11/15/2000       113    299    26336    LA    Lincoln

LA-TER0011-001

   WILLARD DONALD WALLACE ET UX    CYPRESS OPERATING INC      12/18/2000       1113    293    26335    LA    Lincoln

LA-TER0011-002

   SALEM UNITED METHODIST CHURCH    CYPRESS OPERATING INC.      1/8/2001       1113    351    26349    LA    Lincoln

LA-TER0011-003

   SALEM UNITED METHODIST CHURCH    WILDHORSE RESOURCES LLC      4/15/2012       1312    594    F123757    LA    Lincoln

LA-TER0013-000

   BELLEVUE TIMBER COMPANY INC    CYPRESS OPERATING INC.      11/27/2000       1113    303    26337    LA    Lincoln

LA-TER0014-001

   JAMES E DAVISON ET UX    CYPRESS OPERATING INC.      11/27/2000       1115    277    26822    LA    Lincoln
            1118    619    028608      

LA-TER0014-002

   ROBERT CRAIG SMITH ET UX    CYPRESS OPERATING INC.      4/23/2001       1322    387    F128919    LA    Lincoln

LA-TER0014-003

   MARTA HUDSON CAMPBELL ET VIR    KCS RESOURCES INC      9/16/2003             F75987    LA    Lincoln

LA-TER0014-004

   ALAN PHILLIP CAMPBELL ET UX    HUNTER ENERGY CORPORATION      10/31/2002       1139    114    42860    LA    Lincoln
            1311    482    F123120      

LA-TER0014-005

   ALAN PHILLIP CAMPBELL SR ET UX    WILDHORSE RESOURCES LLC      3/7/2012       1311    482    F123120    LA    Lincoln

LA-TER0014-006

   CHARLES PEYTON MCCULLIN    HUNTER ENERGY CORPORATION      10/21/2002       1139    526    43065    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            1173    764    063930      

LA-TER0014-007

   JOSEPH DREW RADESCICH    KCS RESOURCES INC      3/30/2005       1173    764    063930    LA    Lincoln
            1311    477    F123119      
            1311    477    F123119      

LA-TER0014-008

   JOSEPH DREW RADESCICH    WILDHORSE RESOURCES LLC      3/12/2012       1311    477    F123119    LA    Lincoln

LA-TER0014-009

   JOSEPH DREW RADESCICH    HUNTER ENERGY CORPORATION      10/30/2002       1139    118    42861    LA    Lincoln

LA-TER0014-010

   MILDRED Y REYNOLDS JACKSON    HUNTER ENERGY CORPORATION      11/11/2002       1142    18    F44576    LA    Lincoln

LA-TER0014-011

   PINKIE LOU REYNOLDS STREET    HUNTER ENERGY CORPORATION      11/11/2002       1139    608    43107    LA    Lincoln

LA-TER0014-012

   VELMA R SPIVEY    HUNTER ENERGY CORPORATION      11/5/2002       1139    291    42901    LA    Lincoln

LA-TER0014-013

   LOU JONE REYNOLDS    HUNTER ENERGY CORPORATION      11/5/2002       1139    616    43109    LA    Lincoln

LA-TER0014-014

   SANDRA MARIE REYNOLDS HILL    HUNTER ENERGY CORPORATION      11/11/2002       1139    612    43108    LA    Lincoln

LA-TER0014-015

   KIM LOTT    HUNTER ENERGY CORPORATION      11/11/2002       1141    785    F44499    LA    Lincoln

LA-TER0014-016

   EFFIE JEWEL BADGER    HUNTER ENERGY CORPORATION      11/5/2002       1139    299    42903    LA    Lincoln

LA-TER0016-000

   LOUISIANA MINERALS LTD    CYPRESS OPERATING INC.      4/23/2001       1118    624    F28609    LA    Lincoln
   JAMES E DAVISON ET UX                     

LA-TER0019-000

   DIANNE ODOM DAVISON    HUNTER ENERGY CORPORATION      9/23/2002       1139    122    42862    LA    Lincoln

LA-TER0020-000

   BELLEVUE TIMBER COMPANY INC    HUNTER ENERGY CORPORATION      10/10/2002       1139    90    42854    LA    Lincoln

LA-TER0021-000

   SIDNEY GLEN MCCULLIN ET UX    HUNTER ENERGY CORPORATION      10/17/2002       1139    86    42853    LA    Lincoln

LA-TER0024-000

   RICHARD KEITH CANTERBURY ET UX    KCS RESOURCES INC      10/23/2002       1139    277    42897    LA    Lincoln

LA-TER0025-001

   MILTON LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    134    42865    LA    Lincoln

LA-TER0025-002

   MILTON LEWIS    KCS RESOURCES INC      7/10/2003       1150    206    49783    LA    Lincoln
            1139    126    042863      

LA-TER0025-005

   NELLIE LEWIS BROWN ET AL    HUNTER ENERGY CORPORATION      10/17/2002       1139    126    042863    LA    Lincoln

LA-TER0025-006

   MARVIN LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    138    42866    LA    Lincoln

LA-TER0025-007

   GLADYS LEWIS    HUNTER ENERGY CORPORATION      10/14/2002       1139    146    42868    LA    Lincoln

LA-TER0025-008

   ANDREW LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    102    42857    LA    Lincoln

LA-TER0025-009

   MARY LEWIS KILLINGS    HUNTER ENERGY CORPORATION      10/17/2002       1139    94    42855    LA    Lincoln

LA-TER0025-010

   SARAH JEAN LEWIS DAVIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    130    42864    LA    Lincoln

LA-TER0025-011

   RUBY LEE LEWIS AUSTIN    HUNTER ENERGY CORPORATION      10/17/2002       1139    142    42867    LA    Lincoln

LA-TER0025-012

   LACY B LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    98    42856    LA    Lincoln

LA-TER0025-013

   JOHN H LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    303    42904    LA    Lincoln

LA-TER0025-014

   LARRY D LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    110    42859    LA    Lincoln

LA-TER0025-015

   CLAUDE LEWIS    HUNTER ENERGY CORPORATION      10/17/2002       1139    106    42858    LA    Lincoln

LA-TER0025-016

   EFFIE LEWIS JOHNSON    KCS RESOURCES INC      5/12/2005       1177    391    F65782    LA    Lincoln

LA-TER0025-017

   IRENE LEWIS    KCS RESOURCES INC      4/14/2006       1203    127    F77439    LA    Lincoln

LA-TER0025-P03

   LAWRENCE BROWN    HUNTER ENERGY CORPORATION      10/17/2002       1139    533    43067    LA    Lincoln

LA-TER0025-P04

   MARY L B WILTZ    HUNTER ENERGY CORPORATION      10/17/2002       1139    307    42905    LA    Lincoln

LA-TER0026-001

   DOROTHY J STANDIFER ET AL    HUNTER ENERGY CORPORATION      9/23/2002       1139    162    42872    LA    Lincoln

LA-TER0026-002

   LARRY STANDIFER SR    HUNTER ENERGY CORPORATION      9/23/2002       1139    158    42871    LA    Lincoln

LA-TER0026-003

   MARY S PAGE ET AL    HUNTER ENERGY CORPORATION      9/23/2002       1139    166    42873    LA    Lincoln

LA-TER0026-004

   MICHAEL I STANDIFER    HUNTER ENERGY CORPORATION      9/23/2002       1139    154    42870    LA    Lincoln

LA-TER0026-005

   LAVERNE S JUNIOR ET VIR    HUNTER ENERGY CORPORATION      9/23/2002       1139    170    42874    LA    Lincoln

LA-TER0026-006

   GEORGE STANDIFER JR    HUNTER ENERGY CORPORATION      9/23/2002       1139    150    42869    LA    Lincoln

LA-TER0027-001

   WILLARD DONALD WALLACE ET AL    KCS RESOURCES INC      4/12/2004       1159    514    55631    LA    Lincoln
            1205    334    F78525      

LA-TER0027-002

   ALICE STINSON BOWDEN    KCS RESOURCES INC      8/16/2006       1204    257    F78012    LA    Lincoln

LA-TER0028-000

   LAWRENCE NICHOLAS MCCULLIN    KCS RESOURCES INC      4/14/2004       1160    612    56501    LA    Lincoln

LA-TER0029-000

   MATTIE HILL MURPHY ET AL    KCS RESOURCES INC      6/26/2007       1229    230    DOC. #F87718    LA    Lincoln

LA-TER0031-001

   HAZEL STANDIFER CARODINE    UNION TEXAS PETROLEUM CORPORATION      10/4/1982       416    111    D-46939    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-002

   MARY JEAN STANDIFER GRANT    UNION TEXAS PETROLEUM CORPORATION      10/1/1982       416    115    D-46940    LA    Lincoln

LA-TER0031-003

   SAMUEL STANDIFER    UNION TEXAS PETROLEUM CORPORATION      10/1/1982       468    197    D-55067    LA    Lincoln

LA-TER0031-004

   LESSIE MAE MALCOLM WALSH    UNION TEXAS PETROLEUM CORPORATION      10/5/1982       416    147    D-46948    LA    Lincoln

LA-TER0031-005

   ROBERT MAY    UNION TEXAS PETROLEUM CORPORATION      9/29/1982       416    139    D-46946    LA    Lincoln

LA-TER0031-006

   ANNIE RUTH STANDIFER FULCHER    UNION TEXAS PETROLEUM CORPORATION      4/14/1982       467    56    D-54889    LA    Lincoln

LA-TER0031-007

   FENIS MARIE HILL    UNION TEXAS PETROLEUM CORPORATION      5/25/1981       340    17    D-35830    LA    Lincoln

LA-TER0031-008

   FELTON HILL    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       338    58    D-35478    LA    Lincoln

LA-TER0031-009

   PEGGY ANN HILL CHAIRES    UNION TEXAS PETROLEUM CORPORATION      5/25/1981       340    21    D-35831    LA    Lincoln

LA-TER0031-010

   ELTON HILL    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       340    5    D-35827    LA    Lincoln

LA-TER0031-011

   BARBARA ELLIS MCMURRAY    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       340    9    D-35828    LA    Lincoln

LA-TER0031-012

   OSSIE HILL THOMAS    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       338    348    D-35637    LA    Lincoln

LA-TER0031-013

   DOROTHY ELLIS CRAWFORD    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       340    13    D-35829    LA    Lincoln

LA-TER0031-014

   JOHN WESLEY LOCKHART ET AL    KCS RESOURCES INC      8/28/2007       1253    642    F97724    LA    Lincoln
            203    356    D-2523      

LA-TER0031-015

   LADDIE DUPREE ET UX    FRANK D RIPPY      10/12/1976       203    356    D-2523    LA    Lincoln
            303    330    D-29763      

LA-TER0031-016

   SALLIE TALBERT GARNER    UNION TEXAS PETROLEUM      6/5/1980       303    330    D-29763    LA    Lincoln

LA-TER0031-017

   LILLIAN GIVENS BURNHAM    UNION TEXAS PETROLEUM      7/12/1980       323    58    D-33200    LA    Lincoln

LA-TER0031-018

   ALICE MARIE LEWIS PARKER    UNION TEXAS PETROLEUM      6/25/1980       308    322    D-30631    LA    Lincoln

LA-TER0031-019

   CLEVELAND BROWN    UNION TEXAS PETROLEUM      9/3/1980       308    318    D-30630    LA    Lincoln
            314    144    D-31569      

LA-TER0031-020

   CARRIE MAE LEWIS KING    UNION TEXAS PETROLEUM      6/25/1980       314    144    D-31569    LA    Lincoln
            381    220    D-41937      

LA-TER0031-021

   JESSE COLQUIT ET UX    UNION TEXAS PETROLEUM CORPORATION      12/15/1981       381    220    D-41937    LA    Lincoln
            379    187    D-41599      

LA-TER0031-022

   GENE T OLIVER ET UX    UNION TEXAS PETROLEUM CORPORATION      3/19/1982       379    187    D-41599    LA    Lincoln
            381    224    D-41938      

LA-TER0031-023

   FILMORE COLQUIT    UNION TEXAS PETROLEUM      12/15/1981       381    224    D-41938    LA    Lincoln

LA-TER0031-024

   LENOIT HILL    UNION TEXAS PETROLEUM CORPORATION      9/17/1980       312    95    D-31202    LA    Lincoln

LA-TER0031-025

   MICHAEL J ELLIS    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       363    193    D-39502    LA    Lincoln

LA-TER0031-026

   ELMER BRIDGES JR    UNION TEXAS PETROLEUM CORPORATION      11/20/1981       365    39    D-39682    LA    Lincoln

LA-TER0031-027

   BETTY LYNN BRIDGES CHISM    UNION TEXAS PETROLEUM CORPORATION      11/20/1981       365    35    D-39681    LA    Lincoln

LA-TER0031-028

   MARY ELLIS HUMES    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       345    298    D-36784    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-029

   FLORA WALKER GOREE    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       345    302    D-36785    LA    Lincoln

LA-TER0031-030

   DIANE WALKER MOORE    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       345    306    D-36786    LA    Lincoln

LA-TER0031-031

   RUTH LEWIS BOOZE ET AL    UNION TEXAS PETROLEUM CORPORATION      6/13/1981       369    213    D-40325    LA    Lincoln

LA-TER0031-032

   DALLAS WALKER    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       346    113    D-36836    LA    Lincoln

LA-TER0031-033

   EZRA WALKER    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       346    116    D-36837    LA    Lincoln

LA-TER0031-034

   JERELEAN WALKER DEBOSE    UNION TEXAS PETROLEUM CORPORATION      7/8/1981       346    120    D-36838    LA    Lincoln

LA-TER0031-035

   JOE HILL JR    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       338    46    D-35475    LA    Lincoln

LA-TER0031-036

   JENNIE LEE HILL CAMPBELL    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       338    50    D-35476    LA    Lincoln

LA-TER0031-037

   WILLIAM HILL JR    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       338    54    D-35477    LA    Lincoln

LA-TER0031-038

   LLOYD HILL    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       342    141    D-36261    LA    Lincoln

LA-TER0031-039

   MARY JOYCE HILL    UNION TEXAS PETROLEUM CORPORATION      5/25/1981       340    25    D-35832    LA    Lincoln

LA-TER0031-040

   ZANDRA ELLIS LEVINGSTON    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       342    137    D-36260    LA    Lincoln

LA-TER0031-041

   LOTTIE MAE HILL STEIB    UNION TEXAS PETROLEUM CORPORATION      5/25/1981       355    297    D-38353    LA    Lincoln

LA-TER0031-042

   THERESA DUNN CALDWELL    FRANK D RIPPY      3/16/1977       209    309    D-4781    LA    Lincoln
            258    151    D-23143      

LA-TER0031-043

   JIM ED REYNOLDS    ALLIED CHEMICAL CORPORATION      7/31/1979       258    151    D-23143    LA    Lincoln
            253    461    D-21773      

LA-TER0031-044

   PRENTISS CAMP    ALLIED CHEMICAL CORPORATION      6/25/1979       253    461    D-21773    LA    Lincoln
            253    465    D-21774      
            253    465    D-21774      
            253    465    D-21774      

LA-TER0031-045

   ELSIE KERKSIECK MENTIL    ALLIED CHEMICAL CORPORATION      6/25/1979       253    465    D-21774    LA    Lincoln

LA-TER0031-046

   JESSIE REYNOLDS WINES    UNION TEXAS PETROLEUM CORPORATION      11/22/1982       418    262    D-47173    LA    Lincoln

LA-TER0031-047

   LUGENE REYNOLDS    UNION TEXAS PETROLEUM CORPORATION      11/23/1982       418    266    D-47174    LA    Lincoln

LA-TER0031-048

   JESSIE ADAMS WILLIAMS    UNION TEXAS PETROLEUM CORPORATION      7/16/1981       346    124    D-36839    LA    Lincoln

LA-TER0031-049

   BOOKER T ADAMS    UNION TEXAS PETROLEUM CORP      7/16/1981       346    128    D-36840    LA    Lincoln

LA-TER0031-050

   ESSIE LEAN ADAMS HOWARD    UNION TEXAS PETROLEUM CORP      7/15/1981       346    132    D-36841    LA    Lincoln

LA-TER0031-051

   MARJORIE ADAMS WASHINGTON    UNION TEXAS PETROLEUM CORP      7/15/1981       347    195    D-37044    LA    Lincoln

LA-TER0031-052

   MILTON D ADAMS    UNION TEXAS PETROLEUM CORP      7/15/1981       347    199    D-37045    LA    Lincoln

LA-TER0031-053

   FLOYD REYNOLDS    UNION TEXAS PETROLEUM CORPORATION      7/11/1981       347    227    D-37052    LA    Lincoln

LA-TER0031-054

   AVERT L ADAMS JR    UNION TEXAS PETROLEUM CORP      8/25/1981       352    224    D-37885    LA    Lincoln

LA-TER0031-055

   PINKIE LOU REYNOLDS STREET    UNION TEXAS PETROLEUM CORP      11/22/1982       422    192    D47740    LA    Lincoln


Lease No.

  

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Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-056

   TITUS WALKER    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       347    207    D-37047    LA    Lincoln

LA-TER0031-057

   NAOMI WALKER LEWIS    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       347    211    D-37048    LA    Lincoln

LA-TER0031-058

   EMMA WALKER SMITH    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       347    219    D-37050    LA    Lincoln

LA-TER0031-059

   CORNELL BROWN    UNION TEXAS PETROLEUM CORPORATION      6/6/1981       347    223    D-37051    LA    Lincoln

LA-TER0031-060

   JAMES WALKER    UNION TEXAS PETROLEUM CORPORATION      12/16/1981       367    289    D-40027    LA    Lincoln

LA-TER0031-061

   SUSAN ELLIS MCCRAY    UNION TEXAS PETROLEUM CORPORATION      10/8/1981       369    221    D-40327    LA    Lincoln

LA-TER0031-062

   GLADYS DANIEL REED    UNION TEXAS PETROLEUM CORPORATION      3/12/1982       379    183    D-41598    LA    Lincoln

LA-TER0031-063

   FRANK LOCKHART    UNION TEXAS PETROLEUM CORPORATION      3/12/1982       379    175    D-41596    LA    Lincoln

LA-TER0031-064

   ANNIE MAE LOCKHART ROBINSON    UNION TEXAS PETROLEUM CORPORATION      3/12/1982       381    272    D-41950    LA    Lincoln

LA-TER0031-065

   LUCILLE WILSON WALKER    UNION TEXAS PETROLEUM CORPORATION      3/12/1982       381    268    D-41949    LA    Lincoln

LA-TER0031-066

   Q T MOORE WILSON CORBIN    UNION TEXAS PETROLEUM CORPORATION      3/12/1982       381    276    D-41951    LA    Lincoln

LA-TER0031-067

   BERNICE SMITH HARRIS    UNION TEXAS PETROLEUM CORPORATION      3/17/1982       381    280    D-41952    LA    Lincoln

LA-TER0031-068

   JAMES CHARLES WILSON    UNION TEXAS PETROLEUM CORPORATION      3/12/1982       381    260    D-41947    LA    Lincoln

LA-TER0031-069

   MARY ODIS GREEN MILLER    UNION TEXAS PETROLEUM CORPORATION      3/17/1982       381    264    D-41948    LA    Lincoln

LA-TER0031-070

   JESSIE B SMITH MCCOY    UNION TEXAS PETROLEUM CORPORATION      3/17/1982       381    248    D-41944    LA    Lincoln

LA-TER0031-071

   MAGGIE LEE GREEN BREWSTER    UNION TEXAS PETROLEUM CORPORATION      3/17/1982       381    252    D-41945    LA    Lincoln

LA-TER0031-072

   BENNY PIERCE    UNION TEXAS PETROLEUM CORPORATION      3/22/1982       381    256    D-41946    LA    Lincoln

LA-TER0031-073

   BOBBIE RAY WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       390    57    D-43287    LA    Lincoln

LA-TER0031-074

   OLLIE PIERCE LARK    UNION TEXAS PETROLEUM CORPORATION      3/15/1982       381    228    D-41939    LA    Lincoln

LA-TER0031-075

   JOHNNY WILSON    UNION TEXAS PETROLEUM CORPORATION      3/22/1982       459    40    D-53677    LA    Lincoln

LA-TER0031-076

   ISIAH PIERCE    UNION TEXAS PETROLEUM CORPORATION      3/25/1982       381    232    D-41940    LA    Lincoln

LA-TER0031-077

   THOMAS JAMES PIERCE    UNION TEXAS PETROLEUM CORPORATION      4/20/1982       383    36    D-42157    LA    Lincoln

LA-TER0031-078

   MAURENE LOCKHART GREEN    UNION TEXAS PETROLEUM CORPORATION      10/1/1982       416    119    D-46941    LA    Lincoln

LA-TER0031-079

   ALLEN PIERCE    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       381    236    D-41941    LA    Lincoln

LA-TER0031-080

   JESSES JAMES WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       392    29    D-43551    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-081

   ROBERT LEE WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       432    208    D-49236    LA    Lincoln

LA-TER0031-082

   GENE WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       390    61    D-43288    LA    Lincoln

LA-TER0031-083

   RUBY JEAN WILSON WATSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       392    33    D-43552    LA    Lincoln

LA-TER0031-084

   LULA MAE WILSON MCCHRISTER    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       432    220    D-49239    LA    Lincoln

LA-TER0031-085

   HELEN WILSON SMITH    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       392    37    D-43553    LA    Lincoln

LA-TER0031-086

   CATER WILSON    UNION TEXAS PETROLEUM CORPORATION      3/25/1982       401    92    D-44859    LA    Lincoln

LA-TER0031-087

   RUTH PIERCE    UNION TEXAS PETROLEUM CORPORATION      3/25/1982       381    240    D-41942    LA    Lincoln

LA-TER0031-088

   SARAH WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       392    25    D-43550    LA    Lincoln

LA-TER0031-089

   ESPERANZA WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       390    65    D-43289    LA    Lincoln

LA-TER0031-090

   JAMES EDWARD WILSON    UNION TEXAS PETROLEUM CORPORATION      3/18/1982       432    212    D-49237    LA    Lincoln

LA-TER0031-091

   ANNA BELLE WILSON COLEMAN    UNION TEXAS PETROLEUM CORPORATION      3/22/1982       381    244    D-41943    LA    Lincoln

LA-TER0031-092

   ELLIE BRIDGES    UNION TEXAS PETROLEUM CORPORATION      11/20/1981       381    216    D-41936    LA    Lincoln

LA-TER0031-093

   JOHNNIE B WILSON MACK    UNION TEXAS PETROLEUM CORPORATION      4/20/1982       402    260    D-45111    LA    Lincoln

LA-TER0031-094

   CLARA STANDIFER HENDERSON    UNION TEXAS PETROLEUM CORPORATION      4/19/1982       432    216    D-49238    LA    Lincoln

LA-TER0031-095

   NORVIS S MALCOLM    UNION TEXAS PETROLEUM CORPORATION      10/5/1982       416    131    D-46944    LA    Lincoln

LA-TER0031-096

   ALONZO D MALCOLM    UNION TEXAS PETROLEUM CORPORATION      9/29/1982       416    123    D-46942    LA    Lincoln

LA-TER0031-097

   SHELTON MALCOLM    UNION TEXAS PETROLEUM CORPORATION      10/4/1982       416    135    D-46945    LA    Lincoln

LA-TER0031-098

   MARY KENDRIX MALCOLM    UNION TEXAS PETROLEUM CORPORATION      9/29/1982       416    127    D-46943    LA    Lincoln

LA-TER0031-099

   LEROY STANDIFER    UNION TEXAS PETROLEUM CORPORATION      10/1/1982       416    143    D-46947    LA    Lincoln

LA-TER0031-100

   AZZIE DAVISON LEWIS    UNION TEXAS PETROLEUM CORPORATION      1/27/1983       421    41    D-47607    LA    Lincoln

LA-TER0031-101

   IONIA HILL WHITE    UNION TEXAS PETROLEUM CORPORATION      5/18/1981       340    1    D-35826    LA    Lincoln

LA-TER0031-102

   DAVID CHARLES HILL    UNION TEXAS PETROLEUM CORPORATION      5/25/1981       339    348    D-235825    LA    Lincoln
            231    73    D13447      
            231    73    D13447      

LA-TER0031-103

   R L COLEMAN ET UX    FRANK D RIPPY      5/30/1978       231    73    D13447    LA    Lincoln
   A B ATKINS JR SUCCESSION                     
   REPRESENTED BY THE HOMER NATIONAL BANK AS                     

LA-TER0031-104

   TESTAMENTARY EXECUTOR    FRANK D RIPPY      7/31/1978       237    133    D-15765    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   P E BROWN INDIV & A-I-F FOR                     
   WILLIAM DAVID BROWN                     

LA-TER0031-105

   DULCIE PATRICIA BROWN    UNION TEXAS PETROLEUM CORPORATION      8/5/1980       301    109    D-29357    LA    Lincoln
            203    451    D-2546      

LA-TER0031-106

   GROVER CROWE JR    FRANK D RIPPY      11/6/1976       203    451    D-2546    LA    Lincoln

LA-TER0031-107

   AVIS DYE HAMMONS ET AL    FRANK D RIPPY      10/27/1976       203    384    D-2530    LA    Lincoln

LA-TER0031-108

   EVERLEANER REED DANIELS ET VIR    FRANK D RIPPY      11/9/1976       203    397    D-2533    LA    Lincoln

LA-TER0031-109

   SALLIE LOCKHART LEWIS ET AL    FRANK D RIPPY      11/11/1976       203    447    D-2545    LA    Lincoln

LA-TER0031-110

   J C CROW    FRANK D RIPPY      11/10/1976       203    443    D-2544    LA    Lincoln

LA-TER0031-111

   OLG B GRIMES HAMPTON ET AL    FRANK D RIPPY      11/16/1976       203    439    D-2543    LA    Lincoln

LA-TER0031-112

   R B DANIEL    FRANK D RIPPY      11/15/1976       203    435    D-2542    LA    Lincoln

LA-TER0031-113

   ALMA GOLDSMITH    FRANK D RIPPY      11/16/1976       203    431    D-2541    LA    Lincoln

LA-TER0031-114

   WILLIE DAVIS ET AL    FRANK D RIPPY      11/12/1976       203    415    D-2537    LA    Lincoln
            251    725    D-21264      
            251    725    D-21264      

LA-TER0031-115

   AURELIA CAMP HULSE    FRANK D RIPPY      2/23/1977       251    725    D-21264    LA    Lincoln

LA-TER0031-116

   LUMMYE HUDGENS SEALS    FRANK D RIPPY      11/4/1976       203    463    D-2549    LA    Lincoln
            203    618    D-2641      
            203    618    D-2641      
            203    618    D-2641      

LA-TER0031-117

   MRS ROY WESSON    FRANK D RIPPY      11/15/1976       203    618    D-2641    LA    Lincoln

LA-TER0031-118

   WILLIE ADAMS    UNION TEXAS PETROLEUM CORPORATION      6/26/1981       345    310    D-36787    LA    Lincoln

LA-TER0031-119

   BILLIE ADAMS    UNION TEXAS PETROLEUM CORPORATION      6/26/1981       345    314    D-36788    LA    Lincoln

LA-TER0031-120

   MARY JANE ADAMS ELLIS    UNION TEXAS PETROLEUM CORPORATION      6/26/1981       345    318    D-36789    LA    Lincoln

LA-TER0031-121

   EDWARD JENKINS    UNION TEXAS PETROLEUM CORPORATION      11/24/1982       418    246    D-47169    LA    Lincoln

LA-TER0031-122

   BARBARA JENKINS    UNION TEXAS PETROLEUM CORPORATION      11/23/1982       418    250    D-47170    LA    Lincoln

LA-TER0031-123

   ELIZABETH REYNOLDS WASHINGTON    UNION TEXAS PETROLEUM CORPORATION      11/22/1982       418    254    D-47171    LA    Lincoln

LA-TER0031-124

   GLORIA DELL JENKINS    UNION TEXAS PETROLEUM CORPORATION      11/24/1982       418    258    D-47172    LA    Lincoln

LA-TER0031-125

   ESSIE ADAMS MALCOLM    UNION TEXAS PETROLEUM CORPORATION      7/16/1981       347    203    D-37046    LA    Lincoln

LA-TER0031-126

   MARY ADAMS    UNION TEXAS PETROLEUM CORPORATION      7/16/1981       346    136    D-36842    LA    Lincoln

LA-TER0031-127

   JANET ADAMS CASEY    UNION TEXAS PETROLEUM CORPORATION      8/14/1981       365    47    D-39684    LA    Lincoln

LA-TER0031-128

   OAKLAND B ADAMS    UNION TEXAS PETROLEUM CORPORATION      8/27/1981       352    228    D-37886    LA    Lincoln

LA-TER0031-129

   JACOB PARKER ADAMS JR    UNION TEXAS PETROLEUM CORPORATION      8/15/1981       355    305    D-38355    LA    Lincoln

LA-TER0031-130

   ELAINE ADAMS WILSON    UNION TEXAS PETROLEUM CORPORATION      9/3/1981       355    301    D-38354    LA    Lincoln

LA-TER0031-131

   CARRIE REYNOLDS MCCLAIN ET VIR    UNION TEXAS PETROLEUM CORPORATION      11/23/1982       418    242    D-47168    LA    Lincoln

LA-TER0031-132

   NELLIE LEWIS BROWN ET AL    UNION TEXAS PETROLEUM CORPORATION      10/1/1981       355    309    D-38356    LA    Lincoln


Lease No.

  

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Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-133

   SALLIE LOCKHART LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       355    313    D-38357    LA    Lincoln

LA-TER0031-134

   ODIS MALCOLM ADAMS    UNION TEXAS PETROLEUM CORPORATION      9/8/1981       355    293    D-38352    LA    Lincoln

LA-TER0031-135

   RUBY LEE LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       367    294    D-40028    LA    Lincoln

LA-TER0031-136

   EFFIE LEWIS JOHNSON    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       355    317    D-38358    LA    Lincoln

LA-TER0031-137

   SARAH JEAN LEWIS DAVIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       355    321    D-38359    LA    Lincoln

LA-TER0031-138

   MILTON LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       363    169    D-39496    LA    Lincoln

LA-TER0031-139

   ALMER LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       363    173    D-39497    LA    Lincoln

LA-TER0031-140

   MARY LEWIS KILLINGS ET AL    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       363    177    D-39498    LA    Lincoln

LA-TER0031-141

   ANDREW LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/8/1981       363    181    D-39499    LA    Lincoln

LA-TER0031-142

   CLAUDE LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       363    185    D-39500    LA    Lincoln

LA-TER0031-143

   MARVIN LEWIS    UNION TEXAS PETROLEUM CORPORATION      10/2/1981       363    189    D-39501    LA    Lincoln

LA-TER0031-144

   MAMMIE BEATRICE ADAMS REED    UNION TEXAS PETROLEUM CORPORATION      8/15/1981       368    304    D-40212    LA    Lincoln

LA-TER0031-145

   VIRGINIA ADAMS MAY    UNION TEXAS PETROLEUM CORPORATION      1/19/1982       369    217    D-40326    LA    Lincoln

LA-TER0031-146

   GEORGIA B ADAMS LEWIS    UNION TEXAS PETROLEUM CORPORATION      2/15/1982       375    252    D-41126    LA    Lincoln

LA-TER0031-147

   VELONIA ADAMS PALMER    UNION TEXAS PETROLEUM CORPORATION      2/15/1982       375    256    D-41127    LA    Lincoln

LA-TER0031-148

   ORA LEE ADAMS HILDRETH    UNION TEXAS PETROLEUM CORPORATION      2/15/1982       375    260    D-41128    LA    Lincoln

LA-TER0031-149

   EARLINE BEATRICE ADAMS GREER    UNION TEXAS PETROLEUM CORPORATION      2/15/1982       379    179    D-41597    LA    Lincoln

LA-TER0031-150

   MERCIE D JENKINS WEST    UNION TEXAS PETROLEUM CORP      11/23/1982       418    238    D-47167    LA    Lincoln

LA-TER0031-151

   EFFIE JEWEL REYNOLDS BADGER    UNION TEXAS PETROLEUM CORP      11/22/1982       418    234    D-47166    LA    Lincoln

LA-TER0031-152

   BOBBY REYNOLDS    UNION TEXAS PETROLEUM CORP      11/22/1982       428    97    D-48535    LA    Lincoln

LA-TER0031-153

   OLLIE MARIE JENKINS WATTS    UNION TEXAS PETROLEUM CORP      11/24/1982       421    53    D-47610    LA    Lincoln

LA-TER0031-154

   TILLMON JENKINS JR    UNION TEXAS PETROLEUM CORP      11/23/1982       432    224    D-49240    LA    Lincoln

LA-TER0031-155

   VELMA REYNOLDS SPIVEY    UNION TEXAS PETROLEUM CORP      11/22/1982       421    45    D-47608    LA    Lincoln

LA-TER0031-156

   EVA REYNOLDS BLOUNT    UNION TEXAS PETROLEUM CORPORATION      11/23/1982       421    37    D-47606    LA    Lincoln

LA-TER0031-157

   RUBY L MCCLAIN ET VIR    UNION TEXAS PETROLEUM CORPORATION      3/4/1983       479    204    D56489    LA    Lincoln
            203    344    D-2520      

LA-TER0031-158

   JOHN ELTON DUNN    FRANK D RIPPY      10/8/1976       203    344    D-2520    LA    Lincoln

LA-TER0031-159

   LONNIE DUNN    FRANK D RIPPY      10/25/1976       203    348    D-2521    LA    Lincoln

LA-TER0031-160

   JUDGE DUNN    FRANK D RIPPY      10/26/1976       203    352    D-2522    LA    Lincoln

LA-TER0031-161

   ZENOBIA DUNN    FRANK D RIPPY      10/26/1976       203    471    D-2551    LA    Lincoln

LA-TER0031-162

   COLLEEN LEWIS    FRANK D RIPPY      11/3/1976       203    467    D-2550    LA    Lincoln

LA-TER0031-163

   MATTIELEE WALLER    FRANK D RIPPY      11/9/1976       203    427    D-2540    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-164

   SHELTON EARL DUNN    FRANK D RIPPY      3/18/1977       209    317    D-4783    LA    Lincoln

LA-TER0031-165

   NELLIE MARIE KNIGHT    FRANK D RIPPY      3/24/1977       209    321    D-4784    LA    Lincoln

LA-TER0031-166

   NELLIE BURKS DUNN    FRANK D RIPPY      3/15/1977       209    313    D-4782    LA    Lincoln

LA-TER0031-167

   THERON J DUNN    FRANK D RIPPY      3/17/1977       208    335    D-4426    LA    Lincoln
            262    046    D-23691      

LA-TER0031-168

   LOU ALICE REYNOLDS PATTERSON    ALLIED CHEMICAL CORPORATION      7/31/1979       262    046    D-23691    LA    Lincoln
            274    105    D-25382      

LA-TER0031-169

   MARY LEE ARRINGTON MOTT    UNION TEXAS PETROLEUM CORPORATION      1/15/1980       274    105    D-25382    LA    Lincoln

LA-TER0031-170

   BENFADINE ROBERSON CRIBBS    UNION TEXAS PETROLEUM CORPORATION      1/22/1981       329    17    D33945    LA    Lincoln

LA-TER0031-171

   JAMES ROBERSON    UNION TEXAS PETROLEUM CORPORATION      1/22/1981       329    9    D-33943    LA    Lincoln

LA-TER0031-172

   CORA B ROBERSON HOLMES    UNION TEXAS PETROLEUM CORPORATION      1/22/1981       329    13    D-33944    LA    Lincoln

LA-TER0031-173

   JOHN HARRIELL FOGLE    UNION TEXAS PETROLEUM CORPORATION      1/22/1981       329    1    D-33941    LA    Lincoln

LA-TER0031-174

   WILBERT DOUGLAS FOGLE ET AL    UNION TEXAS PETROLEUM CORPORATION      1/22/1981       328    340    D-33938    LA    Lincoln

LA-TER0031-175

   O D ROBERSON    UNION TEXAS PETROLEUM CORPORATION      1/22/1981       238    344    D-33939    LA    Lincoln

LA-TER0031-176

   CLARESTA ROBERSON SHIELDS    UNION TEXAS PETROLEUM CORPORATION      2/11/1981       333    37    D-34594    LA    Lincoln

LA-TER0031-177

   NATHANIEL ROBERSON    UNION TEXAS PETROLEUM CORPORATION      4/15/1981       330    106    D-34126    LA    Lincoln

LA-TER0031-178

   LARRY ROBERSON    UNION TEXAS PETROLEUM CORPORATION      2/10/1981       333    34    D-34593    LA    Lincoln
   MARY AMELIA WHITED TRUST                     

LA-TER0031-179

   FIRST NATIONAL BANK OF SHREVEPORT TRUSTEE    FRANK D RIPPY      12/20/1976       203    839    D-2724    LA    Lincoln
            258    147    D-23142      

LA-TER0031-180

   CHARLIE REYNOLDS    ALLIED CHEMICAL CORPORATION      7/31/1979       258    147    D-23142    LA    Lincoln

LA-TER0031-181

   GERTRUDE DANIEL CRAWFORD    JAMES R HOOD      3/27/1978       228    168    D-12460    LA    Lincoln

LA-TER0031-182

   SHELBY HILL    FRANK D RIPPY      10/23/1976       203    459    D-2548    LA    Lincoln

LA-TER0031-183

   MARK GLAZER    FRANK D RIPPY      10/29/1976       203    376    D-2528    LA    Lincoln

LA-TER0031-184

   MEYER WELDMAN    FRANK D RIPPY      10/22/1976       203    606    D-2638    LA    Lincoln

LA-TER0031-185

   MARY BELL COLQUITT    FRANK D RIPPY      11/17/1976       203    835    D-2723    LA    Lincoln

LA-TER0031-186

   GERTRUDE THOMPSON HILL    FRANK D RIPPY      11/17/1976       203    455    D-2547    LA    Lincoln

LA-TER0031-187

   HENRY FLORSHEIM JR    FRANK D RIPPY      10/22/1976       204    168    D-2829    LA    Lincoln

LA-TER0031-188

   WILLIAM P TALBERT ET AL    UNION TEXAS PETROLEUM      6/5/1980       293    120    D-28202    LA    Lincoln

LA-TER0031-189

   JOHN WILKS    UNION TEXAS PETROLEUM      6/4/1980       298    26    D-28916    LA    Lincoln

LA-TER0031-190

   JESSIE LEE TALBERT    UNION TEXAS PETROLEUM      6/5/1980       299    347    D-29222    LA    Lincoln
            71    533    N-131276      
            71    533    N-131276      

LA-TER0031-191

   ROBERT ULMER JR    SOUTHWEST GAS PRODUCING CO INC      5/2/1955       71    533    N-131276    LA    Lincoln
            73    303    N-135963      
            73    303    N-135963      

LA-TER0031-192

   R L COLEMAN ET AL    SOUTHWEST GAS PRODUCING CO INC ET AL      3/27/1956       73    303    N-135963    LA    Lincoln
            66    35    N-120117      

LA-TER0031-193

   ALMAR LEWIS ET AL    J HOWARD HOOPER      4/24/1953       66    35    N-120117    LA    Lincoln
            69    589    N-126976      

LA-TER0031-194

   THERESA MAYFIELD GRAY ET AL    SOUTHWEST GAS PRODUCING CO INC ET AL      5/12/1954       69    589    N-126976    LA    Lincoln
            70    141    N-126517      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0031-195

   WILLIE MAE MAYFIELD WARREN    SOUTHWEST GAS PRODUCING CO INC ET AL      5/27/1954       70    141    N-126517    LA    Lincoln
            65    151    N-118951      

LA-TER0031-196

   LUTHER CILLIS COLQUITT ET AL    A R WHERRITT      1/29/1953       65    151    N-118951    LA    Lincoln
            70    89    N-126367      

LA-TER0031-197

   MACK MAYFIELD    SOUTHWEST GAS PRODUCING CO INC ET AL      5/27/1954       70    89    N-126367    LA    Lincoln
            70    155    N-126595      

LA-TER0031-198

   RUTLEDGE MAYFIELD    SOUTHWEST GAS PRODUCING CO INC ET AL      5/27/1954       70    155    N-126595    LA    Lincoln

LA-TER0031-199

   CHARLIE S DYE    FRANK D RIPPY      10/25/1976       203    380    D-2529    LA    Lincoln

LA-TER0031-200

   ADA LOCKHART CROWE    FRANK D RIPPY      10/27/1976       203    388    D-2531    LA    Lincoln
   MARY STANDIFER HILL PAGE                     

LA-TER0031-201

   NATURAL TUTRIX OF RAVA D HILL    UNION TEXAS PETROLEUM CORPORATION      3/31/1981       333    41    D34595    LA    Lincoln

LA-TER0032-000

   NORMAN LAMAR DOWLING ET AL    C C BARHAM      1/28/1953       64    527    N-118459    LA    Lincoln

LA-TER0033-000

   JOHN L HOOD    J HOWARD HOOPER      3/8/1954       69    589    N-124956    LA    Lincoln

LA-TER0034-000

   DOROTHY MAE DOWLING    C C BARHAM      1/28/1953       64    391    N-118283    LA    Lincoln
   DOROTHY MAE DOWLING                     

LA-TER0035-000

   REPRESENTED BY WILLIE DOWLING NATURAL TUTRIX    H W KLEIN      4/19/1949       50    161    N-88072    LA    Lincoln

LA-TER0036-000

   J L HOOD    H W KLEIN      4/8/1949       50    93    N-87791    LA    Lincoln

LA-TER0038-000

   NORMAN LAMAR DOWLING ET AL    BYRON H SCHAFF      2/12/1949       49    447    N-87102    LA    Lincoln

LA-TER0039-000

   SIDNEY F HOOD    BYRON H SCHAFF      2/12/1949       49    399    N-87067    LA    Lincoln

LA-TER0040-000

   L R SKINNER    BYRON H SCHAFF      2/21/1949             N-87098    LA    Lincoln

LA-TER0041-000

   MILDRED MEDRICK HOOD CANTERBURY ET VIR    KCS RESOURCES INC      10/24/2002       1150    824    50385    LA    Lincoln

LA-TER0042-000

   ALBERT FREDERICK HOOD ET UX    KCS RESOURCES INC      10/23/2002       1150    827    50386    LA    Lincoln

LA-TER0043-001

   DAVID S SKINNER ET UX    KCS RESOURCES INC      10/28/2002       1150    833    50388    LA    Lincoln

LA-TER0043-002

   JAMES C SKINNER ET UX    KCS RESOURCES INC      10/24/2002       1150    830    50387    LA    Lincoln

LA-TER0043-003

   LEE ROY SKINNER JR ET UX    KCS RESOURCES INC      10/28/2002       1150    836    50389    LA    Lincoln

LA-TER0044-000

   MILTON LAVELLE HOOD ET AL    KCS RESOURCES INC      11/20/2003       1154    797    52903    LA    Lincoln

LA-TER0045-000

   NORMAN L DOWLING ET UX    KCS RESOURCES INC      7/19/2005       1181    835    F68152    LA    Lincoln

LA-TER0047-001

   ANTHONY WAYNE CROCKETT    KCS RESOURCES INC      1/9/2007       1216    153    F82449    LA    Lincoln

LA-TER0047-002

   ANDREW LEWIS    KCS RESOURCES INC      8/22/2006       1216    750    F82728    LA    Lincoln

LA-TER0047-003

   CLAUDE LEWIS    KCS RESOURCES INC      8/22/2006       1216    752    F82729    LA    Lincoln

LA-TER0047-004

   EFFIE LEWIS JOHNSON    KCS RESOURCES INC      8/22/2006       1216    754    F82730    LA    Lincoln

LA-TER0047-005

   JOHN H LEWIS    KCS RESOURCES INC      8/22/2006       1216    758    F82732    LA    Lincoln

LA-TER0047-006

   LACY B LEWIS    KCS RESOURCES INC      8/22/2006       1216    760    F82733    LA    Lincoln

LA-TER0047-007

   MARVIN LEWIS    KCS RESOURCES INC      8/22/2006       1216    762    F82734    LA    Lincoln

LA-TER0047-008

   MARY LEWIS KILLINGS    KCS RESOURCES INC      8/22/2006       1216    764    F82735    LA    Lincoln

LA-TER0047-009

   MILTON LEWIS    KCS RESOURCES INC      8/22/2006       1216    766    F82736    LA    Lincoln
   NELLIE LEWIS BROWN                     

LA-TER0047-010

   REPRESENTED BY BETTYE JONES AGENT & A-I-F    KCS RESOURCES INC      8/22/2006       1216    768    F82737    LA    Lincoln

LA-TER0047-011

   RONALD D LEWIS    KCS RESOURCES INC      8/22/2006       1216    770    F82738    LA    Lincoln

LA-TER0047-012

   RUBY LEE LEWIS AUSTIN    KCS RESOURCES INC      8/22/2006       1216    772    F82739    LA    Lincoln

LA-TER0047-013

   SARAH JEAN LEWIS DAVIS    KCS RESOURCES INC      8/22/2006       1216    774    F82740    LA    Lincoln

LA-TER0047-014

   GLADYS LEWIS    KCS RESOURCES INC      8/22/2006       1216    756    F82731    LA    Lincoln

LA-TER0048-001

   ELVA MARIE CARTER TERRELL ET AL    KCS RESOURCES INC      7/18/2006       1216    170    F82455    LA    Lincoln

LA-TER0048-002

   DON C BURNS ET UX    KCS RESOURCES INC      7/19/2006       1216    173    F82456    LA    Lincoln

LA-TER0049-001

   MARTHA REED WOJECKI    ROBERT E MCKELLAR      11/11/2003       1153    477    52147    LA    Lincoln

LA-TER0049-002

   COURTNEY REED JR ET UX    ROBERT E MCKELLAR      11/11/2003       1153    342    52055    LA    Lincoln
            203    299    D-2509      

LA-TER0049-003

   ZORA PASCHAL ZACHRY ET AL    FRANK D RIPPY      9/23/1976       203    299    D-2509    LA    Lincoln
            203    303    D-2510      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0049-004

   RICHARD JEFF ZACHRY ET AL    FRANK D RIPPY      9/24/1976       203    303    D-2510    LA    Lincoln

LA-TER0049-005

   COURTNEY A REED JR ET AL    SCHOEFFLER ENERGY LLC      5/13/2013       1331    656    F133981    LA    Lincoln

LA-TER0049-006

   MARGARET LOUISE WILLIAMS ZACHRY ET AL    SCHOEFFLER ENERGY LLC      8/30/2013                LA    Lincoln

LA-TER0050-000

   DONNA SIMPSON MOORE    KCS RESOURCES INC      2/17/2004       1159    170    55340    LA    Lincoln

LA-TER0051-000

   JOHN M HOOD    KCS RESOURCES INC      11/20/2003       1154    651    52809    LA    Lincoln

LA-TER0052-000

   MILTON LAVELLE HOOD    KCS RESOURCES INC      11/20/2003       1154    809    52905    LA    Lincoln

LA-TER0053-001

   GEORGE RANDALL PYLES ET UX    KCS RESOURCES INC      3/1/2004       1158    3    54679    LA    Lincoln

LA-TER0053-002

   BILLY BRUCE DOUGLAS JR ET UX    KCS RESOURCES INC      3/1/2004       1160    604    56498    LA    Lincoln

LA-TER0054-001

   WENDY SINGLETON REEVES    KCS RESOURCES INC      2/17/2004       1158    23    54686    LA    Lincoln

LA-TER0054-002

   MARLETTE SINGLETON RYAN    KCS RESOURCES INC      2/17/2004       1158    640    55065    LA    Lincoln

LA-TER0055-000

   GERALD CLAYTON SINGLETON ET UX    KCS RESOURCES INC      12/3/2003       1155    215    53091    LA    Lincoln

LA-TER0056-000

   EVA COX SINGLETON HAMMONS    KCS RESOURCES INC      12/2/2003       1155    668    53321    LA    Lincoln

LA-TER0057-000

   EVA DALE HENRY ET AL    KCS RESOURCES INC      11/11/2003       1155    665    53320    LA    Lincoln

LA-TER0058-001

   TRAVIS DEAN HOOD ET UX    KCS RESOURCES INC      11/18/2003       1157    29    54071    LA    Lincoln

LA-TER0058-002

   ANDY L TURLINGTON ET UX    KCS RESOURCES INC      11/21/2003       1157    26    54070    LA    Lincoln

LA-TER0059-000

   BOBBY G MCCULLIN ET AL    KCS RESOURCES INC      1/5/2004       1157    20    54068    LA    Lincoln

LA-TER0060-000

   JAMES EDWARD LEWELLYAN    KCS RESOURCES INC      11/13/2003       1157    23    54069    LA    Lincoln

LA-TER0061-000

   ALBERT FREDERICK HOOD ET UX    KCS RESOURCES INC      11/18/2003       1157    32    54072    LA    Lincoln

LA-TER0062-000

   MILDRED MEDRICK HOOD CANTERBURY ET VIR    KCS RESOURCES INC      11/18/2003       1157    35    54073    LA    Lincoln

LA-TER0063-000

   WEYERHAEUSER COMPANY    KCS RESOURCES INC      10/27/2004       1167    722    60700    LA    Lincoln

LA-TER0064-000

   EUGENIA WEIR    KCS RESOURCES INC      4/11/2005       1180    613    F67458    LA    Lincoln

LA-TER0065-000

   GEORGE RANDALL PYLES ET UX    KCS RESOURCES INC      1/26/2006       1190    175    F71782    LA    Lincoln

LA-TER0066-000

   MARVIN EDGAR DAVIDSON ET UX    ROBERT E MCKELLAR      11/11/2003       1152    604    51660    LA    Lincoln

LA-TER0067-000

   SHELBY GENE COOPER    ROBERT E MCKELLAR      11/11/2003       1152    608    51661    LA    Lincoln

LA-TER0068-000

   WILLARD DON WALLACE ET AL    KCS RESOURCES INC      11/7/2003       1156    438    53726    LA    Lincoln

LA-TER0069-000

   MARY PILGREEN WILSON    KCS RESOURCES INC      11/19/2003       1154    640    52805    LA    Lincoln
            1156    77    053462      

LA-TER0070-001

   MARY ELIZABETH HARRISON TRANT ET AL    KCS RESOURCES INC      11/17/2003       1156    77    053462    LA    Lincoln
            1155    241    053100      

LA-TER0070-002

   KATHLEEN HARRISON HARPER    KCS RESOURCES INC      11/17/2003       1155    241    053100    LA    Lincoln
            1156    232    053602      

LA-TER0070-003

   WALLACE S HARRISON ET AL    KCS RESOURCES INC      11/15/2003       1156    232    053602    LA    Lincoln

LA-TER0070-004

   MARSHALL C HEDGEPETH ET AL    KCS RESOURCES INC      12/30/2003       1156    251    53618    LA    Lincoln

LA-TER0070-005

   JOHN CARROLL GIPSON    KCS RESOURCES INC      12/17/2003       1155    671    53322    LA    Lincoln

LA-TER0070-006

   ELIZABETH GIPSON THOMAS    KCS RESOURCES INC      12/17/2003       1155    649    53315    LA    Lincoln

LA-TER0070-007

   WILLIAM DAVID HEDGEPETH    KCS RESOURCES INC      12/15/2003       1156    279    53630    LA    Lincoln

LA-TER0070-008

   INEZ HEDGEPETH BURGE    KCS RESOURCES INC      1/15/2004       1157    4    54064    LA    Lincoln

LA-TER0070-009

   JAMES PATRICK DUGGAN    KCS RESOURCES INC      1/20/2004       1158    21    54685    LA    Lincoln

LA-TER0070-010

   RHONDA CRENSHAW LITTLE    KCS RESOURCES INC      1/20/2004       1158    630    55061    LA    Lincoln
   MARGUERITE HENRY GARRETT                     

LA-TER0070-011

   WALLACE S HARRISON AGENT & A-I-F    KCS RESOURCES INC      5/7/2004       1160    607    56499    LA    Lincoln

LA-TER0070-012

   C L MCCRARY JR    KCS RESOURCES INC      5/7/2004       1160    610    56500    LA    Lincoln

LA-TER0070-013

   FRANCES V HARRISON    KCS RESOURCES INC      5/7/2004       1161    251    56815    LA    Lincoln

LA-TER0070-014

   JOHANNA HULLS HUGGANS    KCS RESOURCES INC      12/19/2003       1160    149    56088    LA    Lincoln

LA-TER0070-015

   PHILLIP MCCRARY    KCS RESOURCES INC      7/7/2004       1163    729    58300    LA    Lincoln

LA-TER0070-016

   VIRGINIA ANN DUGGAN MOSHER    KCS RESOURCES INC      7/6/2004       1163    727    58299    LA    Lincoln

LA-TER0070-017

   PATRICIA HARPER    KCS RESOURCES INC      7/8/2004       1163    725    58298    LA    Lincoln

LA-TER0070-018

   KAY C DUGGAN    KCS RESOURCES INC      7/7/2004       1163    731    58301    LA    Lincoln
   KAY HOWARD ANDERSON INDIVIDUALLY AND                     

LA-TER0070-019

   AS AGENT AND A-I-F FOR JAMES C HOWARD    KCS RESOURCES INC      7/6/2004       1163    723    58297    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0070-020

   ALICE HULLS ANDREYK    KCS RESOURCES INC      7/8/2004       1165    182    59176    LA    Lincoln

LA-TER0070-021

   ELEANOR MCCRARY BELLER    KCS RESOURCES INC      11/23/2004       1173    241    63590    LA    Lincoln

LA-TER0070-022

   SONDRA MCCRARY CLARK    KCS RESOURCES INC      5/12/2005       1180    610    F67456    LA    Lincoln

LA-TER0070-023

   GLENDA T EADES    KCS RESOURCES INC      5/12/2005       1180    611    F67457    LA    Lincoln

LA-TER0070-024

   LOUISIANA METHODIST CHILDRENS HOME OF RUSTON    KCS RESOURCES INC      4/18/2007       1225    390    F86214    LA    Lincoln

LA-TER0070-025

   BILLYE MARGARET SNIDER HUFF    KCS RESOURCES INC      4/18/2007       1225    374    F86206    LA    Lincoln

LA-TER0070-026

   JOHN STEVEN DELONY    KCS RESOURCES INC      4/18/2007       1225    392    F86215    LA    Lincoln

LA-TER0070-027

   GEORGE PATRICK DELONY    KCS RESOURCES INC      4/18/2007       1225    376    F86207    LA    Lincoln

LA-TER0070-028

   JERRY GENE MCCRARY    KCS RESOURCES INC      3/9/2007       1225    378    F86208    LA    Lincoln

LA-TER0070-029

   JAMES ARNOLD DELONEY    KCS RESOURCES INC      4/18/2007       1225    386    F86212    LA    Lincoln

LA-TER0070-030

   PEGGY DELONY    KCS RESOURCES INC      4/18/2007       1225    380    F86209    LA    Lincoln

LA-TER0070-031

   JO ANNE DELONY RAINEY    KCS RESOURCES INC      4/18/2007       1225    382    F86210    LA    Lincoln

LA-TER0070-032

   JUDITH LORRAINE DELONY WASSON    KCS RESOURCES, INC      4/18/2007       1225    384    F86211    LA    Lincoln

LA-TER0070-033

   RONNIE LEE MCCULLIN    KCS RESOURCES INC      4/18/2007       1225    388    F86213    LA    Lincoln

LA-TER0071-000

   WALLACE S HARRISON ET AL    KCS RESOURCES INC      11/15/2003       1156    239    53607    LA    Lincoln
   WALLACE HARRISON INDIV AND AS AGENT AND A-I-F                     

LA-TER0072-001

   FOR MARGUERITE HENRY GARRETT ET AL    KCS RESOURCES INC      11/17/2003       1155    658    53318    LA    Lincoln

LA-TER0072-002

   KATHLEEN HARRISON HARPER    KCS RESOURCES INC      11/17/2003       1156    270    53627    LA    Lincoln

LA-TER0072-003

   MARY ELIZABETH HARRISON TRANT ET AL    KCS RESOURCES INC      11/17/2003       1156    80    53463    LA    Lincoln

LA-TER0073-001

   WAITE FAMILY LTD PARTNERSHIP    KCS RESOURCES INC      11/20/2003       1155    235    53098    LA    Lincoln

LA-TER0073-002

   BETTY DURRETT JINKS    KCS RESOURCES INC      11/18/2003       1155    238    53099    LA    Lincoln
   B H DURRETT HOLDINGS LP REPRESENTED BY NANCY                     

LA-TER0073-003

   DURRETT DRIVER    KCS RESOURCES INC      11/24/2003       1155    226    53095    LA    Lincoln
   B H DURRETT HOLDINGS LP REPRESENTED BY                     

LA-TER0073-004

   CHARLOTTE ANN DURRETT    KCS RESOURCES INC      11/24/2003       1155    229    53096    LA    Lincoln
   B H DURRETT HOLDINGS LP REPRESENTED BY DAISY                     

LA-TER0073-005

   DURRETT BATMAN    KCS RESOURCES INC      11/24/2003       1155    232    53097    LA    Lincoln

LA-TER0073-006

   MARGARET DURRETT SMITH    KCS RESOURCES INC      11/24/2003       1155    244    53101    LA    Lincoln

LA-TER0074-000

   RUSSELL A WOODARD ET UX    KCS RESOURCES INC      12/3/2003       1155    651    53316    LA    Lincoln

LA-TER0075-000

   NELDA LOU PILGREEN    KCS RESOURCES INC      11/19/2003       1155    655    53317    LA    Lincoln

LA-TER0076-001

   HELEN KNOTTS EVANS SHRELL    KCS RESOURCES INC      12/30/2003       1156    273    53628    LA    Lincoln

LA-TER0076-002

   RUTH KNOTTS DUSAN    KCS RESOURCES INC      12/31/2003       1156    267    53626    LA    Lincoln

LA-TER0076-003

   HAROLD MELBERN KNOTTS    KCS RESOURCES INC      12/30/2003       1156    276    53629    LA    Lincoln

LA-TER0077-000

   EVA DALE HENRY ET AL    KCS RESOURCES INC      2/21/2004       1158    634    55063    LA    Lincoln

LA-TER0078-000

   CYNTHIA ANN HENRY MAGEE ET AL    KCS RESOURCES INC      2/21/2004       1158    632    55062    LA    Lincoln

LA-TER0079-000

   FRANCES V HARRISON    KCS RESOURCES INC      11/9/2003       1154    649    F52808    LA    Lincoln

LA-TER0080-000

   SAMMIE WOODROW COLVIN ET AL    KCS RESOURCES INC      11/20/2003       1154    643    52806    LA    Lincoln

LA-TER0080-T00

   KATHERINE ELAINE COLVIN BARRETT    KCS RESOURCES INC      6/12/2006       1209    28    F79806    LA    Lincoln

LA-TER0081-001

   EDWARD HOPKINS LEATHERMAN    KCS RESOURCES INC      11/16/2003       1154    646    52807    LA    Lincoln

LA-TER0081-002

   MERRILEE STREUN LEATHERMAN CARTER    KCS RESOURCES INC      11/8/2003       1154    656    52810    LA    Lincoln

LA-TER0081-003

   KENT ANDERSON ET UX    COHORT ENERGY COMPANY      2/9/2004       1162    144    57457    LA    Lincoln

LA-TER0082-000

   MILTON LAVELLE HOOD ET AL    KCS RESOURCES INC      11/20/2003       1154    791    52902    LA    Lincoln

LA-TER0083-001

   KATHLEEN HARRISON HARPER ET AL    KCS RESOURCES INC      11/9/2003       1156    266    53625    LA    Lincoln

LA-TER0083-002

   PATRICIA HARRISON AUDIRSCH    KCS RESOURCES INC      11/11/2003       1155    224    53094    LA    Lincoln

LA-TER0084-000

   WALLACE S HARRISON ET AL    KCS RESOURCES INC      11/11/2003       1156    259    53621    LA    Lincoln

LA-TER0085-000

   VIVIAN S MAGEE ET AL    KCS RESOURCES INC      12/3/2003       1156    253    53619    LA    Lincoln

LA-TER0086-000

   FREDDIE DON MULLINS    KCS RESOURCES INC      11/7/2003       1156    441    53727    LA    Lincoln

LA-TER0087-000

   YVONNE H MCKINNEY    COHORT ENERGY COMPANY      9/10/2003       1155    4    52938    LA    Lincoln

LA-TER0088-000

   MARTHA HAMMON YOUNG ET VIR    COHORT ENERGY COMPANY      9/12/2003       1155    26    52945    LA    Lincoln

LA-TER0089-000

   MAVIS HAMMON SPAIN    COHORT ENERGY COMPANY      8/27/2003       1154    14    52941    LA    Lincoln
            1155    41    052950      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0090-001

   PAMELA GAYE GANEY    COHORT ENERGY COMPANY      9/29/2003                LA    Lincoln

LA-TER0090-002

   LEE ROY SANFORD ET UX    COHORT ENERGY COMPANY      9/29/2003       1155    32    52947    LA    Lincoln
            1155    38    052949      

LA-TER0090-003

   LISA CARROLL LETTERMAN    COHORT ENERGY COMPANY      9/29/2003       1155    38    052949    LA    Lincoln
            1155    44    052951      

LA-TER0090-004

   MICHAEL GENE SANFORD    COHORT ENERGY COMPANY      9/29/2003       1155    44    052951    LA    Lincoln

LA-TER0091-001

   DAVID COLVIN HAMMON ET AL    COHORT ENERGY COMPANY      9/17/2003       1155    17    52942    LA    Lincoln

LA-TER0091-002

   KATHERINE H TAYLOR ET AL    COHORT ENERGY COMPANY      9/17/2003       1155    20    52943    LA    Lincoln

LA-TER0091-003

   CHERE CLARE PICKETT    COHORT ENERGY COMPANY      10/14/2003       1155    23    52944    LA    Lincoln

LA-TER0092-000

   JAMES DANIEL HAMMON ET AL    COHORT ENERGY COMPANY      9/18/2003       1155    7    52939    LA    Lincoln

LA-TER0093-000

   CARMA S COOK    COHORT ENERGY COMPANY      9/10/2003       1155    11    52940    LA    Lincoln

LA-TER0094-000

   JULIA BETH HAMMON HAY ET VIR    COHORT ENERGY COMPANY      9/12/2003       1155    29    52946    LA    Lincoln

LA-TER0095-000

   BEVERLY MCCULLEN EARNEST ET VIR    ROBERT E MCKELLAR      9/25/2003       1151    246    50667    LA    Lincoln

LA-TER0096-000

   WILBUR HUGH HAMMONS SR    KCS RESOURCES INC      11/15/2005       1187    106    F70269    LA    Lincoln

LA-TER0097-000

   VIRGIE SINGLETON WALLACE    KCS RESOURCES INC      9/13/2005       1183    138    F68682    LA    Lincoln

LA-TER0098-001

   HELEN THROWER    KCS RESOURCES INC      9/24/2003       1152    822    51763    LA    Lincoln
            1170    385    062070      

LA-TER0098-002

   HESSIE GOLDSMITH LYONS ET AL    KCS RESOURCES INC      11/5/2004       1170    385    062070    LA    Lincoln
            1173    238    063589      

LA-TER0098-003

   EDWARD HALL    KCS RESOURCES INC      1/17/2005       1173    238    063589    LA    Lincoln
            1175    128    F64629      

LA-TER0098-004

   ARDESSA HALL LEWIS    KCS RESOURCES INC      1/17/2005       1175    128    F64629    LA    Lincoln
            1180    187    F67134      

LA-TER0098-005

   S & E FABRICATIONS LLC    KCS RESOURCES INC      4/20/2005       1180    187    F67134    LA    Lincoln

LA-TER0098-006

   JESSIE MAE STANDIFER HARRIS    KCS RESOURCES INC      1/17/2005       1175    120    F64626    LA    Lincoln

LA-TER0098-007

   LETTIE MAE STANDIFER HARRIS    KCS RESOURCES INC      1/17/2005       1175    106    F64622    LA    Lincoln

LA-TER0098-008

   ASHLEY TAD HILLIN    KCS RESOURCES INC      3/1/2005       1175    89    F64616    LA    Lincoln

LA-TER0098-009

   DESERT PARTNERS III LP    KCS RESOURCES INC      3/1/2005       1175    116    F64625    LA    Lincoln

LA-TER0098-010

   MYRTIS LEE HALL    KCS RESOURCES INC      1/17/2005       1181    791    F68130    LA    Lincoln

LA-TER0098-011

   JOSEPH DREW RADESCICH    KCS RESOURCES INC      4/12/2006       1197    575    F74980    LA    Lincoln

LA-TER0098-012

   SHARONDA HILL MELVIN    KCS RESOURCES INC      6/8/2006       1203    119    F77437    LA    Lincoln

LA-TER0098-017

   MANUAL ADAMS    KCS RESOURCES INC      8/22/2006       1216    175    F82457    LA    Lincoln

LA-TER0098-018

   MICHAEL REITZELL    KCS RESOURCES INC      4/28/2006       1216    177    F82458    LA    Lincoln

LA-TER0098-019

   JAMES EDWARD HALL    KCS RESOURCES INC      4/28/2006       1216    179    F82459    LA    Lincoln

LA-TER0098-020

   RENEE LOUISE ADAMS    KCS RESOURCES INC      8/25/2006       1244    323    F93798    LA    Lincoln

LA-TER0098-P13

   EUGENE HALL III    KCS RESOURCES INC      4/28/2006       1201    315    F76514    LA    Lincoln

LA-TER0098-P14

   RICKY DEWAYNE HALL    KCS RESOURCES INC      4/28/2006       1201    317    F76515    LA    Lincoln

LA-TER0098-P15

   STACY ANN HALL JOHNSON    KCS RESOURCES INC      4/28/2006       1201    313    F76513    LA    Lincoln

LA-TER0098-P16

   AMANDA LYNN HALL PORTER    KCS RESOURCES INC      4/28/2006       1201    319    F76516    LA    Lincoln

LA-TER0099-001

   ERIC J SEIBERT    KCS RESOURCES INC      5/21/2003       1148    396    48723    LA    Lincoln

LA-TER0099-002

   SARAH RUTH LOTT BOUDREAUX    KCS RESOURCES INC      5/20/2003       1148    398    48724    LA    Lincoln

LA-TER0099-003

   ELBERT G WARREN JR    HUNTER ENERGY CORPORATION      9/30/2002       1139    311    42906    LA    Lincoln

LA-TER0099-004

   WILLIAM C WARREN    HUNTER ENERGY CORPORATION      9/30/2002       1139    295    42902    LA    Lincoln
   JOAN L WARREN ET AL                     

LA-TER0099-005

   JAMES B WARREN JR AS NAKED OWNER    HUNTER ENERGY CORPORATION      9/30/2002       1142    21    F44577    LA    Lincoln

LA-TER0099-006

   JOAN L WARREN AS NAKED OWNER    HUNTER ENERGY CORPORATION      9/30/2002       1142    24    F44578    LA    Lincoln

LA-TER0099-007

   MARTHA JEAN NORRIS SURLINE    KCS RESOURCES INC      9/10/2003       1154    636    52804    LA    Lincoln

LA-TER0099-008

   GLENDA NORRIS PIPES    KCS RESOURCES INC      9/10/2003       1152    153    51322    LA    Lincoln

LA-TER0099-009

   MICKEY NORRIS HOLLIS    KCS RESOURCES INC      9/10/2003       1152    157    51323    LA    Lincoln

LA-TER0099-010

   MYRTA MAE LOTT WHITEHEAD    KCS RESOURCES INC      5/20/2003       1152    151    51319    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0099-011

   JOEL ANN LOTT ERWIN    KCS RESOURCES INC      9/10/2003       1152    161    51324    LA    Lincoln

LA-TER0099-012

   SUSAN SEIBERT MULLINS    KCS RESOURCES INC      9/10/2003       1152    169    51326    LA    Lincoln

LA-TER0099-013

   WILLIAM W NORRIS JR    KCS RESOURCES INC      9/10/2003       1152    165    51325    LA    Lincoln

LA-TER0099-014

   SHIRLEY NORRIS HAYNES    KCS RESOURCES INC      9/10/2003       1155    661    53319    LA    Lincoln

LA-TER0099-015

   MALCOLM EUGENE NORRIS    KCS RESOURCES INC      9/10/2003       1152    828    51765    LA    Lincoln

LA-TER0099-016

   MARY INEZ HUDSON NORRIS    KCS RESOURCES INC      9/10/2003       1152    818    51762    LA    Lincoln

LA-TER0099-017

   RANDALL MARK NORRIS    KCS RESOURCES INC      2/19/2004       1158    11    54682    LA    Lincoln

LA-TER0099-018

   KARL ANTHONY NORRIS ET AL    KCS RESOURCES INC      2/19/2004       1158    636    55064    LA    Lincoln

LA-TER0099-019

   DEBORAH NORRIS DISK    KCS RESOURCES INC      2/19/2004       1160    145    56087    LA    Lincoln

LA-TER0099-020

   LANE SEIBERT LARSON    KCS RESOURCES INC      5/9/2006       1198    261    F75306    LA    Lincoln

LA-TER0099-021

   DEREK W SEIBERT    KCS RESOURCES INC      5/9/2006       1203    122    F77438    LA    Lincoln

LA-TER0099-022

   THOMAS JACK NORRIS JR    KCS RESOURCES INC      9/22/2006       1216    181    F82460    LA    Lincoln

LA-TER0099-023

   DIANA LYNN MARX MEARS    KCS RESOURCES INC      9/22/2006       1216    248    F82501    LA    Lincoln
   SALEM UNITED METHODIST CHURCH OF THE                     
   LOUISIANA ANNUAL CONFERENCE                     

LA-TER0100-000

   REPRESENTED BY BILLY JOE HARRELL TRUSTEE    KCS RESOURCES INC      5/25/2003       1147    664    48218    LA    Lincoln
            1150    208    049784      

LA-TER0101-001

   JAMES E DAVISON ET UX    KCS RESOURCES INC      5/20/2003       1150    208    049784    LA    Lincoln
            1153    645    052246      

LA-TER0101-002

   PEARLIE B COLLIER    KCS RESOURCES INC      9/11/2003       1153    645    052246    LA    Lincoln

LA-TER0102-001

   MARTHA DOUGLAS    KCS RESOURCES INC      9/24/2003       1152    825    51764    LA    Lincoln

LA-TER0103-001

   JAMES CURTIS COLE    KCS RESOURCES INC      2/19/2004       1158    18    54684    LA    Lincoln

LA-TER0104-000

   BERNIECE HOOD WILLIAMS ET VIR    KCS RESOURCES INC      1/4/2005       1170    380    62069    LA    Lincoln

LA-TER0105-000

   ADOLPHUS CALLOWAY    KCS RESOURCES INC      11/17/2004       1169    422    61573    LA    Lincoln

LA-TER0106-000

   JAMES L LOE ET UX    KCS RESOURCES INC      8/1/2005       1182    389    F68351    LA    Lincoln

LA-TER0107-000

   ROBERT W CEDOTAL ET UX    KCS RESOURCES INC      4/20/2005       1179    567    F66912    LA    Lincoln
            1176    259    F65245      

LA-TER0108-000

   HUNT FOREST PRODUCTS INC    KCS RESOURCES INC      2/28/2005       1176    259    F65245    LA    Lincoln

LA-TER0145-001

   CONNIE ARMSTRONG WATTS ET AL    KCS RESOURCES INC      2/23/2005       1176    271    F65250    LA    Lincoln

LA-TER0145-002

   JAMES GORDON MCCULLIN    KCS RESOURCES INC      2/23/2005       1176    269    F65249    LA    Lincoln

LA-TER0146-001

   CONNIE ARMSTRONG WATTS ET AL    KCS RESOURCES INC      2/23/2005       1176    267    F65248    LA    Lincoln

LA-TER0146-002

   JAMES GORDON MCCULLIN    KCS RESOURCES INC      2/23/2005       1176    265    F65247    LA    Lincoln
            1178    492    F-66391      

LA-TER0147-000

   WEYERHAEUSER COMPANY    KCS RESOURCES INC      6/20/2005       1178    492    F-66391    LA    Lincoln
                  416963      
            1366    164    CLAIBORNE      

LA-TER0194-001

   DON DURRETT ET UX    KCS RESOURCES INC      7/21/2005       1185    632    F69744 LINCOLN    LA    Lincoln
   S A & N C WILLIAMS REVOCABLE TRUST                     
   SHERWOOD A WILLIAMS & NETTYELENE C WILLIAMS                     

LA-TER0194-002

   CO-TRUSTEES    KCS RESOURCES INC      7/29/2006       1203    106    F77433    LA    Lincoln

LA-TER0195-000

   LAVELLE W AYCOCK JR ET UX    KCS RESOURCES INC      6/27/2005       1181    826    F68149    LA    Lincoln

LA-TER0196-001

   MARGARET S JAMES    KCS RESOURCES INC      8/25/2005       1182    682    F68471    LA    Lincoln

LA-TER0196-002

   BOBBIE JEAN WOODARD LAWRENCE    KCS RESOURCES INC      9/8/2005       1184    415    F69268    LA    Lincoln

LA-TER0196-003

   ADA LOUISE HOLLIS    KCS RESOURCES INC      8/25/2005       1182    676    F68469    LA    Lincoln

LA-TER0196-004

   LORI WOODARD ROBIN    KCS RESOURCES INC      8/25/2005       1182    692    F68474    LA    Lincoln

LA-TER0196-005

   TERESA WOODARD SPILLERS    KCS RESOURCES INC      8/25/2005       1182    695    F68475    LA    Lincoln

LA-TER0196-006

   MARSHALL L WOODARD    KCS RESOURCES INC      8/25/2005       1184    440    F69276    LA    Lincoln

LA-TER0197-001

   WILLIAM R SUMLIN JR    KCS RESOURCES INC      7/12/2005       1181    823    F68418    LA    Lincoln

LA-TER0197-002

   CHARLOTTE S CANTWELL    KCS RESOURCES INC      7/12/2005       1180    633    F67467    LA    Lincoln

LA-TER0198-000

   STANLEY N KING ET UX    KCS RESOURCES INC      10/12/2005       1187    888    F70687    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0199-001

   FRANCES PILGREEN DUGDALE ET VIR    KCS RESOURCES INC      11/9/2005       1187    864    F70678    LA    Lincoln

LA-TER0199-002

   AVA PILGREEN    KCS RESOURCES INC      11/14/2005       1191    154    F72242    LA    Lincoln

LA-TER0199-003

   MARTHA P CRUMPLER    KCS RESOURCES INC      11/14/2005       1191    141    F72238    LA    Lincoln

LA-TER0199-004

   LINDA SUE PILGREEN SUMAN    KCS RESOURCES INC      11/14/2005       1191    145    F72239    LA    Lincoln

LA-TER0199-005

   RACHEL HENDERSON    KCS RESOURCES INC      11/21/2005       1191    148    F72240    LA    Lincoln

LA-TER0200-001

   VIOLA HOOD    KCS RESOURCES INC      10/12/2005       1187    882    F70685    LA    Lincoln

LA-TER0200-002

   JUDY LYNN FALLIN WOODARD    KCS RESOURCES INC      10/12/2005       1187    945    F70707    LA    Lincoln

LA-TER0200-003

   RICHARD WESTON SIMMERING ET UX    KCS RESOURCES INC      10/12/2005       1187    921    F70699    LA    Lincoln

LA-TER0201-000

   LESTER L HOOD    KCS RESOURCES INC      11/29/2005       1191    151    F72241    LA    Lincoln

LA-TER0203-001

   DELORES CASTINE PAYNE    KCS RESOURCES INC      9/22/2006       1207    32    F79231    LA    Lincoln

LA-TER0203-002

   JANIS E K CASTINE    KCS RESOURCES INC      9/26/2006       1207    28    F79230    LA    Lincoln

LA-TER0203-003

   MARK TINSLEY    KCS RESOURCES INC      9/22/2006       1207    44    F79234    LA    Lincoln

LA-TER0203-004

   TOMMIE HOLLEMAN YOUNG    KCS RESOURCES INC      11/2/2006       1207    52    F79236    LA    Lincoln

LA-TER0203-005

   RHONDA LYNN TINSLEY    KCS RESOURCES INC      9/22/2006       1207    48    F79235    LA    Lincoln

LA-TER0203-006

   COLLETTE NADINE SHRADER    KCS RESOURCES INC      10/25/2006       1207    36    F79232    LA    Lincoln

LA-TER0203-007

   JIMMY RAY TINSLEY    KCS RESOURCES INC      9/22/2006       1207    40    F79233    LA    Lincoln

LA-TER0203-008

   MYRON LEROY CASTINE JR    KCS RESOURCES INC      9/22/2006       1216    264    F82504    LA    Lincoln

LA-TER0203-009

   ROBERT E BROWN JR    KCS RESOURCES INC      9/22/2006       1216    268    F82505    LA    Lincoln

LA-TER0203-010

   RICHARD LEE TERRELL    KCS RESOURCES INC      9/26/2006       1216    272    F82506    LA    Lincoln

LA-TER0203-011

   CHRISTINE A FISK MCNEESE    KCS RESOURCES INC      10/25/2006       1216    276    F82507    LA    Lincoln
   GARLAND THOMAS HOOD JR INDIVIDUALLY AND AS AGENT AND A-I-F FOR MARION ELIZABETH PILCHER                     

LA-TER0212-001

   HOOD ET AL    SOUTHBAY EXPLORATION INC      10/26/2004       1166    285    59822    LA    Lincoln

LA-TER0212-002

   SANDY HOOD CRAMER    SOUTHBAY EXPLORATION INC      10/26/2004       1166    288    59823    LA    Lincoln

LA-TER0213-000

   LINDA HOOD BROWN ET VIR    SOUTHBAY EXPLORATION INC      10/26/2004       1166    294    59825    LA    Lincoln

LA-TER0214-000

   ANNIE MURIEL WOODARD COLVIN    HOOD PETROLEUM INC      1/25/2005       1170    80    61897    LA    Lincoln

LA-TER0215-000

   WAYLON D WALLER    HOOD PETROLEUM INC      1/24/2005       1170    77    61896    LA    Lincoln

LA-TER0216-000

   ANN WOODARD WINDSOR    HOOD PETROLEUM INC      1/21/2005       1170    74    61895    LA    Lincoln

LA-TER0217-001

   ANN WOODARD WINDSOR    HOOD PETROLEUM INC      1/21/2005       1170    71    61894    LA    Lincoln

LA-TER0217-002

   EMMETT R WOODWARD    HOOD PETROLEUM INC      1/21/2005       1170    62    61891    LA    Lincoln

LA-TER0217-003

   DELL WOODARD NICHOLS    HOOD PETROLEUM INC      1/21/2005       1170    107    61912    LA    Lincoln

LA-TER0217-004

   ROBERT L WOODARD ET UX    HOOD PETROLEUM INC      1/21/2005       1170    83    61898    LA    Lincoln

LA-TER0218-000

   SHELTON LORENZ PERRITT ET UX    HOOD PETROLEUM INC      1/24/2005       1170    68    61893    LA    Lincoln

LA-TER0219-001

   BONNIE SUE WOODARD    HOOD PETROLEUM INC      1/21/2005       1170    56    61889    LA    Lincoln

LA-TER0219-002

   GLENDA WOODARD ROGERS    HOOD PETROLEUM INC      1/21/2005       1170    536    62192    LA    Lincoln

LA-TER0220-000

   EMMETT R WOODARD    HOOD PETROLEUM INC      1/21/2005       1170    59    61890    LA    Lincoln

LA-TER0222-000

   LOUISIANA MINERALS LTD    HOOD PETROLEUM INC      1/25/2005       1173    150    63541    LA    Lincoln

LA-TER0223-000

   BOBBIE JEAN WOODARD LAWRENCE    HOOD PETROLEUM INC      1/21/2005       1170    65    61892    LA    Lincoln

LA-TER0224-000

   DELL WOODARD NICHOLS    HOOD PETROLEUM INC      1/21/2005       1170    104    61911    LA    Lincoln

LA-TER0225-001

   THESSALONIA GIVENS PARKER    HOOD PETROLEUM INC      2/4/2005       1170    110    61913    LA    Lincoln
            1171    288    062584      
            1171    288    062584      

LA-TER0226-001

   BILLY GENE ROBERSON    HOOD PETROLEUM INC      3/2/2005       1171    288    062584    LA    Lincoln
            1171    291    062585      
            1171    291    062585      

LA-TER0226-002

   ODESSA ROBERSON BURNS    HOOD PETROLEUM INC      3/2/2005       1171    291    062585    LA    Lincoln
            1171    630    062856      
            1171    630    062856      

LA-TER0226-003

   ROY ROBERSON    HOOD PETROLEUM INC      3/8/2005       1171    630    062856    LA    Lincoln

LA-TER0226-004

   CLEVON ROBERSON    HOOD PETROLEUM INC      3/2/2005       1171    297    62587    LA    Lincoln

LA-TER0226-005

   CONWALLACE ALLEN    HOOD PETROLEUM INC      1/31/2005       1170    113    61914    LA    Lincoln
                  F75049 (LINCOLN)      
            1197    755    420116      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0226-006

   CLINTON SAMPSON    HOOD PETROLEUM INC      12/26/2005       1389    27    (CLAIBORNE)    LA    Lincoln

LA-TER0226-007

   DEBRA LOUISE WALKER    HOOD PETROLEUM INC      3/20/2006       1197    720    F75037    LA    Lincoln

LA-TER0226-008

   JOHN WAYNE WALKER    HOOD PETROLEUM INC      3/23/2006       1197    723    F75038    LA    Lincoln

LA-TER0226-009

   EARLINE SAMPSON WILLS    HOOD PETROLEUM INC      3/20/2006       1197    729    F75040    LA    Lincoln

LA-TER0226-010

   FLORIDA SAMPSON DANIEL    HOOD PETROLEUM INC      3/20/2006       1197    732    F75041    LA    Lincoln

LA-TER0226-011

   CYNTHIA WALKER STEINACKER    HOOD PETROLEUM INC      3/23/2006       1197    735    F75042    LA    Lincoln

LA-TER0226-012

   TAMMY LYNN WALKER    HOOD PETROLEUM INC      3/15/2006       1197    741    F75044    LA    Lincoln

LA-TER0226-013

   FREDDIE ALLEN    HOOD PETROLEUM INC      12/16/2005       1197    758    F75050    LA    Lincoln

LA-TER0226-014

   CLOTIEL ALLEN TAYLOR    HOOD PETROLEUM INC      12/16/2005       1197    761    F75051    LA    Lincoln
   WILLIE HENRY SAMPSON                     

LA-TER0226-015

   BY JOHNNIE O’CON A-I-F    HOOD PETROLEUM INC      3/24/2006       1202    534    F77240    LA    Lincoln

LA-TER0226-016

   PATRICIA S HAGGARD    CLAYTON WILLIAMS ENERGY INC.      3/10/2007       1219    675    F83762    LA    Lincoln

LA-TER0226-017

   TERRY WAYNE SAMPSON ET UX    CLAYTON WILLIAMS ENERGY INC.      3/8/2007       1219    672    F83761    LA    Lincoln

LA-TER0226-018

   BEATRICE S WILLS    CLAYTON WILLIAMS ENERGY INC.      4/11/2007       1220    365    F83997    LA    Lincoln

LA-TER0226-019

   LINDA KAY S TURNER    CLAYTON WILLIAMS ENERGY INC.      4/11/2007       1220    580    F84108    LA    Lincoln

LA-TER0226-020

   CLOTIS JEWEL A DANIELS    CLAYTON WILLIAMS ENERGY INC.      4/25/2007       1221    71    F84341    LA    Lincoln

LA-TER0226-021

   JOHN LEWIS DAVISON    CLAYTON WILLIAMS ENERGY INC.      3/10/2007       1218    228    F83233    LA    Lincoln

LA-TER0226-022

   RAYMOND SAMPSON JR    CLAYTON WILLIAMS ENERGY INC.      4/11/2007       1221    403    F84544    LA    Lincoln

LA-TER0226-023

   CEDRIC MALONE    CLAYTON WILLIAMS ENERGY INC.      4/25/2007       1223    158    F85195    LA    Lincoln

LA-TER0226-024

   JAMES CURTIS ALLEN    CLAYTON WILLIAMS ENERGY INC.      4/15/2007       1223    312    F85302    LA    Lincoln

LA-TER0226-025

   TRACY DENISE MALONE    CLAYTON WILLIAMS ENERGY INC.      4/25/2007       1223    309    F85301    LA    Lincoln

LA-TER0226-026

   VIOLA A HARRIS    CLAYTON WILLIAMS ENERGY INC.      6/8/2007       1226    313    F86579    LA    Lincoln

LA-TER0226-027

   FRANCINE MALONE    CLAYTON WILLIAMS ENERGY INC.      4/20/2007       1226    780    F86844    LA    Lincoln

LA-TER0226-028

   PAMELA DENISE C ROBINSON    CLAYTON WILLIAMS ENERGY INC.      7/9/2007       1226    777    F86843    LA    Lincoln

LA-TER0226-029

   JOYCE C CHANEY    CLAYTON WILLIAMS ENERGY INC.      7/9/2007       1227    104    F86952    LA    Lincoln

LA-TER0226-030

   LINDA GAIL D SIMPSON    CLAYTON WILLIAMS ENERGY INC      6/22/2007       1228    347    F87349    LA    Lincoln

LA-TER0226-031

   BARBARA S ELLIS    CLAYTON WILLIAMS ENERGY INC      4/11/2007       1228    350    F87350    LA    Lincoln

LA-TER0226-032

   ROOSEVELT ALLEN    HOOD PETROLEUM INC      1/31/2005       1170    114    61915    LA    Lincoln

LA-TER0226-033

   MICHAEL CAPTAIN    CLAYTON WILLIAMS ENERGY INC      6/22/2007       1228    341    F87347    LA    Lincoln

LA-TER0226-034

   CLEO ALLEN    HOOD PETROLEUM INC      1/31/2005       1170    117    61916    LA    Lincoln

LA-TER0226-035

   PATRICIA ANN M MCKEEVER    CLAYTON WILLIAMS ENERGY INC      4/20/2007       1229    277    F87737    LA    Lincoln

LA-TER0226-036

   RUFUS ALLEN    HOOD PETROLEUM INC      1/31/2005       1170    119    61917    LA    Lincoln

LA-TER0226-037

   WILLIE MALONE    CLAYTON WILLIAMS ENERGY INC      8/13/2007       1230    529    F88289    LA    Lincoln

LA-TER0226-038

   MABLE TOWERS    HOOD PETROLEUM INC      1/28/2005       1170    52    61887    LA    Lincoln

LA-TER0226-039

   ORA BUD CAPTAIN JR    CLAYTON WILLIAMS ENERGY INC      7/9/2007       1230    532    F88290    LA    Lincoln

LA-TER0226-040

   ESTHER ALLEN KING ET VIR    HOOD PETROLEUM INC      1/31/2005       1170    54    61888    LA    Lincoln

LA-TER0226-041

   CANDACE M HARVEY    CLAYTON WILLIAMS ENERGY INC      8/3/2007       1231    79    F88519    LA    Lincoln

LA-TER0226-042

   MILDRED ALLEN BARNES ET AL    HOOD PETROLEUM INC      2/2/2005       1170    400    62074    LA    Lincoln

LA-TER0226-043

   CALVIN ALLEN    HOOD PETROLEUM INC      2/7/2005       1170    349    62038    LA    Lincoln

LA-TER0226-044

   QUINCY ALLEN    HOOD PETROLEUM INC      2/7/2005       1170    351    62039    LA    Lincoln

LA-TER0226-045

   ARVIE LEE ALLEN CAESAR    HOOD PETROLEUM INC      2/7/2005       1170    353    62040    LA    Lincoln

LA-TER0226-046

   DELLA DAVISON    HOOD PETROLEUM INC      1/31/2005       1170    355    62041    LA    Lincoln

LA-TER0226-047

   C L ALLEN    HOOD PETROLEUM INC      2/7/2005       1170    357    62042    LA    Lincoln

LA-TER0226-048

   EDDIE RAY ALLEN    HOOD PETROLEUM INC      2/7/2005       1170    359    62043    LA    Lincoln

LA-TER0226-049

   LINDA ANN ALLEN    HOOD PETROLEUM INC      2/7/2005       1170    532    62190    LA    Lincoln

LA-TER0226-050

   DAVID WAYNE DENNIS    HOOD PETROLEUM INC      2/11/2005       1170    534    62191    LA    Lincoln

LA-TER0226-051

   CASANDRA DENNIS SYE    HOOD PETROLEUM INC      2/11/2005       1170    539    62193    LA    Lincoln

LA-TER0226-052

   GEORGIA ALLEN AMRSTRONG    HOOD PETROLEUM INC      2/11/2005       1170    400    62342    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0226-053

   BELESTER DENNIS BEASLEY    HOOD PETROLEUM INC      2/11/2005       1171    116    62420    LA    Lincoln

LA-TER0226-054

   TOMMY L ALLEN    HOOD PETROLEUM INC      2/15/2005       1171    118    62421    LA    Lincoln

LA-TER0226-055

   CLAUDE ALLEN JR    HOOD PETROLEUM INC      2/15/2005       1171    120    62422    LA    Lincoln

LA-TER0226-056

   MALVIN SAMPSON SR    HOOD PETROLEUM INC      3/29/2005       1173    139    63537    LA    Lincoln

LA-TER0226-057

   ANNIE B ALLEN DENNIS    HOOD PETROLEUM INC      6/28/2005       1181    501    F67881    LA    Lincoln
            1171    294    062586      
            1171    294    062586      

LA-TER0226-058

   CLEVON ROBERSON ET UX    HOOD PETROLEUM INC      3/2/2005       1171    294    062586    LA    Lincoln
            1226    385    F86613      
            1434    180    425606      
            1226    385    F86613      

LA-TER0226-059

   DONALD E ROBERSON SR    CLAYTON WILLIAMS ENERGY INC      5/28/2007       1434    180    425606    LA    Lincoln
            1171    612    062850      

LA-TER0226-060

   CLENTON ROBERSON    HOOD PETROLEUM INC      3/2/2005       1171    612    062850    LA    Lincoln
            1171    627    062855      
            1224    408    F85804      
            1171    627    062855      
            1224    408    F85804      
            1171    627    062855      

LA-TER0226-061

   NEOMIA ROBERSON DANIEL    HOOD PETROLEUM INC      3/2/2005       1224    408    F85804    LA    Lincoln
            1171    618    062852      
            1224    414    F85807      
            1171    618    062852      
            1224    414    F85807      
            1171    618    062852      

LA-TER0226-062

   LOYE JEAN FORD    HOOD PETROLEUM INC      3/2/2005       1224    414    F85807    LA    Lincoln
            1171    621    062853      
            1224    412    F85806      
            1171    621    062853      
            1224    412    F85806      
            1171    621    062853      

LA-TER0226-063

   JUANITA SNEED    HOOD PETROLEUM INC      3/2/2005       1224    412    F85806    LA    Lincoln
            1171    624    062854      
            4557    410    F85805      
   LENNIE FAYE DAVIS          1171    624    062854      
   AKA LENNIE FAYE ROBINSON DAVIS          1171    624    062854      

LA-TER0226-064

   AKA FAYE ROBERSON DAVIS    HOOD PETROLEUM INC      3/2/2005       4557    410    F85805    LA    Lincoln
            1173    574    063825      

LA-TER0226-065

   PINKIE ROBERSON LEWIS    HOOD PETROLEUM INC      3/2/2005       1173    574    063825    LA    Lincoln
            1176    703    F65489      
            1224    416    F85808      
            1176    703    F65489      
            1224    416    F85808      
            1176    703    F65489      

LA-TER0226-066

   ADOLPHUS RAY MILLS    HOOD PETROLEUM INC      4/14/2005       1224    416    F85808    LA    Lincoln
            1179    350    F66800      
            1179    350    F66800      

LA-TER0226-067

   THELMA ROBERSON BOBB    HOOD PETROLEUM INC      6/7/2005       1179    350    F66800    LA    Lincoln
            1179    371    F66807      
   THELMA ROBERSON BOBB ET VIR          1179    371    F66807      

LA-TER0226-068

   JOHN BOBB    HOOD PETROLEUM INC      6/7/2005       1179    371    F66807    LA    Lincoln
            1183    543    F68884      
            1369    167    417364      
            1183    543    F68884      
            1369    167    417364      
            1183    543    F68884      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0226-069

   BARBARA ROBERSON GOMBOSSY    HOOD PETROLEUM INC      9/13/2005       1369    167    417364    LA    Lincoln
            1183    546    F68885      
            1369    170    417365      
            1183    546    F68885      
            1369    170    417365      
            1183    546    F68885      

LA-TER0226-070

   LILY ROBERSON DAVIS    HOOD PETROLEUM INC      9/13/2005       1369    170    417365    LA    Lincoln
            1184    686    F69408      
            1371    25    417636      
            1184    686    F69408      
            1371    25    417636      
            1184    686    F69408      

LA-TER0226-071

   BOBBY RAY ROBERSON    HOOD PETROLEUM INC      9/13/2005       1371    25    417636    LA    Lincoln
            1184    683    F69407      
            1371    29    417637      
            1184    683    F69407      
            1371    29    417637      
            1184    683    F69407      

LA-TER0226-072

   WINFORD ROBERSON    HOOD PETROLEUM INC      9/13/2005       1371    29    417637    LA    Lincoln
            1186    178    F69897      
            1372    193    417799      
            1186    178    F69897      
            1372    193    417799      
            1186    178    F69897      

LA-TER0226-073

   IRMA ROBERSON DAVIS    HOOD PETROLEUM INC      9/13/2005       1372    193    417799    LA    Lincoln
            1186    172    F69895      
            1372    199    417801      
            1186    172    F69895      
            1372    199    417801      
            1186    172    F69895      

LA-TER0226-074

   MINNIE ROBERSON CALAHAN    HOOD PETROLEUM INC      9/13/2005       1372    199    417801    LA    Lincoln
            1186    175    F69896      
            1372    196    417800      
            1186    175    F69896      
            1372    196    417800      
            1186    175    F69896      

LA-TER0226-076

   MAE JEWEL THOMPSON    HOOD PETROLEUM INC      9/13/2005       1372    196    417800    LA    Lincoln
            1197    726    F75039      
            1226    544    F86693      
            1197    726    F75039      

LA-TER0226-077

   JOHN WAYNE WALKER    HOOD PETROLEUM INC      3/23/2006       1226    544    F86693    LA    Lincoln
            1197    705    F75032      
            1388    208    420049      
            1197    705    F75032      

LA-TER0226-078

   L D ROBERSON    HOOD PETROLEUM INC      5/10/2006       1388    208    420049    LA    Lincoln
            1197    738    F75043      
            1226    542    F86691      
            1197    738    F75043      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0226-079

   CYNTHIA WALKER STEINACKER    HOOD PETROLEUM INC      3/23/2006       1226    542    F86691    LA    Lincoln
            1197    750    F75047      
            1226    543    F86692      
            1197    750    F75047      

LA-TER0226-080

   DEBRA LOUISE WALKER    HOOD PETROLEUM INC      3/23/2006       1226    543    F86692    LA    Lincoln
            1197    747    F75046      
            1231    19    F88476      
            1197    747    F75046      

LA-TER0226-081

   TAMMY LYNN WALKER    HOOD PETROLEUM INC      3/15/2006       1231    19    F88476    LA    Lincoln
            1197    753    F75048      
            1224    418    F85809      
            1197    753    F75048      
            1224    418    F85809      
            1197    753    F75048      

LA-TER0226-082

   PATRICIA MILLS PATTERSON    HOOD PETROLEUM INC      5/16/2006       1224    418    F85809    LA    Lincoln
            1198    423    F75378      
            1389    34    420120      
            1224    420    105960      
            1198    423    F75378      
            1389    34    420120      
            1224    420    105960      
            1198    423    F75378      
            1389    34    420120      

LA-TER0226-083

   CHARLES G MILLS    HOOD PETROLEUM INC      5/16/2006       1224    420    105960    LA    Lincoln
            1199 (L)    369 (L)    F75772      
            1390 (C)    219 (C)    420358      
            1199 (L)    369 (L)    F75772      

LA-TER0226-084

   AMBER MARSHAWNFAY HOSKIN ET AL    HOOD PETROLEUM INC      5/16/2006       1390 (C)    219 (C)    420358    LA    Lincoln
            1223    161    F85196      

LA-TER0226-085

   DAISY MAE H ROBERSON    CLAYTON WILLIAMS ENERGY INC      5/16/2007       1223    161    F85196    LA    Lincoln

LA-TER0226-086

   CLENTON ROBERSON    HOOD PETROLEUM INC      3/2/2005       1171    615    62851    LA    Lincoln
            1216    082    F82408      

LA-TER0226-087

   ONITA WIMBERLY SMITH    CLAYTON WILLIAMS ENERGY INC      2/20/2007       1216    082    F82408    LA    Lincoln
            1216    086    F82409      

LA-TER0226-088

   SHEROLYN MYLES HARRIS    CLAYTON WILLIAMS ENERGY INC      2/23/2007       1216    086    F82409    LA    Lincoln
            1216    090    F82410      

LA-TER0226-089

   CYNTHIA MALONE    CLAYTON WILLIAMS ENERGY INC      2/23/2007       1216    090    F82410    LA    Lincoln
            1216    094    F82411      

LA-TER0226-090

   BENNIE L ROBINSON    CLAYTON WILLIAMS ENERGY INC      2/20/2007       1216    094    F82411    LA    Lincoln
            1217    393    F82943      

LA-TER0226-091

   DEBRA M HOGG    CLAYTON WILLIAMS ENERGY INC      2/27/2007       1217    393    F82943    LA    Lincoln
            1218    224    F83232      

LA-TER0226-092

   RHODELLA MAE MALONE    CLAYTON WILLIAMS ENERGY INC      2/20/2007       1218    224    F83232    LA    Lincoln
            1220    583    F84109      

LA-TER0226-093

   SARAH JACKSON    CLAYTON WILLIAMS ENERGY INC      4/18/2007       1220    583    F84109    LA    Lincoln
            1219    508    F83696      

LA-TER0226-094

   STEVE MALONE    CLAYTON WILLIAMS ENERGY INC      2/27/2007       1219    508    F83696    LA    Lincoln
            1219    504    F83695      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0226-095

   JOSHUA ROBERSON    CLAYTON WILLIAMS ENERGY INC      4/5/2007       1219    504    F83695    LA    Lincoln
            1219    500    F83694      

LA-TER0226-096

   SHEMECA ROBERSON    CLAYTON WILLIAMS ENERGY INC      4/3/2007       1219    500    F83694    LA    Lincoln
            1228    748    F87579      

LA-TER0226-097

   SOLOMON ROBERSON    CLAYTON WILLIAMS ENERGY INC      8/1/2007       1228    748    F87579    LA    Lincoln
            1224    427    F93846      

LA-TER0226-098

   NATRIEL WINZER ET AL    CLAYTON WILLIAMS ENERGY INC      12/1/2007       1244    427    F93846    LA    Lincoln

LA-TER0226-099

   CANDACE MALONE HARVEY ET AL    HOOD PETROLEUM INC      3/2/2005       1172    356    63154    LA    Lincoln
               830 (L)         

LA-TER0226-100

   GEORGIA ALLEN ARMSTRONG    HOOD PETROLEUM INC      2/11/2005       1170 (L)    F84261    62342    LA    Lincoln
            1259    724    F99401      

LA-TER0226-P075

   ELLERY L HOSKIN    CLAYTON WILLIAMS ENERGY INC      10/20/2007       1487    276    431862    LA    Lincoln

LA-TER0228-000

   FREDDIE MAE GIVENS ADAMS    HOOD PETROLEUM INC      2/4/2005       1170    402    62075    LA    Lincoln

LA-TER0229-001

   ESSIE RICHARD REED ET UX    HOOD PETROLEUM INC      2/11/2005       1170    439    62106    LA    Lincoln

LA-TER0229-002

   SYLVIA R POPE    EQUITY OIL CO INC      10/3/2003       1152    265       LA    Lincoln

LA-TER0229-003

   LILLIE R FULLER    EQUITY OIL CO INC      10/3/2003       1152    267       LA    Lincoln

LA-TER0231-000

   ROBERT L WOODARD ET UX    HOOD PETROLEUM INC      1/21/2005       1170    86    61899    LA    Lincoln

LA-TER0232-000

   ELEANOR WOODARD BEERS    HOOD PETROLEUM INC      1/25/2005       1170    89    61900    LA    Lincoln

LA-TER0233-001

   ADA LOUISE WOODARD HOLLIS    HOOD PETROLEUM INC      2/17/2005       1170    821    62339    LA    Lincoln

LA-TER0233-P02

   LORI WOODARD ROBIN    HOOD PETROLEUM INC      2/17/2005       1170    824    62340    LA    Lincoln

LA-TER0233-P03

   TERESA WOODARD SPILLERS    HOOD PETROLEUM INC      2/17/2005       1170    832    62343    LA    Lincoln

LA-TER0234-001

   LORI WOODARD ROBIN    HOOD PETROLEUM INC      2/17/2005       1170    827    62341    LA    Lincoln

LA-TER0234-002

   TERESA WOODARD SPILLERS    HOOD PETROLEUM INC      2/17/2005       1170    835    62344    LA    Lincoln

LA-TER0235-001

   BETTY SUE WESTBROOK KYLE ET AL    HOOD PETROLEUM INC      2/24/2005       1171    193    62465    LA    Lincoln

LA-TER0235-002

   KAYE KYLE RICE    HOOD PETROLEUM INC      2/24/2005       1171    285    62583    LA    Lincoln

LA-TER0238-000

   LOUISIANA MINERALS LTD    HOOD PETROLEUM INC      3/29/2005       1172    458    63271    LA    Lincoln

LA-TER0245-000

   WEYERHAEUSER COMPANY    CLAYTON WILLIAMS ENERGY INC      6/3/2005       1177    534    F65854    LA    Lincoln

LA-TER0247-000

   JAMES SCOTT WILLIAMS    ROBERT E MCKELLAR      5/19/2005       1174    436    F64814    LA    Lincoln
  

JOHN BOBB ET UX

                    

LA-TER0251-001

   THELMA ROBERSON BOBB    HOOD PETROLEUM INC      6/7/2005       1178    128    F61194    LA    Lincoln

LA-TER0254-000

   MICHAEL PETER MORRONE ET UX    HOOD PETROLEUM INC      6/28/2005       1179    362    F66804    LA    Lincoln

LA-TER0255-000

   ANTHONY KENNER    HOOD PETROLEUM INC      7/20/2005       1179    365    F66805    LA    Lincoln
            240    101         

LA-TER0256-001

   GEORGE CURTIS TAYLOR ET AL    M F MILEY OIL PROPERTIES INC      10/25/1978       240    101       LA    Lincoln
            242    320    D-17710      

LA-TER0256-002

   BARBARA TYLER SHULTS    M F MILEY OIL PROPERTIES INC      10/25/1978       242    320    D-17710    LA    Lincoln

LA-TER0259-000

   HESTER LEWIS    HOOD PETROLEUM INC      10/23/2005       1184    680    F69406    LA    Lincoln

LA-TER0260-000

   BOBBY RAY CRAWFORD JR ET UX    HOOD PETROLEUM INC      11/11/2005       1187    575    F70530    LA    Lincoln

LA-TER0261-000

   MICHAEL R BELL    HOOD PETROLEUM INC      11/15/2005       1187    578    F70531    LA    Lincoln

LA-TER0262-001

   FRANK JAMES LAKEY    HOOD PETROLEUM INC      11/7/2005       1187    569    F70528    LA    Lincoln

LA-TER0262-002

   BRENDA MAYO LAKEY    HOOD PETROLEUM INC      12/15/2005       1197    744    F75045    LA    Lincoln

LA-TER0263-001

   ANN MENEFEE COOK ET AL    HOOD PETROLEUM INC      6/9/2006       1198    752    F75551    LA    Lincoln

LA-TER0263-002

   PRIMER DAY LEWIS    JOHNIE W ADKINS      5/19/1956       73    423    C18    LA    Lincoln

LA-TER0263-003

   J FLOYD HODGE    JOHNIE W ADKINS      5/22/1956       73    455    C91    LA    Lincoln

LA-TER0263-004

   L D BARNETT ET UX    JOHNIE W ADKINS      5/11/1956       73    453    C89    LA    Lincoln

LA-TER0263-005

   T B GODFREY    THE ATLANTIC REFINING COMPANY      9/26/1957       58    339    C7262    LA    Lincoln
            73    397    N136588      

LA-TER0264-000

   B F FALLIN    JOHNIE W ADKINS      5/5/1956       73    397    N136588    LA    Lincoln

LA-TER0265-000

   C M BICE    JOHNIE W ADKINS      5/8/1956       73       N136590    LA    Lincoln
            73-405       54-141 C-2237      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0266-001

   E L HENRY    JOHNIE W ADKINS      5/5/1956       73-405       54-141 C-2237    LA    Lincoln
            73-519       54-138 C-2236      

LA-TER0266-002

   T L MC CRARY    JOHNIE W ADKINS      5/5/1956       73-519       54-138 C-2236    LA    Lincoln

LA-TER0267-000

   WILLIS E STEPHENSON ET AL    JOHNIE W ADKINS      5/9/1956       73    427    C22    LA    Lincoln
            73    425    C20      

LA-TER0268-000

   L D BARNETT    JOHNIE W ADKINS      5/11/1956       73    425    C20    LA    Lincoln

LA-TER0269-000

   WILEY MCCRARY    JOHNIE W ADKINS      5/5/1956       73    431    C25    LA    Lincoln

LA-TER0270-001

   W E MCBRIDE ET AL    JOHNIE W ADKINS      5/16/1956       73    461    C98    LA    Lincoln

LA-TER0270-002

   AMOS LEWIS ET AL    THE ATLANTIC REFINING COMPANY      8/13/1957       57    557    C6459    LA    Lincoln
   CLEO SEHON DYE                     

LA-TER0270-003

   REPRESENTED BY E W SEHON AS CURATOR    THE ATLANTIC REFINING COMPANY      8/22/1957       58    205    C6905    LA    Lincoln

LA-TER0270-004

   L T HOLLAND    THE ATLANTIC REFINING COMPANY      8/7/1957       58    15    C6628    LA    Lincoln

LA-TER0270-005

   GEORGE H DYE    THE ATLANTIC REFINING COMPANY      10/13/1956       53    583    C1986    LA    Lincoln

LA-TER0270-006

   E W SEHON    THE ATLANTIC REFINING COMPANY      8/22/1957       58    13    C6627    LA    Lincoln

LA-TER0270-007

   AARON LEWIS    THE ATLANTIC REFINING COMPANY      10/15/1956       53    585    C1987    LA    Lincoln

LA-TER0270-008

   GLEN DYE    THE ATLANTIC REFINING COMPANY      10/13/1956       53    581    C1985    LA    Lincoln
   QUINCY HOLLAND JR ET AL AS MINORS                     
   LARRY HOLLAND                     
   DELOSIE HOLLAND                     
   JOHN EDWARD HOLLAND                     
   REPRESENTED BY CHRISTELL LEWIS HOLLAND AS                     

LA-TER0270-009

   NATURAL TUTRIX    THE ATLANTIC REFINING COMPANY      8/21/1957       58    354    C7315    LA    Lincoln

LA-TER0270-010

   DELIA LEWIS LAFAIR WILKINS    THE ATLANTIC REFINING COMPANY      10/25/1956       58    213    C6925    LA    Lincoln

LA-TER0270-011

   LETHA LEWIS ET AL    THE ATLANTIC REFINING COMPANY      10/14/1956       53    587    C1988    LA    Lincoln

LA-TER0270-012

   EVES HOLLAND    THE ATLANTIC REFINING COMPANY      8/7/1957       58    447    C7452    LA    Lincoln

LA-TER0270-013

   MARVIN HOLLAND    THE ATLANTIC REFINING COMPANY      10/15/1956       53    609    C2014    LA    Lincoln

LA-TER0270-014

   RICHARD LEWIS    THE ATLANTIC REFINING COMPANY      10/17/1956       53    611    C2015    LA    Lincoln

LA-TER0270-015

   JOYCE DYE MILLER ET AL    THE ATLANTIC REFINING COMPANY      10/18/1956       54    53    C2098    LA    Lincoln

LA-TER0270-016

   YOUNG LEWIS    THE ATLANTIC REFINING COMPANY      10/17/1956       54    131    C2202    LA    Lincoln

LA-TER0270-017

   CALVIN HOLLAND    THE ATLANTIC REFINING COMPANY      10/15/1956       54    149    C2263    LA    Lincoln

LA-TER0270-018

   MATTIE LEWIS WHITMORE ET AL    THE ATLANTIC REFINING COMPANY      10/25/1956       54    179    C2328    LA    Lincoln

LA-TER0270-019

   LUVONIA NELSON WILSON    THE ATLANTIC REFINING COMPANY      10/17/1956       54    155    C2287    LA    Lincoln

LA-TER0270-020

   DOROTHY STANDIFER FULLER ET AL    THE ATLANTIC REFINING COMPANY      10/25/1956       54    211    C2371    LA    Lincoln

LA-TER0270-021

   VELMA HOLLAND FORD    THE ATLANTIC REFINING COMPANY      10/24/1956       54    219    C2388    LA    Lincoln

LA-TER0270-022

   LUCENDA LEWIS GOLDSMITH ET AL    THE ATLANTIC REFINING COMPANY      10/25/1956       54    421    C2747    LA    Lincoln

LA-TER0270-023

   F LOWENIA GIBSON WINTERS ET AL    THE ATLANTIC REFINING COMPANY      10/25/1956       54    171    C2319    LA    Lincoln

LA-TER0270-024

   G W DYE    THE ATLANTIC REFINING COMPANY      10/20/1956       54    177    C2327    LA    Lincoln

LA-TER0270-025

   ESTER HOLLAND ET AL    THE ATLANTIC REFINING COMPANY      10/24/1956       54    207    C2370    LA    Lincoln
   CECIL DYE REPRESENTED BY HIS AGENT AND A-I-F                     

LA-TER0270-026

   GLEN DYE    THE ATLANTIC REFINING COMPANY      10/29/1956       54    217    C2387    LA    Lincoln

LA-TER0270-027

   SAM DYE    THE ATLANTIC REFINING COMPANY      12/18/1956       55    13    C3222    LA    Lincoln

LA-TER0270-028

   SUSIE C YATES LEWIS ET AL    THE ATLANTIC REFINING COMPANY      10/22/1956       55    169    C3539    LA    Lincoln

LA-TER0270-029

   ELIZABETH LEWIS SMITH    THE ATLANTIC REFINING COMPANY      11/20/1956       56    113    C4742    LA    Lincoln

LA-TER0270-030

   IRA MAE LEWIS VILLA    THE ATLANTIC REFINING COMPANY      5/20/1957       56    439    C5358    LA    Lincoln

LA-TER0270-031

   HERMAN STANDIFER    THE ATLANTIC REFINING COMPANY      11/16/1956       57    381    C6069    LA    Lincoln

LA-TER0270-032

   GEORGIA MARY MCBRIDE    KCS RESOURCES INC      9/21/2006       1216    155    F82450    LA    Lincoln

LA-TER0270-033

   KATHERINE LOUISE MCBRIDE COX    KCS RESOURCES INC      9/21/2006       1216    157    F82451    LA    Lincoln

LA-TER0270-034

   VALERIE DIANE MCBRIDE GRAHAM    KCS RESOURCES INC      9/21/2006       1216    159    F82452    LA    Lincoln

LA-TER0270-035

   OMAH JEAN (OJ) HIGGINS    KCS RESOURCES INC      9/21/2006       1216    161    F82453    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   MARYMAC ASSOCIATES INC                     

LA-TER0270-036

   JOHN F MCBRIDE VICE PRESIDENT    KCS RESOURCES INC      9/21/2006       1216    163    F82454    LA    Lincoln

LA-TER0271-000

   CLAY ROACH    JOHNIE W ADKINS      5/19/1956       73    457    C94    LA    Lincoln

LA-TER0272-001

   L E PARKER    JOHNIE W ADKINS      5/21/1956       73    441    C87    LA    Lincoln

LA-TER0272-002

   LEON BURKS    JOHNIE W ADKINS      5/21/1956       73    513    C354    LA    Lincoln

LA-TER0273-001

   YOUNG LEWIS    JOHNIE W ADKINS      5/8/1956       73    589    C604    LA    Lincoln

LA-TER0273-002

   JESSIE HUEY ET AL    JOHNIE W. ADKINS      5/14/1956       52    553    C1071    LA    Lincoln

LA-TER0274-001

   THOMAS LEVI MCCRARY    THE ATLANTIC REFINING COMPANY      10/31/1956       54    163    C2291    LA    Lincoln

LA-TER0274-002

   RUBY MCCRARY BEASLEY INDIV AND AS AGENT AND A-I-F FACT FOR BESSIE MCCRARY JONES ET AL    THE ATLANTIC REFINING COMPANY      11/1/1956       54    159    C2289    LA    Lincoln

LA-TER0274-003

   JANIE MCCRARY HEDGEPETH    THE ATLANTIC REFINING COMPANY      11/1/1956       54    215    C2372    LA    Lincoln

LA-TER0274-004

   WILEY MCCRARY    THE ATLANTIC REFINING COMPANY      11/9/1956       54    205    C2366    LA    Lincoln

LA-TER0274-005

   C L MCCRARY ET AL    THE ATLANTIC REFINING COMPANY      11/13/1956       54    435    C2769    LA    Lincoln
   MARY MCCRARY THOMAS ET AL REPRESENTED BY          55    583    C4443      

LA-TER0274-006

   WALTER A CLEMENTS AGENT AND A-I-F    THE ATLANTIC REFINING COMPANY      11/8/1956       59    249    C8253    LA    Lincoln
            59    57    C7876      
   JOHN CAUWIN MCCRARY BY AND THROUGH DAISY E          59    57    C7876      

LA-TER0274-007

   MCCRARY AS NATURAL TUTRIX    THE ATLANTIC REFINING COMPANY      11/6/1957       59    57    C7876    LA    Lincoln
            60    147    C9108      
            60    147    C9108      

LA-TER0274-008

   JAMES L MCCRARY    THE ATLANTIC REFINING COMPANY      1/23/1958       60    147    C9108    LA    Lincoln

LA-TER0274-009

   MARY MARTIN BLACKWOOD    KCS MEDALLION RESOURCES INC      1/14/1997       977    1    86793    LA    Lincoln

LA-TER0274-010

   GEORGE T JOHNS ET AL    KCS MEDALLION RESOURCES INC      1/27/1997       989    49    89464    LA    Lincoln

LA-TER0274-011

   DON DURRETT ET UX    OBRIEN OPERATING COMPANY      9/23/1999       1073    223    16506    LA    Lincoln

LA-TER0274-012

   WAYNE L SIMPSON    OBRIEN OPERATING COMPANY      9/23/1999       1073    223    16507    LA    Lincoln

LA-TER0274-013

   W LANE MCCRARY ET AL    OBRIEN OPERATING COMPANY      9/13/1999       1079    297    18141    LA    Lincoln

LA-TER0274-014

   RALPH J MCCRARY ESTATE    OBRIEN OPERATING COMPANY      5/15/2000       1092    314    21530    LA    Lincoln

LA-TER0274-015

   ROBERT EUGENE JOHNS ET AL    J CURTIS SMITH      6/30/2000       1096    189    22274    LA    Lincoln

LA-TER0274-016

   CECIL O JOHNS JR    J CURTIS SMITH      6/30/2000       1128    254    F-35642    LA    Lincoln

LA-TER0274-017

   GEORGE JOHNS    J CURTIS SMITH      8/29/2000       1128    256    F-35643    LA    Lincoln

LA-TER0275-001

   E C ATKINS    THE ATLANTIC REFINING COMPANY      11/1/1956       54    157    C2288    LA    Lincoln

LA-TER0275-002

   JOHN L HOOD    THE ATLANTIC REFINING COMPANY      10/31/1956       54    161    C2290    LA    Lincoln

LA-TER0275-003

   JOHN E WARREN    THE ATLANTIC REFINING COMPANY      11/7/1956       54    255    C2450    LA    Lincoln

LA-TER0276-000

   BENJAMIN HOWARD FALLIN JR    HOOD PETROLEUM INC      7/13/2006       1201    174    F76426    LA    Lincoln
   LESTER L HOOD ET AL          203    249         

LA-TER0277-000

   INETA HOOD BAKER    FRANK D RIPPY      8/13/1976       203    249       LA    Lincoln
            203    241         

LA-TER0279-000

   INETA HOOD BAKER    FRANK D RIPPY      8/13/1976       203    241       LA    Lincoln
            203    237         
            203    237         

LA-TER0280-000

   EVA MYRL ROBINSON BELCHER ET VIR    FRANK D RIPPY      8/16/1976       203    237       LA    Lincoln

LA-TER0281-000

   DREW DANIELS    FRANK D RIPPY      10/14/1976       203    332    D-2517    LA    Lincoln

LA-TER0282-000

   JOHN E WALKER ET UX    CLAYTON WILLIAMS ENERGY INC      4/23/2007       1223    155    F85194    LA    Lincoln
   LIBERTY HILL MISSIONARY BAPTIST CHURCH                     
   ALMA GOLDSMITH AS DEACON                     

LA-TER0283-000

   EARL BROWN AS DEACON    FRANK D RIPPY      11/16/1976       203    392    D-2532    LA    Lincoln

LA-TER0290-000

   DONNY RAY HARRIS ET UX    CLAYTON WILLIAMS ENERGY INC      7/13/2009       1274    723    F105959    LA    Lincoln

LA-TER0291-000

   CARLEVER DANIEL ALLEN    CLAYTON WILLIAMS ENERGY INC      7/21/2009       1274    720    F105958    LA    Lincoln

LA-TER0301-000

   DAVID L WINKLER ET AL    FRANK D RIPPY      8/16/1976       203    233    D-2493    LA    Lincoln

LA-TER0302-000

   STANLEY L JONES    FRANK D RIPPY      10/6/1976       203    319    D-2514    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0303-000

   NORMAN LAMAR DOWLING    FRANK D RIPPY      12/7/1976       203    479    D-2553    LA    Lincoln

LA-TER0304-000

   MYRA HOOD HOLLINGSWORTH    FRANK D RIPPY      9/21/1976       203    287    D-2506    LA    Lincoln

LA-TER0306-000

   WILLARD DON WALLACE    FRANK D RIPPY      10/23/1976       203    364    D-2525    LA    Lincoln
            33    331    N-58614      
            33    331    N-58614      

LA-TER0335-000

   T L MCCRARY    JOE B CLARK      3/3/1944       33    331    N-58614    LA    Lincoln

LA-TER0337-001

   DR LEE ROY SKINNER JR    ST MARY LAND & EXPL CO      8/9/2003       1152    448       LA    Lincoln

LA-TER0337-002

   JAMES C SKINNER    ST MARY LAND & EXPL CO      8/9/2003             51536    LA    Lincoln

LA-TER0337-003

   DAVID S SKINNER    ST MARY LAND & EXPL CO      8/9/2003             51537    LA    Lincoln
            196    197    C-97873      

LA-TER0338-000

   PATRICIA E HENDRICKS    FRANK D RIPPY      3/11/1976       196    197    C-97873    LA    Lincoln

LA-TER0343-000

   LEE ROY SKINNER    FRANK D RIPPY      3/11/1976       196    189       LA    Lincoln
            1172    454    063270      
            1273    013    F105107      
            1172    454    063270      

LA-TER0558-000

   LOUISIANA MINERALS LTD    HOOD PETROLEUM INC      3/29/2005       1272    521    F104946    LA    Lincoln

LA-TER0559-000

   JOSEPH G MITCHELL III    HOOD PETROLEUM INC      9/22/2005       1184    365    F69246    LA    Lincoln

LA-TER0560-000

   VIRGINIA ANN MITCHELL    HOOD PETROLEUM INC      9/22/2005       1184    369    F69247    LA    Lincoln
   CLEM B FAMILY LIMITED PARTNERSHIP REPRESENTED BY JERRY STEPHEN DREWETT AND MARGIE N                     

LA-TER0561-000

   DREWETT    R & O ENERGY LLC      10/10/2007       1232    649    F89340    LA    Lincoln
            328    348         

LA-TER0565-000

   ELIZABETH STEWART GARNER    UNION TX PETROLEUM CORP      3/20/1981       328    348       LA    Lincoln
               447 OR         
   MURLENE O’RESS BRAZZEL BENEDICT             457         
   NATURAL TUTRIX FOR DEWEY JADELL STEWART &          253    447 OR         

LA-TER0566-000

   MELYNDA SUE STEWART, HER CHILDREN    ALLIED CHEMICAL CORP      6/19/1979       253    457       LA    Lincoln
            329    5         

LA-TER0567-000

   LULA MAE STEWART NEILSON    UNION TX PETROLEUM CORP      3/18/1981       329    5       LA    Lincoln
            259    238         

LA-TER0568-000

   CAROLYN D STEWART ET AL    ALLIED CHEMICAL CORP      8/6/1979       259    238       LA    Lincoln
            204    291         

LA-TER0570-001

   COURTNEY A REED ET AL    FRANK D RIPPY      1/3/1977       204    291       LA    Lincoln
            203    732         

LA-TER0570-002

   ZORA PASCHAL ZACHRY ET AL    FRANK D RIPPY      12/20/1976       203    732       LA    Lincoln
            204    164         

LA-TER0570-003

   RICHARD JEFF ZACHRY ET AL    FRANK D RIPPY      12/20/1976       204    164       LA    Lincoln
            203    372         

LA-TER0571-000

   J C HENRY ET AL    FRANK D RIPPY      10/12/1976       203    372       LA    Lincoln

LA-TER0572-001

   RAYMOND EARL SIMPSON    MICHAEL F MILEY OIL PROPERTIES INC      2/20/1979       246    716    D-19346    LA    Lincoln

LA-TER0572-002

   EVERETT HILL    FRANK D RIPPY      1/20/1977       205    21    D-3153    LA    Lincoln

LA-TER0572-003

   ROSA LEWIS BROOKS    FRANK D RIPPY      1/14/1977       204    426    D-2982    LA    Lincoln

LA-TER0572-004

   MELVIN TERRELL    MERIDIAN OIL INC      12/8/1994       920    61    74293    LA    Lincoln

LA-TER0572-005

   LUTHER LEWIS    MERIDIAN OIL INC      12/8/1994       920    65    74294    LA    Lincoln

LA-TER0572-006

   CASCEAL LEWIS THOMAS    MERIDIAN OIL INC      3/7/1995       920    123    74308    LA    Lincoln
            240    140         

LA-TER0572-007

   LEOPHIS SAMPSON GIPSON    MAC’S OIL & GAS CORP      11/15/1978       275    66    D-25574    LA    Lincoln
   DONNY RAY LEWIS A MINOR REPRESENTED BY ETHEL                     

LA-TER0572-008

   M LEWIS HILL AS NATURAL TUTRIX    MICHAEL F MILEY OIL PROPERTIES INC      2/27/1979       257    450    D-22966    LA    Lincoln
            275    82         

LA-TER0572-009

   ELEANOR SAMPSON ABNEY    MAC’S OIL & GAS CORP      11/15/1978       240    144    D25582    LA    Lincoln
            275    74         


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0572-010

   EZEKIEL LEWIS    MAC’S OIL & GAS CORP      11/15/1978       240    152    D25578    LA    Lincoln

LA-TER0572-011

   REV IODUS H LEWIS    MAC’S OIL & GAS CORP      11/15/1978       240    156       LA    Lincoln
            275    60         

LA-TER0572-012

   VERA M MARTIN    MAC’S OIL & GAS CORP      11/15/1978       240    160    D25571    LA    Lincoln
            275    76         

LA-TER0572-013

   ALBERT SAMPSON JR    MAC’S OIL & GAS CORP      11/15/1978       240    164    D25579    LA    Lincoln
            275    78         

LA-TER0572-014

   ANDREW LEWIS    MAC’S OIL & GAS CORP      11/15/1978       240    168    D25580    LA    Lincoln
            275    58    D25570      

LA-TER0572-015

   SYBLE LEE SAMPSON SERRELL    MAC’S OIL & GAS CORP      11/15/1978       240    172    D16942    LA    Lincoln
            275    56    D25569      

LA-TER0572-016

   VICTORIA SAMPSON MINOR    MAC’S OIL & GAS CORP      11/15/1978       240    176    D16943    LA    Lincoln
            240    184         

LA-TER0572-017

   MILDRED HOLMAN    MAC’S OIL & GAS CORP      11/15/1978       275    72    D-25577    LA    Lincoln
            275    68         

LA-TER0572-018

   MELVIN R SAMPSON    MAC’S OIL & GAS CORP      11/15/1978       240    188    D25575    LA    Lincoln
            275    62    D25572      

LA-TER0572-019

   QUINCY D SAMPSON    MAC’S OIL & GAS CORP      11/15/1978       240    192    D-16947    LA    Lincoln
            275    64    D25573      

LA-TER0572-020

   THERESA PINE    MAC’S OIL & GAS CORP      11/15/1978       240    196    D16948    LA    Lincoln
            240    442    D-17079      

LA-TER0572-021

   DOYLE L LEWIS    MAC’S OIL & GAS CORP      11/22/1978       275    70    D-25576    LA    Lincoln

LA-TER0572-022

   HERMAN E DAY    MERIDIAN OIL INC      12/8/1994       920    73    74296    LA    Lincoln

LA-TER0572-023

   PECOLIA DAY BROWN    MERIDIAN OIL INC      12/8/1994       920    77    74297    LA    Lincoln

LA-TER0572-024

   ANDREW C DAY    MERIDIAN OIL INC      12/8/1994       920    81    74298    LA    Lincoln

LA-TER0572-025

   JESSIE LEWIS CARTER    MERIDIAN OIL INC      3/7/1995       920    111    E-74305    LA    Lincoln

LA-TER0572-026

   PRENTICE R HILL    MERIDIAN OIL INC      12/8/1994       920    57    E74292    LA    Lincoln

LA-TER0573-000

   WILLIAMETTE INDUSTRIES INC    FRANK D RIPPY      5/26/1977       247    235    D-19515    LA    Lincoln

LA-TER0574-001

   DHU DOWLING ET AL    MERIDIAN OIL INC      11/10/1994       920    154    74315    LA    Lincoln

LA-TER0574-002

   ELDON M HOSFORD JR ET AL    MERIDIAN OIL INC      11/10/1994       920    150    74314    LA    Lincoln
   ELIZABETH J J WEINGART                     

LA-TER0574-003

   AKA ELIZABETH JANE WEINGART    MERIDIAN OIL INC      11/10/1994       920    146    74313    LA    Lincoln

LA-TER0575-001

   JERRY STEPHEN DREWETT ET AL    MERIDIAN OIL INC      11/11/1994       920    141    74312    LA    Lincoln

LA-TER0575-002

   JOHN COLVIN DREWETT    MERIDIAN OIL INC      11/11/1994       920    136    74311    LA    Lincoln

LA-TER0575-003

   PATTON BARHAM DREWETT ET AL    MERIDIAN OIL INC      11/11/1994       920    131    74310    LA    Lincoln

LA-TER0576-001

   ELDEN M HOSFORD JR ET AL    MERIDIAN OIL INC      11/10/1994       920    49    74290    LA    Lincoln
   ELIZABETH J H WEINGART                     

LA-TER0576-002

   AKA ELIZABETH JANE WEINGART    MERIDIAN OIL INC      11/10/1994       920    53    74291    LA    Lincoln

LA-TER0576-003

   DHU DOWLING ET AL    MERIDIAN OIL INC      11/10/1994       920    45    74289    LA    Lincoln

LA-TER0577-000

   ELLA MAE HASSELL ET AL    FRANK D RIPPY      10/5/1976       203    315    D-2513    LA    Lincoln

LA-TER0578-000

   MURPHY EARL PICKETT ET UX    ALLIED CHEMICAL CORPORATION      8/27/1979       256    20    D-22476    LA    Lincoln
            203    253    D-2498      
            203    253    D-2498      

LA-TER0579-001

   GEORGE H DYE    FRANK D RIPPY      8/13/1976       203    253    D-2498    LA    Lincoln

LA-TER0579-002

   RENFORD COLE ELLIS ET UX    ALLIED CHEMICAL CORPORATION      8/12/1977       216    528    D-7700    LA    Lincoln

LA-TER0579-003

   PETER REPPETO ET UX    MERIDAIN OIL INC      3/10/1995       920    166    74318    LA    Lincoln

LA-TER0579-004

   JOSEPH C ELLIS ET UX    MERIDAIN OIL INC      4/12/1996       952    222    81301    LA    Lincoln

LA-TER0579-005

   TRUMAN A POTTS ET UX    MERIDAIN OIL INC      3/17/1995       920    162    74317    LA    Lincoln

LA-TER0579-006

   RICHARD H SPRINGER ET UX    MERIDAIN OIL INC      4/12/1995       920    158    E-74316    LA    Lincoln

LA-TER0579-007

   JAMES ALBERT MONK ET AL    SCHOEFFLER ENERGY LLC      3/26/2013       1328    658    F132381    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0579-008

   WILLIAM THOMAS BURT ET UX    SCHOEFFLER ENERGY LLC      5/1/2013       1326    829    F131505    LA    Lincoln

LA-TER0579-009

   BILLY TROY JONES JR ET UX    SCHOEFFLER ENERGY LLC      3/19/2013       1326    569    F131378    LA    Lincoln
   NEW LIBERTY HILL BAPTIST CHURCH REPRESENTED BY                     

LA-TER0581-000

   T OLIVER WASHINGTON AND WILLIAM HILL    ALLIED CHEMICAL CORPORATION      12/2/1977       222    239       LA    Lincoln

LA-TER0585-000

   BERNIE SINGLETON WILLIAMS    FRANK D RIPPY      11/10/1976       203    614    D-2640    LA    Lincoln

LA-TER0586-000

   NORMAN LAMAR DOWLING ET AL    FRANK D RIPPY      1/3/1977       204    172    D-2830    LA    Lincoln

LA-TER0587-000

   KATHCO INC    FRANK D RIPPY      10/21/1976       203    599    D-2637    LA    Lincoln

LA-TER0588-000

   D N MOON    HUNT ENERGY CORPORATION      7/9/1976       201    63    D-1393    LA    Lincoln

LA-TER0589-000

   JOHNNIE M TATUM    HUNT ENERGY CORP      7/9/1976       200    574    D-1186    LA    Lincoln

LA-TER0590-000

   BRYON E HAMMON    HUNT ENERGY CORPORATION      7/9/1976       200    582    D-1189    LA    Lincoln

LA-TER0591-000

   MAVIS HAMMON SPAIN    HUNT ENERGY CORPORPORATION      7/13/1976       200    569    D-1185    LA    Lincoln

LA-TER0592-001

   GEORGE W HENRY    HUNT ENERGY CORPORATION      7/14/1976       200    561    D-1183    LA    Lincoln

LA-TER0592-002

   BENNIE HENRY HOLSTEAD    HUNT ENERGY CORPORATION      7/9/1976       200    565    D-1184    LA    Lincoln

LA-TER0593-001

   ROBERT H WICK    HUNT ENERGY CORPORATION      4/15/1980       311    127    D-31062    LA    Lincoln

LA-TER0593-002

   RALPH WICK    HUNT ENERGY CORPORATION      4/15/1980       311    111    D-31058    LA    Lincoln

LA-TER0593-003

   EDNA MILLET ZERINGUE ET AL    HUNT ENERGY CORPORATION      3/6/1980       311    82    D-31052    LA    Lincoln

LA-TER0593-004

   CLARA FULLER TOBIN    HUNT ENERGY CORPORATION      11/27/1979       267    258    D-24449    LA    Lincoln

LA-TER0593-005

   JACK H ROMAIN ET UX    GENE T OLIVER      11/1/1979       265    337    D-24257    LA    Lincoln

LA-TER0593-006

   RUDOLPH J ROBERT    HUNT ENERGY CORP      10/6/1981       352    217    D-37876    LA    Lincoln

LA-TER0593-007

   VIRGINIA HENDERSON SAGE    HUNT ENERGY CORPORATION      4/15/1980       311    103    D-31056    LA    Lincoln

LA-TER0593-008

   C E SHELOR    FRANK BRIGHT      9/24/1979       266    52    D-24278    LA    Lincoln

LA-TER0593-009

   JOEL LOUIS DOWLING ET AL    FRANK BRIGHT      9/27/1979       266    39       LA    Lincoln

LA-TER0593-010

   ROBERT WILLIAM MONDY    FRANK BRIGHT      9/25/1979       266    43       LA    Lincoln

LA-TER0593-011

   EVA MOON WARTENBERG    HUNT ENERGY CORPORATION      11/27/1979       267    234       LA    Lincoln

LA-TER0593-012

   SHIRLEY A FULLER ET AL    FRANK BRIGHT      9/27/1979       283    145       LA    Lincoln

LA-TER0593-013

   DANIEL NEIL MOON ET AL    UNION TEXAS PETROLEUM CORPORATION      8/13/1980       308    11       LA    Lincoln

LA-TER0593-014

   PEGGY STRAUSS GREENBAUM    HUNT ENERGY CORPORATION      4/9/1980       311    99       LA    Lincoln

LA-TER0593-015

   JEAN STRAUSS MINTZ    HUNT ENERGY CORPORATION      4/9/1980       311    131       LA    Lincoln

LA-TER0593-016

   CLIFFORD M STRAUSS    HUNT ENERGY CORPORATION      4/1/1980       311    74       LA    Lincoln

LA-TER0593-017

   MILTON GORN    FRANK BRIGHT      10/3/1979       283    137       LA    Lincoln
   DOROTHY SLOCUM MASUR                     

LA-TER0593-018

   REPRESENTED BY RALPH W KENNEDY AS POA    HUNT ENERGY CORPORATION      3/26/1980       311    86       LA    Lincoln

LA-TER0593-019

   JACK MASUR    FRANK BRIGHT      10/3/1979       283    149       LA    Lincoln
   CARMA SINGLETON COOK AKA CARMA S COOK ET VIR          267    266         

LA-TER0593-020

   RAYEBURN G COOK    HUNT ENERGY CORPORATION      9/15/1979       267    266       LA    Lincoln
            267    250         

LA-TER0593-021

   DEWEY HOUGH SINGLETON ET UX    RAYEBURN G. COOK      9/15/1978       267    250       LA    Lincoln
   CLIFFORD H GREENBAUM                     
   REPRESENTED BY JAMES R GREENBALUM AS AGENT                     

LA-TER0593-022

   AND A-I-F    GENE T OLIVER      11/27/1979       270    1       LA    Lincoln

LA-TER0593-023

   ROBERT S GREENBAUM    GENE T OLIVER      11/27/1979       269    350       LA    Lincoln

LA-TER0593-024

   CAROLYN ROSE MINTZ    GENE T OLIVER      11/27/1979       270    9       LA    Lincoln

LA-TER0593-025

   MORRIS FRED MINTZ    GENE T OLIVER      11/27/1979       270    5       LA    Lincoln

LA-TER0593-026

   O M MORRISON ET AL    HUNT ENERGY CORPORATION      3/19/1980       311    95       LA    Lincoln

LA-TER0593-027

   HELEN WICK MCWHIRT    HUNT ENERGY CORPORATION      4/15/1980       311    123       LA    Lincoln

LA-TER0593-028

   HAZEL CROMER MILLET ET AL    HUNT ENERGY CORPORATION      3/6/1980       311    78       LA    Lincoln

LA-TER0593-029

   J B MILAM JR    HUNT ENERGY CORPORATION      10/18/1979       267    262       LA    Lincoln

LA-TER0593-030

   MEREDITH BARCLAY GRISAFFI ET AL    HUNT ENERGY CORPORATION      3/6/1980       283    141       LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0593-031

   HAROLD LEE    HUNT ENERGY CORPORATION      4/15/1980       311    107       LA    Lincoln

LA-TER0593-032

   BETTY MILLET LOUCKS    HUNT ENERGY CORPORATION      6/29/1981       340    131       LA    Lincoln

LA-TER0593-033

   W H FIORELLA SR ET AL    HUNT ENERGY CORPORATION      11/28/1979       267    230       LA    Lincoln

LA-TER0593-034

   JAMES ROY FULLER JR    HUNT ENERGY CORPORATION      11/27/1979       267    254       LA    Lincoln

LA-TER0593-035

   JOHN ROBERT    GENE T OLIVER      11/5/1979       263    184       LA    Lincoln

LA-TER0593-036

   J C NANCE SR ET AL    HUNT ENERGY CORPORATION      1/22/1982       368    195       LA    Lincoln

LA-TER0593-037

   MARC L ROBERT ET AL    HUNT ENERGY CORPORATION      11/29/1979       267    238       LA    Lincoln
            283    153         

LA-TER0593-038

   RAYMOND J ROBERT SR    HUNT ENERGY CORPORATION      3/6/1980       291    152    27854    LA    Lincoln

LA-TER0593-039

   CRAIG BARCLAY    HUNT ENERGY CORPORATION      3/17/1980       311    70       LA    Lincoln

LA-TER0593-040

   HELEN LEE BISHOP    HUNT ENERGY CORPORATION      4/15/1980       311    119       LA    Lincoln

LA-TER0593-041

   JUDITH FULLER NAJOLIA    HUNT ENERGY CORPORATION      11/28/1979       267    270       LA    Lincoln

LA-TER0593-042

   JAMES R GREENBAUM JR    GENE T OLIVER      11/27/1979       269    354    D-24825    LA    Lincoln

LA-TER0597-000

   BARBARA TAYLOR CAMP ET AL    FRANK BRIGHT      9/21/1979       266    47       LA    Lincoln
            267    246         

LA-TER0601-001

   ANNA DORIS SINGLETON    RAYEBURN G COOK      9/15/1979       267    246       LA    Lincoln

LA-TER0601-002

   PAULINE BARHAM DREWETT    HUNT ENERGY CORPORATION      9/11/1979       258    321       LA    Lincoln

LA-TER0604-000

   WAYNE FALLIN ET AL    FRANK D RIPPY      9/22/1976       203    282    D-2505    LA    Lincoln
            203    291    D-2507      

LA-TER0605-000

   KATIE HOOD ET AL    FRANK D RIPPY      9/22/1976       909    166    E-72270    LA    Lincoln

LA-TER0606-000

   ARDELIA HARRIS THOMPSON ET AL    R L SKINNER      4/12/1949       50    135    N-87977    LA    Lincoln

LA-TER0607-000

   JOHN L HOOD    HOWARD W WRIGHT JR      9/5/1951       59    379    108077    LA    Lincoln
            202    172    D-1966      

LA-TER0608-000

   LORAINE NOBLES EARLY HOWARD    IMC EXPLORATION COMPANY      10/21/1976       202    172    D-1966    LA    Lincoln

LA-TER0615-000

   D L SANFORD ET UX    FRANK D RIPPY      10/14/1976       203    336    D-2518    LA    Lincoln
   NOVIS HENRY GALLOWAY                     

LA-TER0777-000

   WILLARD DONALD WALLACE CURATOR    GENE T OLIVER      11/14/1979       263    305    D-23961    LA    Lincoln
            203    269    D-2502      
            203    269    D-2502      

LA-TER0780-001

   PAULINE BARHAM DREWETT ET AL    FRANK D RIPPY      10/7/1976       203    269    D-2502    LA    Lincoln

LA-TER0780-002

   JOYCE DYE MILLER    FRANK D RIPPY      9/3/1976       203    261    D-2500    LA    Lincoln

LA-TER0780-003

   JEWEL DYE BOWDEN    FRANK D RIPPY      9/3/1976       203    257    D-2499    LA    Lincoln

LA-TER0780-004

   MAYCE G SEHON ET AL    FRANK D RIPPY      9/20/1976       203    274    D-2503    LA    Lincoln

LA-TER0780-005

   G W DYE    FRANK D RIPPY      10/28/1976       203    610    D-2639    LA    Lincoln

LA-TER0780-006

   MAURICE DYE ET AL    FRANK D RIPPY      11/18/1976       203    419    D-2538    LA    Lincoln

LA-TER0780-007

   JEWEL DYE BOWDEN    FRANK D RIPPY      12/18/1978       243    108    D-17926    LA    Lincoln

LA-TER0780-008

   GEORGE H DYE    FRANK D RIPPY      9/1/1976       203    265    D-2501    LA    Lincoln

LA-TER0780-009

   CHARLES E SHELOR    FRANK D RIPPY      10/21/1976       203    405    D-2535    LA    Lincoln

LA-TER0780-010

   GEORGE STANDIFER    FRANK D RIPPY      11/17/1976       203    401    D-2534    LA    Lincoln

LA-TER0780-011

   OTIS LEON HILL    FRANK D RIPPY      11/17/1976       203    475    D-2552    LA    Lincoln

LA-TER0780-012

   SUE BARMORE COOK    FRANKS PETROLEUM INC      4/11/1979       248    157    D-19835    LA    Lincoln

LA-TER0782-000

   LOUISIANA MINERALS LTD    HOOD PETROLEUM, INC.      3/29/2005       1172    462    PTREL F104947    LA    Lincoln

LA-TER0783-000

   JOHN W DYE    RAYEBURN G COOK      9/15/1979       267    242       LA    Lincoln

LA-TER0786-001

   ROSSETTA GARNER BISSIC ET AL    IMC EXPLORATION CO      11/11/1976       202    600       LA    Lincoln

LA-TER0786-P02

   L C BISSIC    IMC EXPLORATION CO      10/16/1979       274    51       LA    Lincoln

LA-TER0797-000

   NORMAN LAMAR DOWLING ET AL    FRANK D RIPPY      1/3/1977       204    192    D-2834    LA    Lincoln

LA-TER0798-000

   YOUNGSTOWN SHEET AND TUBE COMPANY    FRANK D RIPPY      9/8/1976       203    323    D-2515    LA    Lincoln

LA-TER0808-000

   DAVID WARREN TRUSSELL ET AL    ENSIGHT ENERGY PARTNERS LP      5/6/2003       1149    61    49105    LA    Lincoln

LA-TER0809-001

   LOUISE TRUSSELL NORRIS GLADNEY    ENSIGHT ENERGY PARTNERS LP      10/10/2003       1151    792    51137    LA    Lincoln

LA-TER0810-001

   LOIS TRUSSELL BAREMORE ET AL    ENSIGHT ENERGY PARTNERS LP      6/27/2003       1149    67    49107    LA    Lincoln

LA-TER0810-002

   JOHN PAUL BAREMORE    ENSIGHT ENERGY PARTNERS LP      6/27/2003       1151    82    F-50502    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0810-003

   IVY ELIZABETH BAREMORE    ENSIGHT ENERGY PARTNERS LP      6/27/2003       1149    610    49439    LA    Lincoln

LA-TER0811-000

   DON MARVIN MCGEHEE ET UX    ENSIGHT ENERGY PARTNERS LP      6/6/2003       1149    64    49106    LA    Lincoln

LA-TER0812-000

   CHARLES STANLEY BALDWIN ET UX    ENSIGHT ENERGY PARTNERS LP      1/11/2003       1149    91    49112    LA    Lincoln

LA-TER0813-001

   ROBERT LANE PITTARD    ENSIGHT ENERGY PARTNERS LP      1/11/2003       1149    83    49110    LA    Lincoln

LA-TER0813-002

   CAROL ANN PITTARD ANDERSON    ENSIGHT ENERGY PARTNERS LP      3/6/2003       1149    75    49108    LA    Lincoln

LA-TER0813-003

   CALVIN JOSEPH BRISCOE JR    ENSIGHT ENERGY PARTNERS LP      1/11/2003       1149    79    49109    LA    Lincoln

LA-TER0813-004

   JESSICA CHRISTINE BRISCOE SCHROCK    ENSIGHT ENERGY PARTNERS LP      1/11/2003       1149    87    49111    LA    Lincoln

LA-TER0814-000

   CHARLES RAYMOND HAWKINS    ENSIGHT ENERGY PARTNERS LP      4/4/2003       1151    80    50501    LA    Lincoln
            1149    52    049102      

LA-TER0815-001

   MINNIE ESTELLE M SKINNER ET AL    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    52    049102    LA    Lincoln
            1149    55    049103      

LA-TER0815-002

   JOYCE SKINNER BRAZZEL    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    55    049103    LA    Lincoln
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LA-TER0815-003

   GLORIA JEAN SKINNER THOMAS    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    58    049104    LA    Lincoln

LA-TER0816-001

   WILLIAM MICHAEL GOSDIN    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    46    49100    LA    Lincoln

LA-TER0816-002

   STEPHEN LEE GOSDIN    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    43    49099    LA    Lincoln

LA-TER0816-003

   JOHN DAVID GOSDIN    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    40    49098    LA    Lincoln

LA-TER0816-004

   LISA GOSDIN SMITH    ENSIGHT ENERGY PARTNERS LP      12/10/2002       1149    49    49101    LA    Lincoln
            1149    145    049163      

LA-TER0817-001

   KENNETH W BREWSTER ET UX    ENSIGHT ENERGY PARTNERS LP      8/1/2003       1149    145    049163    LA    Lincoln
            1149    149    0149164      

LA-TER0817-002

   EDWARD ERVIN TINSLEY    ENSIGHT ENERGY PARTNERS LP      7/29/2003       1149    149    049164    LA    Lincoln
            1149    95    049113      

LA-TER0817-003

   GERALDINE TINSLEY AUTREY    ENSIGHT ENERGY PARTNERS LP      4/30/2003       1149    95    049113    LA    Lincoln

LA-TER0817-004

   MAXINE TINSLEY HOTLZCLAW    ENSIGHT ENERGY PARTNERS LP      5/1/2003       1149    99    49114    LA    Lincoln

LA-TER0817-005

   RHONDA TINSLEY POPE    ROBERT E MCKELLAR      9/20/2003       1151    716    F51058    LA    Lincoln

LA-TER0817-006

   SHERRI TINSLEY SHARP    ROBERT E MCKELLAR      9/20/2003       1151    734    F51078    LA    Lincoln

LA-TER0818-000

   DANNY C HOLTZCLAW ET UX    ENSIGHT ENERGY PARTNERS LP      5/1/2003       1149    103    49115    LA    Lincoln
            973    135    085908      

LA-TER0820-001

   LOUISIANA UNITED METHODIST CHILDREN    INTERCOAST OIL AND GAS COMPANY      11/5/1996       973    135    085908    LA    Lincoln

LA-TER0820-002

   GEORGE A PETERKIN JR ET AL    OBRIEN OPERATING COMPANY      5/18/2000       1092    316    21531    LA    Lincoln

LA-TER0820-003

   CELESTINE FAVROT ARNDT    J CURTIS SMITH      6/30/2000       1096    187    22273    LA    Lincoln

LA-TER0824-001

   BETTY ANNE SHELOR MORRIS    KCS MEDALLION RESOURCES INC      2/13/1997       980    50    87430    LA    Lincoln

LA-TER0824-002

   W LANE MCCRARY    KCS MEDALLION RESOURCES INC.      1/31/1997       980    58    87432    LA    Lincoln

LA-TER0824-003

   JERRY G MCCRARY    KCS MEDALLION RESOURCES INC      1/31/1997       980    54    87431    LA    Lincoln

LA-TER0824-004

   SARA GENE MCCRARY MOORE ET AL    KCS MEDALLION RESOURCES INC      1/31/1997       980    62    87433    LA    Lincoln

LA-TER0824-005

   RALPH J MCCRARY    KCS MEDALLION RESOURCES INC      2/4/1997       980    66    87434    LA    Lincoln

LA-TER0824-006

   EDWIN L MCCRARY    KCS MEDALLION RESOURCES INC      2/4/1997       980    70    87435    LA    Lincoln

LA-TER0824-007

   SONDRA MCCRARY CLARK ET VIR    KCS MEDALLION RESOURCES INC      1/31/1997       981    1    87626    LA    Lincoln

LA-TER0824-008

   KERRY M REIS ET AL    KCS MEDALLION RESOURCES INC      2/26/1997       981    5    87627    LA    Lincoln

LA-TER0824-009

   CHARLOTTE MCCRARY RIDDEL    KCS MEDALLION RESOURCES INC      1/31/1997       983    266    88203    LA    Lincoln

LA-TER0824-010

   CHARLES F SHELOR    KCS MEDALLION RESOURCES INC      2/12/1997       983    270    88204    LA    Lincoln

LA-TER0824-011

   MARY LYNN CASON    OBRIEN OPERATING COMPANY      5/15/2000       1092    312    21529    LA    Lincoln

LA-TER0824-012

   ANNIE RAY MCGOWEN    OBRIEN OPERATING COMPANY      5/10/2000       1092    310    21528    LA    Lincoln
            981    9    087628      

LA-TER0825-001

   BOBBY GEORGE MCCULLIN    KCS MEDALLION RESOURCES INC      1/24/1997       981    9    087628    LA    Lincoln
            981    14    087629      

LA-TER0825-002

   CONNIE A WATTS    KCS MEDALLION RESOURCES INC      1/24/1997       981    14    087629    LA    Lincoln
            1082    160    018794      

LA-TER0825-003

   JAMES GORDON MCCULLIN    OBRIEN OPERATING COMPANY      1/29/2000       1082    160    018794    LA    Lincoln
            1185    780    F69819      
            1185    780    F69819      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER0825-005

   BOBBY GEORGE MCCULLIN ET AL    ENSIGHT III ENERGY PARTNERS LP      10/13/2005       1185    780    F69819    LA    Lincoln
            1313    862    F124372      
            1322    800    F129117      
            1313    862    F124372      

LA-TER0827-000

   WEYERHAEUSER COMPANY ET AL    WILDHORSE RESOURCES LLC      5/25/2012       1322    800    F129117    LA    Lincoln
   LOUISIANA UNITED METHODIST CHILDREN AND                     
   FAMILY SERVICES INC          1305    979    F120424      

LA-TER0845-000

   REPRESENTED BY TERREL DEVILLE    WILDHORSE RESOURCES LLC      4/27/2011       1305    979    F120424    LA    Lincoln

LA-TER0846-000

   PULPWOOD PRODUCERS INC    WILDHORSE RESOURCES LLC      5/2/2011       1305    770    F120382    LA    Lincoln
            1305    850    F120399      

LA-TER0847-001

   DEBBIE JEAN AUSTIN WILLIAMSON ET AL    WILDHORSE RESOURCES LLC      7/26/2011       1305    850    F120399    LA    Lincoln

LA-TER0847-002

   DONALD MORGAN MITCHELL    CLAYTON WILLIAMS ENERGY INC      12/16/2008       1267    568    F102621    LA    Lincoln

LA-TER0848-001

   TAMMY JO DOWLING STRAKOS    WILDHORSE RESOURCES LLC      5/11/2011       1305    923    F120414    LA    Lincoln

LA-TER0848-002

   JAMES RUSSELL DOWLING    WILDHORSE RESOURCES LLC      5/11/2011       1305    917    F120413    LA    Lincoln

LA-TER0848-003

   CODY DHUWAYNE DOWLING    WILDHORSE RESOURCES LLC      5/11/2011       1305    929    F120415    LA    Lincoln

LA-TER0849-000

   LOUISIANA MINERALS LTD    WILDHORSE RESOURCES LLC      7/5/2011       1305    696    F120365    LA    Lincoln

LA-TER0850-000

   STEPHEN ROBERT NUTT    WILDHORSE RESOURCES LLC      7/1/2011       1305    830    F120394    LA    Lincoln

LA-TER0851-000

   GARY WAYNE MAXWELL ET UX    WILDHORSE RESOURCES LLC      7/1/2011       1305    834    F120395    LA    Lincoln

LA-TER0852-000

   JOHN C MORRIS III ET AL    WILDHORSE RESOURCES LLC      6/5/2012       1314    298    F124544    LA    Lincoln
            1227    109    F86954      

LA-TER0853-000

   WEYERHAEUSER COMPANY    BROAD OAK ENERGY INC      4/30/2007       1227    173    F107182    LA    Lincoln

LA-TER0869-001

   JEFFREY RAY THOMAS ET UX    WILDHORSE RESOURCES LLC      4/20/2012       1313    534    F124165    LA    Lincoln

LA-TER0869-002

   GREGORY ALAN THOMAS ET AL    WILDHORSE RESOURCES LLC      4/20/2012       1313    537    F124166    LA    Lincoln
   SHRINERS HOSPITALS FOR CRIPPLED CHILDREN                     
   REPRESENTED BY C VICTOR THORNTON AS PRESIDENT                     
   AND                     

LA-TER0877-000

   GEORGE M SAUNDERS AS SECRETARY    FRANK D RIPPY      10/25/1976       203    409    D-2536    LA    Lincoln

LA-TER0982-000

   TOWNS COMPANY, LLC    V L C INC      4/13/2011       1301    886    F118676    LA    Lincoln

LA-TER0983-000

   JAMES FOSTER III ET UX    V L C INC      4/14/2011       1300    253    F117866    LA    Lincoln

LA-TER0984-000

   JAY DOUGLAS STRICKLER ET UX    V L C INC      4/15/2011       1301    892    F118678    LA    Lincoln

LA-TER0985-000

   JAY DOUGLAS STRICKLER    V L C INC      4/15/2011       1301    895    F118679    LA    Lincoln

LA-TER0986-000

   LOUISE JONES GRISHAM    V L C INC      4/28/2011       1301    883    F118675    LA    Lincoln

LA-TER0987-000

   LUTHER RICHARD PYLES ET UX    V L C INC      5/14/2011       1300    256    F117867    LA    Lincoln

LA-TER0988-000

   HOWARD O ULMER JR ET UX    V L C INC      5/17/2011       1301    889    F118677    LA    Lincoln

LA-TER0989-000

   ELIZABETH C PHILLIPS HENLEY    V L C INC      5/25/2011       1301    857    F118667    LA    Lincoln

LA-TER0990-000

   CARGILL LEGACY TRUST    V L C INC      6/21/2011       1301    872    F118672    LA    Lincoln

LA-TER0991-000

   BRIAN ROWDELL DAVIS ET UX    V L C INC      6/21/2011       1301    854    F118666    LA    Lincoln

LA-TER0992-000

   LUCY JANELLE PRICE SILVEY    V L C INC      6/20/2011       1301    877    F118673    LA    Lincoln

LA-TER0993-000

   MARY MARGARET PHILLIPS YOUNG    V L C INC      7/1/2011       1301    880    F118674    LA    Lincoln

LA-TER0994-000

   GALE ALLEN SCHOONOVER JR ET UX    V L C INC      6/30/2011       1301    898    F118680    LA    Lincoln

LA-TER0995-001

   THELMA JEAN GRAY LAY    V L C INC      5/24/2011       1301    863    F118669    LA    Lincoln

LA-TER0995-002

   THELMA ELIZABETH LAY THIGPEN, NAKED OWNER    V L C INC      5/24/2011       1301    860    F118668    LA    Lincoln

LA-TER0995-003

   LYNN ANNE LAY MARSH, NAKED OWNER    V L C INC      5/24/2011       1301    869    F118671    LA    Lincoln

LA-TER0995-004

   LAVERN LAY SHELTON, NAKED OWNER    V L C INC      5/24/2011       1301    866    F118670    LA    Lincoln

LA-TER0996-000

   MARTHA ANN OGDEN TURNER    V L C INC      9/9/2011       1308    725    F121724    LA    Lincoln

LA-TER1003-001

   DONALD ROY FAUST ET UX    SCHOEFFLER ENERGY LLC      8/13/2012       1319    539    F127348    LA    Lincoln

LA-TER1003-002

   ELVA MARIE CARTER TERRELL ET AL    SCHOEFFLER ENERGY LLC      9/26/2012       1322    265    F128832    LA    Lincoln
            1322    302    F128837      


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-TER1003-003

   GERALD L BURNETT DBA B&F DRILLING COMPANY    WILDHORSE RESOURCES, LLC      12/13/2012       1322    302    F128837    LA    Lincoln

LA-TER1003-004

   SARAH JANE MONK FOSTER    SCHOEFFLER ENERGY LLC      3/12/2013       1326    879    F131516    LA    Lincoln

LA-TER1003-005

   JACKSON LEE ET UX    SCHOEFFLER ENERGY LLC      4/11/2013       1327    87    F131563    LA    Lincoln

LA-TER1003-006

   JUANITA KAM LO    SCHOEFFLER ENERGY LLC      4/15/2013       1327    92    F131564    LA    Lincoln

LA-TER1003-007

   BOBBY T LO    SCHOEFFLER ENERGY LLC      4/30/2013       1328    653    F132380    LA    Lincoln

LA-TER1004-000

   YOUNG ESTATE LLC    SCHOEFFLER ENERGY LLC      4/23/2012       1319    735    F127383    LA    Lincoln

LA-TER1005-000

   JAMES LESTER TERRELL    SCHOEFFLER ENERGY LLC      7/24/2012       1319    529    F127346    LA    Lincoln
   MCPHERSON FAMILY TRUST                     

LA-TER1006-000

   REPRESENTED HEREIN BY JANICE MCPHERSON    SCHOEFFLER ENERGY LLC      8/3/2012       1319    534    F127347    LA    Lincoln

LA-TER1007-000

   ELVA MARIE CARTER TERRELL ET AL    SCHOEFFLER ENERGY LLC      7/24/2012       1322    271    F128833    LA    Lincoln
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LA-TER1009-000

   LOUISIANA MINERALS LTD    WILDHORSE RESOURCES      9/4/2012       1319    588    F127355    LA    Lincoln

LA-TER1010-000

   STEPHEN MICHAEL GLEASON ET UX    SCHOEFFLER ENERGY LLC      3/5/2012       1319    428    F127330    LA    Lincoln

LA-TER1011-000

   JOSEPH GREGORY PESNELL    SCHOEFFLER ENERGY LLC      4/7/2012       1319    882    F127407    LA    Lincoln

LA-TER1012-000

   ANTHONY W JONES ET UX    SCHOEFFLER ENERGY LLC      4/19/2012       1323    428    F129492    LA    Lincoln

LA-TER1013-001

   BRIDGET GAIL JONES RICHARDSON    SCHOEFFLER ENERGY LLC      2/20/2012       1319    394    F127323    LA    Lincoln

LA-TER1013-002

   JANET TERESA JONES    SCHOEFFLER ENERGY LLC      2/20/2012       1319    399    F127324    LA    Lincoln

LA-TER1013-003

   ANTHONY W JONES    SCHOEFFLER ENERGY LLC      2/20/2012       1319    404    F127325    LA    Lincoln

LA-TER1013-004

   BRUCE DESMOND JONES    SCHOEFFLER ENERGY LLC      2/20/2012       1319    409    F127326    LA    Lincoln

LA-TER1013-005

   PHYLLIS ANN JONES MANUEL    SCHOEFFLER ENERGY LLC      3/6/2012       1319    414    F127327    LA    Lincoln

LA-TER1014-000

   SIBYL IRENE DOWLING RUSSELL    SCHOEFFLER ENERGY LLC      3/26/2012       1319    855    F127402    LA    Lincoln

LA-TER1015-000

   DENNIS WAYNE COLE    SCHOEFFLER ENERGY LLC      1/31/2013       1326    862    F131512    LA    Lincoln
            1319    807    F127395      

LA-TER1016-000

   PAUL TAYLOR FARR ET AL    SCHOEFFLER ENERGY LLC      2/9/2012       1319    807    F127395    LA    Lincoln
            1326    927    F131525      

LA-TER1017-000

   MILDU LLC    SCHOFFLER ENERGY LLC      12/6/2012       1326    927    F131525    LA    Lincoln
            1323    442    F129495      

LA-TER1018-000

   DONALD L BULLOCK ET AL    SCHOFFLER ENERGY LLC      12/14/2012       1323    442    F129495    LA    Lincoln

LA-TER1019-000

   LENNIS DUPREE MCGLOTHEN    SCHOEFFLER ENERGY LLC      3/22/2013       1326    848    F131509    LA    Lincoln

LA-TER1020-000

   ANTHONY EUGENE DUPREE ET AL    SCHOEFFLER ENERGY LLC      3/20/2013       1326    835    F131507    LA    Lincoln

LA-TER1021-000

   LARRY WAYNE HISAW ET UX    SCHOEFFLER ENERGY LLC      3/22/2013       1326    574    F131379    LA    Lincoln

LA-TER1022-001

   ALBERT JOE DUPREE ET UX    SCHOEFFLER ENERGY LLC      1/29/2013       1326    826    F131504    LA    Lincoln

LA-TER1022-002

   LINDA JOYCE DUPREE EBERHARDT ET AL    SCHOEFFLER ENERGY LLC      2/20/2013       1326    872    F131515    LA    Lincoln

LA-TER1022-003

   LORRIS BROWN ET AL    SCHOEFFLER ENERGY LLC      2/20/2013       1326    842    F131508    LA    Lincoln

LA-TER1022-004

   CHRISTOPHER DANIEL DUPREE ET AL    SCHOEFFLER ENERGY LLC      2/11/2013       1326    832    F131510    LA    Lincoln

LA-TER1023-000

   ALBERT JOE DUPREE ET UX    SCHOEFFLER ENERGY LLC      1/29/2013       1326    882    F131517    LA    Lincoln

LA-TER1024-000

   MICHELLE D YOUNG    SCHOEFFLER ENERGY LLC      2/8/2013       1326    832    F131506    LA    Lincoln

LA-TER1025-000

   LORRIS BROWN ET AL    SCHOEFFLER ENERGY LLC      4/19/2013       1330    728    F133549    LA    Lincoln

LA-UNV0002-001

   ROBERT M GILL    JACK T EVERETT      2/8/1971       147    769    C-73451    LA    Lincoln

LA-UNV0002-002

   RUEL C GILL    JACK T EVERETT      2/5/1971       147    765    C-73450    LA    Lincoln

LA-UNV0002-003

   NETTIE MAE GARRETT ET AL    JACK T EVERETT      2/5/1971       147    761    C-73449    LA    Lincoln

LA-UNV0003-000

   LEONA FRASIER PYLANT    JACK T EVERETT      1/21/1971       146    661    C-72966    LA    Lincoln

LA-UNV0004-000

   THELMA FRASIER WILLIAMSON ET VIR    JACK T EVERETT      1/21/1971       146    657    C-72965    LA    Lincoln

LA-UNV0005-000

   ANNIE MAE FRASIER ELLIOTT    JACK T EVERETT      1/21/1971       146    653    C-72964    LA    Lincoln

LA-UNV0006-001

   CHARLIE GREEN COLVIN ET AL    KCS RESOURCES INC      8/2/2002       1136    125    40802    LA    Lincoln

LA-UNV0006-002

   LAMAR W COLVIN ET AL    KCS RESOURCES INC      8/2/2002       1136    128    40803    LA    Lincoln
            1158    627    055060      
            1158    627    055060      

LA-UNV0007-001

   LOUIS CHARLES SIMPSON    KCS RESOURCES INC      3/1/2004       1158    627    055060    LA    Lincoln

LA-UNV0007-002

   WILLIE B SIMPSON JACKSON    KCS RESOURCES INC      3/10/2004       1159    283    F55438    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-UNV0007-003

   CORA SIMPSON HURT    KCS RESOURCES INC      3/10/2004       1159    292    55441    LA    Lincoln
            1159    182    055344      

LA-UNV0007-004

   AUSTIN ANDERSON ET UX    KCS RESOURCES INC      3/10/2004       1159    182    055344    LA    Lincoln

LA-UNV0007-005

   OZELL SIMPSON    KCS RESOURCES INC      3/10/2004       1160    142    56086    LA    Lincoln

LA-UNV0007-006

   OLIA JUNE SIMPSON LIPFORD    KCS RESOURCES INC      3/10/2004       1160    139    56085    LA    Lincoln

LA-UNV0007-007

   ODELL SIMPSON MADISON    KCS RESOURCES INC      3/10/2004       1160    133    56083    LA    Lincoln

LA-UNV0007-008

   COSETTA S MALCOLM    KCS RESOURCES INC      4/22/2004       1160    136    56084    LA    Lincoln

LA-UNV0007-009

   WILLIE R SHELTON JR    KCS RESOURCES INC      4/22/2004       1160    586       LA    Lincoln

LA-UNV0007-010

   FELICIA SIMPSON    KCS RESOURCES INC      5/3/2004       1160    592    56494    LA    Lincoln

LA-UNV0007-011

   VANESSA R SIMPSON    KCS RESOURCES INC      5/12/2004       1160    598    56496    LA    Lincoln

LA-UNV0007-012

   LEROY SIMPSON    KCS RESOURCES INC      4/21/2004       1160    601    56497    LA    Lincoln

LA-UNV0007-013

   LATONYA SIMPSON ALEXANDER    KCS RESOURCES INC      5/3/2004       1184    379    F69256    LA    Lincoln

LA-UNV0007-014

   SCOTT SIMPSON    KCS RESOURCES INC      5/3/2004       1160    589    56493    LA    Lincoln

LA-UNV0007-015

   RODNEY SIMPSON    KCS RESOURCES INC      5/3/2004       1160    595    56495    LA    Lincoln

LA-UNV0007-016

   MICHAEL DAVID SIMPSON    KCS RESOURCES INC      12/13/2006       1216    147    F82447    LA    Lincoln

LA-UNV0007-017

   CHARLES P HARRIS    KCS RESOURCES INC      12/13/2006       1216    150    F82448    LA    Lincoln

LA-UNV0008-001

   THOMAS M MONCRIEF ET AL    KCS RESOURCES INC      12/15/2003       1155    673    53323    LA    Lincoln

LA-UNV0008-002

   JANICE MONCRIEF    KCS RESOURCES INC      12/15/2003       1155    676    53324    LA    Lincoln

LA-UNV0008-003

   FRANCES L PLATT BURFORD ET AL    KCS RESOURCES INC      1/8/2004       1156    281    53631    LA    Lincoln

LA-UNV0008-004

   HARRY R COOK JR    KCS RESOURCES INC      1/8/2004       1156    284    53632    LA    Lincoln

LA-UNV0008-005

   JOYCE DANIEL HENRY    KCS RESOURCES INC      12/12/2003       1157    271    54239    LA    Lincoln

LA-UNV0008-006

   HELEN H COLVIN    KCS RESOURCES INC      3/17/2004       1159    173    55341    LA    Lincoln

LA-UNV0008-007

   LITTLETON PARKS COLVIN III    KCS RESOURCES INC      3/29/2004       1159    179    55343    LA    Lincoln

LA-UNV0008-008

   JAMES H COLVIN    KCS RESOURCES INC      3/29/2004       1159    439    55564    LA    Lincoln

LA-UNV0008-009

   JULIA ANN COLVIN NICHOLS    KCS RESOURCES INC      3/29/2004       1159    289    55440    LA    Lincoln

LA-UNV0008-010

   WALTER R FARRAR    KCS RESOURCES INC      3/19/2004       1159    286    55439    LA    Lincoln

LA-UNV0008-011

   MICHAEL H GIBBS KAY    KCS RESOURCES INC      4/1/2004       1159    176    F55342    LA    Lincoln

LA-UNV0008-012

   WILLIAM DON SMITH    KCS RESOURCES INC      10/7/2004       1166    717    60150    LA    Lincoln

LA-UNV0008-013

   PHYLLIS COLVIN CARLYON    KCS RESOURCES INC      3/28/2005       1175    604    F64909    LA    Lincoln

LA-UNV0008-014

   WILLIAM L COLVIN III    KCS RESOURCES INC      3/28/2005       1175    606    F64910    LA    Lincoln

LA-UNV0008-015

   CATHERINE F COLVIN    KCS RESOURCES INC      3/28/2005       1175    608    F64911    LA    Lincoln

LA-UNV0009-001

   CASSANDRA J THOMPSON    KCS RESOURCES INC      6/11/2004       1162    199    57524    LA    Lincoln

LA-UNV0009-002

   RHONDAL E JENKINS    KCS RESOURCES INC      6/11/2004       1162    208    57528    LA    Lincoln

LA-UNV0009-003

   JOHN D JENKINS ET AL    KCS RESOURCES INC      6/11/2004       1162    205    57527    LA    Lincoln

LA-UNV0009-004

   VALERIE J MCMURRY    KCS RESOURCES INC      6/11/2004       1162    202    57526    LA    Lincoln

LA-UNV0010-001

   OTIS CHARLES JENKINS    KCS RESOURCES INC      8/18/2004       1165    194    59181    LA    Lincoln

LA-UNV0010-002

   HATTIE MAE JENKINS LEWIS    KCS RESOURCES INC      8/18/2004       1165    192    59180    LA    Lincoln

LA-UNV0010-003

   ABAN J RICHARDS JR    KCS RESOURCES INC      8/18/2004       1165    184    59177    LA    Lincoln

LA-UNV0010-004

   JERRIE ANNE WILSON    KCS RESOURCES INC      8/18/2004       1169    413    61570    LA    Lincoln
            1175    24         
            1174    25         

LA-UNV0010-005

   JOHN W JENKINS JR    KCS RESOURCES INC      3/2/2005       1355    289    F64570    LA    Lincoln

LA-UNV0010-006

   LETTIE EILAND    KCS RESOURCES INC      8/18/2004       1187    564    F70525    LA    Lincoln

LA-UNV0011-001

   BETTY LAY KIRBY    KCS RESOURCES INC      10/5/2004       1168    234    60975    LA    Lincoln

LA-UNV0011-002

   CHRIS A LAY JR    KCS RESOURCES INC      10/5/2004       1166    704    60146    LA    Lincoln

LA-UNV0011-003

   JEFFREY BARKSDALE HILL IV    KCS RESOURCES INC      10/5/2004       1166    707    60147    LA    Lincoln

LA-UNV0011-004

   CHARLIE GREEN COLVIN ET AL    KCS RESOURCES INC      10/5/2004       1166    720    60151    LA    Lincoln
            1166    710    060148      

LA-UNV0011-005

   MILDRED SUE BARMORE COOK    KCS RESOURCES INC      10/5/2004       1166    710    060148    LA    Lincoln

LA-UNV0011-006

   DAVID F BARMORE    KCS RESOURCES INC      4/4/2005       1175    164    F64641    LA    Lincoln

LA-UNV0011-007

   JOYCE SUTTON    KCS RESOURCES INC      3/30/2005       1175    162    F64640    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-UNV0011-008

   CLYDE ALLEN BARMORE    KCS RESOURCES INC      4/4/2005       1175    160    F64639    LA    Lincoln

LA-UNV0011-009

   PATSY BARMORE CRITSELOUS    KCS RESOURCES INC      3/29/2005       1175    158    F64638    LA    Lincoln

LA-UNV0011-010

   TOM E FRASIER JR    KCS RESOURCES INC      3/30/2005       1177    386    F65780    LA    Lincoln

LA-UNV0011-011

   KIMBERLY B BUTLER    KCS RESOURCES INC      4/4/2005       1177    351    F65769    LA    Lincoln

LA-UNV0011-012

   ANN MCKNEELY    KCS RESOURCES INC      3/29/2005       1176    781    F65558    LA    Lincoln

LA-UNV0011-013

   ALICE BARMORE S HEABERLIN    KCS RESOURCES INC      10/1/2005       1187    880    70684    LA    Lincoln

LA-UNV0012-000

   VIVIAN S MAGEE ET AL    KCS RESOURCES INC      9/28/2004       1166    713    60149    LA    Lincoln

LA-UNV0013-001

   JOHN A DELLEY JR    KCS RESOURCES INC      3/16/2005       1175    143    F64633    LA    Lincoln

LA-UNV0013-002

   MARTIN GIVENS    KCS RESOURCES INC      3/16/2005       1175    146    F64634    LA    Lincoln

LA-UNV0013-003

   CATO DELLEY JR    KCS RESOURCES INC      3/16/2005       1175    149    F64635    LA    Lincoln

LA-UNV0013-004

   ROBERT DELLEY    KCS RESOURCES INC      3/16/2005       1175    152    F64636    LA    Lincoln

LA-UNV0013-005

   ETTA B GRIFFIN GARRETT    KCS RESOURCES INC      3/16/2005       1175    155    F64637    LA    Lincoln

LA-UNV0013-006

   MILDRED MAE GRIFFIN GILLESPIE    KCS RESOURCES INC      4/7/2005       1175    168    F64643    LA    Lincoln

LA-UNV0013-007

   TIMMY D MINER    KCS RESOURCES INC      3/16/2005       1177    375    F65777    LA    Lincoln

LA-UNV0013-008

   DORSEY MICHELLE ROBERTSON    KCS RESOURCES INC      3/16/2005       1177    378    F65778    LA    Lincoln

LA-UNV0013-009

   MARY HALE PALMER    KCS RESOURCES INC      4/25/2005       1177    383    F65779    LA    Lincoln

LA-UNV0013-010

   JON E GIVENS    KCS RESOURCES INC      3/16/2005       1177    348    F65768    LA    Lincoln

LA-UNV0013-011

   DIXIE C GIVENS    KCS RESOURCES INC      3/16/2005       1177    353    F65770    LA    Lincoln

LA-UNV0013-012

   RAYMOND HALE JR    KCS RESOURCES INC      4/25/2005       1177    356    F65771    LA    Lincoln

LA-UNV0013-013

   ADELLE DELLEY JOHNSON    KCS RESOURCES INC      3/16/2005       1177    372    F65766    LA    Lincoln

LA-UNV0013-014

   NOLLA MARIETHA BEASLEY    KCS RESOURCES INC      3/16/2005       1177    369    F65775    LA    Lincoln

LA-UNV0013-015

   SANDRA HALE BLACKNELL    KCS RESOURCES INC      4/25/2005       1177    366    F65774    LA    Lincoln

LA-UNV0013-016

   PATRICIA GIVENS    KCS RESOURCES INC      3/16/2005       1177    363    F65773    LA    Lincoln

LA-UNV0013-017

   JANICE HALE    KCS RESOURCES INC      4/30/2005       1177    360    F65772    LA    Lincoln

LA-UNV0013-018

   RAYELLA DELLEY BOYD    KCS RESOURCES INC      3/16/2005       1179    543    F66904    LA    Lincoln

LA-UNV0013-019

   COELLA DELLEY WELLS    KCS RESOURCES INC      3/16/2005       1179    540    F66903    LA    Lincoln

LA-UNV0013-020

   PATRICIA L FRAZIER    KCS RESOURCES INC      3/16/2005       1179    537    F66902    LA    Lincoln

LA-UNV0013-021

   BRENDA BEASLEY    KCS RESOURCES INC      3/16/2005       1178    441    F66374    LA    Lincoln

LA-UNV0013-022

   OLIVE MAE GRIFFIN    KCS RESOURCES INC      3/16/2005       1179    190    F66666    LA    Lincoln

LA-UNV0013-023

   ROSA DALE GRIFFIN JENSON    KCS RESOURCES INC      6/8/2005       1178    749    66505    LA    Lincoln

LA-UNV0013-024

   ANGELA JENKINS BAGLEY    KCS RESOURCES INC      5/10/2005       1178    746    F66504    LA    Lincoln

LA-UNV0013-025

   RAYMOND HALE JR    KCS RESOURCES INC      5/20/2005       1178    444    F66375    LA    Lincoln

LA-UNV0013-026

   JOSEPHUS C DELLEY    KCS RESOURCES INC      5/20/2005       1178    447    F66376    LA    Lincoln

LA-UNV0013-027

   LAJUANA DELLEY    KCS RESOURCES INC      3/16/2005       1182    422    F68362    LA    Lincoln

LA-UNV0013-028

   DOROTHY HALE FLOURNOY    KCS RESOURCES INC      3/16/2005       1182    416    F68360    LA    Lincoln

LA-UNV0013-029

   ETHEL JENKINS BROWN    KCS RESOURCES INC      5/14/2005       1182    419    F68361    LA    Lincoln

LA-UNV0013-030

   LINDA HALE CARLISLE    KCS RESOURCES INC      5/10/2005       1181    811    F68144    LA    Lincoln

LA-UNV0013-031

   CARLA MICHELLE DELLEY MASON    KCS RESOURCES INC      6/22/2005       1181    808    F68143    LA    Lincoln

LA-UNV0013-032

   YOLLANDA WASHINGTON MCCLARTY    KCS RESOURCES INC      7/28/2005       1182    602    F68420    LA    Lincoln

LA-UNV0013-033

   CRYSTAL A DELLEY HOLMAN    KCS RESOURCES INC      6/22/2005       1182    679    F68470    LA    Lincoln

LA-UNV0013-034

   CARTHEYA ANN DELLEY HARRIS    KCS RESOURCES INC      6/22/2005       1182    673    F68468    LA    Lincoln

LA-UNV0013-035

   GWENDOLYN DANIAL JENKINS    KCS RESOURCES INC      5/10/2005       1187    885    F70686    LA    Lincoln

LA-UNV0013-036

   TIESHA MAY GIVENS    KCS RESOURCES INC      3/16/2005       1184    399    F69263    LA    Lincoln

LA-UNV0013-037

   JACQUELINE WASHINGTON JONES    KCS RESOURCES INC      4/30/2005       1184    409    F69266    LA    Lincoln

LA-UNV0013-038

   EARLIE B DELLEY    KCS RESOURCES INC      10/28/2005       1187    860    F70677    LA    Lincoln

LA-UNV0013-039

   BOBBIE HALE MCFADDEN    KCS RESOURCES INC      1/6/2006       1197    661    F75009    LA    Lincoln

LA-UNV0013-040

   CHRISTIA G DELLEY ORR    KCS RESOURCES INC      6/22/2005       1197    658    F75008    LA    Lincoln

LA-UNV0013-041

   FELISHA DELLEY LYNCH    KCS RESOURCES INC      4/17/2006       1203    113    F77435    LA    Lincoln

LA-UNV0013-042

   ARTHUR LOWELLDON JENKINS    KCS RESOURCES INC      5/10/2005       1203    116    F77436    LA    Lincoln

LA-UNV0013-043

   SHELLEY S DELLEY    KCS RESOURCES INC      8/14/2006       1216    144    F82446    LA    Lincoln

LA-UNV0013-044

   JEROME R DELLEY JR    KCS RESOURCES INC      10/31/2006       1239    498    F91869    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-UNV0014-001

   ALBERT V GARR    KCS RESOURCES INC      4/11/2005       1175    166    F64642    LA    Lincoln

LA-UNV0015-001

   DESERT PARTNERS III LP    KCS RESOURCES INC      2/9/2005       1173    232    63587    LA    Lincoln

LA-UNV0015-002

   ASHLEY TAD HILLIN    KCS RESOURCES INC      2/9/2005       1173    235    63588    LA    Lincoln
   BOBBY R. AND TAMMY NOLAN AINSWORTH         1/16/2013       1326    200    F131089    LA    Lincoln
   IVANETTE SANFORD ALBRITTON         1/20/2014                LA    Lincoln
   ANTIOCH CEMETERY ASSOCIATION         2/28/2013       1330    89    F133170    LA    Lincoln
   CLIFFORD RAY AND CAROLE KEEDY ARRINGTON         11/16/2010       1297    213    F116587    LA    Lincoln
   CLIFFORD RAY AND CAROLE KEEDY ARRINGTON         11/22/2010       1297    217    F116588    LA    Lincoln
   ASHLEY ANN ENERGY, LLC         8/19/2013                LA    Lincoln
   JOE CALVIN AND DONNA KAY RATLIFF AULDS         3/9/2011       1305    739    F120376    LA    Lincoln
   DANNY MARK AUSTIN         7/26/2011       1305    850    F120399    LA    Lincoln
   BRUCE CARROLL AND MARY CULPEPPER AYRES         3/8/2013       1327    6    F131546    LA    Lincoln
   B&F DRILLING COMPANY         12/13/2012       1322    302    F128837    LA    Lincoln
   KAREN QUILTY AND CHARLES STANLEY BALDWIN         8/17/2013                LA    Lincoln
   JAMES WALTER BALLARD         1/21/2011       1297    285    F116605    LA    Lincoln
   GARY HALE BALLARD         1/24/2011       1299    510    F117535    LA    Lincoln
   GARY HALE BALLARD         12/13/2012       1323    410    F129487    LA    Lincoln
   ELEANOR ANN HALE BALLARD         12/27/2012       1323    415    F129488    LA    Lincoln
   JOHN PAUL BAREMORE         8/6/2012       1319    558    F127352    LA    Lincoln
   MICHAEL W. AND AIMEE DAY BAXTER         3/18/2013       1326    985    F131542    LA    Lincoln
   SANDRA R BEARD         12/21/2012       1327    703    F131960    LA    Lincoln
   CAROLYN DEMOSS BEATTY         11/28/2012       1322    71    F128782    LA    Lincoln
   DOROTHY CLAIRE BELL         12/14/2010       1397    282    F116604    LA    Lincoln
   SAM M BISSIC         10/21/2013                LA    Lincoln
   SCOTTY L. AND GENA COMER BLACKSTONE         3/18/2013       1327    1    F131545    LA    Lincoln
   NANCY HODGE BLUEMEL         2/7/2013       1327    726       LA    Lincoln
   MICHAEL STUART BOUNDS         2/13/2014                LA    Lincoln
   PRISCILLA HEARD BOWMAN         7/25/2011                LA    Lincoln
   MARCY LYNN BOYD         3/26/2013       1328    658    F132381    LA    Lincoln
   DOROTHY R BRACKIN         2/14/2013       1327    737    F131968    LA    Lincoln
   WILLIAM BURR ANDKELLY W. BRANTLEY         3/21/2013       1328    611    F132371    LA    Lincoln
   CALVIN JOSEPH BRISCOE, JR         11/26/2013                LA    Lincoln
   DEBORAH BROWN         8/16/2012       1319    760    F127387    LA    Lincoln
   CLAUDIE BROWN         4/19/2013       1330    728    F133549    LA    Lincoln
   ELEANOR HARRIS BROWN         9/27/2013                LA    Lincoln
   ELEANOR HARRIS BROWN         1/6/2014                LA    Lincoln
   WILLIAM THOMAS AND SHERI LEWIS LEWIS BURT         5/1/2013       1326    829    F131505    LA    Lincoln
   SHERI LEWIS BURT         7/30/2013       1332    975    F134581    LA    Lincoln
   JACK EDWIN, JR. AND PEGGY SINGLETON BYRD         11/20/2012       1324    574    F130066    LA    Lincoln
   DAVID RANDALL CALLAWAY         6/11/2012       1319    698    F127376    LA    Lincoln
   KENNETH ALLEN AND JULIA HAND CALLAWAY         3/20/2013       1326    179    F131086    LA    Lincoln
   CHARLOTTE SUMLIN CANTWELL         10/16/2012       1322    181    F128802    LA    Lincoln
   CAPITAL LIQUOR, LLC         8/13/2013       1334    405    F135216    LA    Lincoln
   THOMAS DREW AND SHERRY LYNN JOHNSON CAREY         7/11/2013       1334    386    F135213    LA    Lincoln
   THOMAS DREW AND SHERRY LYNN JOHNSON CAREY         7/11/2013       1334    393    F135214    LA    Lincoln
   TRACY CARNEY         2/6/2014                LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   PHILLIP BROWNING AND ALNITA JOHNSON CARROLL         5/16/2011       1305    707    F120368    LA    Lincoln
   JAMES S CASKEY         1/9/2013       1326    888    F131519    LA    Lincoln
   CHARLES I CASKEY         1/9/2013       1326    893    F131520    LA    Lincoln
   JIMMIE L CATES         8/9/2011       1306    611    F120751    LA    Lincoln
   AL G. AND DOROTHY S. CATHEY         12/21/2012       1327    693    F131958    LA    Lincoln
   JERRY WAYNE CHANDLER         5/2/2013       1327    780    F131977    LA    Lincoln
   JERRY WAYNE CHANDLER         5/2/2013       1327    767    F131974    LA    Lincoln
   JERRY WAYNE CHANDLER         6/27/2013       1330    682    F133539    LA    Lincoln
   RONALD N. AND LARA GUZMAN CHICOLA         8/18/2013                LA    Lincoln
   CLARKE LAND & TIMBER, LLC         9/21/2012       1322    171    F128800    LA    Lincoln
   DARIN M. AND JEANNINE BOUBY COKER         3/25/2013       1326    995    F131544    LA    Lincoln
   DENNIS WAYNE COLE         1/31/2013       1326    862    F131512    LA    Lincoln
   WILLIAM RANDOLPH COLLINS         4/2/2013       1327    70    F131559    LA    Lincoln
   LINDA JEAN MCKENZIE COLLINS         4/24/2013       1327    134    F131572    LA    Lincoln
   WILLIAM RANDOLPH COLLINS         6/27/2013       1331    630    F133976    LA    Lincoln
   LARRY DELANEY COLLINS         1/8/2014                LA    Lincoln
   JOHN C COLVIN         11/8/2012       1322    221    F128809    LA    Lincoln
   LARRY E COLVIN         8/26/2013                LA    Lincoln
   FRANK M. AND KATHIE MARTIN CORDARO         11/22/2010       1297    223    F116590    LA    Lincoln
   PAMELA CHRISTINE LENARD CULVER         11/30/2012       1324    583    F130068    LA    Lincoln
   JENNIFER SMART DANKLEFBSON         6/19/2012       1319    708    F127378    LA    Lincoln
   STEPHANIE CHAISSON DARK         5/27/2011       1305    727    F120373    LA    Lincoln
   HAROLD EUGENE AND ELIZABETH ROGERS                     
   DAUGHDRIL         2/24/2012       1319    823    F127398    LA    Lincoln
   ELIZABETH MERIEL ROGERS DAUGHDRIL         10/15/2012       1322    156    F128797    LA    Lincoln
   JOHN BOOTH AND VONITA DELL DAVIDSON         7/19/2011       1305    776    F120383    LA    Lincoln
   SIMMIE LEE DAVIS         10/15/2012       1322    81    F128784    LA    Lincoln
   SIMMIE LEE AND LENNIE FAYE DANIEL DAVIS         10/15/2012       1322    76    F128783    LA    Lincoln
   CHARLES B DELONY         7/21/2011       1305    842    F120397    LA    Lincoln
   DESERT PARTNERS III, LP         8/13/2012       1319    544    F127349    LA    Lincoln
   STEVEN WAYNE DIEBOLD         10/23/2012       1322    236    F128826    LA    Lincoln
   JOYCE HOOD DOUCET         1/7/2014                LA    Lincoln
   DOWLING ROYALTIES, LLC         5/10/2012       1319    656    F127368    LA    Lincoln
   SUSAN M DOWNEY         7/1/2012       1319    465    F127337    LA    Lincoln
   ALBERT JOE AND LORENE MASON DUPREE         1/29/2013       1326    826    F131504    LA    Lincoln
   RICHARD ALAN DUPREE         2/11/2013       1326    852    F131510    LA    Lincoln
   MONIQUE VIOLA DUPREE         2/20/2013       1326    822    F131515    LA    Lincoln
   DANIEL BENJAMIN DURRETT         4/29/2013       1328    625    F132374    LA    Lincoln
   WILLIAM DOUGLAS DURRETT         4/29/2013       1328    629    F132375    LA    Lincoln
   WILLIAM DOUGLAS DURRETT         8/27/2013                LA    Lincoln
   BEVERLY MCCULLEN EARNEST         1/17/2014                LA    Lincoln
   SCOTT R. AND KANDY S. EASLEY         4/10/2013       1328    636    F132377    LA    Lincoln
   GEORGE T. AND SHERRILL P. EDWARDS         11/12/2012       1322    48    F128777    LA    Lincoln
   MARY DELORIS EDWARDS         9/9/2013                LA    Lincoln
   GEORGE TAYLOR EDWARDS         1/8/2014                LA    Lincoln
   TIMOTHY CLAY AND VICKIE ADAMS ELLIOT         3/18/2011       1309    229    F121987    LA    Lincoln
   JAMES WAYNE AND HOLLY RUTH ELTON         4/25/2012       1319    601    F127358    LA    Lincoln
   RICHARD WESLEY AND KAREN HAYDEN EMERSON         3/15/2011       1299    472    F117525    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   RICHARD WESLEY AND KAREN HAYDEN EMERSON         3/15/2011       1299    472    F117525    LA    Lincoln
  

ERMA S. ROGERS REVOCABLE LIVING TRUST

        8/14/2013       1334    381    F135212    LA    Lincoln
   GRAYLAN AND CONNIE F. ERWIN         7/15/2013       1331    667    F133982    LA    Lincoln
   DONALD ROY AND MARGARET LEE WILLIAMS FAUST         8/1/2012       1319    510    F127343    LA    Lincoln
  

FIRTH HOLDINGS, LLC

        10/3/2013                LA    Lincoln
   LYNDA L FOERSTERLING         4/25/2012       1319    661    F127369    LA    Lincoln
  

FOERSTERLING LIVING TRUST

        4/25/2012       1319    667    F127370    LA    Lincoln
   SARAH JANE MONK FOSTER         3/12/2013       1326    879    F131516    LA    Lincoln
   CAROLYN C. FOSTER         7/11/2013       1334    316    F135200    LA    Lincoln
   JACKIE R. FULLER         7/12/2012       1322    277    F128834    LA    Lincoln
   MICHAEL R. AND TERI ARTHUR FULTON         5/14/2013       1328    596    F132368    LA    Lincoln
   FRANCES LOUISE SIMS GAMBRELL         10/12/2012       1319    740    F127384    LA    Lincoln
   JAN MITCHAM GAMBRELL         1/10/2014                LA    Lincoln
   CHRISTOPHER D. AND CHRISTINE ALLEN GATLIN         8/1/2013       1331    862    F134135    LA    Lincoln
   GLENDA CEIL GILES         8/12/2013                LA    Lincoln
   JANE W GILLIS         10/24/2012       1322    177    F128801    LA    Lincoln
   VIRGINIA HODGE GNATEK         4/12/2013       1327    763    F131973    LA    Lincoln
   LARRY KENT GRAHAM         2/18/2011       1299    501    F117533    LA    Lincoln
   ROYCE ANTHONY GRAHAM         2/4/2014                LA    Lincoln
   JASON CHARLES AND BRANDY PERDUE GRANGER         4/1/2013       1327    36    F131552    LA    Lincoln
   MICHAELT. AND JENNIFER K. GREEN         10/24/2012       1322    250    F128829    LA    Lincoln
   LOUISE JONES GRISHAM         4/24/2013       1328    696    F132387    LA    Lincoln
   LARRY J. AND MARY K. GRUBBS         3/18/2013       1326    990    F131543    LA    Lincoln
   KATHY SUE DURRETT GULLATT         2/15/2013       1326    919    F131524    LA    Lincoln
  

H & N WALKER, LTD. PART.

        7/26/2013       1334    367    F135209    LA    Lincoln
   DAVID COLVIN HAMMON         1/8/2014                LA    Lincoln
   JOHNNY KEITH HAMMONS         1/7/2011       1297    316    F116613    LA    Lincoln
   ALICE FAYE HANCOCK         1/7/2014                LA    Lincoln
   MARY ELIZABETH CHANDLER HANSON         6/26/2012       1319    459    F127336    LA    Lincoln
   KEVIN R. AND DEBORAH C. HARPER         11/8/2012                LA    Lincoln
   VICKI WAYNETTE HENRY HARRIS         1/16/2013       1327    682    F131955    LA    Lincoln
   MARY JANE COLLINS HARTMAN         1/23/2014                LA    Lincoln
   SIDNEY ANDREW AND LENA GUSET HARVARD         4/5/2012       1319    755    F127386    LA    Lincoln
   LUTHER GRAHAM AND MARTHA SUE HARVEY         3/14/2011       1305    742    F120377    LA    Lincoln
   KENNETH LAVELLE AND LIBBY ANNE COLLINS HARVEY         4/24/2013       1327    138    F131573    LA    Lincoln
   JAMES ELLIS HAWKINS         2/15/2013       1327    110    F131567    LA    Lincoln
   WILS HAWKINS, III         10/16/2012       1327    752    F131971    LA    Lincoln
  

HEARNE ENTERPRISES #1, LLC

        7/12/2013       1332    978    F134582    LA    Lincoln
   BARRY WAYNE HENRY         1/21/2013       1326    956    F131531    LA    Lincoln
   JIMMY MARVIN HENRY         1/31/2013       1326    952    F131530    LA    Lincoln
  

HICKS-LAURENCE-WARDEN FAMLIY LIMITED

                    
   PARTNERSHIP         12/14/2010       1297    254    F116598    LA    Lincoln
   MARILYN MADDEN HILL         10/17/2012       1322    140    F128794    LA    Lincoln
   CAROLYN DIANE HINSON         9/11/2012       1319    331    F127312    LA    Lincoln
   DRAYTON REED HINTON         5/13/2013       1331    656    F133981    LA    Lincoln
   LARRY WAYNE AND SHARON M. AKERS HISAW         3/22/2013       1326    574    F131379    LA    Lincoln
   WILLIAM LEONARD HODGE, JR.         2/14/2013       1327    730    F131966    LA    lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   JEFFREY SCOTT AND ANGELA LYNN HOFFMAN         10/22/2012       1322    91    F128786    LA    Lincoln
   BOBBY D HOLLOWAY         7/21/2011       1305    845    F120398    LA    Lincoln
   MARIETTA MOORE HOLLOWAY         10/21/2013                LA    Lincoln
   PHILLIP S. AND REBECCA P. HOLTZCLAW         10/25/2012       1322    161    F128798    LA    Lincoln
   RANDAL WADE HOOD         1/10/2014                LA    Lincoln
   GILBERT WADE HOOD         1/23/2014                LA    Lincoln
   SHEPEARD HOOD         1/23/2014                LA    Lincoln
   MARVIN LEE AND KAYE OWENS HOPPER         3/8/2013       1327    41    F131553    LA    Lincoln
   MARY JO HOUCK         4/27/2012       1326    223    F131098    LA    Lincoln
   MARY JO HOUCK         6/7/2012       1319    693    F127375    LA    Lincoln
   BETTY KEEDY HOWE         11/16/2010       1297    236    F116593    LA    Lincoln
   RUBY COLVIN HAMMON HUCKABY         3/15/2013       1327    56    F1311556    LA    Lincoln
   ALEX T HUNT         1/9/2013       1323    425    F129491    LA    Lincoln
  

HUNT FOREST PRODUCTS, INC.

        1/9/2013       1323    419    F129489    LA    Lincoln
   DARIUS DEQUINT HUNTER         12/20/2013                LA    Lincoln
  

JAMES MARSHALL LAUGHEAD FAMILY TRUST

        12/17/2010       1297    297    F116609    LA    Lincoln
  

JAMES MARSHALL LAUGHEAD FAMILY TRUST

        7/17/2013       1334    358    F135208    LA    Lincoln
   LOUIS VERNON JAMISON         10/11/2013                LA    Lincoln
  

JKD INVESTMENTS, LLC

        12/14/2010       1297    264    F116600    LA    Lincoln
  

JKD INVESTMENTS, LLC

        1/15/2014                LA    Lincoln
  

JOHN SLAYTON SIMONTON, JR. MARTIAL TRUST

        5/31/2013       1331    879    F134139    LA    Lincoln
   RODNEY M. AND BEVERLY K. JOHNSON, JR.         3/15/2013       1327    51    F131555    LA    Lincoln
   JANET TERESA JONES         2/20/2012       1319    399    F127324    LA    Lincoln
   ANTHONY WAYNE JONES         2/20/2012       1319    404    F127325    LA    Lincoln
   BRUCE DESMOND JONES         2/20/2012       1319    409    F127326    LA    Lincoln
   HERSCHEL M JONES         6/19/2012                LA    Lincoln
   JOSHUA WAYNE JONES         11/5/2012       1323    450    F129497    LA    Lincoln
   BRUCE DESMOND JONES         11/5/2012                LA    Lincoln
   BILLY TROY AND DEBORAH FLOWERS JONES         3/19/2013       1326    569    F131378    LA    Lincoln
   CLAYTON FORREST JONES         12/30/2013                LA    Lincoln
  

JWAL3, LLC

        1/15/2014                LA    Lincoln
   JOHN A KEEDY         11/16/2010       1297    245    F116596    LA    Lincoln
   PAUL KEEDY         11/16/2010       1297    242    F116595    LA    Lincoln
   MARK KEEDY         11/16/2010       1297    239    F116594    LA    Lincoln
   BARI LYNN TEAGLE KENNINGTON         11/9/2012       1322    255    F128830    LA    Lincoln
   CRAIG M. AND MARY RUTH KENT         8/23/2011       1306    739    F120815    LA    Lincoln
   JAMES H KILGORE         2/21/2011       1296    523    F116296    LA    Lincoln
   GLENDA FAYE COLVIN KNOWLES         3/15/2011       1299    478    F117527    LA    Lincoln
   BENJAMIN C. LARY         8/22/2011       1306    600    F120748    LA    Lincoln
   GEORGE ROSS LAUGHEAD         12/14/2010       1297    300    F116610    LA    Lincoln
   GEORGE ROSS LAUGHEAD         6/30/2011       1306    1    F120427    LA    Lincoln
   JACKSON LEE AND WELLESLEY LEE         4/11/2013       1327    87    F131563    LA    Lincoln
   JACQUELINE L. LENZY         8/19/2013                LA    Lincoln
   LEE EDWARD LEWELLYAN         5/1/2012       1319    640    F127365    LA    Lincoln
   MAX TODD LEWIS         4/25/2012       1319    624    F127362    LA    Lincoln
  

JOHN KENNETH AND PHYLLIS JEAN LAWLESS

LIBENGOOD

        11/15/2012       1322    260    F128831    LA    Lincoln
   SUZANNE PERRY LITSINGER         12/13/2010       1297    304    F116611    LA    Lincoln
   BARBARA ANNETTE BALLARD LITTLETON         12/27/2012       1323    402    F129485    LA    Lincoln
   JANITA K LO         4/15/2013       1327    92    F131564    LA    Lincoln
   BOBBY T LO         4/30/2013       1328    653    F132380    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   MARTHA JANE HINES LOE         10/24/2012       1322    246    F128828    LA    Lincoln
   DAVID R. AND LANA MICHELLE LONG         3/14/2013       1328    617    F132372    LA    Lincoln
  

LOUISIANA MINERALS, LTD

        7/5/2011       1305    696    F120365    LA    Lincoln
  

LOUISIANA MINERALS, LTD

        11/6/2012       1322    53    F128778    LA    Lincoln
  

LOUISIANA UNITED METHODIST CHILDREN AND

                    
   FAMILY SER         4/27/2011       1305    979    F120424    LA    Lincoln
  

LOUISIANA UNITED METHODIST CHILDREN AND

                    
   FAMILY SER         9/11/2011       1305    974    F120423    LA    Lincoln
  

LOUISIANA UNITED METHODIST CHILDREN AND

                    
   FAMILY SER         4/8/2013       1328    701    F132388    LA    Lincoln
  

M. DOUGLAS WALTON, INC.

        7/9/2013       1331    675    F133984    LA    Lincoln
   PHYLLIS ANN JONES MANUEL         11/5/2012       1323    466    F129500    LA    Lincoln
   NELDA CHRISTINE WILTCHER MARTIN         5/31/2011       1305    795    F120387    LA    Lincoln
   PHILLIP WAYNE MARTIN         5/31/2011       1305    753    F120379    LA    Lincoln
   SCOTT H. MARTIN         5/31/2011       1305    812    F120391    LA    Lincoln
   SCOTT H. MARTIN         9/13/2011       1305    819    F120392    LA    Lincoln
   WINSTON C. AND BRIGITTE JOHNSON MATEJOWSKY         5/30/2013       1328    601    F132369    LA    Lincoln
   DON MARVIN AND CAROLYN POWELL MCGEHEE         9/28/2012       1319    549    F127350    LA    Lincoln
   LENNIS DUPREE MCGLOTHEN         3/22/2013       1326    548    F131509    LA    Lincoln
   EMMETT CLAYTON MCKASKLE         3/14/2013       1326    969    F131539    LA    Lincoln
   DOUGLAS W MCKAY         3/21/2013       1327    11    F131547    LA    Lincoln
  

MCPHERSON FAMILY TRUST

        8/3/2012       1319    534    F127347    LA    Lincoln
  

MILDU, LLC

        12/6/2012       1326    927    F131525    LA    Lincoln
   MARK ANTHONY MILKS         12/27/2012       1327    742    F131969    LA    Lincoln
   GLENN E. AND ELIZABETH HARGRAVE MILLER         5/15/2013       1328    648    F132379    LA    Lincoln
   MARZEE WHITE MITCHAM         11/15/2010                LA    Lincoln
   JOAN ROGERS MORGAN         9/17/2012       1319    357    F127316    LA    Lincoln
   JASPER W. AND MARY ALVERNE HOOD MORTON         6/4/2013       1331    639    F133978    LA    Lincoln
   GLORIA A. MOSES         7/18/2012       1319    500    F127342    LA    Lincoln
   RALEIGH L MYERS         9/19/2013                LA    Lincoln
   NONA DALE AND TERRIS LOIS CLARK NASH         7/26/2012       1319    518    F127344    LA    Lincoln
   LAURA ATKINSON NEL         6/1/2011       1305    961    F120421    LA    Lincoln
   THOMAS A. MARY LOUBARLOW NEWLEN         8/27/2013                LA    Lincoln
   WILLIAM GARY AND THERESA HAFFEY NIX         11/4/2010                LA    Lincoln
   WILLIAM GARY AND THERESA HAFFEY NIX         11/15/2010                LA    Lincoln
   WILLIAM GARY AND THERESA HAFFEY NIX         10/15/2013                LA    Lincoln
   RICHARD A NIXON         2/20/2013       1327    74    F131560    LA    Lincoln
   GARY AND SUSAN KELLEY NOLES         4/18/2013       1328    606    F132370    LA    Lincoln
   TIMOTHY RAY AND KIMBERLY NEWSOME NUTT         10/25/2012       1322    193    F128804    LA    Lincoln
   ROBERT THOMAS AND MILDRED LASHONE OLIVER         6/11/2013       1332    970    F134580    LA    Lincoln
   CHARLES H. AND DELORIS STEPHENSON OWENS, III         9/4/2013                LA    Lincoln
   MILDRED WILSON PARKER         2/6/2014                LA    Lincoln
   DOROTHY L PATTERSON         7/9/2013                LA    Lincoln
   JEREMY HAYDEN AND TANYA SHEA HUMPHREY PAUL         3/14/2013       1327    46    F131554    LA    Lincoln
   JANIS C PERRITT         9/25/2012       1319    345    F127314    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   HAROLD ROSS PERRITT         10/23/2012       1322    129    F128792    LA    Lincoln
   WILLIS D PERRITT         10/23/2012       1322    146    F128795    LA    Lincoln
   JUSTIN HOWARD PERRITT         10/25/2012       1322    210    F128807    LA    Lincoln
   ZEMOBIA YOUNGER PERRY         8/22/2013                LA    Lincoln
   VIVIAN YOUNGER PERRY         1/7/2014                LA    Lincoln
   JOSEPH GREGORY PESNELL         4/7/2012       1319    882    F127407    LA    Lincoln
   DURWARD AND ALICE LANN PETERSON         10/15/2012       1322    43    F128776    LA    Lincoln
   TERRY GAYLE AND CAROLE BURHALTER PLAMONDON         11/22/2010       1297    228    F116591    LA    Lincoln
   TERRY GAYLE AND CAROLE BURHALTER PLAMONDON         10/10/2013                LA    Lincoln
   SYLVIA RICHARD POPE         5/23/2012       1319    678    F127372    LA    Lincoln
   RHONDA TINSLEY POPE         9/16/2013                LA    Lincoln
   WAYLAND E. PULLIG         1/8/2014                   Lincoln
  

PULPWOOD PRODUCERS

        6/27/2013       1331    679    F133985    LA    Lincoln
  

QUARLES PROPERTIES, LLC

        7/6/2013       1331    683    F133986    LA    Lincoln
   CHARLES MICHAEL RAMSDELL         12/17/2010       1297    288    F116606    LA    Lincoln
   MAXINE H READY         12/20/2012       1324    588    F130069    LA    Lincoln
   ESSIE RICHARD AND JOHN W. REED         5/23/2012       1319    673    F127371    LA    Lincoln
   GWENDOLYN T REESE         2/7/2013       1326    937    F131527    LA    Lincoln
   KAY KYLE RICE         4/18/2013                LA    Lincoln
   SHELYNA THAWER RICE         6/20/2013       1331    625    F133975    LA    Lincoln
   SAMMY L RICH         12/21/2012       1327    698    F131959    LA    Lincoln
   MELLIE HODGE RICH         1/17/2013       1327    757    F131972    LA    Lincoln
   BRIDGET GAIL RICHARDSON         2/20/2012       1319    394    F127323    LA    Lincoln
   DARRELL L. AND FRANCES W. RICHARDSON         4/30/2012       1319    612    F127360    LA    Lincoln
   DARRELL LYNN RICHARDSON         5/31/2012       1319    723    F127381    LA    Lincoln
   JIMMIE LANE AND SANDRA K. NICKLAS RICHARDSON         1/13/2013       1326    865    F131513    LA    Lincoln
   VICKI SUE RITZ         7/2/2013       1330    720    F133547    LA    Lincoln
   REUL GENE, JR. AND KAREN WOOLEY ROBERSON         4/1/2013       1326    980    F131541    LA    Lincoln
   JAMES M ROGERS         9/17/2012       1327    718    F131963    LA    Lincoln
   BILL G. ROGERS         3/5/2013       1326    184    F131087    LA    Lincoln
   NEAL LEO AND GENA PECORARO RUFFINO         7/16/2012       1319    683    F127373    LA    Lincoln
   SIBYL IRENE RUSSELL         3/26/2012       1319    855    F127402    LA    Lincoln
   KENNETH P SAMPSON         10/15/2012                LA    Lincoln
   ROY WESLEY AND KATHERINE KAY TERRELL SCHUBERT         2/6/2013       1327    119    F131569    LA    Lincoln
   SHERRI TINSLEY SHARP         9/16/2013                LA    Lincoln
   LUCILLE WOODARD SHELTON         5/31/2012       1319    713    F127379    LA    Lincoln
   RICKI R SHOVAN         12/21/2012       1327    708    F131961    LA    Lincoln
  

SHRINERS HOSPITAL FOR CHILDREN

        11/6/2012       1324    580    F130067    LA    Lincoln
   BENJAMIN F. SIMS         10/8/2013                LA    Lincoln
  

SKINNER LAND, LLC

        10/11/2013                LA    Lincoln
   KATHY ADALE SLOCUM         10/25/2012       1322    198    F128805    LA    Lincoln
   STEPHEN O SMITH         12/14/2010       1297    259    F116599    LA    Lincoln
   TREY AD TARA WHITLOW SMITH         4/15/2013       1327    31    F131551    LA    Lincoln
   THOMAS JAMES, III AND ADRIANNE HADDOX SMITH         6/15/2013       1331    645    F133979    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   THOMAS JAMES, III AND ADRIANNE HADDOX SMITH         6/15/2013       1331    634    F133977    LA    Lincoln
   TERRI GILBERT SPENCE         12/19/2013                LA    Lincoln
   CYNTHIA WALKER STEINACKER         4/10/2013       1328    668    F132382    LA    Lincoln
   HESTER ANN STINNETT         2/15/2013       1326    931    F131526    LA    Lincoln
   JOHN S. AND TERESA DIANE STONE         5/30/2013       1328    686    F132385    LA    Lincoln
   GEORGE M STRICKLER, JR.         1/21/2011       1299    507    F117534    LA    Lincoln
   LESSIE JILL STUEART         3/29/2011       1306    603    F120749    LA    Lincoln
  

SUCCESSION OF ESTHER CLAIRE REESE THOMPSON

        12/21/2012       1327    713    F131962    LA    Lincoln
  

SUCCESSION OF REUBEN NEAL BAREMORE

        5/2/2013       1327    388    F131732    LA    Lincoln
  

SYLVAN ACRES FAMILY, LP

        10/8/2012       1319    367    F127318    LA    Lincoln
  

TALBERT FAMILY, LLC

        5/20/2013       1328    633    F132376    LA    Lincoln
  

TALBERT FAMILY, LLC

        9/12/2013       1335    458    F135999    LA    Lincoln
   KATHERINE L. ZAWADA TALEB         11/20/2012       1323    506    F129506    LA    Lincoln
   JAMES CHARLES TARBUTTON         8/22/2013                LA    Lincoln
   TIMOTHY H. AND TERESA CHANDLER TAYLOR         1/25/2013       1327    677    F131954    LA    Lincoln
   BRODIE D. AND MARGARET JOYCE TELFORD         11/15/2010                LA    Lincoln
   MARY ELEANOR HARRIS TEMPLE         1/6/2014                LA    Lincoln
   MARY ELEANOR HARRIS TEMPLE         1/10/2014                LA    Lincoln
   ELVA MARIE CARTER TERRELL         7/24/2012       1322    271    F128833    LA    Lincoln
  

THE BROWNLAND CORPORATION

        9/27/2013                LA    Lincoln
  

THE BROWNLAND CORPORATION

        1/6/2014                LA    Lincoln
  

THE CAROLINE MARBURY TRUST

        8/22/2013       1334    346    F135206    LA    Lincoln
  

THE FRED LEE RAMSDELL TRUST

        12/21/2010       1297    294    F116608    LA    Lincoln
  

THE FRED LEE RAMSDELL TRUST

        6/30/2011       1305    862    F120401    LA    Lincoln
  

THE RUBY SELPH STURGIS TRUST FBO JOHN M.

                    
   STURGIS         3/21/2011       1299    516    F117537    LA    Lincoln
  

THE WILLIAM H. RAMSDELL & VIRGINIA G. RAMSDELL

                    
   REVOCABLE LIVING TRUST         12/20/2010       1299    513    F117536    LA    Lincoln
  

THE WILLIAM H. RAMSDELL AND VIRGINIA G.

                    
   RAMSDELL R         6/30/2011       1305    984    F120425    LA    Lincoln
   GREGORY ALAN THOMAS         8/6/2013       1334    339    F135204    LA    Lincoln
   SARAH N THRAILKILL         12/21/2012       1327    688    F131957    LA    Lincoln
   MICHAEL LAND KATHY T. TOWNS         10/23/2012       1322    151    F128796    LA    Lincoln
   STEVEN L. AND JENNIFER PETERSON TOWNS         11/28/2012       1322    66    F128781    LA    Lincoln
   FRANCES LEIGH TRAYLOR         3/31/2011       1299    492    F117531    LA    Lincoln
  

TRUSSELL HOLDINGS, LLC

        4/19/2012       1319    606    F127359    LA    Lincoln
   DAVID E TURNER         6/28/2013       1330    678    F133538    LA    Lincoln
   MARY BELLE KIRLAND TUTEN         12/6/2012       1323    496    F129504    LA    Lincoln
   JACKIE ANN LEWIS VINING         8/14/2013       1334    343    F135205    LA    Lincoln
   JACK BRADLEY WALDRON         7/2/2013       1330    702    F133543    LA    Lincoln
   JACK BRADLEY WALDRON         7/2/2013       1330    688    F133540    LA    Lincoln
   ALBERT LEE AND LISA FAYE DAVIS WALKER         5/8/2012       1319    635    F127364    LA    Lincoln
   ALBERT LEE AND LISA FAYE DAVIS WALKER         10/15/2012       1322    86    F128785    LA    Lincoln
   BARBARA JEAN WALKER         12/27/2012       1326    192    F131088    LA    Lincoln
   KENDRA RAY WALL         6/27/2013       1330    674    F133537    LA    Lincoln
   TANYE L. WALLACE         9/25/2012       1322    95    F128787    LA    Lincoln
   FRANKLIN STEVEN AND GINGER GUNTER WALPOLE         12/14/2010       1297    264    F116601    LA    Lincoln
   MICHAEL LEE AND PAMELA BEST WALPOLE           1/5/2011       1297    274    F116602    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   FRANKLIN STEVEN AND GINGER GUNTER WALPOLE         1/15/2014                LA    Lincoln
   BETTY BONUGLI WALTERS         1/14/2013       1326    948    F131529    LA    Lincoln
   JOAN LARANCE WARREN         9/28/2012       1319    554    F127351    LA    Lincoln
   M. DOUGLAS WATSON         7/9/2013       1330    707    F133544    LA    Lincoln
   ANDREW F. WEIR         12/30/2013                LA    Lincoln
   MITZI ELIZABETH HAMILTON WERNER         3/10/2011       1299    475    F117526    LA    Lincoln
   MITZI ELIZABETH HAMILTON WERNER         8/9/2011       1306    607    F120750    LA    Lincoln
  

WEYERHAEUSER COMPANY

        5/25/2012       1322    801    F129117    LA    Lincoln
   ROBERT OTIS WHITE         6/24/2013       1331    916    F134144    LA    Lincoln
  

WHITE LIGHTNING FARMS, LLC

        3/6/2014                LA    Lincoln
   COLLIN DALE AND DE ETTE TTBIAS WICK         4/12/2013       1327    16    F131548    LA    Lincoln
   GWENDOLYN BLACKWELL WILHITE         5/27/2011       1305    731    F120374    LA    Lincoln
   DAVID LEE WILLIAMS         5/3/2012       1319    645    F127366    LA    Lincoln
   ARBY M WILLIAMS         10/16/2012       1322    226    F128810    LA    Lincoln
   KEVIN BRIAN AND CHALLYS MARIE MCKINNEY                     
   WILLIAMS         10/16/2012       1322    231    F128811    LA    Lincoln
   CYNDA WEIR WILLIS         12/30/2013                LA    Lincoln
   HERBERT BRADLEY WOMACK         1/9/2013       1323    501    F129505    LA    Lincoln
   DEBRA K WOODARD         4/18/2012       1319    876    F127406    LA    Lincoln
   JOHN BARRY WOODARD         5/15/2013       1328    691    F132386    LA    Lincoln
  

WOODLAND ACRES

        12/14/2010       1297    249    F116597    LA    Lincoln
   JOYCE DELONY WOODS         7/21/2011       1306    595    F120747    LA    Lincoln
   ROBERT S. AND MARTHA JOYCE BROOKS WYNN, JR.         12/6/2012       1327    734    F131967    LA    Lincoln
   JERRY VON YARBOROUGH         3/15/2013       1326    976    F131540    LA    Lincoln
   MICHELLE D. YOUNG         2/8/2013       1326    832    F131506    LA    Lincoln
   WILLIE EARL YOUNG         3/20/2013       1331    888    41500    LA    Lincoln
   JAMES EARL AND CHARLENE A. YOUNG         3/20/2013       1331    906    F134142    LA    Lincoln
   LEVELL AND PEARL R. YOUNGER         8/22/2013                LA    Lincoln
   HOWARD D YOUNGER         8/22/2013                LA    Lincoln
   MARGARET LOUISE ZACHRY         8/30/2013                LA    Lincoln
   MELANIE CARSON HARRIS ZACHRY         10/16/2013                LA    Lincoln
   CAREY P. ZAWADA         4/25/2012       1319    565    F127353    LA    Lincoln
  

4 ANGELS FARM, LLC

   SCHOEFFLER ENERGY LLC      12/16/2013                LA    Lincoln
   BRUCE AND WANDA T. ALLEN    SCHOEFFLER ENERGY LLC      2/17/2012       1319    796    F127393    LA    Lincoln
   BETTY NORRIS APALATEGUI    SCHOEFFLER ENERGY LLC      3/6/2012       1319    385    F127322    LA    Lincoln
   CLIFFORD RAY AND CAROLE KEEDY ARRINGTON    SCHOEFFLER ENERGY LLC      9/26/2013                LA    Lincoln
   DOROTHY O’GLEE BARROW    SCHOEFFLER ENERGY LLC      2/20/2013       1327    114    F131568    LA    Lincoln
   DONALD L. AND MARY ANN BELTON    SCHOEFFLER ENERGY LLC      2/15/2013       1327    97    F131565    LA    Lincoln
   ANNIE BRYANT BISSIC    SCHOEFFLER ENERGY LLC      4/4/2012       1319    419    F127328    LA    Lincoln
   CORA RANKINS BISSIC    SCHOEFFLER ENERGY LLC      11/1/2013       1338    493    F137440    LA    Lincoln
   CHRIS W. BITTICK    SCHOEFFLER ENERGY LLC      3/12/2012       1319    444    F127333    LA    Lincoln
   DALMA PAUL WILLIAMS BRILEY    SCHOEFFLER ENERGY LLC      12/6/2013                LA    Lincoln
   BRENDA SUE CHANDLER BRISTER    SCHOEFFLER ENERGY LLC      7/17/2013       1331    883    F134140    LA    Lincoln
   NANCY CAROLYN BROWNLEE    SCHOEFFLER ENERGY LLC      3/30/2012       1319    591    F127356    LA    Lincoln
   PAMELA CARDWELL COLLINSWORTH    SCHOEFFLER ENERGY LLC      2/19/2013       1327    124    F131570    LA    Lincoln
   SHELBY GENE COOPER    SCHOEFFLER ENERGY LLC      11/18/2013                LA    Lincoln
   JOE LENON COPES    SCHOEFFLER ENERGY LLC      10/25/2013                LA    Lincoln
   FRANK M. AND KATHIE MARTIN CORDARO    SCHOEFFLER ENERGY LLC      9/24/2013                LA    Lincoln
   FRANK M. AND KATHIE MARTIN CORDARO      SCHOEFFLER ENERGY LLC      9/24/2013                LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   FRANK M. AND KATHIE MARTIN CORDARO    SCHOEFFLER ENERGY LLC      9/24/2013                LA    Lincoln
   FRANK M. AND KATHIE MARTIN CORDARO    SCHOEFFLER ENERGY LLC      9/24/2013                LA    Lincoln
   HAROLD EUGENE AND ELIZABETH ROGERS                     
   DAUGHDRIL    SCHOEFFLER ENERGY LLC      2/24/2012       1319    818    F127397    LA    Lincoln
   ELIZABETH MERIEL ROGERS DAUGHDRIL    SCHOEFFLER ENERGY LLC      2/24/2012       1319    813    F127396    LA    Lincoln
   RUBY DAVENPORT    SCHOEFFLER ENERGY LLC      12/8/2013                LA    Lincoln
   SELMA GRACE SANDERS DAVIDSON    SCHOEFFLER ENERGY LLC      11/18/2013                LA    Lincoln
   WILBERT AND EBELLA C. DAVIS    SCHOEFFLER ENERGY LLC      8/15/2013                LA    Lincoln
   ROSE TURNER DEW    SCHOEFFLER ENERGY LLC      6/28/2013       1330    724    F133548    LA    Lincoln
   DON AND MARTHA SHARON GARRISON DURRETT    SCHOEFFLER ENERGY LLC      6/14/2012       1319    730    F127382    LA    Lincoln
   STACIA BREWSTER EMERSON    SCHOEFFLER ENERGY LLC      8/29/2013       1337    613    F137062    LA    Lincoln
   DOUGLAS TURNER FARR    SCHOEFFLER ENERGY LLC      2/9/2012       1319    807    F127395    LA    Lincoln
   JUDY LYNN FOX    SCHOEFFLER ENERGY LLC      3/26/2012       1319    897    F127410    LA    Lincoln
   VINCENT KEVIN AND SHARON HAMMONS FRANKLIN    SCHOEFFLER ENERGY LLC      3/9/2012       1319    449    F127334    LA    Lincoln
   WENDELL DEAN GARRISON    SCHOEFFLER ENERGY LLC      4/2/2012       1319    902    F127411    LA    Lincoln
   JOHN HENRY AND SANDRA ANN LANDRY GASS    SCHOEFFLER ENERGY LLC      6/6/2013       1328    681    F132384    LA    Lincoln
   RICHARD LEE GILBERT    SCHOEFFLER ENERGY LLC      12/19/2013                LA    Lincoln
   TERRANCE & GWENDOLYN GILES    SCHOEFFLER ENERGY LLC      12/18/2013                LA    Lincoln
   TERRANCE GILES    SCHOEFFLER ENERGY LLC      12/18/2013                LA    Lincoln
   SAMANTHA ANN GINN    SCHOEFFLER ENERGY LLC      12/12/2013                LA    Lincoln
   SAMANTHA ANN GINN    SCHOEFFLER ENERGY LLC      12/30/2013                LA    Lincoln
   STEPHEN MICHAEL AND ELIZABETH ARLEDGE                     
   GLEASON    SCHOEFFLER ENERGY LLC      3/5/2012       1319    428    F127330    LA    Lincoln
   SHARON FREEMAN GOLDMAN    SCHOEFFLER ENERGY LLC      12/12/2013       1338    477    F137436    LA    Lincoln
   ALBERT GROVER AND MARY ELLA GADBERRY                     
   GRAHAM    SCHOEFFLER ENERGY LLC      12/4/2013                LA    Lincoln
   LARRY KENT GRAHAM    SCHOEFFLER ENERGY LLC      12/4/2013                LA    Lincoln
   LARRY KENT GRAHAM    SCHOEFFLER ENERGY LLC      12/4/2013                LA    Lincoln
   JAMES HOUSTON AND MARGARET CATHERINE HALL    SCHOEFFLER ENERGY LLC      10/16/2013                LA    Lincoln
   JOHNNY CLEVELAND HAMMONS    SCHOEFFLER ENERGY LLC      10/11/2013                LA    Lincoln
  

HICKS-LAURENCE-WARDEN FAMLIY LIMITED

                    
   PARTNERSHIP    SCHOEFFLER ENERGY LLC      9/24/2013                LA    Lincoln
   LEE ARTHUR AND ARLENE LOUISE HILL    SCHOEFFLER ENERGY LLC      12/16/2013       1338    472    F137435    LA    Lincoln
   SANDRA HORNE    SCHOEFFLER ENERGY LLC      9/30/2013       1338    569    F137454    LA    Lincoln
   BETTY KEEDY HOWE    SCHOEFFLER ENERGY LLC      9/25/2013                LA    Lincoln
  

JAMES MARSHALL LAUGHEAD FAMILY TRUST

   SCHOEFFLER ENERGY LLC      7/17/2013       1334    349    F135207    LA    Lincoln
  

JAMES MARSHALL LAUGHEAD FAMILY TRUST

   SCHOEFFLER ENERGY LLC      9/27/2013                LA    Lincoln
   ANTHONY WAYNE AND DENISE STEWARD JONES    SCHOEFFLER ENERGY LLC      2/6/2012       1323    428    F129492    LA    Lincoln
   JANET TERESA JONES    SCHOEFFLER ENERGY LLC      2/16/2012       1319    786    F127391    LA    Lincoln
   CLAYTON FORREST JONES    SCHOEFFLER ENERGY LLC      12/12/2013                LA    Lincoln
   TERRIE ANN DOUGHERTY JORDAN    SCHOEFFLER ENERGY LLC      3/6/2012       1319    434    F127331    LA    Lincoln
   MARK KEEDY    SCHOEFFLER ENERGY LLC      9/30/2013                LA    Lincoln
   JOHN A KEEDY    SCHOEFFLER ENERGY LLC      9/25/2013                LA    Lincoln
   PAUL KEEDY    SCHOEFFLER ENERGY LLC      9/25/2013                LA    Lincoln
   GEORGE ROSS LAUGHEAD    SCHOEFFLER ENERGY LLC      9/27/2013                LA    Lincoln
   JOHN KENNETH AND PHYLLIS JEAN LAWLESS                     
   LIBENGOOD    SCHOEFFLER ENERGY LLC      3/27/2012       1319    892    F127409    LA    Lincoln
   PHYLLIS ANN JONES MANUEL      SCHOEFFLER ENERGY LLC      3/6/2012       1319    414    F127327    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
   STEVEN L MORTON    SCHOEFFLER ENERGY LLC      6/11/2013       1331    912    F134143    LA    Lincoln
   DAVID & ANGELA NALITT    SCHOEFFLER ENERGY LLC      1/8/2014                LA    Lincoln
   CHRISTOPHER CLAUDE NORRIS    SCHOEFFLER ENERGY LLC      3/29/2012       1319    772    F127389    LA    Lincoln
   TERRY GAYLE AND CAROLE BURHALTER PLAMONDON    SCHOEFFLER ENERGY LLC      10/10/2013                LA    Lincoln
   TERRY GAYLE AND CAROLE BURHALTER PLAMONDON    SCHOEFFLER ENERGY LLC      10/10/2013                LA    Lincoln
   TERRY GAYLE AND CAROLE BURHALTER PLAMONDON    SCHOEFFLER ENERGY LLC      10/10/2013                LA    Lincoln
   JOHN E. AND GLENDA SUE COUNCIL PRICE    SCHOEFFLER ENERGY LLC      7/8/2013       1330    697    F133542    LA    Lincoln
   JOHN E PRICE    SCHOEFFLER ENERGY LLC      7/8/2013       1330    693    F133541    LA    Lincoln
   CHARLES MICHAEL RAMSDELL    SCHOEFFLER ENERGY LLC      9/27/2013                LA    Lincoln
   BRYAN D. AND LESLIE EVANS RAY    SCHOEFFLER ENERGY LLC      7/26/2013       1331    871    F134137    LA    Lincoln
   AL RICH    SCHOEFFLER ENERGY LLC      11/18/2013                LA    Lincoln
   BRYAN ROGERS    SCHOEFFLER ENERGY LLC      3/9/2012       1319    865    F127404    LA    Lincoln
   JAMES M ROGERS    SCHOEFFLER ENERGY LLC      4/30/2012       1319    870    F127405    LA    Lincoln
   JAMES M ROGERS    SCHOEFFLER ENERGY LLC      1/3/2013       1327    722    F131964    LA    Lincoln
   DAVID LEE ROGERS    SCHOEFFLER ENERGY LLC      3/15/2012       1319    839    F127400    LA    Lincoln
  

SIBLEY LAKE REALTY CORPORATION

   SCHOEFFLER ENERGY LLC      11/25/2013       1338    499    F137442    LA    Lincoln
   JOHN DAVID SLAGLE    SCHOEFFLER ENERGY LLC      9/17/2013                LA    Lincoln
   DONALD B. AND BARBARA LIBENGOOD SMITH    SCHOEFFLER ENERGY LLC      2/21/2012       1319    802    F127394    LA    Lincoln
   STEPHEN O SMITH    SCHOEFFLER ENERGY LLC      1/15/2014                LA    Lincoln
   JOYCE M. SPEED    SCHOEFFLER ENERGY LLC      12/8/2013                LA    Lincoln
   JAYS STANLEY    SCHOEFFLER ENERGY LLC      2/15/2013       1328    676    F132383    LA    Lincoln
  

SYLVAN ACRES FAMILY, LP

   SCHOEFFLER ENERGY LLC      10/24/2012                LA    Lincoln
  

SYLVAN ACRES FAMILY, LP

   SCHOEFFLER ENERGY LLC      10/24/2012                LA    Lincoln
  

SYLVAN ACRES FAMILY, LP

   SCHOEFFLER ENERGY LLC      2/16/2012       1319    791    F127392    LA    Lincoln
   JAMES MARK TAYLOR    SCHOEFFLER ENERGY LLC      4/2/2012       1319    618    F127361    LA    Lincoln
   JONATHAN A. AND CHASITY CROSS TAYLOR    SCHOEFFLER ENERGY LLC      12/6/2013                LA    Lincoln
   BRODIE D. AND MARGARET JOYCE TELFORD    SCHOEFFLER ENERGY LLC      9/30/2013                LA    Lincoln
   MARY ELEANOR HARRIS TEMPLE    SCHOEFFLER ENERGY LLC      10/16/2013                LA    Lincoln
  

THE FRED LEE RAMSDELL TRUST

   SCHOEFFLER ENERGY LLC      9/27/2013                LA    Lincoln
  

THE JAMES K. SEHON, SR. AND ELIZABETH G. SEHON

                    
   REVOCABLE LIVING TRUST    SCHOEFFLER ENERGY LLC      3/26/2012       1319    860    F127403    LA    Lincoln
   MICHAEL GREGORY THOMAS    SCHOEFFLER ENERGY LLC      1/25/2013       1326    943    F131528    LA    Lincoln
   JOSEPH SAMUEL TURNER    SCHOEFFLER ENERGY LLC      6/28/2013       1330    716    F133546    LA    Lincoln
   MARY JANE TURNER    SCHOEFFLER ENERGY LLC      12/6/2013                LA    Lincoln
   JACKIE ANN LEWIS VINING    SCHOEFFLER ENERGY LLC      3/14/2012       1319    439    F127332    LA    Lincoln
  

VIRGINIA RAMSDELL MERSHON TRUST

   SCHOEFFLER ENERGY LLC      9/27/2013                LA    Lincoln
   JOHN T. WALKER    SCHOEFFLER ENERGY LLC      12/13/2013                LA    Lincoln
  

WALNUT CREEK CEMETERY

   SCHOEFFLER ENERGY LLC      6/3/2013       1330    69    F133167    LA    Lincoln
   KEVIN H. WEIR    SCHOEFFLER ENERGY LLC      12/12/2013                LA    Lincoln
   ANDREW F. WEIR    SCHOEFFLER ENERGY LLC      12/12/2013                LA    Lincoln
   AMY BLOXOM WILLIAMS    SCHOEFFLER ENERGY LLC      12/26/2013       1338    472    F137431    LA    Lincoln
   MIRIAM M. WILLIAMS    SCHOEFFLER ENERGY LLC      9/18/2013                LA    Lincoln
   SANDRA KILGORE WILLIAMSON    SCHOEFFLER ENERGY LLC      1/13/2014                LA    Lincoln
   CYNDA WEIR WILLIS    SCHOEFFLER ENERGY LLC      12/12/2013                LA    Lincoln
   DEBRA K WOODARD    SCHOEFFLER ENERGY LLC      11/3/2012       1322    61    F128780    LA    Lincoln
  

WOODLAND ACRES

   SCHOEFFLER ENERGY LLC      9/24/2013                LA    Lincoln
   GENE BRAZZEL    WILDHORSE RESOURCES, LLC      5/16/2011       1306    623    F120754    LA    Lincoln
   GARY L BRAZZEL      WILDHORSE RESOURCES, LLC      5/17/2011       1305    703    F120367    LA    Lincoln


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
  

C.L.B. PROPERTIES, INC.

   WILDHORSE RESOURCES, LLC      7/26/2013                LA    Lincoln
   WILLIAM CLAUDE AND NANCY GALE PAYTON                     
   CHIPMON    WILDHORSE RESOURCES, LLC      4/20/2011       1305    907    F120411    LA    Lincoln
   MARIANNE JENNIE DAVIDSON    WILDHORSE RESOURCES, LLC      5/17/2011       1305    800    F120388    LA    Lincoln
   BARBARA LEE DAVIDSON    WILDHORSE RESOURCES, LLC      4/19/2011       1305    723    F120372    LA    Lincoln
   THOMAS G. AND CAROLYN ANN DAVIDSON, JR.    WILDHORSE RESOURCES, LLC      5/13/2011       1305    804    F120389    LA    Lincoln
   PATRICIA DELONY    WILDHORSE RESOURCES, LLC      6/13/2011       1305    940    f120417    LA    Lincoln
   CODY DUHWAYNE DOWLING    WILDHORSE RESOURCES, LLC      5/11/2011       1305    929    F120415    LA    Lincoln
   EVELYN WILDER GRAY    WILDHORSE RESOURCES, LLC      3/10/2011       1299    446    F117520    LA    Lincoln
   MICHAEL JOSEPH AND ADRIAN HOPE GRILLOT    WILDHORSE RESOURCES, LLC      5/16/2011       1305    699    F120366    LA    Lincoln
   HARRIS LIVING TRUST    WILDHORSE RESOURCES, LLC      8/15/2011       1305    893    F120408    LA    Lincoln
   HUNT TIMBERLAND, LLC    WILDHORSE RESOURCES, LLC      6/30/2011       1305    692    F120364    LA    Lincoln
   ALTON RAY AND WENONAH STEWART KILGORE    WILDHORSE RESOURCES, LLC      2/22/2011       1299    457    F117522    LA    Lincoln
   LISA OTT LAKY    WILDHORSE RESOURCES, LLC      6/30/2011       1306    628    F120755    LA    Lincoln
   JENNIFER LYN LINDENSTEIN    WILDHORSE RESOURCES, LLC      4/18/2011       1305    719    F120371    LA    Lincoln
  

LOUISIANA MINERALS, LTD

   WILDHORSE RESOURCES, LLC      6/5/2013                LA    Lincoln
  

LOUISIANA MINERALS, LTD

   WILDHORSE RESOURCES, LLC      11/13/2013       1336    740    F136547    LA    Lincoln
  

LOUISIANA MINERALS, LTD

   WILDHORSE RESOURCES, LLC      11/13/2013       1336    743    F136548    LA    Lincoln
  

LOUISIANA UNITED METHODIST CHILDREN AND FAMILY SER

   WILDHORSE RESOURCES, LLC      5/16/2013       1328    707    F132389    LA    Lincoln
   FELIX EUGENE LUEG    WILDHORSE RESOURCES, LLC      2/24/2011       1299    431    F117517    LA    Lincoln
   PHILLIP WAYNE MARTIN    WILDHORSE RESOURCES, LLC      5/31/2011       1305    746    F120378    LA    Lincoln
   DONALD M MITCHELL    WILDHORSE RESOURCES, LLC      5/3/2011       1305    949    F120419    LA    Lincoln
   JERRY WAYNE MITCHELL    WILDHORSE RESOURCES, LLC      5/12/2011       1305    784    F120385    LA    Lincoln
   JOHN C. MORRIS, III    WILDHORSE RESOURCES, LLC      6/16/2011       1305    935    F120416    LA    Lincoln
   MILTON THOMAS AND REBECCA MOORE MURPHY                     
   MURPHY    WILDHORSE RESOURCES, LLC      5/30/2011       1305    808    F120390    LA    Lincoln
   MILTON THOMAS AND REBECCA MOORE MURPHY                     
   MURPHY    WILDHORSE RESOURCES, LLC      5/30/2011       1305    780    F120384    LA    Lincoln
   MICHAEL ALAN NOLAN    WILDHORSE RESOURCES, LLC      3/1/2011       1299    451    F117521    LA    Lincoln
   STEPHEN ROBERT NUTT    WILDHORSE RESOURCES, LLC      7/1/2011       1305    830    F120394    LA    Lincoln
   SUSAN D PARSONS    WILDHORSE RESOURCES, LLC      6/13/2011       1305    766    F120381    LA    Lincoln
   CHARLES MICHAEL RAMSDELL    WILDHORSE RESOURCES, LLC      6/30/2011       1306    8    F120428    LA    Lincoln
   MURRAY P. AND SUSAN SQUYRES RASBURY, JR.    WILDHORSE RESOURCES, LLC      3/28/2011       1305    826    F120393    LA    Lincoln
   JAMES ALBERT AND ELIZABETH ANN SMITH                     
   REYNOLDS    WILDHORSE RESOURCES, LLC      4/7/2011       1299    488    F117530    LA    Lincoln
   MICHAEL LANE AND DIANNE ROE REYNOLDS    WILDHORSE RESOURCES, LLC      5/12/2011       1305    711    F120369    LA    Lincoln
   CODY SCOTT AND LYNORE CHAMBERS RICHARD    WILDHORSE RESOURCES, LLC      5/18/2011       1305    838    F120396    LA    Lincoln
   JIMMIE L RICHARDSON    WILDHORSE RESOURCES, LLC      5/5/2011       1305    944    F120418    LA    Lincoln
   PAULA D RILEY    WILDHORSE RESOURCES, LLC      6/13/2011       1305    715    F120370    LA    Lincoln
   PHALA HARTZOG SIMMONS    WILDHORSE RESOURCES, LLC      2/25/2011       1299    436    F117518    LA    Lincoln
   TAMMY JO STRAKOS    WILDHORSE RESOURCES, LLC      5/11/2011       1305    923    F120414    LA    Lincoln
   J. ROBERT SUMLIN    WILDHORSE RESOURCES, LLC      4/13/2011       1305    912    F120412    LA    Lincoln
   BRENDA BALES TAYLOR    WILDHORSE RESOURCES, LLC      3/24/2011       1299    481    F117528    LA    Lincoln
  

THE DAVID NOLAN & EVELYN Z. NOLAN 1996 TRUST

   WILDHORSE RESOURCES, LLC      4/15/2011       1305    902    F120410    LA    Lincoln
  

THE STEPHEN C. PANKEY SPECIAL NEEDS TRUST

   WILDHORSE RESOURCES, LLC      6/1/2011       1305    966    F120422    LA    Lincoln
  

THE VIRIGINIA MERSHON TRUST

   WILDHORSE RESOURCES, LLC      6/30/2011       1305    991    F120426    LA    Lincoln


Lease No.

 

Lessor

 

Lessee

  Lease date      Book   Page   Reference   ST   County
         291   314   D-27926    
         291   314   D-27926    
         291   314   D-27926    
         291   314   D-27926    
         291   314   D-27926    
         291   314   D-27926    
         291   314   D-27926    

LA-HKN0044-021

  JOSEPHINE COOMBS KIRBY   TRAVIS ROWE     4/12/1980       291   314   D-27926   LA   Lincoln
         291   41   D-27793    
         291   41   D-27793    
         291   41   D-27793    
         291   41   D-27793    
         291   41   D-27793    

LA-HKN0044-026

  ALINE JERABECK ESTATE   AMOCO PRODUCTION COMPANY INC     4/19/1980       291   41   D-27793   LA   Lincoln
         268   2   D-24496    
         268   2   D-24496    
         268   2   D-24496    
         268   2   D-24496    
         268   2   D-24496    

LA-SBW0067-000

  MARZELLA YOUNGER LUDLEY ET AL   PAR OIL CORPORATION     11/17/1979       268   2   D-24496   LA   Lincoln
         1307   821   F121302    
         1307   821   F121302    
         1307   821   F121302    
         1307   821   F121302    
         1307   821   F121302    

LA-SMB0048-002

  REGAN BURT MADDEN   MINERAL VENTURES INC     11/15/2011       1307   821   F121302   LA   Lincoln
         1307   806   F121296    
         1307   806   F121296    
         1307   806   F121296    
  BETTY MADDEN HARRISON DEALING WITH HER        1307   806   F121296    
  SEPARATE PROPERTY        1307   806   F121296    

LA-SMB0048-003

  MARILYN MADDEN HILL   MINERAL VENTURES INC     11/10/2011       1307   806   F121296   LA   Lincoln
  TODD S FIELD       6/20/2013           ACT 20131661   LA   Lincoln and Bienville
  ROBERT G. AND SHELIA JOHNSON FRAZIER, JR. ALBERT GROVER       2/28/2013       1328   642   F132378   LA   Lincoln and Bienville
  AND MARY ELLA GADBERRY GRAHAM       4/17/2013       1326   906   F131522   LA   Lincoln and Bienville
  REBECCA P HOLTZCLAW       10/25/2012       1322   27   F128773   LA   Lincoln and Bienville
 

WEYERHAEUSER REAL ESTATE DEVELOPMENT

      11/30/2012       1322   805   F129118   LA   Lincoln and Bieville
  COMPANY               

LA-CAL0009-001

  WALTER L MAXEY ET AL   R C LANCASTER JR     7/22/1957       624   311   430442   LA   Ouachita

LA-CAL0011-000

  ROSA MURPHREY PURDY ET AL   LAZA CASPARI     11/27/1957       633   845   435873   LA   Ouachita

LA-CAL0012-001

 

WILLIE MAE HOGAN

  MAGNOLIA PETROLEUM COMPANY     12/13/1957       634   745   436440   LA   Ouachita

LA-CAL0012-002

 

WILLIE MAE HOGAN ET AL

  MAGNOLIA PETROLEUM COMPANY     11/25/1957       634   742   436439   LA   Ouachita

LA-CAL0013-000

 

IRVIN R HOGAN ET AL

  MAGNOLIA PETROLEUM COMPANY     12/3/1957       635   733   436995   LA   Ouachita

LA-CAL0014-000

 

IRVIN R HOGAN

  MAGNOLIA PETROLEUM COMPANY     11/25/1957       634   748   436441   LA   Ouachita

LA-CAL0015-000

 

J W RUSSELL ET UX

  MAGNOLIA PETROLEUM COMPANY     11/23/1957       635   60   436547   LA   Ouachita

LA-CAL0016-000

 

CLARENCE K EMORY

  LAZA CASPARI     10/21/1957       631   256     LA   Ouachita

LA-CAL0017-000

 

CLARENCE K EMORY

  LAZA CASPARI     10/19/1957       631   259     LA   Ouachita

LA-CAL0018-000

 

J P PURDY

  MAGNOLIA PETROLEUM COMPANY     11/25/1957       634   754     LA   Ouachita

LA-CAL0019-000

 

DONALD J ZADECK ET AL

  KCS MEDALLION RESOURCES INC     2/10/2000       1788   216     LA   Ouachita

LA-CAL0020-000

 

ARLIS SANFORD

  LAZA CASPARI     7/6/1957       622   755   429648   LA   Ouachita


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County

LA-CAL0021-000

   VOLLIE SANFORD SR ET AL    LAZA CASPARI      7/6/1957       622    741    429647    LA    Ouachita
      SOUTHWEST GAS PRODUCING COMPANY                  

LA-CAL0022-000

   NEWT V MILLS    INC      5/29/1957       622    434    429476    LA    Ouachita
      SOUTHWEST GAS PRODUCING COMPANY                  

LA-CAL0023-001

   CLARENCE G MONK ET UX    INC      3/6/1958       639    185    438988    LA    Ouachita
      SOUTHWEST GAS PRODUCING COMPANY                  

LA-CAL0023-002

   FRED MONK    INC      7/24/1958       647    486    443811    LA    Ouachita
      SOUTHWEST GAS PRODUCING COMPANY                  

LA-CAL0023-003

   J B MONK    INC      7/24/1958       648    21    444006    LA    Ouachita
   DAVIS M SHEPHEARD    SOUTHWEST GAS PRODUCING COMPANY                  

LA-CAL0024-000

   BY GRAVES C KENNEDY, CURATOR FOR THE INTERDICT    INC      9/4/1958       651    253    445987    LA    Ouachita

LA-CAL0025-000

   J C SANFORD ET AL    UNITED CARBON COMPANY      4/15/1952       501    276    367785    LA    Ouachita

LA-CAL0026-000

   L B SMITH    MONLA GAS COMPANY INC      7/29/1958       647    483    443810    LA    Ouachita
      SOUTHWEST GAS PRODUCING COMPANY                  

LA-CAL0027-000

   HENRIETTA BRYAN ET VIR    INC      3/5/1958       642    693    440969    LA    Ouachita

LA-CAL0028-000

   THE METHODIST CHURCH ET AL    MONLA GAS COMPANY INC      8/13/1958       648    596    444389    LA    Ouachita

LA-CAL0029-000

   MATTIE M RUSSELL ET AL    R J ZUBERBIER      10/20/1953       537    207    385183    LA    Ouachita

LA-DRS0005-000

   LUNNIE JACKSON ET UX    KCS MEDALLION RESOURCES      2/20/2002       1883    264    1364959    LA    Ouachita

LA-DRS0006-000

   ANN RACHEL STENNETT    KCS MEDALLION RESOURCES INC      12/8/1997       1727    713    1223221    LA    Ouachita

LA-DRS0007-001

   KATHERINE JENKINS ET AL    KCS MEDALLION RESOURCES INC      8/4/1997       1726    388    1221980    LA    Ouachita
   ANNA JANE RABON WASHINGTON REPRESENTED BY                     

LA-DRS0008-000

   NICCIE B JOHNSON A-I-F    KCS MEDALLION RESOURCES INC      1/9/1998       1726    401    1221981    LA    Ouachita
   ANNA JANE RABON WASHINGTON REPRESENTED BY                     

LA-DRS0009-000

   NICCIE B JOHNSON A-I-F    KCS MEDALLION RESOURCES INC      1/9/1998       1726    405    1221982    LA    Ouachita

LA-DRS0010-001

   NANCY L HUNTER ET AL    KCS MEDALLION RESOURCES INC      8/4/1997       1726    413    1221985    LA    Ouachita

LA-DRS0011-000

   BOB ANTHONY HOWZE JR ET AL    KCS MEDALLION RESOURCES INC      9/2/1997       1727    719    1223222    LA    Ouachita

LA-DRS0012-001

   CLYDE JACKSON ET AL    KCS MEDALLION RESOURCES INC      7/22/1997       1726    428    1221986    LA    Ouachita

LA-DRS0013-000

   LINDA FAGAN STEELE BASSETT ET AL    KCS MEDALLION RESOURCES INC      3/10/1998       1727    727    1223224    LA    Ouachita

LA-DRS0014-000

   MAX ALLEN NAPPIER ET UX    KCS RESOURCES INC      12/19/1997       1727    723    1223223    LA    Ouachita

LA-DRS0015-000

   NANCY W BAGGETTE    KCS MEDALLION RESOURCES INC      12/3/1997       1727    735    1223226    LA    Ouachita

LA-DRS0016-000

   SALLIE HARPER HELM    KCS MEDALLION RESOURCES INC      10/2/1997       1727    731    1223225    LA    Ouachita

LA-DRS0017-000

   ANTHONY A RISPOLI    KCS MEDALLION RESOURCES INC      1/26/1998       1725    540    1221545    LA    Ouachita
            1726    462    1221988      

LA-DRS0018-001

   DOROTHY L RICHARDSON ET AL    KCS MEDALLION RESOURCES INC      8/4/1997       1726    462    1221988    LA    Ouachita

LA-DRS0019-000

   NORTHEAST LOUISIANA WHOLESALE OIL & GAS CO INC    KCS MEDALLION RESOURCES INC      2/4/1998       1727       1223227    LA    Ouachita

LA-DRS0020-000

   JIMMY LEE FROST SR    KCS MEDALLION RESOURCES INC      9/23/1997       1727       1223228    LA    Ouachita

LA-DRS0021-000

   JAMES ANTHONY BABIN    KCS MEDALLION RESOURCES INC      9/23/1997       1727       1223229    LA    Ouachita

LA-DRS0022-000

   EFFIE LOUIS BISHOP LEWIS ET AL    KCS MEDALLION RESOURCES INC      10/1/1997       1727       1223230    LA    Ouachita

LA-DRS0023-000

   MELINDA PRICE MOBLEY    KCS MEDALLION RESOURCES INC      9/24/1997       1727       1223231    LA    Ouachita

LA-DRS0024-000

   HAROLD E CRIPPS ET UX    KCS MEDALLION RESOURCES INC      9/24/1997       1727       1223232    LA    Ouachita

LA-DRS0025-000

   RONNIE L FOWLER ET AL    KCS MEDALLION RESOURCES INC      9/25/1997       1727       1223235    LA    Ouachita

LA-DRS0026-000

   DAVID D MCMILLAN ET UX    KCS MEDALLION RESOURCES INC      9/24/1997       1727       1223236    LA    Ouachita
            1728       1223808      
            1728       1223809      

LA-DRS0027-001

   MILDRED IRENE CHAPMAN ET AL    KCS MEDALLION RESOURCES INC      10/5/1997       1728    369    1223810    LA    Ouachita

LA-DRS0028-000

   JAMES E FLETCHER ET UX    KCS MEDALLION RESOURCES INC      9/24/1997       1727       1223237    LA    Ouachita

LA-DRS0029-000

   HAFCO INC      KCS MEDALLION RESOURCES INC      11/12/1997       1728       1223807    LA    Ouachita


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            1727       1223238      
            1727       1223239      

LA-DRS0030-000

   FRANCES MURIEL ALLEN DAVIS ET AL    KCS RESOURCES INC      9/30/1997       1727       1223240    LA    Ouachita
            1916    404    1390460      

LA-DRS0031-001

   CLAUDIA BEAMS    KCS RESOURCES INC      6/3/2003       1916    404    1390460    LA    Ouachita
            1916    408    1390461      

LA-DRS0031-002

   DAVID LEE BEAMS    KCS RESOURCES INC      6/3/2003       1916    408    1390461    LA    Ouachita
            1921    459    1393769      

LA-DRS0031-003

   ERIKA BEAMS    KCS RESOURCES INC      6/3/2003       1921    459    1393769    LA    Ouachita
            2052    468    1467315      

LA-DRS0031-004

   CURTIS BEAMS    KCS RESOURCES INC      6/6/2006       2052    468    1467315    LA    Ouachita
            1725    527    1221539      
            1725    535    1221542      
            1725    509    1221530      

LA-DRS0031-005

   CHARLES KELLEY ET AL    KCS MEDALLION RESOURCES INC      7/23/1997       1725    533    1221541    LA    Ouachita

LA-DRS0031-006

   RODERICK O CARRAWAY    KCS MEDALLION RESOURCES INC      12/18/1997       1726    482    1221990    LA    Ouachita
            1725    505    1221529      
            1725    511    1221531      
            1725    531    1221540      
            1725    515    1221533      
            1725    517    1221534      
            1725    538    1221544      
            1725    513    1221532      
            1725    519    1221535      
            1725    523    1221537      
            1725    521    1221536      
            1725    525    1221538      

LA-DRS0031-007

   RICHARD GHOLSTON ET AL    KCS MEDALLION RESOURCES INC      6/10/1997       1724    480    1221989    LA    Ouachita

LA-DRS0031-008

   HERBERT GHOLSTON ET UX    KCS MEDALLION RESOURCES INC      6/10/1997       1725    501    1221528    LA    Ouachita

LA-DRS0031-009

   MARJORIE COX HENDRICKS    KCS MEDALLION RESOURCES INC      6/10/1998       1743       1238289    LA    Ouachita

LA-DRS0031-010

   JEWEL EDWARD COX    KCS MEDALLION RESOURCES INC      6/10/1998       1743       1238290    LA    Ouachita

LA-DRS0031-011

   HAROLD JAMES COX    KCS MEDALLION RESOURCES INC      6/10/1998       1743       1238291    LA    Ouachita

LA-DRS0031-012

   VINCENT NORMAN COX    KCS MEDALLION RESOURCES INC      6/10/1998       1743       1238292    LA    Ouachita

LA-DRS0031-013

   JOE ANTHONY COX    KCS MEDALLION RESOURCES INC      6/10/1998       1743       1238294    LA    Ouachita

LA-DRS0031-014

   ELVATUS CROMWELL MORRIS JR    KCS MEDALLION RESOURCES INC      9/16/1998       1743       1238295    LA    Ouachita

LA-DRS0031-015

   BERNICE GULLEDGE EDWARDS    KCS RESOURCES INC      8/19/1997       1725    546    1221546    LA    Ouachita
            1725       1221547      

LA-DRS0032-001

   MARGUERITE YOUNG ANDERSON ET AL    KCS MEDALLION RESOURCES INC      8/14/1997       1728    550    1223806    LA    Ouachita

LA-DRS0033-000

   BERRY D BURKHALTER    KCS MEDALLION RESOURCES INC      7/30/1997       1725    554    1221548    LA    Ouachita
            1725       1221549      

LA-DRS0034-000

   DUDLEY B SANDERSON ET UX    KCS MEDALLION RESOURCES INC      2/26/1998       1731    558    1226826    LA    Ouachita

LA-DRS0035-000

   CHARLES EDWARD BRUMLEY    KCS MEDALLION RESOURCES INC      11/5/1997       1725    562    1221550    LA    Ouachita

LA-DRS0036-000

   PAUL ELVIN FROST ET UX    KCS MEDALLION RESOURCES INC      10/24/1997       1725    566    1221551    LA    Ouachita

LA-DRS0037-000

   FOREST KRAFT FEDERAL CREDIT UNION    KCS MEDALLION RESOURCES INC      9/3/1997       1725    570    1221552    LA    Ouachita

LA-DRS0038-001

   LESLEY MAE ALLEN THOMAS ET AL    KCS MEDALLION RESOURCES INC      11/5/1997       1725    574    1221553    LA    Ouachita

LA-DRS0039-000

   RED BEAR BROADCASTING CORPORATION    KCS MEDALLION RESOURCES INC      7/30/1997       1725    578    1221554    LA    Ouachita

LA-DRS0040-000

   JEAN FIEBELKORN ET VIR    KCS MEDALLION RESOURCES INC      7/25/1997       1725    582    1221555    LA    Ouachita

LA-DRS0041-000

   LINDA JUSTICE MCEACHARN    KCS MEDALLION RESOURCES INC      9/3/1997       1725    648    1221572    LA    Ouachita

LA-DRS0042-000

   KENNETH EARL GREER ET UX    KCS MEDALLION RESOURCES INC      9/3/1997       1725    644    1221571    LA    Ouachita

LA-DRS0043-000

   ELLA BIGGS ALLEN      KCS MEDALLION RESOURCES INC      8/22/1997       1725    640    1221570    LA    Ouachita


Lease No.

  

Lessor

  

Lessee

   Lease date      Book    Page    Reference    ST    County
            1725       1221569      

LA-DRS0044-000

   EDNA SANDERSON MCMANUS ET AL    KCS MEDALLION RESOURCES INC      8/25/1997       1726    636    1222026    LA    Ouachita

LA-DRS0045-000

   RUTH CHAPMAN BISHOP ET AL    KCS MEDALLION RESOURCES INC      8/26/1997       1725    632    1221568    LA    Ouachita
            1725       1221565      
            1725    624    1221567      
            1725    630    1221566      

LA-DRS0046-000

   LEONARD O GARLINGTON ET AL    KCS MEDALLION RESOURCES INC      9/16/1997       1743    628    1238293    LA    Ouachita
            1725    619    1221564      

LA-DRS0047-000

   WILLIAM WYOT LOVETT JR ET UX    KCS MEDALLION RESOURCES INC      9/10/1997       1725    619    1221564    LA    Ouachita

LA-DRS0048-000

   OTHA L BESANT    KCS MEDALLION RESOURCES INC      9/3/1997       1725    606    1221561    LA    Ouachita

LA-DRS0049-000

   RUBIE COLEMAN NAPPIER    KCS MEDALLION RESOURCES INC      12/19/1997       1725    602    1221560    LA    Ouachita

LA-DRS0050-000

   BEATRICE LINCOLN RICHARDS    KCS MEDALLION RESOURCES INC      8/19/1997       1725    598    1221559    LA    Ouachita

LA-DRS0051-000

   JERRY WAYNE SPIVEY    KCS MEDALLION RESOURCES INC      9/29/1997       1725    594    1221558    LA    Ouachita

LA-DRS0052-000

   C W DAY ET UX    KCS MEDALLION RESOURCES INC      8/26/1997       1725    652    1221573    LA    Ouachita

LA-DRS0053-000

   MARVIN W HOLLIS ET UX    KCS MEDALLION RESOURCES INC      8/27/1997       1725    656    1221574    LA    Ouachita

LA-DRS0054-000

   HERSCHEL EUGENE THORNTON ET UX    KCS MEDALLION RESOURCES INC      9/3/1997       1725    660    1221575    LA    Ouachita
            1725    664    1221576      

LA-DRS0055-000

   ORA JEAN STANCIL SMITH ET VIR    KCS MEDALLION RESOURCES INC      12/22/1997       1725    672    1221578    LA    Ouachita

LA-DRS0056-000

   STEPHANIE MILLS PORTER WOMACK    KCS MEDALLION RESOURCES INC      9/15/1997       1725    668    1221577    LA    Ouachita

LA-DRS0057-000

   LARRY STEVEN GREEN ET UX    KCS MEDALLION RESOURCES INC      8/22/1997       1725    674    1221579    LA    Ouachita

LA-DRS0058-000

   AARON ODELL CARR ET UX    KCS MEDALLION RESOURCES INC      10/30/1997       1725    678    1221580    LA    Ouachita

LA-DRS0059-000

   GARY DEWAYNE FLETCHER ET UX    KCS MEDALLION RESOURCES INC      8/27/1997       1725    686    1221582    LA    Ouachita
            1725    682    1221581      

LA-DRS0060-001

   ORA JEAN STANCIL SMITH ET VIR    KCS MEDALLION RESOURCES INC      11/26/1997       1725    672    1221578    LA    Ouachita

LA-DRS0061-000

   CELIA TALTON ET AL    KCS MEDALLION RESOURCES INC      9/2/1997       1725    590    1221557    LA    Ouachita

LA-DRS0062-000

   LESLYE MAE ALLEN THOMAS    KCS MEDALLION RESOURCES INC      9/5/1997       1725    586    1221556    LA    Ouachita

LA-DRS0063-000

   RUTHIE ANN ROY ELLARD ET AL    KCS MEDALLION RESOURCES INC      9/19/1997       1725    690    1221583    LA    Ouachita

LA-DRS0064-000

   ROBERT L COTTON    KCS MEDALLION RESOURCES INC      9/3/1997       1725    694    1221584    LA    Ouachita

LA-DRS0065-000

   TIMOTHY RANDALL MCMANUS    KCS MEDALLION RESOURCES INC      8/27/1997       1725    698    1221585    LA    Ouachita

LA-DRS0066-000

   RUTH CHAPMAN BISHOP    KCS MEDALLION RESOURCES INC      8/26/1997       1725    702    1221586    LA    Ouachita

LA-DRS0067-000

   HILTON T RAMSEY ET UX    KCS MEDALLION RESOURCES INC      12/20/2000       1814       1301332    LA    Ouachita

LA-DRS0068-000

   WAYNE BLACK ET UX    KCS MEDALLION RESOURCES INC      8/27/1997       1725    710    1221588    LA    Ouachita

LA-DRS0069-000

   SHANNON GLENN MORRIS    KCS MEDALLION RESOURCES INC      8/27/1997       1725    714    1221589    LA    Ouachita

LA-DRS0070-000

   JO ANN ELDRIDGE GREGORY    KCS MEDALLION RESOURCES INC      9/16/1997       1725    718    1221590    LA    Ouachita

LA-DRS0071-000

   VIOLET LAVERNE FREEMAN BREWSTER    KCS MEDALLION RESOURCES INC      9/18/1997       1725    722    1221591    LA    Ouachita

LA-DRS0072-000

   ALMA COVINGTON TURNAGE ET AL    KCS MEDALLION RESOURCES INC      9/3/1997       1725    726    1221592    LA    Ouachita
            1725    732    1221594      
            1725    736    1221595      

LA-DRS0073-000

   BLANCHE LOVELADY BARRETT ET AL    KCS MEDALLION RESOURCES INC      9/9/1997       1725    738    1221596    LA    Ouachita

LA-DRS0074-000

   LORI GREGORY MCGOWEN FINCHER    KCS MEDALLION RESOURCES INC      8/26/1997       1725    740    1221597    LA    Ouachita

LA-DRS0075-000

   WEAKS ENTERPRISES INC    KCS MEDALLION RESOURCES INC      10/9/1997       1725    744    1221598    LA    Ouachita

LA-DRS0076-000

   WEST FEED MILLS INC    KCS MEDALLION RESOURCES INC      9/23/1997       1725    750    1221599    LA    Ouachita

LA-DRS0077-000

   SIMMIE L HEISLER ET UX    KCS MEDALLION RESOURCES INC      8/26/1997       1725    756    1221600    LA    Ouachita
            1725    760    1221601      

LA-DRS0078-000

   JAMES ROLAND MCNEIL    KCS MEDALLION RESOURCES INC      9/19/1997       1725    764    1221602    LA    Ouachita

LA-DRS0079-000

   CONNIE L FONTANA ROY    KCS MEDALLION RESOURCES INC      9/18/1997       1725    766    1221603    LA    Ouachita

LA-DRS0080-000

   LELA MAE GUICE    KCS MEDALLION RESOURCES INC      8/26/1997       1725    770    1221604    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            1725    774    1221605      
            1725    778    1221606      
            1725    784    1221609      
            1725    782    1221608      

LA-DRS0081-000

   WINNIE MAE COATES MOSS ET AL    KCS MEDALLION RESOURCES INC      9/22/1997       1725    780    1221607    LA    Ouachita

LA-DRS0082-000

   STEPHANIE ANN JOHNSON REITZELL    KCS MEDALLION RESOURCES INC      9/30/1997       1725    786    1221610    LA    Ouachita

LA-DRS0083-000

   CHARLES MILTON MCQUILLIN ET UX    KCS MEDALLION RESOURCES INC      11/6/1997       1725    790    1221611    LA    Ouachita

LA-DRS0084-000

   EMMIT WILLIAMS JR ET UX    KCS MEDALLION RESOURCES INC      3/5/1998       1726       1221858    LA    Ouachita

LA-DRS0085-000

   ROBERT W PLUNK ET UX    KCS MEDALLION RESOURCES INC      7/29/1997       1725    610    1221562    LA    Ouachita

LA-DRS0086-001

   HAROLD E OETGEN ET AL    KCS MEDALLION RESOURCES INC      8/29/1997       1728       1224298    LA    Ouachita

LA-DRS0087-000

   STATE OF LOUISIANA OUACHITA PARISH POLICE JURY    JC PETROLEUM, INC      2/11/1998       1730    20    1225428    LA    Ouachita
   STATE OF LOUISIANA DEPT OF TRANSPORTATION AND                     

LA-DRS0088-000

   DEVELOPMENT    JC PETROLEUM, INC      2/11/1998       1789    1    1225427    LA    Ouachita

LA-DRS0089-000

   MEADIE THOMAS ET AL    KCS MEDALLION RESOURCES INC      1/28/1998       1729    825    1225346    LA    Ouachita

LA-DRS0090-000

   CHARLOTTE MCDONALD CRAYTON    KCS MEDALLION RESOURCES INC      8/8/1998       1729       1225348    LA    Ouachita

LA-DRS0091-000

   ELBERT RUSSELL WALTERS ET UX    KCS MEDALLION RESOURCES INC      9/3/1997       1729    821    1225345    LA    Ouachita

LA-DRS0092-000

   JOHNNY T JOHNSON ET AL    KCS MEDALLION RESOURCES INC      3/14/2000       159       1284490    LA    Ouachita

LA-DRS0093-000

   SANTA FE SNYDER CORPORATION    KCS MEDALLION RESOURCES INC      5/22/2000       1798    580    1288268    LA    Ouachita
            1809    687    1296808      
            1800    472    1289131      

LA-DRS0094-000

   RIVERWOOD INTERNATIONAL CORPORATION    KCS MEDALLION RESOURCES INC      11/16/1999       1783    365    1275208    LA    Ouachita

LA-DRS0095-000

   GEORGIA PACIFIC CORP    KCS MEDALLION RESOURCES INC      7/8/2000       1811    301    1298242    LA    Ouachita

LA-DRS0096-000

   HAROLD G FROST ET UX    KCS MEDALLION RESOURCES INC      3/20/2001       1849    45    1332359    LA    Ouachita

LA-DRS0097-000

   FRED E VARNER ET UX    KCS MEDALLION RESOURCES INC      1/14/2002       1851    95    1333719    LA    Ouachita

LA-DRS0098-001

   GLADYS MARIE SIMS WESLEY    KCS MEDALLION RESOURCES INC      3/20/2001       1849    48    1332360    LA    Ouachita

LA-DRS0099-000

   WILBERT HAMILTON ET UX    KCS RESOURCES INC      2/19/2005       1989    139    1433615    LA    Ouachita

LA-DRS0100-000

   WILBERT WOODWARD ET UX    KCS RESOURCES INC      9/22/2006       2074    72    1478476    LA    Ouachita

LA-DRS0101-000

   LYNETTE WOODWARD M JACKSON    KCS RESOURCES INC      9/2/2006       2074    76    1478477    LA    Ouachita

LA-DRS0102-000

   DONALD EARL DEAL SR ET UX    KCS RESOURCES INC      7/14/2006       2074    79    1478478    LA    Ouachita
            2016    262    1447882      
            2020    335    1449849      

LA-DRS0103-000

   RICHARD EARL COVINGTON    KCS RESOURCES INC      11/16/2005       2025    386    1452696    LA    Ouachita

LA-DRS0104-000

   VERA LOU BLAZIER ALLEN ADAMS    KCS MEDALLION RESOURCES INC      9/10/1997       1725    615    1221563    LA    Ouachita

LA-DRS0105-000

   DOROTHY CLEMONS CHAMBERS ET VIR    KCS RESOURCES, INC.      4/23/2007       2096    835    1492119    LA    Ouachita

LA-DRS0106-000

   MATTIE TAYLOR    KCS RESOURCES, INC.      5/15/2007       2096    832    1492118    LA    Ouachita

LA-DRS0107-001

   EMMITT WILLIAMS JR ET AL    KCS RESOURCES, INC.      5/5/2007       2096    814    1492112    LA    Ouachita

LA-DRS0108-001

   REOLA JACKSON ET AL    KCS RESOURCES, INC.      5/5/2007       2096    823    1492115    LA    Ouachita

LA-DRS0109-000

   JOHN CHRISTOPHER BRAGG ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/17/2000       1786    283    1277737    LA    Ouachita

LA-DRS0110-000

   CARL RAY PHELPS JR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/17/1999       1784       1275781    LA    Ouachita

LA-DRS0111-000

   CHERRY ANNE PHILLIPS NEE SKAINS    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/17/1998       1742    357    1237759    LA    Ouachita

LA-DRS0112-000

   TOMMY HAROLD PITRE ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/17/1998       1742    387    1237767    LA    Ouachita

LA-DRS0113-000

   WALTER RAY EDWARDS SR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/28/1998       1744       1239606    LA    Ouachita

LA-DRS0114-000

   LOIS LACOMB SIMS    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/25/2000       1788       1279719    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0115-000

   TERRY LOUIS LASYONE ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/13/1998       1744       1239611    LA    Ouachita

LA-DRS0116-000

   DAVID LYNN THOMPSON ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/3/1998       1744       1239599    LA    Ouachita

LA-DRS0117-000

   DONNA MARIE YOUNGER TOLAR ET VIR    GOODRICH PETROLEUM COMPANY OF LOUISIANA      1/25/2000       1786    246    1277726    LA    Ouachita

LA-DRS0118-000

   JULIE THARPE DEGARZA    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/28/1998       1747    664    1242397    LA    Ouachita

LA-DRS0119-000

   JERRY DEWAINE PRICE ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/17/2000       1786    286    1277738    LA    Ouachita

LA-DRS0120-000

   JOHN WILLIAM SMITH    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/3/2000       1786    262    1277731    LA    Ouachita

LA-DRS0121-000

   DAVE ALLEN SMEAD ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/1/2000       1786    168    1277733    LA    Ouachita

LA-DRS0122-000

   TAMMY LAURICE ALLEN DENNIS    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/17/1998       1744       1239605    LA    Ouachita

LA-DRS0123-000

   BILLY JOE ROAN    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/29/1998       1747    667    1242398    LA    Ouachita

LA-DRS0124-000

   WOODROW FRANKLIN ARMFIELD    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/16/1998       1747    677    1242401    LA    Ouachita

LA-DRS0125-000

   BASIL E ARMFIELD ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/16/1998       1747    680    1242402    LA    Ouachita

LA-DRS0126-000

   JEWEL B DOUGLAS ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/4/1998       1742    413    1237774    LA    Ouachita

LA-DRS0127-000

   KATHY A PAYNE WATSON    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/15/2000       1786    292    1277740    LA    Ouachita

LA-DRS0128-000

   KENNETH MICHAEL DESOTO ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/21/2000       1786    298    1277742    LA    Ouachita

LA-DRS0129-000

   JERRY WAYNE CASCIO ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/12/1998       1744       1239610    LA    Ouachita

LA-DRS0130-000

   DOLVIN L MCCARDLE ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/6/1998       1744       1239600    LA    Ouachita

LA-DRS0131-000

   ROBERT PHILLIP SKIPPER ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/11/2000       1790       1281260    LA    Ouachita

LA-DRS0132-000

   MARZELL HEMPHILL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/9/2000       1786    274    1277735    LA    Ouachita

LA-DRS0133-000

   THOMAS WAYNE COCKERHAM    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/3/1998       1744       1239598    LA    Ouachita

LA-DRS0134-000

   ALFRED BENOIT JOHNSON ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/3/1998       1744       1239604    LA    Ouachita

LA-DRS0135-000

   WILLIAM RAY NELSON SR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/1/2000       1786    256    1277729    LA    Ouachita

LA-DRS0136-000

   WILLIAM RAY NELSON JR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/1/2000       1786    253    1277728    LA    Ouachita

LA-DRS0137-000

   PAULA D CASE MCCOIN    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/1/2000       1786    279    1277736    LA    Ouachita

LA-DRS0138-000

   JEEMS WILLIAM SNIPES ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/28/1998       1747    670    1242399    LA    Ouachita

LA-DRS0139-000

   J W HOLTON ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/12/1998       1750    392    1244747    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0140-000

   WILLIAM LARRY COLE    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/1/1998       1744       1239603    LA    Ouachita

LA-DRS0141-000

   LARRY JOE CONRAD ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/1/1998       1744       1239608    LA    Ouachita

LA-DRS0142-000

   JOHN WESLEY DYE    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/7/2000       1788       1279718    LA    Ouachita

LA-DRS0143-000

   JOHN O HENNEN JR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/22/2000       1790       1281261    LA    Ouachita

LA-DRS0144-000

   TRAVIS D PEPPERS SR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/28/2000       1790       1281257    LA    Ouachita

LA-DRS0145-000

   MICHAEL FRANCIS MILLER    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/1/2000             1277732    LA    Ouachita

LA-DRS0146-000

   CHARLENE WALLACE BURNS    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/1/2000       1786    259    1277730    LA    Ouachita

LA-DRS0147-000

   KATIE PEARCY FUNDERBURK    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/25/2000       1788       1279720    LA    Ouachita

LA-DRS0148-000

   W-W HOMES INC    GOODRICH PETROLEUM COMPANY OF LOUISIANA      4/13/2000             1283814    LA    Ouachita

LA-DRS0149-000

   STATE OF LOUISIANA #16275, THE OUACHITA PARISH SCHOOL SYSTEM    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/9/1998       1743       1239129    LA    Ouachita

LA-DRS0150-000

   GLENN WAYNE EDWARDS ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/13/1998       1744       1239612    LA    Ouachita

LA-DRS0151-000

   SOUTHERN DELTA HOMES INC    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/24/1998       1742    390    1237768    LA    Ouachita

LA-DRS0152-000

   CLIFFORD JACKSON CALLOWAY ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      5/26/1998       1742    509    1237798    LA    Ouachita

LA-DRS0153-000

   JESSIE BABCOCK ALGER    GOODRICH PETROLEUM COMPANY OF LOUISIANA      2/11/2000       1786    295    1277741    LA    Ouachita

LA-DRS0154-000

   TERESA PHILLIPS MCDANELL ET AL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      1/25/2000       1786    250    1277727    LA    Ouachita

LA-DRS0155-000

   JAMES E TOWNSEND ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/9/2000       1788       1279717    LA    Ouachita

LA-DRS0156-000

   GEORGE M YOUNGER JR    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/25/1999       1784       1275780    LA    Ouachita

LA-DRS0157-000

   DOROTHY LEE HUTSON    GOODRICH PETROLEUM COMPANY OF LOUISIANA      3/30/2000       1793       1283815    LA    Ouachita

LA-DRS0158-000

   HANSEL T NELSON ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/28/1998       1742    377    1237764    LA    Ouachita

LA-DRS0159-000

   MARY ANNE COOK WHITE    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    444    1237783    LA    Ouachita

LA-DRS0160-000

   BILLY JOE TAYLOR ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      4/30/1998       1742    476    1237791    LA    Ouachita

LA-DRS0161-000

   TARSHA CORPORATION    GOODRICH PETROLEUM COMPANY OF LOUISIANA      4/30/1998       1742    472    1237790    LA    Ouachita

LA-DRS0162-000

   LORA HELEN LAWRENCE WHITTINGTON ET VIR    GOODRICH PETROLEUM COMPANY OF LOUISIANA      7/29/1998       1742    399    1237770    LA    Ouachita

LA-DRS0163-000

   STATE OF LOUISIANA #16274, THE OUACHITA PARISH POLICE JURY    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/9/1998       1743       1239130    LA    Ouachita

LA-DRS0164-001

   HARRY DONALD PASCHAL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      7/7/1998       1742    483    1237771    LA    Ouachita

LA-DRS0165-000

   LEWIS M BARKER    GOODRICH PETROLEUM      10/20/2000       1811    567    1298527    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0166-001

   LEE ROY MCGREW ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    501    1237796    LA    Ouachita

LA-DRS0167-001

   VELMA FLETCHER BOWKER    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    441    1237782    LA    Ouachita

LA-DRS0168-001

   TERESA PHILLIPS MCDANELL ET VIR    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/17/1998       1742    373    1237763    LA    Ouachita

LA-DRS0169-001

   DENVER L COPELAND ET AL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      12/9/1998       1750    387    1244746    LA    Ouachita

LA-DRS0170-001

   BETHEL BAPTIST CHURCH INC    GOODRICH PETROLEUM COMPANY OF LOUISIANA      7/30/1998       1742    394    1237769    LA    Ouachita

LA-DRS0171-001

   DOYLE C DANIEL ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    438    1237781    LA    Ouachita

LA-DRS0172-001

   SUE PARKER TIDWELL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      5/4/1998       1742    499    1237795    LA    Ouachita

LA-DRS0173-001

   STERLING OAKS LLC    GOODRICH PETROLEUM COMPANY OF LOUISIANA      4/30/1998       1742    504    1237797    LA    Ouachita

LA-DRS0174-001

   DARYL KEITH DANIEL ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    432    1237779    LA    Ouachita

LA-DRS0175-001

   IRENE MONROE CASE    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    533    1237805    LA    Ouachita

LA-DRS0175-002

   LINDA CASE FERGUSON    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    419    1237776    LA    Ouachita

LA-DRS0175-003

   PAULA CASE MCCOIN    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    416    1237775    LA    Ouachita

LA-DRS0176-001

   EARTH RECYCLING CORPORATION    GOODRICH PETROLEUM COMPANY OF LOUISIANA      5/6/1998       1742    493    1237794    LA    Ouachita

LA-DRS0177-001

   LUCY ALICE SCHANKS WHITLOCK    GOODRICH PETROLEUM COMPANY OF LOUISIANA      6/5/1998       1742    435    1237780    LA    Ouachita

LA-DRS0178-001

   NATHAN G ROBERTS ET UX    GOODRICH PETROLEUM COMPANYOF LOUISIANA      6/5/1998       1742    429    1237778    LA    Ouachita

LA-DRS0179-001

   JOSEPH ALBERT FORD III STACIE HARGROVE FORD    GOODRICH PETROLEUM COMPANY OF LOUISIANA      5/6/1998       1742    462    1237788    LA    Ouachita

LA-DRS0180-001

   DOW CON INC    GOODRICH PETROLEUM COMPANY OF LOUISIANA      4/20/1998       1742    466    1237787    LA    Ouachita

LA-DRS0181-001

   JAMES MICHAEL BARNES    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/28/1998       1742    370    1237762    LA    Ouachita

LA-DRS0182-001

   HERMAN W CHILTON ET AL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/15/1998       1788    723    1280400    LA    Ouachita

LA-DRS0183-001

   WAMUL R OWENS ET AL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/15/1998       1788    710    1280399    LA    Ouachita

LA-DRS0184-001

   E A MOORE ET AL    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/15/1998       1788    696    1280398    LA    Ouachita

LA-DRS0185-001

   LINDA COSTELLO SILMON    GOODRICH PETROLEUM COMPANY OF LOUISIANA      4/28/1998       1742    458    1237787    LA    Ouachita

LA-DRS0186-001

   G L HENDRIX AKA GARLAND LEON HENDRICKS ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      8/4/1998       1742    410    1237773    LA    Ouachita

LA-DRS0187-001

   BEVERLY F BAIN    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/1/1998       1744       1239607    LA    Ouachita

LA-DRS0187-002

   CAROLYN F UPTON    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/1/1998       1744       1239609    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0187-003

   BILLY S HANCOCK    GOODRICH PETROLEUM COMPANY OF LOUISIANA      10/1/1998       1747    674    1242400    LA    Ouachita

LA-DRS0188-001

   ERNEST LAVAINE WILLIAMSON    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/9/1998       1744       1239601    LA    Ouachita

LA-DRS0188-002

   ROY HERSHEL WILLIAMSON ET UX    GOODRICH PETROLEUM COMPANY OF LOUISIANA      9/9/1998       1744       1239602    LA    Ouachita
            283       1326769      
            283       1326769      
            283       1326769      
            283       1326769      

LA-DRS0189-000

   RITA EDNA P BARTLETT ET AL    JM EXPLORATION CO., LLC      9/22/2001       283       1326769    LA    Ouachita
            293       1326770      
            293       1326770      
                      293         1326770          
            293       1326770      
            293       1326770      

LA-DRS0190-000

   JAMES DALE BASS ET AL    JM EXPLORATION CO., LLC      9/22/2001       293       1326770    LA    Ouachita
            303       1326771      
            293       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
            303       1326771      
                      303         1326771          
            303       1326771      
            303       1326771      

LA-DRS0191-000

   CLARENCE LEE AVANT ET AL    JM EXPLORATION CO., LLC      9/22/2001       303       1326771    LA    Ouachita
            318       1326772      
            318       1326772      
            318       1326772      
            318       1326772      
            318       1326772      
            318       1326772      
            318       1326772      

LA-DRS0192-000

   FRANCIS M BOOTH ET AL    JM EXPLORATION CO., LLC      9/22/2001       318       1326772    LA    Ouachita
            355       1326775      
            355       1326775      

LA-DRS0193-000

   TIMOTHY G NEATHERY ET AL    JM EXPLORATION CO., LLC      9/22/2001       355       1326775    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      
                      329         1326773          
            329       1326773      
            329       1326773      
            329       1326773      
            329       1326773      

LA-DRS0194-000

   CHARLES T BUMGARDNER ET AL    JM EXPLORATION CO., LLC      9/22/2001       329       1326773    LA    Ouachita
            346       1326774      
            346       1326774      
            346       1326774      
            346       1326774      

LA-DRS0195-000

   LUISE BACH CAUSEY ET AL    JM EXPLORATION CO., LLC      9/22/2001       346       1326774    LA    Ouachita
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
                      32         1326732          
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      
            32       1326732      

LA-DRS0196-000

   DINA L K ANTLEY ET AL    JM EXPLORATION CO., LLC      9/8/2001       32       1326732    LA    Ouachita

LA-DRS0197-000

   BREARD BONNETTE ET AL    JM EXPLORATION CO., LLC      9/8/2001       364       1326776    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            889       1326730      
            889       1326730      
            889       1326730      

LA-DRS0198-001

   ACHIEVERS INC ET AL    JM EXPLORATION CO., LLC      9/22/2001       889       1326730    LA    Ouachita
            886       1335494      
            886       1335494      
            886       1335494      
            886       1335494      
            886       1335494      
            886       1335494      
                      886         1335494          
            886       1335494      
            886       1335494      

LA-DRS0198-002

   JUANITA FAYE HARPER BAILEY ET AL    JM EXPLORATION CO., LLC      10/29/2001       886       1335494    LA    Ouachita
            54       1326733      
            54       1326733      
            54       1326733      
            54       1326733      
            54       1326733      
            54       1326733      
            54       1326733      

LA-DRS0199-000

   CHARLES ROY BENTLEY ET AL    JM EXPLORATION CO., LLC      9/22/2001       54       1326733    LA    Ouachita
            68       1326734      

LA-DRS0200-000

   ROBERT W BARNHILL ET AL    JM EXPLORATION CO., LLC      9/22/2001       68       1326734    LA    Ouachita
            75       1326735      

LA-DRS0201-000

   JIMMY W WILLIAMS ET AL    JM EXPLORATION CO., LLC      9/22/2001       75       1326735    LA    Ouachita
                      105         1326738          
            105       1326738      

LA-DRS0202-000

   CHLOTILE JOHNSON ET AL    JM EXPLORATION CO., LLC      9/22/2001       105       1326738    LA    Ouachita
            827       1335486      

LA-DRS0203-000

   CLYDE R BEAVER ET AL    JM EXPLORATION CO., LLC      10/29/2001       827       1335486    LA    Ouachita
            851       1335489      

LA-DRS0204-000

   WAYMAN L LACAS ET AL    JM EXPLORATION CO., LLC      10/29/2001       851       1335489    LA    Ouachita

LA-DRS0205-000

   RICHARD L ROGERS    JM EXPLORATION CO., LLC      10/29/2001       865       1335491    LA    Ouachita
            96       1326737      
            96       1326737      
            96       1326737      
            96       1326737      
            96       1326737      

LA-DRS0206-000

   HATTIE ELIZABETH ARCHIE ET AL    JM EXPLORATION CO., LLC      9/22/2001       96       1326737    LA    Ouachita

LA-DRS0207-000

   BROWN & LEE INC ET AL    JM EXPLORATION CO., LLC      9/22/2001       81       1326736    LA    Ouachita
            840       1335488      
            840       1335488      
            840       1335488      
            840       1335488      
            840       1335488      
                      840         1335488          
            840       1335488      
            840       1335488      

LA-DRS0208-000

   BENNIE J PARKER ET AL    JM EXPLORATION CO., LLC      10/29/2001       840       1335488    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            1       1335498      
            1       1335498      
            1       1335498      

LA-DRS0209-000

   JERRY ADAY ET AL    JM EXPLORATION CO., LLC      10/29/2001       1       1335498    LA    Ouachita
            10       1335499      
            10       1335499      

LA-DRS0210-000

   MANSFORD E PARKER ET AL    JM EXPLORATION CO., LLC      10/29/2001       10       1335499    LA    Ouachita
            37       1335503      
            37       1335503      
            37       1335503      
LA-DRS0211-000    ROGER DALE JONES ET AL    JM EXPLORATION CO., LLC    10/29/2001      37         1335503    LA    Ouachita

LA-DRS0212-000

   SARA EVON MOORE MCLEMORE ET VIR    JM EXPLORATION CO., LLC      10/29/2001       45       1335504    LA    Ouachita
            57       1335506      
            57       1335506      

LA-DRS0213-000

   JOHN R LAWSON ET AL    JM EXPLORATION CO., LLC      10/29/2001       57       1335506    LA    Ouachita

LA-DRS0214-000

   WESLEY F PIPES    JM EXPLORATION CO., LLC      10/29/2001       70       1335508    LA    Ouachita

LA-DRS0215-000

   LORETTA MILES BAILEY ET AL    JM EXPLORATION CO., LLC      9/8/2001       112       1326739    LA    Ouachita
            909       1335496      
            909       1335496      

LA-DRS0216-000

   TOLLIE E BAUGH ET AL    JM EXPLORATION CO., LLC      10/29/2001       909       1335496    LA    Ouachita
            879       1335493      
            879       1335493      

LA-DRS0217-000

   DOUGLAS E BAKER ET AL    JM EXPLORATION CO., LLC      10/29/2001       879       1335493    LA    Ouachita
            870       1335492      
            870       1335492      
            870       1335492      
LA-DRS0218-000    PAUL M LUBOFSKY ET AL    JM EXPLORATION CO., LLC    10/29/2001      870         1335492    LA    Ouachita

LA-DRS0219-000

   MILDRED CAUGHLIN    JM EXPLORATION CO., LLC      10/10/2001       867       1327209    LA    Ouachita
            76       1335509      
            76       1335509      
            76       1335509      
            76       1335509      
            76       1335509      
            76       1335509      
            76       1335509      
            76       1335509      

LA-DRS0220-000

   LESTER W NICHOLS ET AL    JM EXPLORATION CO., LLC      10/29/2001       76       1335509    LA    Ouachita

LA-DRS0221-000

   SHARON DENISE JOHNSON    JM EXPLORATION CO., LLC      10/29/2001       64       1335507    LA    Ouachita

LA-DRS0222-000

   HERBERT MERLIN CADY    JM EXPLORATION CO., LLC      11/28/2001       53       1333006    LA    Ouachita
            858       1335490      

LA-DRS0223-000

   WILLIAM O WELCH ET AL    JM EXPLORATION CO., LLC      10/29/2001       858       1335490    LA    Ouachita

LA-DRS0224-000

   JAMES WALTER PARROTT    JM EXPLORATION CO., LLC      10/29/2001       834       1335487    LA    Ouachita
            917       1335497      

LA-DRS0225-000

   THERESA MCDONALD ET AL    JM EXPLORATION CO., LLC      10/29/2001       917       1335497    LA    Ouachita

LA-DRS0226-000

   INTEGRA ENTERPRISES LLC    JM EXPLORATION CO LLC      10/29/2001       26       1335501    LA    Ouachita
            31       1335502      
LA-DRS0227-000    JAMES F WELCH ET AL    JM EXPLORATION CO., LLC    10/29/2001      31         1335502    LA    Ouachita

LA-DRS0228-000

   LINDA ANN MITCHELL HUTSON    JM EXPLORATION CO., LLC      10/29/2001       51       1335505    LA    Ouachita

LA-DRS0229-000

   WILLIE MUSE ET UX    JM EXPLORATION CO., LLC      11/1/2001       910       1332991    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            17       1335500      
            17       1335500      
            17       1335500      
            17       1335500      

LA-DRS0230-000

   DWAIN SUTTON ET AL    JM EXPLORATION CO., LLC      12/10/2001       17       1335500    LA    Ouachita

LA-DRS0231-000

   VERA K WILLIAMSON    FIRESIDE OIL AND GAS, INC.      9/26/2001       701       1324878    LA    Ouachita

LA-DRS0232-000

   EDWARD LAMAR HEMPHILL ET UX    FIRESIDE OIL AND GAS, INC.      9/26/2001       703       1324879    LA    Ouachita

LA-DRS0233-000

   SUMMIT CONSTRUCTION INC    FIRESIDE OIL AND GAS, INC.      9/26/2001       708       1324880    LA    Ouachita

LA-DRS0234-000

   J & P INC    FIRESIDE OIL AND GAS, INC.      9/26/2001       712       1324881    LA    Ouachita

LA-DRS0235-000

   OBIOLINE HIGHTOWER PARHAM ET VIR    FIRESIDE OIL AND GAS INC      9/27/2001       717       1324882    LA    Ouachita
LA-DRS0236-000    JERRY WAYNE CASCIO    FIRESIDE OIL AND GAS, INC.    10/1/2001      720         1324883    LA    Ouachita

LA-DRS0237-000

   GENE ELDRA BROOM    FIRESIDE OIL AND GAS, INC.      10/3/2001       725       1324884    LA    Ouachita

LA-DRS0238-000

   KENNETH R HILL JR ET UX    FIRESIDE OIL AND GAS, INC.      10/3/2001       728       1324885    LA    Ouachita

LA-DRS0239-000

   CECIL H SMITH ET UX    FIRESIDE OIL AND GAS, INC.      10/4/2001       731       1324886    LA    Ouachita

LA-DRS0240-000

   MAGGIE WILLOWDENE MCMILLIAN    FIRESIDE OIL AND GAS, INC.      10/6/2001       734       1324887    LA    Ouachita

LA-DRS0241-000

   C ROY BUILDERS INC    FIRESIDE OIL AND GAS, INC.      10/11/2001       123       1325198    LA    Ouachita

LA-DRS0242-000

   LONNIE VINCENT TRICHELL    FIRESIDE OIL AND GAS, INC.      10/10/2001       126       1325199    LA    Ouachita

LA-DRS0243-000

   WILLIAM MARVIN SPILLERS ET UX    FIRESIDE OIL AND GAS, INC.      10/8/2001       158       1325244    LA    Ouachita

LA-DRS0244-000

   BETTY IVEY GARTMAN    JM EXPLORATION CO, LLC      10/29/2001       900       1335495    LA    Ouachita

LA-DRS0245-000

   SAFE INVESTMENTS INC    FIRESIDE OIL AND GAS INC      10/23/2001       357       1326201    LA    Ouachita

LA-DRS0246-000

   HENRY LAVELLE MURPHY ET UX    FIRESIDE OIL AND GAS, INC.      10/22/2001       360       1326202    LA    Ouachita

LA-DRS0247-000

   MARGUERITE YOUNG ANDERSON    JM EXPLORATION CO, LLC      10/20/2001       92       1325984    LA    Ouachita

LA-DRS0248-000

   CLAUDELL BEENE ET UX    JM EXPLORATION CO, LLC      10/20/2001       96       1325985    LA    Ouachita

LA-DRS0249-000

   J S BELL ET UX    JM EXPLORATION CO, LLC      10/20/2001       100       1325986    LA    Ouachita

LA-DRS0250-000

   ROBERT G BENCH ST ET UX    JM EXPLORATION CO, LLC      10/10/2001       104       1325987    LA    Ouachita

LA-DRS0251-000

   AUDREY MAE BONDS    JM EXPLORATION CO, LLC      10/10/2001       213       1326759    LA    Ouachita
LA-DRS0252-000    CAROLYN SEA COON ET VIR    JM EXPLORATION CO, LLC    10/20/2001      108         1325988    LA    Ouachita

LA-DRS0253-000

   DONNIE E DAWSON ET UX    JM EXPLORATION CO, LLC      10/13/2001       9       1329044    LA    Ouachita

LA-DRS0254-000

   B T DEAN    JM EXPLORATION CO, LLC      10/20/2001       116       1325990    LA    Ouachita

LA-DRS0255-000

   SAM LUSTER FARMER ET UX    JM EXPLORATION CO, LLC      10/20/2001       161       1326001    LA    Ouachita

LA-DRS0256-000

   EARL FARRIS ET UX    JM EXPLORATION CO, LLC      10/20/2001       217       1326760    LA    Ouachita

LA-DRS0257-000

   LINDA JEAN HENNING    JM EXPLORATION CO, LLC      10/10/2001       703       1325771    LA    Ouachita

LA-DRS0258-000

   ROBERT JENKINS ESTATE    JM EXPLORATION CO, LLC      10/10/2001       715       1325774    LA    Ouachita

LA-DRS0259-000

   GLENN TODD JENKINS    JM EXPLORATION CO, LLC      10/10/2001       707       1325772    LA    Ouachita

LA-DRS0260-000

   JIMMY LEE JENKINS ET UX    JM EXPLORATION CO, LLC      10/10/2001       145       1325997    LA    Ouachita

LA-DRS0261-000

   PANSY JENKINS    JM EXPLORATION CO, LLC      10/10/2001       711       1325773    LA    Ouachita

LA-DRS0262-000

   PLEAS JENKINS JR    JM EXPLORATION CO, LLC      10/10/2001       149       1325998    LA    Ouachita

LA-DRS0263-000

   J H P CONSTRUCTION CO INC    JM EXPLORATION CO LLC      10/11/2001       719       1325775    LA    Ouachita

LA-DRS0264-000

   JO ANN MARDIS JONES    JM EXPLORATION CO, LLC      10/10/2001       723       1325776    LA    Ouachita

LA-DRS0265-000

   JO ANN MARDIS JONES    JM EXPLORATION CO, LLC      10/15/2001       822       1327198    LA    Ouachita

LA-DRS0266-000

   SAMMY GENE KENNEDY ET UX    JM EXPLORATION CO, LLC      10/10/2001       727       1325777    LA    Ouachita

LA-DRS0267-000

   LOUISE WILLIAMS LEE    JM EXPLORATION CO, LLC      10/20/2001       221       1326761    LA    Ouachita

LA-DRS0268-000

   VIRGINIA MAYES ET AL    JM EXPLORATION CO, LLC      10/31/2001       25       1329048    LA    Ouachita

LA-DRS0269-000

   ODESSA MILLS    JM EXPLORATION CO, LLC      10/20/2001       169       1326003    LA    Ouachita

LA-DRS0270-000

   ODESSA MILLS ET AL    JM EXPLORATION CO LLC      10/31/2001       469       1327840    LA    Ouachita

LA-DRS0271-000

   VANESSA MINNIEFIELD    JM EXPLORATION CO, LLC      10/20/2001       173       1326004    LA    Ouachita
LA-DRS0272-000    MARY ELIZABETH MORRIS    JM EXPLORATION CO, LLC    10/20/2001      177         1326005    LA    Ouachita

LA-DRS0273-000

   WILLIE MORRIES ET UX    JM EXPLORATION CO, LLC      10/20/2001       181       1326006    LA    Ouachita

LA-DRS0274-000

   OLCIE C OWENS    JM EXPLORATION CO, LLC      10/20/2001       189       1326008    LA    Ouachita

LA-DRS0275-000

   JOHN H PRUETT JR ET UX    JM EXPLORATION CO, LLC      10/11/2001       189       1326753    LA    Ouachita

LA-DRS0276-000

   LORETHA L ROBINSON    JM EXPLORATION CO, LLC      10/20/2001       477       1327842    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0277-000

   SAMARIA ALLEN ROBINSON    JM EXPLORATION CO, LLC      10/10/2001       193       1326009    LA    Ouachita

LA-DRS0278-000

   JEFFERY MITCHELL RUSHING ET UX    JM EXPLORATION CO, LLC      10/20/2001       197       1326010    LA    Ouachita

LA-DRS0279-000

   BENNERSON STAMPER ET UX    JM EXPLORATION CO, LLC      10/20/2001       185       1326752    LA    Ouachita

LA-DRS0280-000

   LEON W STEWART    JM EXPLORATION CO, LLC      11/6/2001       289       1328319    LA    Ouachita

LA-DRS0281-000

   EDDIE TAYLOR ET UX    JM EXPLORATION CO, LLC      10/20/2001       205       1326012    LA    Ouachita

LA-DRS0282-000

   PATRICIA MANNING TOSTEN    JM EXPLORATION CO, LLC      10/20/2001       826       1327199    LA    Ouachita

LA-DRS0283-000

   JULIA ANN TRAYLOR    JM EXPLORATION CO, LLC      10/13/2001       831       1325802    LA    Ouachita

LA-DRS0284-000

   LEULLAR WADE ET VIR    JM EXPLORATION CO, LLC      10/20/2001       830       1327200    LA    Ouachita

LA-DRS0285-000

   GEORGE WASHINGTON ET UX    JM EXPLORATION CO, LLC      10/20/2001       821       1335485    LA    Ouachita

LA-DRS0286-000

   MATTHEW WILLIAMS ET AL    JM EXPLORATION CO, LLC      10/10/2001       835       1325803    LA    Ouachita
LA-DRS0287-000    THOMAS L WILLIAMS    JM EXPLORATION CO, LLC    10/10/2001      424         1327829    LA    Ouachita

LA-DRS0288-000

   MAGDALEAN WOODS YOUNG    JM EXPLORATION CO, LLC      10/22/2001       225       1326762    LA    Ouachita

LA-DRS0289-000

   JAMES HAROLD DEAN    JM EXPLORATION CO, LLC      11/8/2001       313       1328325    LA    Ouachita

LA-DRS0290-000

   MAXINE HAMILTON WILLIAMS HARRIS    JM EXPLORATION CO, LLC      10/20/2001       886       1327213    LA    Ouachita

LA-DRS0291-000

   ETHEL MAE GRAY HINES    JM EXPLORATION CO, LLC      10/31/2001       17       1329046    LA    Ouachita

LA-DRS0292-000

   GERALD GLENN HOGARD ET UX    JM EXPLORATION CO, LLC      10/20/2001       317       1328326    LA    Ouachita

LA-DRS0293-000

   VIVIAN C RANEY    JM EXPLORATION CO, LLC      10/20/2001       321       1328327    LA    Ouachita

LA-DRS0294-000

   SIEGLE COMMUNITY BAPTIST CHURCH INC    JM EXPLORATION CO, LLC      10/30/2001       325       1328328    LA    Ouachita

LA-DRS0295-000

   HOUSTON HINES ET UX    JM EXPLORATION CO, LLC      11/19/2001       21       1329047    LA    Ouachita

LA-DRS0296-000

   JIM HALL    JM EXPLORATION CO, LLC      10/10/2001       452       1327836    LA    Ouachita

LA-DRS0297-000

   JESUS HOUSE OF PRAYER    JM EXPLORATION CO, LLC      11/16/2001       28       1333000    LA    Ouachita

LA-DRS0298-000

   DAVPORT CO INC    JM EXPLORATION CO, LLC      11/8/2001       61       1333008    LA    Ouachita

LA-DRS0299-001

   FELICIA D MANNING    JM EXPLORATION CO, LLC      12/27/2001       84       1333013    LA    Ouachita

LA-DRS0299-002

   JANET WILSON    JM EXPLORATION CO, LLC      12/27/2001       76       1333011    LA    Ouachita

LA-DRS0299-003

   LEON WILSON    JM EXPLORATION CO, LLC      12/27/2001       80       1333012    LA    Ouachita

LA-DRS0300-000

   ANGELA SAMUELS    JM EXPLORATION CO, LLC      12/7/2001       803       1335481    LA    Ouachita
LA-DRS0301-000    SAN-TECH INC    JM EXPLORATION CO, LLC    10/10/2001      807         1335482    LA    Ouachita

LA-DRS0302-000

   JAMES MARVIN BRASHER    JM EXPLORATION CO, LLC      10/24/2001       177       1326750    LA    Ouachita

LA-DRS0303-000

   JOYCE BECKTON COLE    JM EXPLORATION CO, LLC      9/28/2001       661       1325761    LA    Ouachita

LA-DRS0304-000

   CECIL GLEASON COPELAND    JM EXPLORATION CO, LLC      9/28/2001       665       1325762    LA    Ouachita

LA-DRS0305-000

   LEANDREW CYRUS    JM EXPLORATION CO, LLC      10/22/2001       181       1326751    LA    Ouachita

LA-DRS0306-000

   MARY LOUS CYRUS    JM EXPLORATION CO, LLC      10/22/2001       818       1327197    LA    Ouachita

LA-DRS0307-000

   LARRY EUGENE EVANS ET UX    JM EXPLORATION CO, LLC      9/28/2001       687       1325767    LA    Ouachita

LA-DRS0308-000

   JAMES COY FORD ET UX    JM EXPLORATION CO, LLC      9/28/2001       699       1325770    LA    Ouachita

LA-DRS0309-000

   EDGAR CLEO LAMBERT ET UX    JM EXPLORATION CO, LLC      10/8/2001       731       1325778    LA    Ouachita

LA-DRS0310-000

   RALPH E MAGOURIK ET UX    JM EXPLORATION CO, LLC      9/12/2001       743       1325781    LA    Ouachita

LA-DRS0311-000

   HARRY LEROY MCLAUGHLIN ET UX    JM EXPLORATION CO, LLC      9/25/2001       760       1325785    LA    Ouachita

LA-DRS0312-000

   BOBBIE MOSS    JM EXPLORATION CO, LLC      9/28/2001       816       1335484    LA    Ouachita

LA-DRS0313-000

   ALFRED JAMES RICKMAN ET UX    JM EXPLORATION CO, LLC      9/28/2001       781       1325790    LA    Ouachita

LA-DRS0314-000

   LONNIE BERNARD SMITH SR    JM EXPLORATION CO, LLC      9/28/2001       803       1325795    LA    Ouachita

LA-DRS0315-000

   ST JOSEPH BAPTIST CHURCH OF WEST MONROE    JM EXPLORATION CO, LLC      9/28/2001       811       1325797    LA    Ouachita

LA-DRS0316-000

   BUSTER WOODS ESTATE ET AL    JM EXPLORATION CO, LLC      9/28/2001       843       1325805    LA    Ouachita

LA-DRS0317-000

   STARDUST ENTERPRISES LLC    JM EXPLORATION CO, LLC      10/31/2001       29       1329049    LA    Ouachita

LA-DRS0318-000

   PAMELA SUE RICE ALBRITTON    JM EXPLORATION CO, LLC      10/10/2001       209       1326758    LA    Ouachita

LA-DRS0319-000

   JIMMY LEE ARMSTRONG    JM EXPLORATION CO, LLC      11/8/2001       277       1328316    LA    Ouachita

LA-DRS0320-000

   PAULINE M AVANT    JM EXPLORATION CO, LLC      10/20/2001       197       1326755    LA    Ouachita
LA-DRS0321-000    GENEIVA S BANKSTON    JM EXPLORATION CO, LLC    10/31/2001      890         1327214    LA    Ouachita

LA-DRS0322-000

   CLYDE RAYMOND BEAVER    JM EXPLORATION CO, LLC      10/10/2001       633       1325754    LA    Ouachita

LA-DRS0323-000

   ADDIE JEAN PITHER BEAVERS    JM EXPLORATION CO, LLC      10/10/2001       637       1325755    LA    Ouachita

LA-DRS0324-000

   ROBERT G BENCH ET UX    JM EXPLORATION CO, LLC      10/10/2001       641       1325756    LA    Ouachita

LA-DRS0325-000

   JOSEPH A BOUWELL ET UX    JM EXPLORATION CO, LLC      10/10/2001       645       1325757    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0326-000

   SANDRA LEWIS BRISTER    JM EXPLORATION CO, LLC      10/10/2001       444       1327834    LA    Ouachita

LA-DRS0327-000

   WAYNE S BUSH ET UX    JM EXPLORATION CO, LLC      10/10/2001       432       1327831    LA    Ouachita

LA-DRS0328-000

   OUIDA CADY    JM EXPLORATION CO, LLC      10/20/2001       838       1327202    LA    Ouachita

LA-DRS0329-000

   OLA J CONRAD    JM EXPLORATION CO, LLC      10/11/2001       205       1326757    LA    Ouachita

LA-DRS0330-000

   DEVA ROBINSON CONVILLE    JM EXPLORATION CO, LLC      10/24/2001       871       1327210    LA    Ouachita

LA-DRS0331-000

   EDNA F SPELL CRAWFORD    JM EXPLORATION CO, LLC      10/10/2001       112       1325989    LA    Ouachita

LA-DRS0332-000

   FRANCIS E DEVILLIER ET UX    JM EXPLORATION CO, LLC      10/10/2001       120       1325991    LA    Ouachita

LA-DRS0333-000

   GREGORY STEPHEN FLEMISTER ET UX    JM EXPLORATION CO, LLC      10/10/2001       695       1325769    LA    Ouachita

LA-DRS0334-000

   PATSY GATES HICKS    JM EXPLORATION CO, LLC      10/10/2001       448       1327835    LA    Ouachita

LA-DRS0335-000

   CLAUDE ROBERT HOBGOOD JR    JM EXPLORATION CO, LLC      10/24/2001       428       1327830    LA    Ouachita
LA-DRS0336-000    JAMES H JINKS ET UX    JM EXPLORATION CO, LLC    10/10/2001      842         1327203    LA    Ouachita

LA-DRS0337-000

   JAMES KENT JINKS    JM EXPLORATION CO, LLC      10/10/2001       456       1327837    LA    Ouachita

LA-DRS0338-000

   LARHONDA RENEE WALKER LENARD    JM EXPLORATION CO, LLC      10/20/2001       193       1326754    LA    Ouachita

LA-DRS0339-000

   WILBUR R LEWELLYAN ET UX    JM EXPLORATION CO, LLC      10/20/2001       846       1327204    LA    Ouachita

LA-DRS0340-000

   WILLIAM V MCKINLEY ET UX    JM EXPLORATION CO, LLC      10/10/2001       834       1327201    LA    Ouachita

LA-DRS0341-000

   HERMAN EUGENE MCLAIN ET UX    JM EXPLORATION CO, LLC      11/7/2001       285       1328318    LA    Ouachita

LA-DRS0342-001

   PATRICIA ANN POWELL    JM EXPLORATION CO, LLC      10/10/2001       145       1326743    LA    Ouachita

LA-DRS0342-002

   BILLIE SUE MEREDITH    JM EXPLORATION CO, LLC      12/3/2001       32       1333001    LA    Ouachita

LA-DRS0343-000

   TODD ALLEN RISLEY ET UX    JM EXPLORATION CO, LLC      9/25/2001       785       1325791    LA    Ouachita

LA-DRS0344-000

   TROY SMITH ET UX    JM EXPLORATION CO, LLC      10/20/2001       201       1326011    LA    Ouachita

LA-DRS0345-000

   JAMES EDWARD STRAHAN    JM EXPLORATION CO, LLC      10/22/2001       464       1327839    LA    Ouachita

LA-DRS0346-000

   CARLTON C TRAWEEK ET UX    JM EXPLORATION CO, LLC      10/20/2001       201       1326756    LA    Ouachita

LA-DRS0347-000

   MALCOLM GLENN WILLIAMS ET UX    JM EXPLORATION CO, LLC      10/29/2001       850       1327205    LA    Ouachita

LA-DRS0348-001

   RALPH W WOOLSEY    JM EXPLORATION CO, LLC      10/24/2001       293       1328320    LA    Ouachita

LA-DRS0349-000

   MARGARET ANN BUTLER WYLES    JM EXPLORATION CO, LLC      10/24/2001       436       1327832    LA    Ouachita

LA-DRS0350-000

   BOBBY R EAKER ET UX    JM EXPLORATION CO, LLC      10/24/2001       13       1329045    LA    Ouachita
LA-DRS0351-000    DONALD W HAMMETT ET UX    JM EXPLORATION CO, LLC    10/10/2001      273         1328315    LA    Ouachita

LA-DRS0352-000

   ELEANOR RUTH WILEY WHITLOCK    JM EXPLORATION CO, LLC      11/13/2001       38       1329051    LA    Ouachita

LA-DRS0353-000

   BILLY W SANDERS ET UX    JM EXPLORATION CO, LLC      10/10/2001       460       1327838    LA    Ouachita

LA-DRS0354-000

   MELINDA ARLETHA CROMWELL BARTON    JM EXPLORATION CO, LLC      10/24/2001       5       1329043    LA    Ouachita

LA-DRS0355-000

   LEANNE STUCKEY    JM EXPLORATION CO, LLC      10/10/2001       34       1329050    LA    Ouachita

LA-DRS0356-000

   KV INDUSTRIES INC    JM EXPLORATION CO, LLC      11/16/2001       23       1332999    LA    Ouachita

LA-DRS0357-000

   BROWNVILLE BAPTIST CHURCH INC    JM EXPLORATION CO, LLC      10/31/2001       40       1333003    LA    Ouachita

LA-DRS0358-000

   DONALD G MILBY ET UX    JM EXPLORATION CO, LLC      10/20/2001       45       1333004    LA    Ouachita

LA-DRS0359-001

   MELINDA ARLETHA CROMWELL BARTON    JM EXPLORATION CO, LLC      12/11/2001       914       1332992    LA    Ouachita

LA-DRS0360-000

   WILLIAM LARRY COLE    JM EXPLORATION CO, LLC      11/14/2001       906       1332990    LA    Ouachita

LA-DRS0361-001

   EDNA F SPELL CRAWFORD ET AL    JM EXPLORATION CO, LLC      12/3/2001       1       1332994    LA    Ouachita

LA-DRS0361-002

   SANDRA SPELL FROST SUMRALL    JM EXPLORATION CO, LLC      12/27/2001       795       1335479    LA    Ouachita

LA-DRS0361-003

   W E SUMRALL JR    JM EXPLORATION CO, LLC      1/21/2002       812       1335483    LA    Ouachita

LA-DRS0362-000

   GREATER OUACHITA WATER CO    JM EXPLORATION CO, LLC      10/24/2001       19       1332998    LA    Ouachita

LA-DRS0363-000

   DAVID W HALL ET UX    JM EXPLORATION CO, LLC      12/3/2001       918       1332993    LA    Ouachita

LA-DRS0364-000

   LESSIE ELAINE HOOTER ARROWOOD    JM EXPLORATION CO, LLC      10/10/2001       629       1325753    LA    Ouachita

LA-DRS0365-000

   FLOYD E BENNETT    JM EXPLORATION CO, LLC      10/15/2001       485       1327844    LA    Ouachita

LA-DRS0366-000

   RANDY JOE BRANCH ET UX    JM EXPLORATION CO, LLC      10/10/2001       649       1325758    LA    Ouachita

LA-DRS0367-000

   BEATRICE LOUISE BRISTER    JM EXPLORATION CO, LLC      10/15/2001       173       1326749    LA    Ouachita

LA-DRS0368-000

   RAYMOND ALBERT CAGLE ET UX    JM EXPLORATION CO, LLC      10/20/2001       859       1327207    LA    Ouachita
LA-DRS0369-000    DARRELL WAYNE CARAWAY ET
UX
   JM EXPLORATION CO, LLC    10/10/2001      653         1325759    LA    Ouachita

LA-DRS0370-000

   GLEN B CLOYD    JM EXPLORATION CO, LLC      10/10/2001       657       1325760    LA    Ouachita

LA-DRS0371-000

   VIRGINIA GAIL THOMAS COX    JM EXPLORATION CO, LLC      10/10/2001       669       1325763    LA    Ouachita

LA-DRS0372-000

   HOMER K CRAIG ET UX    JM EXPLORATION CO, LLC      10/10/2001       673       1325764    LA    Ouachita

LA-DRS0373-001

   ALVIN LEE DAUGHERTY    JM EXPLORATION CO, LLC      10/20/2001       481       1327843    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0373-002

   SHIRLEY HILL DAUGHERTY    JM EXPLORATION CO, LLC      10/20/2001       281       1328317    LA    Ouachita

LA-DRS0374-000

   ANNIE RUTH DUFFY    JM EXPLORATION CO, LLC      10/2/2001       678       1325765    LA    Ouachita

LA-DRS0375-000

   JOHN KENNETH DUNN JR ET UX    JM EXPLORATION CO, LLC      10/15/2001       124       1325992    LA    Ouachita

LA-DRS0376-000

   DAVID GENE EVANS ET UX    JM EXPLORATION CO, LLC      10/10/2001       682       1325766    LA    Ouachita

LA-DRS0377-000

   DANNY GENE FARNELL    JM EXPLORATION CO, LLC      10/20/2001       168       1326748    LA    Ouachita

LA-DRS0378-000

   JACK L FIEBELKORN    JM EXPLORATION CO, LLC      10/15/2001       128       1325993    LA    Ouachita

LA-DRS0379-000

   JAMES J FINLEY ET UX    JM EXPLORATION CO, LLC      10/12/2001       691       1325768    LA    Ouachita

LA-DRS0380-000

   REGENA C GLASCOCK    JM EXPLORATION CO, LLC      10/20/2001       132       1325994    LA    Ouachita

LA-DRS0381-000

   HANSFORD T HAIR ET UX    JM EXPLORATION CO, LLC      10/15/2001       137       1326741    LA    Ouachita

LA-DRS0382-000

   MICHAEL GLENDON HOLTON    JM EXPLORATION CO, LLC      10/10/2001       863       1327208    LA    Ouachita
LA-DRS0383-000    OLIVER L HOWARD ET UX    JM EXPLORATION CO, LLC    10/20/2001      136         1325995    LA    Ouachita

LA-DRS0384-000

   J & H MOBILE HOME PARK LLC    JM EXPLORATION CO, LLC      10/20/2001       141       1325996    LA    Ouachita

LA-DRS0385-000

   TRAVIS L JOHNSTON    JM EXPLORATION CO, LLC      10/15/2001       153       1325999    LA    Ouachita

LA-DRS0386-000

   TRAVIS L JOHNSTON ET AL    JM EXPLORATION CO LLC      10/20/2001       157       1326000    LA    Ouachita

LA-DRS0387-000

   MILDRED BAMBURG KANE    JM EXPLORATION CO, LLC      10/15/2001       160       1326746    LA    Ouachita

LA-DRS0388-000

   LARRY L LAWSON ET UX    JM EXPLORATION CO, LLC      10/20/2001       165       1326002    LA    Ouachita

LA-DRS0389-000

   GERTRUDE LONG    JM EXPLORATION CO, LLC      10/2/2001       735       1325779    LA    Ouachita

LA-DRS0390-000

   MATTIE LOU PRICE LONG    JM EXPLORATION CO, LLC      10/10/2001       739       1325780    LA    Ouachita

LA-DRS0391-000

   OLIVER H LOWERY ET UX    JM EXPLORATION CO, LLC      10/2/2001       141       1326742    LA    Ouachita

LA-DRS0392-000

   DOROTHY FAYE TRICHELL MATHESON    JM EXPLORATION CO, LLC      10/20/2001       473       1327841    LA    Ouachita

LA-DRS0393-000

   BEVERLY JEAN SLATON MAY    JM EXPLORATION CO, LLC      10/10/2001       748       1325782    LA    Ouachita

LA-DRS0394-000

   JIMMY DALE MAY ET UX    JM EXPLORATION CO, LLC      10/8/2001       752       1325783    LA    Ouachita

LA-DRS0395-000

   JIMMY RAY MAY ET UX    JM EXPLORATION CO, LLC      10/8/2001       756       1325784    LA    Ouachita

LA-DRS0396-000

   CARLOUS C MORRIS ET UX    JM EXPLORATION CO, LLC      10/2/2001       765       1325786    LA    Ouachita

LA-DRS0397-000

   NANCY INEZ DYE MOSS    JM EXPLORATION CO, LLC      10/20/2001       152       1326744    LA    Ouachita

LA-DRS0398-000

   MARSHALL RAY OLIVEAUX    JM EXPLORATION CO, LLC      10/20/2001       881       1327212    LA    Ouachita
                      185         1326007          

LA-DRS0399-001

   DEWITT J OWENS    JM EXPLORATION CO, LLC      10/20/2001       185       1326007    LA    Ouachita

LA-DRS0399-002

   MARY SUE P OWENS SLOCUM    JM EXPLORATION CO, LLC      11/1/2001       440       1327833    LA    Ouachita

LA-DRS0400-000

   MICHAEL STEPHEN PARKER ET UX    JM EXPLORATION CO, LLC      10/2/2001       773       1325788    LA    Ouachita

LA-DRS0401-000

   BEN ERNEST PARROTT ET UX    JM EXPLORATION CO, LLC      10/15/2001       876       1327211    LA    Ouachita

LA-DRS0402-000

   HAROLD SPILLERS ET UX    JM EXPLORATION CO, LLC      10/10/2001       229       1326763    LA    Ouachita

LA-DRS0403-001

   STACY S SMITH    JM EXPLORATION CO, LLC      10/22/2001       855       1327206    LA    Ouachita

LA-DRS0404-000

   JESSIE CLAYTON SEPULVEDA SR ET UX    JM EXPLORATION CO, LLC      10/10/2001       794       1325793    LA    Ouachita

LA-DRS0405-000

   ROLAND J THOMAS ET UX    JM EXPLORATION CO, LLC      10/10/2001       819       1325799    LA    Ouachita

LA-DRS0406-000

   J H THRASHER ET UX    JM EXPLORATION CO, LLC      10/10/2001       823       1325800    LA    Ouachita

LA-DRS0407-000

   TRAVIS DORMA TOLBIRD ET UX    JM EXPLORATION CO, LLC      10/15/2001       827       1325801    LA    Ouachita

LA-DRS0408-001

   LOUIS HOWARD TRICHEL ET AL    JM EXPLORATION CO, LLC      10/2/2001       133       1326740    LA    Ouachita

LA-DRS0409-000

   SYBOL GIBSON WHITLOCK    JM EXPLORATION CO, LLC      10/10/2001       209       1326013    LA    Ouachita

LA-DRS0410-000

   SHIRLEY JEAN MAYES WILLIAMS    JM EXPLORATION CO, LLC      10/20/2001       156       1326745    LA    Ouachita

LA-DRS0411-000

   JOHN RANDALL WILLINGHAM ET UX    JM EXPLORATION CO, LLC      10/10/2001       839       1325804    LA    Ouachita

LA-DRS0412-000

   BERNITA FERN COX WORLEY ET VIR    JM EXPLORATION CO, LLC      10/20/2001       847       1325806    LA    Ouachita

LA-DRS0413-000

   MARIE ARRANT JOHNSON YEAGER    JM EXPLORATION CO, LLC      10/15/2001       164       1326747    LA    Ouachita

LA-DRS0414-000

   VIRGINIA EARLINE WILLIS ALLEN    JM EXPLORATION CO, LLC      11/13/2001       1       1329042    LA    Ouachita

LA-DRS0415-000

   CCT INVESTMENTS INC    JM EXPLORATION CO, LLC      10/20/2001       297       1328321    LA    Ouachita

LA-DRS0416-001

   KATHLEEN ANN WROTON ET AL    JM EXPLORATION CO, LLC      11/13/2001       42       1329052    LA    Ouachita
LA-DRS0416-002    MAX WROTEN JR    JM EXPLORATION CO, LLC    11/16/2001      46         1329053    LA    Ouachita

LA-DRS0417-000

   HELEN KOLOKOURIS    JM EXPLORATION CO, LLC      10/15/2001       301       1328322    LA    Ouachita

LA-DRS0418-000

   BILLY JOE D REEVES    JM EXPLORATION CO, LLC      10/15/2001       305       1328323    LA    Ouachita

LA-DRS0419-000

   DONALD RAY REEVES ET UX    JM EXPLORATION CO, LLC      10/20/2001       309       1328324    LA    Ouachita

LA-DRS0420-000

   JAMES RICAHRD MOORE ET UX    JM EXPLORATION CO, LLC      10/10/2001       57       1333007    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0421-000

   JOSEPH BRADLEY EMERY JR ET UX    JM EXPLORATION CO, LLC      10/20/2001       49       1333005    LA    Ouachita

LA-DRS0422-000

   LETHA ANN DUCHESNE SMITH    JM EXPLORATION CO, LLC      10/8/2001       798       1325794    LA    Ouachita

LA-DRS0423-000

   NELLIE IRENE ADAMS SPIKES    JM EXPLORATION CO, LLC      10/10/2001       807       1325796    LA    Ouachita

LA-DRS0424-000

   MARIE CALHOUN PILGRAM    JM EXPLORATION CO, LLC      10/10/2001       777       1325789    LA    Ouachita

LA-DRS0425-000

   SHELBY JEAN RUSSELL    JM EXPLORATION CO, LLC      10/2/2001       790       1325792    LA    Ouachita

LA-DRS0426-000

   GLEN RAY THOMAS ET UX    JM EXPLORATION CO, LLC      10/10/2001       815       1325798    LA    Ouachita

LA-DRS0427-000

   MICHAEL EUGENE CAMPBELL ET UX    JM EXPLORATION CO, LLC      10/10/2001       36       1333002    LA    Ouachita

LA-DRS0428-000

   OUACHITA LOCAL #654    JM EXPLORATION CO, LLC      10/15/2001       902       1332989    LA    Ouachita

LA-DRS0429-000

   JOHN D HUDLESTON    JM EXPLORATION CO, LLC      10/15/2001       15       1332997    LA    Ouachita

LA-DRS0430-000

   FRANKS RICKS SR    JM EXPLORATION CO, LLC      10/20/2001       11       1332996    LA    Ouachita
LA-DRS0431-000    BERT ANDING SR    JM EXPLORATION CO, LLC    12/11/2001      7         1332995    LA    Ouachita

LA-DRS0432-000

   RANDY L H HEMPHILL    JM EXPLORATION CO, LLC      10/15/2001       66       1333009    LA    Ouachita

LA-DRS0433-000

   KELLER CRAFT LEWIS SR ET UX    JM EXPLORATION CO, LLC      10/20/2001       88       1333014    LA    Ouachita

LA-DRS0434-000

   SHIRLEY JEAN MAYES WILLIAMS ET AL    JM EXPLORATION CO, LLC      10/29/2001       70       1333010    LA    Ouachita

LA-DRS0435-000

   WALLACE FROST    JM EXPLORATION CO, LLC      12/5/2001       799       1335480    LA    Ouachita
            235       1326764      

LA-DRS0436-000

   JACK RODNEY FORD ET AL    JM EXPLORATION CO, LLC      9/22/2001       235       1326764    LA    Ouachita
            243       1326765      
            243       1326765      
            243       1326765      

LA-DRS0437-000

   I & F ENTERPRISES LLC ET AL    JM EXPLORATION CO, LLC      9/22/2001       243       1326765    LA    Ouachita
            251       1326766      
            251       1326766      

LA-DRS0438-000

   DOROTHY ELIZABETH WRIGHT GEORGE ET AL    JM EXPLORATION CO, LLC      9/22/2001       251       1326766    LA    Ouachita
            260       1326767      
            260       1326767      
                      260         1326767          
            260       1326767      
            260       1326767      

LA-DRS0439-000

   DONNIS MARY H CHAVERS ET AL    JM EXPLORATION CO, LLC      9/22/2001       260       1326767    LA    Ouachita

LA-DRS0440-000

   KENNETH DELANE ALBRITTON ET AL    JM EXPLORATION CO, LLC      9/22/2001       270       1326768    LA    Ouachita

LA-DRS0441-000

   DAVID ASHCRAFT ET UX    FIRESIDE OIL & GAS, INC.      10/24/2001       423       1326275    LA    Ouachita

LA-DRS0442-000

   WEST HEIGHTS BAPTIST CHURCH INC    FIRESIDE OIL & GAS, INC      10/23/2001       253       1328305    LA    Ouachita

LA-DRS0443-000

   ROBERT C PILGREEN    FIRESIDE OIL & GAS, INC      10/30/2001       258       1328306    LA    Ouachita

LA-DRS0444-000

   DAVID ELLIS DELRIO    FIRESIDE OIL & GAS, INC      10/23/2001       260       1328307    LA    Ouachita

LA-DRS0445-000

   WYE ELECTRIC INC ET AL    JM EXPLORATION CO, LLC      9/22/2001       1       1326731    LA    Ouachita

LA-DRS0446-000

   BILLY FAY BRISTER ET UX    KCS MEDALLION RESOURCES INC      9/24/1997       1727       1223233    LA    Ouachita

LA-DRS0447-000

   DENNY D LAWRENCE ET UX    KCS MEDALLION RESOURCES INC      9/26/1997       1727       1223234    LA    Ouachita
      GOODRICH PETROLEUM COMPANY OF                  

LA-DRS0448-000

   GREATER OUACHITA WATER COMPANY    LOUISIANA      12/21/1998       1784       1275782    LA    Ouachita
      GOODRICH PETROLEUM COMPANY OF                  

LA-DRS0449-000

   TOBIAS N DANNA ET UX    LOUISIANA      2/9/2000       1786    289    1277739    LA    Ouachita
      GOODRICH PETROLEUM COMPANY OF                  

LA-DRS0450-000

   JOSEPH E DUPUY ET UX    LOUISIANA      10/29/1998       1747    684    1242403    LA    Ouachita
      GOODRICH PETROLEUM COMPANY OF                  

LA-DRS0451-000

   VERNON L MARTIN ET UX    LOUISIANA      12/8/1998       1750    395    1244748    LA    Ouachita
          GOODRICH PETROLEUM
COMPANY OF
                               

LA-DRS0452-000

   VINCENT F DANNA ET UX    LOUISIANA      2/8/2000       1786    271    1277734    LA    Ouachita
      GOODRICH PETROLEUM COMPANY OF                  

LA-DRS0453-000

   MILTON SMITH    LOUISIANA      12/9/1998       1750    399    1244749    LA    Ouachita


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County

LA-DRS0454-000

   JEANETTE WALL LEWIS AKA DAISY WALL LEWIS ET VIR    KCS RESOURCES INC      2/19/2005       1989    142    1433616    LA    Ouachita

LA-DRS0455-000

   MAXINE ELMORE ET AL    WILDHORSE RESOURCES, LLC.      6/1/2011       2266    769    1591483    LA    Ouachita
      ANGELLE & DONOHUE OIL & GAS                  

LA-WIL0001-001

   WARREN D RATCLIFF    PROPERTIES, INC      8/2/1995       61    887    157088    LA    Tensas

LA-WIL0002-001

   RUSSELL Y RATCLIFF JR ET AL    KCS RESOURCES, INC      3/14/1996       62    64    158241    LA    Tensas
      ANGELLE & DONOHUE OIL & GAS                  

LA-WIL0002-002

   WARREN D RATCLIFF    PROPERTIES, INC      8/2/1995       61    882    157087    LA    Tensas

LA-WIL0003-000

   PATRICIA CURRY BAGWELL ET VIR    KCS RESOURCES, INC      2/8/1996       62    41    158176    LA    Tensas
      ANGELLE & DONOHUE OIL & GAS                  

LA-WIL0004-001

   FRED W JAMES    PROPERTIES, INC      2/17/1995       61    332    156066    LA    Tensas
          ANGELLE & DONOHUE OIL & GAS                                

LA-WIL0004-002

   KATHERYN BERWICK    PROPERTIES, INC      2/16/1995       61    327    156065    LA    Tensas

LA-UNV0001-000

   WILLIAM O ROBERTS ET AL    TRITON OIL & GAS CORPORATION      6/21/1979       374    501       LA    Union

LA-CTV0001-001

   RUFUS B STINSON ET UX    HOOD PETROLEUM INC      10/11/2004       995    244    479175    LA    Webster
   MARY ALICE PRINCE HARMON INDIV & TRUSTEE                     

LA-CTV0001-002

   RALPH L HARMON TESTAMENTARY TRUST    HOOD PETROLEUM INC      10/11/2004       995    234    479173    LA    Webster

LA-CTV0002-000

   ROBERT F HARPER ET UX    HOOD PETROLEUM INC      10/11/2004       994    537    478918    LA    Webster

LA-CTV0003-000

   ALMA LYNN DAVIS HICKS    HOOD PETROLEUM INC      10/12/2004       994    528    478916    LA    Webster

LA-CTV0004-000

   TEDDIE LEE HANSON ET UX    SOUTHWIND ENERGY COMPANY      5/5/2005       996    570    479695    LA    Webster

LA-CTV0005-001

   ILA CUMMINGS WOODARD    HOOD PETROLEUM, INC.      10/11/2004       994    640    478942    LA    Webster

LA-CTV0006-001

   ROBERT PYLES ET UX    SOUTHWIND ENERGY COMPANY      12/20/2004       996    129    479496    LA    Webster

LA-CTV0006-002

   GEORGE W SHAW SR ET UX    SOUTHWIND ENERGY COMPANY      12/20/2004       996    133    479497    LA    Webster

LA-CTV0007-001

   MARY FRANCIS COLE TIDWELL RAWLS ET VIR    HOOD PETROLEUM, INC.      2/8/2005       994    550    478921    LA    Webster

LA-CTV0007-002

   EDWARD DEAN COLE ET UX    HOOD PETROLEUM, INC.      2/8/2005       994    554    478922    LA    Webster

LA-CTV0007-003

   ELTON FRANK COLE ET AL    HOOD PETROLEUM, INC.      2/8/2005       994    542    478919    LA    Webster

LA-CTV0007-004

   JAMES LEE COLE ET UX    HOOD PETROLEUM, INC.      2/8/2005       994    583    478929    LA    Webster
LA-CTV0007-005    DONNIE RAY COLE    CLAYTON WILLIAMS ENERGY,
INC.
   2/10/2008      1062    262    503566    LA    Webster

LA-CTV0007-006

   RONALD DUANE COLE    CLAYTON WILLIAMS ENERGY, INC.      3/3/2008       1062    271    503572    LA    Webster

LA-CTV0008-000

   GERTRUDE N HODGES    SOUTHWIND ENERGY COMPANY      2/7/2005       996    146    479500    LA    Webster

LA-CTV0009-000

   MARY JOAN BRUMLEY HART MILES S/P    SOUTHWIND ENERGY COMPANY      11/11/2004       996    150    479501    LA    Webster

LA-CTV0010-000

   CHARLES LEROY COLE ET UX    HOOD PETROLEUM, INC.      1/21/2005       994    595    478932    LA    Webster

LA-CTV0011-001

   RAYFORD L COLE ET AL    HOOD PETROLEUM, INC.      1/21/2005       994    612    478936    LA    Webster

LA-CTV0011-002

   MARY COLE    HOOD PETROLEUM, INC.      1/21/2005       994    496    478909    LA    Webster

LA-CTV0013-000

   ALBERT W COLE ET AL    SOUTHWIND ENERGY COMPANY      1/26/2005       996    137    479498    LA    Webster
            994    511    478912      

LA-CTV0014-001

   ROBERT DALE COLE ET UX    HOOD PETROLEUM, INC.      1/25/2005       994    511    478912    LA    Webster

LA-CTV0014-002

   DEBORAH COLE BOOKER    HOOD PETROLEUM, INC.      1/25/2005       994    506    478911    LA    Webster

LA-CTV0014-003

   BETTY COLE EVANS    HOOD PETROLEUM, INC.      1/25/2005       994    516    478913    LA    Webster

LA-CTV0016-000

   SONJA TERESA HART VILLARREAL    SOUTHWIND ENERGY COMPANY      1/17/2005       996    142    479499    LA    Webster
            1009    333    484488      
            1060    600    503044      
            1074    186    507535      
            1100    435    517272      
            1009    333    484488      
            1060    600    503044      
            1074    186    507535      
LA-CTV0017-003    RANDALL G HERBERT    SOUTHWIND ENERGY COMPANY    8/1/2005      1100    435    517272    LA    Webster


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            1009    303    484483      
            1060    610    503049      
            1074    164    507528      
            1085    750    511755      
            1100    441    517274      
            1102    199    517952      
            1100    447    517276      
            1102    210    517960      
            1009    303    484483      
   JEFFERY C HERBERT INDIV AND AGENT & A-I-F FOR          1060    610    503049      
   FRANK JOHN HERBERT, VALERIE DEE HERBERT, SARAH          1074    164    507528      
   ELIZABETH HERBERT          1085    750    511755      
   AGENT AND A-I-F FOR FRANK JOHN HERBERT          1100    441    517274      
   VALERIE DEE HERBERT          1102    199    517952      
   SARAH ELIZABETH HERBERT AND AS          1100    447    517276      

LA-CTV0017-004

   TRUSTEE OF THE JACOB JOSEPH BAKER TRUST    SOUTHWIND ENERGY COMPANY      8/1/2005       1102    210    517960    LA    Webster

LA-CTV0020-000

   JAMES L HOLTZCLAW ET UX    HOOD PETROLEUM, INC.      2/15/2006       1012    638    485366    LA    Webster

LA-CTV0021-001

   CHARLES THOMAS HAMMETT ET UX    HOOD PETROLEUM, INC.      6/16/2006       1020    239    488401    LA    Webster
   DALE MORTON AKA LAWRENCE DALE HOOVER                     

LA-CTV0022-000

   MORTON    HOOD PETROLEUM, INC.      6/20/2006       1020    252    488404    LA    Webster

LA-CTV0023-000

   DENNIS FLOWERS    HOOD PETROLEUM, INC.      6/22/2006       1021    182    488751    LA    Webster

LA-CTV0024-000

   EMALENE TODD ROBINS    HOOD PETROLEUM, INC.      7/17/2006       1025    616    490301    LA    Webster
   CORNERSTONE BAPTIST CHURCH OF COTTON VALLEY                     
   LOUISIANA                     
   A NON-PROFIT RELIGIOUS CORPORATION,                     
   REPRESENTED HEREIN BY ITS DULY AUTHORIZED                     

LA-CTV0025-000

   DIRECTOR, REV. FRANK A DELOACH    HOOD PETROLEUM, INC.      8/21/2006       1025    586    490295    LA    Webster

LA-CTV0026-001

   GEORGE W SHAW SR ET UX    CLAYTON WILLIAMS ENERGY, INC.      11/15/2007       1057    791    501885    LA    Webster

LA-CTV0026-002

   ROBERT PYLES ET UX    CLAYTON WILLIAMS ENERGY, INC.      11/15/2007       1057    799    501887    LA    Webster

LA-CTV0027-000

   SHERMAN W SINCLAIR JR ET UX    CLAYTON WILLIAMS ENERGY, INC.      1/4/2008       1057    795    501886    LA    Webster

LA-CTV0031-MIN

   DORIS COX BLANCHE    CLAYTON WILLIAMS ENERGY, INC.      8/3/2008       1071    383    506538    LA    Webster

LA-CTV0033-000

   CLAYTON M PARRISH    HOOD PETROLEUM INC      2/7/2005       994    600    478933    LA    Webster

LA-CTV0039-001

   FRANCES WALKER STEPHENS    CLAYTON WILLIAMS ENERGY INC      12/28/2005       1013    551    485726    LA    Webster

LA-CTV0039-002

   EDNA MAE WALKER POWELL    CLAYTON WILLIAMS ENERGY INC      12/28/2005       1013    505    485714    LA    Webster

LA-CTV0039-003

   DONALD E WALKER    CLAYTON WILLIAMS ENERGY INC      12/14/2005       1013    502    485713    LA    Webster

LA-CTV0039-004

   BURNIS L WALKER    CLAYTON WILLIAMS ENERGY INC      12/14/2005       1013    499    485712    LA    Webster

LA-CTV0039-005

   BELVE FRANKLIN WALKER    CLAYTON WILLIAMS ENERGY INC      12/14/2005       1013    496    485711    LA    Webster

LA-CTV0039-006

   BERNICE WALKER ANDREWS    CLAYTON WILLIAMS ENERGY INC      12/14/2005       1013    493    485710    LA    Webster

LA-CTV0039-007

   CHARLES R MCBRIDE III    CLAYTON WILLIAMS ENERGY INC      12/14/2005       1013    487    485708    LA    Webster

LA-CTV0039-008

   CLYDE W MCBRIDE    CLAYTON WILLIAMS ENERGY INC      12/14/2005       1013    490    485709    LA    Webster

LA-CTV0040-000

   CHARLES S EADY    CLAYTON WILLIAMS ENERGY INC      1/18/2006       1013    476    485705    LA    Webster

LA-CTV0041-000

   MICHAEL SANFORD LAND ET UX    CLAYTON WILLIAMS ENERGY INC      1/18/2006       1013    473    485704    LA    Webster

LA-CTV0042-000

   DORIS ROBERTS SIMMONS    CLAYTON WILLIAMS ENERGY INC      1/19/2006       1013    467    485702    LA    Webster

LA-CTV0043-000

   JIMMIE MARGENE WINNINGHAM LIVELY    CLAYTON WILLIAMS ENERGY INC      5/15/2006       1018    811    487865    LA    Webster

LA-CTV0044-000

   CHARLES STEVENS EADY    CLAYTON WILLIAMS ENERGY INC      5/17/2006       1020    75    488331    LA    Webster

LA-CTV0045-000

   BOYCE E SKAGGS JR ET AL    CLAYTON WILLIAMS ENERGY INC      10/9/2006       1027    600    490908    LA    Webster

LA-CTV0046-001

   EDITH TOLER YAO    CLAYTON WILLIAMS ENERGY INC      3/22/2007       1039    175    495083    LA    Webster

LA-CTV0047-000

   CHAD LEE HOLLOWAY ET UX    CLAYTON WILLIAMS ENERGY INC      7/1/2007       1046    705    497759    LA    Webster

LA-CTV0048-001

   RACHEL LEE FOLSOM HOLLOWAY    CLAYTON WILLIAMS ENERGY INC      7/1/2007       1046    697    497757    LA    Webster
            1046    701    497758      

LA-CTV0048-002

   RICHARD LEE HOLLOWAY ET UX    CLAYTON WILLIAMS ENERGY INC      7/1/2007       1046    701    497758    LA    Webster


Lease No.    Lessor    Lessee    Lease date      Book    Page    Reference    ST    County
            1049    703    498931      

LA-CTV0048-003

   STEPHEN HENRY HOLLOWAY ET UX    CLAYTON WILLIAMS ENERGY INC      7/1/2007       1049    703    498931    LA    Webster

LA-CTV0049-001

   PATRICIA ELAINE HINTON    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    523    485719    LA    Webster

LA-CTV0049-002

   EMILIE SUSAN WATSON    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    519    485718    LA    Webster

LA-CTV0050-001

   JAMES CLYDE SPURLIN    CLAYTON WILLIAMS ENERGY INC      11/22/2005       1013    483    485707    LA    Webster

LA-CTV0050-002

   MARY LOUISE HINES HOLLAND ET AL    CLAYTON WILLIAMS ENERGY INC      11/22/2005       1013    479    485706    LA    Webster

LA-CTV0051-001

   HENRY G HOBBS ET UX    CLARK ENERGY COMPANY INC      10/12/2004       989    793    477399    LA    Webster
   MOLLIE HELEN HOLLOWAY SEWELL ESTATE          998    41    480215      

LA-CTV0051-002

   THEODORE HOLLOWAY ADMINSTRATOR    CLARK ENERGY COMPANY INC      7/19/2005       998    41    480215    LA    Webster

LA-CTV0051-003

   WILLIAM T BOWEN    CLAYTON WILLIAMS ENERGY INC      2/1/2006       1013    470    485703    LA    Webster

LA-CTV0051-004

   REBECCA RAE PERRYMAN MARTIN ET AL    CLAYTON WILLIAMS ENERGY INC      2/6/2006       1013    554    485727    LA    Webster

LA-CTV0051-005

   JUDY DEAN MARTIN RICE    CLAYTON WILLIAMS ENERGY INC      2/6/2006       1013    557    485728    LA    Webster

LA-CTV0051-006

   BRUCE EDWIN MARTIN    CLAYTON WILLIAMS ENERGY INC      2/6/2006       1013    560    485729    LA    Webster

LA-CTV0051-007

   GLASS PROPERTIES LLC    CLAYTON WILLIAMS ENERGY INC      3/1/2006       1018    822    487869    LA    Webster

LA-CTV0052-001

   HARRY LUTHER BROWN ET AL    CLAYTON WILLIAMS ENERGY INC      12/5/2005       1013    515    485717    LA    Webster

LA-CTV0052-002

   RUTH BARNELL BROWN EDWARDS    CLAYTON WILLIAMS ENERGY INC      12/5/2005       1013    511    485716    LA    Webster

LA-CTV0053-001

   DURWARD KENNETH STUTTS    CLAYTON WILLIAMS ENERGY INC      12/1/2005       1013    508    485715    LA    Webster

LA-CTV0053-002

   CECIL E RAMEY JR ET UX    CLAYTON WILLIAMS ENERGY INC      12/1/2005       1013    464    485701    LA    Webster
   MARY JUNE MCCLURE COYLE                     

LA-CTV0053-003

   DELTON BERNARD COYLE JR AGENT & A/I/F    CLAYTON WILLIAMS ENERGY INC      4/23/2007       1040    242    495504    LA    Webster

LA-CTV0054-001

   DOROTHY ELAINE VANCE ET AL    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    543    485724    LA    Webster

LA-CTV0054-002

   GARY EDWARD ROLLER    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    535    485722    LA    Webster

LA-CTV0055-001

   DOROTHY ELAINE VANCE ET AL    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    547    485725    LA    Webster

LA-CTV0055-002

   GARY EDWARD ROLLER    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    539    485723    LA    Webster

LA-CTV0056-001

   PATRICIA ELAINE HINTON    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    531    485721    LA    Webster

LA-CTV0056-002

   EMILIE SUSAN WATSON    CLAYTON WILLIAMS ENERGY INC      11/21/2005       1013    527    485720    LA    Webster

LA-CTV0057-000

   RICHARD A BARRON    CLAYTON WILLIAMS ENERGY INC      8/8/2006       1023    777    489720    LA    Webster

LA-CTV0058-000

   MURPHY BLUME HORTON    CLARK ENERGY COMPANY INC      11/17/2004       984    371    475074    LA    Webster
            960    364    465596      

LA-DKE0001-001

   BETTY LENNARD PATTERSON    KCS RESOURCES INC      9/9/2003       960    364    465596    LA    Webster
            961    315    466064      

LA-DKE0001-002

   LORENE RUTH LENNARD WARWICK ET AL    KCS RESOURCES INC      9/9/2003       961    315    466064    LA    Webster
            961    345    466070      

LA-DKE0001-003

   JENNIFER ROBIN LENNARD JONES    KCS RESOURCES INC      9/9/2003       961    345    466070    LA    Webster
            961    320    466065      
            961    320    466065      

LA-DKE0001-004

   RONALD RALPH LENNARD ET UX    KCS RESOURCES INC      9/9/2003       961    320    466065    LA    Webster
            961    330    466067      

LA-DKE0001-005

   MAURICE LENNARD BAIRD    KCS RESOURCES INC      9/9/2003       961    330    466067    LA    Webster

LA-DKE0001-006

   BRENDA KATHRYN LENNARD SLEDGE ET AL    KCS RESOURCES INC      9/9/2003       961961    325325    466066466066    LA    Webster

LA-DKE0001-007

   RICHARD MARK LENNARD ET UX    KCS RESOURCES INC      9/9/2003       961961    339339    466069466069    LA    Webster

LA-DKE0002-000

   TOM SALE CROCKER ET AL    KCS RESOURCES INC      10/21/2003       964    299    467256    LA    Webster
   CLEONE HAYNES HODGES LIVING TRUST                     

LA-DKE0003-000

   CLEONE HAYNES HODGES INDIVIDUALLY AND TRUSTEE KCS RESOURCES INC         7/23/2003       957957    570570    464547464547    LA    Webster

LA-RL30234-000

   LA ES-55070 USA    WINCHESTER PRODUCTION COMPANY      11/8/2007                LA    Webster


Exhibit F

 

Company

Contract #

 

Counterparty
Contract #

 

Counterparty
(Original)

 

Company
(Original)

 

Counterparty
(Successor/Assignee)

 

Company
(Successor/Assignee)

  Effective
Date
    Term     Term   Notice  

Type

 

Fields

                    Intrastate Gas Transportation  

NLA0100GTH

  PEL1569TSA   Pelico Pipeline LLC   WildHorse Resources LLC   Pelico Pipeline LLC   WildHorse Resources LLC     7/1/2010        6/30/2011      MTM   30   Agreement  
      Winchester Production               Gas Gathering, Processing &  

NLA0101GTH

  MIN1349PRO   DCP Assets Holding LP   Company   DCP Assets Holding LP   WildHorse Resources LLC     5/1/2007        10/31/2007      MTM   30   Purchase Agreement   Redland
                    Gas Gathering, Processing &  

NLA0101GTHA1

  MIN1349PROA   DCP Assets Holding LP   WildHorse Resources LLC   DCP Assets Holding LP   WildHorse Resources LLC     7/1/2010        MTM   30   Purchase Agreement   Redland
                    Gas Gathering, Processing &  

NLA0101GTHA2

  MIN1349PROA   DCP Assets Holding LP   WildHorse Resources LLC   DCP Assets Holding LP   WildHorse Resources LLC     4/1/2011        4/30/2012      MTM   30   Purchase Agreement   Redland
    Gulf South Pipeline Company                 Pipeline Interconnect  

NLA0104OTH

    LP   Strand Energy LC   Gulf South Pipeline Company LP   WildHorse Resources LLC     3/8/2005            Agreement   Lucky
                    Compression, Dehydration and  

NLA0105GTH

    Hunt Petroleum Corporation   Stratland Exploration Company   Hunt Petroleum Corporation   WildHorse Resources LLC     8/1/2005        MTM   30   Gas Gathering Agreement   Lucky
      Winchester Production               Agreement For Rental of Excess  

NLA0106GTH

    Apache Corporation   Company   JAG Operating LLC   WildHorse Resources LLC     5/22/2007        MTM   30   Line Capacity   Redland
                    Agreement For Rental of Excess  

NLA0106GTHA1

    JAG Operating LLC   WildHorse Resources LLC   JAG Operating LLC   WildHorse Resources LLC     6/1/2010        MTM   30   Line Capacity   Carterville North
                    Agreement For Rental of Excess  

NLA0106GTHA2

    JAG Operating LLC   WildHorse Resources LLC   JAG Operating LLC   WildHorse Resources LLC     5/18/2011        MTM   30   Line Capacity   Redland
    Samson Contour Energy E&P                  

NLA0107SLE

    LLC   WildHorse Resources LLC   Samson Contour Energy E&P LLC   WildHorse Resources LLC     3/30/2010        3/30/2011      MTM   30   Gas Purchase Agreement   Rocky Mount

NLA0116GTH

  3008   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     5/1/2011        4/30/2014        90   Gas Gathering Agreement   Lisbon, Ruston
                    Gas Gathering Agreement  

NLA0116GTHA1

  3008   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     7/21/2011          90   Amendment   Lisbon, Ruston
    Cornerstone Gas Processing,   InterCoast Gas Services               Gas Gathering, Processing and  

NLA0148GTH

  3162   Inc.   Company   Regency Field Services LLC   WildHorse Resources LLC     2/1/1995        1/1/2000      YTY   30   Purchase Agreement   Ruston Field, Gibson 32-1 well
                    Gas Gathering, Processing and  
                    Purchase Agreement  

NLA0148GTHA1

  3162   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     6/14/2011            Amendment   Ruston Field, Gibson 32-1 well
    Cornerstone Gas Processing,   InterCoast Gas Services               Gas Gathering and Processing  

NLA0149GTH

  5787   Inc.   Company   Regency Field Services LLC   WildHorse Resources LLC     2/1/1995        1/31/2000      YTY   30   Agreement Amendment   West Lisbon & Calhoun Fields
                    Gas Gathering, Processing and  
                    Purchase Agreement  

NLA0149GTHA1

  5787   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     6/14/2011            Amendment   West Lisbon & Calhoun Fields
                    Gas Gathering, Processing and  
                    Purchase Agreement  

NLA0149GTHA2

  5787   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     8/17/2012            Amendment   West Lisbon & Calhoun Fields
                    Gas Gathering, Processing and  
                    Purchase Agreement  

NLA0149GTHA3

  5787   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     5/1/2013            Amendment   West Lisbon & Calhoun Fields
                    Gas Gathering, Processing and  
                    Purchase Agreement  

NLA0149GTHA4

  5787   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     5/1/2013            Amendment   West Lisbon & Calhoun Fields
                    Gas Gathering, Processing and  
                    Purchase Agreement  

NLA0149GTHA5

  5787   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     7/1/2013            Amendment   West Lisbon & Calhoun Fields
    PanEnergy Louisiana   Comstock Oil & Gas - Louisiana,                 Terryville / Hico Knowles

NLA0157SLE

  PEL1498PUR   Intrastate, LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     8/1/2005        3/31/2006      MTM   30   Gas Purchase Agreement   Comstock Wells
      Comstock Oil & Gas - Louisiana,               Gas Purchase Agreement   Terryville / Hico Knowles

NLA0157SLEA1

  PEL1498PUR   Pelico Pipeline LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     9/1/2007        MTM   30   Amendment   Comstock Wells
      Comstock Oil & Gas - Louisiana,               Gas Purchase Agreement   Terryville / Hico Knowles

NLA0157SLEA2

  PEL1498PUR   Pelico Pipeline LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     10/1/2007        MTM   30   Amendment   Comstock Wells
      Comstock Oil & Gas - Louisiana,               Gas Purchase Agreement   Terryville / Hico Knowles

NLA0157SLEA3

  PEL1498PUR   Pelico Pipeline LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     1/1/2008        MTM   30   Amendment   Comstock Wells
      Comstock Oil & Gas - Louisiana,               Gas Purchase Agreement   Terryville / Hico Knowles

NLA0157SLEA4

  PEL1498PUR   Pelico Pipeline LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     3/1/2008        MTM   30   Amendment   Comstock Wells
      Comstock Oil & Gas - Louisiana,               Gas Purchase Agreement   Terryville / Hico Knowles

NLA0157SLEA5

  PEL1498PUR   Pelico Pipeline LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     7/1/2008        MTM   30   Amendment   Comstock Wells
      Comstock Oil & Gas - Louisiana,               Gas Purchase Agreement   Terryville / Hico Knowles

NLA0157SLEA6

  PEL1498PUR   Pelico Pipeline LLC   LLC   Pelico Pipeline LLC   WildHorse Resources LLC     8/1/2008        MTM   30   Amendment   Comstock Wells


Company

Contract #

 

Counterparty
Contract #

 

Counterparty
(Original)

 

Company
(Original)

 

Counterparty
(Successor/Assignee)

 

Company
(Successor/Assignee)

  Effective
Date
    Term     Term   Notice  

Type

 

Fields

NLA0159GTH

  MIN1308PRO   Duke Energy Field Services, LP   Comstock Oil & Gas Inc   DCP Assets Holding LP   WildHorse Resources LLC     11/1/2004        10/31/2005      YTY   30   Gas Gathering Agreement   Hico Knowles Britt A-1 well
    Regency Gas Gathering and   Sugar Creek Producing               Gas Gathering and Processing  

NLA0173PRO

  3806   Processing LLC   Company   Regency Field Services LLC   WildHorse Resources LLC     1/7/2005        11/30/2009      YTY   60   Agreement   Sugar Creek Field, Lincoln Parish
    Regency Gas Gathering and   Sugar Creek Producing               Gas Gathering and Processing  

NLA0173PROA1

  3806   Processing LLC   Company   Regency Field Services LLC   WildHorse Resources LLC     5/1/2013        YTY   60   Agreement Amendment   Sugar Creek Field, Lincoln Parish
    Regency Gas Gathering and   Sugar Creek Producing               Gas Gathering and Processing  

NLA0173PROA2

  3806   Processing LLC   Company   Regency Field Services LLC   WildHorse Resources LLC     5/1/2013        YTY   60   Agreement Amendment   Sugar Creek Field, Lincoln Parish
    Regency Gas Gathering and   Sugar Creek Producing               Gas Gathering and Processing  

NLA0173PROA3

  3806   Processing LLC   Company   Regency Field Services LLC   WildHorse Resources LLC     7/1/2013        YTY   60   Agreement Amendment   Sugar Creek Field, Lincoln Parish
    Regency Gas Gathering and   Sugar Creek Producing               Gas Gathering and Processing  

NLA0173PROA4

  3806   Processing LLC   Company   Regency Field Services LLC   WildHorse Resources LLC     2/1/2014        YTY   60   Agreement Amendment   Sugar Creek Field, Lincoln Parish

NLA0175GTH

  3747   Dominion Gas Ventures   BP America Company   Regency Field Services LLC   WildHorse Resources LLC     9/30/2004        8/31/2009      YTY   60   Gas Gathering Agreement   Spider Field, Desoto Parish
                    Gas Gathering Agreement  

NLA0175GTHA1

  3747   Regency Field Services LLC   BP America Company   Regency Field Services LLC   WildHorse Resources LLC     6/8/2008            Amendment   Spider Field, Desoto Parish
                    Gas Gathering Agreement  

NLA0175GTHA2

  3747   Regency Field Services LLC   BP America Company   Regency Field Services LLC   WildHorse Resources LLC     9/30/2008            Amendment   Spider Field, Desoto Parish

NLA0183GTH

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     11/1/2012        12/31/2020      MTM   60   Gas Gathering Agreement   New Contract for Terryville

NLA0183GTHA1

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     12/17/2012        12/31/2020      MTM   60   Gas Gathering Agreement   Terryville Field

NLA0183GTHA2

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     1/17/2013        12/31/2020      MTM   60   Gas Gathering Agreement   Terryville Field

NLA0183GTHA3

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     2/4/2013        12/31/2020      MTM   60   Gas Gathering Agreement   Terryville Field
                    Gas Gathering Agreement  

NLA0183GTHA4

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     4/1/2013        12/31/2020      MTM   60   Amendment and Restatement   Terryville Field
                    Gas Gathering Agreement  

NLA0183GTHA5

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     6/1/2013        12/31/2020      MTM   60   Amendment   Terryville Field
                    Gas Gathering Agreement  

NLA0183GTHA6

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     7/1/2013        12/31/2020      MTM   60   Amendment   Terryville Field
                    Gas Gathering Agreement  

NLA0183GTHA7

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     10/1/2013        12/31/2020      MTM   60   Amendment   Terryville Field
                    Gas Gathering Agreement  

NLA0183GTHA8

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     12/1/2013        12/31/2020      MTM   60   Amendment   Terryville Field

NLA0188SLE

  PEL1546PUR   DCP Assets Holding LP   Plantation Operating LLC   DCP Assets Holding LP   WildHorse Resources LLC     6/1/2008        5/31/2011      MTM   30   Gas Purchase Agreement   Liberty Hills

NLA0196GTH

  MIN1324PRO   Duke Energy Field Services, LP   KCS Resources, Inc.   Duke Energy Field Services, LP   WildHorse Resources LLC     10/1/2005        9/30/2008      YTY   30   Gas Gathering Agreement   Hodges 33-1 Webster Parish
      InterCoast Gas Services                

NLA0197SLE

  MIN1099PUR   PanEnergy Field Services Inc   Company   Duke Energy Field Services, LP   WildHorse Resources LLC     1/1/1996        12/31/1999      MTM   30   Gas Purchase Agreement   Cook 31-1 Hico Knowles Field
                    Gas Gathering Agreement  

NLA0183GTHA9

  3400   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     2/1/2014        12/31/2020      MTM   60   Amendment   Terryville Field

NLA0199GTH

  3213GGA   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     6/1/2012        5/31/2013      YTY   90   Gas Gathering Agreement   Gibson 32-1 Ruston Field

NLA0208SLE

    EROC Gathering Company L.P.   Chesapeake Louisiana, L.P.   EROC Gathering Company L.P.   WildHorse Resources LLC     10/1/2008        7/31/2009      YTY   60   Gas Purchase Agreement   Simsboro Questar operated wells
    CenterPoint Energy Services                  

NLA0209SLE

  700626   Inc   WildHorse Resources LLC   CenterPoint Energy Services Inc   WildHorse Resources LLC     5/1/2013        MTM   30   Gas Purchase Agreement   Ruston Mitcham #1
    Southern Natural Gas                 Construction and Operations   Midland Receipt Point, Spider

NLA0201OTH

  CIOM3769NEX   Company   ARCO Oil and Gas Company   Regency Field Services LLC   WildHorse Resources LLC     7/1/1994            Agreement   Field
                      Colvin 6-1, Campbell 17-1 and

NLA0214GTH

  3018GGP   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     6/1/2013        5/31/2014      YTY   90   Gas Gathering Agreement   King 1
    PanEnergy Louisiana   Chesapeake Energy Marketing               Intrastate Gas Transportation   Indigo Wells (see exhibit A for

NLA0221GTH

  PEL1504TSAB   Intrastate, LLC   Inc.   Pelico Pipeline LLC   WildHorse Resources LLC     1/1/2006        MTM   30   Agreement   meters)
                    Intrastate Gas Transportation   Indigo Wells Add Meters See

NLA0221GTHA1

  PEL1504TSAB   Pelico Pipeline LLC   Indigo Minerals LLC   Pelico Pipeline LLC   Indigo Minerals LLC     12/1/2010        11/30/2017      MTM   30   Agreement   contract for term


Company

Contract #

 

Counterparty
Contract #

 

Counterparty
(Original)

 

Company
(Original)

 

Counterparty
(Successor/Assignee)

 

Company
(Successor/Assignee)

  Effective
Date
    Term     Term   Notice  

Type

 

Fields

                    Intrastate Gas Transportation   Indigo Wells Add Meters See

NLA0221GTHA2

  PEL1504TSAB   Pelico Pipeline LLC   WildHorse Resources LLC   Pelico Pipeline LLC   WildHorse Resources LLC     8/1/2013        11/30/2017      MTM   30   Agreement   contract for term
                    Intrastate Gas Transportation  

NLA0221GTHA3

  PEL1504TSAB   Pelico Pipeline LLC Duke Energy Field Services   WildHorse Resources LLC   Pelico Pipeline LLC   WildHorse Resources LLC     12/1/2013        11/30/2017      MTM   30   Agreement   Add Meters

NLA0223SLE

  PEL1366PUR   Marketing, LP   KCS Resources, Inc.   Pelico Pipeline LLC   WildHorse Resources LLC     8/1/2003        7/31/2004      MTM   30   Gas Purchase Agreement   Napper CDP
                    Gas Gathering Agreement Note   Colvin 6-1, Campbell 17-1 and

NLA0214GTH S1

  3018GGP   Regency Field Services LLC   WildHorse Resources LLC   Regency Field Services LLC   WildHorse Resources LLC     6/1/2013        5/31/2014      YTY   90   to File   King 1

NLA0225SLE

  PEL1548PUR   DCP Assets Holding LP   Indigo Minerals LLC   DCP Assets Holding LP   WildHorse Resources LLC     8/1/2008        7/31/2013      MTM   30   Gas Purchase Agreement   Indigo Properties
                    Gas Purchase Agreement  

NLA0225SLEA1

  PEL1548PUR   DCP Assets Holding LP   Indigo Minerals LLC   DCP Assets Holding LP   WildHorse Resources LLC     9/1/2008        7/31/2013      MTM   30   Amendment   Indigo Properties
                    Gas Purchase Agreement  

NLA0225SLEA2

  PEL1548PUR   DCP Assets Holding LP   Indigo Minerals LLC   DCP Assets Holding LP   WildHorse Resources LLC     4/1/2009        7/31/2013      MTM   30   Amendment   Indigo Properties
                    Gas Purchase Agreement  

NLA0225SLEA3

  PEL1548PUR   DCP Assets Holding LP   Indigo Minerals LLC   DCP Assets Holding LP   WildHorse Resources LLC     12/1/2010        11/30/2017      YTY   90   Amendment   Indigo Properties
                    Gas Purchase Agreement  

NLA0225SLEA4

  PEL1548PUR   DCP Assets Holding LP   Indigo Minerals LLC   DCP Assets Holding LP   WildHorse Resources LLC     12/1/2010        11/30/2017      YTY   90   Amendment   Indigo Properties
                    Gas Gathering & Processing  

NLA0226GTH

  MIN1380PRO   DCP Assets Holding LP   Indigo Minerals LLC   DCP Assets Holding LP   WildHorse Resources LLC     12/1/2010        11/30/2017      YTY   90   Agreement   Indigo Properties
                    Agreement For Rental of Excess  

NLA0106GTH S1

    JAG Operating LLC   WildHorse Resources LLC   JAG Operating LLC   WildHorse Resources LLC     11/15/2013        MTM   30   Line Capacity   Redland

NLA0224GTH

    Regency Intrastate Gas LP   El Paso E&P Company, LP   Regency Intrastate Gas LP   WildHorse Resources LLC     3/29/2009             


EXHIBIT G

PLANT DESIGN SPECIFICATIONS

Gas received at the Point of Delivery is expected to have the specifications set forth below:

*

 

 

*

-

Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

EXHIBIT G – Page -1-

EX-23.1 10 d658814dex231.htm EX-23.1 EX-23.1

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

The Board of Directors

Memorial Resource Development Corp.:

 

We consent to the use of (i) our report dated February 6, 2014, with respect to the balance sheet of Memorial Resource Development Corp. as of January 31, 2014 and (ii) our report dated April 4, 2014, with respect to the consolidated and combined balance sheets of Memorial Resource Development LLC and subsidiaries as of December 31, 2013 and 2012, and the related consolidated and combined statements of operations, equity, and cash flows for each of the years then ended, and Schedule I—Condensed Financial Information, included herein and to the reference to our firm under the heading “Experts” in the registration statement.

 

As discussed in Note 1 to the consolidated and combined financial statements of Memorial Resource Development LLC and subsidiaries, the balance sheets, and the related statements of operations, equity, and cash flows have been prepared on a combined basis of accounting.

 

/s/ KPMG LLP

Dallas, TX

May 2, 2014

EX-23.2 11 d658814dex232.htm EX-23.2 EX-23.2

Exhibit 23.2

 

LOGO

 

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

 

We hereby consent to (1) the inclusion in or incorporation by reference into the Registration Statement on Form S-1 (including any amendments, supplements or exhibits thereto, any prospectus that is a part thereof, and any financial statements) of Memorial Resource Development Corp. (the “Registration Statement”) of (a) our report, dated April 3, 2014, with respect to estimates of proved reserves and future net revenues to the Memorial Resource Development LLC interest, as of December 31, 2013; (b) our audit letter, dated April 24, 2014, with respect to estimates of probable and possible reserves and future net revenues to the Memorial Resource Development LLC interest, as of December 31, 2013; and (c) our report, dated January 30, 2014, with respect to estimates of reserves and future net revenues to the combined interest of Memorial Production Partners LP and its subsidiaries, as of December 31, 2013; and (2) all references to our firm or such reports included in or incorporated by reference into the Registration Statement.

 

NETHERLAND, SEWELL & ASSOCIATES, INC.

By:

 

/s/ C.H. (Scott) Rees III

 

C.H. (Scott) Rees III, P.E.

 

Chairman and Chief Executive Officer

 

Dallas, Texas

May 2, 2014

EX-24.2 12 d658814dex242.htm EX-24.2 EX-24.2

Exhibit 24.2

 

POWER OF ATTORNEY

 

The undersigned hereby constitutes and appoints John A. Weinzierl and Kyle N. Roane, and each of them, his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and his name place and stead, in any and all capacities, to execute any and all amendments (including post-effective amendments) to the Registration Statement on Form S-1 (File No. 333-195062) of Memorial Resource Development Corp., to sign any registration statement filed pursuant to Rule 462(b) of the Securities Act of 1933, and to cause the same to be filed with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and desirable to be done in and about the premises as fully and to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all acts and things that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

 

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 2nd day of May, 2014.

 

By:

 

/s/ Andrew J. Cozby

 

Andrew J. Cozby

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